Manager Managed Limited Liability Company Operating Agreement with Classes of Members
What is this form?
This Manager Managed Limited Liability Company Operating Agreement outlines the internal rules and regulations governing the operations and management of a manager-managed limited liability company (LLC) with classes of members. Unlike member-managed LLCs, this agreement specifies that a designated manager or managers will handle the company's affairs, allowing for a clear hierarchy and minimizing potential disputes among members. This document is essential for establishing the framework for governance, capital contributions, profit distributions, and other operational aspects tailored to multi-class membership structures.
Form components explained
- Formation and Business Purpose: Details the formation of the company, its purpose, and principal office location.
- Member Information: Contains fields for the names, addresses, and percentage interests of all members.
- Management Structure: Establishes the roles and responsibilities of the appointed manager(s) and outlines decision-making processes.
- Capital Contributions: Addresses the initial and additional contributions from members and the management of capital accounts.
- Distributions: Details the rules for profit and loss allocations, as well as how and when distributions will be made.
- Withdrawal and Dissolution: Describes the procedures for member withdrawal and the conditions that may lead to the dissolution of the company.
Common use cases
This operating agreement is essential when forming a manager-managed LLC to ensure that all members understand their roles and the management structure. It is particularly useful for businesses with multiple members who prefer a clear delineation of decision-making authority, such as family-owned businesses, investment groups, or start-ups. By utilizing this agreement, members can prevent conflicts and ensure efficient management of affairs.
Who should use this form
This form is intended for:
- Entrepreneurs forming a new manager-managed LLC.
- Existing LLC members seeking to clarify management roles within their company.
- Legal professionals advising clients on company formation and governance.
- Businesses operating under a multi-class member structure.
How to complete this form
- Identify the parties involved in the agreement by entering their names and addresses.
- Specify the date of the agreement and the state of registration to align with local laws.
- Detail the purpose of the LLC and its principal place of business for clarity.
- Define the management structure by appointing a manager or managers and outlining their roles.
- Include information about capital contributions from each member and how profits and losses will be allocated.
Does this document require notarization?
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
Mistakes to watch out for
- Failing to update member information or changes in management roles.
- Not specifying the percentages of interest held by each member, which can lead to confusion.
- Neglecting to include member capital contributions, which can affect distribution calculations.
- Overlooking compliance with state-specific regulations governing LLCs.
Why complete this form online
- Convenient access to customizable templates that can be edited as needed.
- Ensures compliance with current legal standards and requirements.
- Reduces costs associated with hiring legal professionals for drafting standard agreements.
- Ability to download and print copies for personal records or filing purposes.
Form popularity
FAQ
Every member of the LLC and the manager or managers (if there are any) need to sign the operating agreement. Each signatory should sign a separate signature page.Learn how to properly sign business documents on your state's LLC formation page.
The core elements of an LLC operating agreement include provisions relating to equity structure (contributions, capital accounts, allocations of profits, losses and distributions), management, voting, limitation on liability and indemnification, books and records, anti-dilution protections, if any, restrictions on
There is no legal requirement that an Operating Agreement be notarized in California.
An operating agreement is a key document used by LLCs because it outlines the business' financial and functional decisions including rules, regulations and provisions. The purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the business owners.
A manager-managed LLC is a good option for an LLC with several members, with some members who want to invest only and not be involved in any decision-making processes. The dedicated manager members do not need to get the approval of the investors to make decisions.
LLCs do not have stock, but ownership units that are usually called membership units. An LLC can have more than one class of members. Different classes may have different rights.Additionally, one class may have decision-making rights with another class having no decision-making rights or limited rights.
The core elements of an LLC operating agreement include provisions relating to equity structure (contributions, capital accounts, allocations of profits, losses and distributions), management, voting, limitation on liability and indemnification, books and records, anti-dilution protections, if any, restrictions on
Member Financial Interest. What percentage ownership does each member have? Corporate Governance. Corporate Officer's Power and Compensation. Non-Compete. Books and Records Audit. Arbitration/Forum Selection. Departure of Members. Fiduciary duties.
An LLC Operating Agreement is the document wherein a Limited Liability Company memorializes its rules and structure.That said, many states do not require LLCs to create Operating Agreements. In fact, most do not. But that doesn't mean you shouldn't create one.
