LIMITED LIABILITY COMPANY OPERATING AGREEMENT
[insert the proposed company name], LLC
A Member Managed Limited Liability Company
OPERATING AGREEMENT

THIS OPERATING AGREEMENT is made and entered into effective on this [insert date], by and
between:
1. Me (M) and My Wife (W) – [list the full legal names]
2. My Brother in law (B) – [list the full legal name]
(collectively referred to in this agreement as the "Members").
SECTION 1: THE LIMITED LIABILITY COMPANY
1.1 Formation. Effective [insert date], the Members form a limited liability company under the
name [insert the proposed name of the company] L.L.C. (the "Company") on the terms and
conditions in this Operating Agreement (the "Agreement") and pursuant to the Limited
Liability Company Act of the State of New Jersey (the "Act"). The Members agree to file
with the appropriate agency within the State of New Jersey charged with processing and
maintaining such records all documentation required for the formation of the Company.
The rights and obligations of the parties are as provided in the Act except as otherwise
expressly provided in this Agreement.
1.2 Name. The business of the Company will be conducted under the name
[insert the proposed name of the company], L.L.C., or such other name upon which the
Members may unanimously agree.
1.3 Purpose. The purpose of the Company is to engage in any lawful act or activity for which a
Limited Liability Company may be formed within the State of New Jersey.
1.4 Office. The Company will maintain its principal business office within the State of New
Jersey at the following address: [insert address]
1.5 Term. The term of the Company commences on [insert date] and shall continue perpetually
unless sooner terminated as provided in this Agreement.
1.6 Names and Addresses of Members. The Members’ names and addresses are attached as
Schedule 1 to this Agreement.
1.7 Admission of Additional Members. Except as otherwise expressly provided in this Agreement, no
additional members may be admitted to the Company through issuance by the company of a new
interest in the Company without the prior unanimous written consent of the Members.
SECTION 2 CAPITAL CONTRIBUTIONS
2.1 Initial Contributions. The Members initially shall contribute to the Company capital as
described in Schedule 2 attached to this Agreement, and the subject to the terms and conditions
set out in Schedule 4 attached to this agreement.

2.2 Additional Contributions. No Member shall be obligated to make any additional contribution
to the Company’s capital without the prior unanimous written consent of the Members.
2.3 No Interest on Capital Contributions. Members are not entitled to interest or other
compensation for or on account of their capital contributions to the Company except to the extent,
if any, expressly provided in this Agreement.
SECTION 3: ALLOCATION OF PROFITS AND LOSSES; DISTRIBUTIONS
3.1 Profits/Losses. For financial accounting and tax purposes, the Company’s net profits or net
losses shall be determined on an annual basis and shall be allocated to the Members in proportion
to each Member’s relative capital interest in the Company as set forth in Schedule 2 as amended
from time to time in accordance with U.S. Department of the Treasury Regulation 1.704-1.
3.2 Distributions. The Members shall determine and distribute available funds annually or at more
frequent intervals as they see fit. Available funds, as referred to herein, shall mean the net cash of
the Company available after appropriate provision for expenses and liabilities, as determined by the
Managers. Distributions in liquidation of the Company or in liquidation of a Member’s interest shall be
made in accordance with the positive capital account balances pursuant to U.S. Department of the
Treasury Regulation 1.704.1(b)(2)(ii)(b)(2). To the extent a Member shall have a negative capital
account balance, there shall be a qualified income offset, as set forth in U.S. Department of the
Treasury Regulation 1.704.1(b)(2)(ii)(d).
3.3 No Right to Demand Return of Capital. No Member has any right to any return of capital or
other distribution except as expressly provided in this Agreement. No Member has any drawing
account in the Company.
SECTION 4: INDEMNIFICATION
The Company shall indemnify any person who was or is a party defendant or is threatened to be
made a party defendant, pending or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the Company) by reason of
the fact that he is or was a Member of the Company, Manager, employee or agent of the Company,
or is or was serving at the request of the Company, against expenses (including attorney’s fees),
judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if the Members determine that he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interest of the Company, and with respect
to any criminal action proceeding, has no reasonable cause to believe his/her conduct was unlawful.
The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon
a plea of "no lo Contendere" or its equivalent, shall not in itself create a presumption that the person
did or did not act in good faith and in a manner which he reasonably believed to be in the best interest
of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to
believe that his/her conduct was lawful.
SECTION 5: POWERS AND DUTIES OF MANAGERS
5.1 Management of Company.

5.1.1 The Members, within the authority granted by the Act and the terms of this
Agreement shall have the complete power and authority to manage and operate the Company
and make all decisions affecting its business and affairs.
5.1.2 Except as otherwise provided in this Agreement, all decisions and documents relating
to the management and operation of the Company shall be made and executed by a Majority
Interest of the Members.
5.1.3 Third parties dealing with the Company shall be entitled to rely conclusively upon the
power and authority of a Majority in Interest of the Members to manage and operate the business and
affairs of the Company.
5.2 Decisions by Members. Whenever in this Agreement reference is made to the decision, consent,
approval, judgment, or action of the Members, unless otherwise expressly provided in this
Agreement, such decision, consent, approval, judgment, or action shall mean a Majority of the
Members.
5.3 Withdrawal by a Member. A Member has no power to withdraw from the Company, except
as otherwise provided in Section 8.
SECTION 6: SALARIES, REIMBURSEMENT, AND PAYMENT OF EXPENSES
6.1 Organization Expenses. All expenses incurred in connection with organization of the
Company will be paid by the Company.
6.2 Salary. No salary will be paid to a Member for the performance of his or her duties under this
Agreement unless the salary has been approved in writing by a Majority of the Members.
6.3 Legal and Accounting Services. The Company may obtain legal and accounting services to the
extent reasonably necessary for the conduct of the Company’s business.
SECTION 7: BOOKS OF ACCOUNT, ACCOUNTING REPORTS, TAX RETURNS, FISCAL YEAR,
BANKING
7.1 Method of Accounting. The Company will use the method of accounting previously
determined by the Members for financial reporting and tax purposes.
7.2 Fiscal Year; Taxable Year. The fiscal year and the taxable year of the Company is the
calendar year.
7.3 Capital Accounts. The Company will maintain a Capital Account for each Member on a
cumulative basis in accordance with federal income tax accounting principles.
7.4 Banking. All funds of the Company will be deposited in a separate bank account or in an
account or accounts of a savings and loan association in the name of the Company as
determined by a Majority of the Members. Company funds will be invested or deposited with an
institution, the accounts or deposits of which are insured or guaranteed by an agency of the
United States government.
SECTION 8: TRANSFER OF MEMBERSHIP INTEREST
8.1 Sale or Encumbrance Prohibited. Except as otherwise permitted in this Agreement, no Member
may voluntarily or involuntarily transfer, sell, convey, encumber, pledge, assign, or otherwise
dispose of (collectively, "Transfer") an interest in the Company without the prior written consent
of a majority of the other non-transferring Members determined on a per capita basis.
8.2 Right of First Refusal. Notwithstanding Section 8.1, a Member may transfer all or any part of
the Member’s interest in the Company (the "Interest") as follows:
8.2.1 The Member desiring to transfer his or her Interest first must provide written notice (the
"Notice") to the other Members, specifying the price and terms on which the Member is
prepared to sell the Interest (the "Offer").
8.2.2 For a period of 30 days after receipt of the Notice, the Members may acquire all, but
not less than all, of the Interest at the price and under the terms specified in the Offer. If the
other Members desiring to acquire the Interest cannot agree among themselves on the
allocation of the Interest among them, the allocation will be proportional to the Ownership
Interests of those Members desiring to acquire the Interest.

8.2.3 Closing of the sale of the Interest will occur as stated in the Offer; provided,
however, that the closing will not be less than 45 days after expiration of the 30-day notice
period.
8.2.4 If the other Members fail or refuse to notify the transferring Member of their desire to
acquire all of the Interest proposed to be transferred within the 30 day period following receipt
of the Notice, then the Members will be deemed to have waived their right to acquire the
Interest on the terms described in the Offer, and the transferring Member may sell and convey
the Interest consistent with the Offer to any other person or entity; provided, however, that
notwithstanding anything in Section 8.2 to the contrary, should the sale to a third person be at
a price or on terms that are more favorable to the purchaser than stated in the Offer, then the
transferring Member must re offer the sale of the Interest to the remaining Members at that
other price or other terms; provided, further, that if the sale to a third person is not closed
within six months after the expiration of the 30day period describe above, then the provisions of
Section
8.2 will again apply to the Interest proposed to be sold or conveyed.
8.2.5 Notwithstanding the foregoing provisions of Section 8.2, should the sole
remaining Member be entitled to and elect to acquire all the Interests of the other
Members of the Company in accordance with the provisions of Section 8.2, the acquiring
Member may assign the right to acquire the Interests to a spouse, lineal descendent, or
an affiliated entity if the assignment is reasonably believed to be necessary to continue
the existence of the Company as a limited liability company.
8.3 Substituted Parties. Any transfer in which the Transferee becomes a fully substituted
Member is not permitted unless and until:
(1) The transferor and assignee execute and deliver to the Company the documents and
instruments of conveyance necessary or appropriate in the opinion of counsel to the
Company to effect the transfer and to confirm the agreement of the permitted assignee to
be bound by the provisions of this Agreement; and
(2) The transferor furnishes to the Company an opinion of counsel, satisfactory to the
Company, that the transfer will not cause the Company to terminate for federal income tax
purposes or that any termination is not adverse to the Company or the other Members.
8.4 Death, Incompetency, or Bankruptcy of Member. On the death, adjudicated incompetence, or
bankruptcy of a Member, unless the Company exercises its rights under Section 8.5, the
successor in interest to the Member (whether an estate, bankruptcy trustee, or otherwise)
will receive only the economic right to receive distributions whenever made by the Company
and the Member’s allocable share of taxable income, gain, loss, deduction, and credit (the
"Economic Rights") unless and until a majority of the other Members determined on a per
capita basis admit the transferee as a fully substituted Member in accordance with the
provisions of Section 8.3.
8.4.1 Any transfer of Economic Rights pursuant to Section 8.4 will not include any right to
participate in management of the Company, including any right to vote, consent to, and will not
include any right to information on the Company or its operations or financial condition.
Following any transfer of only the Economic Rights of a Member’s Interest in the Company,
the transferring Member’s power and right to vote or consent to any matter submitted to the
Members will be eliminated, and the Ownership Interests of the remaining Members, for
purposes only of such votes, consents, and participation in management, will be
proportionately increased until such time, if any, as the transferee of the Economic Rights
becomes a fully substituted Member.
8.5 Death Buy Out. Notwithstanding the foregoing provision of Section 8, the Members covenant
and agree that on the death of any Member, the Company, at its option, by providing written
notice to the estate of the deceased Member within 180 days of the death of the Member, may
purchase, acquire, and redeem the Interest of the deceased Member in the Company pursuant
to the provision of Section 8.5.
8.5.1 The value of each Member’s Interest in the Company will be determined on the date
this Agreement is signed, and the value will be endorsed on Schedule 3 attached and made a

part of this Agreement. The value of each Member’s Interest will be redetermined
unanimously by the Members annually, unless the Members unanimously decide to
redetermine those values more frequently. The Members will use their best efforts to endorse
those values on Schedule 3. The purchase price for a decedent Member’s interest
conclusively is the value last determined before the death of such Member; provided,
however, that if the latest valuation is more than two years before the death of the deceased
Member, the provisions of Section 8.5.2 will apply in determining the value of the Member’s
Interest in the Company.
8.5.2 If the Members have failed to value the deceased Member’s Interest within the prior
two-year period, the value of each Member’s Interest in the Company on the date of death, in
the first instance, will be determined by mutual agreement of the surviving Members and the
personal representative of the estate of the deceased Member. If the parties cannot reach an
agreement on the value within 30 days after the appointment of the personal representative of
the deceased Member, then the surviving Members and the personal representative each
must select a qualified appraiser within the next succeeding 30 days. The appraisers so
selected must attempt to determine the value of the Company Interest owned by the decedent
at the time of death based solely on their appraisal of the total value of the Company’s assets
and the amount the decedent would have received had the assets of the Company been sold
at that time for an amount equal to their fair market value and the proceeds (after payment of
all Company obligations) were distributed in the manner contemplated in Section 8. The
appraisal may not consider and discount for the sale of a minority Interest in the Company. In
the event the appraisers cannot agree on the value within 30 days after being selected, the
two appraisers must, within 30 days, select a third appraiser. The value of the Interest of the
decedent in the Company and the purchase price of it will be the average of the two appraisals
nearest in amount to one another. That amount will be final and binding on all parties and their
respective successors, assigns, and representatives. The costs and expenses of the third
appraiser and any costs and expenses of the appraiser retained but not paid for by the estate
of the deceased Member will be offset against the purchase price paid for the deceased
Member’s Interest in the Company.
8.5.3 Closing of the sale of the deceased Member’s Interest in the Company will be held at
the office of the Company on a date designated by the Company, not be later than 90 days
after agreement with the personal representative of the deceased Member’s estate on the
fair market value of the deceased Member’s Interest in the Company; provided, however,
that if the purchase price are determined by appraisals as set forth in Section 8.5.2, the
closing will be 30 days after the final appraisal and purchase price are determined. If no
personal representative has been appointed within 60 days after the deceased Member’s
death, the surviving Members have the right to apply for and have a personal representative
appointed.

8.5.4 At closing, the Company will pay the purchase price for the deceased Member’s Interest
in the Company. If the purchase price is less than $1,000.00, the purchase price will be paid in
cash; if the purchase price is $1,000.00 or more, the purchase price will be paid as follows:
(1) $1,000.00 in cash, bank cashier’s check, or certified funds;
(2) The balance of the purchase price by the Company executing and delivering its
promissory note for the balance, with interest at the prime interest rate stated by
primary banking institution utilized by the Company, its successors and assigns, at the
time of the deceased Member’s death. Interest will be payable monthly, with the
principal sum being due and payable in three equal annual installments. The
promissory note will be unsecured and will contain provisions

that the principal sum may be paid in whole or in part at any time, without penalty.
8.5.5 At the closing, the deceased Member’s estate or personal representative must assign to
the Company all of the deceased Member’s Interest in the Company free and clear of all liens,
claims, and encumbrances, and, at the request of the Company, the estate or personal
representative must execute all other instruments as may reasonably be necessary to vest in
the Company all of the deceased Member’s right, title, and interest in the Company and its
assets. If either the Company or the deceased Member’s estate or personal representative
fails or refuses to execute any instrument required by this Agreement, the other party is
hereby granted the irrevocable power of attorney which, it is agreed, is coupled with an
interest, to execute and deliver on behalf of the failing or refusing party all instruments
required to be executed and delivered by the failing or refusing party.
8.5.6 On completion of the purchase of the deceased Member’s Interest in the
Company, the Ownership Interests of the remaining Members will increase
proportionately to their then existing Ownership Interests.
8.6 Incompetence. A Member’s membership interest may be transferable in whole or in part
without the Member’s consent if it is determined by the rest of the membership that such
member is incompetent, is willfully neglecting his/her duties, and is unprofessional in his/her
conduct.
SECTION 9: DISSOLUTION AND WINDING UP OF THE COMPANY
9.1 Dissolution. The Company will be dissolved on the happening of any of the following events:
9.1.1 Sale, transfer, or other disposition of all or substantially all of the property of the
Company;
9.1.2 The agreement of all of the Members;
9.1.3 By operation of law; or
9.1.4 The death, incompetence, expulsion, or bankruptcy of a Member, or the occurrence of
any event that terminates the continued membership of a Member in the Company, unless
there are then remaining at least the minimum number of Members required by law and all of
the remaining Members, within 120 days after the date of the event, elect to continue the
business of the Company.
9.2 Winding Up. On the dissolution of the Company (if the Company is not continued), the
Members must take full account of the Company’s assets and liabilities, and the assets will be
liquidated as promptly as is consistent with obtaining their fair value, and the proceeds, to the
extent sufficient to pay the Company’s obligations with respect to the liquidation, will be
applied and distributed, after any gain or loss realized in connection with the liquidation has
been allocated in accordance with Section 3 of this Agreement, and the Members’ Capital
Accounts have been adjusted to reflect the allocation and all other transactions through the
date of the distribution, in the following order:
9.2.1 To payment and discharge of the expenses of liquidation and of all the
Company’s debts and liabilities to persons or organizations other than Members;
9.2.2 To the payment and discharge of any Company debts and liabilities owed to
Members; and
9.2.3 To Members in the amount of their respective adjusted Capital Account balances on the
date of distribution; provided, however, that any then outstanding Default Advances (with
interest and costs of collection) first must be repaid from distributions otherwise allocable to
the Defaulting Member pursuant to Section 9.2.3.
SECTION 10: GENERAL PROVISIONS
10.1 Amendments. Amendments to this Agreement may be proposed by any Member. A
proposed amendment will be adopted and become effective as an amendment only on the written
approval of all of the Members.

10.2 Governing Law. This Agreement and the rights and obligations of the parties under it are
governed by and interpreted in accordance with the laws of the State of New Jersey (without
regard to principles of conflicts of law).
10.3 Entire Agreement; Modification. This Agreement constitutes the entire understanding and
agreement between the Members with respect to the subject matter of this Agreement. No
agreements, understandings, restrictions, representations, or warranties exist between or among the
members other than those in this Agreement or referred to or provided for in this Agreement. No
modification or amendment of any provision of this Agreement will be binding on any Member unless
in writing and signed by all the Members.
10.4 Attorney Fees. In the event of any suit or action to enforce or interpret any provision of this
Agreement (or that is based on this Agreement), the prevailing party is entitled to recover, in addition
to other costs, reasonable attorney fees in connection with the suit, action, or arbitration, and in any
appeals. The determination of who is the prevailing party and the amount of reasonable attorney fees
to be paid to the prevailing party will be decided by the court or courts, including any appellate courts,
in which the matter is tried, heard, or decided.
10.5 Further Effect. The parties agree to execute other documents reasonably necessary to further
effect and evidence the terms of this Agreement, as long as the terms and provisions of the other
documents are fully consistent with the terms of this Agreement.
10.6 Severability. If any term or provision of this Agreement is held to be void or unenforceable, that
term or provision will be severed from this Agreement, the balance of the Agreement will survive, and
the balance of this Agreement will be reasonably construed to carry out the intent of the parties as
evidenced by the terms of this Agreement.
10.7 Captions. The captions used in this Agreement are for the convenience of the parties only
and will not be interpreted to enlarge, contract, or alter the terms and provisions of this Agreement.
10.8 Notices. All notices required to be given by this Agreement will be in writing and will be effective
when actually delivered or, if mailed, when deposited as certified mail, postage prepaid, directed
to the addresses first shown above for each Member or to such other address as a Member
may specify by notice given in conformance with these provisions to the other Members.
IN WITNESS WHEREOF, the parties to this Agreement execute this Operating Agreement as of the
date and year first above written.
MEMBERS:
1. Me (M) and My Wife (W)- [list the full legal name] –
/s/_________________________________

2. My Brother in law (B) – [list the full legal name] – /s/_________________________________

Listing of Members – Schedule 1

LIMITED LIABILITY COMPANY OPERATING AGREEMENT
[insert the proposed company name], LLC
As of the [insert date], the following is a list of Members of the Company:
NAME: ADDRESS:
1. Me (M) and My Wife (W)- [list the full legal names]
2. My Brother in law (B) – [list the full legal name]

Authorized by Member(s) to provide Member Listing as of this [insert date]
1. Me (M) and My Wife (W)- [list the full legal names] –
/s/_________________________________
2. My Brother in law (B) – [list the full legal name] – /s/_________________________________

Listing of Capital Contributions – Schedule 2

LIMITED LIABILITY COMPANY OPERATING AGREEMENT
[insert the proposed company name], LLC

Pursuant to ARTICLE 2, the Members’ initial contribution to the Company capital is stated to be
$[insert amount] The description and each individual portion of this initial contribution is as follows:
NAME: CONTRIBUTION: % OWNERSHIP:
(M) and (W)- [list the full legal names] $[insert amount] 50%
Brother (B) – [list the full legal name] $[insert amount] 50%

SIGNED AND AGREED this [INSERT DATE]
1. Me (M) and My Wife (W)- [list the full legal name] –
/s/_________________________________
2. My Brother in law (B) – [list the full legal name] – /s/_________________________________

Listing of Valuation of Members Interest – Schedule 3
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
[insert the proposed company name], LLC
VALUATION OF MEMBERS INTEREST

Pursuant to ARTICLE 8, the value of each Member’s interest in the Company is endorsed as follows:
NAME: VALUATION ENDORSEMENT
(M) and (W) – [list the full legal name] [Insert value] [Insert Endorsement]
Brother (B) – [list the full legal name] [Insert value]] [Insert Endorsement]

SIGNED AND AGREED this [insert date]
1. Me (M) and My Wife (W)- [list the full legal name] –
/s/_________________________________
2. My Brother in law (B) – [list the full legal name] – /s/_________________________________

Membership Interest (Me (M) and My Wife (W)- Schedule 4

It is hereby agreed between the members that the 50 percent shares owned by M and W shall be
subject to the following rules and conditions;
1. M and W shall at all times be considered a single party.
2. In the unlikely event that W and M get a divorced, 50% of the shares owned by M and W, which is
25% interest in the company, will transfer over to M. Furthermore, W will be required to pay M 50%

of his initial investment in the company.
3. Any SBA loans will be modified to match the proportionality to the company shares.
SIGNED AND AGREED this [insert date]
1. Me (M) – [list the full legal name] – /s/_________________________________
2. My Wife (W) /s/_________________________________

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