LIMITED LIABILITY COMPANY PACKAGE
for STATE-LICENSED PROFESSIONALS
STATE OF MARYLAND
Electronic Version
STATUTORY REFERENCES
MARYLAND CODE, Corporations and Associations §§ 4A-101 through 4A-1103
(Maryland Limited Liability Company Act)
INTRODUCTORY NOTES AND LAW SUMMARY
"Professional service" includes a service provided by:
(i) An architect; (ii) An attorney; (iii) A certified public accountant; (iv) A chiropractor; (v) A dentist; (vi)
An osteopath; (vii) A physician; (viii) A podiatrist; (ix) A professional engineer; (x) A psychologist; (xi)
A licensed real estate broker, licensed associate real estate broker, or licensed real estate salesperson; or
(xii) A veterinarian.
In Maryland a limited liability company (LLC) may be organized for any lawful purpose or purposes
except insurance, including the rendering of professional services, and is subject to the provisions of the
Maryland Limited Liability Company Act (Act). (§4A-201)
A LLC organized for the purpose of rendering professional services is subject to the Act and is
particularly subject to its special provisions regarding companies performing professional services.
In addition to the various statutory provisions applicable to LLCs which are formed to engage in
rendering of professional services, a LLC formed to engage in a state-licensed profession and the
individual professional members of the LLC are subject to the rules and regulations of the Maryland State
Governing/Examining Board for the subject profession.
Selected Definitions
A "limited liability company" is a permitted form of unincorporated business organization which is
organized and existing under the Maryland Limited Liability Company Act.
A "member" is a person with an interest in a limited liability company with the rights and obligations
specified under the Maryland Limited Liability Company Act.
Purpose and Powers
A limited liability company may be organized for any lawful purpose, except the business of acting as an
insurer. Unless otherwise provided by law or its articles of organization, a limited liability company has
the general powers, whether or not set forth in its articles of organization, to render professional services
within or without Maryland.
Regulatory Authorities
Nothing in the Maryland Limited Liability Company Act restricts or limits the authority and duty of a
regulatory body that licenses professionals within Maryland to license persons who render professional
services or to regulate the practice of any profession that is within the jurisdiction of the regulatory body.
LLC Name
The name of a limited liability company must include:
(1) The words "limited liability company"; (2) "L.L.C."; (3) "LLC"; (4) "L.C."; or (5) "LC".
Further, the name must contain the surname (last name) of one or more members of the LLC unless :
- The name of the LLC is approved by the appropriate licensing unit (i.e.- the State
Governing/Examining Board for the subject profession);
- A certificate of authorization for use of the LLC name is issued to the LLC or to its organizer by the
appropriate licensing unit; and
- The certificate of authorization for use of the name issued by the licensing unit is attached to the
articles of organization document in which the name is adopted.
A LLC or its organizer must file an application with the appropriate licensing unit, using a form provided
by the licensing unit , requesting approval of a name. Contact your State Governing/Examining Board for
your profession to inquire about a certificate of authorization.
Principal Office and Resident Agent
A limited liability company must have a principal office in Maryland and at least one resident agent. The
registered agent must be a citizen of the Maryland who resides in Maryland, a Maryland corporation, or a
Maryland limited liability company.
A resident agent may resign at any time upon notification of the resignation to the LLC and the State
Department of Assessments and Taxation.
Disposition of LLC Interest
Unless the operating agreement provides otherwise, if the limited liability company is not dissolved after
a member ceases to be a member, then, within a reasonable time after a person has ceased to be a
member, the limited liability company may elect to pay to that person or that person's successor in interest
the fair value of that person's interest.
Unless otherwise agreed, the members of the limited liability company continuing the business following
the withdrawal of a member will be deemed to have entered into an operating agreement containing the
same terms and conditions as those contained in the operating agreement in effect immediately prior to
the withdrawal.
Limited Liability
§ 4A-301 - Liability to third persons
Except as otherwise provided by this title, no member shall be personally liable for the obligations of the
limited liability company, whether arising in contract, tort or otherwise, solely by reason of being a
member of the limited liability company.
§ 4A-301.1 - Liability for negligence in rendering professional services
(a) Individual liability-
(1) An individual who renders a professional service in this State as an employee of a domestic
or foreign limited liability company is liable for a negligent or wrongful act or omission in which
the individual personally participated to the same extent as if the individual rendered the service
as a sole practitioner.
(2) An individual who renders a professional service in this State as an employee of a domestic
or foreign limited liability company is not liable for a negligent or wrongful act or omission of
another employee or member of the limited liability company unless the employee is negligent in
appointing, supervising, or cooperating with the other employee or member.
(b) Company liability- A domestic or foreign limited liability company whose employees perform
professional services within the scope of their employment or within the scope of the employees' apparent
authority to act for the limited liability company is liable to the same extent as its employees.
(c) Liability no greater than in nonprofessional company- The personal liability of a member of a
domestic or foreign limited liability company that provides professional services is no greater in any
respect than the liability of a member of a limited liability company which is not engaged in rendering
professional services.
* * *
BEFORE YOU FORM A LIMITED LIABILITY COMPANY TO ENGAGE IN A
STATE-LICENSED PROFESSION, YOU SHOULD FIRST CONFIRM THAT YOU ARE
IN FULL COMPLIANCE WITH ALL RULES AND REGULATIONS OF THE STATE
GOVERNING/EXAMINING BOARD FOR YOUR PROFESSION - PARTICULARLY
ANY REQUIREMENTS REGARDING THE NAME OF THE LLC.
* * *
Disclaimer: If you are not an attorney, you are advised to seek the advice of an attorney
for all serious legal matters. The information and forms contained herein are
not legal advice and are not to be construed as such. Although the
information contained herein is believed to be correct, no warranty of fitness
or any other warranty shall apply. All use is subject to the U.S. Legal Forms,
Inc. Disclaimer and License located at http://www.uslegalforms.com/disclaimer.htm
STEPS TO FORM LLC
Step 1: SEE FORM 1 - APPLICATION FOR RESERVED NAME
It is recommended that you reserve a LLC name in order to assure that your
Articles of Organization are not rejected because the name you have selected is
not available.
You may skip this step and go to Step 2, but if the LLC name you have selected
is not available, the Articles of Organization will be rejected and returned to
you.
D OCUMENTS MUST BE TYPED OR PRINTED . N O
HANDWRITTEN DOCUMENTS WILL BE ACCEPTED .
This form should be typewritten/printed in black ink.
The LLC name must comply with all provisions cited above in the LLC
Name section.
Have the applicant sign the Application, print/type his/her name and title, and
date the Application.
File the original and one copy of the Application.
A name is reserved for 30 days.
The filing fee is $25.00 (call 767-1330 or 767-1340 to confirm the amount
prior to mailing your check!)
You may call 767-1330 for a non-binding check for name availability . This is
a preliminary check and does not guarantee that the name will be available at
the time of filing.
Mail the original and one copy of your APPLICATION FOR RESERVED
NAME along with the $25.00 filing fee (make check payable to State Department
of Assessments and Taxation) to:
State Department of Assessments and Taxation
301 West Preston Street
Baltimore, Maryland 21201
Telephone: (410) 767-1340 or -1330.
Step 2: SEE FORM 2 – ARTICLES OF ORGANIZATION
Once you have reserved the limited liability company name, or if you have chosen
to proceed without reserving a name, you are ready to complete the Articles of
Organization.
D OCUMENTS MUST BE TYPED OR PRINTED . N O
HANDWRITTEN DOCUMENTS WILL BE ACCEPTED .
This form should be typewritten in black ink.
(1) Provide the LLC name that you have reserved.
(2) Provide a brief description of the business / profession to be practiced.
(3) Provide the address of the LLC. The address must be in Maryland and
CANNOT be a P.O. box.
(4) Provide the name and address (CANOT be a P.O. box) of the resident
agent. A resident agent is another entity or individual designated to accept
service of process for the LLC. The resident agent can be any Maryland
citizen who is over eighteen, a Maryland corporation, or a Maryland LLC.
NOTE: The Registered Agent must sign the Articles of Organization in
the space provided.
(5) Have the Organizer sign the Articles. The Organizer must an adult
individual authorized by the persons forming the LLC.
(6) The resident agent must sign here.
(7) Provide the return address for any correspondence regarding this filing.
Mail the original and one copy of the Articles of Organization.
The filing fee is $100.00, plus $20.00 + $1.00 per page for a certified copy,
plus $20.00 for a certificate of status.
If desired, you can expedite the filing of the Articles by paying an
ADDITIONAL fee of $50.00. CALL THE DEPARTMENT OF
ASSESSMENTS AND TAXATION (410) 767-134 FOR DETAILS ABOUT
THIS SERVICE.
Step 3: Mail the original and one copy of the ARTICLES OF ORGANIZATION , along
with the filing fee of $100.00 and the expedite fee, if applicable, plus $20.00 +
$1.00 per page for a certified copy, plus $20.00 for a certificate of status (make
check payable to State Department of Assessments and Taxation) to:
State Department of Assessments and Taxation
301 West Preston Street
Baltimore, Maryland 21201
Telephone: (410) 767-1340 or -1330.
A sample cover letter to send with the Articles of Organization is included in this
packet.
SEE FORM 3 – SAMPLE TRANSMITTAL LETTER
Step 4: Upon return of the Articles of Organization complete the Operating Agreement.
SEE FORM 4 – SAMPLE OPERATING AGREEMENT
Step 5. Apply for a Federal Tax Identification Number. This is done with form SS-4.
Mail to your regional IRS office.
SEE FORM 5 – IRS-SS-4
Step 6: Open a bank account and conduct business.
FORM 1
APPLICATION FOR RESERVED NAME
(Handwritten documents not accepted. Fill in using your computer and print.)
APPLICATION FOR RESERVED NAME
To: State Department of Assessments and Taxation
301 West Preston Street
Baltimore, MD 21201
This request is made to reserve a name for a Limited Liability Company that I intend to form
within 30 days.
1. ___________________________________________________________________________
is the proposed name to be reserved for thirty days.
2. The name and address of the applicant is
___________________________________________________________________________
(Applicant’s name)
___________________________________________________________________________
(Applicant’s address)
___________________________________________________________________________
________________________________________________________________
City State Zip Code
_______________________________________________
Signature
_______________________________________________
Type/Print name and title, if applicable
Date: ________________________________, 20_______
FORM 2
ARTICLES OF ORGANIZATION
(Handwritten documents not accepted. Fill in using your computer and print.)
ARTICLES OF ORGANIZATION
The undersigned, with the intention of creating a Maryland Limited Liability Company, files the following
Articles of Organization:
(1) The name of the Limited Liability Company is:
(2) The purpose for which the Limited Liability Company is filed is as follows:
(3) The address of the Limited Liability Company in Maryland is
(4) The resident agent of the Limited Liability Company in Maryland is
whose address is
(5)
(6)
Signature of Resident Agent
Signature(s) of Authorized Person(s)
RETURN TO:
(7)
FORM 3
SAMPLE TRANSMITTAL LETTER
Return Name and Address
____________________________________
____________________________________
____________________________________
____________________________________
Date:
State Department of Assessments and Taxation
301 West Preston Street
Baltimore, Maryland 21201
Re: Articles of Organization
Dear Sir:
Enclosed you will find an original and one copy of Articles of Organization along with a filing
fee of $100.00 [PLUS AN EXPEDITE FEE][PLUS AMOUNTS FOR A CERTIFIED COPY
AND/OR CERTIFICATE OF STATUS]. Please file and provide a filed copy to me, together
with any other information you commonly provide to persons who form a Maryland LLC.
Please contact me at the above address if you require anything further.
With kindest regards, I am
Sincerely yours,
__________________________________
Signature
Enclosures
Check # __________ Enclosed for $___________
FORM 4
SAMPLE 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.
Fill in the name of your profession in the blanks where appropriate.
Read carefully and make appropriate changes to suit your
individual needs and purposes.
OPERATING AGREEMENT
OF
______________________________________
A MARYLAND 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 Maryland limited liability
company named ___________________________________________________ ("LLC"). The
operation of the LLC shall be governed by the terms of this Agreement and the applicable laws
of the State of Maryland relating to the formation, operation and taxation of a LLC, including the
Maryland Limited Liability Company Act hereinafter referred to as the "Act". To the extent
permitted by the Act, the terms and provisions of this Agreement shall control if there is a
conflict between such Act and this Agreement. The Parties intend that the LLC shall be taxed as
a partnership. Any provisions of this Agreement, if any, that may cause the LLC not to be taxed
as a partnership shall be inoperative.
2. Articles or Organization . The Members acting through one of its Members,
_____________________________________, filed Articles of Organization, ("Articles") for
record in the office of the with the Maryland State Department of Assessments and Taxation on
_________________________, thereby creating the LLC.
3. Purpose . The purpose of the LLC is to engage in the practice of ______________
through persons qualified to practice ___________________ in the State of Maryland. The
LLC's activities shall be conducted in compliance with the applicable statutes, the rules and
regulations of the Maryland State Board of Examiners of ___________________.
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:
Initial Percentage Interest Capital
Members in LLC Contribution
________________________ _________________ ___________________
________________________ _________________ ___________________
________________________ _________________ ___________________
________________________ _________________ ___________________
8. Members.
(a) Each member of the LLC and each of the employees of the LLC engaged in
the practice of ___________________ shall be licensed to practice
___________________.
(b) All members of the LLC shall be licensed to practice ___________________
in the State of Maryland.
(c) No member of the LLC, or the LLC itself, shall do any act which would
violate the standards of professional conduct applicable to licensed
___________________ as set determined by of the Maryland State Board of
Examiners of ___________________.
(d) No member (or manager, if applicable) of the LLC who is not licensed to
practice ___________________ in Maryland shall be permitted to practice in
Maryland.
(e) 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 shall elect officers who shall manage the
company. The President and Secretary may act for and on behalf of the LLC and
shall have the power and authority to bind the LLC in all transactions and
business dealings of any kind except as otherwise provided in this Agreement.
The Members hereby delegate the management of the LLC to Manager(s),
subject to the limitations set out in this agreement.
a) Each Manager shall be licensed to practice ___________________ in the
State of Maryland.
b) The Members shall elect and may remove the Manager(s) by majority vote.
c) A Manager shall serve until a successor is elected by the Members.
d) The Manager(s) shall have the authority to take all necessary and proper
actions in order to conduct the business of the LLC.
e) Except for decisions concerning distributions, any Manager can take any
appropriate action on behalf of the LLC, including, but not limited to signing
checks, executing leases, and signing loan documents.
f) 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.
g) The c ompensation to the Manager(s) shall be in the discretion of the majority
of the Members of the LLC.
h) There shall be _________ initial Managers.
i) 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. Members
may hold more than one office. The officers shall act in the name of the LLC and shall supervise
its operation under the direction and management of the Members, as further described below.
All officers of the LLC shall be licensed to practice ___________________.
(b) Election and Term of Office . The officers of the LLC shall be elected
annually by the Members by a majority vote. Vacancies may be filled or new offices created and
filled at any meeting of the Members. Each officer shall hold office until his/her death, until
he/she shall resign, or until he/she is removed from office. Election or appointment of an officer
or agent shall not of itself create a contract right.
(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.
Such removal shall be without prejudice to the contract rights, if any, of the person so removed.
(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. The President shall have such other powers and
perform such duties as are specified in this Agreement and as may from time to time be assigned
by the Members of the LLC.
(f) The Treasurer . The Treasurer shall be the chief financial officer of the LLC.
The Treasurer shall not be required to give a bond for the faithful discharge of his/her duties. The
Treasurer shall: (i) have charge and custody of and be responsible for all funds and securities of
the LLC; (ii) in the absence of the President, preside at meetings of the Members; (iii) receive
and give receipts for moneys due and payable to the LLC from any source whatsoever, and
deposit all such moneys in the name of the LLC in such banks, trust companies or other
depositaries as shall be selected by the Members of the LLC; and (iv) in general perform all the
duties incident to the office of treasurer and such other duties as from time to time may be
assigned by the President or by the Members of the LLC.
(g) Secretary . The secretary shall: (i) keep the minutes of the Members meetings
in one or more books provided for that purpose; (ii) see that all notices are duly given in
accordance with the provisions of this Agreement or as required by law; (iii) be custodian of
LLC records; (iv) keep a register of the post office address of each Member; (v) certify the
Member’s resolutions; and other documents to the LLC as true and correct; (vi) in the absence of
the President and Treasurer, preside at meetings of the Members and (vii) in general perform all
duties incident to the office of secretary and such other duties as from time as may be assigned
by the President or the Members.
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 (sometimes
referred to as a share) in the LLC. The Member’s percentage interest shall be based on the
amount of cash or other property that the Member has contributed to the LLC and that
percentage interest shall control the Member’s share of the profits, losses, and distributions of 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. The amount of any additional cash contribution shall be based on the Member's then
existing percentage interest. To the extent a Member is unable to meet a cash call, the other
Members can contribute the unmet call on a pro rata basis based on the Members' percentage
interests at that time, and the percentage interest of each Member will be adjusted accordingly.
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 (other than in
dissolution of the LLC) shall be made in the total amounts and at the times as determined by a
majority of the Members. Any such distributions shall be allocated among the Members on the
basis of the Members' percentage interests in the LLC.
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. If a meeting is held, evidence of the action shall be by Minutes or
Resolution reflecting the action of the Meeting, signed by a majority of the Members. Action
without a meeting may be evidenced by a written consent signed by a majority of the Members.
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 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, in a manner they reasonably believe to be in the best
interests of the LLC, and with such care as an ordinarily prudent person in a like position would
use under similar circumstances. No Member or officer shall have any liability to the LLC or
any other Member by reason of being or having been a Member or officer. No Member or
officer shall not be liable to the LLC or to any other Member or officer for any loss or damage
sustained by the LLC or any other Member or officer unless the loss or damage shall have been
the result of fraud, deceit, gross negligence, willful misconduct, or a wrongful taking by that
Member or officer.
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. Members may have other business
interests and may participate in other investments or activities in addition to those relating to the
LLC. Neither the LLC nor any other Member shall have any right, by virtue of this Agreement,
to share or participate in another member’s business interests, investments or activities or the
income or proceeds derived therefrom. No Member shall incur liability to the LLC or to any
other Member by reason of participating in any such other business, investment or activity.
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 (including
fiduciary 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 to the LLC or to any other Protected Party for good faith reliance on:
(i) the provisions of this Agreement;
(ii) the records of the LLC; and/or
(iii) such information, opinions, reports or statements presented to the LLC by
any person as to matters the Protected Party reasonably believes are within
such other person’s professional or expert competence and who has been
selected with reasonable care by or on behalf of the LLC, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits or losses of the LLC or any other fact
pertinent to the existence and amount of assets from which distributions to
Members might properly be paid.
(c) The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Protected Party to the LLC or to any other Protected Party
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Protected Party.
(d) Whenever this Agreement permits or requires a Protected Party to make a
decision in its “discretion” or under a grant of similar authority or latitude, the
Protected Party shall be entitled to consider only such interests and factors as
it desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the LLC or any
other Person.
(e) Whenever this Agreement permits or requires a Protected Party to make a
decision using a “good faith” or under another express standard, the
Protected Party shall act under such express standard and shall not be subject
to any other or different standard imposed by this Agreement or other
applicable law.
27. Indemnification and Insurance .
(a) Right to Indemnification .
(i) Any person who is or was a member or officer of the LLC and who is
or may be a party to any civil action because of his/her participation in
or with the LLC, and who acted in good faith and in a manner which
he/she reasonably believed to be in, or not opposed to, the best
interests of the LLC, shall be indemnified and held harmless by the
LLC.
(ii) Any person who is or was a member or officer of the LLC and who is
or may be a party to any criminal action because of his/her
participation in or with the LLC, and who acted in good faith and had
reasonable cause to believe that the act or omission was lawful, shall
be indemnified and held harmless by the LLC.
(b) Advancement of Expenses . Expenses (including attorney’s fees) incurred by
an indemnified person in defending any proceeding shall be paid in advance
of the proceeding’s final disposition. Should the indemnified member or
officer ultimately be determined to not be entitled to indemnification, that
member or officer agrees to immediately repay to LLC all funds expended by
the LLC on behalf of the member or officer.
(c) Non-Exclusivity of Rights . The right to indemnification and the advancement
of expenses conferred in this section shall not be exclusive of any right which
any person may have or hereafter acquire under any statute, provision of this
Agreement, contract, agreement, vote of Members or otherwise. The Members
and officers are expressly authorized to adopt and enter into indemnification
agreements for Members, officers and advisory committee members.
(d) Insurance . The Members may cause the LLC to purchase and maintain
insurance for the LLC, for its Members and officers, and/or on behalf of any
third party or parties whom the members might determine should be entitled
to such insurance coverage.
(e) Effect of Amendment . No amendment, repeal or modification of this Article
shall adversely affect any rights hereunder with respect to any action or
omission occurring prior to the date when such amendment, repeal or
modification became effective.
28. Duties of Persons Serving on Advisory Committees; Limitation of Liability;
Indemnification . The Members shall have the right to form advisory committees. Persons serving
on an advisory committee, whether or not a Member or officer, shall perform their duties in good
faith, in a manner they reasonably believe to be in the best interests of the LLC, and with such
care as an ordinarily prudent person in a like position would use under similar circumstances. A
person serving on an advisory committee shall not have any liability to the LLC or to any
Member or officer for any loss or damage sustained by the LLC or any Member or officer unless
the loss or damage was the result of fraud, deceit, gross negligence, willful misconduct, or a
wrongful taking by such person.
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. Withdrawal by a Member is not a breach of
this Agreement.
(b) A Member assigns all of his/her interest to a third party.
(c) A Member dies.
(d) There is an entry of an order by a court of competent jurisdiction adjudicating
the Member incompetent to manage his/her person or his/her 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: (1) makes an
assignment for the benefit of creditors; (2) files a voluntary petition in
bankruptcy; (3) is adjudicated a bankrupt or insolvent; (4) files a petition or
answer seeking for himself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any statute, law
or regulation; (5) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against him in any
proceeding of the nature described in this paragraph; (6) seeks, consents to, or
acquiesces in the appointment of a trustee, receiver, or liquidator of the
Member or of all or any substantial part of his properties; or (7) if any
creditor permitted by law to do so should commence foreclosure or take any
other action to seize or sell any Member's interest in the LLC.
(g) If within one hundred twenty (120) days after the commencement of any
action against a Member seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any statute, law,
or regulation, 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, without a member’s consent
or acquiescence, of a trustee, receiver, or liquidator of the Member or of all or
any substantial part of the member’s properties, said appointment is not
vacated or within ninety (90) days after the expiration of any stay, the
appointment is not vacated and/or has not been consented to by a majority of
the members.
(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. A dissociated Member that
still owns an interest in the LLC shall be entitled to continue to receive such profits and losses, to
receive such distribution or distributions, and to receive such allocations of income, gain, loss,
deduction, credit or similar items to which he would have been entitled if still a Member. For all
other purposes, a dissociated Member shall no longer be considered a Member and shall have no
rights of a Member.
ARTICLE VIII
RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST;
SET PRICE FOR LLC INTEREST
31. LLC Interest . The LLC interest is personal property. A Member has no interest
in property owned by the LLC.
32. Encumbrance . A Member can encumber his LLC interest by a security interest
or other form of collateral only with the consent of a majority of the other Members. Such
consent shall only be given if the proceeds of the encumbrance are contributed to the LLC to
respond to a cash call of the LLC.
33. Sale of Interest . A Member can sell his LLC interest only as follows:
(a) If a Member desires to sell his/her interest, in whole or in part, 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 LLC shall have the option to
buy the offered interest at the then existing Set Price as provided in this
Agreement. The LLC shall have thirty (30) days from the receipt of the
assigning Member's notice to give the assigning Member written notice of its
intention to buy all, some, or none of the offered interest. The decision to buy
shall be made by a majority of the other Members. Closing on the sale shall
occur within sixty (60) days from the date that the LLC gives written notice of
its intention to buy. 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 twelve (12) equal quarterly installments
beginning with the date of closing. The installment amounts shall be
computed by applying the following interest factor to the principal amount:
interest compounded quarterly at the Quarterly Federal Short-Term Rate
existing at closing under the Applicable Federal Rates used for purposes of
Internal Revenue Code § 1 274(d), or any successor provision.
(b) To the extent the LLC does not buy the offered interest of a Member, the other
Members shall have the option to buy the offered interest at the Set Price on a
pro rata basis based on the Members' percentage interests at that time. If
Member does not desire to buy up to his/her proportional part, the other
Members can buy the remaining interest on the same pro rata basis. Members
shall have fifteen (15) days from the date the LLC gives its written notice to
the selling Member to give the selling Member notice in writing of their
intention to buy all, some, or none of the offered interest. Closing on the sales
shall occur within sixty (60) days from the date that the Members give written
notice of their intention to buy. The purchase price from each purchasing
Member shall be paid in cash at closing.
(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, provided that
the non-member is licensed to practice ______________________ in the State
of Maryland. The selling Member must close on the assignment within ninety
(90) days of the date that he gave notice to the LLC. If he does not close by
that time, he must again give the notice and options to the LLC and the LLC
Members before he sells the interest.
(d) A non-member purchaser of a member’s interest cannot exercise any rights of
a Member unless a majority of the non-selling Members consent to him
becoming a Member. The non-member purchaser will be entitled, however,
to share in such profits and losses, to receive such distributions, and to receive
such allocation of income, gain, loss, deduction, credit or similar items to
which the selling member would be entitled, to the extent of the interest
assigned, and will be subject to calls for contributions under the terms of this
Agreement. The purchaser, by purchasing the selling member’s interest,
agrees to be subject to all the terms of this Agreement as if he were 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 Set Price shall be memorialized and made a part
of the LLC records. The initial Set Price for each Member's interest is the amount of the
Member's contribution(s) to the LLC as provided above, as updated in accordance with the terms
hereof. Any future changes in the Set Price by the Members shall be based upon net equity in
the assets of the LLC (fair market value of the assets less outstanding indebtedness), considering
the most recent appraisal obtained by the LLC for its assets, as may be adjusted by the Members
in their discretion. The initial Set Price shall be adjusted no later than ________________. This
basis for determining the Set Price shall remain in effect until changed by consent of a majority
of the Members. The Members will consider revising the basis for determining the Set Price at
least annually.
35. When a member dies or becomes disqualified, that member's interest may be
transferred as set out above. If there is no such transfer, then the limited liability company
SHALL purchase or redeem that interest.
ARTICLE IX
OBLIGATION TO SELL ON A DISSOCIATION
EVENT CONCERNING A MEMBER
36. Dissociation . Except as otherwise provided, 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 in the same manner as
provided in ARTICLE VIII and as if the dissociated Member had notified the LLC of his desire
to sell all of his LLC interest. The date the LLC received the notice as provided in ARTICLE
VIII triggering the options shall be deemed to be the date that the LLC receives actual notice of
the dissociation event.
ARTICLE X
DISSOLUTION
37. 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.
38. Final Distributions . Upon the winding up of the LLC, the assets must be
distributed as follows: (a) to the LLC creditors; (b) to Members in satisfaction of liabilities for
distributions; and (c) to Members first for the return of their contributions and secondly
respecting their LLC interest, in the proportions in which the Members share in profits and
losses.
ARTICLE XI
TAX MATTERS
39. Capital Accounts . Capital accounts shall be maintained consistent with Internal
Revenue Code § 704 and the regulations thereunder.
40. 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.
41. 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
42. 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, and the same shall be subject to inspection and copying at the
reasonable request, and the expense, of any Member.
43. Obtaining Additional Information . Subject to reasonable standards, each Member
may obtain from the LLC from time to time upon reasonable demand for any purpose reasonably
related to the Member's interest as a Member in the LLC: (1) information regarding the state of
the business and financial condition of the LLC; (2) promptly after becoming available, a copy of
the LLC's federal, state, and local income tax returns for each year; and (3) other information
regarding the affairs of the LLC as is just and reasonable.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
44. Amendment . Except as otherwise provided in this Agreement, any amendment to
this Agreement may be proposed by a Member. Unless waived by the Members, the proposing
Member shall submit to the Members any such proposed amendment together with an opinion of
counsel as to the legality of such amendment and the recommendation of the Member as to its
adoption. A proposed amendment shall become effective at such time as it has been approved in
writing by a majority of the Members. This Agreement may not be amended nor may any rights
hereunder be waived except by an instrument in writing signed by the party sought to be charged
with such amendment or waiver, except as otherwise provided in this Agreement.
45. 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 Maryland.
46. 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.
47. Counterparts . This instrument may be executed in any number of counterparts
each of which shall be considered an original.
48. Specific Performance . Each Member agrees with the other Members
that the other Members would be irreparably damaged if any of the provisions of this Agreement
are not performed in accordance with their specific terms and that monetary damages would not
provide an adequate remedy in such event. Accordingly, it is agreed that, in addition to any other
remedy to which the nonbreaching Members may be entitled, at law or in equity, the
nonbreaching Members shall be entitled to injunctive relief to prevent breaches of this
Agreement and, specifically, to enforce the terms and provisions of this Agreement in any action
instituted in any court of the United States or any state thereof having subject matter jurisdiction
thereof.
49. 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.
50. Method of Notices . All written notices required or permitted by this Agreement
shall be hand delivered or sent by registered or certified mail, postage prepaid, addressed to the
LLC at its place of business or to a Member as set forth on the Member's signature page of this
Agreement (except that any Member may from time to time give notice changing his address for
that purpose), and shall be effective when personally delivered or, if mailed, on the date set forth
on the receipt of registered or certified mail.
51. 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 writing, transmission or signature for any and all
purposes for which the original writing, transmission or signature could be used, provided that
such copy, facsimile telecommunication or other reproduction shall have been confirmed
received by the sending Party.
52. 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. The last day of the period so computed shall be included, unless it is a Saturday,
Sunday or legal holiday, in which event the period shall run until the end of the next day which is
not 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
MARYLAND LIMITED LIABILITY COMPANY. EACH MEMBER REALIZES THAT AN
INVESTMENT IN THIS COMPANY IS SPECULATIVE AND INVOLVES SUBSTANTIAL
RISK. EACH MEMBER IS AWARE AND CONSENTS TO THE FACT THAT THE
INTERESTS IN THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR SECURITIES ACT OF THE STATE OF MARYLAND.
EACH MEMBER AGREES TO BE BOUND BY ALL OF THE TERMS AND CONDITIONS
OF THIS AGREEMENT AND THE FORMATION CERTIFICATE OR ARTICLES.
Members:
__________________________________
Name
__________________________________
Name
__________________________________
Name
__________________________________
Name
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a Maryland limited liability
company. I realize that an investment in this Company is speculative and involves substantial
risk. I agree to be bound by all of the terms and conditions of the Articles of Organization and
Limited Liability Company Agreement of ___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a Maryland limited liability
company. I realize that an investment in this Company is speculative and involves substantial
risk. I agree to be bound by all of the terms and conditions of the Articles of Organization and
Limited Liability Company Agreement of ___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a Maryland limited liability
company. I realize that an investment in this Company is speculative and involves substantial
risk. I agree to be bound by all of the terms and conditions of the Articles of Organization and
Limited Liability Company Agreement of ___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a Maryland limited liability
company. I realize that an investment in this Company is speculative and involves substantial
risk. I agree to be bound by all of the terms and conditions of the Articles of Organization and
Limited Liability Company Agreement of ___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a Maryland limited liability
company. I realize that an investment in this Company is speculative and involves substantial
risk. I agree to be bound by all of the terms and conditions of the Articles of Organization and
Limited Liability Company Agreement of ___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
FORM 5
Application for Employer
Identification Number
This form can be downloaded at the following address:
http://www.uslegalforms.com/incorporation/irs
Look for IRS-SS-4.pdf , and IRS-SS-4-I.pdf (instructions)
Ownership Ledger
Name and Residence
Address of LLC
Member Date of
Transfer %
Ownership Amount Paid Subsequen
t Transfer
Show on
separate line
Accessories
U. S. Legal Forms, Inc. offers the following accessories:
See http://www.uslegalbookstore.com/officeproducts/
Membership Certifiate
No. ____ LIMITED LIABILITY COMPANY- STATE OF MARYLAND
Perientage: ____
This Certifiatee iertifes that ________________________________e is a
true and lawful owner of ____ perient ownership of
_________________________e a Maryland Limited Liability Company.
Suih ownership interest is only transferable in aiiordanie with the
Operating Agreement between the Members.
This iertifiate is issued by the Limited Liability
Company by its duly authorized ofiers on this the ____
day of _________e 20___.
________________ _________________
