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

Summary

This template is an operating agreement for a manager-managed limited liability company (LLC) with multiple members and a single class of membership interests. This template includes practical guidance, drafting notes, alternate and optional clauses. 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 manager(s); the members' capital contributions and rights to distributions; voting rights; rights of first refusal; and more. Notwithstanding the significant and important role an operating agreement can play in the management and operation of an LLC, very few jurisdictions mandate the adoption of an operating agreement. See the image below to see which states mandate the adoption of an operating agreement. Visualization of the Map of States Requiring Operating Agreements Source: Operating Agreement and Initial Filing Requirements State Law Survey (LLC), Current as of 06/10/2022 Operating agreements may be written or verbal, and while most jurisdictions allow either, some jurisdictions require operating agreements be in writing. See the image below to see which states require the use of a writing or some other template. Visualization of the Map of States Requiring Operating Agreements Be Written Source: Operating Agreement and Initial Filing Requirements State Law Survey (LLC), Current as of 06/10/2022 Since various state LLC statutes may possess significant differences, each clause of the agreement should be carefully examined for compliance with the applicable law of the jurisdiction in which the LLC has been formed. 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, Partnership Tax Audit Clauses (Bipartisan Budget Act of 2015), and Current Legal Forms with Tax Analysis § 18A.04. To compare state laws on Operating Agreements, see the following topics in the Business Entities State Law Comparison Tool : Limited Liability Company: Formation and Qualification and Limited Liability Company: Management and Indemnification. For additional information on LLC formation and management, see Current Legal Forms with Tax Analysis § 18A.08, Current Legal Forms with Tax Analysis § 18A.24, Limited Liability Companies, and Management of Limited Liability Companies. 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.