What provisions should be included in a well drafted sample LLC Operating Agreement
The LLC Operating Agreement is the core document that is referred to when issues concerning the LLC need to be resolved. The LLC Operating Agreement reflects the agreement among the members with respect to the affairs and management of the LLC and governs the relationship among the members of the LLC.
In reviewing a sample LLC Operating Agreement, it is important that the following issues be addressed in the agreement.
- The name of the business
- The official business address
- Registered agent
- The name of the members
- The business purpose of the LLC
- Capital accounts
- Adjustments to Capital Accounts
- The withdrawal of Members
- Compensation
- The amount of money or property contributed by the members
- Additional capital contributions
- Failure to Contribute
- How disputes among members will be handled
- How the business will be managed
- Conduct of meetings
- Voting
- Rights, duties, and liabilities of the members
- Rights, duties, and liabilities of the managers
- Indemnification of managers
- How cash will be distributed to the members
- How profits and losses will be allocated to the members
- Under what circumstances will members be permitted to transfer their interest to a third-party
- Will the members be granted a “right of first refusal” or a “right of first offer”
- Will the members be granted “Drag-Along” and/or “Tag-Along” rights
- Will the members be provided with “tax distributions”
- The duration of the LLC
- Books and records
- Termination
- Dissolution
- Amendments
- Notice
- Arbitration/Court of Law
- Governing Law
