LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF [[LLC Legal Name]]
This Limited Liability Company Operating Agreement (the "Agreement") of [[LLC Legal Name]], a California limited liability company (the "Company"), is entered into as of [[Effective Date]] by and among the Members listed on Schedule A attached hereto.
ARTICLE 1 - FORMATION AND PURPOSE
1.1 Formation. The Company was formed as a limited liability company under the California Revised Uniform Limited Liability Company Act (Corp. Code § 17701.01 et seq.) (the "Act") upon the filing of Articles of Organization with the California Secretary of State on [[Formation Date]].
1.2 Name. The name of the Company is [[LLC Legal Name]]. The Company may conduct business under any other name permitted by law.
1.3 Principal Office. The principal office of the Company is at [[Full Address, City, CA, ZIP]], or such other place as the Members or Managers may designate.
1.4 Purpose. The purpose of the Company is to engage in any lawful business or activity for which limited liability companies may be organized under the Act and to do all things necessary or incidental thereto.
1.5 Term. The Company shall continue until dissolved in accordance with this Agreement or the Act.
ARTICLE 2 - MEMBERS, CAPITAL CONTRIBUTIONS, AND INTERESTS
2.1 Members. The initial Members of the Company and their respective Percentage Interests are set forth on Schedule A. Additional Members may be admitted only as provided in this Agreement.
2.2 Capital Contributions. Each Member has contributed (or agrees to contribute) the capital set forth opposite such Member's name on Schedule A, in cash, property, or services as agreed.
2.3 Additional Capital. No Member is required to make additional capital contributions unless unanimously agreed. If additional capital is required and approved, Members shall have the opportunity to contribute pro rata or as otherwise agreed.
2.4 Capital Accounts. The Company shall maintain a capital account for each Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv). Capital accounts shall be adjusted for contributions, distributions, allocations of profit and loss, and other events as required for tax purposes.
2.5 Percentage Interests. A Member's "Percentage Interest" means the percentage ownership interest in the Company as set forth on Schedule A, as adjusted from time to time for additional contributions, transfers, or other events.
ARTICLE 3 - MANAGEMENT
3.1 Management Structure (select one):
- [ ] Member-Managed. The business and affairs of the Company shall be managed by the Members. Decisions shall be made by the vote or consent required under Article 4.
- [ ] Manager-Managed. The business and affairs of the Company shall be managed by one or more Managers. The initial Manager(s) are: [[Manager Name(s)]]. Managers shall be elected and removed by the vote of Members holding a majority of the Percentage Interests (or such higher threshold as set forth herein).
3.2 Authority. Managers or Members (as applicable) shall have authority to bind the Company in the ordinary course. Major actions listed in Article 4 require the specified approval.
3.3 Fiduciary Duties. Managers and Members exercising management authority owe fiduciary duties of care and loyalty to the Company and the other Members as provided by the Act and California law.
ARTICLE 4 - VOTING AND MAJOR ACTIONS
4.1 Ordinary Matters. Decisions on ordinary course matters require approval of Members holding a majority of the Percentage Interests (or the Manager(s) in a manager-managed LLC).
4.2 Reserved Matters. The following actions require the affirmative vote or written consent of Members holding at least [[e.g., 75% or unanimous]] of the Percentage Interests:
(a) Admission of new Members or issuance of additional interests;
(b) Amendment of this Agreement or the Articles of Organization;
(c) Sale, lease, or disposition of substantially all assets;
(d) Merger, conversion, or reorganization of the Company;
(e) Incurring debt or granting liens in excess of $[[Threshold Amount]];
(f) Entering into contracts outside the ordinary course with a value exceeding $[[Threshold]];
(g) Hiring or terminating key employees or entering compensation arrangements above approved budgets;
(h) Any action that would require a vote of members under the Act or that would result in a material change to the business purpose.
4.3 Deadlock Resolution. In the event of a deadlock on a material matter, the Members agree to [[mediation / buy-sell procedure / other deadlock resolution mechanism described in Schedule B]].
ARTICLE 5 - ALLOCATIONS AND DISTRIBUTIONS
5.1 Profits and Losses. Profits and losses of the Company shall be allocated among the Members in proportion to their Percentage Interests, except as otherwise required by section 704(c) of the Internal Revenue Code or the Treasury Regulations thereunder.
5.2 Tax Allocations. Allocations shall be made in a manner that complies with Treas. Reg. § 1.704-1(b), including the maintenance of capital accounts, qualified income offset, and minimum gain chargeback provisions.
5.3 Distributions. The Company shall distribute available cash at such times and in such amounts as the Members (or Managers) determine, in proportion to Percentage Interests, after reserving such amounts as are reasonably necessary for working capital, reserves, and anticipated liabilities.
5.4 Tax Distributions. To the extent practicable, the Company shall make tax distributions to each Member in an amount sufficient to cover the Member's estimated federal and California income tax liability attributable to the Member's share of Company income, at the highest marginal rate.
ARTICLE 6 - TRANSFER OF INTERESTS; RIGHT OF FIRST REFUSAL; BUY-SELL
6.1 Restrictions on Transfer. No Member may transfer, assign, pledge, or otherwise encumber all or any part of such Member's Interest without the prior written consent of the other Members (or Manager(s)), except as provided in this Article 6.
6.2 Permitted Transfers. A Member may transfer an Interest to a trust for the benefit of the Member or the Member's family, or to the Member's spouse, children, or other permitted transferees, provided the transferor remains liable for all obligations and the transferee agrees in writing to be bound by this Agreement.
6.3 Right of First Refusal. If a Member (the "Selling Member") receives a bona fide third-party offer to purchase all or part of the Selling Member's Interest, the Selling Member shall first offer such Interest to the Company and the other Members on the same terms and conditions. The Company and then the other Members shall have [[30]] days to accept the offer pro rata or as agreed.
6.4 Drag-Along and Tag-Along. In the event of a sale of a controlling interest in the Company approved by the required vote, the selling Members may require other Members to participate in the sale on the same terms (drag-along). Conversely, if a controlling interest is sold, non-selling Members may require the buyer to purchase their Interests on the same terms (tag-along).
6.5 Buy-Sell on Death, Disability, or Involuntary Transfer. Upon the death, disability, bankruptcy, or divorce of a Member (or other triggering event), the Company or the remaining Members shall have the option (or obligation, if required) to purchase the affected Interest at fair market value determined by [[appraisal / agreed formula / other]].
ARTICLE 7 - DISSOCIATION AND DISSOLUTION
7.1 Dissociation. A Member dissociates upon death, resignation, expulsion, bankruptcy, or other events specified in the Act or this Agreement. A dissociated Member has only the rights of an assignee unless the remaining Members agree otherwise.
7.2 Dissolution. The Company shall dissolve and wind up upon:
(a) The written consent of Members holding the percentage required to amend this Agreement;
(b) Entry of a decree of judicial dissolution;
(c) The occurrence of any event requiring dissolution under the Act; or
(d) Sale of all or substantially all assets and distribution of proceeds.
7.3 Winding Up. Upon dissolution, the Company shall wind up its affairs, pay or provide for creditors, and distribute remaining assets to Members in accordance with positive capital account balances (after adjustments) and then in proportion to Percentage Interests.
ARTICLE 8 - INDEMNIFICATION AND LIABILITY
8.1 Indemnification. The Company shall indemnify and hold harmless each Member, Manager, and officer to the fullest extent permitted by the Act against liabilities and expenses (including reasonable attorneys' fees) arising out of or relating to the person's service to the Company, except for liabilities arising from fraud, bad faith, willful misconduct, or breach of fiduciary duty that is not exculpated.
8.2 Limitation of Liability. No Member or Manager shall be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a Member or Manager. This limitation does not limit liability for the person's own fraud, bad faith, or willful misconduct.
ARTICLE 9 - TAX MATTERS AND ELECTIONS
9.1 Tax Classification. The Company is (or elects to be) classified for federal and California tax purposes as:
- [ ] A partnership (default for multi-member LLCs);
- [ ] A disregarded entity (default for single-member LLCs);
- [ ] An S corporation (if eligible and election made on Form 2553);
- [ ] A C corporation (if election made).
9.2 Tax Matters Partner / Partnership Representative. [[Name of Member or Manager]] is designated as the partnership representative (or tax matters partner) under IRC § 6223 and corresponding California rules. The representative shall have authority to bind the Company and Members in tax proceedings, subject to notice to Members.
9.3 Capital Account Maintenance. The Company shall maintain capital accounts and make allocations in accordance with Treas. Reg. § 1.704-1(b), including qualified income offset and minimum gain chargeback provisions as set forth in Schedule C (Tax Provisions).
ARTICLE 10 - BOOKS, RECORDS, AND ACCOUNTING
10.1 Records. The Company shall keep at its principal office (or other designated location) complete and accurate books and records, including a current list of Members and their addresses, capital accounts, and copies of this Agreement and tax returns.
10.2 Access. Each Member has the right to inspect the books and records upon reasonable notice, as provided by the Act.
10.3 Fiscal Year and Accounting. The fiscal year of the Company is the calendar year (or [[other fiscal year]]). The Company shall use the [[cash / accrual]] method of accounting unless otherwise required.
ARTICLE 11 - SINGLE-MEMBER PROVISIONS (IF APPLICABLE)
If at any time the Company has only one Member:
11.1 The Company shall not dissolve upon the death or dissociation of the sole Member unless the Member's successor or estate elects to dissolve.
11.2 The sole Member may amend this Agreement unilaterally.
11.3 To preserve limited liability and separateness, the sole Member shall: (a) maintain separate bank accounts and records; (b) not commingle assets; (c) hold the Company out as a separate entity; and (d) cause the Company to observe all formalities required to avoid veil-piercing under California law.
ARTICLE 12 - MISCELLANEOUS
12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of law principles.
12.2 Entire Agreement. This Agreement (including schedules and exhibits) constitutes the entire agreement among the Members with respect to the subject matter and supersedes all prior agreements.
12.3 Amendment. This Agreement may be amended only by a written instrument signed by Members holding the percentage of Interests required for the action under Article 4.
12.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions continue in full force.
12.5 Counterparts. This Agreement may be executed in counterparts (including electronic signatures), each of which is an original.
12.6 Notices. Notices shall be in writing and delivered by certified mail, overnight courier, or email with read receipt to the addresses on file.
12.7 Dispute Resolution. Any dispute arising out of this Agreement shall first be submitted to mediation in [[County]], California. If not resolved, the dispute shall be resolved by binding arbitration or in the state or federal courts located in [[County]], California.
ARTICLE 13 - SIGNATURES
IN WITNESS WHEREOF, the Members have executed this Agreement as of the date first written above.
MEMBERS:
[[Member 1 Full Legal Name]]
Signature: ________________________________________ Date: [[Date]]
[[Member 2 Full Legal Name]]
Signature: ________________________________________ Date: [[Date]]
[[Additional Members as needed]]
SCHEDULE A - MEMBERS, CAPITAL CONTRIBUTIONS, AND PERCENTAGE INTERESTS
| Member Full Legal Name | Capital Contribution (Cash/Property/Services) | Percentage Interest | Capital Account (Initial) |
|------------------------|-----------------------------------------------|---------------------|---------------------------|
| [[Member 1]] | $[[Amount or description]] | [[XX]]% | $[[Amount]] |
| [[Member 2]] | $[[Amount or description]] | [[XX]]% | $[[Amount]] |
| [[...]] | [[...]] | [[...]] | [[...]] |
Total: 100%
SCHEDULE B - DEADLOCK RESOLUTION AND BUY-SELL PROCEDURES
[[Describe in detail the mechanism, e.g., "Shotgun buy-sell: either Member may initiate an offer to buy the other's Interest or sell their own at a stated price; the recipient has 30 days to elect to buy or sell on the same terms." Or "Appraisal by mutually selected appraiser; if no agreement, each selects one and the two select a third."]]
SCHEDULE C - TAX ALLOCATION PROVISIONS
The Company adopts the following special tax allocation provisions to comply with Treas. Reg. § 1.704-1(b):
- Partner Nonrecourse Deduction Chargeback
- Curative allocations under § 704(c)
[Additional detailed language as needed for specific assets or contributions.]
DISCLAIMER
Template - not professional (legal/financial/medical) advice. This is a sample California limited liability company operating agreement. The California Revised Uniform Limited Liability Company Act (Corp. Code §§ 17701.01-17713.13) governs formation, management, and dissolution. Tax classification elections, capital account maintenance, and special allocations are governed by the Internal Revenue Code and Treasury Regulations (particularly § 704(b) and § 704(c)). Single-member LLCs must observe separateness formalities to preserve limited liability. This template does not address securities law, employment law, or industry-specific regulatory requirements. Members should consult qualified California business and tax counsel. As of June 2026.
RECORD OF ADOPTION
This Agreement was adopted by the Members on the date shown above. The Company shall maintain an original or electronic copy in its records.
