"Limited Liability Company Operating Agreement Template" - Delaware

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LLC Operating Agreement For ____________, LLC
A Delaware Limited Liability Company
This Operating Agreement (the "Agreement") is made effective as of ______, by and among and
those Persons (the “Members”) identified in Exhibit A.
In consideration of the mutual covenants and conditions herein, the Members agree as follows:
ARTICLE I
ORGANIZATION
1.1 Formation and Qualification. The Members have formed a limited liability company
(the “Company”) under the Delaware Limited Liability Company Act (currently Chapter 18 of Title 6
of the Delaware Code) (the "Act") by filing Articles of Organization with the Delaware Secretary of
State.
1.2 Governing Law. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Delaware, including the Delaware Limited Liability
Company Act, (the "Act") as amended from time to time, without regard to Delaware's conflicts of
laws principles. The rights and liabilities of the Members shall be determined pursuant to the Act and
this Agreement. To the extent that any provision of this Agreement is inconsistent with any
provision of the Act, this Agreement shall govern to the extent permitted by the Act.
1.3 Name. The name of the Company shall be " ___________, LLC." The business of the
Company may be conducted under that name or, on compliance with applicable laws, any other
name that the Voting Members deem appropriate or advisable. The Voting Members on behalf of
the Company shall file any certificates, articles, fictitious business name statements and the like, and
any amendments and supplements thereto, as the voting Members consider appropriate or advisable.
1.4 Term. The term of the Company commenced on the filing of the Articles of
Organization and shall be perpetual unless dissolved as provided in this Agreement.
1.5 Office and Agent. The principal office of the Company shall be at such place or places
of business within or without the State of Delaware as the Voting Members may determine. The
Company shall continuously maintain a registered agent in the State of Delaware as required by the
Act. The registered agent shall be as stated in the Certificate or as otherwise determined by the
Voting Members.
1.6 Purpose of Company. The purpose of the Company is to engage in all lawful activities,
including, but not limited to the following activities:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
ARTICLE II
MEMBERSHIP INTERTESTS, VOTING AND MANAGEMENT
Section 2.1 Initial Members. The initial Members of the Company are the Members who
are identified in Exhibit A.
Section 2.2 Classification of Membership Interests. The Company shall issue Class A
Voting Capital (“Voting Capital”), to the Voting Members (the “Voting Members”). The Voting
LLC Operating Agreement For ____________, LLC
A Delaware Limited Liability Company
This Operating Agreement (the "Agreement") is made effective as of ______, by and among and
those Persons (the “Members”) identified in Exhibit A.
In consideration of the mutual covenants and conditions herein, the Members agree as follows:
ARTICLE I
ORGANIZATION
1.1 Formation and Qualification. The Members have formed a limited liability company
(the “Company”) under the Delaware Limited Liability Company Act (currently Chapter 18 of Title 6
of the Delaware Code) (the "Act") by filing Articles of Organization with the Delaware Secretary of
State.
1.2 Governing Law. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Delaware, including the Delaware Limited Liability
Company Act, (the "Act") as amended from time to time, without regard to Delaware's conflicts of
laws principles. The rights and liabilities of the Members shall be determined pursuant to the Act and
this Agreement. To the extent that any provision of this Agreement is inconsistent with any
provision of the Act, this Agreement shall govern to the extent permitted by the Act.
1.3 Name. The name of the Company shall be " ___________, LLC." The business of the
Company may be conducted under that name or, on compliance with applicable laws, any other
name that the Voting Members deem appropriate or advisable. The Voting Members on behalf of
the Company shall file any certificates, articles, fictitious business name statements and the like, and
any amendments and supplements thereto, as the voting Members consider appropriate or advisable.
1.4 Term. The term of the Company commenced on the filing of the Articles of
Organization and shall be perpetual unless dissolved as provided in this Agreement.
1.5 Office and Agent. The principal office of the Company shall be at such place or places
of business within or without the State of Delaware as the Voting Members may determine. The
Company shall continuously maintain a registered agent in the State of Delaware as required by the
Act. The registered agent shall be as stated in the Certificate or as otherwise determined by the
Voting Members.
1.6 Purpose of Company. The purpose of the Company is to engage in all lawful activities,
including, but not limited to the following activities:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
ARTICLE II
MEMBERSHIP INTERTESTS, VOTING AND MANAGEMENT
Section 2.1 Initial Members. The initial Members of the Company are the Members who
are identified in Exhibit A.
Section 2.2 Classification of Membership Interests. The Company shall issue Class A
Voting Capital (“Voting Capital”), to the Voting Members (the “Voting Members”). The Voting
Members shall have the right to vote upon all matters upon which Members have the right to vote
under the Act or under this Agreement, in proportion to their respective Percentage Voting Interest
("Percentage Voting Interest") in the Company. The Percentage Voting Interest of a Voting Member
shall be the percentage that is derived when the Member’s Voting Capital account is divided by the
total of all of the Voting Capital accounts.
The Company may issue Class B, Nonvoting Capital (“Nonvoting Capital”). Members may own
interests in both Voting Capital and Nonvoting Capital. Members who own interests only in
Nonvoting Capital (“Nonvoting Members”) shall have no right to vote upon any matters.
Notwithstanding, to the extent otherwise permitted by this agreement, a Nonvoting Member shall
have the right to file or participate in a mediation or an arbitration action, and shall be bound by an
amendment to this agreement only if he signs such amendment.
Section 2.3 Percentage Ownership and Voting Interests. A Member’s Ownership
Interest (“Ownership Interest”) is the total of his interests in Voting Capital and Nonvoting Capital,
together with all of the rights, as a Member or Manager of the Company, that arise from such
interests. The Percentage Ownership Interest ("Percentage Ownership Interest") of a Member shall
be calculated by adding together that Member’s Voting Capital Account and Nonvoting Capital
Account, and then dividing this sum by the total of all of the Member’s Voting Capital and
Nonvoting Capital Accounts.
The Members shall have the initial Ownership, Percentage Ownership and Percentage Voting
Interests in the Company that are identified in Exhibit A, immediately following the making of the
capital contributions set forth therein.
Section 2.4 Management by Voting Members. The Voting Members shall manage the
Company and shall have the right to vote, in their capacity as Managers, upon all matters upon which
Managers have the right to vote under the Act or under this Agreement, in proportion to their
respective Percentage Voting Interests in the Company. Voting Members need not identify whether
they are acting in their capacity as Members or Managers when they act.
The Nonvoting Members shall have no right to vote or otherwise participate in the management of
the Company. No Nonvoting Member shall, without the prior written consent of all of the Voting
Members, take any action on behalf of, or in the name of, the Company, or enter into any contract,
agreement, commitment or obligation binding upon the Company, or perform any act in any way
relating to the Company or the Company's assets.
Section 2.5 Voting. Except as otherwise provided or permitted by this Agreement, Voting
Members shall in all cases, in their capacity as Members or Managers of the Company, act
collectively, and, unless otherwise specified or permitted by this Agreement, unanimously. Except as
otherwise provided or permitted by this Agreement, no Voting Member acting individually, in his
capacity as a Member or Manager of the Company, shall have any power or authority to sign for,
bind or act on behalf of the Company in any way, to pledge the Company's credit, or to render the
Company liable for any purpose.
Unless the context requires otherwise, in this Agreement, the terms “Member” or “Members,”
without the qualifiers “Voting” or “Nonvoting,” refer to the Voting and Nonvoting Members
collectively; and the terms “Manager” or “Managers” refers to the Voting Members.
Section 2.6 Liability of Members. All debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of
the Company, and no Member shall be obligated personally for any such debt, obligation or liability
of the Company solely by reason of being a Member.
Section 2.7 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 (i) is approved unanimously by the Voting Members; (ii) delivers
to the Company his required capital contribution; (iii) agrees in writing to be bound by the terms of
this Agreement by becoming a party hereto; and (iv) delivers such additional documentation as the
Voting Members shall reasonably require to so admit such new Member to the Company.
Upon the admission of a new Member or Members, as the case may be, to the Company, the capital
accounts of Members, and the calculations that are based on the capital accounts, shall be adjusted
appropriately.
ARTICLE III
CAPITAL ACCOUNTS
3.1 Initial Capital Contributions. Each original Member to this Agreement shall make an
initial Capital Contribution to the Company in accordance with Exhibit A, at the time of each
Member's execution of this Agreement.
3.2 Capital Accounts. A separate capital account shall be maintained for each Member’s
ownership interest in Class A Voting Capital (the "Voting Capital Account") and Class B Nonvoting
Capital (the "Nonvoting Capital Account").
The capital account of each Member shall be increased by (i) the amount of any cash and the fair
market value of any property contributed to the Company by such Member (net of any liability
secured by such contributed property that the Company is considered to assume or take subject to),
(ii) the amount of income or profits allocated to such Member.
The capital account or accounts of each Member shall be reduced by (i) 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 the Member is considered to assume or take subject to on account of his
ownership interest), (ii) the amount of expenses or loss allocated to the Member. If any property other
than cash is distributed to a Member, the Capital Accounts of the Members shall be adjusted as if the
property had instead been sold by the Company for a price equal to its fair market value and the proceeds
distributed.
Guaranteed Payments (“Guaranteed Payments”) for salary, wages, fees, payments on loans, rents,
etc., may be made to the Members. Guaranteed Payments shall not be deemed to be distributions to
the Members on account of their Ownership Interests, and shall not be charged to the Members’
capital accounts.
No Member shall be obligated to restore any negative balance in his Capital Account. No Member
shall be compensated for any positive balance in his Capital Account except as otherwise expressly
provided herein. The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with the provisions of Regulations Section
1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Regulations. The
Members agree that the initial Capital Accounts of the Members on the date hereof are as set forth in
Exhibit A.
3.3 Additional Contributions. If, at any time or times hereafter, the Voting Members
shall determine that additional capital is required by the Company, the Voting Members shall
determine the amount of such additional capital and the anticipated time such additional capital
will be required; whether such additional capital shall be provided by the Members by way of
additional Capital Contributions or by way of loans from Members; whether additional Capital
Contributions, if any, shall be of in the form of Class A Voting Capital or Class B Nonvoting
Capital. No Member shall be obligated, at any time, to guarantee or otherwise assume or become
liable for any obligations of the Company or to make any additional Capital Contributions
advances or loans to the Company, unless such obligations are specifically accepted and agreed to
by such Member.
In the event that additional Class A Voting Capital is to be issued, the Voting Members who exist
immediately prior to such issuance shall be provided written notice of this intent, and shall be offered
in such notice the opportunity to make additional capital contributions in Class A Voting Capital in
proportion to their respective Percentage Voting Interests; provided that this right, if not exercised
within ninety (90) days after such notice is received, shall expire automatically, unless this period is
extended by the Voting Members. Any loans or additional capital contributions shall be voluntary.
The capital accounts of the Members, and the calculations that are based on the capital accounts,
shall be adjusted appropriately to reflect any transfer of an interest in the Company, distributions, or
additional capital contributions.
ARTICLE IV
MANNER OF ACTING
4.1 Officers and Agents of the Company. The Voting Members may authorize any
Member or Members of the Company, or other individuals or entities, whether or not a Member, to
take action on behalf of the Company, as the Voting Members deem appropriate. Any Member may
lend money to and receive loans from the Company, act as an employee, independent contractor,
lessee, lessor, or surety of the company, and transact any business with the Company that could be
carried out by someone who is not a Member; and the Company may receive from or pay to any
Member remuneration, in the form of wages, salary, fees, rent, interest, or any form that the Voting
Members deem appropriate.
The Voting Members may appoint officers of the Company who, to the extent provided by the
Voting Members, may have and may exercise all the powers and authority of the Members or
Managers in the conduct of the business and affairs of the Company. The officers of the Company
may consist of a President, a Treasurer, a Secretary, or other officers or agents as may be elected or
appointed by the Voting Members. The Voting Members may provide rules for the appointment,
removal, supervision and compensation of such officers, the scope of their authority, and any other
matters relevant to the positions. The officers shall act in the name of the Company and shall
supervise its operation, within the scope of their authority, under the direction and management of
the Voting Members.
Any action taken by a duly authorized officer, pursuant to authority granted by the Voting Members
in accordance with this Agreement, shall constitute the act of and serve to bind the Company, and
each Member hereby agrees neither to dispute such action nor the obligation of the Company created
thereby.
4.2 Meetings of Voting Members. No regular, annual, special or other meetings of Voting
Members are required to be held. Any action that may be taken at a meeting of Voting Members may
be taken without a meeting by written consent in accordance with the Act. Meetings of the Voting
Members, for any purpose or purposes, may be called at any time by a majority of the Voting
Members, or by the President of the Company, if any. The Voting Members may designate any place
as the place of meeting for any meeting of the Voting Members. If no designation is made, the place
of meeting shall be the principal place of business of the Company.
4.3 Notice of Meetings. In the event that a meeting of the Voting Members is called,
written notice stating the place, day and hour of the meeting and the purpose or purposes for which
the meeting is called shall be delivered not less than five nor more than sixty business days before the
date of the meeting unless otherwise provided, either personally or by mail, by or at the direction of
the Members calling the meeting, to each Voting Member. Notice of a meeting need not be given to
any Voting Member who signs a waiver of notice or a consent to holding the meeting or an approval
of the minutes thereof, whether before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to such Voting Member.
4.4 Record Date. For the purpose of determining Voting Members entitled to notice of or
to vote at any meeting of Voting Members or any adjournment thereof, the date on which notice of
the meeting is provided shall be the record date for such determination of the Voting Members.
When a determination of Voting Members has been made as provided in this Section, such
determination shall apply to any adjournment thereof.
4.5 Quorum. Members holding at least 67% of the Voting Capital in the Company
represented in person, by telephonic participation, or by proxy, shall constitute a quorum at any
meeting of Voting Members. In the absence of a quorum at any such meeting, a majority of the
Voting Members so represented may adjourn the meeting from time to time for a period not to
exceed sixty days without further notice. However, if the adjournment is for more than sixty days, or
if after the adjournment a new record date is fixed for another meeting, a notice of the adjourned
meeting shall be given to each Voting Member. The Voting Members present at a duly organized
meeting may continue to transact business only as previously provided on the agenda until
adjournment, notwithstanding the withdrawal during such meeting of that number of Voting
Members whose absence would cause less than a quorum.
4.6 Voting. If a quorum is present, a unanimous vote of the Voting Members so
represented shall be the act of the Members or Managers, unless the vote of a lesser proportion or
number is otherwise required by the Act, by the Certificate or by this Agreement.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
5.1 Allocations of Profits and Losses. Profits and Losses, after deducting Guaranteed
Payments, shall be allocated among the Members in proportion to their Percentage Ownership
Interests. Any special allocations necessary to comply with the requirements set forth in Internal
Revenue Code Section 704 and the corresponding Regulations, including, without limitation, the
qualified income offset and minimum gain chargeback provisions contained therein, shall be made if
the Voting Members deem these actions to be appropriate.
5.2 Distributions. Subject to applicable law and any limitations elsewhere in this
Agreement, the Voting Members shall determine the amount and timing of all distributions of cash,
or other assets, by the Company. Except as otherwise provided in this Agreement, all distributions
shall be made to all of the Members, in proportion to their Percentage Ownership Interests. Except
as otherwise provided in this Agreement, the decision as to whether to make distributions shall be
within the sole discretion of the Voting Members.
All such distributions shall be made only to the Members who, according to the books and records
of the Company, are the holders of record on the actual 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 the Members shall incur any liability for making distributions.
5.3 Form of Distribution. 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 VI
TRANSFER AND ASSIGNMENT OF INTERESTS
6.1 Resignation of Membership and Return of Capital. For a period of one (1) year after