District of Columbia Corporate Business

LLC Operating Agreement

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LIMITED LIABILITY COMPANY OPERATING AGREEMENT

[________________________________], LLC

A District of Columbia Limited Liability Company

OPERATING AGREEMENT

Effective Date: [__/__/____]

RECITALS

This Limited Liability Company Operating Agreement (this "Agreement") of [________________________________], LLC, a District of Columbia limited liability company (the "Company"), is entered into and shall be effective as of the Effective Date set forth above, by and among the Company and the Members identified herein.

The Members desire to form a limited liability company under the District of Columbia Limited Liability Company Act, D.C. Code §§ 29-801.01 to 29-810.01 (the "Act"), and to set forth in this Agreement the terms and conditions governing the Company's internal affairs, the rights and obligations of the Members, and the management and operation of the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I - FORMATION AND ORGANIZATION

Section 1.1 Formation

The Members hereby form a limited liability company pursuant to the District of Columbia Limited Liability Company Act, D.C. Code §§ 29-801.01 to 29-810.01 (the "Act") by filing Articles of Organization with the District of Columbia Department of Licensing and Consumer Protection (DLCP), Corporations Division (formerly DCRA).

Section 1.2 Name

The name of the Company is:

[________________________________], LLC

The Company may conduct business under one or more assumed names if properly registered in accordance with D.C. Code § 29-801.05.

Section 1.3 Principal Office

The principal office of the Company shall be located at:

[________________________________]
[________________________________]
Washington, D.C. [____]

The Company may change its principal office upon notice to all Members.

Section 1.4 Registered Agent

The Company's registered agent for service of process in the District of Columbia is:

Registered Agent: [________________________________]
Address: [________________________________]
Washington, D.C. [____]

The registered agent may be changed in accordance with the Act by filing a statement of change with DLCP.

Section 1.5 Term

The Company shall have perpetual existence unless dissolved in accordance with Article XII of this Agreement or as required by the Act.

Section 1.6 Purposes

The Company is formed for the following purposes:

(a) [________________________________];

(b) To engage in any other lawful business, purpose, or activity for which limited liability companies may be organized under the Act; and

Section 1.7 Powers

The Company shall have all powers permitted under the Act and the laws of the District of Columbia, including without limitation:

(a) To sue and be sued, complain, and defend in its own name;

(b) To purchase, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal with real or personal property;

(d) To lend money, invest funds, and acquire interests in other entities;

(e) To borrow money and issue evidences of indebtedness;

(f) To enter into contracts and guarantees, incur liabilities, and secure obligations;

(g) To conduct business in and outside the District of Columbia;

(h) To appoint officers, employees, and agents and to define their duties and compensation;

(i) To indemnify Members, Managers, officers, employees, and agents;

(j) To make charitable contributions; and

(k) To do all other acts necessary or proper to accomplish the Company's purposes.

Section 1.8 Biennial Reports

The Company shall file biennial reports with DLCP as required by D.C. Code § 29-102.11. Biennial reports are due by April 1 of each odd-numbered year (or even-numbered year, depending on formation year). Failure to file may result in administrative dissolution.

ARTICLE II - DEFINITIONS

Section 2.1 Defined Terms

As used in this Agreement, the following terms shall have the meanings set forth below:

"Act" means the District of Columbia Limited Liability Company Act, D.C. Code §§ 29-801.01 to 29-810.01, as amended from time to time.

"Adjusted Capital Account Deficit" means the deficit balance, if any, in a Member's Capital Account as of the end of the relevant Fiscal Year, after giving effect to adjustments required under Treasury Regulations Section 1.704-1(b)(2)(ii)(d).

"Affiliate" means, with respect to any Person, (a) any other Person directly or indirectly controlling, controlled by, or under common control with such Person; (b) any officer, director, manager, general partner, or trustee of such Person; (c) any Person who is an officer, director, manager, general partner, trustee, or holder of a controlling interest of any Person described in (a) or (b); or (d) any member of the immediate family of such Person.

"Agreement" means this Limited Liability Company Operating Agreement, as amended, restated, or supplemented from time to time.

"Articles of Organization" means the Articles of Organization filed with DLCP to form the Company, as amended or restated.

"Assignee" means a Person who has acquired a Transferor's Economic Interest but has not been admitted as a Substitute Member.

"Business Day" means any day other than a Saturday, Sunday, or legal holiday in the District of Columbia.

"Capital Account" means the capital account maintained for each Member in accordance with Section 4.5 of this Agreement.

"Capital Contribution" means the total amount of cash and the Agreed Value of any property contributed to the Company by a Member, including Initial Capital Contributions and Additional Capital Contributions.

"Code" means the Internal Revenue Code of 1986, as amended, or any successor federal tax law.

"Company" means [________________________________], LLC, a District of Columbia limited liability company.

"D.C. Franchise Tax" means the unincorporated business franchise tax imposed by D.C. Code § 47-1808.03 on LLCs conducting business in the District of Columbia.

"Distributable Cash" means all cash received by the Company, less amounts used or reserved for Company expenses, debt payments, capital improvements, and other Company purposes as determined by the Members or Managers.

"Distribution" means any transfer of money or property by the Company to the Members.

"Economic Interest" means a Person's share of the Company's Profits, Losses, and Distributions, without any right to participate in management or to vote on Company matters.

"Fiscal Year" means the Company's taxable year, which shall be the calendar year unless otherwise required by the Code or selected by the Members.

"Gross Asset Value" means, with respect to any asset, the adjusted basis of such asset for federal income tax purposes, except as otherwise provided in Treasury Regulations Section 1.704-1(b)(2)(iv).

"Majority Vote" or "Majority in Interest" means the vote of Members holding more than fifty percent (50%) of the total Percentage Interests of all Members entitled to vote on the matter.

"Manager" means each Person designated as a manager of the Company pursuant to Article VII, if the Company is Manager-Managed.

"Member" means each Person who has been admitted to the Company as a member and who holds a Membership Interest, as reflected on Exhibit A attached hereto.

"Membership Interest" means a Member's entire interest in the Company, including the Member's Economic Interest and all rights to participate in management and voting.

"Operating Expenses" means all costs and expenses incurred in connection with the operation of the Company.

"Percentage Interest" means, with respect to each Member, the percentage set forth opposite such Member's name on Exhibit A, as adjusted from time to time.

"Person" means any individual, corporation, partnership, limited liability company, trust, estate, association, or other entity.

"Profits" and "Losses" mean, for each Fiscal Year, the Company's taxable income or loss determined in accordance with Code Section 703(a), with adjustments as required by the Treasury Regulations.

"Supermajority Vote" means the affirmative vote of Members holding at least [____] percent ([____]%) of the total Percentage Interests.

"Transfer" means any sale, assignment, gift, pledge, encumbrance, hypothecation, or other disposition, whether voluntary or involuntary, by operation of law or otherwise.

"Treasury Regulations" means the regulations promulgated by the U.S. Department of the Treasury under the Code, as amended from time to time.

ARTICLE III - MEMBERS

Section 3.1 Initial Members

The names, addresses, Initial Capital Contributions, and Percentage Interests of the initial Members are set forth on Exhibit A attached hereto and incorporated by reference.

Section 3.2 Representations and Warranties

Each Member represents and warrants to the Company and to each other Member that:

(a) If such Member is an entity, it is duly organized, validly existing, and in good standing under the laws of its jurisdiction of organization;

(b) Such Member has full power and authority to execute, deliver, and perform this Agreement;

(d) The execution and performance of this Agreement will not violate any law, regulation, court order, or agreement to which such Member is subject or bound;

(e) Such Member is acquiring its Membership Interest for investment and not with a view to distribution in violation of securities laws;

(f) Such Member has had access to all information concerning the Company that such Member considers necessary or appropriate for deciding whether to become a Member;

(g) Such Member understands that the Membership Interest is illiquid and may not be freely Transferred; and

(h) Such Member has consulted with or had the opportunity to consult with independent legal and tax advisors regarding this investment.

Section 3.3 Additional Members

Additional Members may be admitted to the Company only upon satisfaction of all of the following conditions:

(a) The affirmative vote of Members holding [Majority/Supermajority/Unanimous] approval;

(b) The proposed Member's execution of a counterpart of this Agreement or an amendment hereto agreeing to be bound by all terms and conditions;

(d) Delivery of such other documents as the Members or Managers may reasonably require; and

(e) Amendment of Exhibit A to reflect the admission.

Section 3.4 No Personal Liability

Except as otherwise provided by the Act or this Agreement, no Member shall be personally liable for any debt, obligation, or liability of the Company, whether arising in contract, tort, or otherwise, solely by reason of being a Member. This limitation is consistent with D.C. Code § 29-804.02.

Section 3.5 Member Meetings

3.5.1 Annual Meeting

An annual meeting of Members shall be held at such time and place as determined by the Members or Managers for the purpose of transacting such business as may properly come before the meeting.

3.5.2 Special Meetings

Special meetings of Members may be called by:

(a) The Manager(s), if the Company is Manager-Managed;

(b) Any Member holding at least [____] percent ([____]%) of the Percentage Interests; or

3.5.3 Notice of Meetings

Written notice of each meeting shall be given to all Members not less than ten (10) nor more than sixty (60) days before the meeting date. The notice shall state the place, date, time, and purposes of the meeting.

3.5.4 Quorum

The presence in person or by proxy of Members holding a Majority in Interest shall constitute a quorum for the transaction of business at any meeting.

3.5.5 Voting

Each Member shall be entitled to vote in proportion to such Member's Percentage Interest. Unless otherwise required by this Agreement or the Act, matters shall be decided by a Majority Vote.

3.5.6 Proxies

A Member may vote by proxy executed in writing by the Member or by the Member's authorized attorney-in-fact. A proxy shall be valid for eleven (11) months unless otherwise specified therein.

3.5.7 Action Without Meeting

Any action required or permitted to be taken at a meeting of Members may be taken without a meeting if a written consent, setting forth the action taken, is signed by Members having not less than the minimum voting power required to authorize such action at a meeting. Such consent shall have the same force and effect as a vote at a meeting.

Section 3.6 Limitation on Member Authority

Except as otherwise provided in this Agreement, no Member (in such Member's capacity as a Member) shall have any authority to:

(a) Bind the Company to any contract, obligation, or liability;

(b) Sell, lease, or dispose of Company property;

(d) Execute any instrument conveying Company property; or

(e) Take any action on behalf of the Company.

ARTICLE IV - CAPITAL CONTRIBUTIONS

Section 4.1 Initial Capital Contributions

Each Member shall make an Initial Capital Contribution to the Company in the amount and form set forth on Exhibit A. Initial Capital Contributions shall be made on or before [__/__/____], or as otherwise agreed by the Members.

Section 4.2 Additional Capital Contributions

4.2.1 Voluntary Contributions

No Member shall be required to make any Additional Capital Contribution without such Member's consent.

4.2.2 Capital Calls

☐ CAPITAL CALLS PERMITTED: If approved by [Majority Vote/Supermajority Vote/Unanimous Vote], the Members may authorize capital calls requiring Members to make Additional Capital Contributions in proportion to their Percentage Interests.

☐ CAPITAL CALLS NOT PERMITTED: No Member may be required to make any Additional Capital Contribution without such Member's written consent.

4.2.3 Failure to Contribute

If a Member fails to make a required Additional Capital Contribution within [____] days after written notice:

(a) The non-contributing Member's Percentage Interest may be diluted;

(b) The contributing Members may treat the contribution as a loan bearing interest at [____]% per annum;

(d) Such other remedies as the Members may determine.

Section 4.3 Form of Contributions

Capital Contributions may be made in cash or, with the approval of the Members, in property, services, or promissory notes.

Section 4.4 No Interest on Capital

No Member shall be entitled to receive interest on any Capital Contribution.

Section 4.5 Capital Accounts

4.5.1 Maintenance

A separate Capital Account shall be established and maintained for each Member in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). Each Member's Capital Account shall be:

(a) Increased by:
(i) The amount of cash contributed by such Member;
(ii) The Gross Asset Value of property contributed by such Member;
(iii) Allocations of Profits to such Member; and
(iv) Allocations of income and gain to such Member.

(b) Decreased by:
(i) The amount of cash distributed to such Member;
(ii) The Gross Asset Value of property distributed to such Member;
(iii) Allocations of Losses to such Member; and
(iv) Allocations of deductions and losses to such Member.

4.5.2 Compliance with Regulations

The Capital Accounts shall be maintained in compliance with Treasury Regulations Section 1.704-1(b)(2)(iv), and this Agreement shall be interpreted consistently therewith.

Section 4.6 Withdrawal of Capital

No Member shall have the right to withdraw any part of such Member's Capital Account or to receive any Distribution except as expressly provided in this Agreement.

Section 4.7 Capital Account Adjustments

Upon the occurrence of certain events specified in Treasury Regulations Section 1.704-1(b)(2)(iv)(f), the Capital Accounts of all Members may be adjusted to reflect the fair market value of Company assets.

ARTICLE V - ALLOCATIONS

Section 5.1 Allocation of Profits

After giving effect to the special allocations in Section 5.3, Profits for each Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests.

Section 5.2 Allocation of Losses

After giving effect to the special allocations in Section 5.3, Losses for each Fiscal Year shall be allocated among the Members in proportion to their respective Percentage Interests; provided, however, that Losses shall not be allocated to any Member to the extent such allocation would cause or increase an Adjusted Capital Account Deficit.

Section 5.3 Special Allocations

5.3.1 Minimum Gain Chargeback

If there is a net decrease in Company Minimum Gain during any Fiscal Year, each Member shall be allocated items of income and gain for such year equal to such Member's share of the net decrease in Company Minimum Gain, determined in accordance with Treasury Regulations Section 1.704-2(g).

5.3.2 Member Minimum Gain Chargeback

If there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Fiscal Year, each Member with a share of such Member Minimum Gain shall be allocated items of income and gain equal to such Member's share of the net decrease, determined in accordance with Treasury Regulations Section 1.704-2(i).

5.3.3 Qualified Income Offset

If any Member unexpectedly receives an adjustment, allocation, or Distribution described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate any Adjusted Capital Account Deficit as quickly as possible.

5.3.4 Nonrecourse Deductions

Nonrecourse Deductions for any Fiscal Year shall be allocated among the Members in proportion to their Percentage Interests.

5.3.5 Member Nonrecourse Deductions

Member Nonrecourse Deductions shall be allocated to the Member who bears the economic risk of loss for the Member Nonrecourse Debt to which such deductions are attributable.

5.3.6 Section 754 Adjustments

To the extent an adjustment to the adjusted tax basis of any Company asset under Code Section 734(b) or 743(b) is required to be taken into account in determining Capital Accounts, the amount of such adjustment shall be treated as an item of gain or loss and allocated in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m).

Section 5.4 Tax Allocations

5.4.1 General Rule

Except as otherwise provided in this Section 5.4, each item of income, gain, loss, deduction, and credit for federal and District of Columbia income tax purposes shall be allocated among the Members in the same manner as the corresponding item of Profit or Loss is allocated.

5.4.2 Section 704(c) Allocations

In accordance with Code Section 704(c) and Treasury Regulations thereunder, items of income, gain, loss, and deduction with respect to property contributed to the Company shall be allocated among the Members so as to take into account the variation between the adjusted tax basis and the Gross Asset Value of such property at the time of contribution.

5.4.3 Revaluation Allocations

If the Gross Asset Value of Company property is adjusted pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss, and deduction shall take into account the variation between the adjusted tax basis and Gross Asset Value in the same manner as under Code Section 704(c).

Section 5.5 Allocation Period

If a Member's Percentage Interest changes during a Fiscal Year, Profits, Losses, and other items shall be allocated to such Member based on the varying interests method or such other method as the Members may select that is permitted under Code Section 706 and the Treasury Regulations thereunder.

ARTICLE VI - DISTRIBUTIONS

Section 6.1 Distributions of Distributable Cash

Distributions of Distributable Cash shall be made at such times and in such amounts as determined by:

☐ A Majority Vote of the Members (if Member-Managed); or
☐ The Manager(s) (if Manager-Managed).

Section 6.2 Order of Distributions

Distributions shall be made to the Members in proportion to their respective Percentage Interests, unless otherwise agreed by the Members.

Section 6.3 Tax Distributions

6.3.1 Estimated Tax Distributions

Not later than [fifteen (15)] days before each quarterly estimated tax payment due date, the Company shall distribute to each Member an amount equal to such Member's estimated federal and District of Columbia income tax liability arising from the Company's income for such quarter.

6.3.2 Calculation

Tax Distributions shall be calculated by multiplying the Member's allocable share of the Company's estimated taxable income by the highest combined marginal federal and D.C. individual income tax rate then in effect (currently approximately 37% federal + 10.75% D.C. = 47.75%).

6.3.3 Offset

Tax Distributions shall be treated as advances against future Distributions and shall be offset against amounts otherwise distributable to such Member.

Section 6.4 Limitations on Distributions

6.4.1 Statutory Limitation

No Distribution shall be made if, after giving effect thereto:

(a) The Company would not be able to pay its debts as they become due in the usual course of business; or

(b) The Company's total assets would be less than the sum of its total liabilities plus the amount that would be needed to satisfy the preferential rights of Members with superior rights upon dissolution.

This limitation is consistent with D.C. Code § 29-804.05.

6.4.2 Return of Distributions

If a Member receives a Distribution that violates Section 6.4.1, and the Member knew at the time of the Distribution that it violated such section, the Member shall be liable to the Company for the amount of the Distribution.

Section 6.5 Distributions in Kind

The Company may make Distributions in kind of Company property, provided that such property shall be distributed to all Members entitled to receive such Distribution in proportion to their respective interests therein. Any property distributed in kind shall be valued at its fair market value as determined by the Members.

Section 6.6 Withholding

The Company shall withhold from Distributions any amounts required to be withheld under federal, District of Columbia, or other applicable tax laws. Any amounts so withheld shall be treated as having been distributed to the Member.

ARTICLE VII - MANAGEMENT

Section 7.1 Management Structure

The management of the Company shall be vested as follows (check one):

☐ MEMBER-MANAGED: The Company shall be managed by its Members, and each Member shall have the authority to bind the Company and participate in management in accordance with D.C. Code § 29-804.07.

☐ MANAGER-MANAGED: The Company shall be managed by one or more Managers designated herein or appointed by the Members in accordance with D.C. Code § 29-804.07.

Section 7.2 Member-Managed Provisions

If the Company is Member-Managed:

7.2.1 Authority of Members

Each Member shall have equal rights in the management and conduct of the Company's business, regardless of Percentage Interest, unless otherwise agreed.

7.2.2 Ordinary Business Decisions

Decisions regarding ordinary business matters shall be decided by a Majority Vote of the Members.

7.2.3 Agency Authority

Each Member shall be an agent of the Company for the purpose of its business and may bind the Company by acts carried on in the ordinary course of the Company's business.

Section 7.3 Manager-Managed Provisions

If the Company is Manager-Managed:

7.3.1 Initial Manager(s)

The initial Manager(s) of the Company shall be:

Manager Name	Address	Title
[________________________________]	[________________________________]	[________________________________]
[________________________________]	[________________________________]	[________________________________]

7.3.2 Powers of Manager(s)

The Manager(s) shall have full and exclusive authority, power, and discretion to manage and control the business, affairs, and properties of the Company, including without limitation:

(a) Making all decisions regarding the ordinary business operations;

(b) Negotiating, executing, and performing contracts;

(d) Hiring, supervising, and terminating employees;

(e) Engaging professionals such as attorneys, accountants, and consultants;

(f) Purchasing, leasing, and disposing of property;

(g) Borrowing money and granting security interests (subject to limitations);

(h) Investing Company funds;

(i) Making Distributions (subject to Member approval if required);

(j) Instituting, prosecuting, defending, and settling litigation;

(k) Filing tax returns and making tax elections; and

(l) Taking all other actions necessary or appropriate to accomplish the Company's purposes.

7.3.3 Number and Qualification

The Company shall have [____] Manager(s). A Manager need not be a Member.

7.3.4 Term

Each Manager shall serve until such Manager's death, resignation, removal, or until a successor is appointed.

7.3.5 Resignation

A Manager may resign at any time by giving written notice to the Members. Such resignation shall be effective upon receipt unless a later effective date is specified.

7.3.6 Removal

A Manager may be removed with or without cause by the affirmative vote of Members holding a [Majority/Supermajority] of the Percentage Interests.

7.3.7 Vacancies

Any vacancy in the position of Manager shall be filled by a Person appointed by the affirmative vote of Members holding a [Majority/Supermajority] of the Percentage Interests.

7.3.8 Compensation

The Manager(s) shall be entitled to receive compensation for services rendered to the Company as determined by the Members. The initial compensation shall be:

Manager	Annual Compensation
[________________________________]	$[________________________________]

7.3.9 Multiple Managers

If there is more than one Manager:

(a) Decisions among Managers shall be made by majority vote;

(b) Each Manager shall have equal authority unless otherwise specified; and

Section 7.4 Officers

The Members or Manager(s) may appoint officers of the Company, including a President, Vice President, Secretary, and Treasurer. Officers shall have such authority and duties as determined by the appointing authority. Officers may be removed at any time with or without cause.

Section 7.5 Actions Requiring Member Approval

Notwithstanding any other provision of this Agreement, the following actions shall require the approval of Members holding [Majority/Supermajority/Unanimous] voting power:

(a) Amendment or restatement of this Agreement;

(b) Amendment of the Articles of Organization;

(d) Approval of a Transfer of a Membership Interest;

(e) Merger, conversion, or domestication of the Company;

(f) Sale, lease, exchange, or other disposition of all or substantially all of the Company's assets outside the ordinary course of business;

(g) Dissolution of the Company;

(h) Incurrence of indebtedness exceeding $[________________________________];

(i) Entry into any single transaction exceeding $[________________________________];

(j) Guaranteeing obligations of third parties;

(k) Making capital calls;

(l) Changing the Company's principal business;

(m) Filing for bankruptcy or making an assignment for the benefit of creditors;

(n) Confession of judgment against the Company;

(o) Approval of annual budgets (if required);

(p) Establishment of reserves;

(q) Commencement or settlement of material litigation; and

(r) Any other action that would make it impossible to carry on the ordinary business of the Company.

Section 7.6 Standard of Care and Fiduciary Duties

7.6.1 Duty of Loyalty

Each Member and Manager owes a duty of loyalty to the Company and its Members, which includes:

(a) Accounting to the Company for any property, profit, or benefit derived from Company business or use of Company property;

(b) Refraining from dealing with the Company as or on behalf of an adverse party; and

7.6.2 Duty of Care

Each Member and Manager shall act with the care that a person in a like position would reasonably exercise under similar circumstances and in a manner the Member or Manager reasonably believes to be in the best interests of the Company.

7.6.3 Good Faith and Fair Dealing

Each Member and Manager shall discharge duties and exercise rights under this Agreement consistent with the obligation of good faith and fair dealing.

7.6.4 Modification of Duties

In accordance with D.C. Code § 29-801.09, the duties set forth in this Section 7.6 may not be eliminated but may be modified by this Agreement as permitted by law.

Section 7.7 Reliance on Information

A Member or Manager shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by:

(a) One or more officers or employees of the Company whom the Member or Manager reasonably believes to be reliable and competent;

(b) Legal counsel, accountants, or other persons regarding matters reasonably within their professional competence; or

(c) A committee of which the Member or Manager is not a member if the Member or Manager reasonably believes the committee merits confidence.

Section 7.8 Records and Information

7.8.1 Records to Be Maintained

The Company shall maintain at its principal office:

(a) A current list of Members with addresses and Percentage Interests;

(b) Copies of federal, state, and local income tax returns for the three (3) most recent Fiscal Years;

(d) Copies of the Articles of Organization and all amendments;

(e) Financial statements for the three (3) most recent Fiscal Years;

(f) Minutes of Member meetings and records of actions taken without meetings; and

(g) Records of all contributions and Distributions.

7.8.2 Member Access

Each Member shall have the right to obtain from the Company, upon reasonable written request:

(a) True and complete copies of the records listed in Section 7.8.1;

(b) Promptly after becoming available, copies of the Company's federal, state, and local income tax returns for each Fiscal Year; and

ARTICLE VIII - VOTING

Section 8.1 Voting Rights

Each Member shall be entitled to vote on matters submitted to the Members in proportion to such Member's Percentage Interest as of the record date.

Section 8.2 Voting Thresholds

Unless otherwise specified in this Agreement or required by the Act:

(a) Ordinary Matters: Majority Vote
(b) Admission of New Members: [Majority/Supermajority/Unanimous] Vote
(c) Amendment of Agreement: [Majority/Supermajority/Unanimous] Vote
(d) Amendment of Articles: [Majority/Supermajority/Unanimous] Vote
(e) Dissolution: [Majority/Supermajority/Unanimous] Vote
(f) Merger or Conversion: [Majority/Supermajority/Unanimous] Vote
(g) Sale of Substantially All Assets: [Majority/Supermajority/Unanimous] Vote

Section 8.3 Record Date

The record date for determining Members entitled to notice of or to vote at any meeting shall be the close of business on the day before notice is given, unless otherwise specified.

Section 8.4 Manner of Voting

Members may vote:

(a) In person at a meeting;
(b) By proxy;
(c) By written consent without a meeting; or
(d) By electronic transmission if authorized.

ARTICLE IX - TRANSFER OF MEMBERSHIP INTERESTS

Section 9.1 General Restriction

No Member shall Transfer all or any portion of such Member's Membership Interest except in compliance with this Article IX.

Section 9.2 Permitted Transfers

A Member may Transfer all or any portion of such Member's Membership Interest without the consent of the other Members to:

(a) A revocable trust of which the Member is the grantor and a beneficiary;

(b) An Affiliate of the Member;

(d) Another Member; or

(e) A transferee approved by [Majority/Unanimous] vote of the non-transferring Members.

Section 9.3 Right of First Refusal

9.3.1 Offer Notice

Before Transferring any Membership Interest to a third party (other than a Permitted Transfer), the transferring Member (the "Offering Member") shall first offer such interest to the Company and the other Members by delivering written notice (the "Offer Notice") specifying:

(a) The proposed transferee;
(b) The portion of the Membership Interest to be Transferred;
(c) The purchase price and other material terms; and
(d) Evidence that the proposed transferee has the financial ability to complete the purchase.

9.3.2 Company's Right

The Company shall have [____] days from receipt of the Offer Notice to elect to purchase all (but not less than all) of the offered interest at the same price and on the same terms.

9.3.3 Members' Right

If the Company does not elect to purchase, each non-offering Member shall have [____] days from the expiration of the Company's option to elect to purchase a pro rata portion (based on Percentage Interests) of the offered interest.

9.3.4 Over-Allotment

If any Member does not exercise such Member's full right, the other Members may purchase the remaining interest pro rata.

9.3.5 Closing

The closing of any purchase under this Section 9.3 shall occur within [____] days after the final election.

9.3.6 Third-Party Sale

If the Company and Members do not elect to purchase all of the offered interest, the Offering Member may Transfer to the proposed third-party transferee at a price not less than, and on terms no more favorable than, those stated in the Offer Notice, provided that such Transfer is completed within [____] days.

Section 9.4 Conditions to Transfer

Any Transfer (other than a Transfer pursuant to the right of first refusal) shall be subject to the following conditions:

(a) The transferor and transferee execute and deliver such documents as the Members may require;

(b) The transferee agrees in writing to be bound by this Agreement;

(d) The Transfer will not cause the Company to be treated as a publicly traded partnership;

(e) The Transfer will not cause the termination of the Company under Code Section 708; and

(f) The transferee reimburses the Company for reasonable expenses incurred in connection with the Transfer.

Section 9.5 Assignees

A Person who acquires an Economic Interest but is not admitted as a Substitute Member shall be an Assignee and shall be entitled only to receive Distributions and allocations attributable to the assigned interest. An Assignee shall have no right to vote, inspect records, or participate in management.

Section 9.6 Admission of Substitute Members

An Assignee may be admitted as a Substitute Member only upon:

(a) Approval by [Majority/Unanimous] vote of the Members;

(b) Execution of this Agreement or a counterpart signature page;

(d) Compliance with any other requirements established by the Members.

Section 9.7 Involuntary Transfers

9.7.1 Events

An involuntary Transfer shall occur upon:

(a) Death of a Member;
(b) Bankruptcy of a Member;
(c) Dissolution of an entity Member;
(d) Divorce of a Member; or
(e) Charging order against a Member's interest.

9.7.2 Purchase Option

Upon an involuntary Transfer, the Company and/or the remaining Members shall have the option to purchase the affected interest at Fair Market Value within [____] days after receiving notice of the event.

Section 9.8 Fair Market Value Determination

"Fair Market Value" of a Membership Interest shall be determined as follows:

(a) By mutual agreement of the parties; or

(b) If the parties cannot agree within [____] days, by an independent appraiser selected by mutual agreement or, failing agreement, by the American Arbitration Association.

ARTICLE X - WITHDRAWAL AND DISSOCIATION

Section 10.1 Voluntary Withdrawal

☐ WITHDRAWAL PROHIBITED: No Member may voluntarily withdraw from the Company prior to dissolution.

☐ WITHDRAWAL PERMITTED: A Member may withdraw upon [____] days' prior written notice to the Company and the other Members.

Section 10.2 Events of Dissociation

A Member shall be dissociated from the Company upon the occurrence of any of the following events:

(a) The Member's voluntary withdrawal (if permitted);

(b) An event agreed to in writing by all Members;

(c) The Member's expulsion by unanimous vote of the other Members for:
(i) Material breach of this Agreement;
(ii) Conduct making it not reasonably practicable to carry on business with the Member; or
(iii) Willful or persistent misconduct;

(d) The Member's death or incapacity;

(e) The Member's bankruptcy;

(f) A court order of dissociation;

(g) The termination of an entity Member; or

(h) As otherwise provided by the Act.

Section 10.3 Effect of Dissociation

Upon dissociation, the dissociated Member:

(a) Loses the right to participate in management;

(b) Loses voting rights;

(d) Ceases to be a Member and becomes an Assignee; and

(e) Is entitled only to the rights of an Assignee.

Section 10.4 Purchase of Dissociated Member's Interest

The Company or the remaining Members may, but are not obligated to, purchase the dissociated Member's interest at Fair Market Value within [____] days after dissociation.

ARTICLE XI - DISSOLUTION AND WINDING UP

Section 11.1 Events Causing Dissolution

The Company shall be dissolved upon the earliest of:

(a) The consent of Members holding [Majority/Supermajority/Unanimous] Percentage Interests;

(b) The occurrence of an event specified in the Articles of Organization;

(d) Administrative dissolution by DLCP and failure to reinstate; or

(e) Any other event causing dissolution under the Act.

Section 11.2 No Dissolution Upon Dissociation

The dissociation of a Member shall not cause dissolution of the Company unless it results in there being no remaining Members. If there are no remaining Members, the Company shall be wound up by the last Person to be a Member or such Person's legal representative.

Section 11.3 Winding Up

Upon dissolution, the Company shall be wound up, and its affairs shall be conducted by the Managers (or if none, the Members) (the "Liquidating Trustee"), who shall:

(a) Collect all Company assets;

(b) Pay or make reasonable provision for all known debts and liabilities;

(d) Distribute remaining assets to Members in accordance with Section 11.4; and

(e) File Articles of Dissolution with DLCP.

Section 11.4 Distribution of Assets on Dissolution

The assets of the Company shall be distributed in the following order:

(a) First: To creditors, including Members who are creditors, to the extent permitted by law, in satisfaction of the Company's liabilities;

(b) Second: To set up reserves for contingent liabilities as determined by the Liquidating Trustee;

(c) Third: To Members in proportion to their positive Capital Account balances, after all adjustments have been made for the Fiscal Year in which the liquidation occurs.

Section 11.5 Deficit Capital Accounts

No Member shall be obligated to restore a deficit Capital Account upon liquidation, except as required by Treasury Regulations or this Agreement.

Section 11.6 Articles of Dissolution

Upon completion of the winding up, the Liquidating Trustee shall file Articles of Dissolution with DLCP and any other jurisdictions where the Company is qualified to do business.

Section 11.7 Continuation of Business

Notwithstanding dissolution, the Company may continue to exist for the purpose of winding up its affairs.

ARTICLE XII - INDEMNIFICATION

Section 12.1 Indemnification of Members and Managers

The Company shall indemnify, defend, and hold harmless each Member, Manager, officer, employee, and agent of the Company (each, an "Indemnified Party") from and against any and all claims, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys' fees) arising out of or related to:

(a) Any act or omission of such Indemnified Party in connection with the business of the Company; and

(b) The fact that such person is or was a Member, Manager, officer, employee, or agent of the Company;

provided that such Indemnified Party acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to criminal proceedings, had no reasonable cause to believe such conduct was unlawful.

Section 12.2 Limitation

No indemnification shall be provided under this Article XII:

(a) For acts or omissions constituting fraud, willful misconduct, or gross negligence;

(b) For acts or omissions constituting a material breach of this Agreement;

(d) To the extent prohibited by law.

Section 12.3 Advancement of Expenses

The Company shall advance to any Indemnified Party expenses (including attorneys' fees) incurred in defending any proceeding, provided that such Indemnified Party undertakes in writing to repay such amounts if it is ultimately determined that such person is not entitled to indemnification.

Section 12.4 Insurance

The Company may purchase and maintain insurance on behalf of any Indemnified Party against any liability asserted against such person, whether or not the Company would have the power to indemnify such person against such liability.

Section 12.5 Non-Exclusivity

The indemnification provided herein shall not be deemed exclusive of any other rights to which an Indemnified Party may be entitled under any agreement, vote of Members, or otherwise.

Section 12.6 Survival

The indemnification and advancement rights provided herein shall survive the dissolution of the Company and the termination of any Indemnified Party's relationship with the Company.

ARTICLE XIII - TAX MATTERS

Section 13.1 Tax Classification

The Company shall be classified for federal income tax purposes as (check one):

☐ Partnership (if two or more Members)
☐ Disregarded Entity (if single Member)
☐ S Corporation (by election)
☐ C Corporation (by election)

Section 13.2 Partnership Representative

13.2.1 Designation

The "Partnership Representative" for purposes of the Bipartisan Budget Act of 2015 and any similar state provisions shall be:

Name: [________________________________]
Address: [________________________________]

13.2.2 Authority

The Partnership Representative shall have the sole authority to act on behalf of the Company in any administrative or judicial proceeding with the IRS or any state or local tax authority, including the authority to:

(a) Extend the statute of limitations;
(b) Settle tax disputes;
(c) File administrative adjustments; and
(d) Make elections under Code Section 6226.

13.2.3 Push-Out Election

Upon request by any Member, the Partnership Representative shall use best efforts to make a "push-out" election under Code Section 6226 to allocate any imputed underpayment to the affected Members.

13.2.4 Reimbursement

If the Company pays any taxes, penalties, or interest attributable to a Member's allocations, such Member shall indemnify and reimburse the Company for such amounts.

Section 13.3 Tax Returns

The Company shall prepare and file all required federal, District of Columbia, and other state and local tax returns. The Company shall provide each Member with a Schedule K-1 and any other information necessary for the Member to prepare such Member's tax returns.

Section 13.4 Tax Elections

The Partnership Representative, with the consent of a Majority in Interest of the Members, may make the following elections:

(a) Election under Code Section 754 to adjust the basis of Company assets;

(b) Election of accounting methods;

(d) Election to amortize organizational expenses under Code Section 709; and

(e) Any other tax election that the Partnership Representative determines is in the best interests of the Company.

Section 13.5 District of Columbia Taxes

13.5.1 Franchise Tax

The Company shall pay the District of Columbia Unincorporated Business Franchise Tax imposed under D.C. Code § 47-1808.03 on LLCs engaged in trade or business in the District of Columbia. The tax rate is currently 9.975% of taxable income.

13.5.2 Filing Requirements

The Company shall file Form D-20 with the D.C. Office of Tax and Revenue and pay estimated taxes quarterly as required.

13.5.3 Withholding

The Company shall withhold and remit D.C. income taxes on allocations to Members who are nonresidents of the District of Columbia as required by law.

Section 13.6 Fiscal Year

The Fiscal Year of the Company shall be the calendar year, unless otherwise required by the Code or selected by the Members.

ARTICLE XIV - AMENDMENTS

Section 14.1 Amendment Procedure

This Agreement may be amended only by a written instrument signed by Members holding [Majority/Supermajority/Unanimous] Percentage Interests.

Section 14.2 Amendments Requiring Unanimity

Notwithstanding Section 14.1, the following amendments shall require the consent of all Members:

(a) Any amendment that would alter a Member's Percentage Interest without such Member's consent;

(b) Any amendment that would increase a Member's obligation to make Capital Contributions without such Member's consent;

(d) Any amendment to this Section 14.2.

Section 14.3 Amendment to Exhibit A

Exhibit A shall be amended from time to time to reflect:

(a) Admission of additional Members;
(b) Withdrawal or dissociation of Members;
(c) Transfers of Membership Interests; and
(d) Changes in Capital Contributions or Percentage Interests.

Such amendments may be made by the Manager(s) or a Majority in Interest of the Members without further consent.

ARTICLE XV - MISCELLANEOUS

Section 15.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the District of Columbia, without regard to conflict of laws principles.

Section 15.2 Dispute Resolution

☐ ARBITRATION: Any dispute arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The arbitration shall be held in Washington, D.C.

☐ LITIGATION: Any dispute arising out of or relating to this Agreement shall be resolved in the Superior Court of the District of Columbia or the United States District Court for the District of Columbia.

Section 15.3 Jury Waiver

☐ WAIVER ELECTED: EACH PARTY HEREBY IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

☐ WAIVER NOT ELECTED: The parties retain the right to a jury trial.

Section 15.4 Entire Agreement

This Agreement constitutes the entire agreement among the Members with respect to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions.

Section 15.5 Severability

If any provision of this Agreement is held invalid or unenforceable, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions shall continue in full force and effect.

Section 15.6 Binding Effect

This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, and permitted assigns.

Section 15.7 Notices

All notices under this Agreement shall be in writing and shall be deemed given when:

(a) Delivered personally;
(b) Sent by certified mail, return receipt requested;
(c) Sent by overnight courier; or
(d) Sent by email with confirmation of receipt.

Notices shall be sent to the addresses set forth on Exhibit A or such other address as a party may designate.

Section 15.8 Waiver

No waiver of any provision of this Agreement shall be effective unless in writing and signed by the waiving party. No waiver shall constitute a waiver of any other provision or a continuing waiver.

Section 15.9 Counterparts

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument.

Section 15.10 Further Assurances

Each Member agrees to execute and deliver such further documents and take such further actions as may be reasonably necessary to carry out the purposes of this Agreement.

Section 15.11 Construction

The headings in this Agreement are for convenience only and shall not affect interpretation. The word "including" means "including without limitation."

Section 15.12 No Third-Party Beneficiaries

This Agreement is for the sole benefit of the Members and the Company and shall not confer any rights upon any third party.

Section 15.13 Legal Representation

Each Member acknowledges that:

(a) Such Member has had the opportunity to consult with independent legal counsel;

(b) Such Member has read and understands this Agreement; and

Section 15.14 Attorneys' Fees

In any action to enforce this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs from the non-prevailing party.

EXECUTION

IN WITNESS WHEREOF, the undersigned have executed this Operating Agreement as of the Effective Date first written above.

COMPANY

[________________________________], LLC

By: [________________________________]

Name: [________________________________]

Title: [________________________________]

Date: [__/__/____]

MEMBERS

Member 1:

Signature: [________________________________]

Printed Name: [________________________________]

Address: [________________________________]

[________________________________]

Date: [__/__/____]

Member 2:

Signature: [________________________________]

Printed Name: [________________________________]

Address: [________________________________]

[________________________________]

Date: [__/__/____]

Member 3:

Signature: [________________________________]

Printed Name: [________________________________]

Address: [________________________________]

[________________________________]

Date: [__/__/____]

(Add additional signature blocks as needed)

EXHIBIT A - MEMBERS, CAPITAL CONTRIBUTIONS, AND PERCENTAGE INTERESTS

Member Name	Address	Initial Capital Contribution	Percentage Interest
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%
[________________________________]	[________________________________]	$[________________________________]	[____]%

TOTAL: | | $[________________________________] | 100% |

EXHIBIT B - INITIAL MANAGERS (If Manager-Managed)

Manager Name	Address	Appointed Date	Compensation
[________________________________]	[________________________________]	[__/__/____]	$[________________________________]
[________________________________]	[________________________________]	[__/__/____]	$[________________________________]

EXHIBIT C - INITIAL OFFICERS (If Any)

Officer Name	Title	Appointed Date
[________________________________]	President	[__/__/____]
[________________________________]	Vice President	[__/__/____]
[________________________________]	Secretary	[__/__/____]
[________________________________]	Treasurer	[__/__/____]

EXHIBIT D - ACTIONS REQUIRING MEMBER APPROVAL

The following actions require approval by Members holding the specified voting threshold:

Action	Required Vote
Amend Operating Agreement	[Majority/Supermajority/Unanimous]
Amend Articles of Organization	[Majority/Supermajority/Unanimous]
Admit New Members	[Majority/Supermajority/Unanimous]
Approve Transfers	[Majority/Supermajority/Unanimous]
Merger, Conversion, or Domestication	[Majority/Supermajority/Unanimous]
Sale of Substantially All Assets	[Majority/Supermajority/Unanimous]
Dissolution	[Majority/Supermajority/Unanimous]
Incur Debt Over $[________________________________]	[Majority/Supermajority/Unanimous]
Single Transaction Over $[________________________________]	[Majority/Supermajority/Unanimous]
Guarantee Third-Party Obligations	[Majority/Supermajority/Unanimous]
Capital Calls	[Majority/Supermajority/Unanimous]
Change Principal Business	[Majority/Supermajority/Unanimous]
File Bankruptcy	[Unanimous]
Confess Judgment	[Unanimous]

Governed by the District of Columbia Limited Liability Company Act, D.C. Code Sections 29-801.01 to 29-810.01. IMPORTANT: D.C. adopted the Revised Uniform Limited Liability Company Act (RULLCA) effective January 1, 2012. Biennial reports are required with DLCP. D.C. imposes an Unincorporated Business Franchise Tax (currently 9.975%) on LLCs with D.C.-source income.

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Last updated: February 2026