Generate document
Generate

The Hawaii LLC operating agreement is a legal document used to create the outline for how a business will run and operate. This includes assigning responsibilities to members, documenting initial contributions to the business, distributing profit and loss, and more. While not required, it is highly recommended that Hawaii LLCs adopt an operating agreement.

From HI Rev Stat § 428-101 (2019):

“Operating agreement” means the agreement under section 428-103 concerning the relations among the members, managers, and limited liability company. The term includes amendments to the agreement.

Hawaii Operating Agreement Law

Per §428-103 of the Hawaii Uniform Limited Liability Company Act Statutes:

(a) Except as provided in subsection (b), all the members of a limited liability company may enter into an operating agreement to regulate the affairs of the company and the conduct of its business, and to govern relations among the members, managers, and company. To the extent the operating agreement does not otherwise provide, this chapter governs relations among the members, managers, and company.
(b) The operating agreement may not:
(1) Unreasonably restrict a right to information or access to records under section 428-408;
(2) Eliminate the duty of loyalty under section 428-409(b) or 428-603(b)(3), but the agreement may:
(A) Identify specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; and
(B) Specify the number or percentage of members or disinterested managers that may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;
(3) Unreasonably reduce the duty of care under section 428-409(c) or 428-603(b)(3);
(4) Eliminate the obligation of good faith and fair dealing under section 428-409(d), but the operating agreement may determine the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
(5) Vary the right to expel a member in an event specified in section 428-601(5);
(6) Vary the requirement to wind up the limited liability company’s business in a case specified in section 428-801(3) or 428-801(4); or
(7) Restrict rights of third parties under this chapter, other than managers, members, or their transferees. [L 1996, c 92, pt of §1; am L 1999, c 164, §2; am L 2004, c 121, §44]

Forming an LLC in Hawaii

  1. Conduct a name search
  2. Choose a registered agent
  3. File formation articles
  4. Draft an operating agreement

Hawaii LLCs are required to file for their formation with a valid business name. The registered business name must be unique and including one of the following designations:

  • LLC
  • L.L.C.
  • Limited Liability Company

Additionally, “inc”, “corp”, and other business type designators are prohibited along with any government entities or their acronyms.

Some professionals may be required to complete additional verification when using titles such as MD, attorney, or CPA.

To conduct the name search, use the Hawaii Department of Commerce Business Entity Search website.

Step 2: Choose Your Registered Agent

In Hawaii, every LLC must have an individual or business that is appointed as the registered agent. The agent accepts legal documentation on behalf of the LLC such as service of process, making it an important role for staying compliant.

For individuals, the agent must:

  • Be 18 years or older
  • Be available during business hours (9am – 5pm local time)
  • Be a resident of the state
  • Have a physical (not a P.O. Box) address in Hawaii, as well as a mailing address within the state

The agent can be someone in the company or an unrelated third party – just be sure they can be trusted.

When using a registered agent service, the agent must be authorized to do business in Hawaii as a professional registered agent.

Step 3: File Your Formation Articles

Domestic LLC formations (in-state) are required to file Articles of Organization when forming their LLC.

Online Filing (Domestic):

Mailed Filing (Domestic):

Department of Commerce and Consumer Affairs
Business Registration Division
PO Box 40
Honolulu, HI 96810

In-Person Filing (Domestic):

335 Merchant Street
Room 201
Honolulu, HI 96813

Foreign LLCs expanding to Hawaii must complete a Certificate of Authority, and file a Certificate of Existence from the original state of formation of the business that is dated within 60 days of filing.

Online Filing (Foreign):

Mailed Filing (Foreign):

Department of Commerce and Consumer Affairs
Business Registration Division
PO Box 40
Honolulu, HI 96810

In-Person Filing (Foreign):

335 Merchant Street
Room 201
Honolulu, HI 96813

Faxed Filing (Foreign):

(808) 586-2733

Step 4: Draft a Hawaii Operating Agreement

Hawaii does not require an operating agreement, but it is highly recommended that all LLC formations draft their own Hawaii operating agreement. The document creates guidelines for the business, includes agreed-upon terms for each member, and protects legal liability and finances in the case of litigation.

Operating agreements do not have to be filed with the state, but a signed copy of the document should be held by each member.