Free Multi-Member LLC Operating Agreement Template
Create an outline of how your company will be run by using our Multi-Member LLC Operating Agreement template. Draft your document with ease and avoid problems with the other members of your company.
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What is a Multi-Member LLC Operating Agreement
This legal contract will help you govern the internal operations of the company in a way that suits the specific needs of its members and provides clear guidelines on the business's daily management and long-term strategic decisions.
You and the other members of your limited liability company can use this document to outline:
How financial decisions are made
Use our Operating Agreement template for a Multi Member LLC to create your document with ease and avoid leaving out important information.
Importance of a Multi-Member LLC Agreement
Having a Multi-Member LLC Agreement is crucial for having a clear outline of your company and how it will be run.
By creating this document, you can ensure the following:
All members are on the same page regarding the company's rules and procedures.
Members' personal assets are protected from the company's debts and liabilities.
Clarity is provided on the distribution of profits and losses.
By using this document you can avoid disputes related to key issues such as decision-making and profit-sharing.
Operating Agreement for Multi-Member LLC Sample
To better understand what a Multi-Member LLC Agreement looks like, it’s a good idea to review a finished document.
Review our sample below to know what to expect when drafting your contract.
How to Write an Operating Agreement for a Multi-Member LLC
Creating an Operating Agreement for a Multi-Member LLC is a critical step in ensuring the smooth operation and management of your company. So it’s important to know exactly what should be included.
Here’s a step-by-step guide on how to include the key terms and clauses to protect the best interest of each member:
Define ownership interests: Detail each member's percentage of ownership and any special classes of ownership.
Include a registered agent: Appoint a registered agent to receive official communications, as listed with the Secretary of State.
Outline capital contributions: Record members' assets or cash contributions, noting that these are not repayable and separate from any loans to the LLC.
Specify management structure: Choose between member-managed or manager-managed structures and define the company’s decision-making processes.
Schedule annual meetings: Designate an annual meeting with at least 30 days' notice, even if it's a formality, to maintain corporate governance standards.
Detail accounting practices: Specify tax filing responsibilities, the fiscal year, the LLC's tax classification, and profit distribution methods.
Incorporate right of first refusal: Include a clause allowing members to match any offer for a departing member's interest within a set period which is typically 30 days.
Plan for the death of a member: Explain a process that lets members purchase the interest of a deceased member.
Establish dissolution procedures: Outline the dissolution process, including asset liquidation and member distributions, with necessary state filings.
Enforce a non-compete agreement: Protect the LLC with a non-compete agreement, preventing members from starting competing businesses for a certain time post-dissolution or departure.
Take advantage of our Multi-Member LLC Operating Agreement template to ensure each of these terms and clauses are added to your document.
FAQs About Multi-Member LLC Operating Agreement
If you still have some doubts about how this type of agreement works or if you need other legal documents to accompany it, you can read our answers to some typical questions below.
Does a Multi-Member LLC Need an EIN?
Yes, a Multi-Member LLC needs an Employer Identification Number (EIN) from the IRS, it doesn’t matter how it’s taxed.
While with a single-member LLC, you aren’t required to have an EIN in certain cases, for multi-member companies, having a number is always necessary.
An EIN is necessary for tax purposes, such as filing federal and state taxes, and is also required to open a business bank account.
How Do I Get a Multi-Member LLC Operating Agreement?
There are a couple of common ways to get your own Multi-Member Operating Agreement. Firstly, you can use our easy-to-use template to draft your document, which offers a quicker and easier process.
You can also go to an attorney.
Attorneys who specialize in the area of business can create one for you as well, however, the process will likely take much longer and be much more expensive.
How Is a Multi-Member LLC Taxed?
A Multi-Member LLC is typically taxed as a partnership by default. The profits and losses of the LLC pass through to the members, who then report them on their tax returns.
However, not every situation is the same, and being taxed as a partnership may not be the best for you.
An LLC can also choose to be taxed as a corporation if it's more beneficial.
You are only a few steps away from your own Multi-Member LLC Operating Agreement!