Company Operating Agreement Sample: A Comprehensive Guide

When starting a new business venture, one of the most important steps is drafting a company operating agreement. An operating agreement is a legal document that outlines the rules and regulations for running a business and defines the roles and responsibilities of each member. It is an essential document for any business, regardless of its size or industry.

A well-drafted company operating agreement can help avoid conflicts and misunderstandings between business partners. It provides a clear understanding of the expectations and obligations of each member and defines the processes for decision-making and conflict resolution. It is a legally binding document that can be enforced in court if necessary.

If you`re in the process of drafting a company operating agreement, here`s a sample to guide you:

[Company Name] Operating Agreement

This operating agreement (the “Agreement”) is made and entered into on [Date] by and between [Member 1], [Member 2], and [Member 3] (collectively referred to as the “Members”).

1. Purpose

The purpose of this Agreement is to govern the operations of [Company Name], a [State] limited liability company (the “Company”).

2. Formation of the Company

The Company was formed on [Date] in accordance with the [State] Limited Liability Company Act.

3. Membership

The Company shall have [Number of Members] members, who are listed in Exhibit A. The Members shall hold the following interests in the Company:

[Member 1]: [Percentage] percent

[Member 2]: [Percentage] percent

[Member 3]: [Percentage] percent

4. Management

The management of the Company shall be vested in its Members. The Members shall have the authority to make decisions and take actions on behalf of the Company.

5. Capital Contributions

The Members shall contribute the following amounts to the capital of the Company:

[Member 1]: $[Amount]

[Member 2]: $[Amount]

[Member 3]: $[Amount]

6. Distributions

The profits and losses of the Company shall be allocated among the Members in accordance with their respective ownership percentages.

7. Meetings

The Members shall hold regular meetings at least annually to discuss the operations and finances of the Company.

8. Voting

Decisions of the Company shall be made by a vote of the Members. A quorum shall consist of [Number] Members present.

9. Dissolution

The Company may be dissolved by a vote of [Percentage] percent of the Members.

10. Amendment

This Agreement may be amended by a vote of [Percentage] percent of the Members.

11. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of [State].

12. Execution of Agreement

This Agreement shall be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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

[Member 1]

[Member 2]

[Member 3]

Exhibit A

[List of Members and their ownership percentages]

Conclusion

A company operating agreement is an essential document for any business. It provides guidelines and rules for running the company, defines the roles and responsibilities of each member, and outlines the processes for decision-making and conflict resolution. A well-drafted operating agreement can help avoid misunderstandings and conflicts between business partners and ensure the success of the venture.

When drafting a company operating agreement, it`s essential to seek advice from a legal expert experienced in the field. They can help you tailor your operating agreement to your specific business needs and ensure that it complies with the relevant laws and regulations.

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