Operating Agreement Template for S Corp

OPERATING AGREEMENT FOR [COMPANY FULL LEGAL NAME] (S-CORP TAX STATUS)

Document ID: OA-[YYYY]-[MMDD]-001
Effective Date: [Effective Date]
Version: 1.0
Governing Jurisdiction: State of [State of Incorporation]

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STATUTORY & LEGAL COMPLIANCE NOTICE

This document is a template intended for entities electing S-Corporation tax status. While designed to reflect standardized corporate governance best practices, laws regarding Limited Liability Companies (LLCs) taxed as S-Corps vary significantly by jurisdiction. This document does not constitute legal or tax advice. Counsel must verify that this agreement aligns with the specific statutes of the jurisdiction of formation and that the entity has filed Form 2553 with the IRS to achieve valid S-Corp tax status.

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ARTICLE I: FORMATION AND PARTIES

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

[Company Full Legal Name], a [State of Incorporation] Limited Liability Company (the "Company"), and its Members, including:

1. [Member Name 1], residing at [Member 1 Address] (the "Member").
2. [Member Name 2], residing at [Member 2 Address] (the "Member").

Recitals: The Members have formed the Company as a limited liability company pursuant to the laws of the State of [State of Incorporation] for the purpose of engaging in any lawful business permitted under such laws. The Members intend for this Agreement to govern the affairs of the Company and the conduct of its business.

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ARTICLE II: CAPITAL CONTRIBUTIONS AND OWNERSHIP

2.1 Capital Contributions: Each Member shall contribute the amount of [Amount in USD] as their initial capital contribution to the Company. 2.2 Ownership Interests: The ownership interests of the Members shall be allocated as follows: [Member 1 Name]: [XX]%; [Member 2 Name]: [XX]%. 2.3 S-Corp Compliance: The Members acknowledge and agree that the Company shall maintain a single class of stock and shall not issue preferred stock or any other equity interest that would jeopardize the Company’s S-Corporation tax status under Subchapter S of the Internal Revenue Code.

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ARTICLE III: MANAGEMENT AND OPERATIONS

3.1 Management: The business and affairs of the Company shall be managed by [Management Structure: e.g., Members acting as Managers / A Board of Managers]. 3.2 Authority: Except as otherwise provided herein, the Managers shall have the authority to bind the Company to contracts, loans, and other legal obligations in the ordinary course of business. 3.3 Compensation: Compensation for services rendered to the Company by the Members shall be paid as "reasonable compensation" consistent with S-Corp requirements for shareholder-employees, documented via W-2 payroll.

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ARTICLE IV: INTELLECTUAL PROPERTY AND CONFIDENTIALITY

4.1 Intellectual Property: All work product, inventions, designs, or developments created by Members or employees within the scope of Company business ("Work Made for Hire") shall be the sole and exclusive property of the Company. 4.2 Confidentiality: Members agree to hold in strict confidence all proprietary, financial, and trade secret information of the Company. This obligation survives the termination of a Member’s interest in the Company.

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ARTICLE V: TERM AND DISSOLUTION

5.1 Term: The Company shall continue in perpetuity unless dissolved by a unanimous vote of the Members or upon the occurrence of an event requiring dissolution under the laws of the State of [State of Incorporation]. 5.2 Liquidation: Upon dissolution, the Company's assets shall be liquidated, debts satisfied, and remaining proceeds distributed to Members in accordance with their percentage interest.

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ARTICLE VI: DISPUTE RESOLUTION AND GOVERNING LAW

6.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of [State of Incorporation]. 6.2 Arbitration: Any dispute arising out of this Agreement shall be settled by binding arbitration in [City, State], administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules.

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ARTICLE VII: MISCELLANEOUS

7.1 Entire Agreement: This Agreement constitutes the entire understanding between the parties and supersedes all prior agreements. 7.2 Severability: If any provision of this Agreement is held to be invalid, the remainder shall continue in full force and effect. 7.3 Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original.

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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 NAME 1]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Customization: Open this document in your preferred word processor. Use the "Find and Replace" function to locate all bracketed [...] fields and replace them with the verified legal data.
2. Verification of Authority: Ensure that the individual signing on behalf of the company is the legally appointed Officer or Manager authorized to execute contracts per the Company’s Articles of Organization.
3. Internal Review: Before signing, verify that the ownership percentages (Section 2.2) and capital contributions (Section 2.1) match the company’s internal ledger and tax capitalization plan.
4. Execution:
   • Print two hard copies for wet-ink signature OR utilize a secure digital signature platform (e.g., DocuSign or Adobe Sign) which provides a tamper-evident audit trail.
   • Ensure all signatories have reviewed the final version after all fields are populated.
5. Record Retention: Retain the original executed agreement in the company’s "Corporate Minute Book." Provide a copy to each Member and the company’s CPA to ensure S-Corp tax elections (Form 2553) remain compliant with the governance structure outlined in this Agreement.