Operating Agreement
(Member-Managed, Multiple Members) (MN LLC)

Summary

This template operating agreement is for a member-managed, Minnesota limited liability company (LLC) with multiple members. The detailed clauses regarding capital contributions, management, and distributions may be especially important when there are multiple members. You should consult with the LLC's accounting service providers to ensure the tax provisions are appropriate for the LLC. This template includes practical guidance, drafting notes, and alternate clauses. 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. This template takes into account the significant rule changes to the assessment and collection of tax at the partnership level, calculating imputed underpayments, the introduction of a partnership representative or tax member representative that differs in certain critical ways from the former legislation's tax matters partner, requirements to elect out of the new rules, and an election to push out imputed underpayments to the partners in an affected year. This template requires, to the extent possible, that the LLC elect out of the new audit rules (when eligible) and push out the imputed underpayments to the members of the year that was audited. 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 discussion of limited liability companies in Minnesota and for information on filing requirements generally, see Formation and Qualification (MN LLC), and Ownership Interests (MN LLC), and Operating Agreement and Initial Filing Requirements State Law Survey (LLC).