"Limited Liability Company Operating Agreement Template" - Texas

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TEXAS LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
___________________________
This Company Agreement of this MANAGER MANAGED LIMITED LIABILITY COMPANY
organized pursuant to Title 3, Chapter 101 of the Texas Business Organizations code, is
entered into and shall become effective as of the Effective Date by and among the Company
and the persons executing this Agreement as Members. It is the Members express intention to
create a limited liability company in accordance with the Act, as currently written or
subsequently amended or redrafted. Therefore, all provisions of this document shall be
construed consistent with the afore described intent of the Members. Accordingly, in
consideration of the conditions contained herein, he/she/they agree as follows:
ARTICLE I
Company Formation
1.1
FORMATION. The Members hereby form a Limited Liability Company
("Company") subject to the provisions of state law as currently in effect as of this
date. Articles of Organization shall be filed with the Secretary of State.
1.2
REGISTERED OFFICE AND AGENT. The name and address of the initial
Texas registered agent for service of process shall be stated in the Texas LLC
Certificate of Formation.
1.3
TERM. The Company shall continue for a perpetual period.
(a) Members whose capital interest as defined in Article 2.2 exceeds 50 percent
vote for dissolution; or
(b) Any event which makes it unlawful for the business of the Company to be
carried on by the Members; or
(c) Any other event causing dissolution of this Limited Liability Company under
applicable state laws.
1.4
CONTINUANCE OF COMPANY. Notwithstanding the provisions of ARTICLE
1.3, in the event of an occurrence described in ARTICLE 1.3(c), if there are at
least one remaining Member(s), said remaining Member)s) shall have the right to
continue the business of the Company
1.5
BUSINESS PURPOSE. The Company shall conduct any and all lawful business
deemed appropriate to execute the company’s objectives.
 
Operating   A greement   -­‐   1  
 
 
 
TEXAS LIMITED LIABILITY COMPANY OPERATING AGREEMENT
FOR
___________________________
This Company Agreement of this MANAGER MANAGED LIMITED LIABILITY COMPANY
organized pursuant to Title 3, Chapter 101 of the Texas Business Organizations code, is
entered into and shall become effective as of the Effective Date by and among the Company
and the persons executing this Agreement as Members. It is the Members express intention to
create a limited liability company in accordance with the Act, as currently written or
subsequently amended or redrafted. Therefore, all provisions of this document shall be
construed consistent with the afore described intent of the Members. Accordingly, in
consideration of the conditions contained herein, he/she/they agree as follows:
ARTICLE I
Company Formation
1.1
FORMATION. The Members hereby form a Limited Liability Company
("Company") subject to the provisions of state law as currently in effect as of this
date. Articles of Organization shall be filed with the Secretary of State.
1.2
REGISTERED OFFICE AND AGENT. The name and address of the initial
Texas registered agent for service of process shall be stated in the Texas LLC
Certificate of Formation.
1.3
TERM. The Company shall continue for a perpetual period.
(a) Members whose capital interest as defined in Article 2.2 exceeds 50 percent
vote for dissolution; or
(b) Any event which makes it unlawful for the business of the Company to be
carried on by the Members; or
(c) Any other event causing dissolution of this Limited Liability Company under
applicable state laws.
1.4
CONTINUANCE OF COMPANY. Notwithstanding the provisions of ARTICLE
1.3, in the event of an occurrence described in ARTICLE 1.3(c), if there are at
least one remaining Member(s), said remaining Member)s) shall have the right to
continue the business of the Company
1.5
BUSINESS PURPOSE. The Company shall conduct any and all lawful business
deemed appropriate to execute the company’s objectives.
 
Operating   A greement   -­‐   1  
 
 
 
1.6
PRINCIPAL PLACE OF BUSINESS. The location of the principal place of
business of the Company shall be as stated in the Texas certificate of formation
or at a location as the Managers select
.
1.7
THE MEMBERS. The name and place of residence of each member are listed
below at Certification of Members. Members are the owners of this company.
1.8
ADMISSION OF ADDITIONAL MEMBERS. Except as otherwise expressly
provided in the Agreement, no additional members may be admitted to the
Company through issuance by the company of a new interest in the Company
without the prior unanimous written consent of the Members.
ARTICLE II
Capital Contributions
2.1
INITIAL CONTRIBUTIONS. The Members initially shall contribute to the
Company capital and the company shall keep record of the amount each
contributed.
2.2
ADDITIONAL CONTRIBUTIONS. Except as provided in ARTICLE 6.2, no
Member shall be obligated to make any additional contribution to the Company's
capital.
ARTICLE III
Profits, Losses and Distributions
3.1
PROFITS/LOSSES. For financial accounting and tax purposes the Company's
net profits or net losses shall be determined on an annual basis and shall be
allocated to the Members in proportion to each Member's relative capital interest
in the Company, and as amended from time to time in accordance with Treasury
Regulation 1.704-1.
3.2
DISTRIBUTIONS. The Members shall determine and distribute available funds
annually or at more frequent intervals as they see fit. Available funds, as referred
to herein, shall mean the net cash of the Company available after appropriate
provision for expenses and liabilities, as determined by the Managers.
Distributions in liquidation of the Company or in liquidation of a Member's interest
shall be made in accordance with the positive capital account balances pursuant
to Treasury Regulation 1.704-l(b)(2)(ii)(b)(2). To the extent a Member shall have
anegative capital account balance, there shall be a qualified income offset, as set
forth in Treasury Regulation 1.704-l(b)(2)(ii)(d).
 
Operating   A greement   -­‐   2  
 
 
 
ARTICLE IV
Management
4.1
MANAGEMENT OF THE BUSINESS. This company shall be manager
managed. The initial elected managers are set forth in the articles of
organization filed with the appropriate State agency. If the appropriate State
agency does not require the Managers names be set for the in the Texas
certificate of formation, or the organizer elects not to set forth the names of the
Managers in the Texas certificate of formation, the Members may elect the
Managers in this agreement in the certification of Managers. Members holding a
majority of the capital interests in the Company may elect Managers as the
Members determine. Managers listed in the Texas certificate of formation and/or
this agreement will serve as the Managers of this company until a meeting of
members is held and new Manager(s) elected.
4.2
MEMBERS. Members shall not take part in the operation of the Company's
affairs, unless they are elected Managers.
4.3
POWERS OF MANAGERS. The Managers, as authorized by Members, will
make decisions as to (a) the sale, development lease or other disposition of the
Company's assets; (b) the purchase or other acquisition of other assets of all
kinds; (c) the management of all or any part of the Company's assets; (d) the
borrowing of money and the granting of security interests in the Company's
assets; (e) the pre-payment, refinancing or extension of any loan affecting the
Company's assets; (f ) the compromise or release of any of the Company's
claims or debts; and, (g) the employment of persons, firms or corporations for the
operation and management of the company's business. In the exercise of their
management powers, the Managers are authorized to execute and deliver (a) all
contracts, conveyances, assignments leases, sub-leases, franchise agreements,
licensing agreements, management contracts and maintenance contracts
covering or affecting the Company's assets; (b) all checks, drafts and other
orders for the payment of the Company's funds; (c) all promissory notes, loans,
security agreements and other similar documents; and, (d) all other instruments
of any other kind relating to the Company's affairs, whether like or unlike the
foregoing.
4.4
NOMINEE. Title to the Company's assets shall be held in the Company's name
or in the name of any nominee that the Managers may designate. The Managers
shall have
power to enter into a nominee agreement with any such person,
and such agreement may contain provisions indemnifying the nominee, except
for his willful misconduct.
 
Operating   A greement   -­‐   3  
 
 
 
4.5
COMPANY INFORMATION. Upon request, the Managers shall supply to any
member information regarding the Company or its activities. Each Member or his
authorized representative shall have access to and may inspect and copy all
books, records and materials in the Manager's possession regarding
the Company or its activities. The exercise of the rights contained in this
ARTICLE 4.6 shall be at the requesting Member's expense.
4.6
EXCULPATION. Any act or omission of the Managers, the effect of which may
cause or result in loss or damage to the Company or the Members if done in
good faith to promote the best interests of the Company, shall not subject the
Managers to any liability to the Members
4.7
INDEMNIFICATION. The Company shall indemnify any person who was or is a
party defendant or is threatened to be made a party defendant, pending or
completed action, suit or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the Company) by reason of
the fact that he is or was a Member of the Company, Manager, employee or
agent of the Company, or is or was serving at the request of the Company, for
instant expenses (including attorney's fees), judgments, fines, and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding if the Members determine that he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of the
Company, and with respect to any criminal action proceeding, has no
reasonable cause to believe his/her conduct was unlawful. The termination of
any action, suit, or proceeding by judgment, order, settlement, conviction, or
upon a plea of "no lo Contendere" or its equivalent, shall not in itself create a
presumption that the person did or did not act in good faith and in a manner
which he reasonably believed to be in the best interest of the Company, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his/her conduct was lawful.
4.8
RECORDS. The Managers shall cause the Company to keep at its principal
place of business or at another location agreeable by the Members, the following:
(a) A current list in alphabetical order of the full name and the last known street
address of each Member;
(b) A copy of the Certificate of Formation and the Company Operating
Agreement and all amendments;
(c) Copies of the Company's federal, state and local income tax returns and
reports, if any, for the three most recent years;
(d) Copies of any financial statements of the limited liability company for the three
most recent years.
 
Operating   A greement   -­‐   4  
 
 
 
ARTICLE V
Compensation
5.1
MANAGEMENT FEE. Any Manager rendering services to the Company shall be
entitled to compensation commensurate with the value of such services as all
members agree upon.
5.2
REIMBURSEMENT. The Company shall reimburse the Managers or Members
for all direct out-of-pocket expenses incurred by them in managing the
Company.
ARTICLE VI
Bookkeeping
6.1
BOOKS. The Managers shall maintain complete and accurate books of account
of the Company's affairs at the Company's principal place of business or at
another location agreeable by the Members. Such books shall be kept on such
method of accounting as the Managers shall select. The company's accounting
period shall be the calendar year.
6.2
MEMBER'S ACCOUNTS. The Managers shall maintain separate capital and
distribution accounts for each member. Each member's capital account shall be
determined and maintained in the manner set forth in Treasury Regulation 1.704-
l(b)(2)(iv) and shall consist of his initial capital contribution increased by:
(a) Any additional capital contribution made by him/her;
(b) Credit balances transferred from his distribution account to his capital
account; and decreased by:
(a) Distributions to him/her in reduction of Company capital;
(b) The Member's share of Company losses if charged to his/her capital account.
6.3
REPORTS. The Managers shall close the books of account after the close of
each calendar year, and shall prepare and send to each member a statement of
such Member's distributive share of income and expense for income tax reporting
purposes.
ARTICLE VII
Transfers
 
Operating   A greement   -­‐   5  
 
 

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