OPERATING AGREEMENT
OF [[COMPANY FULL LEGAL NAME]], LLC
An Arkansas Limited Liability Company
This Operating Agreement (the "Agreement") of [[Company Full Legal Name]], LLC (the "Company"), an Arkansas limited liability company, is entered into and effective as of [[Effective Date]] by and among the Members listed on Schedule A attached hereto (each a "Member" and collectively the "Members").
Article 1 - Formation and Organization
1.1 Formation. The Company was formed as a limited liability company under the laws of the State of Arkansas (the "Arkansas LLC Act" or "Act," currently codified primarily in Arkansas Code Annotated Title 4, Subtitle 3, Chapter 32 or successor provisions governing small business entities and LLCs) upon the filing of Articles of Organization with the Arkansas Secretary of State on [[Formation / Filing Date]], File Number [[Arkansas Filing Number]].
1.2 Name. The name of the Company is [[Company Full Legal Name]], LLC. The Company may conduct business under any other name permitted by law and approved by the Members or Managers.
1.3 Registered Agent and Office. The Company's registered agent in Arkansas is [[Registered Agent Full Legal Name]] at [[Registered Agent Street Address, City, Arkansas ZIP]]. The registered agent and office may be changed by appropriate filing with the Arkansas Secretary of State.
1.4 Principal Place of Business. The principal place of business of the Company is [[Principal Office Address, City, State, ZIP]]. The Company may maintain offices and conduct business at such other locations as the Members or Managers determine.
1.5 Purpose. The purpose of the Company is to engage in [[Describe business purpose, e.g., "real estate investment, acquisition, development, management, and disposition; consulting; technology services; or any lawful business activity"]], and to engage in any and all activities necessary, incidental, or ancillary thereto.
1.6 Term. The Company's existence commenced on the date the Articles of Organization were filed and shall continue until dissolved in accordance with Article 12 or by operation of law.
1.7 Governing Law. This Agreement and the internal affairs of the Company shall be governed by and construed in accordance with the laws of the State of Arkansas, without regard to conflicts of law principles.
Article 2 - Members; Capital Contributions; Percentage Interests
2.1 Members. The initial Members of the Company and their respective Percentage Interests and capital contributions are set forth on Schedule A. Additional Members may be admitted only in accordance with this Agreement.
2.2 Capital Contributions. Each Member shall contribute the amount of cash, property, or services set forth opposite such Member's name on Schedule A (or any updated schedule). No Member shall be required to make additional capital contributions unless agreed in writing.
2.3 Capital Accounts. The Company shall maintain a separate capital account for each Member in accordance with Treasury Regulation § 1.704-1(b)(2)(iv) (the "704(b) capital account rules"). Each Member's capital account shall be increased by (a) the amount of money contributed, (b) the fair market value of property contributed (net of liabilities), and (c) the Member's share of Company income and gain; and decreased by (x) distributions, (y) the fair market value of property distributed, and (z) the Member's share of losses and deductions.
2.4 Percentage Interests. Percentage Interests shall be adjusted only upon admission of new Members, additional capital contributions (if agreed), or transfers approved under this Agreement. Unless otherwise agreed, Percentage Interests shall be proportionate to positive capital account balances or as set forth on Schedule A.
Article 3 - Allocations and Distributions
3.1 Allocation of Profits and Losses. Profits and losses of the Company shall be allocated among the Members in proportion to their Percentage Interests, subject to the special allocation rules required to comply with § 704(b) of the Internal Revenue Code and the Treasury Regulations thereunder, including a qualified income offset, minimum gain chargeback, and partner nonrecourse debt minimum gain chargeback.
3.2 Tax Allocations. Allocations for tax purposes shall be made in accordance with the Members' interests in the Company as determined under Code § 704(b) and this Agreement. The Company may make curative or remedial allocations as permitted to prevent distortion.
3.3 Distributions. The Company may make distributions of cash or other property at such times and in such amounts as the Members or Managers determine, in accordance with Percentage Interests, after reserving such amounts as the Managers deem necessary for working capital, reserves, debts, and anticipated expenses. No distribution shall be made if it would render the Company insolvent or violate the Arkansas LLC Act.
3.4 Tax Distributions. To the extent the Company has taxable income allocated to a Member, the Company may (but is not obligated to) make tax distributions to that Member in amounts estimated to cover federal and Arkansas state income tax liabilities attributable to such allocation, at the highest combined marginal rate, subject to available cash.
Article 4 - Management
4.1 Management Structure. The Company shall be [[Member-managed / Manager-managed - select one]].
If Member-managed: Management and control of the Company shall be vested in the Members. Decisions shall be made by the affirmative vote or written consent of Members holding a majority (or such higher percentage as required for major actions) of the Percentage Interests, unless this Agreement or the Act requires a greater vote. Each Member has authority to bind the Company in the ordinary course of business.
If Manager-managed: The business and affairs of the Company shall be managed by or under the direction of one or more Managers. The initial Manager(s) are: [[Manager Full Legal Name(s)]]. Managers shall be elected or removed by vote of Members holding a majority of Percentage Interests. Managers have full authority to manage the Company, execute documents, and bind the Company, subject to any limitations in this Agreement or by Member vote.
4.2 Major Decisions. The following actions require the prior written consent of Members holding at least [[66 2/3% / 75% / other supermajority]] of Percentage Interests:
- Admission of new Members or issuance of additional interests;
- Sale, lease, or disposition of substantially all assets;
- Incurring debt in excess of $[[Threshold]];
- Mergers, conversions, or reorganizations;
- Amendment of this Agreement or the Articles of Organization;
- Voluntary dissolution;
- Any act outside the ordinary course that exposes Members to personal liability beyond their capital contributions.
4.3 Officers. The Managers (or Members if member-managed) may appoint officers (President, Treasurer, Secretary, etc.) with such authority as delegated. Officers serve at the pleasure of the appointing body.
4.4 Fiduciary Duties. Managers and Members exercising management authority owe duties of loyalty and care to the Company and the other Members as provided by the Arkansas LLC Act and case law. The Members intend that duties be interpreted consistently with the freedom of contract principles in the Act.
Article 5 - Meetings; Voting; Records
5.1 Meetings. Meetings of Members may be called by any Member (or Manager) upon at least five (5) business days' written notice stating the purpose. Meetings may be held in person, by telephone, or by electronic means permitting all participants to hear each other simultaneously.
5.2 Action by Written Consent. Any action that may be taken at a meeting may be taken without a meeting if a written consent setting forth the action is signed by the requisite Percentage Interests (or all Members for certain actions).
5.3 Records. The Company shall maintain at its principal office (or other designated location) true and complete books and records, including a current list of Members, copies of the Articles and this Agreement, tax returns for three years, and financial statements. Each Member has the right to inspect and copy records upon reasonable notice for a proper purpose, subject to the Act.
Article 6 - Transfer of Interests; Admission of New Members
6.1 Restrictions on Transfer. No Member may sell, assign, transfer, pledge, encumber, or otherwise dispose of all or any part of a Membership Interest without the prior written consent of Members holding a majority (or higher required percentage) of the remaining Percentage Interests, except for transfers to a Member's spouse, lineal descendants, or a trust for their benefit (permitted transfers), which still require notice and may be subject to a right of first refusal.
6.2 Right of First Refusal. Before any voluntary transfer (other than permitted transfers), the transferring Member shall give written notice to the Company and other Members. The Company and/or the other Members shall have a right of first refusal to purchase the offered interest on the same terms within thirty (30) days (or longer period stated).
6.3 Admission of New Members. No person shall become a Member except upon execution of a joinder agreement or counterpart to this Agreement and approval by the required Member vote. New Members shall have such rights and obligations as set forth herein or in the admission instrument.
6.4 Drag-Along / Tag-Along. In the event of a proposed sale of a controlling interest approved by the requisite Members, non-selling Members may be required (drag) or have the right (tag) to participate on the same terms and conditions, as detailed in any separate buy-sell or investor rights agreement if executed.
Article 7 - Withdrawal; Resignation; Expulsion
A Member may withdraw only upon thirty (30) days' prior written notice and only if permitted under this Agreement or by unanimous consent. The Company may repurchase the withdrawing Member's interest at fair market value or book value as agreed or determined by appraisal. A Member may be expelled for cause (breach, misconduct, bankruptcy, etc.) by vote of the other Members upon written notice and opportunity to cure.
Article 8 - Tax Matters; Elections
8.1 Tax Classification. The Members intend that the Company be taxed as a partnership (or disregarded entity if single-member) for federal and Arkansas income tax purposes unless the Members elect otherwise (e.g., S corporation or C corporation election on Form 8832 or 2553).
8.2 Tax Matters Partner / Partnership Representative. [[Name of Tax Matters Partner or Partnership Representative]] is designated as the Partnership Representative under Code § 6223 (as amended by BBA) with authority to bind the Company and Members in tax proceedings. The Representative shall keep Members reasonably informed.
8.3 Tax Elections. The Managers or Members may make all tax elections on behalf of the Company, including § 754 election, depreciation methods, and accounting methods, as they determine in the best interest of the Members.
Article 9 - Indemnification; Limitation of Liability
9.1 Indemnification. The Company shall indemnify and hold harmless each Member, Manager, officer, and agent to the fullest extent permitted by the Arkansas LLC Act and other applicable law against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or in connection with the business or affairs of the Company, except to the extent such person acted in bad faith, with willful misconduct, gross negligence, or in a manner not reasonably believed to be in or not opposed to the best interests of the Company.
9.2 Limitation. No Member shall be personally liable for the debts, liabilities, contracts, or obligations of the Company solely by reason of being a Member. A Member's liability shall be limited to the Member's capital contributions and obligations under this Agreement.
Article 10 - Representations; Confidentiality
Each Member represents that the Member has full power and authority to enter this Agreement, that the Member is acquiring the interest for the Member's own account for investment, and that the Member has had opportunity to review this Agreement and ask questions. Members agree to keep confidential all non-public information concerning the Company and its business, except as required by law or with consent.
Article 11 - Dissolution; Winding Up; Liquidation
11.1 Events of Dissolution. The Company shall dissolve upon the first to occur of: (a) written consent of Members holding the percentage required for major decisions; (b) entry of a decree of judicial dissolution; (c) the sale or other disposition of substantially all assets and distribution of proceeds; or (d) any other event causing dissolution under the Act.
11.2 Winding Up. Upon dissolution, the Managers (or liquidating trustee) shall wind up the affairs of the Company, pay or provide for all liabilities, and distribute remaining assets to Members in accordance with positive capital account balances (after allocations) or Percentage Interests, as required to comply with 704(b) and the Act.
11.3 Certificate of Cancellation. Upon completion of winding up, the appropriate certificate of cancellation shall be filed with the Arkansas Secretary of State.
Article 12 - Amendment
This Agreement may be amended only by a written instrument signed by Members holding at least the percentage of Percentage Interests required for major decisions (or unanimously for amendments affecting economic rights disproportionately). The Articles of Organization may be amended by the Managers or Members as permitted by the Act.
Article 13 - Miscellaneous
13.1 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force.
13.2 Entire Agreement. This Agreement (including schedules and exhibits) constitutes the entire agreement among the Members concerning the subject matter and supersedes all prior agreements, understandings, and negotiations.
13.3 Counterparts. This Agreement may be executed in counterparts (including electronic/PDF), each of which shall be deemed an original.
13.4 Notices. All notices shall be in writing and delivered personally, by certified mail, overnight courier, or email (with read receipt or confirmation) to the addresses set forth on Schedule A or such other address as a party designates in writing.
13.5 Headings. Headings are for convenience only and shall not affect interpretation.
13.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Members and their respective heirs, successors, and permitted assigns.
13.7 Dispute Resolution. Any dispute arising under this Agreement shall first be attempted to be resolved by good-faith negotiation. If not resolved within thirty (30) days, the dispute shall be submitted to binding arbitration in [[City, Arkansas]] under the rules of the American Arbitration Association, or litigated in the courts of Arkansas as the Members elect in writing.
SIGNATURES
IN WITNESS WHEREOF, the Members have executed this Operating Agreement as of the Effective Date first written above.
MEMBER(S):
[[Member 1 Full Legal Name]]
Signature: _______________________________________________ Date: [[Effective Date]]
[[Member 2 Full Legal Name]]
Signature: _______________________________________________ Date: [[Effective Date]]
[[Additional Members - attach additional signature pages as needed]]
SCHEDULE A - MEMBERS, CAPITAL CONTRIBUTIONS, AND PERCENTAGE INTERESTS
| Member Full Legal Name | Address for Notices | Initial Capital Contribution | Percentage Interest | Date Admitted |
|------------------------|---------------------|------------------------------|---------------------|---------------|
| [[Member 1 Name]] | [[Address]] | $[[Amount]] / [[Property description]] | [[XX%]] | [[Effective Date]] |
| [[Member 2 Name]] | [[Address]] | $[[Amount]] | [[XX%]] | [[Effective Date]] |
| [[Additional]] | [[Address]] | [[Contribution]] | [[%]] | [[Date]] |
Total: 100%
Note: Capital accounts and Percentage Interests shall be updated from time to time by the Managers or upon admission of new Members. This Schedule A may be revised without formal amendment to the body of the Agreement.
SCHEDULE B - INITIAL MANAGERS (if Manager-Managed)
Initial Manager(s):
[[Manager Name 1]] - Address / Contact
[[Manager Name 2 (if any)]]
Managers serve until removed or replaced in accordance with Article 4.
> Template - not professional advice. This is a sample operating agreement for an Arkansas limited liability company. LLC operating agreements are highly customizable. Tax, securities, and liability issues are complex. Consult a licensed Arkansas attorney and qualified tax advisor before use or execution. This document does not constitute legal, tax, or investment advice.
Primary Sources (as of 2026-06):
- Arkansas Code Annotated provisions governing limited liability companies (Title 4, Subtitle 3 or current codification of the Arkansas LLC / small business entity statutes).
- Internal Revenue Code §§ 704(b), 704(c), 752, and Treasury Regulations thereunder for capital account and allocation rules.
- Arkansas Secretary of State filing requirements for Articles of Organization and amendments.
File Articles of Organization with the Arkansas Secretary of State before or promptly after executing this Agreement. Update Schedule A upon any change in Members, contributions, or interests. Consider a separate buy-sell agreement for triggering events (death, disability, divorce, deadlock).
