Operating Agreement Template for Multi Member Llc

OPERATING AGREEMENT: MULTI-MEMBER LIMITED LIABILITY COMPANY

Document ID: LLC-OP-AGMT-2024-V1
Effective Date: [Date]
Governing Jurisdiction: [State of Formation]

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LEGAL COMPLIANCE NOTICE

DISCLAIMER: This template is provided for informational purposes as a high-level institutional framework. LLC formation and operating agreements are subject to specific state statutes (e.g., Delaware Revised LLC Act, California Revised Uniform LLC Act). This document does not constitute personalized legal advice. Users must consult with counsel admitted in the governing jurisdiction to ensure compliance with local tax codes, filing requirements, and specific statutory nuances.

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1. PARTIES AND RECITALS

This Operating Agreement (the "Agreement") is entered into as of the Effective Date by and among the Members identified in Exhibit A (collectively, the "Members"). The Members have formed a Limited Liability Company under the laws of the State of [State of Formation] under the name [Company Full Legal Name] (the "Company").

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2. FORMATION AND PURPOSE

2.1 Formation: The Members have formed the Company as a limited liability company pursuant to the statutes of the State of [State of Formation] by filing a Certificate of Formation with the Secretary of State.
2.2 Purpose: The purpose of the Company is to engage in [Description of Business Activity] and any other lawful business for which an LLC may be organized.
2.3 Term: The Company shall continue in perpetual existence unless dissolved in accordance with this Agreement or applicable law.

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3. CAPITAL CONTRIBUTIONS AND OWNERSHIP

3.1 Capital Contributions: Each Member shall contribute the initial capital set forth in Exhibit A.
3.2 Ownership Interests: Each Member’s percentage interest in the Company shall be determined by the ratio of their capital contribution to the total capital contributions of all Members, as adjusted from time to time.
3.3 Additional Contributions: No Member shall be required to make additional capital contributions unless unanimously approved by all Members.

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4. MANAGEMENT AND VOTING

4.1 Management: The Company shall be managed by [“All Members” OR “a Board of Managers”].
4.2 Voting Rights: Except as otherwise required by law, all decisions shall be made by a majority vote of the Members based on their percentage interest.
4.3 Binding Authority: Only authorized officers or designated managers may bind the Company to third-party contracts.

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5. DISTRIBUTIONS AND TAXATION

5.1 Distributions: Net profits and losses shall be allocated among the Members in proportion to their respective Membership Interests. Distributions shall be made at such times and in such amounts as determined by the Members.
5.2 Tax Classification: The Company shall be treated as a [Partnership/Disregarded Entity/C-Corp for tax purposes] for federal and state income tax purposes.

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6. TRANSFER OF INTERESTS

6.1 Restrictions: No Member may sell, assign, encumber, or otherwise transfer their Membership Interest without the prior written consent of the majority of the non-transferring Members.
6.2 Right of First Refusal: Should a Member receive a bona fide offer to purchase their interest, the Company and the remaining Members shall have a right of first refusal to purchase such interest on the same terms.

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7. DISSOLUTION AND LIQUIDATION

7.1 Dissolution: The Company shall dissolve upon the unanimous written consent of all Members or the occurrence of an event of dissolution under state law.
7.2 Liquidation: Upon dissolution, the Company’s assets shall be used to pay creditors, and any remaining proceeds shall be distributed to Members in proportion to their positive capital account balances.

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8. INDEMNIFICATION AND LIABILITY

8.1 Limitation of Liability: No Member, Manager, or Officer shall be liable to the Company or other Members for any loss or damage incurred by reason of any act or omission performed in good faith on behalf of the Company.
8.2 Indemnification: The Company shall indemnify its Members and Managers to the fullest extent permitted by the laws of the State of [State of Formation] against all losses, claims, and expenses arising from their service to the Company.

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9. GOVERNING LAW AND DISPUTE RESOLUTION

9.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of [State of Formation].
9.2 Arbitration: Any dispute arising out of this Agreement shall be submitted to binding arbitration in [City, State] in accordance with the rules of the American Arbitration Association (AAA). The prevailing party shall be entitled to reasonable attorney’s fees.

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10. MISCELLANEOUS

10.1 Entire Agreement: This document constitutes the entire agreement between the parties.
10.2 Amendments: No amendment to this Agreement shall be effective unless in writing and signed by all Members.
10.3 Severability: If any provision is held invalid, the remainder of the Agreement shall remain in full force and effect.

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EXECUTION AND 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 / CLIENT NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION AND FILING GUIDE

1. Information Gathering: Compile the names, addresses, and capital contribution amounts for all initial members.
2. Drafting: Open this template in a word processor. Perform a "Find and Replace" for all bracketed items (e.g., [State of Formation]) to input accurate organizational data.
3. Exhibit A Completion: Create a standalone table (Exhibit A) listing Member Names, Addresses, Initial Contributions, and Membership Percentages.
4. Signatory Verification: Ensure the persons signing have the legal authority (via Articles of Organization or Corporate Resolution) to bind their respective entities.
5. Execution:
   • Utilize a secure e-signature platform (e.g., DocuSign, Adobe Sign) to create an audit trail.
   • Ensure every page is initialed by all parties to prevent claims of document tampering.
6. Record Retention:
   • Keep one "wet" or "digital original" in the Company’s minute book.
   • Provide a copy to every member.
   • Ensure the Operating Agreement is stored in a location accessible for tax audits or due diligence requests from financial institutions.