A manager-managed LLC operating agreement is a crucial document that outlines the roles and responsibilities of the managers and members in an LLC. In this article, we will look at an example of a manager-managed LLC operating agreement and the key clauses that should be included.
Firstly, it is essential to understand the difference between a member-managed and a manager-managed LLC. In a member-managed LLC, all members have equal say in the management of the business. On the other hand, in a manager-managed LLC, the members appoint one or more managers to run the day-to-day operations of the business.
Now, let`s take a look at an example of a manager-managed LLC operating agreement:
Article I: Formation
This section outlines the name of the LLC, the purpose of the business, and the date of formation.
Article II: Management
This section defines the role of the managers and the members in managing the LLC. It outlines the decision-making process, the powers and duties of the managers, and the rights of the members to vote and remove managers.
Article III: Members` Meetings
This section outlines the rules and procedures for member meetings, including notice requirements, voting rights, and quorum requirements.
Article IV: Capital Contributions
This section outlines the amount and type of contributions that each member is required to make to the LLC.
Article V: Distributions
This section outlines the rules for distributing profits and losses among the members. It includes the timing and frequency of distributions and the priority of payments.
Article VI: Transfer of Interest
This section outlines the rules and procedures for transferring ownership of a member`s interest in the LLC.
Article VII: Dissolution
This section outlines the circumstances under which the LLC may be dissolved and the procedures for winding up the business.
Article VIII: Amendments
This section outlines the procedures for amending the operating agreement.
As you can see, a manager-managed LLC operating agreement is a comprehensive document that outlines the rules and procedures for managing the LLC. It is essential to have a well-drafted operating agreement to protect the interests of both the managers and the members. By including the above clauses in your operating agreement, you can ensure that your LLC is well-managed and that all members are on the same page when it comes to decision-making and governance.