Operating Agreement Template Virginia

LIMITED LIABILITY COMPANY OPERATING AGREEMENT

FOR

[COMPANY NAME], LLC

(A Virginia Limited Liability Company)

DOCUMENT CONTROL

• Effective Date: [Date]
• Version: 1.0
• Jurisdiction: Commonwealth of Virginia (Virginia Limited Liability Company Act, Va. Code Ann. § 13.1-1000 et seq.)
• Scope: Multi-Member / Single-Member Operational Governance, Capitalization, and Fiduciary Standards

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OFFICIAL NOTICE & LEGAL DISCLAIMER

CRITICAL LEGAL NOTICE: This Operating Agreement is a foundational corporate document drafted to comply with the default provisions and statutory permissions of the Virginia Limited Liability Company Act. Execution of this document establishes binding legal, financial, and fiduciary obligations. Legal counsel, tax advisors, and certified public accountants should be consulted prior to execution to ensure alignment with specific capitalization strategies, federal tax classifications (e.g., C-Corporation, S-Corporation, or Partnership taxation under the Internal Revenue Code), and long-term operational objectives. The drafter and platform disclaim all liability for direct, indirect, or consequential damages arising from the uncustomized utilization of this template.

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ARTICLE I: COMPANY FORMATION & BASIC PROVISIONS

1.1 Formation

The undersigned Members hereby form a limited liability company (the "Company") pursuant to the provisions of the Virginia Limited Liability Company Act (the "Act"). The rights and liabilities of the Members shall be as provided in the Act, the Articles of Organization filed with the Virginia State Corporation Commission ("SCC"), and this Operating Agreement (the "Agreement").

1.2 Name

The name of the Company is [Company Name], LLC.

1.3 Principal Office & Registered Agent

• Principal Place of Business: [Street Address, City, State, Zip Code]
• Registered Office in Virginia: [Street Address, City, State, Zip Code]
• Registered Agent: [Full Legal Name or Corporate Service Provider Name], whose business office is identical with the registered office.

1.4 Term

The term of the Company shall be perpetual unless dissolved in accordance with the provisions of this Agreement or the Act.

1.5 Business Purpose

The purpose of the Company is to engage in any and all lawful business, acts, or activities for which limited liability companies may be organized under the Act, including but not limited to [Specific Business Purpose, e.g., software development, real estate acquisition, consulting services].

1.6 Foreign Qualification

The Members shall have the authority to cause the Company to do business in any jurisdiction outside the Commonwealth of Virginia, and to appoint designated corporate agents for service of process in such jurisdictions.

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ARTICLE II: CAPITAL CONTRIBUTIONS & INTERESTS

2.1 Initial Capital Contributions

Concurrently with the execution of this Agreement, the initial Members have contributed cash, property, or services valued as set forth below in exchange for the corresponding Percentage Interests and Units.

2.2 Capital Accounts

A separate capital account shall be maintained for each Member in accordance with Internal Revenue Code ("IRC") Section 704(b) and Treasury Regulations thereunder. No Member shall be entitled to withdraw any part of their capital account or to receive any distribution except as expressly provided herein.

2.3 Additional Capital Contributions

Members shall not be required to make any additional capital contributions unless unanimously agreed upon in writing. If the Members determine that additional capital is required, a capital call notice shall be issued stating the total amount needed, the purpose, and each Member's pro-rata share. Failure to contribute within thirty (30) days of notice shall constitute a default, subject to dilution remedies set forth in Article VIII.

2.4 Liability of Members

No Member shall be personally liable for any debts, obligations, or liabilities of the Company solely by reason of being a member or manager, except as otherwise provided by the Act or expressly assumed in writing.

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ARTICLE III: ALLOCATIONS & DISTRIBUTIONS

3.1 Allocation of Profits and Losses

For each fiscal year, net profits and net losses of the Company shall be allocated among the Members in proportion to their respective Percentage Interests. Allocations shall comply with the economic effect equivalence rules of IRC Section 704(b).

3.2 Distributions of Cash Flow

Available Cash Flow (defined as gross cash receipts minus operating expenses, debt service, and reasonable reserves determined by the [Manager / Board of Managers]) shall be distributed periodically, but no less frequently than annually, to the Members in proportion to their Percentage Interests.

3.3 Tax Distributions

To the extent Available Cash Flow permits, the Company shall distribute to each Member an amount estimated to cover federal, state, and local income tax liabilities arising from their allocation of Company taxable income, calculated using the highest marginal individual tax rate applicable in Virginia.

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ARTICLE IV: MANAGEMENT & GOVERNANCE

4.1 Management Structure

The Company shall be [Select One: Member-Managed / Manager-Managed]. (Note: If Manager-Managed, complete Section 4.2; if Member-Managed, skip to Section 4.3).

4.2 Designation of Manager(s)

The business and affairs of the Company shall be managed by one or more Managers. The initial Manager(s) shall be:

• [Full Legal Name of Manager], acting as [Title, e.g., Managing Member / Chief Executive Officer].
• Managers shall serve until resignation, removal for cause, or incapacity. Vacancies shall be filled by a majority vote of the Members.

4.3 Member Voting Rights

Except as otherwise required by the Act or this Agreement, all operational and governance decisions shall require the affirmative vote of Members holding a [Select One: Majority (>50%) / Supermajority (66.7%) / Unanimous (100%)] of the Percentage Interests. Each Member shall have voting power equal to their Percentage Interest.

4.4 Major Decisions Requiring Supermajority / Unanimous Consent

Notwithstanding any other provision herein, the following actions require the prior written consent of Members holding at least [Percentage, e.g., 80%] of the Percentage Interests:

1. The sale, exchange, lease, or other disposition of all or substantially all of the Company’s assets outside the ordinary course of business.
2. The merger, consolidation, conversion, or reorganization of the Company into another entity.
3. The incurrence of debt, guarantees, or financial liabilities exceeding $[Amount] outside the approved annual budget.
4. The admission of new Members or the issuance of additional Units.
5. The voluntary filing of a petition in bankruptcy or insolvency.

4.5 Officer Appointments

The Managers (or Members in a Member-Managed structure) may appoint corporate officers (e.g., President, Chief Financial Officer, Secretary) with designated duties and execution authorities as set forth in an adopted corporate resolution.

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ARTICLE V: TRANSFERS & RESTRICTIONS ON UNITS

5.1 General Restriction on Transfers

No Member may sell, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of ("Transfer") all or any part of their Units without the prior written consent of Members holding a majority of the remaining Percentage Interests, which consent may be withheld in their sole discretion. Any attempted Transfer in violation of this Article shall be null, void ab initio, and of no legal effect.

5.2 Right of First Refusal

If a Member desires to Transfer all or part of their Units to a third party, the selling Member must first deliver a written "Transfer Notice" to the Company and all non-selling Members, disclosing the identity of the prospective transferee, purchase price, and terms.

1. The Company shall have the first option to purchase all (not part) of the offered Units upon the same terms within thirty (30) days of receipt.
2. If the Company declines, the remaining Members shall have a pro-rata option to purchase the Units within an additional fifteen (15) days.
3. If neither exercises the option, the selling Member may complete the Transfer to the third party within sixty (60) days, subject to Section 5.3.

5.3 Admission of Transferee as a Member

A third-party transferee of Units shall only be admitted as a substitute Member with full voting rights upon the unanimous written consent of all non-transferring Members. Otherwise, the transferee shall possess solely economic rights (right to receive distributions and allocations) without governance authority.

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ARTICLE VI: DISSOLUTION, LIQUIDATION, & TERMINATION

6.1 Events of Dissolution

The Company shall dissolve upon the occurrence of any of the following events:

1. The written determination of the Members holding the requisite voting threshold under Section 4.4 to dissolve.
2. The entry of a judicial decree of dissolution under Va. Code Ann. § 13.1-1047.
3. The bankruptcy, death, resignation, expulsion, or dissolution of a Member, unless the remaining Members elect in writing within ninety (90) days to continue the business of the Company.

6.2 Liquidation Process

Upon dissolution, the Company shall enter the winding-up phase. A liquidating trustee appointed by the Members shall liquidate the Company assets, and proceeds shall be distributed in the following strict order of priority:

1. To payment of debts and liabilities of the Company owed to creditors (including Members who are creditors, to the extent permitted by law).
2. To the establishment of any reasonable reserves deemed necessary for contingent liabilities.
3. To the Members in proportion to positive capital account balances.
4. The remainder, if any, to the Members in proportion to their Percentage Interests.

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ARTICLE VII: BOOKS, RECORDS, & TAX MATTERS

7.1 Books and Records

The Company shall maintain true and accurate books of account and operational records at its principal place of business. Every Member shall have the right to inspect and copy such records during normal business hours for any purpose reasonably related to their interest as a Member.

7.2 Fiscal Year & Tax Matters Partner

• Fiscal Year: The calendar year ending December 31.
• Tax Matters Representative: [Full Legal Name] is hereby designated as the Partnership Representative pursuant to IRC Section 6223, possessing full authority to represent the Company in IRS and state tax audits.

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ARTICLE VIII: INDEMNIFICATION & DISPUTE RESOLUTION

8.1 Indemnification

The Company shall indemnify, defend, and hold harmless any Member, Manager, Officer, or employee against any losses, claims, damages, liabilities, and reasonable expenses (including attorney's fees) incurred in connection with any threatened, pending, or completed action arising out of their service to the Company, provided that such conduct did not constitute gross negligence, willful misconduct, or a knowing violation of law.

8.2 Governing Law & Venue

This Agreement, and all claims arising out of or relating to it, shall be governed by, construed, and enforced in accordance with the laws of the Commonwealth of Virginia, without regard to conflict of law principles. Exclusive venue for any litigation shall lie in the state or federal courts located within [County/City Name, e.g., Fairfax County], Virginia.

8.3 Mandatory Mediation / Arbitration

In the event of any dispute arising under this Agreement, the parties agree to first submit the controversy to confidential mediation administered by the American Arbitration Association (AAA). If unresolved within thirty (30) days, the dispute shall be resolved through binding arbitration in Virginia in accordance with commercial arbitration rules.

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ARTICLE IX: MISCELLANEOUS PROVISIONS

9.1 Amendments

This Agreement may be amended, modified, or altered only through a written instrument executed by Members holding at least [Percentage, e.g., 75%] of the Percentage Interests.

9.2 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid, and the remaining provisions shall remain in full force and effect.

9.3 Entire Agreement

This Agreement, together with the Articles of Organization, constitutes the entire agreement between the Members concerning the subject matter hereof, superseding all prior oral or written agreements, negotiations, and understandings.

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ARTICLE X: EXECUTION & SIGNATURES

IN WITNESS WHEREOF, the parties hereto have executed this Limited Liability Company Operating Agreement as of the Effective Date first written above.

MEMBER 1:

Signature: ____________________________________________________
Printed Name: [Full Legal Name of Member 1]
Title: Member / Managing Member
Date: ________________________________________________________

MEMBER 2:

Signature: ____________________________________________________
Printed Name: [Full Legal Name of Member 2]
Title: Member
Date: ________________________________________________________

(Attach additional signature blocks as required for multi-member entities).

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Review & Customization: Verify that all bracketed placeholders (e.g., [Company Name], [Date], [Percentage]) are filled out accurately and consistently throughout the document. Ensure voting thresholds and capital contribution figures reflect the operational agreement of the parties.
2. Initial Formation Verification: Confirm that Articles of Organization have been successfully filed with the Virginia State Corporation Commission (SCC) and that the Company is in active, good-standing status.
3. Formal Execution: All Members must sign and date the Execution Block (Article X). In multi-member entities, it is best practice to have signatures notarized, although not strictly mandated by the Virginia LLC Act.
4. Internal Record Keeping: Store the fully executed original Operating Agreement in the Company's official Records Book (minute book) kept at the Principal Place of Business. Provide a copy to each Member and the corporate accountant.
5. EIN & Banking Setup: Utilize the executed Operating Agreement and SCC formation documents to obtain an Employer Identification Number (EIN) from the IRS and open dedicated corporate banking accounts. Do not commingle personal and company funds.
6. Annual Compliance: Maintain registered agent representation in Virginia, file the SCC Annual Registration Fee on or before the last day of the month of formation each year, and keep contemporaneous meeting minutes for major operational decisions.