Fillable Idaho Operating Agreement (How to Start a Business)

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Idaho Operating Agreement (How to Start a Business)

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  • 23 check-boxes
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1
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
_______________________, LLC
FORMED IN THE STATE OF IDAHO
This Agreement, entered into on ______________, 20____, is a
(Check One)
☐ - SINGLE-MEMBER LLC OPERATING AGREEMENT, entered into by and between
_________________, LLC, a ___________________________ (State) LLC (the “Company”)
and ______________________________ of _________________________(Address),
hereinafter known as the “Member”
☐ - MULTI-MEMBER LLC OPERATING AGREEMENT, entered into by and between
_____________________________, of ____________________________ (Address),
_____________________________, of_____________________________ (Address),
_____________________________, of _____________________________(Address),
hereinafter known as the “Members”
WHEREAS the Member(s) desire to create a limited liability company under the laws of
the State of Idaho and set forth the terms herein of the Company’s operation and the relationship
between Member(s).
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other
valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the
Member(s) and the Company agree as follows:
1. Name and Principal Place of Business
The name of the Company shall be _________________________, LLC. The principal place
of business of the Company shall be at _______________________________________, City
of ____________________, in the State of Idaho or at such other place of business as the
Member(s) shall determine.
2. Formation
The Company was formed on _______________________, 20_____, when the Member(s) filed
the Articles of Organization with the office of the Secretary of State of the State of Idaho pursuant
to the statutes governing limited liability companies in the State of Idaho. (the “Statutes”)
3. Purpose
The purpose of the Company is to engage in and conduct any and all lawful businesses,
2
activities or functions, and to carry on any other lawful activities in connection with or incidental to
the foregoing, as the Member(s) in their discretion shall determine.
4. Term
The term of the Company shall be perpetual, commencing on the filing of the Articles of
Organization of the Company, and continuing until terminated under the provisions set forth
herein.
5. Member Capital Contributions (Check One)
☐ - Single Member LLC: The Member may make such capital contributions (each a “Capital
Contribution”) in such amounts and at such times as the Member shall determine. The
Member shall not be obligated to make any Capital Contributions. The Member may take
distributions of the capital from time to time in accordance with the limitations imposed by the
Statutes.
☐ - Multi-Member LLC: Each Member has contributed the following capital amounts to the
Company as set forth below and are not obligated to make any additional capital contributions:
________________________________ $__________________________
________________________________ $__________________________
________________________________ $__________________________
Members shall have no right to withdraw or reduce their contributions to the capital of the
Company until the Company has been terminated unless otherwise set forth herein. Members
shall have no right to demand and receive any distribution from the Company in any form other
than cash and members shall not be entitled to interest on their capital contributions to the
Company.
The liability of any Member for the losses, debts, liabilities and obligations of the Company shall
be limited to the amount of the capital contribution of each Member plus any distributions paid to
such Member, such Member’s share of any undistributed assets of the Company; and (only to
the extent as might be required by applicable law) any amounts previously distributed to such
Member by the Company.
6. Distributions
For purposes of this Agreement “net profits” and “net losses” mean the profits or losses of the
Company resulting from the conduct of the Company’s business, after all expenses, including
depreciation allowance, incurred in connection with the conduct of its business for which such
expenses have been accounted.
The term “cash receipts” shall mean all cash receipts of the Company from whatever source
derived, including without limitation capital contributions made by the Member(s); the proceeds
of any sale, exchange, condemnation or other disposition of all or any part of the assets of the
3
Company; the proceeds of any loan to the Company; the proceeds of any mortgage or
refinancing of any mortgage on all or any part of the assets of the Company; the proceeds of any
insurance policy for fire or other casualty damage payable to the Company; and the proceeds
from the liquidation of assets of the Company following termination.
The term “capital transactions” shall mean any of the following: the sale of all or any part of the
assets of the Company; the refinancing of mortgages or other liabilities of the Company; the
receipt of insurance proceeds; and any other receipts or proceeds are attributable to capital.
(Check One)
☐ - SINGLE-MEMBER: A “Capital Account” for the Member shall be maintained by the
Company. The Member's Capital Account shall reflect the Member’s capital contributions and
increases for any net income or gain of the Company. The Member’s Capital Account shall also
reflect decreases for distributions made to the Member and the Member’s share of any losses
and deductions of the Company.
☐ - MULTI-MEMBER: The “Capital Account” for each Member shall mean the account
created and maintained for the Member in accordance with Section 704(b) of the Internal
Revenue Code and Treasury Regulation Section 1.704-1(b)(2)(iv).
The term “Members’ Percentage Interests” shall mean the percentages set forth opposite the
name of each Member Below:
Member Percentage Interest
_____________________________ _____________%
_____________________________ _____________%
_____________________________ _____________%
During each fiscal year, the net profits and net losses of the Company (other than from capital
transactions), and each item of income, gain, loss, deduction or credit entering into the
computation thereof, shall be credited or charged, as the case may be, to the capital accounts of
each Member in proportion to the Members’ Percentage Interests. The net profits of the
Company from capital transactions shall be allocated in the following order of priority: (a) to
offset any negative balance in the capital accounts of the Members in proportion to the amounts
of the negative balance in their respective capital accounts, until all negative balances in the
capital accounts have been eliminated; then (b) to the Members in proportion to the Members’
Percentage Interests. The net losses of the Company from capital transactions shall be
allocated in the following order of priority: (a) to the extent that the balance in the capital
accounts of any Members are in excess of their original contributions, to such Members in
proportion to the excess balances until all such excess balances have been reduced to zero;
then (b) to the Members in proportion to the Members’ Percentage Interests.
The cash receipts of the Company shall be applied in the following order of priority: (a) to the
payment of interest or amortization on any mortgages on the assets of the Company, amounts
due on debts and liabilities of the Company other than those due to any Member, costs of the
construction of the improvements to the assets of the Company and operating expenses of the
4
Company; (b) to the payment of interest and establishment of cash reserves determined by the
Members to be necessary or appropriate, including without limitation, reserves for the operation
of the Company’s business, construction, repairs, replacements, taxes and contingencies; and
(d) to the repayment of any loans made to the Company by any Member. Thereafter, the cash
receipts of the Company shall be distributed among the Members as hereafter provided.
Except as otherwise provided in this Agreement or otherwise required by law, distributions of
cash receipts of the Company, other than from capital transactions, shall be allocated among the
Members in proportion to the Members’ Percentage Interests.
Except as otherwise provided in this Agreement or otherwise required by law, distributions of
cash receipts from capital transactions shall be allocated in the following order or priority: (a) to
the Members in proportion to their respective capital accounts until each Member has received
cash distributions equal to any positive balance in their capital account; then (b) to the Members
in proportion to the Members’ Percentage Interests.
It is the intention of the Members that the allocations under this Agreement shall be deemed to
have “substantial economic effect” within the meaning of Section 704 of the Internal Revenue
Code and Treas. Reg. Section 1.704-1. Should the provisions of this Agreement be inconsistent
with or in conflict with Section 704 of the Code or the Regulations thereunder, then Section 704
of the Code and the Regulations shall be deemed to override the contrary provisions thereof. If
Section 704 or the Regulations at any time require that limited liability company operating
agreements contain provisions which are not expressly set forth herein, such provisions shall be
incorporated into this Agreement by reference and shall be deemed a part of this Agreement to
the same extent as though they had been expressly set forth herein.
7. Books, Records and Tax Returns
(Check One)
☐ - SINGLE-MEMBER: The Company shall maintain complete and accurate books and
records of the Company's business and affairs as required by the Statutes and such books and
records shall be kept at the Company's Registered Office and shall in all respects be
independent of the books, records and transactions of the Member.
The Company's fiscal year shall be the calendar year with an ending month of December.
The Member intends that the Company, as a single member LLC, shall be taxed as a sole
proprietorship in accordance with the provisions of the Internal Revenue Code. Any provisions
herein that may cause may cause the Company not to be taxed as a sole proprietorship shall be
inoperative.
☐ - MULTI-MEMBER: The Members, or their designees, shall maintain complete and accurate
records and books of the Company’s transactions in accordance with generally accepted
accounting principles.
The Company shall furnish each Member, within seventy-five days after the end of each fiscal
5
year, an annual report of the Company including a balance sheet, a profit and loss statement a
capital account statement; and the amount of such Member’s share of the Company’s income,
gain, losses, deductions and other relevant items for federal income tax purposes.
The Company shall prepare all Federal, State and local income tax and information returns for
the Company, and shall cause such tax and information returns to be timely filed. Within
seventy-five days after the end of each fiscal year, the Company shall forward to each person
who was a Member during the preceding fiscal year a true copy of the Company’s information
return filed with the Internal Revenue Service for the preceding fiscal year.
All elections required or permitted to be made by the Company under the Internal Revenue
Code, and the designation of a tax matters partner pursuant to Section 6231(a)(7) of the Internal
Revenue Code for all purposes permitted or required by the Code, shall be made by the
Company by the affirmative vote or consent of Members holding a majority of the Members’
Percentage Interests.
Upon request, the Company shall furnish to each Member, a current list of the names and
addresses of all of the Members of the Company, and any other persons or entities having any
financial interest in the Company.
8. Bank Accounts
All funds of the Company shall be deposited in the Company’s name in a bank account or
accounts as chosen by the Member(s). Withdrawals from any bank accounts shall be made
only in the regular course of business of the Company and shall be made upon such signature or
signatures as the Members from time to time may designate.
9. Management of the Company
The business and affairs of the Company shall be conducted and managed by the Member(s) in
accordance with this Agreement and the laws of the State of Idaho.
(Check One)
☐ - SINGLE-MEMBER: __________________, as sole member of the Company, has sole
authority and power to act for or on behalf of the Company, to do any act that would be binding
on the Company, or incur any expenditures on behalf of the Company. The Member shall not
be liable for the debts, obligations or liabilities of the Company, including under a judgment,
decree or order of a court. The Company is organized as a “member-managed” limited liability
company. The Member is designated as the initial managing member.
☐ - MULTI-MEMBER: Except as expressly provided elsewhere in this Agreement, all decisions
respecting the management, operation and control of the business and affairs of the Company
and all determinations made in accordance with this Agreement shall be made by the
affirmative vote or consent of Members holding a majority of the Members’ Percentage
Interests.
6
Notwithstanding any other provision of this Agreement, the Members shall not, without the prior
written consent of the unanimous vote or consent of the Members, sell, exchange, lease, assign
or otherwise transfer all or substantially all of the assets of the Company; sell, exchange, lease
(other than space leases in the ordinary course of business), assign or transfer the Company’s
assets; mortgage, pledge or encumber the Company’s assets other than is expressly authorized
by this Agreement; prepay, refinance, modify, extend or consolidate any existing mortgages or
encumbrances; borrow money on behalf of the Company in the excess of
$___________________.00; lend any Company funds or other assets to any person in an
amount or with a value in excess of $___________________.00; establish any reserves for
working capital repairs, replacements, improvements or any other purpose, in excess of an
aggregate of $___________________.00; confess a judgment against the Company; settle,
compromise or release, discharge or pay any claim, demand or debt in excess of
$___________________.00, including claims for insurance; approve a merger or consolidation
of the Company with or into any other limited liability company, corporation, partnership or other
entity; or change the nature or character of the business of the Company.
The members shall receive such sums for compensation as Members of the Company as may
be determined from time to time by the affirmative vote or consent of Members holding a majority
of the Members’ Percentage Interests.
(Check if Applicable)
☐ - MULTI-MEMBER: Meetings of Members
The annual meeting of the Members shall be held on _____________________________
(day/month) at the principal office of the Company or at such other time and place as the
Members determine, for the purpose of transacting such business as may lawfully come before
the meeting. If the day fixed for the annual meeting shall be a legal holiday, such meeting shall
be held on the next succeeding business day.
The Members may by resolution prescribe the time and place for the holding of regular meetings
and may provide that the adoption of such resolution shall constitute notice of such regular
meetings.
Special meetings of the Members, for any purpose or purposes, may be called by any ___
Members (or such other number of Members as the Members from time to time may specify).
Written or electronic notice stating the place, day and hour of the meeting and, in the case of a
special meeting, the purpose for which the meeting is called, shall be delivered not less than
three days before the date of the meeting, either personally or by mail, to each Member of record
entitled to vote at such meeting. When all the Members of the Company are present at any
meeting, or if those not present sign a written waiver of notice of such meeting, or subsequently
ratify all the proceedings thereof, the transactions of such meeting shall be valid as if a meeting
had been formally called and notice had been given.
At any meeting of the Members, the presence of Members holding a majority of the Members’
Percentage Interests, as determined from the books of the Company, represented in person or
by proxy, shall constitute a quorum for the conduct of the general business of the Company.
7
However, if any particular action by the Company shall require the vote or consent of some other
number or percentage of Members pursuant to this Agreement, a quorum for the purpose of
taking such action shall require such other number or percentage of Members. If a quorum is
not present, the meeting may be adjourned from time to time without further notice, and if a
quorum is present at the adjourned meeting any business may be transacted which might have
been transacted at the meeting as originally notified. The Members present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the withdrawal of
enough Members to leave less a quorum.
At all meetings of the Members, a Member may vote by proxy executed in writing by the Member
or by a duly authorized attorney-in-fact of the Member. Such proxy shall be filed with the
Company before or at the time of the meeting.
A Member of the Company who is present at a meeting of the Members at which action on any
matter is taken shall be presumed to have assented to the action taken, unless the dissent of
such Member shall be entered in the minutes of the meeting or unless such Member shall file a
written dissent to such action with the person acting as the secretary of the meeting before the
meeting’s adjournment. Such right to dissent shall not apply to a Member who voted in favor of
such action.
Unless otherwise provided by law, any action required to be taken at a meeting of the Members,
or any other action which may be taken at a meeting of the Members, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the
Members entitled to vote with respect to the subject.
Members of the Company may participate in any meeting of the Members by means of
conference telephone or similar communication if all persons participating in such meeting can
hear one another for the entire discussion of the matters to be vote upon. Participation in a
meeting pursuant to this paragraph shall constitute presence in person at such meeting.
(Check if Applicable)
☐ - MULTI-MEMBER: Assignment of Interests
Except as otherwise provided in this Agreement, no Member or other person holding any interest
in the Company may assign, pledge, hypothecate, transfer or otherwise dispose of all or any part
of their interest in the Company, including without limitation, the capital, profits or distributions of
the Company without the prior written consent of the other Members in each instance.
The Members agree that no Member may voluntarily withdraw from the Company without the
unanimous vote or consent of the Members.
A Member may assign all or any part of such Member’s interest in the allocations and
distributions of the Company to any of the following (collectively the “permitted assignees”): any
person, corporation, partnership or other entity as to which the Company has given consent to
the assignment of such interest in the allocations and distributions of the Company by the
affirmative vote or consent of Members holding a majority of the Members’ Percentage Interests.
An assignment to a permitted assignee shall only entitle the permitted assignee to the
8
allocations and distributions to which the assigned interest is entitled, unless such permitted
assignee applies for admission to the Company and is admitted to the Company as a Member in
accordance with this Agreement.
An assignment, pledge, hypothecation, transfer or other disposition of all or any part of the
interest of a Member in the Company or other person holding any interest in the Company in
violation of the provisions hereof shall be null and void for all purposes.
No assignment, transfer or other disposition of all or any part of the interest of any Member
permitted under this Agreement shall be binding upon the Company unless and until a duly
executed and acknowledged counterpart of such assignment or instrument of transfer, in form
and substance satisfactory to the Company, has been delivered to the Company.
No assignment or other disposition of any interest of any Member may be made if such
assignment or disposition, alone or when combine with other transactions, would result in the
termination of the Company within the meaning of Section 708 of the Internal Revenue Code or
under any other relevant section of the Code or any successor statute. No assignment or other
disposition of any interest of any Member may be made without an opinion of counsel
satisfactory to the Company that such assignment or disposition is subject to an effective
registration under, or exempt from the registration requirements of, the applicable Federal and
State securities laws. No interest in the Company may be assigned or given to any person
below the age of 21 years or to a person who has been adjudged to be insane or incompetent.
Anything herein contained to the contrary, the Company shall be entitled to treat the record
holder of the interest of a Member as the absolute owner thereof, and shall incur no liability by
reason of distributions made in good faith to such record holder, unless and until there has been
delivered to the Company the assignment or other instrument of transfer and such other
evidence as may be reasonably required by the Company to establish to the satisfaction of the
Company that an interest has been assigned or transferred in accordance with this Agreement.
(Check One)
☐ - SINGLE-MEMBER: Ownership of Company Property.
The Company’s assets shall be deemed owned by the Company as an entity, and the Member
shall have no ownership interest in such assets or any portion thereof. Title to any or all such
Company assets may be held in the name of the Company, one or more nominees or in “street
name”, as the Member may determine.
Except as limited by the Statutes, the Member may engage in other business ventures of any
nature, including, without limitation by specification, the ownership of another business similar
to that operated by the Company. The Company shall not have any right or interest in any such
independent ventures or to the income and profits derived therefrom.
☐ - MULTI-MEMBER: Right of First Refusal
If a Member desires to sell, transfer or otherwise dispose of all or any part of their interest in the
Company, such Member (the “Selling Member”) shall first offer to sell and convey such interest
9
to the other Members before selling, transferring or otherwise disposing of such interest to any
other person, corporation or other entity. Such offer shall be in writing, shall be given to every
other Member, and shall set forth the interest to be sold, the purchase price to be paid, the date
on which the closing is to take place (which date shall be not less than thirty nor more than sixty
days after the delivery of the offer), the location at which the closing is to take place, and all other
material terms and conditions of the sale, transfer or other disposition.
Within fifteen days after the delivery of said offer the other Members shall deliver to the Selling
Member a written notice either accepting or rejecting the offer. Failure to deliver said notice
within said fifteen days conclusively shall be deemed a rejection of the offer. Any or all of the
other Members may elect to accept the offer, and if more than one of the other Members elects
to accept the offer, the interest being sold and the purchase price therefore shall be allocated
among the Members so accepting the offer in proportion to their Members’ Percentage Interests,
unless they otherwise agree in writing.
If any or all of the other Members elect to accept the offer, then the closing of title shall be held in
accordance with the offer and the Selling Member shall deliver to the other Members who have
accepted the offer an assignment of the interest being sold by the Selling Member, and said
other Members shall pay the purchase price prescribed in the offer.
If no other Member accepts the offer, or if the Members who have accepted such offer default in
their obligations to purchase the interest, then the Selling Member within 120 days after the
delivery of the offer may sell such interest to any other person or entity at a purchase price which
is not less than the purchase price prescribed in the offer and upon the terms and conditions
which are substantially the same as the terms and conditions set forth in the offer, provided all
other applicable requirements of this Agreement are complied with. An assignment of such
interest to a person or entity who is not a Member of the Company shall only entitle such person
or entity to the allocations and distributions to which the assigned interest is entitled, unless such
person or entity applies for admission to the Company and is admitted to the Company as a
Member in accordance with this Agreement.
If the Selling Member does not sell such interest within said 120 days, then the Selling Member
may not thereafter sell such interest without again offering such interest to the other Members in
accordance with this Agreement.
(Check if Applicable)
☐ - MULTI-MEMBER: Admission of New Members
The Company may admit new Members (or transferees of any interests of existing Members)
into the Company by the unanimous vote or consent of the Members.
As a condition to the admission of a new Member, such Member shall execute and acknowledge
such instruments, in form and substance satisfactory to the Company, as the Company may
deem necessary or desirable to effectuate such admission and to confirm the agreement of such
Member to be bound by all of the terms, covenants and conditions of this Agreement, as the
same may have been amended. Such new Member shall pay all reasonable expenses in
connection with such admission, including without limitation, reasonable attorneys’ fees and the
10
cost of the preparation, filing or publication of any amendment to this Agreement or the Articles
of Organization, which the Company may deem necessary or desirable in connection with such
admission.
No new Member shall be entitled to any retroactive allocation of income, losses, or expense
deductions of the Company. The Company may make pro rata allocations of income, losses or
expense deductions to a new Member for that portion of the tax year in which the Member was
admitted in accordance with Section 706(d) of the Internal Revenue Code and regulations
thereunder.
In no event shall a new Member be admitted to the Company if such admission would be in
violation of applicable Federal or State securities laws or would adversely affect the treatment of
the Company as a partnership for income tax purposes.
(Check if Applicable)
☐ - MULTI-MEMBER: Withdrawal Events
In the event of the death, retirement, withdrawal, expulsion, or dissolution of a Member, or an
event of bankruptcy or insolvency, as hereinafter defined, with respect to a Member, or the
occurrence of any other event which terminates the continued membership of a Member in the
Company pursuant to the Statutes (each of the foregoing being hereinafter referred to as a
“Withdrawal Event”), the Company shall terminate sixty days after notice to the Members of such
withdrawal Event unless the business of the Company is continued as hereinafter provided.
Notwithstanding a Withdrawal Event with respect to a Member, the Company shall not terminate,
irrespective of applicable law, if within aforesaid sixty day period the remaining Members, by the
unanimous vote or consent of the Members (other than the Member who caused the Withdrawal
Event), shall elect to continue the business of the Company.
In the event of a Withdrawal Event with respect to an Member, any successor in interest to such
Member (including without limitation any executor, administrator, heir, committee, guardian, or
other representative or successor) shall not become entitled to any rights or interests of such
Member in the Company, other than the allocations and distributions to which such Member is
entitled, unless such successor in interest is admitted as a Member in accordance with this
Agreement.
An “event of bankruptcy or insolvency” with respect to a Member shall occur if such Member: (1)
applies for or consents to the appointment of a receiver, trustee or liquidator of all or a substantial
part of their assets; or (2) makes a general assignment for the benefit of creditors; or (3) is
adjudicated a bankrupt or an insolvent; or (4) files a voluntary petition in bankruptcy or a petition
or an answer seeking an arrangement with creditors or to take advantage of any bankruptcy,
insolvency, readjustment of debt or similar law or statute, or an answer admitting the material
allegations of a petition filed against them in any bankruptcy, insolvency, readjustment of debt or
similar proceedings; or (5) takes any action for the purpose of effecting any of the foregoing; or
(6) an order, judgment or decree shall be entered, with or without the application, approval or
consent of such Member, by any court of competent jurisdiction, approving a petition for or
appointing a receiver or trustee of all or a substantial part of the assets of such Member, and
11
such order, judgment or decree shall be entered, with or without the application, approval or
consent of such Member, by any court of competent jurisdiction, approving a petition for or
appointing a receiver or trustee of all or a substantial part of the assets of such Member, and
such order, judgment or decree shall continue unstayed and in effect for thirty days.
10. Dissolution and Liquidation
(Check One)
☐ - SINGLE-MEMBER: The Company shall dissolve and its affairs shall be wound up on the
first to occur of (i) At a time, or upon the occurrence of an event specified in the Articles of
Organization or this Agreement. (ii) The determination by the Member that the Company shall
be dissolved.
Upon the death of the Member, the Company shall be dissolved. By separate written
documentation, the Member shall designate and appoint the individual who will wind down the
Company’s business and transfer or distribute the Member's Interests and Capital Account as
designated by the Member or as may otherwise be required by law.
Upon the disability of a Member, the Member may continue to act as Manager hereunder or
appoint a person to so serve until the Member's Interests and Capital Account of the Member
have been transferred or distributed.
☐ - MULTI-MEMBER: The Company shall terminate upon the occurrence of any of the
following : (i) the election by the Members to dissolve the Company made by the unanimous
vote or consent of the Members; (ii) the occurrence of a Withdrawal Event with respect to a
Member and the failure of the remaining Members to elect to continue the business of the
Company as provided for in this Agreement above; or (iii) any other event which pursuant to this
Agreement, as the same may hereafter be amended, shall cause a termination of the
Company.
The liquidation of the Company shall be conducted and supervised by a person designated for
such purposes by the affirmative vote or consent of Members holding a majority of the Members’
Percentage Interests (the “Liquidating Agent”). The Liquidating Agent hereby is authorized and
empowered to execute any and all documents and to take any and all actions necessary or
desirable to effectuate the dissolution and liquidation of the Company in accordance with this
Agreement.
Promptly after the termination of the Company, the Liquidating Agent shall cause to be prepared
and furnished to the Members a statement setting forth the assets and liabilities of the Company
as of the date of termination. The Liquidating Agent, to the extent practicable, shall liquidate the
assets of the Company as promptly as possible, but in an orderly and businesslike manner so as
not to involve undue sacrifice.
The proceeds of sale and all other assets of the Company shall be applied and distributed in the
following order of priority: (1) to the payment of the expenses of liquidation and the debts and
12
liabilities of the Company, other than debts and liabilities to Members; (2) to the payment of
debts and liabilities to Members; (3) to the setting up of any reserves which the Liquidating Agent
may deem necessary or desirable for any contingent or unforeseen liabilities or obligations of the
Company, which reserves shall be paid over to licensed attorney to hold in escrow for a period of
two years for the purpose of payment of any liabilities and obligations, at the expiration of which
period the balance of such reserves shall be distributed as provided; (4) to the Members in
proportion to their respective capital accounts until each Member has received cash distributions
equal to any positive balance in their capital account, in accordance with the rules and
requirements of Treas. Reg. Section 1.704-1(b)(2)(ii)(b); and (5) to the Members in proportion to
the Members’ Percentage Interests.
The liquidation shall be complete within the period required by Treas. Reg. Section
1.704-1(b)(2)(ii)(b).
Upon compliance with the distribution plan, the Members shall no longer be Members, and the
Company shall execute, acknowledge and cause to be filed any documents or instruments as
may be necessary or appropriate to evidence the dissolution and termination of the Company
pursuant to the Statutes.
11. Representations of Members
(Check if Applicable)
☐ - MULTI-MEMBER: Each of the Members represents, warrants and agrees that the Member
is acquiring the interest in the Company for the Member’s own account for investment purposes
only and not with a view to the sale or distribution thereof; the Member, if an individual, is over
the age of 21; if the Member is an organization, such organization is duly organized, validly
existing and in good standing under the laws of its State of organization and that it has full
power and authority to execute this Agreement and perform its obligations hereunder; the
execution and performance of this Agreement by the Member does not conflict with, and will not
result in any breach of, any law or any order, writ, injunction or decree of any court or
governmental authority against or which binds the Member, or of any agreement or instrument
to which the Member is a party; and the Member shall not dispose of such interest or any part
thereof in any manner which would constitute a violation of the Securities Act of 1933, the Rules
and Regulations of the Securities and Exchange Commission, or any applicable laws, rules or
regulations of any State or other governmental authorities, as the same may be amended.
12. Certificates Evidencing Membership
(Check if Applicable)
☐ - MULTI-MEMBER: Every membership interest in the Company shall be evidenced by a
Certificate of Membership issued by the Company. Each Certificate of Membership shall set
forth the name of the Member holding the membership interest and the Member’s Percentage
Interest held by the Member, and shall bear the following legend:
“The membership interest represented by this certificate is subject to, and may not be
transferred except in accordance with, the provisions of the Operating Agreement of
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______________________, LLC, dated effective as of _________________________,
20______, as the same from time to time may be amended, a copy of which is on file at the
principal office of the Company.”
13. Notices
(Check if Applicable)
☐ - MULTI-MEMBER: All notices, demands, requests or other communications which any of
the parties to this Agreement may desire or be required to give hereunder shall be in writing and
shall be deemed to have been properly given if sent by courier or by registered or certified mail,
return receipt requested, with postage prepaid, addressed as follows: (a) if to the Company, at
the principal place of business of the Company designated by the Company; and (b) if to any
Member, to the address of said Member first above written, or to such other address as may be
designated by said Member by notice to the Company and the other Members pursuant to this
Article 13.
14. Arbitration
(Check if Applicable)
☐ - MULTI-MEMBER: Any dispute, controversy or claim arising out of or in connection with this
Agreement or any breach or alleged breach hereof shall, upon the request of any party
involved, be submitted to, and settled by, arbitration in the city in which the principal place of
business of the Company is then located, pursuant to the commercial arbitration rules then in
effect of the American Arbitration Association (or at any other time or place or under any other
form of arbitration mutually acceptable to the parties involved). Any award rendered shall be
final and conclusive upon the parties and a judgment thereon may be entered in a court of
competent jurisdiction. The expenses of the arbitration shall be borne equally by the parties to
the arbitration, provided that each party shall pay for and bear the cost of its own experts,
evidence and attorneys’ fees, except that in the discretion of the arbitrator any award may
include the attorney’s fees of a party if the arbitrator expressly determines that the party against
whom such award is entered has caused the dispute, controversy or claim to be submitted to
arbitration as a dilatory tactic or in bad faith.
15. Amendments
(Check if Applicable)
☐ - MULTI-MEMBER: This Agreement may not be altered, amended, changed, supplemented,
waived or modified in any respect or particular unless the same shall be in writing and agreed to
by the affirmative vote or consent of Members holding a majority of the Members’ Percentage
Interests. No amendment may be made to Articles that apply to the financial interest of the
Members, except by the vote or consent of all of the Members. No amendment of any
provision of this Agreement relating to the voting requirements of the Members on any specific
subject shall be made without the affirmative vote or consent of at least the number or
percentage of Members required to vote on such subject.
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16. Indemnification
a) SINGLE-MEMBER: The Member (including, for purposes of this Section, any estate,
heir, personal representative, receiver, trustee, successor, assignee and/or transferee
of the Member) shall not be liable, responsible or accountable, in damages or
otherwise, to the Company or any other person for: (i) any act performed, or the
omission to perform any act, within the scope of the power and authority conferred on
the Member by this agreement and/or by the Statutes except by reason of acts or
omissions found by a court of competent jurisdiction upon entry of a final judgment
rendered and un-appealable or not timely appealed (“Judicially Determined”) to
constitute fraud, gross negligence, recklessness or intentional misconduct; (ii) the
termination of the Company and this Agreement pursuant to the terms hereof; (iii) the
performance by the Member of, or the omission by the Member to perform, any act
which the Member reasonably believed to be consistent with the advice of attorneys,
accountants or other professional advisers to the Company with respect to matters
relating to the Company, including actions or omissions determined to constitute
violations of law but which were not undertaken in bad faith; or (iv) the conduct of any
person selected or engaged by the Member.
The Company, its receivers, trustees, successors, assignees and/or transferees shall
indemnify, defend and hold the Member harmless from and against any and all
liabilities, damages, losses, costs and expenses of any nature whatsoever, known or
unknown, liquidated or unliquidated, that are incurred by the Member (including
amounts paid in satisfaction of judgments, in settlement of any action, suit, demand,
investigation, claim or proceeding (“Claim”), as fines or penalties) and from and
against all legal or other such costs as well as the expenses of investigating or
defending against any Claim or threatened or anticipated Claim arising out of,
connected with or relating to this Agreement, the Company or its business affairs in
any way; provided, that the conduct of the Member which gave rise to the action
against the Member is indemnifiable under the standards set forth herein.
Upon application, the Member shall be entitled to receive advances to cover the costs
of defending or settling any Claim or any threatened or anticipated Claim against the
Member that may be subject to indemnification hereunder upon receipt by the
Company of any undertaking by or on behalf of the Member to repay such advances to
the Company, without interest, if the Member is Judicially Determined not to be
entitled to indemnification as set forth herein.
All rights of the Member to indemnification under this Agreement shall (i) be
cumulative of, and in addition to, any right to which the Member may be entitled to by
contract or as a matter of law or equity, and (ii) survive the dissolution, liquidation or
termination of the Company as well as the death, removal, incompetency or
insolvency of the Member.
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The termination of any Claim or threatened Claim against the Member by judgment,
order, settlement or upon a plea of nolo contendere or its equivalent shall not, of itself,
cause the Member not to be entitled to indemnification as provided herein unless and
until Judicially Determined to not be so entitled.
17. Miscellaneous
This Agreement and the rights and liabilities of the parties hereunder shall be governed by and
determined in accordance with the laws of the State of Idaho. If any provision of this Agreement
shall be invalid or unenforceable, such invalidity or unenforceability shall not affect the other
provisions of this Agreement, which shall remain in full force and effect.
The captions in this Agreement are for convenience only and are not to be considered in
construing this Agreement. All pronouns shall be deemed to be the masculine, feminine,
neuter, singular or plural as the identity of the person or persons may require. References to a
person or persons shall include partnerships, corporations, limited liability companies,
unincorporated associations, trusts, estates and other types of entities.
This Agreement, and any amendments hereto may be executed in counterparts all of which
taken together shall constitute one agreement.
This Agreement sets forth the entire agreement of the parties hereto with respect to the subject
matter hereof. It is the intention of the Member(s) that this Agreement shall be the sole
agreement of the parties, and, except to the extent a provision of this Agreement provides for the
incorporation of federal income tax rules or is expressly prohibited or ineffective under the
Statutes, this Agreement shall govern even when inconsistent with, or different from, the
provisions of any applicable law or rule. To the extent any provision of this Agreement is
prohibited or otherwise ineffective under the Statutes, such provision shall be considered to be
ineffective to the smallest degree possible in order to make this Agreement effective under the
Statutes.
Subject to the limitations on transferability set forth above, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and to their respective heirs, executors,
administrators, successors and assigns.
No provision of this Agreement is intended to be for the benefit of or enforceable by any third
party.
IN WITNESS WHEREOF, the parties have executed this Agreement this _____ day of
______________________, 20_____.
________________________________, LLC
By:____________________________ ________________________________
Member Signature
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Member Signature
________________________________
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Idaho Operating Agreement (How to Start a Business)

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Completed 15 July 2020

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