Free Multi-Member LLC Operating Agreement Template

OPERATING AGREEMENT OF [LLC NAME], LLC
(A Multi-Member Limited Liability Company)

This Operating Agreement ("Agreement") is made effective [DATE] among the members listed in Schedule A (each a "Member") of [LLC NAME], LLC ("Company").

1. FORMATION AND PURPOSE. The Company was formed under the laws of [STATE] on [DATE]. Its purpose is [DESCRIBE BUSINESS] and any other lawful activity. Principal office: [ADDRESS]. Registered agent: [NAME, ADDRESS].

2. MEMBERS AND PERCENTAGE INTERESTS. Each Member's capital contribution and percentage interest ("Percentage Interest") is set out in Schedule A.

3. CAPITAL CONTRIBUTIONS. Members have made the initial contributions in Schedule A. No Member is required to contribute more, except as follows: if Members holding [MAJORITY / 66.7%] of Percentage Interests approve a capital call for a stated business purpose, each Member may contribute pro rata within [30] days. If a Member does not contribute, the other Members may contribute the shortfall and Percentage Interests will be adjusted to reflect total contributions [or: the shortfall will be treated as a loan at [RATE]% interest].

4. MANAGEMENT. The Company is [member-managed / manager-managed by [MANAGER NAME(S)]].
(a) Ordinary decisions: made by [Members holding a majority of Percentage Interests / the Manager].
(b) Major decisions requiring approval of Members holding [66.7% / unanimous] Percentage Interests: admitting new members; selling substantially all assets; merging or converting the Company; borrowing or guaranteeing more than [AMOUNT]; any contract over [AMOUNT]; changing the business purpose; amending this Agreement; filing for bankruptcy; paying compensation to a Member; and dissolving the Company.

5. MEETINGS AND VOTING. Members may act at a meeting on [7] days' notice or by unanimous written consent. Voting is by Percentage Interest.

6. DUTIES AND OTHER ACTIVITIES. Members and Managers owe the duties of loyalty and care required by [STATE] law, as permitted to be modified here. [Members may / may not] engage in other businesses that compete with the Company [without the consent of the other Members]. Members will disclose conflicts of interest before voting.

7. ALLOCATIONS AND DISTRIBUTIONS. Profits and losses are allocated according to Percentage Interests, subject to applicable tax rules. Distributions of available cash will be made [quarterly / as approved by the Members] in proportion to Percentage Interests, after reasonable reserves. The Company will make tax distributions to cover Members' estimated taxes on allocated income, where cash allows. No distribution may be made if the Company could not pay its debts afterward.

8. TRANSFERS. No Member may transfer any interest without the approval required for major decisions, except to a revocable trust for estate planning where the Member keeps control.

9. RIGHT OF FIRST REFUSAL. Before selling to a third party, a Member must offer the interest to the Company and then to the other Members on the same terms, who have [30] days to accept.

10. BUYOUT EVENTS. On a Member's death, disability lasting more than [180] days, bankruptcy, or voluntary withdrawal, the Company [or the other Members] may [must] buy the Member's interest at Fair Market Value, paid [[20]% at closing and the balance over [3] years with interest at [RATE]%]. "Fair Market Value" is agreed by the parties or, failing agreement within [30] days, determined by an independent appraiser chosen jointly [or by the Company's accountant].

11. DRAG-ALONG AND TAG-ALONG. If Members holding [75]% of Percentage Interests approve a sale of the whole Company to a third party, the other Members must sell on the same terms (drag-along). If any Members sell more than [50]% of Percentage Interests, the other Members may join the sale on the same terms (tag-along).

12. DEADLOCK. If Members cannot reach a required decision after two meetings, they will attempt mediation for [30] days. If still unresolved, [any Member may trigger a buy-sell: the initiating Member names a price per Percentage Interest, and the other Member(s) must either buy at that price or sell at that price].

13. BOOKS, RECORDS AND REPORTS. The Company will keep accurate books, give each Member annual financial statements and tax information (Schedule K-1) by [DATE], and allow Members to inspect records on reasonable notice.

14. LIABILITY AND INDEMNIFICATION. Members are not personally liable for Company debts solely because they are members. The Company will indemnify Members and Managers for actions taken in good faith within their authority, except for fraud, willful misconduct or knowing violations of law.

15. DISSOLUTION. The Company dissolves on approval required for major decisions, or as required by law. Assets will be used to pay creditors, then returned to Members according to their capital accounts and Percentage Interests.

16. TAX MATTERS. The Company will be taxed as a partnership unless the Members elect otherwise. [NAME] is the partnership representative for IRS purposes. This Agreement is not tax advice.

17. GOVERNING LAW. This Agreement is governed by the laws of [STATE].

GENERAL PROVISIONS
(a) Notices. Notices must be in writing and sent to the addresses or emails above (or as later updated by notice). Email notice is effective when sent, unless the sender receives a delivery failure message.
(b) Entire agreement. This agreement, with any schedules and exhibits, is the entire agreement between the parties on its subject and replaces all prior discussions and agreements on that subject.
(c) Amendments and waivers. Changes must be in writing and signed by both parties. A failure or delay in enforcing any term is not a waiver of it.
(d) Severability. If any provision is found unenforceable, it will be limited to the minimum extent necessary and the rest of this agreement will remain in effect.
(e) Assignment. Neither party may assign this agreement without the other party's written consent, except to a successor in a merger or sale of substantially all of its business, on notice.
(f) Relationship. Nothing in this agreement creates a partnership, joint venture or agency relationship unless expressly stated.
(g) Counterparts and electronic signatures. This agreement may be signed in counterparts and by electronic signature, each of which is an original and together form one agreement.
(h) Independent advice. Each party has had the opportunity to review this agreement with its own legal counsel and signs it voluntarily.

SCHEDULE A: Members, contributions and Percentage Interests
| Member | Address | Contribution | Percentage Interest |
|---|---|---|---|
| [NAME] | [ADDRESS] | [AMOUNT/PROPERTY] | [%] |
| [NAME] | [ADDRESS] | [AMOUNT/PROPERTY] | [%] |

MEMBER: ______________________  Date: __________
MEMBER: ______________________  Date: __________

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This free template is provided by ClauseAudit for general informational purposes and is not legal advice. Have it reviewed before use. Replace all [BRACKETED] placeholders.