"Operating Agreement Template (Single Member Limited Liability Company)" - California

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Download "Operating Agreement Template (Single Member Limited Liability Company)" - California

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DISCLAIMER
THE FOLLOWING FORM OF OPERATING AGREEMENT HAS BEEN
PREPARED BY AN ATTORNEY LICENSED TO PRACTICE LAW IN CALIFORNIA.
THE PROVISIONS CONFORM TO THE LAWS OF THE STATE OF CALIFORNIA
AND MAY BE USED AS A REFERENCE IN PREPARING AN OPERATING
AGREEMENT FOR A SINGLE-MEMBER LIMITED LIABILITY COMPANY (“LLC”)
FORMED UNDER CALIFORNIA LAW. SUNDOC MAKES NO REPRESENTATION
THAT THIS FORM OPERATING AGREEMENT COMPLIES WITH THE LEGAL
REQUIREMENTS OF ANY JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA.
SUBJECT
TO
CALIFORNIA
LAW,
AN
OPERATING
AGREEMENT
GOVERNS: RELATIONS AMONG THE MEMBERS OF THE LLC; RELATIONS
BETWEEN THE MEMBERS AND THE LLC ITSELF; THE RIGHTS AND DUTIES OF
THE MANAGER (IF ANY) OF THE LLC; THE ACTIVITIES OF THE LLC AND THE
CONDUCT OF THOSE ACTIVITIES; AND THE MEANS FOR AMENDING THE
OPERATING AGREEMENT.
NO SINGLE FORM OF OPERATING AGREEMENT CAN SERVE ALL LLC’S
BECAUSE LLC’S DIFFER FROM ONE ANOTHER AS TO PURPOSE AND
OPERATION.
FOR
THAT
REASON,
USERS
OF
THE
FOLLOWING
OPERATING
AGREEMENT SHOULD CONSULT AN ATTORNEY TO DETERMINE WHAT
PROVISIONS THEY MAY WISH TO ADD, REVISE OR DELETE ENTIRELY.
DISCLAIMER
THE FOLLOWING FORM OF OPERATING AGREEMENT HAS BEEN
PREPARED BY AN ATTORNEY LICENSED TO PRACTICE LAW IN CALIFORNIA.
THE PROVISIONS CONFORM TO THE LAWS OF THE STATE OF CALIFORNIA
AND MAY BE USED AS A REFERENCE IN PREPARING AN OPERATING
AGREEMENT FOR A SINGLE-MEMBER LIMITED LIABILITY COMPANY (“LLC”)
FORMED UNDER CALIFORNIA LAW. SUNDOC MAKES NO REPRESENTATION
THAT THIS FORM OPERATING AGREEMENT COMPLIES WITH THE LEGAL
REQUIREMENTS OF ANY JURISDICTION OTHER THAN THE STATE OF
CALIFORNIA.
SUBJECT
TO
CALIFORNIA
LAW,
AN
OPERATING
AGREEMENT
GOVERNS: RELATIONS AMONG THE MEMBERS OF THE LLC; RELATIONS
BETWEEN THE MEMBERS AND THE LLC ITSELF; THE RIGHTS AND DUTIES OF
THE MANAGER (IF ANY) OF THE LLC; THE ACTIVITIES OF THE LLC AND THE
CONDUCT OF THOSE ACTIVITIES; AND THE MEANS FOR AMENDING THE
OPERATING AGREEMENT.
NO SINGLE FORM OF OPERATING AGREEMENT CAN SERVE ALL LLC’S
BECAUSE LLC’S DIFFER FROM ONE ANOTHER AS TO PURPOSE AND
OPERATION.
FOR
THAT
REASON,
USERS
OF
THE
FOLLOWING
OPERATING
AGREEMENT SHOULD CONSULT AN ATTORNEY TO DETERMINE WHAT
PROVISIONS THEY MAY WISH TO ADD, REVISE OR DELETE ENTIRELY.
OPERATING AGREEMENT
(Single Member Limited Liability Company)
for ______________________[insert name],
a California limited liability company
This
Operating
Agreement
is
made
as
of
_________________[date],
by
_________________ [name] (referred to as the Sole Member) with reference to the following
facts:
A. The Sole Member desires to form a limited liability company (Company) under the
Beverly-Killea Limited Liability Company Act (the Act) (California Corporations Code
§§17100-17656).
B. The Member desires to execute this Operating Agreement in order to form and provide
for the governance of the Company and the conduct of its business.
Now, therefore, the Sole Member declares the following to be the Operating Agreement
of the Company:
ARTICLE I: ARTICLES OF ORGANIZATION
1.1. Promptly following execution of this Agreement, the Sole Member will cause
Articles of Organization, in the form attached to this Agreement as Exhibit _________________
[letter/number], to be filed with the California Secretary of State.
1.2. The name of the Company will be _________________ [name].
1.3. The principal executive office of the Company will be at _________________
[address], California _________________ [zip code], or any other place or places determined
by the Sole Member from time to time.
1.4. The initial agent for service of process on the Company will be _________________
[name]. The Sole Member may from time to time change the Company’s agent for service of
process.
1.5. The Company will be formed for the purposes of engaging in the business of
_________________ [description of business].
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1.6. The term of existence of the Company will commence on the effective date of filing
of Articles of Organization with the California Secretary of State and will continue until
terminated by the provisions of this Agreement or as provided by law.
1.7. The Sole Member will be the manager of the Company.
ARTICLE II: CAPITALIZATION
2.1. The Sole Member will contribute to the capital of the Company the money and
property specified in Exhibit _________________ [letter/number] to this Agreement. The Sole
Member may from time to time and at any time contribute cash or property to the Company as
the Sole Member may determine.
2.2. The Sole Member will not be bound by, or be personally liable for, the expenses,
liabilities, or obligations of the Company except as otherwise provided in the Act or in this
Agreement.
ARTICLE III: ALLOCATIONS AND DISTRIBUTIONS
3.1. If any membership interest, or part of an interest, is assigned during any fiscal year in
compliance with the provisions of this Article III, profits, losses, each item thereof, and all other
items attributable to the membership interest for that fiscal year will be divided and allocated
between the transferor and the transferee by taking into account their varying membership
interests during the period in accordance with IRC §706(d), using any convention permitted by
law selected by the Sole Member. All distributions on or before the date of the assignment will
be made to the transferor, and all distributions thereafter will be made to the transferee. Solely
for purposes of making the allocations and distributions, the Company will recognize the
assignment not later than the end of the calendar month during which the assignment occurs.
Neither the Company nor the Sole Member will incur any liability for making allocations and
distributions in accordance with the provisions of this Section 3.1.
3.2. All cash resulting from the operations of the Company will be distributed to the Sole
Member at such times as the Sole Member deems appropriate.
ARTICLE IV: MANAGEMENT
4.1. The business of the Company will be managed by the Sole Member. The Sole
Member may appoint one or more nonmembers as co-managers or may resign as manager at any
time and appoint a nonmember as the manager of the Company on such terms and conditions as
the Sole Member and the manager may agree.
4.2. The Company may have a President who may, but need not, be the Sole Member.
The Sole Member may provide for additional officers of the Company and may alter the powers,
duties, and compensation of the President and of any other officer.
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4.3. All Company assets, whether real or personal, will be held in the name of the
Company.
4.4. All Company funds will be deposited in one or more accounts with one or more
recognized financial institutions in the name of the Company, at locations determined by the
Sole Member. Withdrawal from those accounts will require the signature of the person or
persons designated by the Sole Member.
ARTICLE V: ACCOUNTS AND RECORDS
5.1. Complete books of account of the Company’s business, in which each Company
transaction will be fully and accurately entered, will be kept at the Company’s principal
executive office.
5.2. Financial books and records of the Company will be kept on the cash method of
accounting. A balance sheet and income statement of the Company will be prepared promptly
following the close of each fiscal year in a manner appropriate to and adequate for the
Company’s business and for carrying out the provisions of this Agreement. The fiscal year of the
Company will be January 1 through December 31.
5.3. At all times during the Company’s term of existence, and beyond that term if the
Sole Member deems it necessary, the Sole Member will keep or cause to be kept the books of
account referred to in Section 5.2, and the following:
(a) A current list of the full name and last known business or residence address of
the Sole Member, together with the capital contributions and the share in profits and losses of the
Sole Member;
(b) A copy of the Articles of Organization, as amended;
(c) Copies of the Company’s federal, state, and local income tax or information
returns and reports, if any, for the six most recent taxable years;
(d) Executed counterparts of this Agreement, as amended;
(e) Any powers of attorney under which the Articles of Organization or any
amendments to them were executed;
(f) Financial statements of the Company for the six most recent fiscal years; and
(g) The books and records of the Company as they relate to the Company’s
internal affairs for the current and past four fiscal years.
ARTICLE VI: RESTRICTIONS ON TRANSFER OF MEMBERSHIP INTEREST
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6.1. The Sole Member will not transfer any part of the Sole Member’s membership
interest in the Company. Notwithstanding any other provision of this Agreement to the contrary,
the Sole Member may transfer all or any portion of _________________ [his/her] membership
interest to any revocable trust created for the benefit of the Sole Member, or any combination
between or among the Sole Member, the Sole Member’s spouse or domestic partner, and the
Sole Member’s issue. A transfer of the Sole Member’s entire beneficial interest in the trust will
be deemed a transfer of _________________ [his/her] membership interest in the Company.
ARTICLE VII: DISSOLUTION AND WINDING UP
7.1. The Company will be dissolved on the first to occur of the following events:
(a) The decision of the Sole Member to dissolve the Company.
(b) The sale or other disposition of substantially all of the Company’s assets.
(c) Entry of a decree of judicial dissolution under California Corporations Code
§17351.
7.2. On the dissolution of the Company, it will engage in no further business other than
that necessary to wind up its business and affairs. The Sole Member will wind up the affairs of
the Company and give written Notice of the commencement of winding up by mail to all known
creditors and claimants against the Company whose addresses appear in the records of the
Company. After paying or adequately providing for the payment of all known debts of the
Company (except debts owing to the Sole Member), the remaining assets of the Company will be
distributed or applied in the following order of priority:
(a) To pay the expenses of liquidation.
(b) To repay outstanding loans to the Sole Member.
(c) To the Sole Member.
ARTICLE VIII: GENERAL PROVISIONS
8.1. This Agreement constitutes the whole and entire agreement with respect to the
subject matter of this Agreement.
8.2. This Agreement will be construed and enforced in accordance with the laws of the
state of California. If any provision of this Agreement is determined by any court of competent
jurisdiction or arbitrator to be invalid, illegal, or unenforceable to any extent, that provision will,
if possible, be construed as though more narrowly drawn, if a narrower construction would avoid
that invalidity, illegality, or unenforceability or, if that is not possible, that provision will, to the
extent of that invalidity, illegality, or unenforceability, be severed, and the remaining provisions
of this Agreement will remain in effect.
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