"Limited Liability Company Operating Agreement Template" - Oklahoma

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Download "Limited Liability Company Operating Agreement Template" - Oklahoma

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LIMITED LIABILITY COMPANY OPERATING AGREEMENT
_______________________, LLC
A MemberManaged Limited Liability Company
OPERATING AGREEMENT
THIS OPERATING AGREEMENT is made and entered into effective __________________,
20_____, by and among:
__________________________________________________________________________
_________________________________________________________________________
[list the full legal names of the LLC members] (collectively referred to in this agreement as the
"Members").
SECTION 1
THE LIMITED LIABILITY COMPANY
1.1 Formation. Effective __________________, 20_____, the Members form a limited
liability company under the name _______________________________________,
L.L.C. (the "Company") on the terms and conditions in this Operating Agreement (the
"Agreement") and pursuant to the Limited Liability Company Act of the State of
Oklahoma (the "Act"). The Members agree to file with the appropriate agency within the
State of Oklahoma charged with processing and maintaining such records all
documentation required for the formation of the Company. The rights and obligations of
the parties are as provided in the Act except as otherwise expressly provided in this
Agreement.
1.2 Name. The business of the Company will be conducted under the name
_______________________________________, L.L.C., or such other name upon
which the Members may unanimously may agree.
1.3 Purpose. The purpose of the Company is to engage in any lawful act or activity for which
a Limited Liability Company may be formed within the State of Oklahoma.
1.4 Office. The Company will maintain its principal business office within the State of
Oklahoma at the following address:
_____________________________________________________________________.
1.5 Registered Agent. ____________________________________________ is the
Company's initial registered agent in the State of Oklahoma, and the registered office is
_____________________________________________________________________.
1.6 Term. The term of the Company commences on _____________________ [date] and
shall continue perpetually unless sooner terminated as provided in this Agreement.
1.7 Names and Addresses of Members. The Members' names and addresses are attached
as Schedule 1 to this Agreement.
1.8 Admission of Additional Members. Except as otherwise expressly provided in this
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.
SECTION 2
CAPITAL CONTRIBUTIONS
2.1 Initial Contributions. The Members initially shall contribute to the Company capital as
described in Schedule 2 attached to this Agreement.
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
_______________________, LLC
A MemberManaged Limited Liability Company
OPERATING AGREEMENT
THIS OPERATING AGREEMENT is made and entered into effective __________________,
20_____, by and among:
__________________________________________________________________________
_________________________________________________________________________
[list the full legal names of the LLC members] (collectively referred to in this agreement as the
"Members").
SECTION 1
THE LIMITED LIABILITY COMPANY
1.1 Formation. Effective __________________, 20_____, the Members form a limited
liability company under the name _______________________________________,
L.L.C. (the "Company") on the terms and conditions in this Operating Agreement (the
"Agreement") and pursuant to the Limited Liability Company Act of the State of
Oklahoma (the "Act"). The Members agree to file with the appropriate agency within the
State of Oklahoma charged with processing and maintaining such records all
documentation required for the formation of the Company. The rights and obligations of
the parties are as provided in the Act except as otherwise expressly provided in this
Agreement.
1.2 Name. The business of the Company will be conducted under the name
_______________________________________, L.L.C., or such other name upon
which the Members may unanimously may agree.
1.3 Purpose. The purpose of the Company is to engage in any lawful act or activity for which
a Limited Liability Company may be formed within the State of Oklahoma.
1.4 Office. The Company will maintain its principal business office within the State of
Oklahoma at the following address:
_____________________________________________________________________.
1.5 Registered Agent. ____________________________________________ is the
Company's initial registered agent in the State of Oklahoma, and the registered office is
_____________________________________________________________________.
1.6 Term. The term of the Company commences on _____________________ [date] and
shall continue perpetually unless sooner terminated as provided in this Agreement.
1.7 Names and Addresses of Members. The Members' names and addresses are attached
as Schedule 1 to this Agreement.
1.8 Admission of Additional Members. Except as otherwise expressly provided in this
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.
SECTION 2
CAPITAL CONTRIBUTIONS
2.1 Initial Contributions. The Members initially shall contribute to the Company capital as
described in Schedule 2 attached to this Agreement.
2.2 Additional Contributions. No Member shall be obligated to make any additional
contribution to the Company's capital without the prior unanimous written consent of the
Members.
2.3 No Interest on Capital Contributions. Members are not entitled to interest or other
compensation for or on account of their capital contributions to the Company except to the
extent, if any, expressly provided in this Agreement.
SECTION 3
ALLOCATION OF PROFITS AND LOSSES; 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 as set forth in Schedule
2 as amended from time to time in accordance with U.S. Department of the 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 U.S. Department of the Treasury Regulation 1.704.1(b)(2)(ii)(b)(2). To the extent
a Member shall have a negative capital account balance, there shall be a qualified income
offset, as set forth in U.S. Department of the Treasury Regulation 1.704.1(b)(2)(ii)(d).
3.3 No Right to Demand Return of Capital. No Member has any right to any return of capital
or other distribution except as expressly provided in this Agreement. No Member has
any drawing account in the Company.
SECTION 4
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,
against 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
SECTION 5
POWERS AND DUTIES OF MANAGERS
5.1 Management of Company.
5.1.1 The Members, within the authority granted by the Act and the terms of this
Agreement shall have the complete power and authority to manage and operate the
Company and make all decisions affecting its business and affairs.
5.1.2 Except as otherwise provided in this Agreement, all decisions and documents
relating to the management and operation of the Company shall be made and executed by a
Majority in Interest of the Members.
5.1.3 Third parties dealing with the Company shall be entitled to rely conclusively upon
the power and authority of a Majority in Interest of the Members to manage and operate the
business and affairs of the Company.
5.2 Decisions by Members. Whenever in this Agreement reference is made to the decision,
consent, approval, judgment, or action of the Members, unless otherwise expressly
provided in this Agreement, such decision, consent, approval, judgment, or action shall
mean a Majority of the Members.
5.3 Withdrawal by a Member. A Member has no power to withdraw from the Company,
except as otherwise provided in Section 8.
SECTION 6
SALARIES, REIMBURSEMENT, AND PAYMENT OF EXPENSES
6.1 Organization Expenses. All expenses incurred in connection with organization of the
Company will be paid by the Company.
6.2 Salary. No salary will be paid to a Member for the performance of his or her duties under
this Agreement unless the salary has been approved in writing by a Majority of the Members.
6.3 Legal and Accounting Services. The Company may obtain legal and accounting services
to the extent reasonably necessary for the conduct of the Company's business.
SECTION 7
BOOKS OF ACCOUNT, ACCOUNTING REPORTS, TAX RETURNS,
FISCAL YEAR, BANKING
7.1 Method of Accounting. The Company will use the method of accounting previously
determined by the Members for financial reporting and tax purposes.
7.2 Fiscal Year; Taxable Year. The fiscal year and the taxable year of the Company is the
calendar year.
7.3 Capital Accounts. The Company will maintain a Capital Account for each Member on a
cumulative basis in accordance with federal income tax accounting principles.
7.4 Banking. All funds of the Company will be deposited in a separate bank account or in an
account or accounts of a savings and loan association in the name of the Company as
determined by a Majority of the Members. Company funds will be invested or deposited
with an institution, the accounts or deposits of which are insured or guaranteed by an
agency of the United States government.
SECTION 8
TRANSFER OF MEMBERSHIP INTEREST
8.1 Sale or Encumbrance Prohibited. Except as otherwise permitted in this Agreement, no
Member may voluntarily or involuntarily transfer, sell, convey, encumber, pledge, assign,
or otherwise dispose of (collectively, "Transfer") an interest in the Company without the
prior written consent of a majority of the other nontransferring Members determined on a
per capita basis.
8.2 Right of First Refusal. Notwithstanding Section 8.1, a Member may transfer all or any
part of the Member's interest in the Company (the "Interest") as follows:
8.2.1 The Member desiring to transfer his or her Interest first must provide written
notice (the "Notice") to the other Members, specifying the price and terms on which the
Member is prepared to sell the Interest (the "Offer").
8.2.2 For a period of 30 days after receipt of the Notice, the Members may acquire
all, but not less than all, of the Interest at the price and under the terms specified in the
Offer. If the other Members desiring to acquire the Interest cannot agree among
themselves on the allocation of the Interest among them, the allocation will be
proportional to the Ownership Interests of those Members desiring to acquire the
Interest.
8.2.3 Closing of the sale of the Interest will occur as stated in the Offer; provided,
however, that the closing will not be less than 45 days after expiration of the 30day
notice period.
8.2.4 If the other Members fail or refuse to notify the transferring Member of their
desire to acquire all of the Interest proposed to be transferred within the 30day period
following receipt of the Notice, then the Members will be deemed to have waived their
right to acquire the Interest on the terms described in the Offer, and the transferring
Member may sell and convey the Interest consistent with the Offer to any other person
or entity; provided, however, that notwithstanding anything in Section 8.2 to the
contrary, should the sale to a third person be at a price or on terms that are more
favorable to the purchaser than stated in the Offer, then the transferring Member must
reoffer the sale of the Interest to the remaining Members at that other price or other
terms; provided, further, that if the sale to a third person is not closed within six months
after the expiration of the 30day period describe above, then the provisions of Section
8.2 will again apply to the Interest proposed to be sold or conveyed.
8.2.5 Notwithstanding the foregoing provisions of Section 8.2, should the sole
remaining Member be entitled to and elect to acquire all the Interests of the other
Members of the Company in accordance with the provisions of Section 8.2, the
acquiring Member may assign the right to acquire the Interests to a spouse, lineal
descendent, or an affiliated entity if the assignment is reasonably believed to be
necessary to continue the existence of the Company as a limited liability company.
8.3 Substituted Parties. Any transfer in which the Transferee becomes a fully substituted
Member is not permitted unless and until:
(1) The transferor and assignee execute and deliver to the Company the documents
and instruments of conveyance necessary or appropriate in the opinion of counsel to
the Company to effect the transfer and to confirm the agreement of the permitted
assignee to be bound by the provisions of this Agreement; and
(2) The transferor furnishes to the Company an opinion of counsel, satisfactory to the
Company, that the transfer will not cause the Company to terminate for federal income
tax purposes or that any termination is not adverse to the Company or the other
Members.
8.4 Death, Incompetency, or Bankruptcy of Member. On the death, adjudicated
incompetence, or bankruptcy of a Member, unless the Company exercises its rights
under Section 8.5, the successor in interest to the Member (whether an estate,
bankruptcy trustee, or otherwise) will receive only the economic right to receive
distributions whenever made by the Company and the Member's allocable share of
taxable income, gain, loss, deduction, and credit (the "Economic Rights") unless and
until a majority of the other Members determined on a per capita basis admit the
transferee as a fully substituted Member in accordance with the provisions of Section
8.3.
8.4.1 Any transfer of Economic Rights pursuant to Section 8.4 will not include any
right to participate in management of the Company, including any right to vote, consent
to, and will not include any right to information on the Company or its operations or
financial condition. Following any transfer of only the Economic Rights of a Member's
Interest in the Company, the transferring Member's power and right to vote or consent
to any matter submitted to the Members will be eliminated, and the Ownership
Interests of the remaining Members, for purposes only of such votes, consents, and
participation in management, will be proportionately increased until such time, if any,
as the transferee of the Economic Rights becomes a fully substituted Member.
8.5 Death Buy Out. Notwithstanding the foregoing provision of Section 8, the Members
covenant and agree that on the death of any Member, the Company, at its option, by
providing written notice to the estate of the deceased Member within 180 days of the
death of the Member, may purchase, acquire, and redeem the Interest of the deceased
Member in the Company pursuant to the provision of Section 8.5.
8.5.1 The value of each Member's Interest in the Company will be determined on the
date this Agreement is signed, and the value will be endorsed on Schedule 3 attached
and made a part of this Agreement. The value of each Member's Interest will be
redetermined unanimously by the Members annually, unless the Members
unanimously decide to redetermine those values more frequently. The Members will
use their best efforts to endorse those values on Schedule 3. The purchase price for a
decedent Member's interest conclusively is the value last determined before the death
of such Member; provided, however, that if the latest valuation is more than two years
before the death of the deceased Member, the provisions of Section 8.5.2 will apply in
determining the value of the Member's Interest in the Company.