Operating Agreement
This Operating Agreement (the "Agreement") is entered into as of by and among the Member(s) of [Company Name] (the "Company"), a limited liability company organized under the laws of the State of [State].
The Company was formed by filing Articles of Organization with the Secretary of State of [State] on . The rights, powers, and interests of the Members shall be governed by this Agreement and the laws of the State of formation.
The name of the Company is: [Company Name]
The principal place of business of the Company shall be:
The registered agent for service of process is:
The Company is formed for the purpose of providing management, administrative, marketing, and consulting services to related business entities, and to engage in any lawful business for which limited liability companies may be organized under state law.
The Company shall continue in existence until dissolved in accordance with the provisions of this Agreement or as required by law.
The Company shall have the following Member(s) with the ownership percentages indicated:
| Member Name | Member Address | Ownership % | Capital Contribution |
|---|---|---|---|
Each Member's ownership interest in the Company shall be in proportion to their capital contribution and as reflected in the table above. Ownership interests represent a Member's share of profits, losses, and distributions.
No Member shall be required to make additional capital contributions unless agreed to in writing by all Members.
- Member-Managed: Most common for family LLCs. All members have management authority.
- Manager-Managed: Use when you want to designate specific person(s) to handle day-to-day operations.
The Member(s) or Manager(s), as applicable, shall have full and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company, including but not limited to:
- Hiring and managing employees
- Setting compensation and benefits
- Entering into contracts and agreements
- Opening bank accounts and managing finances
- Making ordinary business decisions
For Member-Managed LLCs: Decisions shall be made by:
The following actions shall require unanimous written consent of all Members:
- Amendment of this Operating Agreement
- Admission of new Members
- Sale or dissolution of the Company
- Loans or borrowing in excess of $
- Purchase of assets in excess of $
The Company is specifically formed to provide legitimate business services and may employ children of the Member(s) for bona fide business purposes. All employment shall comply with federal and state labor laws, including but not limited to the Fair Labor Standards Act (FLSA).
All child employees must:
- Perform actual, substantive work for the Company
- Receive reasonable compensation for services performed
- Have documented job descriptions and duties
- Maintain time records of hours worked
- Comply with all applicable child labor laws
The Company shall maintain contemporaneous records of all compensation paid to employees, including:
- Written job descriptions
- Time logs or timesheets
- Work product samples where applicable
- Payroll records and tax filings (W-2 forms)
Check one:
Profits and losses of the Company shall be allocated to the Members in proportion to their ownership percentages as set forth in Article 2.1.
Distributions of cash or property shall be made to Members in proportion to their ownership percentages, at such times and in such amounts as determined by the Member(s) or Manager(s), subject to applicable law and the financial needs of the Company.
The Company may make tax distributions to Members to cover their tax liability attributable to Company income, if determined appropriate by the Member(s) or Manager(s).
The Company shall maintain complete and accurate books and records of the Company's business and financial affairs at its principal place of business, including:
- A current list of Members and their ownership interests
- A copy of the Articles of Organization and this Operating Agreement
- Financial statements for the past three years
- Federal, state, and local tax returns for the past seven years
- Employment records for all employees
The Company shall maintain its books on the:
The fiscal year of the Company shall be:
For federal income tax purposes, the Company shall be treated as:
No Member may sell, assign, transfer, pledge, or otherwise dispose of any or all of their membership interest without the prior written consent of all other Members.
Notwithstanding Section 7.1, a Member may transfer their interest to:
- Their spouse, children, or other family members
- A trust for the benefit of the Member or their family
- Upon death, to their heirs or beneficiaries
The Company shall dissolve upon the occurrence of any of the following events:
- Written consent of all Members to dissolve
- The occurrence of any event that makes it unlawful for the Company to continue
- Entry of a decree of judicial dissolution
- Any other event requiring dissolution under state law
Upon dissolution, the Company shall be wound up and its assets distributed in the following order:
- To creditors of the Company (including Members who are creditors)
- To Members in respect of their capital accounts
- To Members in proportion to their ownership percentages
This Agreement may be amended only by written consent of all Members.
This Agreement shall be governed by and construed in accordance with the laws of the State of [State].
If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
This Agreement constitutes the entire agreement among the Members concerning the Company and supersedes all prior agreements and understandings.
This Agreement shall be binding upon and inure to the benefit of the Members and their respective heirs, executors, administrators, successors, and permitted assigns.
IN WITNESS WHEREOF, the undersigned Members have executed this Operating Agreement as of the date first written above.
MEMBER 1:
Print Name:
Date:
MEMBER 2: (if applicable)
Print Name:
Date: