LIMITED LIABILITY COMPANY
for LICENSED PROFESSIONALS
STATE OF OREGON
Electronic Version
STATUTORY REFERENCES
OREGON REVISED STATUTES, Chapter 63 (Oregon Limited Liability Company Act)
https://www.oregonlegislature.gov/bills_laws/ors/ors063.html
OREGON REVISED STATUTES, Chapter 58 (Oregon Professional Corporation Act)
https://www.oregonlegislature.gov/bills_laws/ors/ors058.html
INTRODUCTORY NOTES AND LAW SUMMARY
The statutory requirements for the formation and organization of a limited liability company
(LLC) are set out in the Oregon Limited Liability Company Act. Because of the references to
provisions of the Oregon Professional Corporation Act in the Oregon Limited Liability Company
Act, notice should be taken of the provisions of the Oregon Professional Corporation Act when
forming and conducting the business of a LLC.
In addition to the statutory requirements applicable to an LLC organized to engage in the
practice of a profession, the LLC is also subject to all rules, regulations, and disciplinary
procedures established by the governing/examining agency/board for the profession.
A LLC may conduct or promote any lawful business or purpose which a partnership, corporation
or professional corporation may conduct or promote unless a more limited purpose is set forth in
the articles of organization.
Subject to the laws of Oregon, the rules and regulations of the regulatory board of the profession,
and the standards of professional conduct of the profession, a LLC or its members may render
professional service in Oregon. Members, including members who are managers, of a LLC who
are also professionals are personally liable as members of the limited liability company to the
same extent and in the same manner as provided for shareholders of a professional corporation.
The name of the LLC must contain the words “LLC” or the abbreviation “L.L.C.” or “LLC.” A
LLC name cannot contain the word or abbreviation “cooperative,” “corporation,” “corp.,”
“incorporated,” “Inc.,” “limited partnership,” “L.P.,” “LP,” “Ltd.,” “limited liability
partnership,” “L.L.P.,” “LLP” or “partnership” or any derivation of any of these words or
abbreviations.
A LLC name must be written in the alphabet used to write the English language and may include
Arabic and Roman numerals and incidental punctuation. The name must be from any other LLC
name, corporate name, professional corporate name, nonprofit corporate name, cooperative
name, limited partnership name, business trust name, reserved name, registered corporate name
or assumed business name of active record with the office of the Secretary of State.
A LLC must continuously maintain in Oregon a registered agent and registered office that may
be, but need not be, the same as any of its places of business.
A registered agent must be:
1. An individual who resides in Oregon and whose business office is identical to the
registered office;
2. A domestic LLC, a domestic corporation or nonprofit domestic corporation whose
business office is identical to the registered office; or
3. A foreign LLC, foreign corporation or nonprofit foreign corporation authorized to
transact business in Oregon whose business office is identical to the registered office.
The debts, obligations and liabilities of a limited liability company, whether arising in contract,
tort or otherwise, are solely the debts, obligations and liabilities of the LLC. A member or
manager is not personally liable for a debt, obligation or liability of the LLC solely by reason of
being or acting as a member or manager.
A LLC is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a
wrongful act or omission, or other actionable conduct, of a member or manager acting in the
ordinary course of the business of the LLC or with authority of the LLC.
BEFORE YOU FORM A LLC TO ENGAGE IN THE PRACTICE OF A
PROFESSION, YOU SHOULD FIRST CONFIRM WITH YOUR
REGULATORY BOARD/AGENCY THAT YOU ARE IN FULL
COMPLIANCE WITH ALL OF THEIR RULES AND REQUIREMENTS.
Steps to Form LLC
Step 1: NAME RESERVATION?
There is no longer a name reservation form in use in Oregon. We suggest you use
this link to check on whether the corporate name you want to use is already in
use:
http://egov.sos.state.or.us/br/pkg_web_name_srch_inq.login
You might also consider contacting the corporate office and asking them if your
chosen name is available. Their support information, including live on-line help,
email and phone, is here:
http://www.filinginoregon.com/pages/support/index.html
This would be the closest you could get to confirming the name you choose
will not be in use by someone else.
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.
Instructions to complete the Limited Liability Company Articles of
Organization:
The Articles of Organization MUST be typewritten or printed in black ink.
Provide the LLC name you have reserved.
The term of existence of a LLC is usually "in perpetuity." If you have a
specific reason for the LLC to dissolve on a particular date, then enter that
date. Otherwise, check the blank beside "Duration shall be perpetual."
Provide the name of the registered agent.
Provide the STREET address of the initial registered agent.
Provide an address where notices form the Secretary of State may be mailed.
Provide the name(s) and address(es) of each organizer. You only need to have
one organizer.
You must decide if the LLC will be managed by one or more managers or by
the member(s). Check the box indicating your decision.
In the professional purpose section, type: "The purpose of the LLC is to
engage in the practice of [ your profession ]." [For example, architecture,
medicine, chiropratic, engineering, etc.]
You will probably elect NOT to provide any additional information. If you
do, do so on an additional sheet.
Have each Organizer print/type his/her name and provide his/her signature.
Provide a contact name and daytime telephone number so that you may be
contacted if there are problems with the Application.
The filing fee for the Articles of Organization is $50.00.
File the original and one copy of the Articles or Organization.
Step 3: Mail the original and one copy of the ARTICLES OF ORGANIZATION and
the $50.00 filing fee (make check payable to Corporation Division) to:
Secretary of State
Corporation Division
Public Service Building
255 Capitol St. NE, Suite 151
Salem, OR 97310-1327
Phone: (503) 986-2200
FAX: (503) 378-4381
A cover letter to send with the Articles of 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 & IRS-SS-4-I (instructions)
Step 6: Open a bank account and conduct business.
* * *
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
FORMS DOWNLOAD
To access the download page please do the following:
IMPORTANT NOTE : WRITE DOWN THE USERNAME AND PASSWORD SHOWN
BELOW BECAUSE YOU WILL NEED TO ENTER IT EXACTLY (case sensitive) TO
DOWNLOAD THE FORMS.
The download page you will access by using the link below contains links to download the forms
for this package, as well as a brief description of each form. Once you reach the download page,
the easiest procedure to download the forms is to right-click on the form links and select “save
target as” to save each form to your hard drive.
To access the download page you are required to use the following login (PLEASE WRITE
THIS DOWN):
USERNAME: hhr456
PASSWORD: uuu333
The download link can be accessed by any of the following methods:
- Copy the link below and paste into your browser URL location.
- Type the link below exactly (case sensitive) as shown into your browser.
- Click on the highlighted link below.
Download Link:
http://www.uslegalforms.com/data/corp/OR-00LLC/OR-00PLLC.htm
http://www.uslegalforms.com/data/corp/OR-00LLC/OR-00PLLC.htm
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.
INSERT THE NAME OF YOUR PROFESSION
INTO THE BLANKS IN Nos. 3, 7, 8, 29 & 33
Read carefully and make appropriate changes to suit your
individual needs and purposes.
OPERATING AGREEMENT
OF
_____________________________________________
AN OREGON 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 an Oregon 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 Oregon relating to the formation, operation and taxation of a LLC,
including the Oregon Limited Liability Company Act (Oregon Revised Statutes, Chapter
63) 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 . Articles of Organization ("Articles") for record in the office of
the Oregon Secretary of State on _________________________, thereby creating the
LLC.
3. Business . The business of the LLC shall be to engage in the practice 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 are all licensed to engage in the practice
of _________________ in Oregon. 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. 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. All
new members of the LLC shall be licensed to practice __________________ in Oregon.
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) 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 c ompensation 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) All managers of the LLC shall be licensed to engage in the practice of
___________________ in Oregon.
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 must be
members of the LLC.
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 embers 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 shall cause the LLC to purchase and maintain professional
liability 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. That professional liability insurance policy shall be in an amount
no less than _______________________.
(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 or is disqualified from practicing __________________.
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.
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 the assigning 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 who is licensed to engage in
the practice of _________________ in the State of Oregon. 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.
ARTICLE IX
OBLIGATION TO SELL ON A DISSOCIATION
EVENT CONCERNING A MEMBER
35. 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
36. Termination of LLC . The LLC will be dissolved and its affairs must be wound up only
upon the written consent of a majority of the Members.
37. Final Distributions . Upon the winding up of the LLC, the assets must be distributed 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
35. Capital Accounts . Capital accounts shall be maintained consistent with Internal Revenue
Code § 704 and the regulations thereunder.
36. 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.
37. 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
36. 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.
37. 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
38. 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.
39. 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 Oregon.
40. 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.
41. Counterparts . This instrument may be executed in any number of counterparts each of
which shall be considered an original.
42. 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.
43. 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.
44. 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.
45. 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.
46. 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.
47. The LLC shall at all times be and remain in compliance with all applicable laws of the
State of Oregon and the United States of America and all applicable rules and
regulations.
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
OREGON 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 OREGON. 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: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
Print Name of Member: _______________________
Address: ___________________________________
City, State, Zip: _____________________________
Phone: ____________________________________
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/
The certificate below is optional.
Membership Certifiate
No. ____ LIMITED LIABILITY COMPANY- STATE OF OREGON
Perientage: ___
This Certifiate iertifes that ___________________________̮ is a true
and lawful owner of ___ perient ownership of
____________________________̮ an Oregon 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
_________̮ 20___.
__________________ __________________
