Sample Operating Agreement for Two Member Llc

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If you`re starting a small business with a partner, forming a limited liability company (LLC) may be the right choice. An LLC is a popular choice because it provides personal liability protection to the owners while also offering the tax benefits of a partnership. One of the first steps in forming an LLC is to create an operating agreement, which outlines how the business will be run. Here is a sample operating agreement for a two-member LLC.

Article I: Formation

This article establishes the formation of the LLC and outlines the purpose of the business. It states the name of the LLC, the effective date of the agreement, and the address of the principal place of business.

Article II: Members

This article identifies the members of the LLC and their respective ownership percentages. It also outlines the process for admitting new members and the requirements for withdrawing or transferring ownership.

Article III: Management

This article outlines how the business will be managed. The default rule for an LLC is member-managed, meaning all members have equal say in the management of the business. However, some LLCs opt for a manager-managed structure, in which one or more members are designated to manage the business.

Article IV: Voting and Meetings

This article outlines the procedures for voting on major decisions, such as admitting new members or taking on debt. It also outlines the requirements for holding meetings and the procedures for conducting business at those meetings.

Article V: Capital Contributions and Distributions

This article outlines the capital contributions of each member and the method for allocating profits and losses. It also outlines the procedures for distributing profits and losses and the requirements for making additional capital contributions.

Article VI: Dissolution and Termination

This article outlines the procedures for dissolving the LLC and distributing its assets. It also outlines the procedures for terminating the LLC in the event of bankruptcy or other circumstances.

Article VII: Miscellaneous

This article includes any additional provisions that are specific to the LLC. This may include restrictions on members` activities outside the LLC, procedures for resolving disputes, or procedures for amending the operating agreement.

While this sample operating agreement provides a framework for a two-member LLC, it`s important to consult with an attorney to ensure that the agreement is tailored to your specific needs. An attorney can help you address any state-specific requirements and ensure that the operating agreement is legally sound. With a thorough operating agreement in place, you and your partner can focus on growing your business with confidence.