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Monday, May 20, 2019

What is the Connecticut Uniform Limited Liability Act? Part Two

The Connecticut Limited Liability Company Act, originally passed in 1993, was updated in 2017. This new law, called the Connecticut Uniform Limited Liability Company Act (the Act), is intended to create a more business-friendly environment for LLCs. In a previous article, we reviewed and discussed some of the Act's requirements. Below is an overview of some additional requirements under Connecticut's new LLC law. 

Fiduciary duties of managers and members 

  • Regarding the fiduciary duties of managers and members, the Act permits an operating agreement to do the following:
  • Eliminate or alter a manager or member's duty of loyalty
  • Identify categories of activities that don't violate the duty of loyalty
  • Alter the duty of care but not authorize conduct involving willful or intentional misconduct, bad faith, or a knowing violation of law
  • Eliminate or alter any other fiduciary duties

    In addition, under the Act:

  • A manager or member must discharge his or her duties in good faith 
  • Managers in a manager-managed LLC and members in a member-managed LLC have a duty of loyalty and are required to discharge their obligations and duties under the Act or the operating agreement in good faith
  • A majority in interest of disinterested members may approve any breach of the duty of loyalty after full disclosure of all material facts 


Unless otherwise provided in the operating agreement, the unanimous approval of all members is required to amend an LLC’s certificate of organization or operating agreement. This is a change from the previous law, which required majority approval for amendments to an LLC’s articles of organization and a two-thirds in interest vote for amendments to an LLC’s operating agreement. 


  • Under the Act, an individual can become a member in an LLC in the following ways:
  • Via the operating agreement
  • Via a transaction under the Connecticut Entity Transactions Act
  • Via unanimous consent of the members
  • Via the consent of transferees who have the right to receive the majority of distributions when the LLC has no members

 Members as agents

Under the previous LLC law, every member in a member-managed LLC was considered an agent of the organization. Under the Act, however, members are not agents solely by reason of membership. In addition, membership in an LLC does not prohibit other laws from imposing liability on an LLC due to a member's conduct. 

Liability protection

Like the previous law, the Act allows an LLC to hold harmless and indemnify a manager or member. However, this doesn’t apply to liability for improper distributions, breach of the duty of care, or loyalty to the LLC. 

Connecticut Business  Law Attorney 

The Law Office of Benjamin S. Proto, Jr. provides advice and guidance regarding all types of business activity. At the Law Office of Benjamin S. Proto, Jr., our experienced Connecticut business law attorney advises and represents businesses and entrepreneurs of all sizes and types. Whether you are starting a business, establishing an LLC or corporation, forming a partnership or joint venture, seeking licensing or permits, or involved in any other business activities that require legal assistance, please contact us as soon as possible to schedule a free consultation

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