What Should be Included in an Operating Agreement?
A comprehensive Operating Agreement generally includes the following sections:
- Introduction and Definitions: Basic information about the LLC, including name, purpose, and definitions of key terms. - Ownership Structure: Details about the initial capital contributions and ownership percentages of each member. - Management and Voting: Specifies whether the LLC will be managed by members or managers and outlines voting procedures. - Profit and Loss Distribution: How profits and losses will be distributed among members. - Meetings and Voting: Guidelines for meetings, voting procedures, and quorum requirements. - Transfer of Membership Interests: Rules governing the transfer of ownership interests among existing or new members. - Dissolution: Procedures for dissolving the LLC and distributing remaining assets.