Operating Agreement Template for Texas

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

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

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LEGAL NOTICE AND DISCLAIMER

This document is a template provided for informational and drafting purposes. It is designed to comply with the Texas Business Organizations Code (TBOC). However, it does not constitute specific legal advice. Business structures, tax implications (specifically regarding pass-through entity elections), and internal management requirements vary significantly. Consult with a qualified Texas attorney and a tax professional prior to execution. Failure to properly file a Certificate of Formation with the Texas Secretary of State and maintain separate corporate records may result in the loss of limited liability protections (piercing the corporate veil).

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1. PARTIES AND FORMATION

This Operating Agreement (the "Agreement") is entered into as of the [Effective Date] by and among the Members listed in Exhibit A (the "Members").

1.1 Formation. The Members have formed a Texas Limited Liability Company (the "Company") pursuant to the Texas Business Organizations Code by filing a Certificate of Formation with the Secretary of State of Texas.

1.2 Name. The name of the Company is [Company Full Legal Name].

1.3 Principal Office. The principal office of the Company shall be located at [Principal Address], or such other place as the Managers may determine.

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2. CAPITAL CONTRIBUTIONS AND OWNERSHIP

2.1 Initial Contributions. Each Member has contributed the amount set forth in Exhibit A in exchange for their respective Membership Interest.

2.2 Additional Contributions. No Member shall be required to make any additional capital contribution unless unanimously agreed upon by the Members in writing.

2.3 Membership Interests. The profits, losses, and distributions of the Company shall be allocated to the Members in proportion to their respective Membership Interests as defined in Exhibit A.

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3. MANAGEMENT AND VOTING

3.1 Management. The Company shall be [Member-Managed / Manager-Managed]. If Manager-Managed, the initial Manager shall be [Name of Manager].

3.2 Authority. The Manager(s) shall have the authority to bind the Company in the ordinary course of business. Major decisions, including the sale of substantially all assets, merger, or dissolution, require the affirmative vote of Members holding at least [Percentage]% of the Membership Interests.

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4. DISTRIBUTIONS AND TAXES

4.1 Distributions. Cash flow shall be distributed at such times and in such amounts as determined by the Manager(s), subject to the requirements of the TBOC.

4.2 Tax Classification. The Company shall be treated as a [Partnership / Disregarded Entity / Corporation] for federal income tax purposes. The Manager shall appoint a "Tax Matters Partner" or "Partnership Representative" as required by the Internal Revenue Code.

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5. TRANSFER OF INTERESTS

5.1 Restriction on Transfer. No Member may sell, assign, encumber, or otherwise transfer their Membership Interest without the prior written consent of a majority of the remaining Members.

5.2 Right of First Refusal. If a Member receives a bona fide offer to purchase their Interest, the remaining Members shall have a right of first refusal to purchase said interest on the same terms and conditions.

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6. CONFIDENTIALITY AND NON-DISCLOSURE

Members shall maintain in strict confidence all non-public information concerning the Company’s business, trade secrets, and financial condition. This obligation survives the withdrawal of a Member or the dissolution of the Company.

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7. LIMITATION OF LIABILITY AND INDEMNIFICATION

7.1 Limitation of Liability. No Manager or Member shall be liable to the Company or any other Member for monetary damages for any breach of fiduciary duty, except for acts or omissions involving intentional misconduct or knowing violation of the law.

7.2 Indemnification. The Company shall indemnify, defend, and hold harmless any person who was or is a party to any proceeding by reason of the fact that they are or were a Manager or Member, to the fullest extent permitted by Texas law.

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8. DISSOLUTION

The Company shall be dissolved upon: (a) The occurrence of an event of dissolution specified in the Certificate of Formation; (b) The written agreement of Members holding [Percentage]% of the Membership Interests; or (c) Entry of a decree of judicial dissolution under the TBOC.

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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 the State of Texas.

9.2 Dispute Resolution. Any dispute arising under this Agreement shall first be submitted to non-binding mediation in [County], Texas. If mediation fails, the dispute shall be settled by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules.

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10. MISCELLANEOUS

10.1 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.

10.2 Entire Agreement. This Agreement constitutes the entire agreement among the Members regarding the subject matter hereof and supersedes all prior agreements.

10.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original.

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EXECUTION

FOR [COMPANY NAME]: Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] 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. Preparation: Fill all bracketed fields in this document. Ensure that "Exhibit A" (an attached sheet listing members and their ownership percentages) is created and signed by all initial members.
2. Verify Authority: Ensure that all signatories are authorized to bind their respective entities. If an entity is a Member, obtain a Corporate Resolution authorizing the signatory to enter into this Operating Agreement.
3. Execution: Use a secure digital signature platform (DocuSign, Adobe Sign, or HelloSign) to capture signatures. Ensure the "Audit Trail" or "Certificate of Completion" is downloaded and attached to the final PDF.
4. Distribution: Provide a fully executed copy to each Member. The Company must maintain one copy at its principal place of business.
5. Record Retention: Texas LLCs are required to keep specific records under the TBOC, including a current list of members, a copy of the Certificate of Formation, and tax returns for the last three years. Store these in a secure digital repository (e.g., encrypted cloud storage).
6. Filing Note: This document does not need to be filed with the Secretary of State, but the "Certificate of Formation" (Form 205) must have been filed previously to officially create the entity.