MULTI-MEMBER LLC OPERATING AGREEMENT, A STARTING TEMPLATE
Growing Partners (growingpartners.org)

This is general information, not legal or tax advice. It shows what a complete
multi-member operating agreement covers and in what order, for an LLC with two
or more owners that is member-managed by default; Section 10 includes the
manager-managed option in brackets. New York requires members to adopt a
written operating agreement within 90 days of filing (N.Y. LLC Law section
417); Delaware's own LLC Act allows an oral or implied one (6 Del. C.
section 18-101(9)), which is permissive in name only once two members
disagree about what was said. Most states that have not written their own LLC
act have adopted some version of the Revised Uniform Limited Liability
Company Act (RULLCA); its default rules, which this template is built to
override where an LLC usually wants to, include no right for a member to be
bought out on leaving and distributions split equally per member regardless
of who put in the capital. Every bracket needs a decision, and a lawyer and a
tax adviser, both licensed in the members' state, should read the finished
document before anyone signs it, since state LLC acts differ on what an
operating agreement may and may not override.

OPERATING AGREEMENT OF [LLC NAME]

This Operating Agreement ("Agreement") is entered into as of [DATE], by and
among the persons listed on Exhibit A (each a "Member" and together the
"Members"), for [LLC NAME], a [STATE] limited liability company (the
"Company").

RECITALS
The Company was formed by the filing of its articles of organization (or
certificate of formation) with the [STATE] Secretary of State on [DATE]. The
Members enter into this Agreement to govern the Company's business and their
relationship as Members.

1. DEFINITIONS
"Membership Interest" means a Member's entire ownership interest in the
Company, including that Member's share of profits, losses and distributions
and right to vote. "Percentage Interest" means the percentage set opposite a
Member's name on Exhibit A. "Capital Account" has the meaning given in
Section 7. "Manager" has the meaning given in Section 10, if applicable.

2. FORMATION AND NAME
The Members confirm the formation of the Company as a limited liability
company under the [STATE] Limited Liability Company Act. The Company's name
is [LLC NAME], or such other name as the Members may agree in writing.

3. PURPOSE
The purpose of the Company is [BUSINESS PURPOSE, DESCRIBED SPECIFICALLY], and
any other lawful business the Members unanimously agree to undertake.

4. PRINCIPAL OFFICE; REGISTERED AGENT
The Company's principal office is at [ADDRESS]. The Company's registered
agent for service of process in [STATE] is [NAME AND ADDRESS], or such
successor agent as the Members may designate by the filing required under
state law.

5. TERM
The Company's existence began on the date its formation document was filed
and continues until dissolved under Section 17.

6. MEMBERS AND MEMBERSHIP INTERESTS
Each Member's name, address and Percentage Interest are listed on Exhibit A.
Exhibit A shall be updated to reflect an admission, withdrawal or transfer
under this Agreement, without need to amend this Agreement itself unless the
Members agree otherwise.

7. CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Each Member shall contribute to the Company the cash, property or services
described on Exhibit A on or before [DATE]. No Member is required to make an
additional contribution beyond the amount stated on Exhibit A except as the
Members unanimously agree in writing. The Company shall maintain a Capital
Account for each Member, credited with that Member's contributions and
allocated share of income, and charged with that Member's distributions and
allocated share of loss, consistent with the Company's being taxed as a
partnership unless the Members have elected otherwise under Section 21.

8. ALLOCATION OF PROFITS AND LOSSES
Profits and losses are allocated among the Members in proportion to their
Percentage Interests. [IF NOT PROPORTIONAL TO PERCENTAGE INTERESTS, STATE THE
FORMULA AND WHY, E.G. A PREFERRED RETURN ON CAPITAL BEFORE A DIFFERENT SPLIT
OF WHAT REMAINS, AND CONFIRM WITH A TAX ADVISER THAT THE ALLOCATION HAS
SUBSTANTIAL ECONOMIC EFFECT UNDER TREASURY REGULATIONS SECTION 1.704-1(b).]

9. DISTRIBUTIONS
9.1 Tax distributions. No later than the fifteenth day of each month in which
a federal estimated tax payment is due for individuals, the Company shall
distribute to each Member an amount in cash equal to that Member's allocated
taxable income for the relevant period multiplied by the Assumed Tax Rate.
"Assumed Tax Rate" means the highest marginal combined federal and state
individual income tax rate applicable to any Member, as determined in good
faith by the Members. An amount distributed under this Section is an advance
against, and reduces, the Member's next distribution under Section 9.2.
9.2 Other distributions. Subject to Section 9.1, the Company shall distribute
cash available after reasonable reserves at least [QUARTERLY/ANNUALLY], in
proportion to Percentage Interests, unless the Members unanimously agree to
retain it in the business.

10. MANAGEMENT
[OPTION A, MEMBER-MANAGED (THE DEFAULT IN MOST STATES ABSENT A CONTRARY
STATEMENT): The Company is managed by its Members. Each Member has a vote in
management decisions equal to that Member's Percentage Interest. Ordinary
matters in the course of the Company's business are decided by a majority of
the Percentage Interests. Section 11 lists the matters that require more than
a majority.]
[OPTION B, MANAGER-MANAGED: The Company is managed by one or more Managers,
who need not be Members, elected by a majority of the Percentage Interests
and serving until removed by a majority of the Percentage Interests or until
that Manager resigns. The Manager(s) named as of the date of this Agreement
are: [NAME(S)]. A Manager has the authority described in Section 12, subject
to the matters reserved to the Members in Section 11. A Member who is not a
Manager has no authority to bind the Company and no right to participate in
day-to-day management, but retains the voting rights this Agreement gives
Members.]

11. MATTERS REQUIRING MEMBER CONSENT
The following require the written consent of Members holding at least
[PERCENTAGE]% of the Percentage Interests, whether or not the Company is
manager-managed under Section 10:
   (a) borrowing money or granting a security interest in Company property
   outside the ordinary course of business, in excess of $[AMOUNT];
   (b) admitting a new Member;
   (c) amending this Agreement;
   (d) selling, leasing or transferring all or substantially all of the
   Company's assets;
   (e) a capital call in excess of $[AMOUNT] in any twelve-month period;
   (f) any other matter the Members add here: [LIST].
[IF AN EVEN SPLIT OF VOTES IS POSSIBLE: In the event the Members eligible to
vote on a matter requiring majority consent are evenly divided, [TIEBREAKER
MECHANISM, E.G. A NAMED MEMBER'S CASTING VOTE, A ROTATING CASTING VOTE, OR
REFERRAL TO THE DISPUTE RESOLUTION PROCEDURE IN SECTION 18].]

12. AUTHORITY TO BIND THE COMPANY
A Member is not an agent of the Company solely by reason of being a Member.
Subject to Section 11, [THE MEMBERS ACTING BY MAJORITY / EACH MANAGER NAMED
UNDER SECTION 10] may bind the Company in the ordinary course of its
business. No person may sign a contract, incur a debt, or grant a lien in the
Company's name above $[AMOUNT] without the consent required by Section 11.

13. BOOKS AND RECORDS
The Company shall keep its books and records at [ADDRESS, OR "the principal
office"]. Each Member, and that Member's agents and attorneys, may inspect
and copy the books and records during ordinary business hours on reasonable
notice. The Company shall furnish each Member with [FREQUENCY, E.G. MONTHLY]
financial statements without demand, and a Schedule K-1 as soon as reasonably
practicable after the Company's tax return is prepared each year.

14. ADMISSION OF A NEW MEMBER
A person may be admitted as a Member only with the consent required by
Section 11(b). A new Member's capital contribution, Percentage Interest and
voting rights shall be set out in a written amendment to this Agreement and
an updated Exhibit A, signed by all then-current Members and the new Member.
A newly admitted Member is not personally liable for a Company obligation
incurred before that Member's admission, except to the extent of that
Member's contribution to the Company.

15. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL
A Member may not transfer all or part of that Member's Membership Interest,
other than for security purposes, without first offering it to the Company
and the other Members on the same terms, who have [NUMBER] days to accept.
Any transfer in violation of this Section conveys to the transferee only the
economic right to distributions, not a vote or any management right, which
remain with the transferring Member unless the Members admit the transferee
under Section 14.

16. WITHDRAWAL, DISSOCIATION AND BUYOUT
A Member who wishes to withdraw shall give [NUMBER] days' written notice to
the other Members. [MOST STATE LLC ACTS, FOLLOWING THE UNIFORM ACT, GIVE A
WITHDRAWING MEMBER NO RIGHT TO BE BOUGHT OUT AND NO RIGHT TO A DISTRIBUTION ON
ACCOUNT OF THE WITHDRAWAL UNLESS THIS AGREEMENT SAYS OTHERWISE. CHOOSE ONE:]
[OPTION A, NO AUTOMATIC BUYOUT: A withdrawing Member's Membership Interest is
not purchased on withdrawal. The withdrawing Member keeps the economic right
to future distributions on that Interest but no voting or management right,
unless and until it is transferred under Section 15.]
[OPTION B, BUYOUT ON WITHDRAWAL: The Company (or the remaining Members) shall
purchase a withdrawing Member's Membership Interest for the price and on the
terms set out in the Company's buy-sell agreement, if one exists, or
otherwise for [FORMULA OR APPRAISAL PROCESS], paid [AT CLOSING / UNDER A
PROMISSORY NOTE ON THE TERMS IN [CROSS-REFERENCE]].]
A Member may be expelled by the consent required by Section 11 for [CAUSE,
E.G. A MATERIAL AND UNCURED BREACH OF THIS AGREEMENT, OR CONDUCT THAT A COURT
COULD FIND MAKES IT NOT REASONABLY PRACTICABLE TO CONTINUE THE BUSINESS WITH
THAT MEMBER].

17. DISSOLUTION AND WINDING UP
The Company is dissolved on the unanimous written agreement of the Members,
the sale of all or substantially all of its assets, or an event this
Agreement or the [STATE] Limited Liability Company Act makes a dissolution
event. On dissolution, the Company continues only to wind up its business:
finishing contracts, collecting receivables, selling assets and paying debts.
The Company's assets, including any required contribution from a Member with
a negative Capital Account, shall be applied first to outside creditors and
Member loans, then to the remainder distributed to the Members in proportion
to their Capital Accounts after all profit and loss on liquidation is
allocated under Section 8. The Members shall file a certificate of
cancellation or its state equivalent and close the Company's tax accounts.

18. DISPUTE RESOLUTION
Before filing suit, the Members shall attempt to resolve a dispute arising
from this Agreement by [NUMBER] days of good-faith negotiation, followed by
mediation under the rules of [PROVIDER] in [CITY, STATE]. [OPTIONAL: A
dispute not resolved by mediation within [NUMBER] days shall be settled by
binding arbitration under the rules of [PROVIDER], and judgment on the award
may be entered in any court of competent jurisdiction.]

19. RESTRICTIVE COVENANTS
[OPTIONAL, AND UNENFORCEABLE IN SOME STATES FOR SOME MEMBERS: A Member who
withdraws or is expelled shall not, for [NUMBER] months within [GEOGRAPHIC
AREA], [COMPETE WITH THE COMPANY'S BUSINESS / SOLICIT THE COMPANY'S CUSTOMERS
OR EMPLOYEES]. Confirm enforceability under the law of the state where the
restriction would be enforced before including this section.]

20. INDEMNIFICATION AND LIMITATION OF LIABILITY
To the fullest extent permitted by the [STATE] Limited Liability Company Act,
no Member or Manager is personally liable for a Company obligation solely by
reason of being a Member or Manager, and the Company shall indemnify each
Member and Manager against a claim arising from that person's good-faith
conduct on the Company's behalf, except for that person's fraud, gross
negligence, willful misconduct, or material breach of this Agreement.

21. TAX MATTERS
The Members intend that the Company be taxed as a partnership for federal
income tax purposes unless the Members unanimously elect otherwise in
writing. The Company shall designate a partnership representative under
Internal Revenue Code section 6223 to act on the Company's behalf in any
federal tax proceeding; the partnership representative named as of the date
of this Agreement is [NAME]. This Agreement is not tax advice; each Member
should consult that Member's own tax adviser.

22. AMENDMENTS
This Agreement may be amended only by a writing signed by the Members holding
the percentage of Percentage Interests required by Section 11(c), except that
Exhibit A may be updated as this Agreement otherwise provides without a
separate amendment.

23. GOVERNING LAW
This Agreement is governed by the laws of the State of [STATE], including its
Limited Liability Company Act, without regard to conflict of law principles.

24. ENTIRE AGREEMENT
This Agreement is the entire agreement of the Members concerning the Company
and supersedes every prior agreement or understanding, written or oral, on
the same subject.

IN WITNESS WHEREOF, the Members have signed this Agreement as of the date
first written above.

___________________________          ___________________________
[MEMBER 1 NAME]                       [MEMBER 2 NAME]
Date: ______________                  Date: ______________

EXHIBIT A: MEMBERS, CONTRIBUTIONS AND PERCENTAGE INTERESTS

Member Name          Address          Contribution          Percentage Interest
[NAME]                [ADDRESS]        $[AMOUNT] / [DESC]     [PERCENTAGE]%
[NAME]                [ADDRESS]        $[AMOUNT] / [DESC]     [PERCENTAGE]%