Xyz Limited Liability Company Operating Agreement Page 18
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28that distribution.
7.2
Determination of Profits and Losses. The profits and losses of the
Company shall be the Net Profits or Net Losses of the Company for federal income tax
purposes as determined by the Company's accountant in accordance with the
accounting principles employed by the Company for federal tax purposes.
7.3
Liquidation. Upon liquidation of the Company, liquidating distributions
will be made in accordance with the Members' respective Percentage Interests. A
Member shall not receive any distribution until all liabilities of the Company have been
paid or there remains property of the Company sufficient to pay them.
The Company may offset damages for breach of this Operating Agreement by a
Member whose interest is liquidated (either upon the withdrawal of the Member or the
liquidation of the Company) against the amount otherwise distributable to such
Member.
7.4
Deficit Balance. No Member shall have any liability to restore all or any
portion of a deficit balance in such Member's Capital Account.
7.5
Withdrawal or Reduction of Members' Contributions to Capital.
No
Member shall be entitled to withdraw or borrow any amount from his Capital Account
without the consent of the Managers. A Member has only the right to demand and
receive cash in return for its Capital Contribution.
ARTICLE VIII
BOOKS, RECORDS AND ACCOUNTING
8.1
Accounting Year. The Company's fiscal year shall commence on January
1st of each year and shall end on December 31st of each year.
8.2
Method of Accounting. The Company shall use a cash basis method of
accounting and maintain its accounting records in accordance with generally accepted
accounting principles employed for federal income tax purposes.
8.3
Books and Records. The Managers shall maintain the books and records
of the Company at the principal place of business. Each Member shall have access to
such books and records and shall be entitled to examine them at any time during the
Company's ordinary business hours. Such records shall include:
a.
A current list in alphabetical order of the full name and last known
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