LLC Operating Agreement - California

CALIFORNIA LLC OPERATING-AGREEMENT PREPARATION PACKET

CUSTOM NEGOTIATED GOVERNANCE / “DELAWARE-STYLE” TERM INVENTORY

Do not sign this packet as an operating agreement. It records business
decisions and routes them to California counsel. The separate basic California
LLC operating-agreement product serves ordinary governance; this variant is
for a company considering custom economic, control, transfer, investor,
manager-protection, or exit terms.

1. Packet Control and Entity Gate

• Company legal name: [________________________________]
• California entity number: [________________________________]
• Formation date: [__/__/____]
• Articles version reviewed: [________________________________]
• Existing operating agreement: [________________________________]
• Proposed effective date: [__/__/____]
• Matter number: [________________________________]
• California counsel: [________________________________]
• Tax advisor: [________________________________]
• Securities advisor: [________________________________]

Select the entity posture:

• ☐ New California LLC
• ☐ Existing California LLC replacing an agreement
• ☐ Existing California LLC amending an agreement
• ☐ Conversion, merger, domestication, or reorganization
• ☐ Delaware or other foreign LLC — stop and use the correct governing-law form
• ☐ Regulated, licensed, professional, nonprofit, public, or special-purpose entity
• ☐ Entity posture unresolved

Counsel-approved posture and required documents: [_____________________]

2. Members, Beneficial Owners, and Capacity

• Community-property or marital-property review: [________________________]

• Trust, estate, minor, retirement-plan, foreign-person, or exempt-holder review:
  [________________________________]

• Required consents, joinders, certificates, or opinions: [_______________]

3. Agreement Documents and Precedence

The proposed governance package may include:

• ☐ Operating agreement
• ☐ Articles amendment
• ☐ Manager or member consent
• ☐ Subscription or interest-purchase agreement
• ☐ Investor-rights agreement
• ☐ Voting agreement
• ☐ Buy-sell or redemption agreement
• ☐ IP assignment
• ☐ Employment or services agreement
• ☐ Confidentiality and invention agreement
• ☐ Spouse or domestic-partner consent
• ☐ Indemnification agreement
• ☐ Tax election or allocation schedule
• ☐ Other: [________________________________]

Proposed precedence among documents: [________________________________]

Do not place a term in the operating agreement merely because it appeared in a
Delaware form. Allocate each term to the document whose parties, signatures,
duration, administration, and remedies fit the transaction.

4. Capitalization and Contributions

Address separately:

• contribution timing and evidence;
• additional-capital calls;
• default on a funding commitment;
• dilution and preemptive participation;
• member loans and priority;
• return of capital;
• classes, series, profits interests, options, or incentive interests;
• securities and tax treatment;
• valuation and appraisal method; and
• capitalization-table control.

Approved capitalization schedule: [________________________________]

5. Economics and Tax Allocation

Distributions

• Operating distributions: [________________________________]
• Tax distributions: [________________________________]
• Preferred return: [________________________________]
• Distribution waterfall: [________________________________]
• Reserves and solvency review: [________________________________]
• Withholding and nonresident treatment: [________________________________]
• In-kind distributions: [________________________________]

Allocations and Tax Administration

• Intended tax classification: [________________________________]
• Fiscal year and accounting method: [________________________________]
• Capital-account method: [________________________________]
• Special allocations: [________________________________]
• Partnership representative or tax contact: [___________________________]

• Audit, election, settlement, and imputed-underpayment authority:
  [________________________________]

• Tax return review and delivery: [________________________________]

No tax allocation, election, or distribution formula should be inserted until
the tax advisor models the actual capitalization, income, losses, debt, assets,
members, exits, and applicable jurisdictions.

6. Management and Authority

Select the proposed management model:

• ☐ Member-managed
• ☐ Manager-managed
• ☐ Board or committee structure drafted within a manager-managed model
• ☐ Managing member with reserved matters
• ☐ Independent manager or special approval right
• ☐ Structure unresolved

Authority evidence and signing matrix: [________________________________]

7. Duties, Conflicts, and Exculpation Planning

For every proposed modification, waiver, standard, or safe harbor, California
counsel must identify the current mandatory limit and draft the exact scope.

Do not use a blanket statement that all fiduciary duties are waived.

8. Records, Information, and Confidentiality

• Books and records maintained: [________________________________]
• Financial statements and frequency: [________________________________]
• Tax information and delivery: [________________________________]
• Inspection request procedure: [________________________________]

• Confidential, privileged, personal, and competitively sensitive information:
  [________________________________]

• Member and manager confidentiality duties: [___________________________]

• Data-room and audit protocol: [________________________________]
• Regulatory or third-party disclosure: [________________________________]
• Return, deletion, and survival: [________________________________]

9. Transfers and Admission

Sale Rights

• Right of first offer: [________________________________]
• Right of first refusal: [________________________________]
• Tag-along: [________________________________]
• Drag-along: [________________________________]
• Put or call: [________________________________]
• Redemption: [________________________________]
• Deadlock buy-sell: [________________________________]
• Marketability, minority, control, or default discount: [________________]

Model each sale right against valuation, financing, taxes, securities rules,
spouse/trust interests, guaranties, lender covenants, and ability to perform.

10. Service, Employment, and Restrictive-Covenant Separation

Member status does not itself answer employment, wage, worker-classification,
benefit, IP, confidentiality, noncompetition, nonsolicitation, or termination
issues.

Separate agreements required: [________________________________]

Do not place a post-service noncompete or customer restriction in this packet.

11. Default, Deadlock, and Removal

Default

• Defined material breaches: [________________________________]
• Notice and cure: [________________________________]
• Fraud, misconduct, or criminal event: [________________________________]
• Funding default: [________________________________]
• Insolvency event: [________________________________]
• Consequences and proportionality: [________________________________]

Deadlock

• Matters subject to deadlock process: [________________________________]
• Escalation: [________________________________]
• Mediation: [________________________________]
• Tie-breaker or independent decision-maker: [___________________________]
• Buy-sell process: [________________________________]
• Dissolution as last resort: [________________________________]

Manager or Member Removal

• Removal grounds and vote: [________________________________]
• Interim authority: [________________________________]
• Compensation and service-agreement effect: [__________________________]
• Equity effect: [________________________________]
• Required process and records: [________________________________]

No voting suspension, forced sale, forfeiture, penalty discount, setoff, or
expulsion is preapproved by this packet.

12. Indemnification, Advancement, Insurance, and Liability

Claim notice, defense, settlement, and cooperation procedure:
[________________________________]

Do not use a fees-received, distribution-received, or twelve-month cap without
modeling the likely claim, covered loss, insurance, misconduct exceptions,
capitalization, and bargaining position.

13. Dissolution, Winding Up, and Exit

• Voluntary dissolution threshold: [________________________________]
• Judicial or other involuntary route for counsel review: [______________]
• Person authorized to wind up: [________________________________]
• Creditor and reserve process: [________________________________]
• Asset sale and valuation: [________________________________]
• In-kind distribution: [________________________________]
• Distribution waterfall: [________________________________]

• Tax, filing, license, employee, customer, and contract closeout:
  [________________________________]

• Records and survival: [________________________________]

14. Disputes

Complete only after California counsel reviews the parties, claims, forum, and
remedies.

• Governing law: [________________________________]
• Court forum and venue: [________________________________]
• Executive escalation: [________________________________]
• Mediation: [________________________________]
• Separate arbitration addendum: [________________________________]
• Provisional relief: [________________________________]
• Jury treatment: [________________________________]
• Fees and costs: [________________________________]
• Confidentiality and public statements: [________________________________]
• Limitation or claim-notice term: [________________________________]

No jury waiver is supplied by this packet.

15. Amendment and Administration

• Amendment thresholds by topic or class: [_____________________________]
• Disproportionate-adverse-effect consent: [____________________________]
• Notices and effective events: [________________________________]
• Electronic process and authentication: [________________________________]
• Counterparts: [________________________________]
• Assignment of the agreement: [________________________________]
• Entire-agreement package: [________________________________]
• Waiver: [________________________________]
• Severability and reformation: [________________________________]
• Third-party beneficiary: [________________________________]

16. Counsel Completion Gate

• ☐ Entity jurisdiction and posture are confirmed.

• ☐ Existing articles, agreements, consents, ledgers, tax records, and
  capitalization are reconciled.

• ☐ Members, beneficial owners, capacity, marital-property, trust, and authority
  issues are resolved.

• ☐ Economics, allocations, distributions, and tax administration are modeled.

• ☐ Management, voting, reserved matters, conflicts, and authority are complete.

• ☐ Every duty modification, exculpation, indemnity, advancement, and liability
  term has current California-specific support.

• ☐ Transfers, admissions, sale rights, defaults, deadlock, and removal are
  operationally complete.

• ☐ Employment, service, IP, confidentiality, and restrictive covenants use
  separate documents where appropriate.

• ☐ Dissolution, exit, disputes, amendments, and notices are complete.

• ☐ Securities, tax, valuation, insurance, and estate-planning reviews are done.
• ☐ No unresolved field remains in the operative agreement.

Reviewing attorney: [________________________________]

California bar number: [________________________________]

Review date: [__/__/____]

Approved operating agreement and related documents: [__________________]

End of preparation packet. Do not add member signature blocks to this packet.