Operating Agreement
(Manager-Managed, Multiple Members) (NY LLC)

Summary

This template is an operating agreement for a manager-managed limited liability company (LLC) with multiple members in New York. The detailed clauses regarding capital contributions, management, and distributions may be especially important when there are multiple members. This template includes practical guidance, optional clauses, and drafting notes. Every LLC organized in New York must be governed by a written operating agreement, which serves a purpose similar to bylaws, a shareholder agreement and an equity purchase agreement combined into one. An operating agreement generally is entered into among the members of an LLC upon the filing of the LLC's articles of organization, although it also may be entered into before or within 90 days after the filing of the articles. However, an operating agreement may not become effective pursuant to New York law prior to the formation of the LLC. An operating agreement establishes: the rights and obligations of the LLC, its members and managers with respect to the LLC's organization, management and eventual dissolution; the powers of the managers; the members' capital contributions and rights to distributions; voting rights; rights of first refusal; and more. This template has been updated as needed to reflect the revised Internal Revenue Code provisions governing IRS tax audits of partnerships and other entities taxed as partnerships; these rules were passed in the Bipartisan Budget Act of 2015 and took effect on January 1, 2018. For further information, see Partnership Tax Audit Rules. See also Partnership and Other Pass-Through Entities Taxation and Partnership Tax Audit Clauses (Bipartisan Budget Act of 2015). For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit.