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FORM 2.5 — Operating Agreement for Member Managed LLC with Special Allocations |
Price: $40.00
Revised: July 1, 2008 - 31 pages
Description:
Form 2.5 is an operating agreement for a member managed limited liability company. In most states, an LLC is member managed unless an election to be managed by managers is made in the LLC's articles of organization. The form is based upon a partnership model of management and operation and is appropriate for use by an LLC with a limited number of members who are all actively involved in the business. The form is designed to be used in a situation in which there are special allocations for federal income tax purposes because the members' interests in profits and losses are not proportionate to their capital contributions. This may occur, for example, if one or more members of the LLC contribute services in exchange for their interests and other members contribute cash or property. The special allocation provisions make this agreement more lengthy and complex than a basic form of operating agreement.
Features:
Buy-sell provisions, dissociation - Operating agreement gives the LLC and the other members the option to purchase the interest of a member who has dissociated.
Buy-sell provisions, purchase price - Operating agreement provides that the purchase price for a member's interest is to be determined by agreement or appraisal by a single appraiser.
Buy-sell provisions, terms - Operating agreement provides that the purchase price for a member's interest is to be paid in monthly installments over five years and is to be secured with the membership interest being sold.
Dissociation, cause - Operating agreement provides that a member dissociates upon withdrawal, expulsion, death, disability, dissolution, termination, or insolvency.
Dissociation, effect - Operating agreement provides that LLC dissolves when a member dissociates unless the LLC or other members elect to purchase the dissociating member's interest.
Distributions, allocation - Operating agreement provides that distributions to members are allocated in proportion to their percentage interests.
Distributions, required - Operating agreement requires annual distributions in amounts sufficient to enable members to pay taxes on the income of the LLC allocated to them.
Management - Operating agreement for member managed LLC.
Members, percentage interests - Operating agreement fixes the members' percentage interests in a manner disproportionate to their capital contributions.
Members, voting rights - Operating agreement provides that members are entitled to vote in proportion to their percentage interests.
Profits and losses - Operating agreement provides that profits and losses of the LLC are allocated between members based upon their percentage interests, which are not proportionate to capital contributions.
Property - Operating agreement contemplates that one or more members may acquire all or part of their interests in exchange for property other than money.
Services - Operating agreement contemplates that one or more members will acquire all or part of their interests in exchange for services.
Special allocations, profits and losses - Operating agreement allocates profits and losses of the LLC to members in a manner that is not proportionate to capital contributions and specially allocates losses in a manner that enables members to use the greatest possible amount of losses on a current basis for federal income tax purposes.
Special allocations, qualified income offset - Operating agreement contains an qualified income offset, which is necessary for the LLC's special allocations to be given effect for federal income tax purposes. The form does not, however, contain a minimum gain chargeback which would be necessary to insure that the LLC's special allocations will be given effect if they relate to property acquired with nonrecourse indebtedness.
Tax allocations - Operating agreement provides that tax items relating to contributed property are to be specially allocated for tax purposes under IRC 704(c).
Transfer restrictions, right of first refusal - Operating agreement provides that a member's interest may be transferred only if the other members consent or if the LLC and the other members fail to exercise rights of first refusal to purchase the interest.
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| WORD FORMAT |
Form ID: 2005-DOC
Title: Operating Agreement for Member Managed LLC with Special Allocations
Price: $40.00 |
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| RTF FORMAT |
Form ID: 2005-RTF
Title: Operating Agreement for Member Managed LLC with Special Allocations
Price: $40.00 |
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