The Company and Members collectively referred to as the “Parties” or individually as the “Party”) and includes that party’s successors and assigns.
The Company was formed on _________________________ [formation date], when the Member(s) filed the Articles of Organization with the office of the Secretary of State pursuant to the statutes governing limited liability companies in the State of California. (“Statutes”)
The name of the Company is ____________________________________________________.
Subject to compliance with California’s fictitious or assumed business name statutes and procedures, the Company may do business under a different name.
The principal business address of the Company shall be:
The Company may change its principal business address or its registered agent to such other place as members determine.
The Company’s business is: (nature of business)
To own property that will be run as a vacation rental. This however shall not limit the Company from engaging in any other business activity in compliance with the law and obtaining any necessary approvals.
This agreement shall be valid from the date of execution and shall be perpetual.
The Members shall execute, acknowledge, file, record or publish such certificates and documents as may be required by this agreement or by law in connection with the formation and operation of the Company.
The Members have contributed the following capital amounts to the Company as set forth below and are not obligated to make any additional capital contributions:
Member 1 _______________________________________________(name) has a capital contribution of $___________ whose value in shares is____________%
Member 2 _______________________________________________(name) has a capital contribution of $___________ whose value in shares is____________%
Members may, but shall have no obligation to, make additional capital contributions. Member(s) shall have no right to withdraw or reduce their contributions to the Company’s capital until the Company has been terminated unless otherwise set forth herein.
The liability of any Member(s) for the losses, debts, liabilities, and obligations of the Company shall be limited to the amount of the capital contribution of the member (s) plus any distributions paid to such member (s), such member (s)’s share; and (only to the extent as might be required by applicable law) any amounts previously distributed to such member (s) by the Company.
Except as expressly provided elsewhere in this agreement, all decisions respecting the management, operation, and control of the business and affairs of the Company and all determinations made per this agreement shall be made by the affirmative vote or consent of member (s) holding a majority of the Members’ Percentage Interests. Membership Interest means the member’s ownership interest in the Company.
Notwithstanding any other provision of this agreement, the member shall not, without the prior written consent of the unanimous vote or consent of the member (s), sell, exchange, lease, assign or otherwise
transfer all or substantially all of the assets of the Company; sell, exchange, lease (other than space leases in the ordinary course of business), assign or transfer the Company’s assets; mortgage, pledge or encumber the Company’s assets other than is expressly authorized by this agreement; prepay, refinance, modify, extend or consolidate any existing mortgages or encumbrances; borrow money on behalf of the Company; lend any Company funds or other assets to any person or entity; establish any reserves for working capital repairs, replacements, improvements or any other purpose; confess a judgment against the Company; settle, compromise or release, discharge or pay any claim, demand or debt, including claims for insurance; approve a merger or consolidation of the Company with or into any other limited liability company, corporation, partnership or other entity; or change the nature or character of the business of the Company.
The member (s) shall receive such sums for compensation as a member (s) of the Company as may be determined from time to time by the affirmative vote or consent of member (s) holding a majority of the member (s)’ Percentage Interests.
The members will prepare or cause to be prepared reports, statements, and other relevant information for distribution to the Members and initiate legal actions, settle legal actions and defend legal actions. The Members, its shareholders, affiliates, officers, directors, partners, employees, agents and assigns (collectively, the “Covered Persons”) shall not be liable for and shall be indemnified and held harmless (to the extent of the Company’s assets) from, any loss or damage incurred by them, the Company or the Members in connection with the business of the Company, including costs and reasonable attorneys’ fees and any amounts expended in settlement of any claims of loss or damage resulting from any act or omission performed or omitted.
Members agree not to engage in any activity that will negatively affect the Company’s interest, this includes but is not limited to owning an interest in, managing, or working for another business, enterprise, or endeavor that compete with this Company’s business interest or would diminish or impair the member’s ability to perform their duties under this agreement.
ALLOCATION OF NET INCOME AND NET LOSS
For each fiscal year, the Company’s net income and net loss shall be allocated to the Members in proportion to each Member’s Membership Interest.
Distributions shall be made to the Members at times and in the aggregate amounts determined by the Members.
The Company shall pay directly or reimburse the Members, as the case may be, for all of the costs and expenses of the Company’s operations.
The Members agree to gift ______________________ $15,000 for remodeling of the Company’s property located at _______________________________which shall be equal to putting $15,000 in the Company.
The Company will cover Christine’s additional tax obligation from the personal rental income
Any designs, ideas, concepts, discoveries, techniques, patents, copyrights, or trademarks (intellectual property) belonging to or developed by the Company during this agreement’s subsistence are the Company’s exclusive property.
A Party shall not at any time disclose, directly or indirectly, any information concerning this agreement, whether such information or matter is stated to be confidential or not, without the express written permission of the other party(s).
Mediation shall resolve any dispute under this agreement. Parties shall act in good faith to resolve the dispute. Nothing in this section shall be construed as limiting the Court’s jurisdiction.
The Company’s funds shall be deposited in the Company’s name in a bank account or accounts as chosen by the Members. Withdrawals from any bank accounts shall be made only in the regular course of business of the Company and shall be made upon such signature or signatures as the Members from time to time may designate.
The annual meeting of the member (s) shall be held on a day and month each year with at least thirty (30) days’ notice given to the member (s) before the meeting date. The member (s) may by resolution prescribe the time and place for the holding of regular meetings and may provide that the adoption of such resolution shall constitute notice of such regular meetings. Special meetings of the member (s), for
any purpose or purposes, may be called by any Member and notice of it delivered not less than three (3) days before the date of the meeting. When all the member (s) of the Company are present at any meeting, or if those not present sign a written waiver of notice of such meeting, or subsequently ratify all the proceedings thereof, the transactions of such meeting shall be valid as if a meeting had been formally called and notice had been given.
At any meeting of the member (s), the presence of a member (s) holding a majority of the Members’ Percentage Interests, as determined from the books of the Company, represented in person or by proxy, shall constitute a quorum for the conduct of the general business of the Company. However, if any particular action by the Company shall require the vote or consent of some other number or percentage of member (s) pursuant to this agreement, a quorum for the purpose of taking such action shall require such other number or percentage of member (s). If a quorum is not present, the meeting may be adjourned from time to time without further notice, and if a quorum is present at the adjourned meeting, any business matter may be transacted which might have been transacted at the meeting as originally notified. The Member(s) present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough member (s) to leave less a quorum.
At all meetings of the member (s), a Member may vote by proxy executed in writing by the member or by a duly authorized attorney-in-fact of the member. Such proxy shall be filed with the Company before or at the time of the meeting. A Member of the Company who is present at a meeting of the member (s) at which action on any matter is taken shall be presumed to have assented to the action taken, unless the dissent of such member shall be entered in the minutes of the meeting or unless such member shall file a written dissent to such action with the person acting as the secretary of the meeting before the meeting’s adjournment. Such right to dissent shall not apply to a Member who voted in favour of such action.
Unless otherwise provided by law, any action required to be taken at a meeting of the member (s), or any other action which may be taken at a meeting of the member (s), may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the member (s) entitled to vote with respect to the subject. Member(s) of the Company may participate in any meeting of the member (s) by means of conference telephone or similar communication if all persons participating in such meeting can hear one another for the entire discussion of the matters to be voted upon. Participation in a meeting pursuant to this paragraph shall constitute presence in person at such meeting. Voting will be determined by the share held by each member.
RIGHT OF FIRST REFUSAL
If a Member desires to sell, transfer or otherwise dispose of all or any part of their interest in the Company, such member (the “Selling Member”) shall first offer to sell and convey such interest to the other member (s) before selling, transferring, or otherwise disposing of such interest to any other person, corporation or other entity. Such offer shall be in writing, shall be given to every other member, and shall set forth the interest to be sold, the purchase price to be paid, the date on which the closing is to take place (which date shall be not less than sixty (60) days after the delivery of the offer), the location at which the closing is to take place, and all other material terms and conditions of the sale, transfer or other disposition.
Within fifteen (15) days after the delivery of said offer, the other member (s) shall deliver to the Selling Member a written notice either accepting or rejecting the offer. Failure to deliver said notice within said fifteen (15) days conclusively shall be deemed a rejection of the offer. Any or all of the other member (s) may elect to accept the offer, and if more than one of the other member (s) elects to accept the offer, the interest being sold and the purchase price, therefore, shall be allocated among the member (s) so accepting the offer in proportion to their Members’ Percentage Interests, unless they otherwise agree in writing.
If any or all of the other member (s) elect to accept the offer, then the closing of title shall be held in accordance with the offer, and the Selling Member shall deliver to the other member (s) who have accepted the offer an assignment of the interest being sold by the Selling Member(s) and said other member (s) shall pay the purchase price prescribed in the offer.
If no other Member(s) accepts the offer, or if the member (s) who have accepted such offer default in their obligations to purchase the interest, then the Selling Member(s) within one-hundred and twenty (120) days after the delivery of the offer may sell such interest to any other person or entity at a purchase price which is not less than the purchase price prescribed in the offer and upon the terms and conditions which are substantially the same as the terms and conditions set forth in the offer, provided all other applicable requirements of this agreement are complied with. An assignment of such interest to a person or entity who is not a Member(s) of the Company shall only entitle such person or entity to the allocations and distributions to which the assigned interest is entitled, unless such person or entity applies for admission to the Company and is admitted to the Company as a Member(s) in accordance with this agreement.
If the Selling Member(s) does not sell such interest within said one-hundred and twenty (120) days, then the Selling Member(s) may not thereafter sell such interest without again offering such interest to the other member (s) in accordance with this agreement
NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT, A MEMBER CANNOT SELL, TRANSFER OR OTHERWISE DISPOSE OF ALL OF THEIR INTEREST IN THE COMPANY, BEFORE THE EXPIRATION OF TWO (2) YEARS FROM THE DATE OF FORMATION OF THE COMPANY.
ADMISSION OF NEW MEMBERS
The Company may admit new member (s) (or transferees of any interests of existing member (s)) into the Company by the unanimous vote or consent of the member (s).
As a condition to the admission of a new Member(s), such member (s) shall execute and acknowledge such instruments, in form and substance satisfactory to the Company, as the Company may deem necessary or desirable to effectuate such admission and to confirm the agreement of such member (s) to be bound by all of the terms, covenants, and conditions of this agreement, as the same may have been amended. Such new member (s) shall pay all reasonable expenses in connection with such admission, including without limitation, reasonable attorneys’ fees and the cost of the preparation, filing or publication of any amendment to this Agreement or the Articles of Organization, which the Company may deem necessary or desirable in connection with such admission.
No new Member(s) shall be entitled to any retroactive allocation of income, losses, or expense deductions of the Company. The Company may make pro-rata allocations of income, losses, or expense deductions to a new Member(s) for that portion of the tax year in which the member (s) was admitted in accordance with the Internal Revenue Code.
RECORDS, AUDITS AND REPORTS
The Company shall maintain at its principal office the Company’s records and accounts of all operations and expenditures of the Company including the following:
The full name and last known business or resident address of the Members, together with the capital contribution of the Members;
A copy of the Articles of Organization and all amendments thereto, together with any powers of attorney pursuant to which the Articles of Organization or any amendments thereto were executed;
Copies of the Company’s Federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years;
Copies of this Agreement and any amendments thereto together with any powers of attorney pursuant to which any written accounting or any amendments thereto were executed;
Copies of the financial statements of the Company, if any, for the six most recent years; and
The Company’s books and records as they relate to the internal affairs of the Company for at least the current and past four fiscal years.
In the event of the death, retirement, withdrawal, expulsion, or dissolution of a Member(s), or an event of bankruptcy or insolvency, as hereinafter defined, with respect to a Member(s), or the occurrence of any other event which terminates the continued membership of a Member(s) in the Company pursuant to the Statutes (each of the foregoing being hereinafter referred to as a “Withdrawal Event”), the Company shall terminate sixty (60) days after notice to the member (s) of such withdrawal Event unless the business of the Company is continued as hereinafter provided.
Notwithstanding a Withdrawal Event with respect to a Member(s), the Company shall not terminate, irrespective of applicable law, if within the aforesaid sixty-day period the remaining member (s), by the unanimous vote or consent of the member (s) (other than the member (s) who caused the Withdrawal Event), shall elect to continue the business of the Company.
In the event of a Withdrawal Event with respect to a Member(s), any successor in interest to such member (s) (including without limitation any executor, administrator, heir, committee, guardian, or other representative or successor) shall not become entitled to any rights or interests of such member (s) in the Company, other than the allocations and distributions to which such member (s) is entitled, unless such successor in interest is admitted as a Member(s) in accordance with this agreement.
DISSOLUTION AND TERMINATION OF THE COMPANY
The Company shall be dissolved and its assets shall be disposed of, and its affairs wound up upon a determination by a majority of the Membership Interests to terminate the Company. e.g. upon death of a member.
As soon as possible following a determination by the Members to terminate the Company, the Members shall execute a Certificate of Dissolution in such form as shall be prescribed by the California Secretary of State and shall file the Certificate of Dissolution as required by the Act. Upon the completion of the winding up of the affairs of the Company, the Members shall file a Certificate of Cancellation of Articles of Organization in accordance with the Act.
Upon a dissolution and termination of the Company, the Members shall take full account of the Company’s assets and liabilities, shall liquidate the assets as promptly as is consistent with obtaining the fair market value thereof, and shall apply and distribute the proceeds therefrom in the following order:
To the payment of creditors of the Company, including the Members, but excluding secured creditors whose obligations will be assumed or otherwise transferred on the liquidation of Company assets;
To the setting up of any reserves as required by law for any contingent liabilities or obligations of the Company; provided, however, that said reserves shall be deposited with a bank or trust company in escrow at interest for the purpose of disbursing such reserves for the payment of any of the aforementioned contingencies and, at the expiration of a reasonable period, for the purpose of distributing the balance remaining after liquidation of assets.
Any remaining amount to the Members.
The provisions of this agreement are severable. If any provision is held to be invalid or unenforceable, it shall not affect the validity or enforceability of any other provision.
This agreement constitutes the entire agreement between the parties. It supersedes all prior oral or written agreements or understandings between the parties concerning the subject matter of this agreement.
This agreement may not be altered, amended, or modified, except by a written document signed by all parties.
Failure by either party to enforce any of the terms or conditions of this agreement shall not be a waiver of their right to enforce the terms and conditions of this agreement.
No party shall assign their rights or duties under this agreement without the consent of majority of the members.
This agreement shall be governed in all respects by the California State Laws.
A Party’s failure to fulfil its obligations due to Force Majeure or an accident shall not be considered as a breach of this agreement, provided that the Party has taken all reasonable precautions, due care, reasonable alternative measures, and minimal delay all to carry out the terms of this agreement.
All notices, offers or other communications required or permitted to be given pursuant to this agreement shall be in writing and may be personally served or sent by United States mail and shall be deemed to have been given when delivered in person or three (3) business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party.
In computing the number of days (other than business days) for purposes of this agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which national banks are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.
This agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument.
The Article and Section headings in this agreement are for convenience and they form in no part of this agreement and shall not affect its interpretation.
IN WITNESS WHEREOF, each of the Parties has executed this agreement, as set forth below.
Signed by Members
Signature: Name: Designation: Date:
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