OPERATING AGREEMENT
Jesse Tree LLC
(a New Mexico Close Limited Liability Company)
(Organized under the New Mexico Limited Liability Company Act)
ARTICLE I
INITIAL DATE AND PARTIES; AUTHORIZATION
Section 1.01. Initial Date and Parties. This Agreement became effective the date articles of organization were filed with the New Mexico Secretary of State and is between the Company and its Member.
Section 1.02. Authorization for this Agreement. This Agreement is made under the LLC Act.
ARTICLE II
DEFINITIONS
Unless the language or context clearly indicates otherwise, the following definitions apply:
- Act of Members mean decisions undertaken by the Members holding a majority Membership Interest Percentage, unless a different percentage is otherwise specified in this Agreement. These may occur at a meeting or by written consent.
- Agreement means this agreement and the articles of organization, as amended from time to time.
- Capital Account means the account of the Member set forth in Article V.
- Code means the Internal Revenue Code, as amended.
- Company means this LLC, a Limited Liability Company organized under the LLC Act.
- Default Rule means a rule in the LLC Act which: (i) structures, defines, or regulates the finances, governance, operations or other aspects of a limited liability company under the LLC Act, and (ii) applies except to the extent it is negated or modified by the Agreement.
- Fiscal Year means calendar year.
- LLC Act means the New Mexico Limited Liability Company Act.
- Manager means a Manager, officer, director and their agents
- Member means a person with ownership interest in the Company.
- Membership Interest and Percentage have the meanings set forth in Article V.
- Net Losses and Net Profits mean net losses and profits of the Company computed in accordance with the customary methods of accounting consistently applied from prior periods and shall be allocated and distributed according to Membership Interest Percentage.
- Net Operating Cash Flow means all cash received by the Company from operations, including, but limited to, rents fees and reimbursements and proceeds from sales, financings or re-financings, all as decreased by all cash expenditures for operations, including, but not limited to, expenditures for principal and interest on indebtedness, taxes, insurance, management fees, commissions, reasonable reserves, repairs, maintenance, landscaping, renovation and capital improvements.
- Required Records have the meaning set forth in Article IX.
ARTICLE III
BACKGROUND OF THIS AGREEMENT
Section 3.01. History and Nature of the Company. The Company was organized in New Mexico and is authorized to engage in any legal act. The Company’s principal place of business is set forth in its articles of organization and may only be changed by an Act of the Member.
Section 3.02. Powers. The Company has all powers granted under the laws of New Mexico.
Section 3.03. Registered Agent and Office. The Company’s initial registered agent and its office are specified in the articles of organization. The registered agent may only be changed by an Act of Members.
Section 3.04. Term. The Company commenced existence on the date its articles of organization were endorsed by the New Mexico Secretary of State and shall exist in perpetuity unless sooner terminated as provided in Article X.
ARTICLE IV
RELATIONSHIP OF AGREEMENT TO DEFAULT RULES AND ARTICLES
Section 4.01. Relationship of Agreement to LLC Act Default Rules. Regardless of whether this Agreement specifically refers to a Default Rule:
- If any provision of this Agreement conflicts with a Default Rule, the provisions of this Agreement control and the Default Rule is modified or negated accordingly; and
- If it is necessary to construe a Default Rule as modified or negated in order to effectuate any provision of this Agreement, the Default Rule is modified or negated accordingly.
Section 4.02. Relationship between Agreement and Articles of Organization. If a provision of this Agreement differs from a provision of the articles of organization, this Agreement governs to the extent the law allows.
ARTICLE V
CAPITAL STRUCTURE; MEMBERSHIP INTEREST AND PERCENTAGE
Ownership rights in the Company are reflected in the Membership Interests and Percentages stated in the Capital Account maintained in the Required Records. As of the date of this Agreement, there is a single Member, who is as follows:
| Member | Contribution | Membership Interest Percentage |
| Jessica Bendinger[INSERT ADDRESS] | ||
| Directed Trust Company FBO([insert name] IRA/ LLC)[INSERT ADDRESS] | ||
| TOTAL | 100% |
The Company shall not issue Membership certificates but shall at the request of the Member provide a statement setting forth the Membership Interest Percentage owned and any effective transfers.
ARTICLE VI
MANAGEMENT
Section 6.01. Designation of Manager. The Company shall be managed initially by the Manager. The term Manager is singular in this Agreement; however, the term encompasses all Managers, irrespective of whether there is one or more. A Manager need not be a Member. A Manager shall be entitled to compensation for services rendered as agreed between the Manager and Members. A Manager may be removed by an Act of the Members holding a majority Membership Interest Percentage.
Section 6.02. Death, Incapacity or Resignation of Manager. A Manager may resign by providing written notice to the Member. The resignation takes effect 30 days after the date notice is delivered or a specified later date. In the event of the death or incapacity of a Manager, the remaining Manager or Managers, if any, shall continue serving.
Section 6.03. Authority of Manager. The Manager has sole authority to manage the Company and is authorized to make any contracts, enter into any transactions and make and obtain any commitments on behalf of the Company to conduct or further the Company’s business. If there are two or more Managers serving, the signature of one Manager binds the Company; however, Managers shall act by majority consent.
Section 6.04. Duties of Manager. Each Manager must discharge his, her or its responsibilities in good faith, with the care of an ordinarily prudent person in a like position and in a manner reasonably believed to be in the best interests of the Company.
Section 6.05. Indemnification and Hold Harmless of Manager. The Manager shall not be liable, responsible, or accountable in damages or otherwise to any Member for any loss or damage incurred because of any act or omission performed or omitted by the Manager in good faith on behalf of the Company and in a manner reasonably believed by the Manager to be within the scope of the authority granted the Manager by this Agreement and in the best interests of the Company.
- Gross Negligence or Willful Misconduct. A Manager shall be personally liable, responsible and accountable to any Member if the Manager is guilty of fraud, intentional breach of this Agreement, gross negligence or willful misconduct regarding an act or omission.
- Good Faith Acts or Omissions. Any act or omission performed or omitted by a Manager on advice of counsel to the Company shall be conclusively deemed to have been performed or omitted in good faith.
- No Personal Liability for Capital Contributions. The Manager shall not be personally liable for the return of the capital contribution of any Member, or any portion thereof, it being expressly understood that any such return shall be made solely from Company assets.
- Indemnity Provisions. The Company shall indemnify, save, defend and hold the Manager harmless from and against any loss, expense, or damage suffered by the Manager resulting from any act or omission of the Manager relating to the Company; however, the Company shall not be required to indemnify the Manager for any loss, claim, expense, or damage incurred as a result of the willful misconduct, gross negligence or fraud of the Manager.
Section 6.06. Unrelated Business Tax Income. The Company will operate and make investments in a manner that will not cause any Tax Exempt Member or beneficial owner thereof to realize any “unrelated business taxable income” within the meaning of Sections 512 through 514 of the Internal Revenue Code or any item of gross income that would be included in determining such Member’s (or beneficial owner’s) unrelated business taxable income.
The Company is generally deemed to have unrelated business taxable income (UBTI) when it realizes gross income from any regularly conducted trade or business that is not substantially related to its core business constituting unrelated business taxable income (UBTI). UBTI is subject to tax. The Manager shall ensure all UBTI income is disclosed and reported to Federal, State and local tax authorities.
Section 6.07. Prohibited Persons. The Company shall ensure compliance with Internal Revenue Code Sections 4975 & 408 which prohibit fiduciary and other disqualified persons from engaging in certain type of transactions including:
- A transfer of plan income or assets to, or use of them by or for the benefit of, a disqualified person.
- Any act of a fiduciary by which he or she deals with plan income or assets in his or her own interest.
- The receipt of consideration by a fiduciary for his or her own account from any party dealing with the plan in a transaction that involves plan income or assets.
- Any of the following acts between the plan and a disqualified person.
- Selling, exchanging, or leasing property.
- Lending money or extending credit.
- Furnishing goods, services, or facilities.
ARTICLE VII
MEMBER MEETINGS
The Member shall meet as required by the LLC Act.
ARTICLE VIII
AMENDMENTS
The provisions of this Agreement may not be waived, altered, amended or repealed, in whole or in part, except by an Act of Members holding at least 75% of outstanding Membership Interest Percentage.
ARTICLE IX
REQUIRED RECORDS
Section 9.01. Contents and Location of Required Records. The Company shall maintain its Required Records at its principal place of business and Members may obtain copies at their expense during normal business hours.
Section 9.02. Maintenance of Particular Records. The Company shall remain in compliance with all applicable provisions of the LLC Act; specifically, the Company shall maintain the records and information required by the New Mexico Secretary of State including the:
- Name, address, phone number and e-mail address of each Member or Member’s agent;
- Current statement of the Capital Account for each Member, including each Member’s Membership Interest Percentage and transfers, and further including all capital contributions made by each Member, specifying the amount of cash and the agreed value of other property received by the Company and the agreed value of services as a capital contribution that each Member has rendered to the Company;
- Copies of the articles and all amendments or restatements, together with executed copies of any powers of attorney pursuant to the foregoing have been executed;
- Copies of each of the Company’s federal, state and local income tax returns and financial statements for the three most recent years or, if such returns or statements were not prepared for any reason, copies of the information and statements necessary to enable Members to prepare their own federal, state and local tax returns for such periods;
- Copies of every current and prior operating agreement and every amendment to each;
- A statement of the cash, property and services that each Member has agreed to contribute or render to the Company in the future, and of the principal balance outstanding under any promissory note payable in respect of a capital contribution, and of the amount of the capital contribution with which each Member shall be credited upon receipt of such cash, property or services, or any part thereof, by the Company;
- A statement of the times at which, or the events on the happening of which, additional contributions to or withdrawals from capital which Members agree are to occur; and
- Documents or other writings required to be made available to Members by the Agreement.
ARTICLE X
DISSOLUTION
The Company shall dissolve and wind up when the period fixed for duration expires; or on the written Act of the Members holding at least 75% of outstanding Membership Percentage. As soon as possible following the occurrence of either of the foregoing, the Company shall execute a statement of intent to dissolve as prescribed by the New Mexico Secretary of State.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Governing Law. This Agreement, and any question, dispute or other matter related to or arising under this Agreement, shall be governed by the laws of New Mexico.
Section 11.02. Binding Effect. This Agreement binds the Members and all successors and assigns.
Section 11.03. Complete Agreement. This Agreement, which term, as set forth in Article II, includes the articles of organization, each as amended from time to time, constitutes the complete and exclusive Agreement of the Member and supersedes all prior agreements, whether oral or written, with respect to the subject matter hereof and thereof.
Section 11.04. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable:
- that provision shall be severed and this Agreement shall be construed and enforced as if the illegal, invalid or unenforceable provision had never been part;
- the remaining provisions of this Agreement shall remain in full force and shall not be affected by the illegal, invalid or unenforceable provision or by its severance; and
- in place of the illegal, invalid or unenforceable provision, there shall be added to this Agreement a legal, valid and enforceable provision as similar to the illegal, invalid or unenforceable provision as legally possible.
Section 11.05. Notices. A notice to be given or made to the Company or any Member must be in writing and shall be considered to have been given when delivered to the address specified in the Required Records. A person who wants to change an address in the Required Records may do so by giving written notice of the change to the Company. The change takes effect five days after notice is given
Section 11.06. Multiple Counterparts. This Agreement may be executed in several counterparts, each of which shall be considered an original and all of which shall constitute one and the same document. Proving the execution and contents of this Agreement against a party may be done by producing any copy of this Agreement signed by that party.
Section 11.07. Gender and Number. As used in this Agreement, the masculine, feminine and neuter gender, and the singular or plural number shall be considered to include the others whenever the context indicates.
ACCEPTED AND AGREED: Jesse Tree LLC
MANAGER SIGNATURE: ___________________________
MANAGER NAME: ___________________________
READ AND APPROVED BY: DIRECTED TRUST COMPANY FBO
REPRESENTATIVE SIGNATURE: ____________________________
REPRESENTATIVE NAME: ____________________________
REPRESENTATIVE DESIGNATION: ____________________________
At Legal writing experts, we would be happy to assist in preparing any legal document you need. We are international lawyers and attorneys with significant experience in legal drafting, Commercial-Corporate practice and consulting. In the last few years, we have successfully undertaken similar assignments for clients from different jurisdictions. If given this opportunity, The LegalPen will be able to prepare the legal document within the shortest time possible. You can send us your quick enquiry ( here )
