Connecticut LLC

OPERATING AGREEMENT

FORM 4

OPERATING AGREEMENT

This agreement is a sample operating agreement and should be modified to meet your needs. It provides for the LLC to be operated by one or more managers OR by the members. You will have to decide how you want your LLC to operate.

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

OPERATING AGREEMENT
OF

A CONNECTICUT 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 a Connecticut limited liability company named ("LLC"). The operation of the LLC shall be governed by the terms of this Agreement and the provisions of the Connecticut Limited Liability Company Act ...

2. Articles or Organization. The Members acting through one of its Members, , filed Articles of Organization, ("Articles") for record in the office of the Connecticut Secretary of State on , thereby creating the LLC.

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

a)

b) To conduct or promote any lawful businesses or purposes within Connecticut or any other jurisdiction which a limited liability company is legally allowed to conduct or promote.

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 . The Members may change the registered office and/or registered agent from time to time.

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:

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:

10. Officers and Relating Provisions. In the event the Members elect to manage the LLC, rather than appointing a manager, the Members shall appoint officers for the LLC and the following provisions shall apply:

(a) Officers. The officers of the LLC shall consist of a president, a treasurer and a secretary, or other officers or agents as may be elected and appointed by the Members.

(b) Election and Term of Office. The officers of the LLC shall be elected annually by the Members by a majority vote.

11. Member Only Powers. Notwithstanding any other provision of this Agreement, only a majority of the Members may: (a) sell or encumber (but not lease) 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.

15. Record of Contributions/Percentage Interests. This Agreement, any amendment(s) to this Agreement, and all Resolutions of the Members of the LLC shall constitute the record of the Members of the LLC and of their respective interest therein.

16. Profits and Losses. The profits and losses and all other tax attributes of the LLC shall be allocated among the Members on the basis of the Members' percentage interests in the LLC.

17. Distributions. Distributions of cash or other assets of the LLC shall be made in the total amounts and at the times as determined by a majority of the Members.

18. Change in Interests. If during any year there is a change in a Member's percentage interest, the Member's share of profits and losses and distributions in that year shall be determined under a method which takes into account the varying interests during the year.

ARTICLE V
VOTING; CONSENT TO ACTION

19. Voting by Members. Members shall be entitled to vote on all matters which provide for a vote of the Members in accordance with each Member’s percentage interest.

20. Majority Required. Except as otherwise provided and delegated to the Officers or Managers, 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.

22. Meetings. Meetings of the Members may be called by any Member owning 10% or more of the LLC, or if Managers were selected, by any Manager of the LLC, or if Officers were elected, by any officer.

23. Majority Defined. As used throughout this agreement the term “Majority” of the Members shall mean a majority of the ownership interest of the LLC as determined by the records of the LLC on the date of the action.

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. The Members shall not be required to participate in the LLC as their sole and exclusive business.

26. Protection of Members and Officers.

(a) As used herein, the term “Protected Party” refers to the Members and officers of the Company.

(b) Good faith reliance includes the provisions of this Agreement, the records of the LLC, and other professional information.

(c) The provisions of this Agreement are agreed by the parties to replace other duties and liabilities to the extent permitted by law.

27. Indemnification and Insurance.

ARTICLE VII
MEMBERS INTEREST TERMINATED

28. Termination of Membership. A Member’s interest in the LLC shall cease upon the occurrence of one or more of the following events:

A Member provided notice of withdrawal to the LLC thirty (30) days in advance.

A Member assigns all of his/her interest to a qualified third party.

A Member dies.

There is a court order adjudicating the Member incompetent.

In the case of an estate that is a Member, the distribution of the estate's entire interest.

Bankruptcy or insolvency event occurs.

29. Effect of Dissociation. Any dissociated Member shall not be entitled to receive the fair value of his LLC interest solely by virtue of his dissociation.

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

30. LLC Interest. The LLC interest is personal property.

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

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

(a) Purchase price cap: $ payable in equal quarterly installments.

(b) Members shall have fifteen (15) days to give written notice of their intention to buy.

(c) The selling Member can then assign the interest to a non-member if not purchased.

(d) The selling Member must close on the assignment within ninety (90) days.

(e) A non-member purchaser cannot exercise any rights of a Member unless a majority of the non-selling Members consent.

33. Set Price. The Set Price for purposes of this Agreement shall be the price fixed by consent of a majority of the Members. The initial Set Price for each Member's interest is the amount of the Member's contribution(s) to the LLC.

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

34. Dissociation. Upon the occurrence of a dissociation event with respect to a Member, 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 the winding up of the LLC, the assets must be distributed to creditors, then to Members in satisfaction of liabilities, then to Members according to their 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 at its place of business the Articles of Organization, any amendments thereto, this Agreement, and all other LLC records required to be kept by the Act.

40. Obtaining Additional Information. Subject to reasonable standards, each Member may obtain from the LLC information regarding the business and financial condition of the LLC and other reasonable information.

ARTICLE XIII
MISCELLANEOUS PROVISIONS

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

42. Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Connecticut.

43. Pronouns, Etc. References to a Member or Manager shall be deemed to 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. Each Member agrees that the other Members would be irreparably damaged if any provisions are not performed and agrees to injunctive relief as appropriate.

46. Further Action. Each Member agrees to perform all further acts and execute documents necessary to carry out the provisions of this Agreement.

47. Method of Notices. All written notices required or permitted by this Agreement shall be hand delivered or sent by registered or certified mail.

48. Facsimiles. Any copy, facsimile, telecommunication or other reliable reproduction of a writing or signature may be used in lieu of the original.

49. Computation of Time. The last day of the period so computed shall be included unless it is a Saturday, Sunday or legal holiday.

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 , A CONNECTICUT LIMITED LIABILITY COMPANY.

EACH MEMBER AGREES TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS AGREEMENT AND THE FORMATION CERTIFICATE OR ARTICLES.