LIMITED LIABILITY COMPANY
for LICENSED PROFESSIONALS
STATE OF SOUTH CAROLINA
Electronic Version
STATUTORY REFERENCES
SOUTH CAROLINA CODE OF LAWS, §§ 33-44-101 through 33-44-1207
(Uniform Limited Liability Company Act of 1996)
http://www.scstatehouse.net/code/t33c044.htm
SOUTH CAROLINA CODE OF LAWS, §§ 33-19-101 through 433-19-700
(Professional Corporation Supplement)
http://www.scstatehouse.net/code/t33c019.htm
SOUTH CAROLINA CODE OF LAWS, §§ 40-1-10 through 40-1-220
(Board Regulation of Professions and Occupations)
http://www.scstatehouse.net/code/t40c001.htm
INTRODUCTION AND LAW SUMMARY
In South Carolina, a limited liability company (LLC) can be formed "…for any lawful purpose,
subject to any law of [South Carolina] governing or regulating business." The South Carolina
Uniform Limited Liability Company Act of 1996 does not address with any specificity the
organization of a LLC to engage in the practice of a profession.
In light of the absence of direct statutory guidance regarding the organization and operation of a
LLC organized to engage in the practice of a profession, one must look to the statutory
guidelines and restrictions relative to a professional corporation to determine which, if any, of
those provisions appear applicable to a LLC.
With that in mind, the following provisions of the South Carolina Professional Corporation
Supplement give guidance to the organization and operation of a South Carolina LLC (these
provisions have been incorporated in the Operating Agreement of the LLC contained in this form
package.):
Definitions
A "disqualified person" Is an individual or entity that for any reason is or becomes
ineligible to be issued shares by a professional corporation.
The "licensing authority" is the officer, board, agency, court, or other authority in South
Carolina empowered to license or otherwise authorize the rendition of a professional
service.
"Professional service" is a service that may be rendered lawfully only by a person
licensed or otherwise authorized by a licensing authority in South Carolina to render the
service.
A "qualified person" is an individual, general partnership, or professional corporation that
is eligible to be issued shares by a professional corporation.
A professional corporation may render professional services in South Carolina only through
individuals licensed or otherwise authorized in South Carolina to render the services.
A shareholder of a professional corporation may transfer or pledge shares, fractional shares, and
rights or options to purchase shares of the corporation only to individuals, general partnerships,
and professional corporations qualified to be issued shares.
The relationship between an individual rendering professional services as an employee of a
professional corporation and his client or patient is the same as if the individual were rendering
the services as a sole practitioner.
The relationship between a professional corporation and the client or patient for whom its
employees are rendering professional services is the same as that between the client or patient
and the employee.
A privilege applicable to communications between an individual rendering professional services
and the person receiving the services recognized under the statutes or common law of South
Carolina is not affected by the rendition of services by a professional corporation. The privilege
applies to a professional corporation and to its employees in all situations in which it applies to
communications between an individual rendering professional services on behalf of the
corporation and the person receiving the services.
Each individual who renders professional service as an employee of a professional corporation is
liable for a negligent or wrongful act or omission in which he personally participates to the same
extent as if he rendered the services as a sole practitioner. An employee of a professional
corporation is not liable, however, for the conduct of other employees of the corporation unless
he is at fault in appointing, supervising, or cooperating with them.
A professional corporation whose employees perform professional services within the scope of
their employment or of their apparent authority to act for the corporation is liable to the same
extent as its employees.
The jurisdiction of a licensing authority over individuals rendering a professional service within
the jurisdiction of the licensing authority is not affected by the fact that the services are rendered
by a professional corporation.
The jurisdiction of a licensing authority over individuals rendering a professional service within
the jurisdiction of the licensing authority is not affected by the fact that the services are rendered
by a professional corporation.
PRIOR TO FILING THE ARTICLES OF ORGANIZATION FORMING A LIMITED
LIABILITY COMPANY WHOSE PURPOSE IS TO ENGAGE IN THE PRACTICE OF A
PROFESSION, YOU SHOULD CONFIRM WITH THE APPROPRIATE SOUTH
CAROLINA REGULATORY BOARD TO ASSURE THAT YOU ARE IN FULL
COMPLIANCE WITH ALL OF ITS RULES OR REGULATIONS.
BY LAW, YOU MUST OBTAIN A “CERTIFICATE OF AUTHORIZATION” TO
PRACTICE AS A FIRM. YOU MUST FILE THIS CERTIFICATE WITH YOUR
ARTICLES OF ORGANIZATION. CONTACT THE BOARD TO OBTAIN THE
CERTIFICATE.
Steps to Form LLC
Step 1: It is recommended that you reserve a limited liability company name in order to
assure that your Articles of Organization are not rejected because the name you
have selected is not available.
You may skip this step and go to step 2, but if the limited liability company name
you have selected is not available, the Articles of Organization will be returned to
you.
See FORM 1 - APPLICATION TO RESERVE LIMITED LIABILITY
COMPANY NAME.
This forms should be typed or printed.
You must file the original and one copy of the form.
The name of a limited liability company must contain "limited liability
company" or "limited company" or the abbreviation "L.L.C.", "LLC", "L.C.",
or "LC". "Limited" may be abbreviated as "Ltd.", and "company" may be
abbreviated as "Co.".
A name is reserved for a NON-RENEWABLE 120-day period.
The filing fee is $25.00
Prior to submitting an Application to Reserve Limited Liability Company Name
for filing, you may check the availability of your proposed name by calling one of
the numbers listed below. Telephone name searches are only preliminary and do
not guarantee the availability of the name .
Mail the original and one copy of your APPLICATION TO RESERVE
LIMITED LIABILITY COMPANY NAME along with a $25.00 filing fee
(Make check payable to the Secretary of State) , to:
Secretary of State
Corporations Division
P.O. Box 11350
Columbia, South Carolina 29211
Telephone: (803) 734-2158, 734-1116, or 734-1938
Step 2: Once you have reserved the limited liability company name, or if you have chosen
to proceed without reserving a name, complete the form entitled “Articles of
Organization.”
SEE FORM 2 –ARTICLES OF ORGANIZATION
Follow these instructions to complete the Limited Liability Company Articles of
Organization:
T HIS FORM MUST BE TYPED OR PRINTED CLEARLY IN BLACK INK .
1. This is the name here that you have reserved.
2. This is the address of the initial designated office of the LLC in South
Carolina.
3. State the name of the initial registered agent and the STREET ADDRESS
of the registered agent. An agent must be an individual resident of this State, a
domestic corporation, another limited liability company, or a foreign
corporation or foreign company authorized to do business in South Carolina.
NOTE THAT THE REGISTERED AGENT MUST SIGN THE FORM.
4. One or more persons may organize a limited liability company. You may
list more than one organizer, but you only have to list one.
5. “Term company” means a limited liability company in which its members
have agreed to remain members until the expiration of a term specified in the
articles of organization. (The opposite of "term company" is an "at will
company" - i.e. , any company other than a "term company.") If you do not
want to limit the duration of the LLC, DO NOT check this box. THIS FORM
DOES NOT PROVIDE FOR A SPECIFIC TERM.
6. “Manager” means a person, whether or not a member of a
manager - managed company, who is vested with authority to do and perform
business acts for the LLC. “Manager - managed company” means a limited
liability company which is so designated in its articles of organization.
“Member - managed company” means a limited liability company other than a
manager - managed company. You must decide how you intend to manage the
LLC and, if by managers, provide the information requested here.
7. DO NOT check this box unless one or more members of the LLC will be
personally responsible for the “…debts, obligations, and liabilities of a limited
liability company, whether arising in contract, tort, or otherwise….”
8. If the LLC is NOT to be effective immediately, then specify the date it will
become effective. Ordinarily, an LLC becomes effective immediately.
9. You probably will not want to disclose any other information in the section.
10. The organizer must sign and date the form.
You must file the original and one copy of the form.
The filing fee, payable to the Secretary of State, is $110.00.
SPECIAL NOTE: The first annual report for a Limited Liability Company
must be delivered to the Secretary of State between January first and April
first of the calendar year after which the Limited Liability Company was
organized. Subsequent annual reports must be delivered to the Secretary of
State between January first and April first of the ensuing calendar years.
Step 3: Mail the original and one copy of the ARTICLES OF ORGANIZATION, AND
THE CERTIFICATE OF AUTHORIZATION FROM YOUR
REGULATORY BOARD TO:
Secretary of State
Corporations Division
P.O. Box 11350
Columbia, South Carolina 29211
A cover letter to send with the Articles of Organization is included in this packet.
Make sure you include an original and one copy of the Articles of Organization.
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: eee777
PASSWORD: huj345
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:
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http://www.uslegalforms.com/data/corp/SC-00LLC/SC-00PLLC.htm
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. You will have to decide how you want
your LLC to operate.
Fill in the blanks with the name of your profession
or regulatory board where appropriate.
Read carefully and make appropriate changes
to suit your individual needs and purposes.
OPERATING AGREEMENT
OF
______________________________________
A SOUTH CAROLINA 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 South Carolina 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 South Carolina relating to the formation, operation and taxation of a LLC, including the South
Carolina Uniform Limited Liability Company Act (South Carolina Code of Laws, Title 33,
Chapter 44) 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 of Organization . The Members acting through one of its Members,
_____________________________________, filed Articles of Organization, ("Articles") for
record in the office of the Secretary of State on _________________________, thereby creating
the LLC.
3. Business . The business of the LLC shall be to engage in the business of and to
render the services of to render services as a __________________ and to conduct any lawful
businesses or purposes which a limited liability company whose purpose is to render services as
a __________________ are legally allowed to conduct.
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 of filing and will continue in
perpetuity.
6. Fiscal Year . The LLC's fiscal and tax year shall end December 31.
ARTICLE II
MEMBERS
7. Initial Members . The initial members of the LLC are all licensed
_________________ in the State of South Carolina. 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 must be licensed __________________ in the State
of South Carolina and may be admitted only upon the consent of a majority of the Members and
upon compliance with the provisions of this agreement.
ARTICLE III
MANAGEMENT
9. Management . The Members have elected to manage the LLC as follows (check as
appropriate):
The management of the LLC shall be vested in the Members without an appointed
manager. The members shall elect officers who shall manage the company. The
President and 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. Each manager shall be a licensed
________________ in South Carolina.
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. 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 be members and shall consist of a
president, a treasurer and a secretary, or other officers or agents as may be elected and
appointed by the Members. A Member may hold more than one or all offices. 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,
except the secretary shall be licensed _________________ in the State of South Carolina.
(b) Election and Term of Office . The officers of the LLC shall be elected
annually by the Members by a majority vote. Vacancies may be filled or new offices
created and filled at any meeting of the Members. Each officer shall hold office until
his/her death, until he/she shall resign, or until he/she is removed from office. Election or
appointment of an officer or agent shall not of itself create a contract right.
(c) Removal . Any officer or agent may be removed by a majority of the
Members whenever they decide that the best interests of the Company would be served
thereby. Such removal shall be without prejudice to the contract rights, if any, of the
person so removed.
(d) Vacancies . A vacancy is any office because of death, resignation, removal,
disqualification or otherwise may be filled by the Members for the unexpired portion of
the term.
(e) President . The President shall be the chief executive officer of the LLC and
shall preside at all meetings of the Members. The President shall have such other powers
and perform such duties as are specified in this Agreement and as may from time to time
be assigned by the Members of the LLC.
(f) The Treasurer . The Treasurer shall be the chief financial officer of the LLC.
The Treasurer shall not be required to give a bond for the faithful discharge of his/her
duties. The Treasurer shall: (i) have charge and custody of and be responsible for all
funds and securities of the LLC; (ii) in the absence of the President, preside at meetings
of the Members; (iii) receive and give receipts for moneys due and payable to the LLC
from any source whatsoever, and deposit all such moneys in the name of the LLC in such
banks, trust companies or other depositaries as shall be selected by the Members of the
LLC; and (iv) in general perform all the duties incident to the office of treasurer and such
other duties as from time to time may be assigned by the President or by the Members of
the LLC.
(g) Secretary . The secretary shall: (i) keep the minutes of the Members meetings
in one or more books provided for that purpose; (ii) see that all notices are duly given in
accordance with the provisions of this Agreement or as required by law; (iii) be custodian
of LLC records; (iv) keep a register of the post office address of each Member; (v) certify
the Member’s resolutions; and other documents to the LLC as true and correct; (vi) in the
absence of the President and Treasurer, preside at meetings of the Members and (vii) in
general perform all duties incident to the office of secretary and such other duties as from
time as may be assigned by the President or the Members.
11. Member Only Powers . Notwithstanding any other provision of this Agreement, only a
majority of the Members may: (a) sell or encumber (but not lease) any real estate owned by the
LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC if the debt, expenditure, or
other obligation exceeds $_____________________.
ARTICLE IV
CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS
12. Interest of Members . Each Member shall own a percentage interest (sometimes referred
to as a share) in the LLC. The Member’s percentage interest shall be based on the amount of
cash or other property that the Member has contributed to the LLC and that percentage interest
shall control the Member’s share of the profits, losses, and distributions of the LLC.
13. Contributions . The initial contributions and initial percentage interest of the Members
are as set out in this Agreement.
14. Additional Contributions . Only a majority of the Members of the LLC may call on the
Members to make additional cash contributions as may be necessary to carry on the LLC's
business. The amount of any additional cash contribution shall be based on the Member's then
existing percentage interest. To the extent a Member is unable to meet a cash call, the other
Members can contribute the unmet call on a pro rata basis based on the Members' percentage
interests at that time, and the percentage interest of each Member will be adjusted accordingly.
15. Record of Contributions/Percentage Interests . This Agreement, any amendment(s) to this
Agreement, and all Resolutions of the Members of the LLC shall constitute the record of the
Members of the LLC and of their respective interest therein.
16. Profits and Losses . The profits and losses and all other tax attributes of the LLC shall be
allocated among the Members on the basis of the Members' percentage interests in the LLC.
17. Distributions . Distributions of cash or other assets of the LLC (other than in dissolution
of the LLC) shall be made in the total amounts and at the times as determined by a majority of
the Members. Any such distributions shall be allocated among the Members on the basis of the
Members' percentage interests in the LLC.
18. Change in Interests . If during any year there is a change in a Member's percentage
interest, the Member's share of profits and losses and distributions in that year shall be
determined under a method which takes into account the varying interests during the year.
ARTICLE V
VOTING; CONSENT TO ACTION
19. Voting by Members . Members shall be entitled to vote on all matters which provide for a
vote of the Members in accordance with each Member’s percentage interest.
20. Majority Required . Except as otherwise provided and delegated to the Officers or
Managers, a majority of the Members, based upon their percentage ownership, is required for
any action.
21. Meetings - Written Consent . Action of the Members or Officers may be accomplished
with or without a meeting. 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, or the
President and Secretary. Action without a meeting may be evidenced by a written consent
signed by a majority of the Members, or the President and Secretary.
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, or if Officers were
elected, by any officer.
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, by reason of being or having been a Member or
officer, shall 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. 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:
the provisions of this Agreement;
the records of the LLC; and/or
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.
(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.
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 may 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, may 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
proceedings conclusion. 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 payment of fees and
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 and officers.
(d) Insurance . The Members shall cause the LLC to purchase and maintain insurance for
the LLC, for its Members and officers, and/or on behalf of any third party or parties
whom the members might determine should be entitled to such insurance coverage.
(e) Effect of Amendment . No amendment, repeal or modification of this Article shall
adversely affect any rights hereunder with respect to any action or omission occurring
prior to the date when such amendment, repeal or modification became effective.
ARTICLE VII
MEMBERS INTEREST TERMINATED
28. Termination of Membership . A Member’s interest in the LLC shall cease upon the
occurrence of one or more of the following events:
a. A Member provided notice of withdrawal to the LLC thirty (30) days in advance of
the withdrawal date. 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.
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 or the rules and regulations
of the South Carolina Board of ____________________ that are not inconsistent with
the dissociation events identified above.
j. In the event that a member is disqualified form rendering services as a
___________________, that member's interest in the LLC shall immediately
terminate.
29. 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
30. LLC Interest . The LLC interest is personal property. A Member has no interest in
property owned by the LLC.
31. Encumbrance . A Member can encumber his LLC interest 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.
32. Sale of Interest . A Member can sell his LLC interest only as follows:
(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall give
written notice to the LLC 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 __________ (____) 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. The non-member must be a
licensed __________________ in the State of South Carolina. 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) 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.
(e) A non-member purchaser of a member’s interest cannot exercise any rights of a
Member unless a majority of the non-selling Members consent 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.
33. 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 upon demand by a Member but not more than
once a year unless all Members consent. 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
34. 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
35. 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.
36. 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
37. Capital Accounts . Capital accounts shall be maintained consistent with Internal Revenue
Code § 704 and the regulations thereunder.
38. Partnership Election . The Members elect that the LLC be taxed as a partnership and not
as an association taxable as a corporation.
ARTICLE XII
RECORDS AND INFORMATION
39. Records and Inspection . The LLC shall maintain 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.
40. 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
41. 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.
42. Applicable Law . To the extent permitted by law, this Agreement shall be construed in
accordance with and governed by the laws of the State of South Carolina.
43. 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.
44. Counterparts . This instrument may be executed in any number of counterparts each of
which shall be considered an original.
45. Specific Performance . Each Member agrees 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.
46. 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.
47. 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.
48. 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.
49. 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.
50. Adherence to Applicable Laws, Rules, and Regulations. The LLC shall at all times be
and remain in full compliance with all laws, rules, regulations, and requirements set out in the
South Carolina Code of Laws and promulgated by the South Carolina Board of
_____________________.
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 SOUTH CAROLINA 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 ANY SECURITIES ACT OF THE STATE OF SOUTH
CAROLINA. EACH MEMBER AGREES TO BE BOUND BY ALL OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND ARTICLES OF ORGANIZATION.
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 South Carolina limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and Limited Liability Company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a South Carolina limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and Limited Liability Company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a South Carolina limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and Limited Liability Company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a South Carolina limited
liability company. I realize that an investment in this Company is speculative and involves
substantial risk. I agree to be bound by all of the terms and conditions of the Articles of
Organization and Limited Liability Company Agreement of
___________________________________________.
Member:
________________________________
Address:
________________________________
Date:
_________________________________
INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE
I, _____________________________________, hereby certify that I have received a copy of the
Limited Liability Company Agreement and Articles of Organization of
___________________________________________________, a South Carolina 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:
_________________________________
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 SOUTH CAROLINA
Perientage: __
This Certifiate iertifes that ___________________________) is a true
and lawful owner of ___ perient of _____________________________)
a South Carolina 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___.
__________________ ___________________
