LLC Operating Agreement Template

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

This Limited Liability Company Operating Agreement (the "Agreement") is made and entered into effective as of by and among the persons who sign this Agreement as members (individually a "Member" and collectively the "Members") of , LLC, a limited liability company (the "Company").

1. FORMATION AND NAME

The Members form a limited liability company under the name , LLC on the terms of this Agreement and under the Limited Liability Company Act of the State of (the "Act"). The Members will file all documentation required to form and maintain the Company. The business will be conducted under that name or any other name the Members unanimously agree on. Except as expressly provided in this Agreement, the rights and obligations of the Members are governed by the Act.

2. PURPOSE

The purpose of the Company is to engage in and any lawful act or activity for which a limited liability company may be formed under the Act.

3. PRINCIPAL OFFICE AND REGISTERED AGENT

The Company's principal office is located at , or any other place the Members choose. The Company's initial registered agent in the State of is , with a registered office at .

4. TERM

The Company begins on and continues perpetually unless dissolved earlier as provided in this Agreement.

5. MEMBERS AND ADMISSION OF NEW MEMBERS

The names and addresses of the Members are:

,

,

No additional member may be admitted, and no new membership interest may be issued, without the prior unanimous written consent of the Members.

6. CAPITAL CONTRIBUTIONS

6.1 Initial Contributions. Each Member's initial capital contribution and resulting ownership interest is as follows:

: — % ownership

: — % ownership

6.2 Additional Contributions. No Member is required to make any additional contribution without the prior unanimous written consent of the Members.

6.3 No Interest on Contributions. No Member is entitled to interest on capital contributions, and no Member has any right to demand or receive a return of capital except as expressly provided in this Agreement.

7. ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS

The Company's net profits and losses will be determined annually and allocated to the Members in proportion to their ownership interests. The Members will distribute available funds (the net cash remaining after providing for expenses and liabilities) at the times and in the amounts they determine. Distributions in liquidation will be made in accordance with the Members' positive capital account balances.

8. MANAGEMENT

8.1 Member-Managed. The Company is managed by its Members. Each Member, acting within the authority of the Act and this Agreement, has the power to manage and operate the Company. Except as otherwise provided here, all decisions require the approval of a Majority in Interest of the Members (Members holding more than 50% of the ownership interests). Third parties may rely on the authority of a Majority in Interest to act for the Company.

8.2 Officers (Optional). The Members may appoint officers — such as a president, vice-president, secretary, and treasurer — and delegate duties to them. One person may hold more than one office. Each officer serves at the discretion of the Members and may be removed by them.

8.3 Withdrawal. A Member has no power to withdraw from the Company except as provided in the Transfer of Membership Interest section below.

9. INDEMNIFICATION

The Company will indemnify any Member, manager, officer, employee, or agent against expenses (including reasonable attorney's fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending, or completed action or proceeding, if that person acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interests of the Company, and, for any criminal matter, had no reasonable cause to believe the conduct was unlawful.

10. COMPENSATION AND EXPENSES

The Company will pay all expenses of its organization. No Member will be paid a salary for performing duties under this Agreement unless approved in writing by a Majority of the Members. The Company may obtain legal, accounting, and other professional services reasonably necessary for its business.

11. BOOKS, ACCOUNTING, TAXES, AND BANKING

The Company will keep accurate books and records using the accounting method chosen by the Members. The fiscal and taxable year is the calendar year. The Company will maintain a capital account for each Member in accordance with applicable tax rules. All Company funds will be held in a separate account in the Company's name. After each year, the Members will prepare and send each Member a statement of that Member's share of income and expenses for tax purposes. Each Member is responsible for the taxes on their share of the Company's income.

12. TRANSFER OF MEMBERSHIP INTEREST

12.1 Restriction. No Member may transfer, sell, assign, pledge, or otherwise dispose of an interest in the Company without the prior written consent of a majority of the other Members.

12.2 Right of First Refusal. A Member who wishes to transfer an interest must first offer it in writing to the other Members, stating the price and terms. The other Members have days to buy all (but not less than all) of the offered interest on those terms, in proportion to their ownership interests. If they do not, the Member may sell to a third party on terms no more favorable than those offered; a buyer becomes a full Member only after agreeing in writing to be bound by this Agreement.

12.3 Disability or Death. If a Member becomes unable to contribute to the Company, or dies, the remaining Members may acquire that Member's interest at its fair value. Unless the Members agree otherwise, the value of each Member's interest is . The remaining Members may continue the Company's business.

13. DISSOLUTION AND WINDING UP

The Company will be dissolved on the sale of substantially all of its property, the written agreement of all Members, by operation of law, or the death, incompetence, expulsion, or bankruptcy of a Member unless the remaining Members elect to continue the Company within 120 days. On dissolution, the Company's assets will be applied in this order: (a) pay the expenses of liquidation and debts owed to non-Members; (b) pay debts owed to Members; and (c) distribute the balance to the Members in accordance with their positive capital account balances.

14. ATTORNEY'S FEES AND FURTHER ASSURANCES

In any suit or action to enforce or interpret this Agreement, the prevailing party is entitled to recover its reasonable attorney's fees and costs, including on appeal. The Members agree to sign any further documents reasonably necessary to carry out the terms of this Agreement.

15. ELECTRONIC SIGNATURES AND COUNTERPARTS

This Agreement may be signed in counterparts, each of which is considered an original and which together form one agreement. Electronic signatures, and copies of signatures delivered by email or through an electronic signing service, have the same legal effect as handwritten signatures on an original document.

16. GENERAL PROVISIONS

(a) Governing Law. This Agreement is governed by the laws of the State of , without regard to its conflict-of-law principles.

(b) Entire Agreement. This Agreement is the complete agreement between the parties and replaces any prior discussions, understandings, or agreements on this subject.

(c) Amendments. Any change to this Agreement must be in writing and signed by both parties.

(d) Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions will remain in full effect.

(e) Waiver. If a party does not enforce a provision, it does not give up its right to enforce that or any other provision later.

(f) Assignment. Neither party may assign or transfer this Agreement without the other party's prior written consent.

(g) Notices. Any notice under this Agreement must be given in writing (email is acceptable) to the other party.

IN WITNESS WHEREOF, the Members have signed this Operating Agreement as of the date first written above.