Operating Agreement - 1 www.northwestregisteredagent.com
A Single Member-Managed Limited Liability Company
Company Formation
1.1 FORMATION. The Member hereby does form a Limited Liability Company ("Company")
subject to the provisions of the Limited Liability Company Act as currently in effect as of
this date. Articles of Organization shall be filed with the Secretary of State.
1.2 NAME. The name of the Company shall be: ____________________________________.
1.3 REGISTERED AGENT. The name and location of the registered agent of the Company
shall be:
1.4 TERM. The Company shall continue for a perpetual period unless,
(a) The Member votes for dissolution; or
(b) Any event which makes it unlawful for the business of the Company to be carried on
by the Member; or
(c) Any other event causing dissolution of this Limited Liability Company under the laws
of the State of ___________________.
1.5 CONTINUANCE OF COMPANY. Notwithstanding the provisions of ARTICLE 1.4, in the
event of an occurrence described in ARTICLE 1.4(c), if there is at least one remaining
Member, said remaining Member shall have the right to continue the business of the
Company. Such right can be exercised by the written vote of the remaining
Member within ninety (90) days after the occurrence of an event described in ARTICLE
1.4(c). If not so exercised, the right of the Member to continue the business of the
Company may expire if that member desires.
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1.6 BUSINESS PURPOSE. The purpose of the Company is to __________________________
1.7 PRINCIPAL PLACE OF BUSINESS. The location of the principal place of business of the
Company shall be:
The principal place of business may be changed to a location the Member may select
The Member may also choose to store company documents at any address the Member
1.8 MEMBER. The name and place of residence of the member are contained in Exhibit 1
attached to this Agreement.
1.9 ADMISSION OF ADDITIONAL MEMBERS. Except as otherwise expressly provided in the
Agreement, additional members may be admitted to the Company through issuance by
the company of a new interest in the Company or a sale of current a percent of current
Members interest.
Capital Contributions
2.1 INITIAL CONTRIBUTIONS. The Member initially shall contribute to the Company capital
as described in Exhibit 2 attached to this Agreement. The total value of such
property and cash is ____________________________.
2.2 ADDITIONAL CONTRIBUTIONS. Except as provided in ARTICLE 6.2, no Member shall be
obligated to make any additional contribution to the Company's capital.
Profits, Losses and Distributions
3.1 PROFITS/LOSSES. For financial accounting and tax purposes the Company's net profits
or net losses shall be determined on an annual basis and shall be allocated to the
Members in proportion to each Member's relative capital interest in the Company as set
forth in Exhibit 2 as amended from time to time in accordance with Treasury Regulation
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3.2 DISTRIBUTIONS. The Member shall determine and distribute available funds annually or
at more frequent intervals as the Member sees fit. Available funds, as referred to
herein, shall mean the net cash of the Company available after appropriate provision for
expenses and liabilities, as determined by the Member. Distributions in liquidation of
the Company or in liquidation of a Member's interest shall be made in accordance with
the positive capital account balances pursuant to Treasury Regulation 1.704-
l(b)(2)(ii)(b)(2). To the extent a Member shall have a negative capital account balance,
there shall be a qualified income offset, as set forth in Treasury Regulation 1.704-
3.3 C CORPORATION ELECTION. The Member may elect to be treated as a C corporation at
any time to keep the profits of the LLC at the company level and not be forced to
distribute profits to the Member.
4.1 MANAGEMENT OF THE BUSINESS. The management of the business is invested in the
4.2 MEMBER. The liability of the Member shall be limited as provided pursuant to
applicable law. The Member is in control, management, direction, and operation of the
Company's affairs and shall have powers to bind the Company with any legally binding
agreement, including setting up and operating a LLC company bank account.
4.3 POWERS OF THE MEMBER. The Member is authorized on the Company's behalf to make
all decisions in accordance with ARTICLE 4.2 as to (a) the sale, development lease or
other disposition of the Company's assets; (b) the purchase or other acquisition of other
assets of all kinds; (c) the management of all or any part of the Company's assets; (d)
the borrowing of money and the granting of security interests in the Company's assets;
(e) the pre-payment, refinancing or extension of any loan affecting the Company's
assets; (f ) the compromise or release of any of the Company's claims or debts; and, (g)
the employment of persons, firms or corporations for the operation and management of
the company's business. In the exercise of its management powers, the Member is
authorized to execute and deliver (a) all contracts, conveyances, assignments leases,
sub-leases, franchise agreements, licensing agreements, management contracts and
maintenance contracts covering or affecting the Company's assets; (b) all checks, drafts
and other orders for the payment of the Company's funds; (c) all promissory notes,
loans, security agreements and other similar documents; and, (d) all other instruments
of any other kind relating to the Company's affairs, whether like or unlike the foregoing.
4.7 NOMINEE. Title to the Company's assets shall be held in the Company's name or in the
name of any nominee that the Member may designate. The Member shall have power
to enter into a nominee agreement with any such person, and such agreement may
contain provisions indemnifying the nominee, except for his willful misconduct.
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4.8 COMPANY INFORMATION. Upon request, the Chief Executive Member shall supply to
any member information regarding the Company or its activities. Each Member or his
authorized representative shall have access to and may inspect and copy all books,
records and materials in the Chief Executive Member’s possession regarding
the Company or its activities.
4.9 EXCULPATION. Any act or omission of the Member, the effect of which may cause or
result in loss or damage to the Company or the Member if done in good faith to
promote the best interests of the Company, shall not subject the Member to any
liability to the Member.
4.10 INDEMNIFICATION. The Company shall indemnify any person who was or is a party
defendant or is threatened to be made a party defendant, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative (other than an
action by or in the right of the Company) by reason of the fact that he is or was a
Member of the Company, Manager, employee or agent of the Company, or is or was
serving at the request of the Company, for instant expenses (including attorney's fees),
judgments, fines, and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding if the Member acted in good faith and in
a manner he/she reasonably believed to be in or not opposed to the best interest of the
Company, and with respect to any criminal action proceeding, has no reasonable cause
to believe his/her conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of "no lo
Contendere" or its equivalent, shall not in itself create a presumption that the person
did or did not act in good faith and in a manner which he/she reasonably believed to be
in the best interest of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his/her conduct was lawful.
4.11 RECORDS. The Member shall cause the Company to keep at its principal place of
business or other location the following:
(a) A copy of the Certificate of Formation and the Company Operating Agreement and
all amendments;
(b) Copies of the Company's federal, state and local income tax returns and reports, if
any, for the three most recent years;
(c) Copies of any financial statements of the limited liability company for the three most
recent years.
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5.1 MEMBER MANAGEMENT FEE. Any Member rendering services to the Company shall be
entitled to compensation commensurate with the value of such services.
5.2 REIMBURSEMENT. The Company shall reimburse the Member for all direct out-of-
pocket expenses incurred by the Member in managing the Company.
6.1 BOOKS. The Member shall maintain complete and accurate books of account of the
Company's affairs at the Company's principal place of business or other agreed location.
Such books shall be kept on such method of accounting as the Member shall select. The
company's accounting period shall be the calendar year.
6.2 MEMBER'S ACCOUNTS. The Member shall maintain separate capital and distribution
accounts for each member. Each member's capital account shall be determined and
maintained in the manner set forth in Treasury Regulation 1.704-l(b)(2)(iv) and shall
consist of his initial capital contribution increased by:
(a) Any additional capital contribution made by him/her;
(b) Credit balances transferred from his distribution account to his capital account;
and decreased by:
(a) Distributions to him/her in reduction of Company capital;
(b) The Member's share of Company losses if charged to his/her capital account.
6.3 REPORTS. The Member shall close the books of account after the close of each
calendar year, and shall prepare and send to each member a statement of such
Member's distributive share of income and expense for income tax reporting purposes.
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7.1 ASSIGNMENT. According to the appropriate Court, should the Member have a creditor
with a judgment that was issued an assignment of the membership interest, the creditor
shall only obtain an assignment of the membership interest, not the actual transfer of
Membership in the LLC. The new assignee does not have any rights of the Member or
have the ability to be involved in management of the LLC or the right to dissolve the LLC.
The new assignee is only granted rights of the distributions of the Members interests, if
the Member decides to distribute at all, not the rights of membership. The assignee
must release the Members interests back to Member upon payment of the judgment in
accordance with the appropriate Court.
8.1 DISSOLUTION. The Member may dissolve the LLC at any time. The
Member may NOT dissolve the LLC for a loss of membership interests.
Upon dissolution the LLC must pay its debts first before distributing cash,
assets, and/or initial capital to the Member or the Members interests. The
dissolution may only be ordered by the Member, not by the owner of the
Members interests.
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This Company Operating Agreement is entered into and shall become effective as of the
Effective Date by and among the Company and the person executing this Agreement as
Member. It is the Members express intention to create a limited liability company in
accordance with applicable law, as currently written or subsequently amended or redrafted.
The undersigned hereby agree, acknowledge, and certify that the foregoing operating
agreement is adopted and approved by each member, the agreement consisting of ____ pages,
constitutes, together with Exhibit 1, Exhibit 2 and Exhibit 3 (if any), the Operating Agreement of
____________________________________________________, adopted by the member as of
_______________________, _______ 20______.
________________________________ Printed Name ________________________
Percent: _____%
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As of the _____ day of ______________________, 20_____ the following is a list of Members
of the Company:
Name_________________________________ Percent ______%
Address _______________________________________________
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Pursuant to ARTICLE 2, the Members initial contribution to the Company capital is stated to be
$______________________. The description and each individual portion of this initial
contribution are as follows:
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
__________________________________________________________ $______________
SIGNED AND AGREED this _____ day of ________________, 20____.
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