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Operating Agreement
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Prepared for:
[Members' Names]

Prepared by:
[Company Name]

Operating Agreement

This Operating Agreement (hereinafter referred to as the "Agreement") is made and entered into effective on [Effective Date] (hereinafter referred to as the "Effective Date")

By and Among

[Enter Names of All Members'] (hereinafter referred to as the "Members"), and;

[Company Name], a Limited Liability Company (LLC) organized under the laws of [State] (hereinafter referred to as the "Company").

The Members and the Company shall be collectively referred to as the "Parties" and individually as "Party".

THEREFORE, in consideration of the covenants, other mutual promises, and agreements contained herein, the Parties comply with the terms and conditions as mentioned below:
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Terms and Conditions

1. Definitions

The following terms, whenever stated in the Agreement, henceforth shall have the meaning as established below:

  1. "Act" henceforth shall mean the [State] LLC Law, including amendments from time to time.
  1. "Affiliate" shall mean: (i) any person directly or indirectly controlling or being controlled or is under common control with another person; (ii) a person owning or controlling [0.00]% or more of the outstanding voting securities of such other person; (iii) any officer, director, or partner of such other company, and (iv) if such person is an officer, director or partner, any company for which such person acts in any capacity.
  1. "Person" shall include any person, corporation, partnership, trust, unincorporated association, or other legal entity.
  1. "Membership Interest" shall mean the Members' ownership interest in the Company.
  1. "Available Funds" shall mean the net cash of the Company available after the Company's ongoing and anticipatable liabilities and expenses are paid.

2. Organization

  1. Formation: The Company was formed on [Date] by filing the articles of organization of the Company (“Articles of Organization”) in the office of the Secretary of State of [State] in accordance with and pursuant to the Act.
  1. Name and Address of Business: The name of the Company shall be [Company Name] LLC, and its principal executive office shall be [Address]. The Members shall also hold the right to change the name, or establish additional places of business of the Company upon the necessity or the desirability of the Members.
  1. Purpose: The purpose of the Company is to [Mention the purpose of the Company] and to perform or engage in any lawful activity that shall enhance the pursuance of an LLC under the Act. The Company shall have the authority to do all things necessary or convenient to accomplish its purpose and operate its business.
  1. Term: The terms of the existence of the Company shall commence on the date of filing of the Articles of Organization with the [State]. It shall continue unless the Company is dissolved, liquidated, or terminated in accordance with the provisions of this Agreement.
  1. Registered Office and Registered Agent: The Registered Office and Resident Agent of the Company shall be as provided in the initial Articles of Organization. The Registered Office and/or Resident Agent may be changed from time to time. If the Resident Agent shall ever resign, the Company shall promptly appoint a successor agent.

3. Capital Contribution

  1. The Members shall contribute an initial capital of $[0.00]. The Members may, but shall not be obliged to, making any additional capital contributions. Any additional contribution, including the initial contribution, is described in Exhibit [List Exhibit Letter].
  1. The Members shall have no right to withdraw their contributions to the Capital until the Company has been dissolved, liquidated, or terminated unless otherwise set forth herein.
  1. The Members shall not be entitled to interest on their capital contributions to the Company.
  1. Except as otherwise provided for in this Agreement, the liability of any Member for the losses, debts, liabilities and obligations of the Company shall be limited to their respective initial contribution.

4. Member's Account

The Company shall maintain a separate capital account for each member (hereinafter referred to as the "Capital Account"). Any additional contribution made by any member will be credited to that Member's individual Capital Account.

5. Members' Responsibilities

  1. Management: Members of the Company shall have the right to manage the business and affairs of the Company. Additionally, the Company's manager(s) shall be elected by the Members, either by voting or by mutual consensus. The Manager may be a Member or Non-Member. The name and residential address of each Manager is set forth in Exhibit [List Exhibit Letter] of this Agreement.
  1. Members Authority: The Members shall have full and complete authority, power, and discretion to manage and control the business, affairs, and properties of the Company. They are authorized to take decisions on the Company's behalf as to
  1. sale, development, lease, or other disposition of the Company's assets;
  1. the purchase or other acquisition of other assets;
  1. [add any other responsibilities]
  1. Members Meetings: A meeting shall be held on an annual basis at the principal office of the Company, provided that all Members are made aware of the meeting by giving them a written notice [number of days] days prior to the meeting date.

6. Distribution

Distribution of the Available Funds to the Members shall be made on an annual basis. These distributions shall be distributed to the Members in proportion to each Member’s Membership Interest, as set forth in Exhibit [List Exhibit Letter].

7. Allocation of Net Income and Net Loss

Subject to the other provisions of this Agreement, the Company's net profits or net losses will be calculated on an annual basis for accounting and tax purposes. These net profits and net losses shall be allocated to the Members based on their Membership Interest, as set forth in Exhibit [List Exhibit Letter].

8. Company's Expenses

The Company shall reimburse the Members for all the costs incurred by them in managing and operating the Company.

9. Books, Records and Accounting

The Company's records and accounts of operations and expenditures shall be maintained and recorded, at the principal office of the Company, including the following as mentioned:
  1. Information and status of the Company, including the condition of the Company as of the present time.
  1. Contributions made by each Member, that may include and are not limited to cash, property, services, assets, and such others likewise.
  1. Copies of the financial statements of the Company, as described on Exhibit [List Exhibit Letter].
  1. Copies of the Company's Federal, state, and local income tax or information returns and reports for the recent taxable years.
  1. Copies of this Agreement hereof and any other amendments regarding this Agreement with the written consent along with for the execution of the amendment.
  1. A copy of the Articles of Organization, as amended
  1. The books and records of the Company as they relate to the Company’s internal affairs for the current and past [number] fiscal years
  1. Details of the Members, that may include their name, last known business, and capital contribution sanctioned to the Company.

10. Dissolution and Termination

The Company shall dissolve, and its affairs shall be concluded on the first to occur of:
  1. The expiration of the term of existence of the Company as specified in this Agreement;
  1. The written agreement of a majority of the Members to dissolve the Company.

Upon dissolution and termination of the Company, the Members shall take full account of the Company’s assets and liabilities and shall liquidate the assets as per the market value. After paying for all the debts to the Company (except debts owing to Members), the remaining funds or assets of the Company shall be distributed in the following order:
  1. To pay the expenses of liquidation;
  1. To the establishment of any reserves by a majority of the Members for contingent liabilities or obligations of the Company;
  1. Any remaining amount to the Members.

11. Limitation of Liability

The Members shall not be liable, responsible or accountable, in damages or otherwise, to the Company or any other person for:
  1. 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 Acts
  1. The termination of the Company and this Agreement pursuant to the terms hereof.

12. Indemnification

The Company shall indemnify, defend and hold the Members 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 Members.

13. Arbitration 

In the event of any dispute arising in and out of this Agreement between the Parties, it shall be resolved by Arbitration. There shall be [Number of Arbitrators] Arbitrators which shall be appointed by [Party Name]. The venue of Arbitration shall be [Venue/Location of Arbitration] and seat shall be [State]. The Arbitrators' decision shall be final and will be binding on both the Parties.

14. Miscellaneous

  1. Assignability: The Member may sell, assign or otherwise dispose of all or any part of its interest in the Company, only with the written approval of a majority of the Members.
  1. Governing Law: This Agreement shall be governed in all respects by, and be construed in accordance with, the laws of [State].
  1. Severability: If any term in this Agreement is held unenforceable or invalid, it shall be severed from the Agreement herein. The remaining sections, however, shall continue to be valid and enforceable in full force and effect.
  1. Binding: The terms and conditions set forth in the Agreement hereof shall be binding for the benefit of any and all successors, heirs, assigns, or transferees of the Members.
  1. Notices: All notices under this Agreement must be addressed to the Parties individually through their certified mailing address or email, or at other addresses specified by the Parties in writing.
  1. Entirety: This Agreement and other annexures, therefore, constitute the entire agreement between the Members with respect to the matter of subject hereof and thus, supersedes all prior agreements, purchases, understandings, and negotiations, written or phonated, between the Members.
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Acceptance and Signature

In WITNESS WHEREOF, the Agreement is agreed by the undersigned as on the aforementioned date.
[Company Name]
[Member 1 Name]
[Member 2 Name]
Signature
Assign signer 1
Name
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Date
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Signature
Assign signer 2
Name
Assign signer 2
Date
Assign signer 2
Signature
Assign signer 3
Name
Assign signer 3
Date
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THANK YOU

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Free Operating Agreement Templates

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