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Arkansas LLC Operating Agreement

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SAMPLE LLC OPERATING AGREEMENT

AR-00LLC-1

Read carefully and make appropriate changes to suit your individual needs and purposes.

OPERATING AGREEMENT OF

AN ARKANSAS LIMITED LIABILITY COMPANY

THIS OPERATING AGREEMENT ("Agreement") is entered into the day of , 20 , by and between the following persons:

1.

2.

3.

4.

hereinafter, ("Members" or “Parties”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby acknowledged, the Parties covenant, contract and agree as follows:

ARTICLE I
FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Parties have formed an Arkansas limited liability company named ("LLC").

2. Articles or Organization. The Members, acting through one of its Members, , filed Articles of Organization on , thereby creating the LLC.

3. Business. The business of the LLC shall be:

a)

b) To perform or engage in any act or business in which a limited liability company is allowed to participate in the State of Arkansas.

4. Registered Office and Registered Agent. The registered office and place of business of the LLC shall be and the registered agent at such office shall be .

5. Duration. The LLC will commence business as of the date of filing and will continue in perpetuity.

6. Fiscal Year. The LLC's fiscal and tax year shall end December 31.

ARTICLE II
MEMBERS

7. Initial Members. The initial members of the LLC, their initial capital contributions, and their percentage interest in the LLC are:

Initial Members Percentage Interest in LLC Capital Contribution

8. Additional Members. New members may be admitted only upon the consent of a majority of the Members and upon compliance with the provisions of this agreement.

ARTICLE III
MANAGEMENT

9. Management. The Members have elected to manage the LLC as follows (check as appropriate):

The management of the LLC shall be vested in the Members without an appointed manager.

The Members hereby delegate the management of the LLC to Manager(s), subject to the limitations set out in this agreement.

g) There shall be initial Managers.

h) The initial Manager(s) is/are:

11. Member Only Powers. Only a majority of the Members may: (a) sell or encumber any real estate owned by the LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC if the debt, expenditure, or other obligation exceeds $.

ARTICLE IV
CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

12. Interest of Members. Each Member shall own a percentage interest in the LLC.

13. Contributions. The initial contributions and initial percentage interest of the Members are as set out in this Agreement.

14. Additional Contributions. Only a majority of the Members of the LLC may call on the Members to make additional cash contributions as may be necessary to carry on the LLC's business.

ARTICLE V
VOTING; CONSENT TO ACTION

19. Voting by Members. Members shall be entitled to vote on all matters in accordance with each Member’s percentage interest.

20. Majority Required. A majority of the Members, based upon their percentage ownership, is required for any action.

21. Meetings - Written Consent. Action of the Members or Officers may be accomplished with or without a meeting.

ARTICLE VI
DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS, AND PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION

24. Duties of Members: Limitation of Liability. The Members, Managers and officers shall perform their duties in good faith.

25. Members Have No Exclusive Duty to LLC. Members may have other business interests and may participate in other activities in addition to those relating to the LLC.

27. Indemnification and Insurance.

(a) Right to Indemnification.

Civil action indemnification

Criminal action indemnification

ARTICLE VII
MEMBERS INTEREST TERMINATED

28. Termination of Membership.

Withdrawal notice

Assignment to a qualified third party

Death of a Member

ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST

31. Encumbrance. A Member can encumber his LLC interest only with consent of a majority of the other Members.

32. Sale of Interest. A Member can sell his LLC interest only as follows:

Purchase price in excess of $ payable in equal quarterly installments.

33. Set Price. The Set Price for purposes of this Agreement shall be the price fixed by consent of a majority of the Members.

ARTICLE IX
OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

34. Dissociation. Upon the occurrence of a dissociation event, the LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE X
DISSOLUTION

35. Termination of LLC. The LLC will be dissolved only upon the written consent of a majority of the Members.

36. Final Distributions. Upon winding up, the assets shall be distributed to creditors, then to Members in satisfaction of liabilities, then for return of contributions and LLC interests.

ARTICLE XI
TAX MATTERS

37. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704 and the regulations thereunder.

38. Partnership Election. The Members elect that the LLC be taxed as a partnership and not as an association taxable as a corporation.

ARTICLE XII
RECORDS AND INFORMATION

39. Records and Inspection. The LLC shall maintain its records at its place of business.

40. Obtaining Additional Information. Each Member may obtain information regarding the LLC upon reasonable demand.

ARTICLE XIII
MISCELLANEOUS PROVISIONS

41. Amendment. Any amendment to this Agreement may be proposed by a Member and approved in writing by a majority of the Members.

42. Applicable Law. This Agreement shall be governed by the laws of the State of Arkansas.

43. Pronouns, Etc. References to a Member or Manager shall include masculine, feminine, singular, plural, individuals, partnerships or corporations where applicable.

44. Counterparts. This instrument may be executed in any number of counterparts each of which shall be considered an original.

45. Specific Performance. Nonbreaching Members shall be entitled to injunctive relief.

46. Further Action. Each Member agrees to perform acts and execute documents necessary to carry out this Agreement.

47. Method of Notices. Written notices shall be hand delivered or sent by registered or certified mail.

48. Facsimiles. Copies, facsimiles, telecommunication or other reliable reproductions may be used in lieu of originals.

49. Computation of Time. Time shall be computed excluding the day of the act, event or default.

WHEREFORE, the Parties have executed this Agreement on the dates stated below their signatures on the attached signature page for each individual Party.

NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED A COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMENT OF

AN ARKANSAS LIMITED LIABILITY COMPANY.

Members:

 

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What an Arkansas LLC Operating Agreement Is

An Arkansas LLC Operating Agreement is a written contract among an LLC’s members that defines ownership, management, financial arrangements, and member duties. Although Arkansas does not require the operating agreement to be filed with the Secretary of State, adopting a clear, written agreement at formation helps preserve limited liability protections, sets default rules for decision-making, clarifies capital contributions and profit distributions, and establishes procedures for adding or removing members. This template is designed for member-managed or manager-managed structures and documents voting thresholds, fiduciary duties, amendment procedures, and dissolution steps.

Why a Written Agreement Matters for Arkansas LLCs

A written Arkansas LLC Operating Agreement clarifies member rights, reduces internal disputes, and documents financial and management rules. When signed electronically, properly executed e-signatures meet U.S. legal standards under the ESIGN Act and state UETA statutes for enforceability.

Why a Written Agreement Matters for Arkansas LLCs

Who Uses an Operating Agreement and How They Benefit

Members, managers, attorneys, and lenders commonly use operating agreements to document governance, capital, and exit terms, ensuring predictable outcomes and legal clarity.

  • Members: record ownership percentages, profit allocations, and transfer restrictions to prevent disputes.
  • Managers: set scope of authority, decision thresholds, and compensation or reimbursement policies.
  • Lenders and investors: require operating agreement provisions for voting, distribution priority, and default remedies.

Maintain and distribute an executed agreement to members and advisors so governance is consistent and parties can rely on defined procedures during disputes or transitions.

Typical Signers and Their Roles

Managing Member

Responsible for day-to-day operations and implementing member-approved policies; typically signs contracts, authorizes expenditures within agreed limits, and may bind the LLC when the operating agreement grants express authority. Clearly define limits to avoid disputes and preserve liability protections.

Company Counsel

Provides legal review, ensures provisions comply with the Arkansas LLC Act and other applicable law, drafts buy-sell and dispute resolution provisions, and advises on tax and fiduciary implications to reduce litigation risk and align the agreement with business objectives.

Core Components to Include in the Agreement

A complete Arkansas LLC Operating Agreement covers parties, capital, management, financial allocations, transfer restrictions, and dissolution procedures to limit disputes and define member rights.

Parties

Identify the LLC and each member by full legal name, membership interest or percentage, initial capital contributions, dates of contribution, and any special classes or unit designations used for allocations or voting.

Capital

Describe initial and future capital contributions, capital accounts maintenance, treatment of additional contributions, capital calls process, and remedies for failure to contribute including dilution or redemption mechanics.

Management

State whether the LLC is member-managed or manager-managed, specify manager appointment and removal procedures, define manager powers and limitations, and set duties of care, loyalty, and reporting requirements.

Voting

Set voting rights, quorum definitions, ordinary vs. special action thresholds, tie-breaking procedures, and any reserved matters requiring supermajority or unanimous approval.

Distributions

Define allocation of profits and losses, timing and priority of distributions, preferred returns (if any), withholding for taxes or reserves, and distribution waterfall on liquidation.

Dissolution

Outline events triggering dissolution, winding-up steps, creditor claims priority, asset distribution order, and member withdrawal, buyout, or buy-sell valuation and payment terms.

Step-by‑Step: Complete and Adopt the Agreement

Follow these steps to complete, sign, and adopt an Arkansas LLC Operating Agreement to ensure clear governance and enforceability.

  • 01
    Prepare: Gather member names, ownership percentages, and capital contributions.
  • 02
    Draft: Customize management, voting, and distribution provisions to reflect agreements.
  • 03
    Review: Have counsel review for state law and tax implications.
  • 04
    Execute: All members sign and date; retain executed originals.

How to Configure an Online Drafting and Signing Workflow

Configure an online workflow for drafting, approving, and storing the operating agreement to streamline execution and maintain an audit trail.

Field Configuration
Template Create a reusable template with conditional clauses.
Signing Order Set members to sign in flexible or parallel order.
Authentication Choose email, SMS OTP, or KBA where required.
Storage Auto-save executed copies to secure cloud storage.

Technical Considerations for eSigning and Distribution

Platforms used to customize and sign the agreement should support common document formats, robust audit trails, secure storage, and integrations with business systems for reliable recordkeeping.

  • Formats: PDF and DOCX supported
  • Integrations: Salesforce, NetSuite, Google Workspace
  • Authentication: Email, SMS OTP, and SSO options

Where to File and Who Receives the Final Agreement

Understand where executed copies should be stored and who should receive them so obligations and access are clear after signing.

  • Formation: Adopt at formation; keep with company records
  • Filing: Operating agreement is internal; Articles file with SOS
  • Distribution: Provide executed copies to members and counsel
  • Third Parties: Share certified copies with lenders upon request

Key Timing Considerations

Timing considerations for creating, updating, and reviewing an Arkansas LLC Operating Agreement help keep governance current and legally effective.

At formation:

Adopt agreement when filing Articles of Organization

After ownership changes:

Amend promptly after member admission or transfer

Annual review:

Review provisions annually or upon regulatory changes

Before capital events:

Update terms before fundraising or major financing

Before dissolution:

Record winding-up procedures before formal dissolution

Milestone Timeline from Formation to Ongoing Amendments

A sequential view of primary milestones from drafting to execution and later amendment ensures stakeholders understand the lifecycle of the agreement.

01

Draft Agreement

Prepare initial draft using member inputs

02

Member Approval

Obtain written consent from all members

03

Execution

All members sign and date the agreement

04

Recordkeeping

Store signed copies in secure company records

eSignature Pricing and Feature Comparison

Compare baseline starting prices and key capabilities that affect executing operating agreements, including trial availability, bulk send, audit trails, HIPAA compliance, and envelope caps.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Security and Compliance Points to Note

Encryption: TLS 1.2/1.3 transit; AES-256 at rest
Certifications: SOC 2 Type II; ISO 27001 certified
ESIGN / UETA: Compliant with ESIGN and UETA
HIPAA: HIPAA compliant with BAA available
21 CFR: 21 CFR Part 11 support available
Audit Trail: Tamper-evident logs: timestamps, IPs

Common Preparation Pitfalls to Avoid

  • Failing to create a written agreement and relying on default statutes can lead to member disputes and unclear management authority.
  • Using vague distribution or capital contribution terms causes conflicts when profits are allocated or losses are incurred.
  • Not specifying buyout methods or valuation triggers protracted disputes and unequal outcomes on member exits.
  • Omitting amendment procedures or failing to update the agreement after ownership changes weakens enforceability and governance clarity.

Key Risks and Potential Consequences

Default State Rules: Statutory default governance may apply
Member Disputes: Litigation and damages risk
Liability Exposure: Improper formalities increase risk
Tax Consequences: Misclassification triggers penalties
Operational Disruption: Unclear authority delays decisions
Execution Issues: Invalid signatures may limit enforceability

Examples: How Organizations Use Operating Agreements

Two brief examples show how companies standardize governance and speed execution using electronic workflows and consistent agreement language.

Optica Ventures

Optica Ventures needed a standard operating agreement to document member ownership and expedite onboarding of new investors.

  • They digitized signature routing and document storage.
  • Brian Fitzgibbons, COO, says the interface is simple and easy-to-use for the team and customers; electronic execution shortened turnaround, improved compliance, and centralized signed agreements for audit readiness.

Martin Properties

A real estate owner required clear capital call and distribution language for multiple projects.

  • The team used digital execution for faster approvals.
  • Tim Martin, Founder, reports that processing and executing documents online maintained compliance, reduced in-person meetings, and accelerated project funding and rent-roll transactions.

Practical Tips for an Accurate, Enforceable Agreement

Adopt these best practices to reduce disputes, ensure enforceability, and simplify ongoing administration of an Arkansas LLC Operating Agreement.

Use precise ownership and capital contribution language
Specify exact ownership percentages, describe contribution types and valuation methods, and explain procedures for capital calls and remedies for nonpayment to avoid ambiguity in allocations and tax reporting.
Define management and voting procedures clearly
Include decision thresholds, quorum rules, and reserved matters that require supermajority or unanimous consent to prevent deadlocks and clarify day-to-day authority.
Include buy-sell and transfer mechanics
Provide right-of-first-refusal, valuation method, and payment terms for transfers or member exits to limit litigation and protect remaining owners.
Review periodically with counsel and members
Schedule an annual review or review after material changes; have counsel confirm tax, fiduciary, and statutory compliance to reduce long-term risks.

Frequently Asked Questions About Arkansas LLC Operating Agreements

Answers to common questions about requirement, execution, notarization, amendments, and consequences when operating agreements are missing or outdated.


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