Sample Xyz Limited Liability Company Operating Agreement

ADVERTISEMENT
XYZ Limited Liability Company
Operating Agreement
THIS OPERATING AGREEMENT is made and entered into this 30th day of
August, 2014, by and between the Members whose signatures appear on the signature
page hereof.
WITNESSETH:
WHEREAS, the Parties in consideration of the mutual covenants herein, have
formed XYZ Limited Liability Company (hereinafter "the Company").
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Definitions used in this Operating Agreement shall have the respective meanings
set forth below unless otherwise expressly provided:
1.1
"Assigning Member" means a Member who has assigned his or her
Membership Interest.
1.2
"Capital Accounts," as of any given date shall mean the Capital
Contribution to the Company by a Member as adjusted up to such date. Upon a
dissolution event, as determined in this Operating Agreement, capital will be
determined as of the date of the dissolution event. If Capital Accounts are determined
and maintained through the date of the dissolution event in accordance with the Capital
Accounting rules of §1.704-1(b)(2)(iv) of the Income Tax Regulations, then capital
determined as of the date of the dissolution event represents the Capital Account
balances determined on that date.
1.3
"Capital Contribution" shall mean any contribution to the capital of the
Company in cash or property by a Member whenever made.
1.4
"Company" means the XYZ Limited Liability Company, a Limited
Liability company created under the State of Utah.
1.5
"Distributable Cash" shall mean all cash, revenues and funds received by
the Company from Company operations, less the sum of the following to the extent
1
XYZ Limited Liability Company
Operating Agreement
THIS OPERATING AGREEMENT is made and entered into this 30th day of
August, 2014, by and between the Members whose signatures appear on the signature
page hereof.
WITNESSETH:
WHEREAS, the Parties in consideration of the mutual covenants herein, have
formed XYZ Limited Liability Company (hereinafter "the Company").
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Definitions used in this Operating Agreement shall have the respective meanings
set forth below unless otherwise expressly provided:
1.1
"Assigning Member" means a Member who has assigned his or her
Membership Interest.
1.2
"Capital Accounts," as of any given date shall mean the Capital
Contribution to the Company by a Member as adjusted up to such date. Upon a
dissolution event, as determined in this Operating Agreement, capital will be
determined as of the date of the dissolution event. If Capital Accounts are determined
and maintained through the date of the dissolution event in accordance with the Capital
Accounting rules of §1.704-1(b)(2)(iv) of the Income Tax Regulations, then capital
determined as of the date of the dissolution event represents the Capital Account
balances determined on that date.
1.3
"Capital Contribution" shall mean any contribution to the capital of the
Company in cash or property by a Member whenever made.
1.4
"Company" means the XYZ Limited Liability Company, a Limited
Liability company created under the State of Utah.
1.5
"Distributable Cash" shall mean all cash, revenues and funds received by
the Company from Company operations, less the sum of the following to the extent
1
paid or set aside by the Company: (i) all principal and interest payments on
indebtedness of the Company and all other sums paid to lenders; (ii) all cash
expenditures incurred in the normal operation of the Company's business; and (iii) such
reserves as the Member - Managers deem reasonably necessary for the proper operation
of the Company's business.
1.6
"Manager" shall mean one or more Managers, elected by the Members.
References to the Manager in the singular or as him, her, it, itself, or other like
references shall also, where the context so requires, be deemed to include the plural or
the masculine or feminine reference, as the case may be. References to the Manager in
the plural shall, where the context so requires, be deemed to include the singular, or the
masculine or feminine reference, as the case may be.
1.7
"Majority Interest" shall mean one or more interests of Members which in
aggregate exceed fifty percent (50%) of all interests held in the Company.
1.8
"Member" shall mean each of the parties who executes this Operating
Agreement or its counterpart as a Member and each of the parties who may hereafter
become Members. A Person is a Member immediately upon the purchase or other
acquisition by such Person of an interest, such Person shall have all the rights of a
Member with respect to such purchased or otherwise acquired interest.
1.9
"Membership Interest" shall mean a Member's entire interest in the
Company including such Member's economic and participatory interest.
1.10
"Net Income" means the net income of the Company computed in
accordance with generally accepted accounting principles for federal income taxes
under the Internal Revenue Code.
1.11
"Net Profits" and "Net Losses" shall mean the income, gain, loss,
deductions and credits of the Company in the aggregate or separately stated, as
appropriate, determined in accordance with generally accepted accounting principles
employed under the cash method of accounting at the close of each fiscal year on the
Company's tax return filed for federal income tax purposes.
1.12
"Notice"
a.
A writing, delivered by first class mail, addressed to the last address
known to the sender; or
b.
A writing, delivered to the recipient in person.
2
1.13
"Operating Agreement" means this Limited Liability Company Operating
Agreement.
1.14
"Percentage Interest" shall mean for any Member of the Company the
percentage of ownership interest in the Company as set forth in this Operating
Agreement, as may be changed from time to time by the unanimous vote of the
Members or pursuant to the terms hereof.
1.15
"Person" means any individual or entity (partnership, joint venture,
association, corporation, limited liability company, etc.) and the heirs, executors,
administrators, legal representatives, successors, and assigns of such "Person" where the
context so permits.
1.16
"Property" means anything of value.
1.17
"Profits," upon a dissolution event as determined in this Operating
Agreement, are determined and allocated based on any reasonable estimate of profits
from the date of the dissolution event to the projected termination of the Company,
taking into account present and future allocations of profits under the Company
agreement that is in effect as of the date of the dissolution event.
1.18
"State" means the state in which the XYZ Limited Liability Company is
formed, unless indicated otherwise.
ARTICLE II
NAME, PLACE, PURPOSE, AND DURATION
2.1.
Formation: The Parties have formed a Limited Liability Company
pursuant to the Limited Liability Company Act of the State of Utah ("the Act"). The
Members have executed and caused to be filed the Articles of Organization as required
under the Act.
2.2.
Name: The business of the Company shall be conducted under the name
of XYZ Limited Liability Company.
2.3.
Purpose: The business and purpose of the Company shall be to engage in
any lawful act or activity in which a Company may engage, according to law and the
formation documents of the Company.
2.4.
Place: The principal place of business of the Company shall be at 279 N.
University Avenue, Provo, UT 84601, or at such other place as the Company Members
3
may from time to time designate.
2.5.
Registered Office and Agent: The Company's initial registered office shall
be at the office of its registered agent. The name of its initial registered agent shall be
Lee R. Phillips located at 279 N. University Avenue, Provo, UT 84601. The registered
office and registered agent may be changed by filing the address of the new registered
office and/or the name of the new registered agent with the State pursuant to the Act.
2.6.
Term: The Limited Liability Company shall commence on the date first
above written and shall continue for twenty (20) years, unless sooner terminated by law
or as herein provided.
2.7.
Amendments: This Operating Agreement may be amended upon the
unanimous vote of the Members. Each Member shall receive written Notice of any
amendment within thirty (30) days following the amendment.
ARTICLE III
RIGHTS AND DUTIES OF MANAGERS
3.1
Management. The Company shall be managed by the Managers, who
shall be elected to direct, manage and control the business of the Company. Except for
situations in which the approval of the Members is expressly required by this Operating
Agreement or by non-waivable provisions of the Act, the Managers shall have full and
complete authority, power and discretion to manage and control the business, affairs
and properties of the Company, to make all decisions regarding those matters and to
perform any and all other acts or activities customary or incident to the management of
the Company's business.
[or]
3.1
Management. The Company shall be managed by the Member-Managers,
who shall be elected to direct, manage and control the business of the Company. Except
for situations in which the approval of the Members is expressly required by this
Operating Agreement or by non-waivable provisions of the Act, the Member-Managers
shall have full and complete authority, power and discretion to manage and control the
business, affairs and properties of the Company, to make all decisions regarding those
matters and to perform any and all other acts or activities customary or incident to the
management of the Company's business. The Member-Managers shall herein be
referred to interchangeably as Member-Managers or simply as Managers.
[The first provision is for use when the Company shall be Manager-Managed. The second
4
provision is for use when the Company shall be Member-Managed.]
3.2
Number, Tenure and Qualifications. The Company shall initially have
two (2) Managers (hereinafter referred to as Managers) elected by the Members. A
Manager's right to act as a Manager shall terminate upon the earlier of the sale by
Manager of its entire Membership Interest, or upon such Manager's resignation or
termination by majority vote of the Members. Upon the resignation or termination of a
Manager's right to act as a Manager, Members shall have the right to appoint a new
Manager. The Managers and their addresses are as follows:
John P. Smith
Joseph R. Doe
277 N. University Avenue
275 N. University Avenue
Provo, UT 84601
Provo, UT 84601
[or]
3.2
Number, Tenure and Qualifications. The Company shall initially have
two (2) Managers (hereinafter referred to as Managers) elected by the Members. A
Manager's right to act as a Manager shall terminate upon the earlier of the Manager's
resignation or termination by unanimous vote of the Members. Upon the resignation or
termination of a Manager's right to act as a Manager, Members shall have the right to
appoint a new Manager. The Managers and their addresses are as follows:
John P. Smith
Joseph R. Doe
277 N. University Avenue
275 N. University Avenue
Provo, UT 84601
Provo, UT 84601
[The first provision is for use when business partners come together to form an LLC. This allows
the Members more control over the LLC, but makes the LLC more at risk for a successful
charging order attack. The second provision offers the Manager the most control, making the
LLC less at risk in the event of a charging order attack, but offers the Members little control over
what the Manager does. In the case of a husband and wife or family held LLC, the protection of
the second provision likely outweighs any downside.]
3.3
Duties and Authority of Managers. Subject to the restrictions upon
Managers under this Operating Agreement, Managers may exercise any powers
necessary to provide all needed services with respect to the operation and management
of the Company, including, without limitation, those referenced below:
a.
To obtain, sell, convey, mortgage, encumber, lease, exchange, pledge,
partition, plat, subdivide, improve, repair, surrender, abandon or otherwise deal
5

Download Sample Xyz Limited Liability Company Operating Agreement

319 times
Rate
4.5(4.5 / 5) 19 votes
ADVERTISEMENT