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Fillable Printable LLC Operationg Agreement

Fillable Printable LLC Operationg Agreement

LLC Operationg Agreement

LLC Operationg Agreement

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This document is the fundamental agreement behind your Limited LiabilityCorporation. This one is
in plain-English as much as possible – reading it through should be self-explanatory
Many banks require this document when opening a business checking account
NOTICE:
We wish we could provide an agreement that was tailored exactly to your business. While this isnot
always possible, we feelthat we've come veryclose and thatthis document provides you with the head-
start that you need to get your deal moving. Nevertheless, we must make this disclaimer:
Do Not Use This Agreement 'As-Is.'
This Agreement Is Not Legal Advice.
Read it Thoroughly and Make All Appropriate Changes to Fit Your Requirements.
You Should Have this Agreement Reviewed and Approved by a
Qualified Attorney at Law Before Using It.
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Agreement compliments of: The Law Firm of Burke & Reedy, www.washingtonpractice.com
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THE MEMBERSHIP INTERESTS EVIDENCED BY THISAGREEMENT HAVE NOT BEEN
REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDERTHE
SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION AND MAY NOT BE SOLD
OR TRANSFERRED WITHOUT COMPLIANCE WITH ANY APPLICABLE FEDERAL, STATE OR
FOREIGN SECURITIES LAWS.
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[State]
Limited Liability Company
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Section 1: Formation, Name, Purpose, Term And Definitions5
Section 2: Members, Percentage Interests, Capital Contributions5
Section 3: Classes And Interests, Extraordinary Actions, Dilution6
Section 4: Distribution Of Cash & Proceeds; Allocations Of Tax Items7
Section 5: Management Of The Company8
Section 6: Rights, Duties And Representations Of Members13
Section 7: Transfer Of Interests14
Section 8: Cessation Of Membership16
Section 9: Dissolution And Winding Up17
Section 10: Indemnification Of The Managers18
Section 11: Power Of Attorney For Limited Purposes18
Section 12: Amendment19
Section 13: Miscellaneous Provisions19
Counterpart Signature Page To Operating Agreement21
Exhibit A: Capital Contribution22
Exhibit B: Definitions23
Exhibit C: Tax Allocations28
Execution Page32
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Section 1: Formation, Name, Purpose, Term & Definitions
Section 1.1 Formation. The parties to this Agreement hereby enter into a written Operating Agreement
pursuant to the[State] Limited Liability Company Act (the “Act”), to set forth the terms and conditions
of their joint undertaking as Members of the Company, and to carry out the purposes of the Company as
further described herein, in accordance with the provisions of this Agreement and the laws of the State of
[State].
Section 1.2 Name. The name of the Company is [Company], LLC. The Companys business shall be
conducted under said name, the name “[Company],” and/or such other names as the Manager may from
time to timedeem necessary or advisable, provided thatnecessary filings under applicable assumed or
fictitious name statutes are first obtained.
Section 1.3 Offices & Resident Agent. The name and address of the Resident Agent of the Company in
the State of [State] is:
[Owner/Founder], [Address], [City], [State] [zip code].
The principal office of the Company shall be:
[Address], [City], [State] [zip code],
or such other location as the Manager may, from time to time, designate by notice to the Members.
Section 1.4 Purpose. The purpose and business of the Company shall be to…
[develop and distribute multi-media business productivity tools through software, seminars,
audio/video, and published works.]
Section 1.5 Term.The termof the Company commenced on [Date], upon the acceptance for filing of
the Articles ofOrganization of the Companyby the [State] Corporation Commission, and shall have a
perpetual existence, unless earlier dissolved in accordance with Section 9.1 of this Agreement.
Section 1.6 Defined Terms. The defined terms used in this Agreement, unless the context otherwise
requires, shall have the meanings specified herein or as set forth in Exhibit B, which is attached hereto.
Section 2: Members, Percentage Interests, Capital Contributions
Section 2.1 Members: Exhibit A.The names, addresses, Capital Contributions and Percentage Interests
of all Members shallbedesignated in ExhibitA, which is attached hereto. The Manager shallcause
Exhibit A to be amended from time to time to reflect the withdrawal of one ormore Members or the
admission of one or more additional Members. As of the date of the execution of this Agreement, there
are no Class B or Class C Members. Class A Members shall beadmitted in accordance with Section 3.1
hereof. Class B Members shallbe admitted in accordance with Section 3.2 hereof. Class C Members
shall be admitted to the Company in accordance with Section 3.3 hereof.
Section 2.2 Capital Contributions.On or prior to the date of this Agreement, each existing Member
shall make aCapital Contribution to the Company in an amountset forth opposite such Member’s name
in Exhibit A.
Section 2.3 Class A Members. [Owner/Founder], and [Founder2] own all of the outstanding Class A
membership Units. See Exhibit A for a list of the Members of the Company.
Section 2.4 Conversion of Class A Interests. Subject to the limitations set forth below in Section 3.6 of
this Operating Agreement, the Manager shallhave the right, at any time and fromtime to time, to admit
one or more additional Class A Members upon such terms and conditions as the Manager shall determine
in their solediscretion, provided that they obtains the prior unanimous written consent of the existing
Class A Members.
Section 2.5 Minimum Interest of the Manager. A Manager shallnot be required to own an Interest in
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the Company.
Section 2.6 Additional Capital Liability of Members. No Member shall have any obligation to
contribute capitalto the Companyexcept to the extent of the Capital Contribution of such Member
described in this Section 2. No Member of the Companyshall haveany obligation or duty to advance or
loan funds to the Company for the purpose of satisfying liabilities of the Company orany operating or
carrying costs associated with the Company’s business. No Member shall be personally liable for the
obligations of the Company, whether arising in contract, tortor otherwise, solelyby reason of being a
Member of the Company.
Section 2.7 No Interest.No interest shallbe paid or due byor from the Company on anycontributions
to the capital of the Company, or any advances made by a Member to the Company.
Section 2.8 Indebtedness to Members.Anyindebtedness of theCompanyowed to a Member shall
provide that the payment of principal and interest(if any) shall be made only if, and to the extent that,
paymentof a distribution to the Member could then be made under applicable provisions of the Act
without the imposition on the Member of any liability for repayment to the Company.
Section 2.9 Withdrawal ofCapitalby Interest Holders. Except as otherwise specifically provided in
this Agreement, priorto the liquidation of the Company no Interest Holdershall have the right to require
the return of his/her/its Capital Contribution or the balance of his/her/its Capital Account. There is no
agreed upon time when the Capital Contribution ofan Interest Holder is to be returned. No Interest
Holder shall have any right to demand and receive property, in lieu of cash, in return of his/her/its Capital
Account. Provided, however, the Company shall have theoption to distribute property in lieu of cash in
the event the Company does not have cash resources available to it for such purpose.
Section 3: Classes & Interests, Extraordinary Actions, Dilution
Section 3.1 Admission of Class A Members. Subject to the limitations set forth in Section 3.6 hereof,
the Manager shall have the right, at any time and fromtime to time, to admit one ormore additional
Class A Members upon such terms and conditions as the Manager shalldetermine in its sole discretion,
provided that it obtains the prior written consentof a Majority in Interest of all the Class A Members,
and any such Person receiving Class A Interests shallmake a CapitalContribution to the Company (in
cash or other property) corresponding to the fair value of such Interest, as determined in the sole
discretion of the Manager.
Section 3.2 Admission of Class BMembers. Subjectto the limitations set forth in this Section 3.2 and
in Section 3.6 hereof, the Manager shall have the right at anytime and from time to time to admit one or
more additionalClass B Members and/or to sell or award additional Class B Interests (orrights to
acquire additional Class B Interests) to Persons who are employed by or otherwise have benefited the
Company, upon such terms and conditions as determined in the sole discretion of the Manager.
Section 3.3 Admission of Class C Members. Subjectto the limitationsset forth in thisSection 3.3 and
in Section 3.6 hereof, the Manager shall have the right at anytime and from time to time to admit one or
more Class C Members and/orto sell additional Class C Interests(or rights to acquire additional Class C
Interests), provided thatany such Person receiving Class C Interests shall make a Capital Contribution to
the Company (in cash or other property) corresponding to the fair value of such Interest, as determined in
the sole discretion of the Manager.
Section 3.4 Conditions for New Members. Notwithstanding anything contained herein to the contrary,
no Person at any time shall be admitted as a Member of the Companyunless: The Person delivers to the
Company a written instrument agreeing to be bound bytheterms of this Agreement, as it may have been
amended fromtime to time; and theadmission of such Person as a Member will not result in the
termination of the Company.
Section 3.5 Extraordinary Actions. Subject to the limitations set forth in Sections 3.6 and 3.7 hereof,
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the Manager shall have the right atany time, in their sole discretion, and upon such terms and conditions
as they shall determine in their sole discretion, provided they obtain the prior written consent of a
Majority in Interest of theClass A Members, to cause the Companyto: (1) Convert from a limited
liability company to a corporation; and (2) Engage in a public offeringof its securities;transfer a
substantial portion ofits other assets not in the ordinarycourse of business; or incur any debtin any
single transaction in excess of the greater of(a) One Hundred Thousand U.S. Dollars ($100,000), or (b)
the accumulated capital and reserves of the Company.
In the event of the occurrence of any ofthe actions described in this Section 3.5, all Members hereby
covenant to cooperate fully and timely with such action and to take any and all actions and execute any
and all documents necessary or appropriate to effectuate such action. In the event the Company converts
to a corporation and theManager, in their sole discretion, determines that the Company should be taxed
as an S corporation for federal and applicable state income tax purposes, all Members hereby covenant to
cooperate fully and timely with such election and to take anyand all actions and execute any and all
documents necessary or appropriate to effectuate such election.
Notwithstanding the above, nothing herein shall be construed to restrict or otherwise limit the exercise by
any Member, upon the occurrence of such a transaction, ofsuch rights as may be provided to Members
under the Act or under other applicable statutes.
Section 3.6 Dilution & Percentage Interest ofthe Classes.All Interests of allclasses shall be diluted
on aPro Rata Basis to theextent Interestsof any and allclassesare added or increased in accordance
with this Section 3, includingwithout limitation a dilution resulting froma private or public offering of
securities.
Section 3.7 Mergeror Consolidation.A Majority in Interestof the Members shall be required to
approve whether the Company should be acquired byor otherwise enter into a merger or consolidation
transaction with another limited liability company, or with alimited partnership, a corporation, or a
business trust having transferable units of beneficialinterest, regardless of whether the Companyis the
surviving entity of such transaction.
Section 4: Distribution of Cash & Proceeds; Allocations of Tax Items
Section 4.1 Allocation of NetAvailable Cash Flow.The Company shall allocate 80% ofthe Net
Available Cash Flow to Class C Members until such timeas the Class C Members’ are allocated an
amount equalto 100%of their investment in the Company plus an annualized rate of 12% per year, and
thereafter, the Members shall be allocated a pro-rata share of the Net Available Cash Flow of the
Company based upon theirallocable share of ownership in the Company. Notwithstanding this Section
4.1, the Manager shall have the right to modify thedistribution ofNet Available Cash Flow with the
prior written consent of a Majority in Interest of all the Members.
Section 4.2 Distribution of Net Available Cash Flow.The Companyshall distribute Net Available
Cash Flow to Members at the sole discretion of the Manager. The Companyshallberequired to make
distributions to Members sufficientto enable each Member to pay taxes on allocations to them of Net
Available Cash Flow of the Company.
Section 4.3 Net Capital Proceeds.Net Capital Proceeds, if any, shall be distributed on a Pro Rata Basis
among all of the Interest Holders. Notwithstanding the foregoing, this Section 4.3 shall not apply to any
distributions made in connection with a termination of the Company, which distributions shall be
governed by Section 9.3 hereof.
Section 4.4 Acknowledgment.All of the Members herebyacknowledge that no distribution of
Available Cash Flow or Net Capital Proceeds pursuant to this Section 4 shall be made to the Members to
the extent that theManager determine, in theirsole discretion, that all or a portion ofsuch fundsare
necessary for the payment ofor due provision forthe (a) liabilities of the Companyto all creditors,
includingthe expenses of a Capital Transaction, and/or (b) additionalrequirements for funds in
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connection with the Company’s business.
Section 4.5 Capital Accounts & Tax Allocations.A separate Capital Account shall be maintained for
each Interest Holder. Each Capital Account shall be adjusted annually, unless this Agreement, the acts of
the Members in accordance with thisAgreement, or the applicable Regulations require a more frequent
adjustment. The maintenance of Capital Accounts and allocation of the Companys tax items shall
follow the provisions ofExhibit C, attached hereto;provided, however, that the Companyat all times
shall conform to the requirements ofany Regulations issued with respectto the maintenance of Capital
Accounts and the allocation of tax items. The Company shall exercise itsbest efforts to take all actions
necessary to cause the allocation oftax items amongthe Interest Holders to reflect the actualand
anticipated allocation of the Company’s distributions, as setforth in this Section 4 and in Section 9.3
hereof, in conformity with the Capital Account maintenance requirements contained in the Regulations.
Section 5: Management of the Company
Section 5.1 Appointment of Manager: Executive Employment.The Members hereby appoint
[Owner/Founder] as the Manager of the Company. The Managers may enter into employment agreements
with the Company furtherdelineating the duties, rights, compensation and covenants of the Manager.
Any employment agreements shall be read in conjunction with this Agreement.
Section 5.2 Exclusive Authority ofManager. Except as specifically provided in this Agreement and
any Manager’s employment agreement, the exclusive responsibility for managing the business and affairs
of the Company is hereby granted to the Manager pursuant to the Act. Each of the Members appoints and
authorizes the Manager to serve as the soleagent of the Company, (exceptto the extent thatcertain
discretionary acts may be delegated by the Manager to certain executive employees of the Company).
The Manager mayexercise allpowersofthe Companyand do all such lawful actsnecessary to manage
the affairs and operations of the Company as are not by statute, regulations, theArticles of Organization,
or otherapplicable documentation required to beexercised or done byany of the other Members. Any
Person dealing with the Manager shall be authorized to rely upon the authority ofthe Manager to bind
the Company in accordance with the rights, powers and duties described in this Agreement. The Manager
shall be an “Authorized Person” of the Company, and shall be authorized to execute or file any document
required or permitted to be executed or filed on behalf of the Company, or to otherwise act as an agent of
the Company, as provided under the Act.
Section 5.3 Binding Authority with Respect to Documents.The Manager shall have the right, power
and authority, acting at all times for and on behalf of the Company, to enter into and execute any
agreement or agreements, promissory noteor notes, and any other instruments or documents, and to
undertake and do all acts necessary to carry out the purposes for which the Companywas formed. In no
event shall a party dealingwith the Company with respect to anydocument signed or action undertaken
on behalf of the Company have the right to inquire into:
The necessity or expediency of any act or action of the Manager; or
Personal information of a Manager if the Manager is a natural person; or
Any act or failure to act by the Company; or
The identities of Members other than the Manager; or
The existence or non-existence of any fact or facts that constitute conditions precedent to acts by the
Manager (including, without limitation, conditions, provisions and other requirements herein set forth
relating to borrowing and the execution of any encumbrances to secure the borrowing) or that are in any
other manner germane to the affairs of the Company.
Any and every Person relying upon any document signed or action taken by the Manager on behalf of
the Company or claiming thereunder may conclusively presume that (i) at the time or times of the
execution and/or delivery thereof, this Agreement was in full force and effect, (ii) any instrument or
document was duly executed in accordance with the terms and provisions of this Agreement and is
binding upon the Company without requiring the approval or consent of any of the Members thereof, and
(iii) the Manager was duly authorized and empowered to execute and deliver any and every such
instrument or document for and on behalf of the Company.
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Section 5.4 Specific Authority. In furtherance and not in limitation of theprovisions ofSection 5.2
hereof and of the other provisions of this Agreement, but subjectto any limitations contained in this
Agreement (including without limitation Section 3.7 hereof) and a Manager’s employment agreement,
the Manager isspecifically authorized and empowered, in Manager’s sole discretion, without regard to
the approval thereof by the Members, to:
a.Direct the employees of the Company to execute, acknowledge and deliver anyand all documents,
agreements, notes, contracts, bankresolutions, signature cards, releases, or other instruments on the
Company’s behalf;
b.Make any and all decisions that the Company may be entitled and/or required to make under the
terms of any and all documents, agreements (includingemployment agreements), or other
instruments relative to the ownership, operation, management and supervision ofthe Company’s
business;
c.Execute forand on behalfof the Company, and in accordance with the terms of this Agreement,
deeds absolute, mortgages (which term “mortgages” is hereby defined for all purposes of this
Agreement to include Deeds of Trust, financing statements, chattel mortgages, pledges, conditional
sales contracts, and similar security instruments), leases, contracts, promissory notes, or otherlegal
documents all of which instruments so dulyexecuted as provided herein shall be valid and binding
upon the Company;
d.Cause the Companyto incur indebtedness orobtain financing (including without limitation loans
from Members or Affiliates ofMembers at competitive rates); to issue promissory notes or other
evidences ofindebtedness; to prepay in whole or in part, recast, increase, modify, or extend any
liabilitiesaffecting the business oftheCompanyand assumed in connection therewith; to provide
security orcollateral in connection with any Companyindebtedness or to encumber or pledge any
Company assets; to execute any extensions or renewals of encumbrances with respect to any assets
used in the Company’s business;and to confess judgment on behalf of theCompany in connection
with any Company borrowings;
e.Cause the Company to enter into leases of real or personal property in furtherance of any or all of the
purposes of the Company;
f.Cause the Companyto purchase real property or personal property and to make reasonable and
necessary capital expenditures and improvementswith respectto such property for use in connection
with the operation and management of the Company’s business; to finance such purchases or
expenditures, in whole or in part, bygivingthe seller or any other Person a security interestin the
property purchased;
g.Cause the Company to sell, exchange or otherwise dispose of any or all of the assets of the Company,
or enter into any Capital Transaction involving the assets or business of the Company, including any
or all of the components of the Companys business, whether such components are real property,
personal property, or intellectual property, mixed or intangible, such as goodwill, if any;
h.Cause the Company to redeem or acquire the Interest of any Interest Holder pursuant to the terms of
this Agreement or pursuant to the Manager’s authority hereunder, and to exercise any options or
other rights with respect to the Interest of any Interest Holder, on behalfofthe Companyor for the
Manager’s own account;
i.Open accounts and deposit and maintain funds in the name of the Companyin banks, savings and
loan associations, moneymarket funds, or such other financial instruments as the Manager deems
necessary or appropriate;
j.Pay all costs orexpenses connected with the operation or managementof the Company, including all
debts and otherobligationsof the Company, from its bank accounts by check or other customary
means (without commingling with the funds of any other Person);
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k.Establish reserves in such amounts as the Manager shall deem appropriate;
l.Enter into, perform and carry out contracts with any Person, includingany of the Members or
Affiliates of the Members, at reasonably competitive rates of compensation forthe performance of
any and allservices that may at anytime be necessary, proper, convenient or advisable to carryon
the Companys business, including entering into exclusive and non-exclusive arrangements;
m.Monitor thequality of services and productsprovided byvendors to the Company, and add,
discharge, or replace such vendors as needed in accordance with applicable state law;
n.Appoint and discharge executive employees of the Companyand delegate specific duties and
authority to Persons who may or may not be employees of the Company;
o.Employ or engage Persons in the operation and management of the Company’s business, on such
terms and for such reasonable compensation as the Manager shall determine (at arm’s length prices
and in keeping with comparable salaries for comparable work), in good faith, to be appropriate and in
the best interests of the Company;
p.Approve the hiring and firingof all employees and agents of the Company, subject to the terms and
conditions of anyemployment policies and procedures of the Company, and subject to theterms of
this Agreement, any other written agreements and applicable state law;
q.Evaluate the performance of all employees and agents of the Company, including its executive
employees, and monitor the quality of services provided by employees and agents of the Company;
r.Establish and monitor the compensation requirements (reasonable compensation set atarm’s length
prices and in keeping with comparable salaries for comparable work) of allemployees and agents of
the Company, including its executive employees;
s.Apply for, make proffers and commitments with regard to and obtain anyand all governmental
permits, approvals, licenses necessary and appropriate in connection with orin anywayrelated to the
Company’s business;
t.Place and carry publicliability, workmen’scompensation, fire, extended coverage, business
interruptions, errors and omissions and such otherinsurance as maybe necessary orappropriate for
the protection of the interests and property of the Company;
u.Authorize the lendingof moneyby the Companyat prevailinginterest rates, including lendingto
borrowers who may be Members or Affiliates of Members of the Company;
v.Initiate, settle and defend legal actions on behalf of the Company, including any litigation,
arbitration, mediation, examination, investigation, inquiry, regulatory proceeding, orother similar
mattercontemplated by the Company, threatened by any Person or in or with which the Company
may become involved;
w.Submit a claim or liability involving the Company to arbitration;
x.Prepare, maintain, file and disseminate returns, reports, statements, and other information for
distribution to the InternalRevenue Service, the state of [State], Franchise Tax Board or Secretary of
State, the Members and for submission to any governmental or regulatory authority or agency;
y.Deal directly with relevant stateand United States regulatory authorities on behalf ofthe Company
and render decisions with respect to matters involving such authorities;
z.Cause the Company to create one or more wholly or partially owned domestic or foreign subsidiaries,
which may be corporations, limited liability companies or other forms of business entities;
aa.Enter into agreements with Members as appropriate; and
bb.Generally, do all things consistent with any and all of the foregoing on behalf of the Company.
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Section 5.5 Obligations ofthe Managers. The Manager shall take allactionsthat may be necessary or
appropriate (i) for the continuation of the Company’s valid existence as a limited liability company under
the applicable state laws; (ii) for the operation, management and supervision of the Company’s business
in accordance with the provisions of this Agreement and applicable laws and regulations.
The Manager shall oversee the preparation, review, and safekeeping of the Company’s records and books
of accounts of all operations, receipts and expenditures of the Company, and shall instituteand maintain
such internal controls asmay be required to complywith alllaws and regulations applicable to the
Company.
The Manager shall deliver to the Members copies of “Information Tax Returns” required under
applicable Federal or state income tax laws, including the Internal Revenue Code of 1986, as amended,
as soon as such return may reasonably be prepared, but not later than the due date ofsuch return as may
be extended pursuant to statutory or administrative provision. Such returns shallreflect the allocation of
the profits orlossesof the Company and other tax itemsas provided in this Agreement to each Member
for theFiscal Year then ended and shallserve as the annual accounting reportto be provided to the
Interest Holders. The cost of all such reports shall be paid by the Company at the Company’s expense.
The Manager shalldeliver copies of this Agreement, the Articles of Organization or any amendments
thereto to each Member.
Section 5.6 No Duty to Consult. Except as otherwise specifically provided herein, the Manager shall
have no duty or obligation to consult with or seek the advice of the Members.
Section 5.7 Contracting on Behalfofthe Company; Related Persons.The Manager, on behalf of the
Company, may employ a Member, or a Person related to oraffiliated with a Member, to renderor
perform a service, or may contract to buy property from, or sell property to, any such Member orother
Person; provided, that (i) anysuch transaction shall be on terms that are fair and equitable to the
Company, comparable to those charged by unrelated parties,and no less favorable to theCompany than
the terms, ifany, known to be available fromunrelated and unaffiliated Persons;and (ii) all parties with
whomthe Companycontracts will of such qualifications to be consistent with the requirements and
guidelines of applicable [State] law. The Manager mayemploy, engage, and contract with, on behalf of
the Company, such Persons, firms or corporations as the Manager, in the Manager’s discretion, shall
deem advisable for the operation and managementof the business of the Company, including such
managing agents, attorneys, accountants, insurance brokers, appraisers, experts, consultants, and lenders,
on such reasonable terms and forsuch reasonable compensation, as theManager, in the Manager’s
discretion, shall determine. Any such Person, firm or corporation may include the Manager, or an
Affiliate of the Manager, orentities otherwise employed or retained by the Manager or in which the
Manager has an interest, provided the compensation paid is in accordance with normal fees charged by
independent parties for similar services.
Section 5.8 Tax Elections.The Manager shall be authorized to take such actions as the Manager, in the
Manager’s discretion, deems necessary or desirable in order to comply with requirements of the Act as
promulgated by theInternalRevenue Code of 1986, as amended, for the purposesofcomplyingwith
Federal, local, and state tax requirements. The Manager shall have the power on behalfof the Company,
to make, or to refrain from making, or to revoke, anyelections and determinations referred to in the Act
and the Internal Revenue Code of 1986, as amended, including, but not limited to the method(s) of
depreciation, the amortization of organizational expenses, and themethod of accounting to be employed
by the Company. All elections shall be made by the Manager with the Internal Revenue Service (“IRS”),
as applicable, in his or hersole discretion, in consideration of the advice of the Company’s accountants
and the underlying interests of the InterestHolders as a whole. In the event that evidence shall be
provided thatsuch election was or shall become disadvantageous to any one or more of the Interest
Holders, such evidence shall notbe deemed to be a demonstration of thecommission of an act of willful
misconduct or negligence on the part of the Manager. The Manager shall not be responsible to consider
the impact on specific members in making any elections.
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