Xyz Limited Liability Company Operating Agreement Page 17
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28Net operating profit for any accounting period shall mean the gross receipts of
the Company for such period, less the sum of all cash expenses of operation of the
Company, and such sums as may be necessary to establish a reserve for operating
expenses.
6.10
Federal Income Tax Treatment. The items of income, gain, loss, deduction
or credit allocated among the Members shall for federal income tax purposes be
deemed to retain their character as ordinary income, short-term or long-term capital
gain or loss, depreciation, income or receipts entitled to tax-free or non-recognition
treatment or other federal tax characterization in the hands of the Member to whom
allocated in the same proportion as each Member's proportionate share.
[or]
6.10
Federal Income Tax Elections. The Company shall elect to treat as an
expense, for federal tax purposes, all amounts incurred for taxes, interest, and other
fees, charges and expenses to the extent that such expenditures are permitted or
required to be currently deductible expenses in accordance with applicable laws and
regulations. The Members agree that no election shall be made under Section 761 of the
Internal Revenue Code of 1954, as amended, to exclude the Company from application
of any provisions of Subchapter K, Chapter 1, thereof. It is the intent of the Members to
have the Company treated as an S-Corporation for tax purposes to the fullest extent
possible.
[Select the first provision 6.10 for most LLCs. Select the second provision 6.10 for LLCs taxed as
a Subchapter S corporation.]
ARTICLE VII
CAPITAL ACCOUNTS
7.1
Separate Capital Accounts. A separate Capital Account will be
maintained for each Member. The initial balance of the Capital Account of each
Member shall be that Member's proportionate share of the total Capital Contributions.
The Capital Account of each Member:
a.
Shall be increased at the end of each taxable year by the amount of
the Company's income and gain allocated to the Member for the
taxable year,
b.
Shall be decreased at the end of each taxable year by the amount of
the Company's deductions and losses allocated to the Member for
that taxable year, and
c.
Shall be decreased at the time of any distributions by the amount of
17
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Business