RESTRICTED PROFESSIONAL
LIMITED LIABILITY COMPANY
PENNSYLVANIA
Electronic Version – Rev. January 2008
STATUTORY REFERENCES
PENNSYLVANIA STATUTES (Pa.C.S.A.), Title 15 (Corporations and Unincorporated
Associations), Part III (Partnerships and Limited Liability Companies), Chapter 89 (Limited
Liability Companies), Subchapter L (Restricted Professional Companies)
INTRODUCTION AND LAW SUMMARY
A Pennsylvania limited liability company organized to engage in the practice of accountancy,
law, medicine and surgery, optometry, osteopathic medicine and surgery, podiatric
medicine, public accounting, psychology or veterinary medicine is controlled by the
provisions PENNSYLVANIA STATUTES (Pa.C.S.A.), Title 15 (Corporations and
Unincorporated Associations), Part III (Partnerships and Limited Liability Companies), Chapter
89 (Limited Liability Companies), Subchapter L (Restricted Professional Companies).
Additionally, a limited liability organized to engage in the practice of these professions is subject
to the rules and regulations of the Pennsylvania State Board or other governing entity regulating
the profession and the provisions of PENNSYLVANIA STATUTES identified above.
A Pennsylvania limited liability company (LLC) organized to engage in the practice of one of
the above-listed professions is called a "restricted professional company."
A "domestic restricted professional company" or "restricted professional company" is a limited
liability company that renders one or more restricted professional services.
A "licensed person" is a natural person who is duly licensed or admitted to practice his
profession by a court, department, board, commission or other agency of Pennsylvania or another
jurisdiction to render a professional service that is or will be rendered by the professional
company of which he is or intends to become a manager, member, employee or agent.
A restricted professional company may not engage in any business other than conducting the
practice of the restricted professional service or services for which it was specifically organized,
except that a restricted professional company may:
1. Own real and personal property necessary for or appropriate or desirable in the
fulfillment or rendering of its specific restricted professional service or services and it
may invest its funds in real estate, mortgages, stocks, bonds or any other type of
investment.
2. Be a partner, shareholder, member or other owner of a partnership, corporation, limited
liability company or other association engaged in the business of rendering the restricted
professional service or services for which the restricted professional company was
organized.
Except as otherwise provided by a statute, rule or regulation applicable to a particular profession,
each member and manager of a restricted professional company must be a "licensed person."
A restricted professional company may lawfully render restricted professional services only
through licensed persons. The company may employ persons not so licensed but those persons
shall not render any restricted professional services rendered or to be rendered by it. This
restriction does not include clerks, secretaries, nurses, administrators, bookkeepers, technicians
and other assistants or paraprofessionals who are not usually and ordinarily considered by law,
custom and practice to be rendering the restricted professional service or services for which the
restricted professional company was organized nor to preclude the use of any other person who
performs all his employment under the direct supervision and control of a licensed person.
A restricted professional company may charge for the restricted professional services rendered
by it, may collect those charges and may compensate those who render the restricted professional
services.
A restricted professional company may not engage in the conduct of the business of or own
directly or indirectly any equity interest in:
1. A clinical laboratory as defined The Clinical Laboratory Act.
2. A blood bank as defined in the Pennsylvania Blood Bank Act.
3. A health care facility as defined in the Health Care Facilities Act.
4. An ambulatory service facility as defined the Health Care Cost Containment Act.
5. A kidney treatment center or a hemodialysis center.
PRIOR TO FILING THE CERTIFICATE OF ORGANIZATION FORMING A
RESTRICTED PROFESSIONAL LIMITED LIABILITY COMPANY WHOSE
PURPOSE IS TO ENGAGE IN THE PRACTICE OF A RESTRICTED PROFESSION,
YOU SHOULD CONFIRM WITH THE PENNSYLVANIA STATE BOARD OR OTHER
ENTITY GOVERNING YOUR PROFESSION THAT YOU ARE IN FULL
COMPLIANCE WITH ALL OF THE BOARD’S RULES AND REGULATIONS,
PARTICULARLY ANY REQUIREMENTS REGARDING LIABILITY INSURANCE
FOR A RESTRICTED PROFESSIONAL LLC.
Steps to Form a Restricted LLC
Step 1: See FORM 1 - RESERVATION OF LIMITED
LIABILITY COMPANY NAME
It is recommended that you reserve a LLC name in order to assure that your
Certificate of Organization is not rejected because the name you have selected is
not available
You may skip this step and go to Step 2, but if the name you have selected is
not available, the Certificate of Organization will be rejected and returned to
you.
The Reservation of Limited Liability Company Name MUST by typewritten
or printed legibly in black ink.
Enter the LLC name you want to reserve.
(a) The LLC name may be in any language, but must be expressed in Roman
letters or characters or Arabic or Roman numerals, and must contain the
word "corporation," "company," "incorporated" or "limited" or an
abbreviation of any of them; the word "association," "fund," or
"syndicate"; or words or abbreviations of like import in languages other
than English. A proposed name must be distinguishable from other
business names on the records of the Secretary of State.
(b) A proposed corporate name cannot be the same as, or deceptively similar
to, the name of any entity or any name reservation or registration filed
with the Office of the Secretary of State.
Have the Applicant date and sign the form.
Type or print the name and address of the Applicant.
The fee is $52.00.
A name is reserved for A NON-RENEWABLE 120-day period.
Submit in duplicate (original and one copy). You will receive a computer
generated printout as confirmation of your name reservation.
Name availability may be checked prior to submitting this form by calling
(717) 787-1057. Three names can be checked per phone call. This is,
however, only a preliminary clearance. The final decision regarding name
availability will be made when the application is submitted for filing.
Telephone name searches are only preliminary and do not guarantee the
availability of the name .
Mail or deliver the original and one copy of the Reservation of Limited Liability
Company Name along with the $52.00 filing fee (make check payable to the
Pennsylvania Secretary of State) , to:
MAILING ADDRESS:
Department of State
Corporation Bureau
P.O. Box 8722
Harrisburg, PA 17105-8722
PHYSICAL ADDRESS (for hand/messenger delivery):
Department of State
Corporation Bureau
Commonwealth Avenue & North Street
308 North Office Building
Harrisburg, PA 17120
Phone: (717) 787-1057
Step 2: SEE FORM 2 –CERTIFICATE 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 Certificate of
Organization.
Instructions to complete the Limited Liability Company Certificate of
Organization:
The Certificate of Organization MUST by typewritten or printed legibly in
black ink.
At the top of the Certificate, provide the name and address to which you want
the filed Certificate returned.
1. Provide the LLC name you have reserved.
2. Provide the address (STREET ADDRESS - NOT A P.O. BOX) of the
LLC's initial registered office OR the name of its commercial registered office
provider and the county of venue.
3. Provide the name and address of each Organizer. You only need to have
one Organizer.
4. If this statement is inapplicable to the LLC, strike it out.
5. If this statement is inapplicable to the LLC, strike it out. Management is
vested in the members unless the Operating Agreement states otherwise.
6. The Certificate of Organization is effective upon filing UNLESS a different
effective date is requested. Unless you have a specific reason to do otherwise,
you should allow the LLC to become effective on filing.
7. In this section identify the profession to be practiced.
8. You will probably elect NOT to provide additional information about the
operation of the LLC.
Date the Certificate and have each Organizer sign the form.
Remember to include the filing fee.
File the original and one copy.
You MUST file a Docketing Statement when you file the Certificate of
Organization. See Step 2A below.
Step 2A: SEE FORM 2A – DOCKETING STATEMENT
This form MUST be typed or printed in BLACK ink.
You MUST file the original and three copies of the Docketing Statement
when you file the Certificate of Organization.
Check “restricted professional limtied liability company”.
Check “Organization (Pa.)"
1. Fill in the name of the LLC.
2. Provide the name and mailing address of the individual responsible for
initial tax reports.
3. In this section, identify the profession to be practiced.
4. Provide the specified effective date, if different from the date of filing.
5. Provide the LLC’s EIN.
6. Provide the Fiscal Year End of the LLC.
7. Not applicable.
Step 3: Mail or deliver the original of the CERTIFICATE OF ORGANIZATION and the
original and one copy of the DOCKETING STATEMENT, along with the filing
fee (make check payable to Secretary of State) to:
MAILING ADDRESS:
Department of State
Corporation Bureau
P.O. Box 8722
Harrisburg, PA 17105-8722
PHYSICAL ADDRESS (for hand/messenger delivery):
Department of State
Corporation Bureau
Commonwealth Avenue & North Street
308 North Office Building
Harrisburg, PA 17120
Phone: (717) 787-1057
A cover letter to send with the Certificate of is included in this packet.
SEE FORM 3 – TRANSMITTAL LETTER
Step 4: Upon return of the Certificate of Organization complete the Operating
Agreement.
SEE FORM 4 – 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.
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
FORM 1
RESERVATION OF
LIMITED LIABILITY COMPANY NAME
RESERVATION OF
LIMITED LIABILITY COMPANY NAME
Department of State
Corporation Bureau
P.O. Box 8722
Harrisburg, PA 17105-8722
The undersigned hereby requests that the following limited liability company name
be reserved:
________________________________________________________________________________________________________
This reservation is good for 120 days.
DATED ______________________
____________________________________
Signature
____________________________________
Printed Name/Title
____________________________________
Street Address
____________________________________
City, State, Zip
Forms 2 & 2A
CERTIFICATE OF ORGANIZATION
and
DOCKETING STATEMENT
You may download these forms at the following link:
http://www.uslegalforms.com/incorporation/PA/PA-00LLCT.pdf
FORM 3
TRANSMITTAL LETTER
Return Name and Address
____________________________________
____________________________________
____________________________________
____________________________________
Date
SELECT ADDRESS:
MAILING ADDRESS: Department of State
Corporation Bureau
P.O. Box 8722
Harrisburg, PA 17105-8722
PHYSICAL ADDRESS (for hand/messenger delivery):
Department of State
Corporation Bureau
Commonwealth Avenue & North Street
308 North Office Building
Harrisburg, PA 17120
Re: Certificate of Organization and Docketing Statement
Dear Sir:
Enclosed please find the original and one copy of a Certificate of Organization and the original
and one copy of the Docketing Statement. Also enclosed you will find the filing fee.
Please file and provide a "filed" copy of each document to me, together with any information
you commonly provide to new LLCs.
Please contact me if you require anything further.
With kindest regards, I am
Sincerely yours,
______________________________
Signature
Enclosures
Check # __________ Enclosed for $________
FORM 4
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.
Read carefully and make appropriate changes to suit your
individual needs and purposes.
OPERATING AGREEMENT
OF
______________________________________
A PENNSYLVANIA
RESTRICTED 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 Pennsylvania restricted professional 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 Commonwealth of Pennsylvania relating to the formation, operation and
taxation of a LLC, specifically the provisions PENNSYLVANIA STATUTES (Pa.C.S.A.), Title
15, Part III, Chapter 89. To the extent permitted by statute, the terms and provisions of this
Agreement shall control if there is a conflict between such Law 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 Pennsylvania Department of State on
_________________________, thereby creating the LLC.
3. Business . The business of the LLC shall be to engage in the practice of ____________ in the
Commonwealth of Pennsylvania and in such other jurisdictions where legally allowed to do so.
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. Members . All members, managers, and officers of the LLC shall be licensed to practice
_____________ in the Commonwealth of Pennsylvania. 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
shall be licensed to practice _____________ in the Commonwealth of Pennsylvania.
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 ofcers
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) The initial Manager(s) is/are:
_________________________________________________________.
_________________________________________________________.
_________________________________________________________.
10. Ofcers and Relating Provisions . In the event the Members elect to
manage the LLC, rather than appointing a manager, the Members shall
appoint ofcers 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. All officers shall be members of the LLC. 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.
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 business
of the LLC. 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.
The LLC shall comply at all times with the requirements of the Pennsylvania State
_____________ Board's regarding professional liability insurance.
(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 qualified third party.
(c) A Member dies or is disqualified from practicing _____________ in Pennsylvania.
(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 the selling 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 however , that he/she may sell or
transfer his/her interest in the LLC only to another individual who is duly licensed,
certificated, or otherwise legally authorized to render in Pennsylvania the same
professional service as that for which the LLC was organized or, in the case of a
combination of professional services, to render in Pennsylvania any of the applicable
types of professional services for which the LLC was organized.
(c) 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
38. Capital Accounts . Capital accounts shall be maintained consistent with Internal Revenue
Code § 704 and the regulations thereunder.
39. Tax Matters Partner . The Members hereby designate _______________________________
as the "tax matters partner" for purposes of representing the LLC before the Internal Revenue
Service if necessary.
40. Partnership Election . The Members elect that the LLC be taxed as a partnership and not as
an association taxable as a corporation.
ARTICLE XII
RECORDS AND INFORMATION
41. Records and Inspection . The LLC shall maintain at its place of business the Articles of
Organization, any amendments thereto, this Agreement, and all other LLC records required
to be kept by the Act, and the same shall be subject to inspection and copying at the
reasonable request, and the expense, of any Member.
42. 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
Commonwealth 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
43. 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.
44. Applicable Law . To the extent permitted by law, this Agreement shall be construed in
accordance with and governed by the laws of the Commonwealth of
Pennsylvania.
45. Pronouns, Etc . References to a Member or Manager, including by use of a pronoun, shall be
deemed to include masculine, feminine, singular, plural, individuals, partnerships or
corporations where applicable.
46. Counterparts . This instrument may be executed in any number of counterparts each of which
shall be considered an original.
47. Specific Performance . Each Member agrees with the other Members that the 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.
48. Further Action . Each Member, upon the request of the LLC, agrees to perform all further
acts and to execute, acknowledge and deliver any documents which may be necessary,
appropriate, or desirable to carry out the provisions of this Agreement.
49. Method of Notices . All written notices required or permitted by this Agreement shall be
hand delivered or sent by registered or certified mail, 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.
50. Facsimiles . For purposes of this Agreement, any copy, facsimile, telecommunication or other
reliable reproduction of a writing, transmission or signature may be substituted or used in
lieu of the original 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.
51. Computation of Time . In computing any period of time under this Agreement, the day of the
act, event or default from which the designated period of time begins to run shall not be
included. 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.
52. Restriction on Membership and Transfer of Membership . All members shall at all times be
licensed to practice _____________ in the Commonwealth of Pennsylvania. No membership
interest may be transferred to any person who is not licensed to practice _____________ in
the Commonwealth of Pennsylvania.
53. Disqualification of Members . In the event of the disqualification of a member to practice
_____________ in the Commonwealth of Pennsylvania, then that person shall sever all
employment with the company and immediately terminate all financial interest in the
company. The company will purchase or cause to be purchased from that person all
membership interests owned by the person in the company, at a price and on terms as may be
provided in the articles of organization, the regulations, or any applicable agreement among
the members and company.
54. Successors in Interest . If a person who is not licensed to practice _____________ in the
Commonwealth of Pennsylvania succeeds to the interest of a member of the company, the
person holding the interest shall immediately terminate all financial interest in the company
and company will purchase or cause to be purchased from that person all membership
interests owned by the person in the company, at a price and on terms as may be provided in
the articles of organization, the regulations, or any applicable agreement among the members
and the professional limited liability company.
55. Compliance with Law, Rules, and Regulations . The LLC shall at all times be and remain in
full compliance with all rules and regulations, including professional liability insurance
requirements, of the Pennsylvania State Board of _____________ and all statutory provisions
applicable to a restricted professional limited liability company and the practice of
_____________ in the Commonwealth of Pennsylvania.
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
PENNSYLVANIA LIMITED LIABILITY COMPANY. EACH MEMBER REALIZES THAT
IN 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 AND THAT THE LLC IS NOT SUBJECT TO THE
SECURITIES ACT OF THE COMMONWEALTH OF PENNSYLVANIA. 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: ____________________________________
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 Pennsylvania restricted
professional 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:
Form: http://www.uslegalforms.com/incorporation/irs/IRS-SS-4.pdf
Instructions: http://www.uslegalforms.com/incorporation/irs/IRS-SS-4-I.pdf
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 Certifcate
No. ____ RESTRICTED PROFESSIONAL LIMITED LIABILITY COMPANY -
PENNSYLVANIA Percentage: ____
This Certificate, certifies that ___________________________________________, is a true
and lawful owner of ______ percent ownership of _______________________________, a
Pennsylvania Restricted Professional Limited Liability Company. Such ownership
interest is only transferable in accordance with the Operating Agreement between the
Members.
This certificate is issued by the Restricted Professional Limited Liability Company by its
duly authorized officers on this the ____ date of _________, 20___.
__________________ ___________________
Manager Manager (if more than one)
