How may members of a limited liability company bind the company to contracts?

Members of a limited liability company (LLC) can bind the company to contracts as provided by the operating agreement. The operating agreement is a foundational document that outlines the management structure, operational procedures, and the extent of authority that members have in conducting business on behalf of the LLC. It also delineates who has the authority to enter into contracts and make binding decisions.

If the operating agreement grants specific authority to certain members or outlines a process for entering into contracts, those stipulations must be followed. This ensures that the operations of the LLC remain consistent with the agreed-upon rules among members, providing legal clarity and safeguarding the interests of the company and its members.

While there are other ways members might influence decisions within the LLC, such as through mutual agreement or a majority vote, these methods are not formal mechanisms for binding the company to contracts unless they are explicitly outlined in the operating agreement. Similarly, state registration refers to the formation and legal recognition of the LLC but does not govern the internal authority granted to members concerning contracting.