Small Business Operating Agreement Template

SINGLE-MEMBER / MULTI-MEMBER LIMITED LIABILITY COMPANY OPERATING AGREEMENT

DOCUMENT CONTROL & METADATA

• Effective Date: [Date]
• Version: 2024.1 (Standard Commercial)
• Jurisdiction / Governing Law: State of [State of Organization]
• Entity Type: Member-Managed Limited Liability Company

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SECTION 1: OFFICIAL LEGAL NOTICE & DISCLAIMER

LEGAL COUNSEL NOTICE: This document is a generalized template provided for informational and operational structuring purposes only. It does not constitute formal legal, tax, or accounting advice. Execution of this Operating Agreement creates significant legal rights and obligations. The Company, its organizers, and members are strongly advised to retain independent legal counsel and a certified public accountant (CPA) to review this instrument prior to execution to ensure compliance with localized state statutes, internal revenue codes, and industry-specific regulatory frameworks.

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SECTION 2: PARTIES & DEFINITIONS

This Operating Agreement (the "Agreement") is entered into and made effective as of [Date], by and among the Company and each Person who is admitted to the Company as a Member, as set forth in the books and records of the Company.

2.1 Defined Terms

• "Act" refers to the Limited Liability Company Act of the State of [State of Organization], as amended from time to time.
• "Articles of Organization" refers to the initial certificate filed with the state authority to legally establish [Company Name], as amended or restated.
• "Capital Contribution" means the total amount of cash, property, or services rendered (or agreed to be rendered) by a Member to the Company.
• "Company" refers to [Company Name], LLC.
• "Interest" means a Member's fractional share of the economic, financial, and voting rights of the Company.
• "Member" means each Person executing this Agreement as an initial member, or hereafter admitted to the Company as a member in accordance with the terms herein.
• "Percentage Interest" means the ownership quota of a Member, expressed as a percentage, as defined in Exhibit A.

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SECTION 3: FORMATION, NAME, AND PRINCIPAL PLACE OF BUSINESS

3.1 Formation

The Company was formed as a limited liability company on [Date of Filing] by filing the Articles of Organization with the Secretary of State of [State of Organization].

3.2 Name

The name of the Company is [Company Name], LLC. All business of the Company shall be conducted under this name or such other trade names as the Members may approve in writing.

3.3 Principal Place of Business

The principal office and place of business of the Company shall be located at [Street Address, City, State, Zip], or such other location as determined by the Members.

3.4 Registered Agent

The name and address of the registered agent for service of process is [Registered Agent Name], located at [Street Address, City, State, Zip].

3.5 Term

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

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SECTION 4: BUSINESS PURPOSE

The purpose of the Company is to engage in any and all lawful business activities for which limited liability companies may be organized under the laws of the State of [State of Organization], including, without limitation, [Specific Business Purpose, e.g., software development, consulting, retail sales].

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SECTION 5: CAPITAL CONTRIBUTIONS & OWNERSHIP INTERESTS

5.1 Initial Contributions

The initial Members have contributed cash, property, or services to the Company in the amounts and/or values set forth in Exhibit A.

5.2 Percentage Interests

The Percentage Interest of each Member shall be proportional to their respective Capital Contributions, as detailed in Exhibit A.

5.3 Additional Capital Contributions

Members are not required to make any additional capital contributions unless unanimously agreed upon in writing. If additional capital is deemed necessary by the Members to conduct Company operations, a capital call notice shall be issued, outlining the amount required and the deadline for payment.

5.4 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 acting as a manager.

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SECTION 6: PROFITS, LOSSES, AND DISTRIBUTIONS

6.1 Allocation of Profits and Losses

All net profits and net losses of the Company shall be allocated to the Members in direct proportion to their respective Percentage Interests.

6.2 Distributions

Distributions of cash or other assets shall be made at such times and in such amounts as determined by the Members. All distributions shall be allocated strictly in proportion to the Members' respective Percentage Interests.

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SECTION 7: MANAGEMENT & VOTING

7.1 Management Structure

The Company shall be Member-Managed. The business, property, and affairs of the Company shall be managed, controlled, and operated by the Members in accordance with their respective Percentage Interests.

7.2 Voting Rights

Except as otherwise expressly provided herein or required by law, all decisions, resolutions, and actions requiring Member approval shall be decided by a majority vote of the Percentage Interests. Each Member shall have voting power equal to their Percentage Interest.

7.3 Authority to Bind Company

No individual Member, acting alone, possesses the actual or apparent authority to bind the Company to third parties unless explicitly authorized by a majority vote of the Members or by written delegation of authority.

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SECTION 8: TRANSFERS OF INTERESTS & WITHDRAWAL

8.1 Transfer Restrictions

No Member may sell, assign, transfer, pledge, mortgage, or otherwise encumber or dispose of all or any part of their Company Interest (a "Transfer") without the prior written consent of all other Members.

8.2 Right of First Refusal

If a Member desires to transfer all or part of their Interest, they must first offer the Interest to the remaining Members in writing, specifying the price, terms, and identity of the prospective transferee. The remaining Members shall have thirty (30) days from receipt of the notice to elect to purchase the Interest pro-rata.

8.3 Death, Disability, or Dissolution of a Member

Upon the death, legal incapacity, bankruptcy, or dissolution of a Member, the remaining Members may elect to either purchase the deceased/incapacitated Member's Interest or admit their legal representative or successor solely as an economic assignee.

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SECTION 9: DISSOLUTION, LIQUIDATION, AND TERMINATION

9.1 Events of Dissolution

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

1. The written determination of all Members to dissolve the Company.
2. The entry of a judicial decree of dissolution under the Act.
3. The bankruptcy, insolvency, or cessation of business of the Company.

9.2 Liquidation

Upon dissolution, the Company shall wind up its affairs. The liquidating agent shall liquidate the assets of the Company, pay all creditors, and distribute any remaining assets to the Members in accordance with their positive capital account balances and Percentage Interests.

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SECTION 10: MISCELLANEOUS PROVISIONS

10.1 Governing Law

This Agreement, and all claims or causes of action arising out of or relating to this Agreement, shall be governed by, construed, and enforced in accordance with the internal laws of the State of [State of Organization], without regard to its conflict of laws principles.

10.2 Amendments

This Agreement may be amended, modified, or changed only through a written instrument executed by all Members.

10.3 Severability

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

10.4 Entire Agreement

This Agreement constitutes the entire agreement among the Members regarding the subject matter hereof and supersedes all prior written or oral agreements, understandings, and negotiations.

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SECTION 11: EXECUTION & SIGNATURES BLOCK

IN WITNESS WHEREOF, the undersigned Members have executed this Operating Agreement as of the Effective Date first written above.

MEMBER 1:

• Printed Name: [Full Legal Name of Member 1]
• Title: [e.g., Managing Member]
• Percentage Interest: [00.00]%
• Signature: _________________________________________
• Date: [Date]

MEMBER 2 (If Applicable):

• Printed Name: [Full Legal Name of Member 2]
• Title: [e.g., Member]
• Percentage Interest: [00.00]%
• Signature: _________________________________________
• Date: [Date]

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EXHIBIT A: CAPITAL CONTRIBUTIONS & OWNERSHIP SCHEDULE

(Pursuant to Section 5.1 and 5.2)

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STEP-BY-STEP EXECUTION GUIDE

1. Review and Customize: Replace all bracketed placeholder text (e.g., [Company Name], [State of Organization]) with accurate, verified legal and operational data.
2. Verify State Compliance: Cross-reference operational clauses (specifically management type and dissolution triggers) with the current limited liability company laws of your state of organization.
3. Complete Exhibit A: Ensure that all initial capital contributions match actual bank deposits or asset transfers, and that the total Percentage Interests sum precisely to 100.00%.
4. Execution: Have all Members sign and date the Signature Block in the presence of a notary public (notarization is recommended for evidentiary validity, though optional depending on state statute).
5. Recordkeeping & Filing: Store the fully executed original Operating Agreement in the Company’s official minute book and corporate records binder. Provide copies to all Members and the Company's CPA. Do not file this document with the Secretary of State; it is an internal governance document.