Member-Managed LLC Operating Agreement Template
Prepared for:
[FirstMember.Company]
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FAQ
A member-managed company consists of members or owners who are also considered agents to run the Company on a daily basis. A member-managed LLC doesn’t require a proper structure with well-divided power and responsibilities.
On the other hand, when a company is manager-managed, the members or owners of the Company don’t actively participate in the daily activities of a business.
An Operating Agreement is a legally binding agreement covering a detailed outline of the management process of a company. It also mentions the proper ownership and its overall structure.
If an LLC has multiple members, the operating agreement becomes binding between all the members involved. This document also often has the name of any registered agent, details of all the meetings, the selection process of the managers, and the Company’s policy regarding dropping or adding members.
In simple words, this document covers a business’s functional and financial decisions. Once the members sign it, they become officially bound.
Here are some of the things that an operating agreement must contain:
- Basic member and company information
- Initial capital investments
- Business purpose
- Definition of roles of all members and managers
- Ownership percentage
- Profit distribution
- New members and their withdrawals
- Transferring or dissolving the Company
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