Weekly Legal Guide · Week of July 24, 2026

Business partners often use the word “fiduciary” as if it has one fixed meaning. Under Ohio’s LLC statute, duties can depend on whether the company is member-managed or manager-managed and on what a written operating agreement adds, restricts, or eliminates.

Why this issue matters in Ohio

Undefined expectations about side ventures, compensation, related-party deals, company opportunities, access to information, and spending authority are common dispute triggers. Governance documents should address these subjects before a conflict tests everyone’s memory.

Management structure changes the baseline

Ohio Revised Code 1706.31 distinguishes duties in manager-managed and non-manager-managed LLCs. Section 1706.311 addresses manager duties. The first step is confirming the company’s actual structure and whether day-to-day practice matches the agreement.

• Identify members and designated managers
• Document delegation of authority
• Align bank and contract permissions
• Correct outdated governance records

Loyalty and care address real conduct

Statutory concepts include accounting for certain benefits, avoiding adverse dealings, handling company opportunities, and exercising care. The specific duties and standards must be read with the operating agreement and the facts.

• Disclose conflicts before approval
• Use fair related-party procedures
• Separate company and personal assets
• Record material decisions

The written agreement can reshape duties

Ohio law gives written operating agreements broad ability to expand, restrict, or eliminate duties and liabilities, while preserving limits such as the implied covenant of good faith and fair dealing and its bad-faith boundary.

• Use explicit conflict rules
• Define permitted outside activities
• Set approval and safe-harbor procedures
• Address reliance and indemnification

Good records prevent governance disputes

Minutes, written consents, financial statements, conflict disclosures, valuations, reimbursement policies, and consistent member reporting show how decisions were made. Silence is rarely a strong governance strategy.

• Keep member and manager decisions
• Document compensation changes
• Retain financial support
• Provide information under the agreement

Practical checklist

• Confirm member- or manager-managed status
• Review duty language in the written agreement
• Adopt a conflict-disclosure process
• Document major decisions and related-party transactions
• Update governance as roles change

Common questions

Does every Ohio LLC member owe the same duties?

No. The baseline can differ based on management structure, written agreements, and the member’s role.

Can an operating agreement eliminate all duties?

Ohio allows broad modification, but the agreement cannot eliminate the implied covenant of good faith and fair dealing or excuse bad-faith violation of it.

Is a conflict transaction automatically prohibited?

Not necessarily. Disclosure, authorization, agreement terms, fairness, and statutory rules may determine the result.

This article provides general information about Ohio law and is not legal advice. Reading it does not create an attorney-client relationship. Laws, court rules, and individual circumstances can change the analysis.