District of Columbia Sample LLC Operating Agreement

• Category: Limited Liability Company - Operating Agreements
• State: Multi-State
• Control #: US-0767-WG
• Format: Word; Rich Text

Description

To validly complete the formation of the LLC, members must enter into an Operating Agreement. This operating agreement may be established either before or after the filing of the articles of organization and may be either oral or in writing in many states. Regardless of state requirements, it is preferred practice to have a written operating agreement. If you don't create a written operating agreement, the LLC laws of your state will govern your LLC.

The District of Columbia Sample LLC Operating Agreement is a legal document that outlines the internal operations, ownership structure, and management procedures of a Limited Liability Company (LLC) located in the District of Columbia. This agreement serves as a crucial foundation for the effective and smooth functioning of an LLC. In the District of Columbia, there are primarily two types of Sample LLC Operating Agreements that businesses can choose from, namely the Single-Member LLC Operating Agreement and the Multi-Member LLC Operating Agreement. The Single-Member LLC Operating Agreement is designed for LCS with a sole owner or a single member. It sets out the rights, responsibilities, and obligations of the single member, providing a clear framework for their decision-making power, profit distribution, and liability protection. On the other hand, the Multi-Member LLC Operating Agreement caters to LCS with multiple owners or members. This agreement is particularly useful when there are two or more individuals, corporations, or entities involved in the management and ownership of the LLC. It governs the relationships among the members, outlines each member's contributions, voting rights, profit sharing, dispute resolution, and procedures for adding or removing members. District of Columbia Sample LLC Operating Agreements commonly include essential clauses such as: 1. Purpose: Clearly defines the LLC's business activities and the objectives it aims to achieve. 2. Name and Formation: State the legal name of the LLC and the date it was formed. 3. Principal Place of Business: Specify the address where the LLC operates and conducts its primary activities. 4. Member Information: Provide details about each member, including their names, addresses, capital contributions, and ownership percentages. 5. Management: Establish the management structure, whether it will be member-managed or manager-managed. In member-managed LCS, all members participate in the decision-making process, while manager-managed LCS appoint specific individuals (members or non-members) as managers to handle daily operations. 6. Voting and Governance: Define the voting rights and procedures for making decisions on major issues, including admission of new members, sale of assets, or amendments to the operating agreement. 7. Profit and Loss Allocation: Specify how profits and losses will be distributed among the members, either based on their ownership percentages or through a customized arrangement. 8. Capital Contributions and Financing: Outline the initial capital contributions made by each member and establish guidelines for future capital contributions or investments from the members. 9. Dissolution and Liquidation: Detail the circumstances under which the LLC can be dissolved and the process for distributing its assets among the members. 10. Dispute Resolution: Provide mechanisms for resolving disputes among members, such as mediation or arbitration, to avoid potential litigation. It's important to note that while the District of Columbia provides a sample LLC Operating Agreement template, it is highly recommended consulting with an attorney or legal professional to customize the agreement according to the specific needs of the LLC and ensure compliance with the District's laws and regulations.