Example of Operating Agreement

OPERATING AGREEMENT (LIMITED LIABILITY COMPANY)

Document ID: LLC-OA-2024-001
Effective Date: [Effective Date]
Version: 1.0
Governing Jurisdiction: State of [State of Organization]

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STATUTORY & LEGAL COMPLIANCE NOTICE

DISCLAIMER: This template constitutes a comprehensive legal instrument for a multi-member Limited Liability Company. It is provided for informational and drafting purposes only. Because LLC laws (e.g., Delaware Limited Liability Company Act vs. California Revised Uniform Limited Liability Company Act) vary significantly regarding fiduciary duties, distribution waterfall mechanisms, and tax classification, the user must consult with qualified local legal counsel to ensure compliance with the specific statutes of the state of formation. The use of this document does not create an attorney-client relationship.

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ARTICLE I: PARTIES & RECITALS

This Operating Agreement (the "Agreement") is entered into as of the [Effective Date] by and between the following Members:

1. Member A: [Member A Full Legal Name], residing at [Member A Principal Address].
2. Member B: [Member B Full Legal Name], residing at [Member B Principal Address].

RECITALS: WHEREAS, the Members have formed a Limited Liability Company under the laws of [Governing Jurisdiction] named [Company Full Legal Name] (the "Company"); and WHEREAS, the Members desire to establish the rules and procedures governing the operation, management, and financial affairs of the Company.

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ARTICLE II: SCOPE OF SERVICES & PURPOSE

The purpose of the Company is to engage in [Detailed Business Purpose] and any other lawful act or activity for which a limited liability company may be organized under the laws of the Governing Jurisdiction. The Company shall conduct its business at [Principal Office Address].

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ARTICLE III: CAPITAL CONTRIBUTIONS & OWNERSHIP

3.1 Initial Contributions: Each Member shall contribute the amount set forth opposite their name:

• Member A Name: [Amount in USD]
• Member B Name: [Amount in USD]

3.2 Ownership Interests: The Members shall own the Company in the following percentages:

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ARTICLE IV: MANAGEMENT & VOTING

4.1 Management: The Company shall be [Member-Managed / Manager-Managed]. 4.2 Voting Rights: Except as otherwise required by law, all decisions regarding the business and affairs of the Company shall be made by a [Majority/Supermajority] vote of the Members based on their ownership percentages.

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ARTICLE V: COMPENSATION & DISTRIBUTIONS

5.1 Distributions: Net profits and losses shall be allocated to the Members in proportion to their ownership interest. Distributions shall be made at such times and in such amounts as determined by the Members. 5.2 Tax Matters: The Company shall be treated as a [Partnership / Disregarded Entity / Corporation] for federal and state income tax purposes.

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ARTICLE VI: TERM & DISSOLUTION

6.1 Term: The Company shall continue in existence perpetually unless dissolved upon the affirmative vote of the Members or the occurrence of an event requiring dissolution under the laws of the Governing Jurisdiction. 6.2 Liquidation: Upon dissolution, the Company's assets shall be used to pay all Company debts and liabilities before any remaining assets are distributed to Members.

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ARTICLE VII: INTELLECTUAL PROPERTY & CONFIDENTIALITY

7.1 Work Made for Hire: All intellectual property, inventions, and work product created by a Member on behalf of the Company shall be the sole property of the Company. 7.2 Confidentiality: Each Member agrees to maintain the confidentiality of all non-public information concerning the Company’s business and shall not disclose such information to third parties without prior written consent.

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ARTICLE VIII: LIMITATION OF LIABILITY & INDEMNIFICATION

8.1 Liability: No Member shall be personally liable for any debt, obligation, or liability of the Company solely by reason of being a Member. 8.2 Indemnification: To the fullest extent permitted by law, the Company shall indemnify and hold harmless any Member from any claim, loss, or damage arising out of their service to the Company, provided such conduct did not constitute gross negligence or willful misconduct.

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ARTICLE IX: DISPUTE RESOLUTION & GOVERNING LAW

9.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of [Governing Jurisdiction]. 9.2 Arbitration: Any dispute arising out of this Agreement shall be settled by binding arbitration in [City, State] in accordance with the rules of the American Arbitration Association.

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ARTICLE X: MISCELLANEOUS

10.1 Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect. 10.2 Entire Agreement: This Agreement constitutes the entire understanding between the Members and supersedes all prior agreements, oral or written. 10.3 Amendments: No amendment to this Agreement shall be effective unless in writing and signed by all Members.

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EXECUTION & FORMAL SIGNATURE BLOCKS

FOR [COMPANY FULL LEGAL NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Company: [Company Legal Name] Date: [Date]

FOR [MEMBER NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Document Preparation: Download this text into a word processor. Use the "Find & Replace" function to replace all bracketed placeholders (e.g., [Member A Full Legal Name]) with the accurate entity or individual data.
2. Verification of Authority: Ensure the signatory for any corporate entity possesses a board resolution or corporate bylaw authorization to bind the entity to an operating agreement.
3. Execution Protocol:
   • Print two hard copies for "wet ink" signatures if required by local notary standards.
   • Alternatively, utilize an e-signature platform (DocuSign/Adobe Sign). Ensure the platform provides an Audit Trail Certificate confirming the identity of the signers and the timestamp of the action.
4. Filing:
   • Keep the original signed agreement at the Company’s principal office.
   • Do not file the full Operating Agreement with the Secretary of State (unless required by specific state law), but ensure the Articles of Organization/Certificate of Formation are properly filed.
5. Record Retention: Maintain this document in a digital, encrypted corporate minute book. Update the Agreement via a formal "Amendment to Operating Agreement" for any changes in ownership, capital, or structural policy.