The ability to modify or eliminate fiduciary duties through an LLC operating agreement varies dramatically by state. Because the choice of domicile can determine whether a carefully negotiated limitation is enforceable or void, domicile selection is a threshold question in entity formation. State approaches fall into four broad categories.

Maximum Freedom-of-Contract States

Delaware, Nevada, Wyoming, New Hampshire, and Arizona afford members broad latitude to reshape—or entirely eliminate—traditional fiduciary duties.

Delaware is the most well-known exemplar. Section 18-1101(c) of the Delaware LLC Act permits fiduciary duties to be "expanded or restricted or eliminated" by the LLC agreement, subject only to the implied contractual covenant of good faith and fair dealing. Section 18-1101(e) goes further, permitting limitation or elimination of "any and all liabilities for breach of contract and breach of duties (including fiduciary duties)," so long as liability for bad-faith violations of the implied covenant is preserved. Delaware's statutory policy is expressly "to give the maximum effect to the principle of freedom of contract."

Nevada is arguably more permissive than Delaware. Under NRS 86.298, enacted in 2019, the duties of a manager or managing member are limited to (1) the implied contractual covenant of good faith and fair dealing, and (2) "such other duties, including, without limitation, fiduciary duties, if any, as are expressly prescribed by the articles of organization or the operating agreement." This is an opt-in framework: fiduciary duties do not exist by default and arise only if the operating agreement or articles of organization affirmatively create them. NRS 86.286(5) separately provides that any duties a member, manager, or other person does owe may be "expanded, restricted or eliminated" by the operating agreement, and NRS 86.286(7) permits limitation or elimination of liability for breach of those duties—but these provisions are largely confirmatory where § 86.298 applies, because there is nothing to waive unless the agreement created duties in the first place. The only mandatory floor is the implied contractual covenant of good faith and fair dealing. Nevada courts have consistently enforced these contractual arrangements as written, reflecting strong deference to private ordering. Counsel should ensure, however, that any operating agreement is drafted with precision, as Nevada courts will look to its four corners to determine the scope of any duties created or disclaimed.

Wyoming adopted a version of RULLCA but departed from its default fiduciary duty restrictions in a particularly telling way. Section 17-29-110(c) lists the provisions an operating agreement may not override, and conspicuously absent from that list is any prohibition on eliminating the duties of loyalty or care set out in § 17-29-409(b)–(c). Several subsections that would typically carry those restrictions in a standard RULLCA jurisdiction are marked "Reserved" in the Wyoming code— meaning the legislature affirmatively removed them. Wyoming retains the contractual obligation of good faith and fair dealing (§ 17-29-409(d)). The result is a framework functionally comparable to Delaware and Nevada: parties may eliminate fiduciary duties entirely, subject only to the implied covenant.

New Hampshire tracks the Delaware approach closely, permitting fiduciary duties to be "expanded or restricted or eliminated" by the operating agreement (N.H. Rev. Stat. Ann. § 304-C:107), subject only to the implied contractual covenant of good faith and fair dealing. 

Arizona follows a comparable model, allowing duties—including fiduciary duties—to be "expanded, limited or eliminated" by the operating agreement (Ariz. Rev. Stat. § 29-3105). Like Wyoming, Arizona adopted RULLCA but departed from its default restrictions on fiduciary duty modification.

RULLCA States

A growing number of jurisdictions—including New Jersey, Vermont, Minnesota, Nebraska, North Dakota, and Wisconsin—have adopted the Revised Uniform Limited Liability Company Act. These states prohibit outright elimination of the duty of loyalty or the duty of care, but allow the operating agreement to restrict or alter specific aspects of those duties, provided the restrictions are "not manifestly unreasonable" (RULLCA § 110(d); see, e.g., N.J. Stat. Ann. § 42:2C-11(d); Minn. Stat. § 322C.0110(d)). For example, an operating agreement may restrict the duty to account for profits from LLC property or the duty to refrain from competing, but may not authorize intentional misconduct or knowing violation of law. The contractual obligation of good faith and fair dealing may not be eliminated. The RULLCA framework respects private ordering but imposes a judicial safety valve through the manifest-unreasonableness standard.

Older-Model Uniform Act States

States such as South Carolina, Hawaii, Montana, and Illinois follow earlier uniform acts and adopt a more restrictive posture. These jurisdictions prohibit elimination of the duty of loyalty but permit the operating agreement to identify specific activities that do not violate that duty and to specify the member vote required to authorize otherwise-breaching transactions. Illinois is particularly restrictive: modifications must be "clear and unambiguous" (805 ILCS 180/15-5(b)), and the duty of loyalty may only be modified through specified categories or examples, not by blanket elimination.

California's Distinct Approach

California prohibits elimination of the duty of loyalty and imposes a heightened procedural safeguard: any modification of fiduciary duties must be set forth in a written operating agreement with the "informed consent" of the members (Cal. Corp. Code § 17701.10(e)). Mere assent to the operating agreement under § 17701.11(b) does not constitute informed consent. This introduces a layer of formality—and potential litigation risk—absent in the more permissive jurisdictions.

The Takeaway: Domicile Selection as a Strategic Decision

A fiduciary duty provision that is routine in Delaware or Nevada may be void in a RULLCA state and may never have been validly adopted under California law. Domicile selection is therefore a front-end strategic decision, not an afterthought. When clients seek maximum flexibility—in fund formation, joint ventures, or holding company structures—formation in Delaware or Nevada offers the broadest contractual freedom and the greatest predictability of enforcement. Where mandatory fiduciary protections are desired, a RULLCA jurisdiction may better serve. In every case, counsel should evaluate domicile selection with fiduciary duty flexibility squarely in view, alongside tax treatment, asset protection, and judicial infrastructure.