A Multi-Member LLC Operating Agreement is a document that establishes how an entity with two (2) or more members will be run. Without putting the contract into place, the entity is governed in accordance with the rules and standards established by the state, which may or may not align with the company’s goals.
By State
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- Texas
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Contents |
What is a Multi-Member LLC?
A Multi-Member LLC Operating Agreement is a business form used for spelling out the details of an LLC that shares ownership among two (2) or more people.
The agreement is a legally-binding company guide that contains the agreed-upon member structure, ownership, and rule sets that all members are bound by. The form itself will often vary from one company while maintaining the overall structure.
What It Covers
The operating agreement contains the following important sections:
- Basic details of the entity (name, state of incorporation, founding date, etc.)
- Capital contributions (what each member paid to fund the company)
- Profit and loss allocation
- Indemnification
- The duties and powers of managers
- Salaries, taxes, and accounting
- Transfer of a member’s interest (ownership)
- Dissolution (closing of a company)
- General company provisions
- Signatures of all members
By downloading the form in the Word (.docx) format, one can easily modify the document’s language and add or remove sections. Be forewarned, however, as it is often better to re-word sections instead of deleting entire paragraphs altogether, as some contain important language necessary for the legal protection of the entity and its members.