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Single Member LLC Operating Agreement

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Single Member LLC Operating Agreement Powered By Docstoc
					This is a template of an operating agreement for a Limited Liability Company ("LLC")
that is managed by a single member. This template specifies the name of the company,
capital invested, purpose of the company, member name, and dissolution or winding up
procedure. This template contains numerous standard provisions that are commonly
included in these types of agreements, and may be customized to fit the specific needs
of the contracting party. This template can be used by small businesses or other
entities that want a sample operating agreement for their single member managed LLC.
          SINGLE MEMBER LIMITED LIABILITY COMPANY
                     OPERATING AGREEMENT
                                   FOR
                              ____________
               [Instruction: insert the name of Company]
                                                     RECITALS

WHEREAS, this Single Member Limited Liability Company Agreement (the “Agreement”) is
made this _____ day of ___________, 20_______ [Instruction: insert date]; and

WHEREAS, the party to this Agreement ________________ [Instruction: insert the name of
the single member] (“Member”) is executing this Agreement for the sole purpose of forming a
limited liability company under the Limited Liability Company Act of the State of
________________ [Instruction: insert state name] (the “Act”);

NOW, THEREFORE, Member sets forth the following terms and conditions.


                                         TERMS AND CONDITIONS

                       I.        THE LIMITED LIABILITY COMPANY

1.       The name of the limited liability company is ____________________ [Instruction:
         insert company name] (“Company”); it was incorporated on the ____ day of
         _______________, 2_____ [Instruction: insert date] under the Act. The rights and
         liability of Member with respect to the management and affairs of Company and the
         conduct of the business of Company shall be governed by the Act, except as otherwise
         provided for herein.

2.       The registered office address of Company shall be _____________________,
         [Instruction: insert Company address] until such time as it is changed by Member and
         the required forms are filed with the Secretary of State of the State of _______________
         [Instruction: insert state] notifying them of the change of the registered office address.

3.       Company was formed for the purpose of engaging in any lawful business that is
         permitted under the Act.

4.       Member shall, from time to time, execute, file, and publish any applications, certificates,
         or other documents as may be necessary to comply with the requirements of the laws of
         the applicable jurisdiction governing the formation and operation of a limited liability
         company.

5.       Any and all assets of Company shall be held in the name of Company and Member shall
         not have any right or interest in and to the assets of Company.


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                                            II.       CAPITAL

1.       Member shall make such capital contributions to Company, by way of cash or real
         property, as Member deems necessary and appropriate. The initial capital contribution to
         be made by Member shall be ________________________________ dollars ($__).
         [Instruction: insert contribution amount]

2.       Member shall make any such other capital contributions, at any time, to Company, as
         Member deems necessary and appropriate.

3.       No interest shall be paid on any capital contributions made by Member.

4.       Except as provided by the laws of the applicable jurisdiction, any and all debts, liabilities,
         and obligations of Company shall be solely those of Company and neither Member nor
         an officer of Company shall be held personally liable for such debts, liabilities, and
         obligations.

5.       Member shall open a capital account in which to deposit any and all capital contributions
         made by Member to Company.

                                            III.     MEMBER

1.       The sole Member of Company is _________________ [Instruction: insert name of sole
         Member], whose residential address is: ____________________________. [Instruction:
         insert sole Member’s residential address]

2.       Member shall cease to be a member of Company in the event of any of the following:

         A.       The death or incapacity of Member;

         B.       Member filing for bankruptcy; or

         C.       Upon assignment by Member of its Membership interest in Company.

3.       In the event there is more than one member of Company and upon the occurrence of any
         of the events contained in Article 3 section 2 below, the person who is the holder of
         Member’s interest immediately after any of the events in Article 3 section 2, shall
         become a member with the consent of the other members of Company if applicable.

4.       Except for the holder of the interest of a member who becomes a member under the
         provisions of the section of this Agreement relating to termination of Member’s interest,
         additional members of Company may be admitted only by written agreement of Member
         and the additional members.

                             IV.       ADMITTANCE OF MEMBERS




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1.       Membership in Company shall be available to those persons who are interested in
         furthering the objectives of Company and whose applications for admission as a member
         receive the approval of the other members of Company if applicable. Member may also
         pass Membership rules, providing, among other things, for the admission of members by
         the Secretary of Company. Each member shall be promptly informed by the Secretary of
         their admission as a member.

2.       Any Member may withdraw from Company by delivering to Company a written
         resignation and lodging a copy of same with members or Secretary of Company. A
         resignation shall be effective from acceptance hereof by members of Company. In the
         case of resignation, a member shall remain liable for payment of any outstanding
         membership dues levied or became payable by such member to Company prior to such
         person’s resignation.

3.       The interest of a member in Company is not transferable. Further, the interest lapses and
         ceases to exist:

         A.       Upon death or dissolution of Member;

         B.       When Member’s period of membership expires (if any);

         C.       When Member ceases to be a member by resignation or otherwise; or

         D.       If, at a meeting of members, a resolution is passed to remove Member by at least
                  _____ (_/_) of the votes cast at the meeting, provided that Member shall be
                  granted the opportunity to be heard at such meeting.

                                   V.       COMPANY EXPENSES

Company shall pay any and all of its operating expenses including, but not limited to, any
overhead costs and administrative costs. Member shall be reimbursed by Company for any
reasonable out-of-pocket expenses incurred by Member on behalf of Company.

                                           VI.       OFFICERS

1.       Member shall, at his or her sole discretion, elect a President and Secretary. Two or more
         of the aforesaid offices may be held by the same person. In case and whenever the same
         person holds the offices of Secretary and Treasurer, that person may but need not be
         known as the Secretary-Treasurer. Member may, from time to time, appoint such other
         officers and agents as it shall deem necessary; such other officers and agents shall have
         the authority to perform and shall perform such duties as may from time to time be
         prescribed by Member.

2.       Notwithstanding the foregoing, each incumbent officer shall continue in office until the
         earlier of:




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         A.       That officer’s resignation, which resignation shall be effective at the time the
                  written resignation is received by Member, by Secretary of Company, or at the
                  time specified in the resignation, whichever is later;

         B.       The appointment of successor;

         C.       The meeting at which members annually appoint the officers of Company;

         D.       That officer’s removal; or

         E.       That officer’s death.

3.       The remuneration of all officers appointed by Member shall be determined from time to
         time by resolution of Member. All officers shall be entitled to be reimbursed for
         reasonable expenses incurred in the performance of officer duties.

4.       All officers, in the absence of agreement to the contrary, shall be subject to removal by
         resolution of Member at any time, with or without course.

5.       In case of the absence or inability to act of any officer of Company or for any other
         reason that Member may deem sufficient, Member may delegate all or any of the powers
         of any such officer to any other officer or to any other member for the time being.

6.       All officers shall sign such contracts, documents, and/or instruments in writing that
         require their respective signatures and shall respectively have and perform all powers and
         duties incidental to their respective offices and such other powers and duties respectively
         as may from time to time be assigned to them by Member. The duties of the officers
         shall include:

         A.       Where Company, by resolution, provides for the election of Chairperson by the
                  members, the members may define the duties and may assign to Chairperson any
                  or all of the duties of President or other officer of Company; in that case, the
                  resolution shall fix and prescribe the duties of President.

         B.       The President shall be the Chief Executive Officer of Company unless otherwise
                  determined by resolution of Member. The President shall be vested with and may
                  exercise all of the powers and perform all of the duties of Chairperson in the event
                  that there is no Chairperson, or where there is a Chairperson and such person is
                  absent or refuses to act.

         C.       The Vice-President or, if more than one, the Vice-Presidents, in order of seniority,
                  shall be vested with all the powers and shall perform all the duties of President in
                  the absence or inability or refusal to act of President.




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         D.       Secretary shall give or cause to be given notices for all meetings of members, and
                  when directed to so do, shall have charge of the corporate seal of Company, the
                  minute book(s) of Company, and of the documents and registers of Company.

         E.       Subject to the provisions of any resolution of the members, Treasurer shall have
                  the care and custody of all the funds and securities of Company and shall deposit
                  same in the name of Company in such financial institutions as the members may
                  direct. Treasurer shall keep or cause to be kept the requisite books of account and
                  accounting records. Treasurer may be required to give bond for the faithful
                  performance of Treasurer’s duties as the members in their uncontrolled discretion
                  may require but no member shall be liable for failure to require any bond or for
                  the insufficiency of any bond or for any loss by reason of the failure of Company
                  to receive any indemnity thereby provided.

                  VII.     ADMINISTRATION OF COMPANY BUSINESS

1.       Member has the sole right to manage and conduct Company’s business. Actions by
         Member relating to the management of Company may be memorialized in written
         resolutions signed by Member, but written resolutions are not required to authorize action
         by Member.

2.       Member is the agent of Company and has authority to bind Company on all matters. The
         authority of Member includes, without limitation, the authority to:

         A.       Sell, lease, exchange, mortgage, pledge, or otherwise transfer or dispose of all or
                  substantially all of the property or assets of Company;

         B.       Amalgamate Company with any other legal entity; and

         C.       Amend the Articles of Organization of Company and this Agreement.

                           VIII. EXECUTION OF INSTRUMENTS

1.       Contracts, documents, or other instruments in writing requiring the signature of Company
         must be signed by at least one member of Company and all contracts, documents, and
         instruments in writing so signed shall be binding upon Company without any further
         authorization or formality. Members shall have power, from time to time by resolution,
         to appoint any officer, officers, person, or persons on behalf of Company to sign
         contracts, documents, and instruments in writing generally or to sign specific contracts,
         documents, or instruments in writing.

2.       The term “contracts, documents or instruments in writing” as used in this Agreement
         include, but is not limited to: deeds, mortgages, hypothecs, charges, conveyances,
         transfers, and assignments of property, real or personal and immovable or movable;
         agreements, releases, receipts, and discharges for the payment of money or other




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         obligations, conveyances, transfers, and assignments of shares, share warrants, stocks,
         bonds, debentures or other securities; and all paper writings.

                                  IX.      BOOKS AND RECORDS

1.       Complete, accurate, and up-to-date books of Company shall be kept by Member at the
         registered office of Company and shall be made available for inspection and review by
         any member of Company.

2.       Member shall maintain a bank account for Company and all assets and properties of
         Company shall be maintained separately from Member’s own accounts.

3.       The fiscal year of Company shall commence on the ______ day of ________
         [Instruction: insert commencement date] and shall end on the ______ day of ______
         [Instruction: insert termination date] in each and every calendar year.

                          X.        DISSOLUTION AND WINDING UP

1.       Company’s affairs shall be concluded upon the first to occur of any of the following
         events:

         A.       At the designated time specified in Company’s Articles of Organization;

         B.       Upon written consent of all of members of Company;

         C.       Upon the death or incapacity of Member;

         D.       At any time there are no members and unless otherwise provided in the Articles of
                  Organization, Company shall not be dissolved and shall not be required to be
                  wound up if, within ______________ (__) [i.e., ninety (90)] [Comment: this
                  number is not provided for by law, but can be any number the user chooses,
                  unless a specific number is provided for in the Articles of Organization, then
                  that number of days must be used here] days, or such other period as provided
                  in the Articles of Organization, after the occurrence of the event that terminated
                  the continued membership of the last remaining member, the personal or other
                  legal representative of the last remaining member agrees in writing to continue
                  Company and agrees to the admission of the personal representative of such
                  member or its nominee or designee to Company as a member, effective as of the
                  occurrence of the event that terminated the continued membership of the last
                  remaining member; or

         E.       The entry of an order of dissolution by a court of relevant jurisdiction.

2.       Upon the dissolution of Company, the affairs of Company must be wound up by
         Member. If the affairs of Company are to be wound up, a full account must be taken of
         the assets and liabilities of Company, and the assets of Company must then be promptly



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         liquidated. The proceeds must first be paid to creditors of Company in satisfaction of all
         liabilities and obligations of Company, including, to the extent permitted by law,
         liabilities and obligations owed to Member as a creditor. Any remaining proceeds may
         then be distributed to Member. Property of Company may be distributed in kind in the
         process of winding up and liquidation.

                        XI.       INDEMNIFICATION AND LIABILITY

1.       Except as otherwise provided, no member, officer, or employee of Company shall, for the
         time being, be liable for: (A) the acts, receipts, neglects, or defaults of any other member,
         officer, or employee; (B) any loss, damage, or expense to Company for the insufficiency
         or deficiency of title to any property acquired by Company; (C) any loss, damage, or
         expense to Company for the insufficiency or deficiency of any security in or upon which
         any of the moneys of or belonging to Company shall be paid out or invested; (D) any loss
         or damage arising from the bankruptcy, insolvency, or tortuous act of any person
         including any person with whom any moneys, securities, or effects shall be lodged or
         deposited; (E) any loss, conversion, misapplication, or misappropriation of or any
         damage resulting from any dealings with any moneys, securities, or other assets
         belonging to Company; (D) any other loss, damage, or misfortune that may happen in the
         execution of the duties of a member’s or officer’s respective office or trust or in relation
         thereto, unless the same shall happen by or through such member’s officer’s own willful
         neglect or default.

                           XII.      MISCELLANEOUS PROVISIONS

1.       Member may amend or repeal all or part of this Agreement by written instrument.

2.       This Agreement shall be governed by the laws of the state in which the Articles of
         Organization of Company have been filed.

3.       If any provision of this Agreement is invalid or unenforceable, such invalidity or
         unenforceability shall not affect the remaining provisions herein.

         IN WITNESS WHEREOF, Member hereby executes this Agreement as of the date first
         written above.



                                               Signature:        ________________________________
                                                                 Member

                                               Print Name:       __________________________________
                                                                 [Instruction: insert sole member’s name]




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Description: This is a template of an operating agreement for a Limited Liability Company ("LLC") that is managed by a single member. This template specifies the name of the company, capital invested, purpose of the company, member name, and dissolution or winding up procedure. This template contains numerous standard provisions that are commonly included in these types of agreements, and may be customized to fit the specific needs of the contracting party. This template can be used by small businesses or other entities that want a sample operating agreement for their single member managed LLC.
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