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Operating Agreement For Member Managed Limited Liability Company Template for United States

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Key Requirements PROMPT example:

Operating Agreement For Member Managed Limited Liability Company

"I need an Operating Agreement For Member Managed Limited Liability Company for a tech startup with three equal partners, incorporating specific provisions for intellectual property protection and a first right of refusal for any membership transfers, to be effective from March 1, 2025."

Document background
The Operating Agreement For Member Managed Limited Liability Company is a crucial document required when establishing an LLC where the owners (members) will directly manage the company's operations. While not legally required in all U.S. states, it is highly recommended as it provides clear guidelines for company governance and helps maintain liability protection. The agreement becomes especially important in multi-member LLCs to prevent and resolve disputes, establish clear management procedures, and protect members' interests. It should be drafted in compliance with state-specific LLC laws and can be customized to meet the unique needs of the business while maintaining the flexibility that makes LLCs attractive to business owners. This document typically includes detailed provisions about capital contributions, profit sharing, decision-making processes, and member exit strategies.
Suggested Sections

1. Parties: Identifies all initial members of the LLC and their contact information

2. Background: States the purpose of forming the LLC and basic information about the company's establishment

3. Definitions: Defines key terms used throughout the agreement

4. Formation and Name: Details about the LLC's formation, name, and registered office

5. Purpose and Powers: Describes the LLC's business purpose and general powers

6. Members and Membership Interests: Lists initial members, their capital contributions, and ownership percentages

7. Management and Voting: Outlines management structure, voting rights, and decision-making processes

8. Meetings and Records: Procedures for member meetings and maintenance of company records

9. Allocations and Distributions: Details how profits, losses, and distributions are allocated among members

10. Transfer Restrictions: Rules regarding the transfer of membership interests

11. Withdrawal and Dissolution: Procedures for member withdrawal and company dissolution

12. Books and Tax Matters: Requirements for financial records, tax elections, and reporting

13. Indemnification: Provisions for protecting members from business-related liabilities

14. Amendment Procedures: Process for modifying the operating agreement

15. General Provisions: Miscellaneous legal provisions including governing law and severability

Optional Sections

1. Competing Activities: Restrictions on members engaging in competing businesses - include when members may have other business interests

2. Confidentiality: Provisions protecting company trade secrets and confidential information - important for businesses with proprietary information

3. Drag-Along Rights: Enables majority members to force minority members to join in the sale of the company - useful for companies planning future sale

4. Tag-Along Rights: Allows minority members to join in sales by majority members - protection for minority interests

5. Buy-Sell Provisions: Detailed procedures for buying out members in specific circumstances - important for family businesses or close-knit groups

6. Special Allocations: Complex profit/loss allocation provisions - needed for businesses with unique financial arrangements

7. Mediation and Arbitration: Alternative dispute resolution procedures - useful for avoiding costly litigation

8. Insurance Requirements: Specific insurance coverage requirements - important for high-risk businesses

Suggested Schedules

1. Schedule A - Member Information: Detailed list of members, contact information, and initial capital contributions

2. Schedule B - Capital Accounts: Initial capital account balances and contribution details

3. Schedule C - Approved Officers: List of approved officers and their roles, if any

4. Schedule D - Approved Salaries: Any approved salaries or compensation for managing members

5. Appendix 1 - Form of Member Certificate: Template for membership certificates, if used

6. Appendix 2 - Transfer Notice: Standard form for notifying the LLC of intended membership transfers

7. Appendix 3 - Tax Elections: Documentation of tax treatment elections and related forms

8. Appendix 4 - Valuation Methods: Agreed-upon methods for valuing membership interests

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Professional Services

Real Estate

Technology

Retail

Manufacturing

Healthcare

Construction

Hospitality

Financial Services

Consulting

E-commerce

Agriculture

Entertainment

Education

Transportation

Relevant Teams

Legal

Finance

Executive Leadership

Corporate Governance

Compliance

Tax

Risk Management

Business Development

Corporate Secretary Office

Relevant Roles

Business Owner

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Managing Member

General Counsel

Corporate Attorney

Business Development Manager

Company Secretary

Tax Director

Compliance Officer

Risk Manager

Managing Partner

Entrepreneur

Small Business Owner

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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