Fillable Printable Sample LLC Operating Agreement

Sample LLC Operating Agreement

GA-00LLC-1

Sample LLC Operating Agreement

This agreement is a sample operating agreement and should be modified to meet your needs. It

provides for the LLC to be operated by one or more managers OR by the members. You will

have to decide how you want your LLC to operate.

Read carefully and make appropriate changes to suit your

individual needs and purposes.

OPERATING AGREEMENT

______________________________________

A GEORGIA LIMITED LIABILITY COMPANY

THIS OPERATING AGREEMENT ("Agreement") is entered into the _____ day of

__________, 20___, by and between the following persons:

1. ___________________________________

2. ___________________________________

3. ___________________________________

4. ___________________________________

hereinafter, ("Members" or “Parties”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby

acknowledged, the Parties covenant, contract and agree as follows:

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Parties have formed a Georgia limited liability company

named ___________________________________________________ ("LLC"). The operation

of the LLC shall be governed by the terms of this Agreement and the applicable laws of the State

of Georgia relating to the formation, operation and taxation of a LLC, including the Georgia

Limited Liability Company Act (Georgia Code, Section 14-11-100

et seq.) hereinafter referred to

as the "Act". To the extent permitted by the Act, the terms and provisions of this Agreement

shall control if there is a conflict between such Act and this Agreement. The Parties intend that

the LLC shall be taxed as a partnership. Any provisions of this Agreement, if any, that may

cause the LLC not to be taxed as a partnership shall be inoperative.

2. Articles or Organization

. The Members acting through one of its Members,

_____________________________________, filed Articles of Organization, ("Articles") for

record in the office of the with the Georgia Secretary of State on _________________________,

thereby creating the LLC.

3. Business

. The business of the LLC shall be to engage in any and all lawful

business purposes.

4. Registered Office and Registered Agent

. The registered office and place of

business of the LLC shall be ___________________________________________________

______________________________________ and the registered agent at such office shall be

__________________________________________________________________. The

Members may change the registered office and/or registered agent from time to time.

5. Duration. The LLC will commence business as of the date the Members

contribute their capital investment in the LLC and will continue in perpetuity.

6. Fiscal Year

. The LLC's fiscal and tax year shall end December 31.

ARTICLE II

MEMBERS

7. Initial Members. The initial members of the LLC, their initial capital

contributions, and their percentage interest in the LLC are:

Initial Percentage Interest Capital

Members in LLC Contribution

________________________ _________________ ___________________

8. Additional Members. New members may be admitted only upon the consent of a

majority of the Members and upon compliance with the provisions of this agreement.

ARTICLE III

MANAGEMENT

9. Management. The Members have elected to manage the LLC as follows:

The management of the LLC shall be vested in the Members without an

appointed manager. The members shall elect officers who shall manage the company. The

President and Secretary may act for and on behalf of the LLC and shall have the power and

authority to bind the LLC in all transactions and business dealings of any kind except as

otherwise provided in this Agreement.

The Members hereby delegate the management of the LLC to Manager(s),

subject to the limitations set out in this agreement.

a) The Members shall elect and may remove the Manager(s) by majority

vote.

b) A Manager shall serve until a successor is elected by the Members.

c) The Manager(s) shall have the authority to take all necessary and proper

actions in order to conduct the business of the LLC.

d) Except for decisions concerning distributions, any Manager can take any

appropriate action on behalf of the LLC, including, but not limited to signing checks, executing

leases, and signing loan documents.

e) In determining the timing and total amount of distributions to the

Members, the action of the Manager shall be based on a majority vote of the Managers, with or

without a meeting.

f) The

compensation to the Manager(s) shall be in the discretion of the

majority of the Members of the LLC.

g) There shall be _________ initial Managers.

h) The initial Managers is/are:

_________________________________________________________.

10. Officers and Relating Provisions

. In the event the Members elect to manage the

LLC, rather than appointing a manager, the Members shall appoint officers for the LLC and the

following provisions shall apply:

(a) Officers

. The officers of the LLC shall consist of a president, a treasurer

and a secretary, or other officers or agents as may be elected and appointed by the Members.

Members may hold more than one office. The officers shall act in the name of the LLC and shall

supervise its operation under the direction and management of the Members, as further described

below.

(b) Election and Term of Office

. The officers of the LLC shall be elected

annually by the Members by a majority vote. Vacancies may be filled or new offices created and

filled at any meeting of the Members. Each officer shall hold office until his/her death, until

he/she shall resign, or until he/she is removed from office. Election or appointment of an officer

or agent shall not of itself create a contract right.

. Any officer or agent may be removed by a majority of the

Members whenever they decide that the best interests of the Company would be served thereby.

Such removal shall be without prejudice to the contract rights, if any, of the person so removed.

(d) Vacancies

. A vacancy is any office because of death, resignation, removal,

disqualification or otherwise may be filled by the Members for the unexpired portion of the term.

(e) President

. The President shall be the chief executive officer of the LLC

and shall preside at all meetings of the Members. The President shall have such other powers and

perform such duties as are specified in this Agreement and as may from time to time be assigned

by the Members of the LLC.

(f) The Treasurer. The Treasurer shall be the chief financial officer of the

LLC. The Treasurer shall not be required to give a bond for the faithful discharge of his/her

duties. The Treasurer shall: (i) have charge and custody of and be responsible for all funds and

securities of the LLC; (ii) in the absence of the President, preside at meetings of the Members;

(iii) receive and give receipts for moneys due and payable to the LLC from any source

whatsoever, and deposit all such moneys in the name of the LLC in such banks, trust companies

or other depositaries as shall be selected by the Members of the LLC; and (iv) in general perform

all the duties incident to the office of treasurer and such other duties as from time to time may be

assigned by the President or by the Members of the LLC.

(g) Secretary

. The secretary shall: (i) keep the minutes of the Members

meetings in one or more books provided for that purpose; (ii) see that all notices are duly given

in accordance with the provisions of this Agreement or as required by law; (iii) be custodian of

LLC records; (iv) keep a register of the post office address of each Member; (v) certify the

Member’s resolutions; and other documents to the LLC as true and correct; (vi) in the absence of

the President and Treasurer, preside at meetings of the Members and (vii) in general perform all

duties incident to the office of secretary and such other duties as from time as may be assigned

by the President or the Members.

11. Member Only Powers

. Notwithstanding any other provision of this Agreement,

only a majority of the Members may: (a) sell or encumber (but not lease) any real estate owned

by the LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC if the debt,

expenditure, or other obligation exceeds $_____________________.

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

12. Interest of Members. Each Member shall own a percentage interest (sometimes

referred to as a share) in the LLC. The Member’s percentage interest shall be based on the

amount of cash or other property that the Member has contributed to the LLC and that

percentage interest shall control the Member’s share of the profits, losses, and distributions of the

LLC.

13. Contributions

. The initial contributions and initial percentage interest of the

Members are as set out in this Agreement.

14. Additional Contributions

. Only a majority of the Members of the LLC may call

on the Members to make additional cash contributions as may be necessary to carry on the LLC's

business. The amount of any additional cash contribution shall be based on the Member's then

existing percentage interest. To the extent a Member is unable to meet a cash call, the other

Members can contribute the unmet call on a pro rata basis based on the Members' percentage

interests at that time, and the percentage interest of each Member will be adjusted accordingly.

15. Record of Contributions/Percentage Interests. This Agreement, any

amendment(s) to this Agreement, and all Resolutions of the Members of the LLC shall constitute

the record of the Members of the LLC and of their respective interest therein.

16. Profits and Losses

. The profits and losses and all other tax attributes of the LLC

shall be allocated among the Members on the basis of the Members' percentage interests in the

LLC.

17. Distributions

. Distributions of cash or other assets of the LLC (other than in

dissolution of the LLC) shall be made in the total amounts and at the times as determined by a

majority of the Members. Any such distributions shall be allocated among the Members on the

basis of the Members' percentage interests in the LLC.

18. Change in Interests

. If during any year there is a change in a Member's

percentage interest, the Member's share of profits and losses and distributions in that year shall

be determined under a method which takes into account the varying interests during the year.

ARTICLE V

VOTING; CONSENT TO ACTION

19. Voting by Members. Members shall be entitled to vote on all matters which

provide for a vote of the Members in accordance with each Member’s percentage interest.

20. Majority Required

. Except as otherwise required, a majority of the Members,

based upon their percentage ownership, is required for any action.

21. Meetings - Written Consent

. Action of the Members may be accomplished with

or without a meeting. If a meeting is held, evidence of the action shall be by Minutes or

Resolution reflecting the action of the Meeting, signed by a majority of the Members. Action

without a meeting may be evidenced by a written consent signed by a majority of the Members.

22. Meetings

. Meetings of the Members may be called by any Member owning 10%

or more of the LLC, or, if Managers were selected, by any Manager of the LLC.

23. Majority Defined

. As used throughout this agreement the term “Majority” of the

Members shall mean a majority of the ownership interest of the LLC as determined by the

records of the LLC on the date of the action.

ARTICLE VI

DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS AND

PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION

24. Duties of Members: Limitation of Liability. The Members, Managers and officers

shall perform their duties in good faith, in a manner they reasonably believe to be in the best

interests of the LLC, and with such care as an ordinarily prudent person in a like position would

use under similar circumstances. No Member or officer shall have any liability to the LLC or

any other Member by reason of being or having been a Member or officer. No Member or

officer shall be liable to the LLC or to any other Member or officer for any loss or damage

sustained by the LLC or any other Member or officer unless the loss or damage shall have been

the result of fraud, deceit, gross negligence, willful misconduct, or a wrongful taking by that

Member or officer.

25. Members Have No Exclusive Duty to LLC

. The Members shall not be required to

participate in the LLC as their sole and exclusive business. Members may have other business

interests and may participate in other investments or activities in addition to those relating to the

LLC. Neither the LLC nor any other Member shall have any right, by virtue of this Agreement,

to share or participate in another member’s business interests, investments or activities or the

income or proceeds derived therefrom. No Member shall incur liability to the LLC or to any

other Member by reason of participating in any such other business, investment or activity.

26. Protection of Members and Officers

(a) As used herein, the term “Protected Party” refers to the Members and

officers of the Company.

(b) To the extent that, at law or in equity, a Protected Party has duties

(including fiduciary duties) and liabilities relating thereto to the LLC or to any other Protected

Party, a Protected Party acting under this Agreement shall not be liable to the LLC or to any

other Protected Party for good faith reliance on:

(i) the provisions of this Agreement;

(ii) the records of the LLC; and/or

(iii) such information, opinions, reports or statements presented to the

LLC by any person as to matters the Protected Party reasonably believes are within such other

person’s professional or expert competence and who has been selected with reasonable care by

or on behalf of the LLC, including information, opinions, reports or statements as to the value

and amount of the assets, liabilities, profits or losses of the LLC or any other fact pertinent to the

existence and amount of assets from which distributions to Members might properly be paid.

and liabilities of a Protected Party to the LLC or to any other Protected Party otherwise existing

at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of

such Protected Party.

(d) Whenever this Agreement permits or requires a Protected Party to make a

decision in its “discretion” or under a grant of similar authority or latitude, the Protected Party

shall be entitled to consider only such interests and factors as it desires, including its own

interests, and shall have no duty or obligation to give any consideration to any interest of or

factors affecting the LLC or any other Person.

(e) Whenever this Agreement permits or requires a Protected Party to make a

decision using a “good faith” or under another express standard, the Protected Party shall act

under such express standard and shall not be subject to any other or different standard imposed

by this Agreement or other applicable law.

27. Indemnification and Insurance

(a) Right to Indemnification

(i) Any person who is or was a member or officer of the LLC and who

is or may be a party to any civil action because of his/her participation in or with the LLC, and

who acted in good faith and in a manner which he/she reasonably believed to be in, or not

opposed to, the best interests of the LLC, shall be indemnified and held harmless by the LLC.

(ii) Any person who is or was a member or officer of the LLC and who

is or may be a party to any criminal action because of his/her participation in or with the LLC,

and who acted in good faith and had reasonable cause to believe that the act or omission was

lawful, shall be indemnified and held harmless by the LLC.

(b) Advancement of Expenses

. Expenses (including attorney’s fees) incurred

by an indemnified person in defending any proceeding shall be paid in advance of the

proceeding’s final disposition. Should the indemnified member or officer ultimately be

determined to not be entitled to indemnification, that member or officer agrees to immediately

repay to LLC all funds expended by the LLC on behalf of the member or officer.

. The right to indemnification and the

advancement of expenses conferred in this section shall not be exclusive of any right which any

person may have or hereafter acquire under any statute, provision of this Agreement, contract,

agreement, vote of Members or otherwise. The Members and officers are expressly authorized to

adopt and enter into indemnification agreements for Members, officers and advisory committee

members.

(d) Insurance

. The Members may cause the LLC to purchase and maintain

insurance for the LLC, for its Members and officers, and/or on behalf of any third party or

parties whom the members might determine should be entitled to such insurance coverage.

(e) Effect of Amendment

. No amendment, repeal or modification of this

Article shall adversely affect any rights hereunder with respect to any action or omission

occurring prior to the date when such amendment, repeal or modification became effective.

28. Duties of Persons Serving on Advisory Committees; Limitation of Liability;

Indemnification. The Members shall have the right to form advisory committees. Persons serving

on an advisory committee, whether or not a Member or officer, shall perform their duties in good

faith, in a manner they reasonably believe to be in the best interests of the LLC, and with such

care as an ordinarily prudent person in a like position would use under similar circumstances. A

person serving on an advisory committee shall not have any liability to the LLC or to any

Member or officer for any loss or damage sustained by the LLC or any Member or officer unless

the loss or damage was the result of fraud, deceit, gross negligence, willful misconduct, or a

wrongful taking by such person.

ARTICLE VII

MEMBERS INTEREST TERMINATED

29. Termination of Membership. A Member’s interest in the LLC shall cease upon

the occurrence of one or more of the following events:

(a) A Member provided notice of withdrawal to the LLC thirty (30) days in

advance of the withdrawal date. Withdrawal by a Member is not a breach of this Agreement

(b) A Member assigns all of his/her interest to a third party.

(d) There is an entry of an order by a court of competent jurisdiction

adjudicating the Member incompetent to manage his/her person or his/her estate.

(e) In the case of an estate that is a Member, the distribution by the fiduciary

of the estate's entire interest in the LLC.

(f) A Member, without the consent of a majority of the Members: (1) makes

an assignment for the benefit of creditors; (2) files a voluntary petition in bankruptcy; (3) is

adjudicated a bankrupt or insolvent; (4) files a petition or answer seeking for himself any

reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief

under any statute, law or regulation; (5) files an answer or other pleading admitting or failing to

contest the material allegations of a petition filed against him in any proceeding of the nature

described in this paragraph; (6) seeks, consents to, or acquiesces in the appointment of a trustee,

receiver, or liquidator of the Member or of all or any substantial part of his properties; or (7) if

any creditor permitted by law to do so should commence foreclosure or take any other action to

seize or sell any Member's interest in the LLC.

(g) If within one hundred twenty (120) days after the commencement of any

action against a Member seeking reorganization, arrangement, composition, readjustment,

liquidation, dissolution, or similar relief under any statute, law, or regulation, the action has not

been dismissed and/or has not been consented to by a majority of the members.

(h) If within ninety (90) days after the appointment, without a member’s

consent or acquiescence, of a trustee, receiver, or liquidator of the Member or of all or any

substantial part of the member’s properties, said appointment is not vacated or within ninety (90)

days after the expiration of any stay, the appointment is not vacated and/or has not been

consented to by a majority of the members.

(i) Any of the events provided in applicable code provisions that are not

inconsistent with the dissociation events identified above.

30. Effect of Dissociation

. Any dissociated Member shall not be entitled to receive

the fair value of his LLC interest solely by virtue of his dissociation. A dissociated Member that

still owns an interest in the LLC shall be entitled to continue to receive such profits and losses, to

receive such distribution or distributions, and to receive such allocations of income, gain, loss,

deduction, credit or similar items to which he would have been entitled if still a Member. For all

other purposes, a dissociated Member shall no longer be considered a Member and shall have no

rights of a Member.

ARTICLE VIII

RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST;

SET PRICE FOR LLC INTEREST

31. LLC Interest. The LLC interest is personal property. A Member has no interest

in property owned by the LLC.

32. Encumbrance

. A Member can encumber his LLC interest by a security interest or

other form of collateral only with the consent of a majority of the other Members. Such consent

shall only be given if the proceeds of the encumbrance are contributed to the LLC to respond to a

cash call of the LLC.

33. Sale of Interest. A Member can sell his LLC interest only as follows:

(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall

give written notice to the LLC of his desire to sell all or part of his/her interest and must first

offer the interest to the LLC. The LLC shall have the option to buy the offered interest at the

then existing Set Price as provided in this Agreement. The LLC shall have thirty (30) days from

the receipt of the assigning Member's notice to give the assigning Member written notice of its

intention to buy all, some, or none of the offered interest. The decision to buy shall be made by a

majority of the other Members. Closing on the sale shall occur within sixty (60) days from the

date that the LLC gives written notice of its intention to buy. The purchase price shall be paid in

cash at closing unless the total purchase price is in excess of $_______________ in which event

the purchase price shall be paid in twelve (12) equal quarterly installments beginning with the

date of closing. The installment amounts shall be computed by applying the following interest

factor to the principal amount: interest compounded quarterly at the Quarterly Federal Short-

Term Rate existing at closing under the Applicable Federal Rates used for purposes of Internal

Revenue Code § 1 274(d), or any successor provision.

(b) To the extent the LLC does not buy the offered interest of the assigning

Member, the other Members shall have the option to buy the offered interest at the Set Price on a

pro rata basis based on the Members' percentage interests at that time. If Member does not

desire to buy up to his/her proportional part, the other Members can buy the remaining interest

on the same pro rata basis. Members shall have fifteen (15) days from the date the LLC gives its

written notice to the selling Member to give the selling Member notice in writing of their

intention to buy all, some, or none of the offered interest. Closing on the sales shall occur within

sixty (60) days from the date that the Members give written notice of their intention to buy. The

purchase price from each purchasing Member shall be paid in cash at closing.

selling Member can then assign the interest to a non-member. The selling Member must close

on the assignment within ninety (90) days of the date that he gave notice to the LLC. If he does

not close by that time, he must again give the notice and options to the LLC and the LLC

Members before he sells the interest.

(d) A non-member purchaser of a member’s interest cannot exercise any rights of

a Member unless a majority of the non-selling Members consent to him becoming a Member.

The non-member purchaser will be entitled, however, to share in such profits and losses, to

receive such distributions, and to receive such allocation of income, gain, loss, deduction, credit

or similar items to which the selling member would be entitled, to the extent of the interest