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Limited Liability Company Agreement for the United Kingdom

Limited Liability Company Agreement Template for United States

A Limited Liability Company Agreement is a foundational document that governs the operation, management, and ownership structure of an LLC in the United States. This agreement, also known as an Operating Agreement in some states, establishes the rights and responsibilities of members, details capital contributions and profit distributions, sets forth management procedures, and provides mechanisms for handling various business scenarios including transfers of ownership and dissolution. While specific requirements vary by state, this agreement serves as the primary internal governing document for the LLC.

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What is a Limited Liability Company Agreement?

The Limited Liability Company Agreement is essential for any business forming an LLC in the United States. This document should be created at the time of LLC formation and serves multiple crucial purposes: it defines the financial and functional relations among members, establishes management structures, outlines capital requirements, and sets procedures for various business scenarios. While some states don't legally require an LLC Agreement, having one is considered best practice as it provides clarity and protection for all parties involved. The agreement helps prevent disputes by clearly defining roles and responsibilities, while also providing mechanisms for resolving disagreements when they arise. It's particularly important for multi-member LLCs but can also be valuable for single-member LLCs, especially for maintaining liability protection and establishing succession plans.

What sections should be included in a Limited Liability Company Agreement?

1. Parties: Identifies all members of the LLC and their contact information

2. Background/Recitals: States the purpose of forming the LLC and basic intentions of the parties

3. Definitions: Defines key terms used throughout the agreement

4. Formation: Details about LLC formation, registered office, and registered agent

5. Capital Contributions: Specifies initial and additional capital contributions by members

6. Membership Interests: Defines ownership percentages and classes of interests

7. Management: Describes management structure and decision-making processes

8. Distributions: Details how and when profits will be distributed

9. Transfer Restrictions: Rules regarding transfer of membership interests

10. Dissolution: Conditions and procedures for LLC dissolution

What sections are optional to include in a Limited Liability Company Agreement?

1. Tag-Along Rights: Minority member protection rights allowing them to join in sale of majority interests

2. Drag-Along Rights: Majority member rights to force minority members to join in sale of the company

3. Special Purpose Provisions: Industry-specific requirements and compliance provisions for regulated industries

4. Employee Matters: Employment policies, procedures, and management structure for LLCs with employees

What schedules should be included in a Limited Liability Company Agreement?

1. Schedule A - Members and Capital Contributions: Detailed list of members and their initial capital contributions

2. Schedule B - Membership Interests: Detailed breakdown of ownership percentages and classes of interests

3. Schedule C - Valuation Method: Agreed method for valuing membership interests for various transfer events

4. Appendix A - Form of Transfer Agreement: Template agreement for transferring membership interests

5. Appendix B - Management Procedures: Detailed management and voting procedures for the LLC

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

United States

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Clauses


































Industries

Internal Revenue Code: Federal tax regulations governing the tax treatment of LLCs, including classification options (partnership, corporation, or disregarded entity)

Federal Securities Laws: Federal regulations governing securities offerings and trading, relevant if the LLC plans to issue membership interests that qualify as securities

Federal Employment Laws: Federal regulations governing employment relationships, including FLSA, FMLA, and other employment-related requirements for LLCs with employees

State LLC Act: State-specific legislation governing the formation, operation, and dissolution of LLCs within the particular state

State Business Corporation Laws: State-specific corporate laws that may impact LLC operations and governance structure

State Securities Laws: State-level regulations (Blue Sky Laws) governing securities offerings and trading within the state

State Tax Laws: State-specific tax regulations applicable to LLCs, including filing requirements and tax treatment

State Employment Laws: State-specific employment regulations, including minimum wage, overtime, and worker protection requirements

Uniform Limited Liability Company Act: Model legislation providing standardized rules for LLC formation and operation, which many states have adopted in whole or in part

State Filing Requirements: Specific documentation and procedures required by the state for LLC formation, maintenance, and reporting

SEC Regulations: Federal securities regulatory framework overseen by the Securities and Exchange Commission, applicable if the LLC engages in securities-related activities

Industry-Specific Regulations: Specialized rules and requirements applicable to LLCs operating in regulated industries (e.g., healthcare, financial services, etc.)

Local Business Licensing: Municipal and local government requirements for business operation permits and licenses

State Record-Keeping Requirements: State-mandated obligations for maintaining corporate records, meeting minutes, and other documentation

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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