Georgia LLC

Sample LLC 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 GEORGIA LIMITED LIABILITY COMPANY

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

1.

2.

3.

4.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

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

3. Business. The business of the LLC shall be to engage in any and all lawful business purposes.

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 the Members contribute their capital investment in the LLC 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:

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 Managers 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.

(c) Removal. Any officer or agent may be removed by a majority of the Members whenever they decide that the best interests of the Company would be served thereby.

(d) Vacancies. A vacancy is any office because of death, resignation, removal, disqualification or otherwise may be filled by the Members for the unexpired portion of the term.

(e) President. The President shall be the chief executive officer of the LLC and shall preside at all meetings of the Members.

(f) The Treasurer. The Treasurer shall be the chief financial officer of the LLC.

(g) Secretary. The secretary shall keep the minutes of the Members meetings and perform related duties.

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 required, a majority of the Members, based upon their percentage ownership, is required for any action.

21. Meetings - Written Consent. Action of the Members 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.

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.

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 and with such care as an ordinarily prudent person in a like position would use under similar circumstances.

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) To the extent that, at law or in equity, a Protected Party has duties and liabilities relating thereto to the LLC or to any other Protected Party, a Protected Party acting under this Agreement shall not be liable for good faith reliance on:

(i) the provisions of this Agreement;

(ii) the records of the LLC; and/or

(iii) information, opinions, reports or statements presented to the LLC by a person reasonably believed to be competent.

27. Indemnification and Insurance.

(a) Right to Indemnification.

(b) Advancement of Expenses.

(c) Non-Exclusivity of Rights.

(d) Insurance.

(e) Effect of Amendment.

28. Duties of Persons Serving on Advisory Committees; Limitation of Liability; Indemnification.

ARTICLE VII

MEMBERS INTEREST TERMINATED

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

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

(b) A Member assigns all of his/her interest to a third party.

(c) A Member dies.

(d) A court adjudicates the Member incompetent to manage his/her person or estate.

(e) In the case of an estate that is a Member, the distribution by the fiduciary of the estate's entire interest in the LLC.

(f) A Member, without the consent of a majority of the Members, enters bankruptcy or similar proceedings.

(g) If within one hundred twenty (120) days after the commencement of any action seeking reorganization or similar relief, the action has not been dismissed and/or has not been consented to by a majority of the members.

(h) If within ninety (90) days after the appointment of a trustee, receiver, or liquidator, the appointment is not vacated.

(i) Any of the events provided in applicable code provisions that are not inconsistent with the dissociation events identified above.

30. 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

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

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

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

(a) If a Member desires to sell his/her interest, he/she shall give written notice to the LLC of his desire to sell all or part of his/her interest and must first offer the interest to the LLC. The purchase price shall be paid in cash at closing unless the total purchase price is in excess of $.

(b) To the extent the LLC does not buy the offered interest, the other Members shall have the option to buy the offered interest at the Set Price on a pro rata basis.

(c) To the extent the LLC or the Members do not buy the offered interest, the selling Member can then assign the interest to a non-member.

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

34. 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 shall be adjusted no later than .

ARTICLE IX

OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

35. 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

36. Termination of LLC. The LLC will be dissolved and its affairs must be wound up only upon the written consent of a majority of the Members.

37. Final Distributions. Upon the winding up of the LLC, the assets must be distributed to creditors, then to Members in satisfaction of liabilities for distributions, and then to Members respecting their LLC interest.

ARTICLE XI

TAX MATTERS

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

39. Tax Matters Partner. The Members hereby designate as the "tax matters partner" for purposes of representing the LLC before the Internal Revenue Service if necessary.

40. 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

41. 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.

42. Obtaining Additional Information. Subject to reasonable standards, each Member may obtain from the LLC from time to time upon reasonable demand information regarding the state of the business and financial condition of the LLC.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

43. Amendment. Except as otherwise provided in this Agreement, any amendment to this Agreement may be proposed by a Member.

44. Applicable Law. To the extent permitted by law, this Agreement shall be construed in accordance with and governed by the laws of the State of .

45. Pronouns, Etc. References to a Member or Manager, including by use of a pronoun, shall be deemed to include masculine, feminine, singular, plural, individuals, partnerships or corporations where applicable.

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

47. Specific Performance. Each Member agrees with the other Members that the nonbreaching Members shall be entitled to injunctive relief to prevent breaches of this Agreement.

48. Further Action. Each Member, upon the request of the LLC, agrees to perform all further acts and to execute, acknowledge and deliver any documents which may be necessary, appropriate, or desirable to carry out the provisions of this Agreement.

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

50. Facsimiles. For purposes of this Agreement, any copy, facsimile, telecommunication or other reliable reproduction of a writing, transmission or signature may be substituted or used in lieu of the original.

51. Computation of Time. In computing any period of time under this Agreement, the day of the act, event or default from which the designated period of time begins to run shall not be included.

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 GEORGIA LIMITED LIABILITY COMPANY.