"Limited Liability Company Operating Agreement Template"

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OPERATING AGREEMENT
OF
____________________________________________
Article I - Organization
Section A - Formation and Qualification
The members have formed a Limited-Liability Company (the “Company”) in the state of
__________ by filing Articles of Organization with the _____________________________.
Section B - Name
The name of the Company shall be_________________________________________. The
business of the Company may be conducted under that name or, in compliance with
applicable laws, any other name that the Company deems appropriate.
Section C - Principle Office
The principal office of the Company shall be at such place or places of business within or
without the state of ____________________ as the Company may determine.
Section D - Governing Law
This Agreement shall be governed by and interpreted in accordance with the laws of the
state of _______________________. The rights and liabilities of the Members shall be
determined pursuant to the laws of the state of _________________________ and this
Agreement. To the extent that any provision of this Agreement is inconsistent with the law,
this Agreement shall govern to the extent permitted by law.
Section E - Term
The term of the Company commenced on the filing of the Articles of Organization and
shall be perpetual / for a duration of __________ years (choose one).
Section F - Registered Agent & Office
The Company shall continuously maintain a registered agent in the state of
_____________________ as required by law. The registered agent and office of the
Company shall be as stated in the Articles of Organization or any amendment thereof. The
registered agent and/or office may be changed from time to time by a resolution of the
Members of the Company.
OPERATING AGREEMENT
OF
____________________________________________
Article I - Organization
Section A - Formation and Qualification
The members have formed a Limited-Liability Company (the “Company”) in the state of
__________ by filing Articles of Organization with the _____________________________.
Section B - Name
The name of the Company shall be_________________________________________. The
business of the Company may be conducted under that name or, in compliance with
applicable laws, any other name that the Company deems appropriate.
Section C - Principle Office
The principal office of the Company shall be at such place or places of business within or
without the state of ____________________ as the Company may determine.
Section D - Governing Law
This Agreement shall be governed by and interpreted in accordance with the laws of the
state of _______________________. The rights and liabilities of the Members shall be
determined pursuant to the laws of the state of _________________________ and this
Agreement. To the extent that any provision of this Agreement is inconsistent with the law,
this Agreement shall govern to the extent permitted by law.
Section E - Term
The term of the Company commenced on the filing of the Articles of Organization and
shall be perpetual / for a duration of __________ years (choose one).
Section F - Registered Agent & Office
The Company shall continuously maintain a registered agent in the state of
_____________________ as required by law. The registered agent and office of the
Company shall be as stated in the Articles of Organization or any amendment thereof. The
registered agent and/or office may be changed from time to time by a resolution of the
Members of the Company.
Section G - Purpose of the Company
The purpose of the Company is to engage in all lawful activities, including, but not limited
to the following: ____________________________________________________________
__________________________________________________________________________.
Article I – Membership Interests
Section A – Initial Members of the Company
The initial Members of the Company are the Members who are identified in Exhibit A
(attached).
Section B - Percentage of Ownership
A member’s ownership of the Company is the total of his Voting Shares and Nonvoting Shares,
together with all of the rights that arise from the ownership of such shares. The Percentage of
Ownership (“Ownership Percentage”) shall be calculated by adding together that Member’s
membership shares (Voting and Nonvoting) and then dividing this sum by the total of all of the
Member’s membership shares (Voting and Nonvoting).
The initial Ownership, Percentage Ownership and Percentage Voting Interests in the Company
of each Member are identified in Exhibit A.
Section C - Membership Classifications
The Company shall issue Class A Voting Membership Shares (“Voting Shares”) to the members
who vote (the “Voting Members”). The Voting Members shall have the right to vote on all
company matters, as outlined in this Agreement.
The Company may issue Class B Nonvoting Membership Shares (“Nonvoting Shares”). Nonvoting
shares hold no voting rights whatsoever, and members who only own Nonvoting Shares will
have no right to vote on any matters. Members may hold both Voting Shares and Nonvoting
Shares.
Section D - Management by Members
(Only include this provision if Member-Managed)
The Voting Members shall manage the Company. In their capacity as Managers, they shall have
the right to make decisions and vote upon all matters as specified in this Agreement, in
proportion to their respective Ownership Percentage of the Company. Voting Members need
not identify whether or not they are acting as a Member or a Manager when they take action.
Nonvoting Members have no right to participate in the management of the Company, nor vote
on any matters of the Company. No Nonvoting Member shall take any action or enter into any
contract or obligation on behalf of the Company without the prior written consent of all of the
Voting Members. Likewise, no Nonvoting Member shall perform any act that is in any way
pertaining to the Company or its assets.
Section E - New Members
The Voting Members may issue additional Voting Capital or Nonvoting Capital and thereby
admit a new Member or Members, as the case may be, to the Company, only if such new
Member (a) is approved unanimously by the Voting Members; (b) delivers to the Company
his required capital contribution and (c) agrees in writing to be bound by the terms of this
Agreement by becoming a party hereto.
Upon the admission of a new Member to the Company, the capital accounts of all
Members, and the calculations that are based on the capital accounts, shall be adjusted
appropriately.
Section F - Capital Accounts
A separate capital account shall be maintained for each Member. The capital account of
each Member shall be increased by (a) the amount of money contributed to the Company
by the Member, (b) the fair market value of any property contributed to the Company by
the Member, (c) allocations of profit to the Member, (d) The Member’s share of the
increase in the tax basis of Company property, if any, arising out of the recapture of any
tax credit, and (e) Allocations of income or gain to the Member, as provided under this
Agreement.
The capital account of each Member shall be reduced by (a) the amount of any cash and
the fair market value of any property distributed to the Member by the Company (net of
liabilities, secured by such distributed property that such Member is assumed to take), (b)
the amount of expenses or loss allocated to the Member and (c) the Member’s share of
the decrease in the basis of the Company’s property arising from the allowance of a tax
credit.
Section G - Liability of Members
No Member shall be personally responsible for any debts, liabilities or obligations of the Company solely
by reason of being a Member. All debts, obligations and liabilities of the Company, whether by contract
or not, shall belong solely to the Company.
Section H – Transfer and Assignment of Interests
A Member may not sell, assign, transfer or otherwise dispose of all or part of his
Membership Interest in the Company without first making a written offer to sell such
Membership Interests to the other Members or the Company at a mutually agreed upon
price. If the Company or such other Members decline the purchase of the Membership
Interest within thirty (30) days, and the sale or assignment is made and the Members fail
to approve this sale or assignment unanimously then, the purchaser or assignee shall have
no right to vote nor participate in the management of the business or other affairs of the
Company. The purchaser or assignee shall only be entitled to receive the share of the
profits or other compensation by way of income and the return of contributions to which
that Member would otherwise be entitled.
In the event of a Member’s bankruptcy or other involuntary transfer of interest, such as a
creditor obtaining a lien or a charging order against a Member’s interest, this act shall
constitute a material breach of this Agreement by such Member. The creditor or claimant
shall only be considered an Assignee and shall have no right to become a Member or have
rights to participate in the affairs of the company nor have the right to participate as a
Member or Manager in any regard. Said creditor or claimant shall only be entitled to
receive the share of profit and losses, or the return of capital, to which the Member would
otherwise have been entitled.
In the event of a charging order, bankruptcy, lien or other involuntary transfer, the
Members may unanimously elect that the Company purchase all or any part of the
membership shares that are in question. The price shall be equal to one-half (1/2) of the
fair market value of such shares. Written notice of such purchase shall be provided to the
creditor or claimant within sixty (60) days.
Article IV - Allocations and Profit Distributions
Section A - Allocations of Profits and Losses
The profits and losses of the Company shall be allocated to the Members in proportion with
their individual ownership percentages. Should the Company wish to make special allocations,
they must comply with Section 704 of the Internal Revenue Code and the corresponding
regulations.
Section B – Distributions
Subject to applicable law and limitations elsewhere in this Agreement, the members may
elect, to make a distribution of assets at any time that would not be prohibited under by
law or under this Agreement. The amount and timing of all distributions of cash, or other
assets, shall be determined by a unanimous vote of the Voting Members. All such
Distributions shall be made to those Members who, according to the books and records of
the Company, were the holders of record of Membership Interests on the date of
Distribution.
The Voting Members may base a determination that a distribution of cash may be made
on a balance sheet, profit and loss statement, cash flow statement of the Company or
other relevant information. Neither the Company nor any Members shall be liable for the
making of any Distributions in accordance with the provisions of this section.
No Member has the right to demand and receive any distribution from the Company in any
form other than money. No Member may be compelled to accept from the Company a
distribution of any asset in kind in lieu of a proportionate distribution of money being made to
other Members except on the dissolution and winding up of the Company.
Article V - Meetings & Voting
Section A - Notice of Meetings
If any action on the part of the Members is to be proposed at the meeting, then written
notice of the meeting must be provided to each Member entitled to vote not less than ten
(10) days or more than sixty (60) days prior to the meeting. Notice may be given in
person, by fax, by first class mail, or by any other written communication, charges prepaid,
at the Members’ address listed in Exhibit A, attached. The notice shall contain the date,
time and place of the meeting and a statement of the general nature of this business to be
transacted there.
Section B – Meetings
The Company shall have no predetermined annual or regular meetings of the Members.
However, any Member or Members with a collective ownership percentage of 20% or
more may call a meeting of the Members at any time.