LLC Operating Agreement Template

On (Date) (Effective Date), the parties enter this LLC Operating Agreement (Agreement). The members of this Agreement are:

Member Name: [Member1.FirstName][Member1.LastName]

Member Address: [Member1.StreetAddress][Member1.City][Member1.State][Member1.PostalCode]​

Member Name: [Member2.FirstName][Member2.LastName]​

Member Address: [Member2.StreetAddress][Member2.City][Member2.State][Member2.PostalCode]​

Address each person as Member and refer to the group as Members.

Recitals

The company, known as (Name of company) ("Company"), will form on (Date).

The Company’s primary place of business will be (Business'Address)

The laws of the state of (state) will govern the Company.

The Company’s primary purpose is to provide (Primary purpose)

Agreement

Under the promises and obligations set forth within this Agreement, the parties agree:

Interest and Authority

Exhibit A is now a crucial part of this Agreement. Members will determine their respective interests based on their respective Capital Contributions. It's adjusted for Capital Contributions or distributions made under this Agreement.

The Members may manage and control the Company's business and affairs. This only applies under this Agreement or with the written consent of the Members. No Member will have any authority to bind the Company or act on its behalf. This applies as provided in this Agreement or as otherwise agreed by the Members in writing.

Capital Contributions

This Agreement will determine if a Member must contribute extra capital. Each Member will make an initial Capital Contribution to the Company. Further information is available in Exhibit A. Members may contribute extra capital. These contributions need acceptance among the Members. Members may need extra contributions if they agree to them in writing.

Profit and Losses

The Company will distribute profits and losses based on interests. The Parties set these interests forth in Exhibit A, and they may adjust the allocation from time to time. This change is due to extra contributions or distributions.

Member Roles

The Members will appoint one or more managers to carry out the Company's daily activities. Managers can represent the Company following this Agreement. The Members may create committees or assign people to do specific tasks.

Accounting

The Company will maintain complete and accurate books of its financial transactions. The Parties will ensure that its financial affairs follow accepted accounting principles. The Company's fiscal year is the calendar year unless agreed otherwise. Members may inspect Company books and records with reasonable notice.

New Members

A majority of the existing Members must approve the admission of New Members to the Company. The current Members will determine the terms and conditions for new Members. The new Member will provide a Capital Contribution as specified.

A new Member requires an amendment to Exhibit A. The Member will sign a counterpart to this Agreement. This signature page will reflect the new Member's admission to the Company.

Withdrawal, Death, or Disability

A Member may withdraw from the Company by providing written notice to the other Members. The withdrawal will be effective on the specified date of the notice. The notification should occur at least sixty (60) days before this takes place.

Upon a Member's death or disability, they transfer their interest in the Company. The Company must transfer to heirs if needed. This transfer will be under the Agreement's terms and conditions.

Dissolution

The Members will dissolve the Company upon the occurrence of the following events:

(a) The written consent of the Members;

(b) If a Member departs, passes away, or becomes disabled, the remaining Members must decide in 60 days;

(c) Any other events that result in the Company's dissolution under applicable law;

The Company will liquidate its assets upon dissolution and generate proceeds. The Members will receive these proceeds according to their respective interests. Exhibit A details the Members' interests, which are subject to adjustments. This Agreement will account for any extra Capital Contributions or distributions. These transactions will cause adjustments to the Members' interests.

Amendments

A written instrument executed by all the Members may amend or change this Agreement only. Any changes to this Agreement are binding for all Members.

Pass-Through Taxation

Under this Operating Agreement, the LLC will adopt a pass-through taxation structure. The LLC will divide profits and losses among the Members. They will then report their respective shares on their income tax returns. This provision prevents double taxation and streamlines the tax filing process. It provides an efficient and helpful tax framework for the LLC and its Members.

Limited Liability Protection

This Operating Agreement establishes that the Members will enjoy limited liability protection. Members' assets will remain separate from the LLC's debts, liabilities, and legal obligations. Defining this protection reduces potential legal disputes. Ensuring Members understand their rights and responsibilities. This approach fosters a secure and harmonious business environment.

Distribution of Profits

Distribution of Profits outlines profit sharing. This Operating Agreement can specify a percentage distribution. Members' contributions to the company will determine the chosen method.

This provision outlines the timing and frequency of profit distributions. It promotes transparency and clear expectations among Members. This approach defines the profit distribution process to avoid misunderstandings. It also fosters a positive and collaborative working relationship within the LLC.

Dispute Resolution

The arbitration will be the resolution of any disagreements relating to this contract. The American Arbitration Association's rules will govern the resolution process. This approach ensures a fair resolution process.

The arbitrator(s) will render an award for the dispute. A court with jurisdiction may enter judgment upon the arbitrator's award. The arbitration will take place in the Company's city and state. If the Members agree, they can choose an alternative location for the arbitration.

Governing Law and Jurisdiction

The Company's principal place of business determines the interpretation of this Agreement. The Members will disregard conflict of laws principles.

The Members acknowledge the court power of the state where the Company operates. These courts will settle any disputes arising from this Agreement.

Agreement and Signatures

This Agreement makes up the entire agreement among the Members of the Company. It supersedes all prior agreements and understandings among the Members of the Company. This applies to both written and oral agreements.

Members may execute this Agreement in counterparts, with each counterpart deemed an original. All counterparts together will make up the same instrument.

IN WITNESS WHEREOF, the Members signed this Agreement on the date shown.

Exhibit A

(List of Members and their respective interests and Capital Contributions)