The Innovator’s Counsel: A Bird’s Eye View of the Massachusetts LLC Statute

Jeremy Weltman Uncategorized

A Limited Liability Company (“LLC”) is an unincorporated legal entity organized under a state limited liability company law that offers limited liability to all of its owners, who are called “members.” Massachusetts has codified its LLC laws as Mass. Gen. Laws c. 156C (“MA LLC Statute”). While all 50 states now have their own LLC statutes, Massachusetts’ LLCs were first authorized by statute effective January 1, 1996 (St. 1995, c. 281, §18). While there is a separate registration requirement for LLCs organized under the laws of other states that wish to conduct business in Massachusetts, for so-called “domestic” LLCs, the MA LLC Law provides (in very general brush strokes) as follows:


Although not contemplated when the MA LLC Law was first passed, beginning in 2003, Massachusetts permits the formation of single-member LLCs.  In Massachusetts, an LLC is created by filing a certificate of organization with the Corporations Division of the Secretary of the Commonwealth. The certificate of organization is required to provide public record of only certain basic information about the LLC. To learn more about the basics of forming an LLC in Massachusetts, readers should refer to the KCL December 19, 2014 blog entry here: All LLCs should have a comprehensive written operating agreement which need not be part of the public record so filed. Drafting of such an operating agreement is where an experienced business attorney can add the most value to your LLC’s initial formation to ensure that your LLC’s operations and procedures will be legally enforceable down the road.


As contemplated in Mass. Gen. Laws c. 156C, §§22 – 24, an LLC may be managed by its members in a manner similar to a general partnership, or by one or more “managers,” who may (but need not be) members, in a manner similar to a corporation or limited partnership. If the members so elect in the operating agreement for an LLC, the LLC can also have officers, although the MA LLC Statute does not specifically provide for officers.  In other words, the owners of an LLC may decide upon the degree of centralization of management that they wish to have for their particular LLC.

Liability of Owners

Generally speaking, none of the members or managers of an LLC is personally liable for any debts, obligations or liabilities of the LLC pursuant to Mass. Gen. Laws c. 156C, §22. Thus,

unlike a limited partner of a limited partnership, a member of an LLC may therefore take part in the control of its business without thereby becoming personally liable for its debts – that is, unless the so-called “corporate veil” is successfully pierced (more on that another day).


Under §43 of the MA LLC Statute, a LLC is dissolved and its affairs wound up upon the first to occur of the following: (1) the time specified in the operating agreement; (2) the happening of an event as specified in the operating agreement; (3) the written consent of all members; (4) with respect to a LLC formed prior to January 1, 1997, except as provided in a written operating agreement, the death, insanity, retirement, resignation, expulsion, bankruptcy or dissolution of a member or the occurrence of any other event which terminates the membership of a member in the limited liability company unless the business of the limited liability company is continued either by the consent of all the remaining members within ninety days following the occurrence of any such event or pursuant to a right to continue stated in a written operating agreement; or, (5) the entry of a decree of judicial dissolution under section forty-four.

Transfer of Interests 

A member’s interest in an LLC is freely assignable in whole or in part except as provided in a written operating agreement and as may be required under applicable federal and state securities laws. However, an assignee has no right to participate in the management of the LLC or otherwise exercise a member’s rights (e.g., rights to receive information from the LLC and to vote or consent to various LLC matters) except upon compliance with procedures set forth in a written operating agreement, or with the approval of all members, pursuant to Mass. Gen. Laws c. 156C, §39.

The MA LLC Statute provides some basic framework within which an LLC may form and operate. However, an LLC with more than one member should really consider creating a comprehensive written LLC Operating Agreement. The alternative is that you and your new company are subject to the MA LLC Statute, which will never be as favorable or preferable to customizing your own set of business operating ground rules.