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LLC Taxed As C Corp Operating Agreement Template for England and Wales

This document is a hybrid operating agreement designed to govern an LLC that elects to be taxed as a C Corporation, while operating under English and Welsh law. It presents an unusual structure as it combines U.S. tax treatment preferences with UK company law requirements. The agreement sets out the rights, responsibilities, and relationships between members, management structure, capital contributions, profit distribution, and operational procedures while ensuring compliance with both jurisdictions' requirements.

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What is a LLC Taxed As C Corp Operating Agreement?

The LLC Taxed As C Corp Operating Agreement is essential when establishing a business entity that combines features of U.S. tax treatment with UK legal governance. This document is typically used when companies seek specific tax advantages available under U.S. corporate tax regulations while operating within the English and Welsh legal framework. It comprehensively covers corporate governance, ownership rights, management responsibilities, capital structure, and operational procedures. The agreement is particularly relevant for international businesses or those with U.S. connections seeking to establish operations in the UK while maintaining certain U.S. tax benefits.

What sections should be included in a LLC Taxed As C Corp Operating Agreement?

1. Parties: Identification of all members/shareholders and the company

2. Background: Context and purpose of the operating agreement

3. Definitions: Key terms used throughout the agreement

4. Company Formation: Details of company structure and registration

5. Capital Contributions: Initial and ongoing capital requirements

6. Management Structure: Governance and decision-making processes

7. Voting Rights: Member voting procedures and thresholds

8. Distributions: Profit sharing and distribution policies

9. Transfer of Interests: Rules for transferring ownership stakes

What sections are optional to include in a LLC Taxed As C Corp Operating Agreement?

1. Tag-Along Rights: Protection mechanisms for minority shareholders in case of majority stake sale

2. Drag-Along Rights: Provisions allowing majority shareholders to force minority shareholders to join in the sale of the company

3. Non-Compete Provisions: Restrictions on competitive activities by members during and after their involvement with the company

What schedules should be included in a LLC Taxed As C Corp Operating Agreement?

1. Initial Capital Contributions Schedule: Detailed breakdown of member contributions and valuations

2. Share Register: Current ownership structure and shareholdings details

3. Management Procedures: Detailed operational procedures and policies for company management

4. Valuation Methods: Agreed methods and procedures for company and share valuation

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

England and Wales

Cost

Free to use

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