NY LLC Operating Agreements: Confidentiality Obligations of Members

Several recent court cases remind us to include confidentiality obligations into each LLC Operating Agreement (see legalese commentary here and here).  

You see, under New York law, executive LLC members, i.e. managers, have a duty to keep the Company's valuable secrets secret.  Other members, however, are not necessarily bound to keep their mouth shut.  So you are well advised to provide in the operating agreement that all members shall not disclose or use confidential information of the Company while they are members of the LLC and after they leave the Company.

About Imke Ratschko


Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027.

6 comments

  1. andrew001

    This is intended to help outline the general process of buying a small business in New York, explaining the legal aspects of how a corporate attorney can assist in a business purchase transaction (it is not intended to be construed as legal advice for your particular situation).
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  2. interesting, I use a confidentiality agreement for my business, wonder if that will affect my city of chicago soon

  3. here in north carolina operating agreements are private documents which members of an North Carolina LLC use as an internal governance document.

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  5. “I fail to understand how or why ‘growth’ should be relevant at all. Does anyone else feel the same way?”

  6. Firstly, the population keeps growing and then most people want to improve their standard of living. A long period of slow growth sounds like the best possible outcome in terms of social stability