Operating Agreement Of Llc Page 4
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17writing by Members whose Sharing Ratios equal more than __________ percent (___%)
[Instructions: Insert the percentage of Sharing Ratios that must approve additional capital
contributions] of the Sharing Ratios of all Members. No Member will be obligated to make any
additional capital contribution to the Company. However, if Company's revenues are insufficient
to pay Company’s expenses, the Members have the opportunity, but not the obligation, to
contribute additional capital in cash to Company on a pro-rata basis in accordance with their
respective Sharing Ratio. Each Member will receive a credit to that Member’s Capital Account
(as defined below) in the amount of any additional capital that the Member contributes to
Company. Immediately following such capital contributions, the Sharing Ratio’s will be adjusted
to reflect the new relative proportions of the Members' Capital Accounts.
e.
Member Loans to Company. No Member will be required to loan any funds to
Company.
Notwithstanding the foregoing, any Member may loan funds to the Company,
provided that such loan is previously approved in writing by Members whose Sharing Ratios
equal more than __________ percent (___%) [Instructions: Insert the percentage of Sharing
Ratios that must approve member loans] of the Sharing Ratios of all Members. All loans must
be evidenced by a promissory note (each a “Note”) payable by Company to the lending Member.
f.
Liability for Company Obligations.
Except as otherwise provided in this
Agreement, or required by law, no Member shall be personally liable for any debt, obligation, or
liability of the Company, whether that debt, obligation, or liability arises in contract, tort, or
otherwise.
3.
PROFITS, LOSSES AND DISTRIBUTIONS
a.
Capital Accounts. A Capital Account shall be maintained for each Member. The
Capital Account of each Member will be credited initially with the amount of the Initial Capital
Contribution by that Member. Thereafter, each Member’s Capital Account will be credited with
that Member’s Sharing Ratio of Profits and the amount of any additional capital contributed to
the Company by that Member, and will be debited with that Member’s Sharing Ratio of Losses
and the amount of any capital distributed to that Member. Each Capital Account shall be
maintained in accordance with the requirements of Internal Revenue Code of 1986 (“IRC”) §
704(b) and all other applicable local, state and/or federal regulations. In the event that the
Members determine that it is necessary to modify the manner in which the Capital Accounts are
computed to comply with local, state and/or federal regulations in order to reflect the agreed
allocations, the Members may make a modification, provided that such allocation is not likely to
have a material effect on the amounts distributable to any member upon the dissolution of
Company. No interest will be paid to the Members on capital contributions or on Capital
Account balances.
b.
Profits and Losses. The Profits and Losses of the Company shall be allocated
among the Members in accordance with their Sharing Ratios.
c.
Distributions.
Annually or at more frequent intervals, the Members shall
distribute available funds to the Members, in proportion to their Sharing Ratios. As used herein,
“Available funds” shall mean the Company’s gross cash receipts (other than cash funds obtained
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