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Idaho Sample Operating Agreement for Professional Limited Liability Company

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Operating Agreement of an Idaho Professional Limited Liability Company

SAMPLE OPERATING AGREEMENT

PROFESSIONAL LIMITED LIABILITY COMPANY

STATE OF IDAHO

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

Fill in the name of your profession in the blanks.

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

OPERATING AGREEMENT

OF

AN IDAHO PROFESSIONAL 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 THE PROFESSIONAL LIMITED LIABILITY COMPANY

1. Formation of PLLC. The Parties have formed an Idaho professional limited liability company named ("PLLC").

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

3. Business. The business of the PLLC shall be the professional practice of .

4. Registered Office and Registered Agent. The registered office and place of business of the PLLC 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 PLLC will commence business as of the date of filing and will continue in perpetuity.

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

ARTICLE II

MEMBERS

7. Initial Members. The initial members of the PLLC shall be licensed to practice in Idaho. The initial members of the PLLC, their initial capital contributions, and their percentage interest in the PLLC are:

Initial Members Percentage Interest in PLLC Capital Contribution

8. Additional Members. New members must be licensed to practice in Idaho. 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 PLLC as follows (check as appropriate):

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

The members shall elect officers who shall manage the company. The President and Secretary may act for and on behalf of the PLLC and shall have the power and authority to bind the PLLC in all transactions and business dealings of any kind except as otherwise provided in this Agreement.

The Members hereby delegate the management of the PLLC to Manager(s), subject to the limitations set out in this agreement. Managers must be licensed to practice in Idaho.

a) The Members shall elect and may remove the Manager(s) by majority vote.

b) A Manager shall serve until a successor is elected by the Members.

c) The Manager(s) shall have the authority to take all necessary and proper actions in order to conduct the business of the PLLC.

d) Except for decisions concerning distributions, any Manager can take any appropriate action on behalf of the PLLC, including, but not limited to signing checks, executing leases, and signing loan documents.

e) In determining the timing and total amount of distributions to the Members, the action of the Manager shall be based on a majority vote of the Managers, with or without a meeting.

f) The compensation to the Manager(s) shall be in the discretion of the majority of the Members of the PLLC.

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 PLLC, rather than appointing a manager, the Members shall appoint officers for the PLLC and the following provisions shall apply:

(a) Officers. The officers of the PLLC shall consist of a president, a treasurer and a secretary, or other officers or agents as may be elected and appointed by the Members. A Member may hold more than one or all offices.

(b) Election and Term of Office. The officers of the PLLC 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.

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 PLLC, or (b) incur debt, expend funds, or otherwise obligate the PLLC 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 PLLC.

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 PLLC may call on the Members to make additional cash contributions as may be necessary to carry on the PLLC'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. Except as otherwise provided, a majority of the Members, based upon their percentage ownership, is required for any 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.

27. Indemnification and Insurance.

ARTICLE VII

MEMBERS INTEREST TERMINATED

28. Termination of Membership. A Member’s interest in the PLLC shall cease upon the occurrence of certain events, including withdrawal, assignment, death, disability, and insolvency.

(c) A Member dies or becomes disqualified from the practice of in Idaho.

ARTICLE VIII

RESTRICTIONS ON TRANSFERABILITY OF PLLC INTEREST; SET PRICE FOR PLLC INTEREST

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

(a) The purchase price shall be paid in cash at closing unless the total purchase price is in excess of $ in which event the purchase price shall be paid 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 with respect to a Member, the PLLC 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 PLLC. The PLLC will be dissolved and its affairs must be wound up only upon the written consent of a majority of the Members.

36. Final Distributions. Upon the winding up of the PLLC, the assets must be distributed as follows: to creditors, to Members in satisfaction of liabilities, and to Members for return of contributions and interest.

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 PLLC be taxed as a partnership and not as an association taxable as a corporation.

ARTICLE XII

RECORDS AND INFORMATION

39. Records and Inspection. The PLLC shall maintain at its place of business the Articles of Organization, any amendments thereto, this Agreement, and all other PLLC records required to be kept by the Act.

40. Obtaining Additional Information. Subject to reasonable standards, each Member may obtain information regarding the state of the business and financial condition of the PLLC and tax returns.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

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

42. 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 Idaho.

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 monetary damages would not provide an adequate remedy and injunctive relief may be available.

46. Further Action. Each Member, upon request, 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 delivered or mailed to the PLLC or to a Member as set forth in the signature page.

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

49. Computation of Time. In computing any period of time under this Agreement, the day of the act, event or default 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 , AN IDAHO PROFESSIONAL LIMITED LIABILITY COMPANY.

Signatures of the Members:



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What this Idaho sample operating agreement covers

The Idaho Sample Operating Agreement for Professional Limited Liability Company is a private, internal contract that sets out member roles, professional service restrictions, capital contributions, allocation of profits and losses, governance procedures, and rules for admitting or removing members. It is tailored for licensed professionals organized as a PLLC under Idaho law and complements the public Articles of Organization filed with the Idaho Secretary of State. The agreement does not replace licensure or professional regulatory requirements; it documents internal governance and risk allocation among members and managers.

Why a tailored professional PLLC operating agreement matters

A sample operating agreement for a professional LLC clarifies member duties, protects limited liability structure, preserves licensing compliance, and reduces disputes by documenting decision authority and compensation rules in writing.

Why a tailored professional PLLC operating agreement matters

Who typically prepares and relies on this document

The operating agreement is commonly prepared by licensed professionals, firm founders, and their counsel to record governance and compliance expectations.

  • Small professional firms and partnerships forming a PLLC to document member rights, professional scope, and capital commitments.
  • Managing members or managers who need written authority and voting rules for daily operations and regulatory inspections.
  • Accountants, lenders, and insurers reviewing governance, ownership percentages, and vesting or buyout provisions.

Use this sample as a starting point; have counsel adapt statutory references, licensure requirements, and professional ethics rules to your Idaho practice.

Representative people who sign or review this agreement

Managing Member

A managing member or designated manager signs to accept operational duties and fiduciary obligations. Their signature confirms consent to governance rules, responsibility for day-to-day decisions, and acceptance of member voting thresholds and expense authority.

Firm Counsel

An attorney or compliance advisor often reviews and signs off on provisions related to licensure, malpractice exposure, buy-sell terms, and conflict-of-interest language to ensure the agreement aligns with Idaho professional corporation statutes and applicable licensing rules.

Core clauses to include in a professional PLLC operating agreement

A professional operating agreement should address ownership, management, professional limitations, financial commitments, admission and withdrawal, and dispute resolution in clear, enforceable provisions.

Company Purpose

Define permitted professional services and any restrictions tied to individual licenses or regulatory bodies to prevent unauthorized practice and maintain compliance.

Membership Interests

Describe classes of membership, capital contributions, percentage interests, transfer restrictions, and any rights or restrictions on voting or distributions.

Management Structure

Set out manager or member-managed governance, quorum and voting rules, officer roles, and delegation limits for contracts and expenditures.

Compensation & Distributions

Specify how profits and losses are allocated, timing and priority of distributions, guaranteed payments, and treatment of retained earnings.

Licensure & Compliance

Include representations of active licenses, requirements for professional liability insurance, and procedures if a member loses licensure.

Buy-Sell & Exit

Provide valuation method, buyout mechanics, disability or death provisions, and restrictions on transfers to nonlicensed persons.

Key compliance and data handling notes

Confidentiality: Limit disclosures to necessary parties.
PHI Handling: Use HIPAA safeguards when applicable.
Access Controls: Restrict document edits to authorized users.
Audit Trail: Retain timestamped signing logs.
Storage Encryption: Encrypt at rest and in transit.
Record Retention: Follow statutory retention schedules.

Primary risks from incomplete or incorrect agreements

Loss of Liability Shield: Improper management or mixing personal assets.
Regulatory Sanctions: Noncompliance with professional licensing.
Tax Exposure: Incorrect member reporting or missing elections.
Contract Disputes: Unclear voting or buyout rules.
Insurance Gaps: Missing malpractice coverage clauses.
Transfer Violations: Unauthorized transfer to nonlicensed party.

Common preparation errors to avoid

  • Using a generic LLC agreement without addressing professional licensing and restrictions can cause regulatory conflicts and undermine member expectations.
  • Failing to record capital contributions or promised services precisely leads to accounting disputes and unequal profit allocations among members.
  • Omitting buy-sell valuation formulas or dispute-resolution procedures causes lengthy, costly litigation when relationships deteriorate.
  • Not aligning the agreement with Articles of Organization or state licensure documents creates inconsistencies that impair bank and insurer acceptance.

Step-by-step: complete this sample operating agreement

Follow these steps in sequence to adapt the sample to your Idaho professional LLC and document member approvals, contributions, and management rules.

  • 01
    Draft core terms: Fill entity name, purpose, and member details first.
  • 02
    Define governance: Set manager roles, voting thresholds, and quorum.
  • 03
    Document finances: Record contributions, allocations, and distribution timing.
  • 04
    Sign and retain: Obtain signatures and store executed copies securely.

How to set up an online workflow for execution

Configure an e-signing workflow to collect signatures in order, authenticate signers, and capture an audit trail for compliance and recordkeeping.

Field Configuration
Signature Order Specify signing sequence for members and witnesses.
Authentication Level Choose email, SMS code, or ID verification.
Required Fields Mark signature, date, and initial fields as required.
Completion Notice Enable final PDF delivery and audit certificate.

Typical e-signing flow for this agreement

An efficient online signing path reduces friction while preserving evidence of intent, signer identity, and retention for audits or regulator review.

  • Upload document: Start with the finalized draft in PDF or DOCX format.
  • Place fields: Add signature, initials, and date fields where required.
  • Invite signers: Send email links or route in sequence to each signer.
  • Capture audit: Store timestamps, IPs, and authentication logs automatically.

Technical considerations for digital completion

Choose a platform that supports PDF/DOCX, audit trails, and required authentication methods for professional documents.

  • File formats: PDF and Word DOCX supported.
  • Integrations: Connect to Google Drive, NetSuite, or Box.
  • Authentication: Enable SMS codes or ID verification where needed.

Ensure the vendor supports necessary compliance features such as HIPAA BAA or 21 CFR Part 11 if your industry or the document requires those protections.

Timing considerations and routine review milestones

Track key dates for execution, tax elections, periodic reviews, and license renewals to keep the PLLC compliant and the agreement current.

Execution Date:

Sign and date to establish when the agreement takes effect.

State Filings:

Maintain current Articles of Organization with the Idaho Secretary of State.

Tax Elections:

File any entity-level tax elections by IRS deadlines when applicable.

Annual Review:

Review for business, tax, or regulatory changes at least yearly.

License Renewals:

Coordinate member licensure renewal dates with firm records.

Key milestones from drafting to active governance

A concise sequence helps coordinators track drafting, approval, filing needs, and periodic compliance checks across the company lifecycle.

01

Draft and Review

Prepare initial draft and circulate for member and counsel review.

02

Member Approval

Obtain required member votes or written consents documented in minutes.

03

Execution

Collect signed counterparts and, if used, notarization or RON evidence.

04

Ongoing Compliance

Schedule annual review for tax, licensing, and governance updates.

Comparing eSignature vendors for executing this agreement

Below is a concise feature and starting-price comparison for common eSignature vendors. signNow is listed first per standard vendor ordering practices.

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

Real-world signing experiences with electronic workflows

These brief examples show how organizations use eSignature tools to execute legal and governance documents efficiently.

Optica Ventures LLC

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

  • Platform adoption improved document turnaround across investor and operating workflows.
  • This ease of use translated into faster execution of corporate documents and clearer records for audits and regulatory review.

Martin Properties

I can process and execute all of these documents online with 100% compliance and built-in security.

  • Mobile and offline signing supported our field teams.
  • The ability to capture audit trails and provide signed PDFs to counterparties reduced administrative follow-ups and stored verifiable evidence for compliance teams.

Frequently asked questions about using the Idaho sample operating agreement

Answers address common legal, signing, and retention questions when adapting and executing this professional LLC operating agreement in Idaho.


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