Question

Peter, Preston, and Penny organize an LLC in the month of January. While composing the operating agreement, they forget to include the amendment clause. Six months later, the situation demands an amendment to the operating agreement. Which of the following would best apply in this scenario?

1) The operating agreement can be amended only 60 days after a new amendment provision is included.
2) The operating agreement cannot be amended as it contains no amendment provision.
3) The operating agreement can be amended with the affirmative majority of all shareholders.
4) The operating agreement can be amended if all three members approve.

Answer 1

The operating agreement of the LLC can be amended if all three members, Peter, Preston, and Penny, approve, despite the initial omission of an amendment clause.

Step-by-step explanation:

When Peter, Preston, and Penny organized their LLC in January and forgot to include an amendment clause in the operating agreement, they are not prevented from amending the document later on. Even if an amendment procedure is not outlined in the original agreement, state LLC statutes typically allow for operating agreements to be amended with the consent of all members unless a different procedure has been agreed upon in the operating agreement. Therefore, the correct answer is that the operating agreement can be amended if all three members approve. It's important to check the specific state law that applies to the LLC, as this can vary from one jurisdiction to another.