Can an NY operating agreement become valid automatically if a member who objects to it relinquishes membership interest?

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Four parties form an LLC in New York and operate for three years without a written operating agreement. Then, three of them write and sign an operating agreement, but the fourth objects to certain provisions and does not sign the agreement. After another year, the objecting party assigns all of his membership interests to the other members, thereby giving up all of his rights and privileges as a member, effectively leaving the LLC. Upon his departure, does the operating agreement the other three partners had agreed to previously become effective automatically, or must they rewrite and revote?

Attorney Answer

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Paul R. GoodmanInternet LawyerNew York, NY ·
If the fourth member validly assigned his interest, then you still have 4 members and they all must sign the Operating Agreement. This is really why we advise people to work them out before forming an LLC.
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