Member-Managed LLC Operating Agreement Template

Company Formation

• The formation documents of the Company should have the registered agent’s name and location.

• The Company will continue its business unless:

  • An event occurs that may declare this Company unlawful.

  • The members' capital interest mentioned exceeds 50% in the vote for dissolution.

  • An event such as death, bankruptcy, and the resignation of a Member occurs.

  • An event occurs leading to the Company’s dissolution as per the local st

• If a company faces bankruptcy or the death of a Member, it may continue running by two or more existing Members. The right to continue the business should be decided unanimously by voting.

• The Company can conduct lawful business considered appropriate by its stated laws.

• The formation documents should have the principal place of the Company mentioned. If not, it should be unanimously decided by the members.

• Exhibit 2 lists the details of all the members attached to this agreement.

• The Company must issue a Certificate of New Membership to admit additional members into this Agreement.

Capital Contributions

• The Members are responsible for contributing an initial investment, as mentioned in Exhibit 3. The agreed value of this business is (mention the amount).

• Other than the mentioned contribution, no Member is obliged to pay an extra amount.

Distribution of Profit and Losses

• All the net profits or losses shall be determined at the end of the fiscal year. The distribution of these losses and profits shall be determined by each Member's capital interest proportion in the Company.

• The available funds shall be distributed among Members as they see fit.

Management

• Members with a maximum capital interest in the Company may vote to select a manager or managers. One of them should be declared as a Chief Executive Manager.

• Members that are not managers should not take part in any financial and functional responsibilities of the Company.

• The managers can make decisions on the sale or development of the Company's assets, acquisition of the assets, management of these assets, security interests, loan management, the Company's debts, and the employment of people for the Company.

• The Chief Executive Member must manage all of the Company’s operations and must also carry out all the decisions on behalf of the other members.

• The Members should share the Company’s information and other details when another member asks.

• None of the managers would be subject to any liability if an act of member omission has caused losses or damage but is done for the betterment of the Company.

• The managers should keep proper records containing the name and address of all the Members, a copy of this Agreement, and copies of any tax returns and financial statements from the last three years.

Compensation

• A Member who offers his services to the Company shall be entitled to compensation.

• The direct out-of-pocket expenses by Members shall all be reimbursed by the Company.

Transfers

• If a Member plans to dispose of or sell all of his interest in the Company, he should first offer his interest to the existing Agreement at a price determined by mutual agreement. If the Members fail to elect any interest within thirty days, the purchasee may not have any right to manage the affairs and business of the Company.

Bookkeeping

• Managers should have different distribution and capital accounts for every Member. The Managers must also maintain an accurate and complete accounting of the Company and its principal departments.

• At the end of each year, the managers will close the account books and send a statement covering distributive shares to every Member. This is important to report for income tax.

Dissolution

• The members have the right to dissolve the Company at any time. The Company is responsible for paying its debts before distributing assets, cash, or remaining capital.

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Certification of Members

The undersigned agrees, certifies, and acknowledges that this forgoing Agreement is adopted and approved by each Member effective (date, month, and year).

Members