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Mississippi Operating Agreement

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LLC SAMPLE OPERATING AGREEMENT

MS-00LLC-1

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

OPERATING AGREEMENT

OF

A MISSISSIPPI 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 Mississippi Limited liability company named ("LLC"). The operation of the LLC shall be governed by the terms of this Agreement and the provisions of the Revised Mississippi Limited Liability Company Act (Mississippi Code Annotated, Title 79, Chapter 29), hereinafter referred to as the "Act".

2. Certificate of Formation. The Members acting through one of its Members, , filed a Certificate of Formation, ("Certificate") for record in the office of the Mississippi Secretary of State on , thereby creating the LLC.

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

a)

and

b)

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

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

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

ARTICLE II
MEMBERS

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

Initial Members Percentage Interest in LLC Capital Contribution

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

ARTICLE III
MANAGEMENT

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

The management of the LLC shall be vested in the Members without an appointed manager. The members shall elect officers who shall manage the company. The President, , and 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) 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 LLC.

d) 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.

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 LLC.

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 , a , and a , and 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) Treasurer. The Treasurer shall be the chief financial officer of the LLC.

(g) Secretary. The secretary shall perform the stated duties.

(h) . [If applicable, list other officers, and 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 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 accordingly.

ARTICLE V
VOTING; CONSENT TO ACTION

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

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

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

22. Meetings. Meetings of the Members may be called by any Member owning 10% or more of the LLC, or by any Manager or officer as applicable.

23. Majority Defined. "Majority" means 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 may include reliance on provisions of this Agreement, the records of the LLC, and professional information.

(c) The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Protected Party, are agreed to replace such other duties and liabilities.

27. Indemnification and Insurance.

(a) Right to Indemnification.

(b) Advancement of Expenses.

(c) Non-Exclusivity of Rights.

(d) Insurance.

(e) Effect of Amendment.

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) 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 qualified third party.

(c) A Member dies.

(d) Court adjudication of incompetence.

(e) Distribution by the fiduciary of an estate Member's entire interest in the LLC.

(f) Bankruptcy or similar proceedings.

(g) Unresolved action against a Member after 120 days.

(h) Trustee/receiver/liquidator appointment not vacated after 90 days.

(i) Events provided in applicable code provisions not inconsistent with the above.

29. Effect of Dissociation. Any 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

30. LLC Interest. The LLC interest is personal property. A Member has no interest in property owned by the LLC.

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

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

(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall give written notice to the LLC and first offer the interest to the LLC.

If the purchase price is in excess of $ , then the purchase price shall be paid in equal quarterly installments.

(b) 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 assign the interest to a legally qualified non-member.

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

(e) 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.

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 LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE X
DISSOLUTION

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

36. Final Distributions. Upon winding up, assets must be distributed to creditors, then to Members in satisfaction of liabilities, and then according to LLC interest.

ARTICLE XI
TAX MATTERS

37. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704.

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 records at its place of business and make them available for inspection by any Member.

40. Obtaining Additional Information. Each Member may obtain information regarding the state of the business and financial condition of the LLC as reasonably related to the Member's interest.

ARTICLE XIII
MISCELLANEOUS PROVISIONS

41. Amendment. Except as otherwise provided in this Agreement, any amendment may be proposed by a Member and approved in writing by a majority of the Members.

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

43. Pronouns, Etc. References to a Member or Manager shall be deemed to include all applicable genders and entities.

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

45. Specific Performance. Nonbreaching Members shall be entitled to injunctive relief to prevent breaches of this Agreement.

46. Further Action. Each Member agrees to perform all further acts and execute all necessary documents.

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

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

49. Computation of Time. In computing any period of time under this Agreement, weekends and legal holidays are excluded as provided.

* * *

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 Mississippi 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.

Members:

1. ________________________________

Name:

Address:

City, State, Zip:

Phone:

2. ________________________________

Name:

Address:

City, State, Zip:

Phone:

3. ________________________________

Name:

Address:

City, State, Zip:

Phone:

4. ________________________________

Name:

Address:

City, State, Zip:

Phone:

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What the Mississippi Operating Agreement Is and Who It Governs

A Mississippi Operating Agreement is a private, written contract among members of a limited liability company that sets out ownership interests, capital contributions, management structure, voting rights, profit and loss allocation, and procedures for admitting or removing members. Although not filed with the Mississippi Secretary of State, the agreement governs internal relations, clarifies member expectations, supports limited liability protections, and helps banks and third parties evaluate authority. Well-drafted operating agreements reduce disputes, document tax classification choices, and provide a record that courts or regulators can consult when resolving member or creditor claims.

Why a Written Operating Agreement Matters for Mississippi LLCs

A clear operating agreement documents member rights, reduces ambiguity about management and distributions, and preserves limited liability. It also records tax treatment choices and dispute resolution mechanisms that protect members and the business over time.

Why a Written Operating Agreement Matters for Mississippi LLCs

Who Typically Prepares and Relies on This Agreement

The Mississippi Operating Agreement is prepared and used by owners and managers to set governance rules and financial expectations.

  • LLC members — Owners who need a written record of ownership percentages, capital contributions, distributions, and voting rights.
  • Managers and officers — Individuals responsible for daily operations who require clarity on decision-making authority and indemnification.
  • Lenders, banks, and investors — External parties who rely on an agreement to confirm who can sign, pledge assets, and enter contracts for the LLC.

Maintain a fully executed copy for each member and provide certified copies to banks or investors when requested.

Typical Signatories and Their Roles

Member — Managing Member

A managing member combines ownership and management duties. They sign to accept fiduciary responsibilities, binding the LLC to contracts when the agreement grants them authority. The narrative should describe voting thresholds, compensation, and removal procedures to reduce future disputes.

Attorney — Business Counsel

Business counsel prepares or reviews the agreement to ensure compliance with Mississippi statutory defaults, tax elections, and bespoke provisions. Counsel often includes severability, dispute resolution, and buyout language to reduce litigation risk later.

Six Core Sections to Include in a Professional Agreement

A comprehensive Mississippi Operating Agreement typically contains six foundational sections that define governance, capital, distributions, member duties, transfer rules, and dispute processes.

Parties

Identify each member by full legal name and entity type, list addresses, and state the percentage interest or membership units allocated at formation.

Capital Contributions

Describe cash, property, services, or promissory obligations contributed, valuation method, and procedures for additional contributions or capital calls.

Profits & Losses

Specify allocation method (percentage, units, or special allocations), distribution timing, and tax allocations to align with IRS rules for the chosen tax classification.

Management

State whether the LLC is member-managed or manager-managed, define manager powers, voting thresholds, and procedures for appointing or removing managers.

Transfer Restrictions

Include right-of-first-refusal, buyout valuation methodology, admission requirements for new members, and any tag-along or drag-along provisions.

Dissolution & Exit

Set the events that trigger dissolution, liquidations steps, distribution waterfall, and the mechanism for resolving outstanding liabilities and distributing residual value.

Step-by-Step: Completing and Executing the Agreement

Follow these sequential steps to prepare, approve, and retain a valid Mississippi Operating Agreement.

  • 01
    Draft: Assemble member details and initial capital terms in a working draft.
  • 02
    Review: Have each member and counsel review governance and tax clauses for clarity.
  • 03
    Execute: Obtain signatures from all members and managers as required.
  • 04
    Distribute: Provide a signed copy to each member and store originals securely.

Configuring an Online Completion Workflow

Set up a digital workflow to assign roles, collect signatures, and track completions while preserving an audit trail.

Field Configuration
Template Create reusable document templates for standard LLC provisions
Roles Define signer roles: Member, Manager, Witness, Legal Reviewer
Authentication Choose email, SMS code, or stronger ID verification
Storage Set automatic archival to chosen cloud or on-prem location

Where the Signed Operating Agreement Should Be Stored and Shared

The operating agreement should be kept with company records and shared with parties that require proof of authority or ownership.

  • Company Records: Store a signed original in the LLC’s corporate records book or secured digital vault.
  • Members: Provide each member a fully executed copy for their files and tax records.
  • Banks and Lenders: Submit a certified copy to financial institutions to verify signatory authority.
  • Investors and Advisors: Share copies when requested during due diligence or financing rounds.

Security and Compliance Considerations for Storing Signed Agreements

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Certifications: SOC 2 Type II and ISO 27001 available
Privacy: GDPR and CCPA compliance frameworks supported
Regulated Workflows: HIPAA-compliant storage available with BAA
Audit Trail: Detailed timestamps, IP, and action logs
Accessibility: WCAG 2.0 Level AA support

Key Risks and Penalties to Watch For

Veil Piercing: Loss of liability protection possible
Tax Misclassification: Unclear allocations may trigger IRS disputes
1099 Penalties: $60–$660+ per form for late/incorrect filings
Backup Withholding: 24% withholding if TIN missing
I-9 Violations: $281–$2,789 per paperwork violation
Missing Signatures: Unsigned agreements risk enforceability challenges

Common Errors to Avoid When Preparing the Agreement

  • Failing to specify management structure and voting thresholds leads to stalemates and costly disputes that could require litigation or court intervention to resolve.
  • Using ambiguous valuation language for contributed property creates later disagreements about member equity, distributions, and buyout amounts during exit events.
  • Not updating the agreement after ownership changes or capital contributions can invalidate assumed rights and complicate tax reporting for the affected tax year.
  • Relying on a one-size-fits-all template without legal review can overlook state-specific default rules that may unintentionally disadvantage certain members.

How Real Companies Use Operating Agreements

These condensed examples show practical uses of an operating agreement in small business and real estate contexts.

Optica Ventures (COO)

A small investment firm standardized member distributions and signatory authority using a single operating agreement template.

  • The change cut execution time for new deals.
  • The firm reports clearer internal procedures, easier bank interactions, and fewer follow-up questions during capital calls after adopting the template.

Martin Properties (Founder)

A property manager used an operating agreement to formalize roles for managing members and passive investors.

  • The document defined capital calls and distribution waterfalls.
  • As a result, the company saw more predictable cash flows, simplified investor reporting, and fewer disputes over project-level returns.

How to Save, Export, and Preserve Signed Documents

Preserve signed agreements in formats and locations that meet legal, accounting, and operational needs while retaining an audit trail.

PDF/A Export

Save executed agreements as PDF/A for long-term archiving, preserving visible signatures and embedded audit metadata required for reproducing the full evidentiary record.

DOCX Source

Retain an editable DOCX copy only for internal amendment drafts; always archive a final executed PDF for evidentiary purposes.

Signed Copy Distribution

Distribute certified signed PDFs to members, lenders, and counsel; include a one-page summary of key terms for quick reference by nonlegal stakeholders.

Audit Trail Export

Export the signatory audit trail separately, including timestamps, IP addresses, and method of authentication to support later verification.

Relevant Filing and Tax Deadlines to Keep in Mind

Operating agreements themselves have no formal filing deadline, but related tax and information filings follow federal due dates that affect members.

W-9 Provisioning:

Provide W-9 upon request; no fixed deadline but required before payments that trigger reporting

1099-NEC:

File and furnish by Jan 31 for nonemployee compensation

1099-MISC:

Recipient copy by Jan 31; paper to IRS by Feb 28 and electronic by Mar 31

Form 1040:

Individual returns due April 15 (Oct 15 extension available with Form 4868)

FBAR:

FinCEN Form 114 due April 15 with automatic extension to Oct 15

Key Milestones from Formation to Record Retention

A milestone view helps track drafting, approval, execution, and long-term storage of the operating agreement.

01

Drafting Phase

Create the initial draft and circulate for member review and counsel input

02

Approval Meeting

Hold member meeting or obtain written consent to adopt the agreement

03

Execution

Collect signatures from all members and managers and notarize if desired

04

Archival

Store executed originals and digital copies with accessible audit trails

Digital Signing, Formats, and Integration Options

Choose a platform that supports required formats, audit trails, and your integration needs prior to executing the agreement online.

  • File Formats: PDF and DOCX supported
  • Integrations: Salesforce, NetSuite, Google Workspace, Microsoft 365
  • Authentication: Email, SMS, or stronger identity verification

eSignature Pricing Comparison for Executing Operating Agreements

Cost and feature trade-offs vary by vendor; compare starting price, trial availability, bulk send, audit trail, HIPAA support, and envelope limits when selecting a provider.

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 (Business Premium) Varies Varies Varies Varies
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Common Questions About Mississippi Operating Agreements

Answers to frequent questions about enforceability, notarization, digital signatures, and amendments for Mississippi LLC operating agreements.


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