In the operation of a New York limited liability company (“LLC”), written operating agreements and formal corporate procedures are undoubtedly best practices. Nevertheless, New York courts at times recognize that the absence of formal documentation does not render the conduct of LLC members legally insignificant. Indeed, long‑standing practices, oral understandings, and informal arrangements may be enforceable , provided they reflect mutual assent and do not conflict with the

For many New York LLCs, relationships change long before paperwork does. A member may stop participating in operations, stop contributing capital, or declare themselves “withdrawn” from the business. But as Sealy v. Clifton LLC  illustrates, failing to formally transfer or assign a membership interest —or to seek judicial dissolution —can create years of uncertainty, litigation, and financial exposure. 1. You’re Still a Member Until the Law Says You’re Not In Sealy , the adm