What are the Key Components of an Operating Agreement?
While the contents of an operating agreement may vary, some key components usually included are:
Company Information: Basic details such as the name, address, and purpose of the LLC. Member Information: Details of each member including their contributions and ownership percentages. Management Structure: Defines whether the LLC will be managed by members or designated managers. Voting Rights: Specifies the voting power of each member, usually proportional to their ownership percentage. Profit and Loss Distribution: Details how profits and losses will be allocated among members. Meetings: Guidelines for holding meetings, including frequency and decision-making processes. Transfer of Interests: Rules for transferring ownership interests in the LLC. Dissolution: Procedures for dissolving the LLC.