Multi-Member LLC Operating Agreement — Alaska

Multi-Member LLC Operating Agreement (Alaska)

This Multi-Member Limited Liability Company Operating Agreement (this "Agreement") is entered into and made effective as of [__/__/____] (the "Effective Date") by and among the persons listed on Schedule A (each, a "Member" and collectively, the "Members") and [____], an Alaska limited liability company (the "Company").

Quick-Reference Summary

Article I — Formation

1.1 Formation. The Company was organized as an Alaska limited liability company on [__/__/____] by delivery of conforming Articles of Organization to the Alaska Department of Commerce, Community, and Economic Development for filing under AS 10.50.070, .075, and .080. The Members adopt and ratify that filing.

1.2 Name. The name of the Company is "[____]," which complies with AS 10.50.020, including a required designation such as "Limited Liability Company," "LLC," or "L.L.C."

1.3 Principal Office. The principal office of the Company is located at [____].

1.4 Registered Agent and Registered Office. Pursuant to AS 10.50.055, the Company's registered agent is [____], whose registered office address is [____].

1.5 Duration. The Company has perpetual duration unless dissolved as provided in Article XIV or under AS 10.50.400–10.50.440.

1.6 Operating Agreement Authority. This written Agreement is the "operating agreement" within the meaning of AS 10.50.095 and AS 10.50.990(17). It governs the Members' and Managers' internal arrangements to the extent consistent with the Act and any restriction in the Articles of Organization.

Article II — Purpose and Powers

2.1 Purpose. The Company is formed to engage in [____] and any other lawful business or activity for which a limited liability company may be organized under AS 10.50.010.

2.2 Powers. The Company has all powers granted to limited liability companies under the Act.

2.3 No Unlawful Activity. Nothing in this Agreement authorizes any business prohibited by Alaska or federal law. If an activity is subject to another provision of law, the Company shall also comply with that law (AS 10.50.015).

Article III — Members and Membership Interests

3.1 Initial Members; Percentage Interests. The names, addresses, capital contributions, and Percentage Interests of the initial Members are set forth on Schedule A.

3.2 Limited Liability Company Interest. Pursuant to AS 10.50.370, a Member's limited liability company interest is personal property. Pursuant to AS 10.50.375(b), an assignment transfers only the right to receive distributions unless the assignee is admitted as a member.

3.3 Limited Liability. Under AS 10.50.265, a Member is not personally liable to a third party for a Company liability solely by reason of being a Member. This does not excuse a Member's own enforceable contribution obligation or a separate guaranty.

3.4 Admission of Additional Members. A new Member may be admitted only with the consent of all existing Members and upon execution of a joinder.

3.5 Optional Interest Certificates. ☐ The Company may issue certificates evidencing membership interests under AS 10.50.800; the records custodian shall maintain a certificate register, and a certificate transfer remains subject to Articles X and XI. ☐ No certificates will be issued.

Article IV — Capital Contributions and Capital Accounts

4.1 Initial Capital Contributions. Each Member shall contribute the cash, property, or services described on signed Schedule A by that Member's stated due date.

4.2 Capital Accounts. The Company shall maintain a separate contribution and distribution ledger for each Member. Tax counsel shall determine any additional capital-account method needed for the Company's federal tax treatment.

4.3 No Interest. No Member is entitled to interest on capital contributions.

4.4 No Withdrawal of Capital. No Member may withdraw capital except as provided in this Agreement or by unanimous written consent.

4.5 Liability for Promised Contributions. A promised contribution is enforceable under AS 10.50.280 only if stated in a writing signed by that Member. Each Member shall sign Schedule A to evidence the contribution shown there; the statutory cash-equivalent remedy and any lawful agreed remedy apply to an unfulfilled enforceable promise.

Article V — Capital Calls

5.1 No Mandatory Capital Calls. No Member is obligated to make additional contributions except as provided in Section 4.5 or by separate unanimous written agreement.

5.2 Voluntary Capital Calls. Written notice shall specify the aggregate amount, each Member's pro-rata share by Percentage Interest, due date (not less than [____] days), and consequences of nonpayment.

5.3 Remedies for Failure to Fund. For an enforceable contribution promise under Section 4.5, the Company may seek the remedy in AS 10.50.280(c). An additional contractual remedy applies only if all Members specifically select and complete it here before signing: [NONE / demand loan at ____% per annum / dilution formula attached as Exhibit ____ / purchase formula attached as Exhibit ____]. No dilution, forced sale, or interest rate is implied by leaving a blank.

Article VI — Allocations and Distributions

6.1 Allocations. As between the Members, economic profits and losses shall be allocated in proportion to Percentage Interests, subject to any tax allocations or adjustments approved in a written amendment after tax-counsel review.

6.2 Distributions. Interim distributions of cash and other property shall be made to the Members in proportion to their Percentage Interests at the times and amounts determined by the Governance Body, subject to AS 10.50.295 and .305.

6.3 Tax Distributions (optional). ☐ If tax counsel confirms an applicable pass-through tax treatment and the Members select a rate of [____]%, the Governance Body shall consider distributions toward tax liabilities, subject to the same distribution restrictions in Section 6.4. ☐ No tax-distribution obligation is created.

6.4 Limitations on Distributions. Consistent with AS 10.50.305, no distribution shall be made if, after giving effect to it, (a) the Company would be unable to pay its debts as they become due, or (b) the Company's total assets would be less than its total liabilities (plus, unless otherwise provided in this Agreement, amounts needed to satisfy superior preferential dissolution rights of other Members).

6.5 Liquidating Distributions. Upon winding up under Article XIV, assets shall be applied under AS 10.50.425: first to creditors or adequate provision for them; then to distribution liabilities to Members or former Members unless this Agreement validly provides otherwise; then to return contributions; and then according to the Members' pre-dissolution distribution rights, which are their Percentage Interests under Section 6.2.

6.6 Federal Tax Classification. The Members shall obtain tax advice on the Company's federal classification and any election before filing a return or making an election; this Agreement does not make a tax election.

6.7 Distributions in Kind and Withholding. A noncash distribution requires the recipient Member's written consent and a written valuation approved by all Members. An amount the Company is legally required to withhold from a Member's distribution shall be recorded against that Member's distribution; tax counsel shall determine the applicable withholding duty.

Article VII — Management

7.1 Management Structure. The Company is (check one):

☐ Member-managed (default under AS 10.50.110). Decisions are made by a Majority by Percentage Interest (Section 8.1), except for actions reserved to higher consent in Sections 7.3 and 8.2.

☐ Manager-managed. The Articles of Organization designate the Company as manager-managed. The initial Managers are [names or "one Manager": ____]. Non-Manager Members have no management authority solely by virtue of membership.

For this Agreement, "Governance Body" means the Members in a member-managed Company and the Managers in a manager-managed Company. In a manager-managed Company with more than one Manager, ordinary management decisions require the consent of more than one-half of the Managers unless this Agreement requires a higher Member approval under Section 7.3 or 8.2.

7.2 Authority. Subject to Sections 7.3 and 8.2, the Governance Body may:

(a) execute contracts, deeds, leases, notes, and other instruments;
(b) open, maintain, and close financial accounts;
(c) hire, supervise, and terminate employees, contractors, and agents;
(d) acquire, hold, encumber, and dispose of property;
(e) borrow money and incur indebtedness; and
(f) institute, defend, settle, and compromise legal actions.

7.3 Other Major Decisions. Apart from the matters reserved to all Members in Section 8.2, the following "Major Decisions" require written consent of Members holding at least [____]% of the Percentage Interests:

(a) approving any merger, conversion, or sale of all or substantially all of the Company's assets, subject to any additional statutory approval requirement;
(b) authorizing an act outside the ordinary course of business;
(c) incurring indebtedness in excess of $[____];
(d) changing federal tax classification or making material tax elections; or
(e) appointing or removing a Manager.

7.4 Compensation. Reasonable compensation may be paid to Managers and Managing Members as approved by disinterested Members.

7.5 Removal. A Manager may be removed with or without cause by Members holding at least [____]% of the Percentage Interests.

7.6 Officers and Delegation. The Governance Body may appoint officers, record each officer's authority and term in a written resolution, and revoke that authority by written resolution. An officer cannot approve a matter reserved to Members by Section 8.2 or exceed a limit in Section 7.3.

Article VIII — Voting Rights and Member Meetings

8.1 Override to Percentage-Interest Voting. Notwithstanding the default rule of AS 10.50.150(a) (consent of more than one-half of all Members, counted per capita, unless otherwise provided in an operating agreement), the Members agree that all Member votes shall be cast in proportion to Percentage Interests. "Majority" means more than 50% of all Percentage Interests; a higher threshold means the percentage stated in the applicable section.

8.2 Matters Requiring Unanimous Member Consent. The following matters require written consent of all Members under this Agreement:

(a) amending the Articles of Organization or this Agreement;
(b) admitting a new Member;
(c) consenting to dissolve the Company; and
(d) any other matter for which the Act or this Agreement requires unanimous consent.

8.3 Annual Meeting. An annual meeting of the Members shall be held on [____] of each year.

8.4 Special Meetings. A special meeting may be called by any Manager or Members holding at least [____]% of the Percentage Interests, on not less than [____] days' written notice.

8.5 Action Without Meeting. An action may be taken without a meeting by written consent signed by Members holding the approval percentage required by this Agreement, including all Members for Section 8.2 matters.

8.6 Quorum. Members holding at least [____]% of the Percentage Interests constitute a quorum.

8.7 Remote Participation. The Members may attend a meeting by a method allowing all participants to hear and respond to one another, if the meeting notice states the method.

8.8 Company Records. The Company shall keep the member and manager lists, formation documents, effective and former operating agreements, contribution records, and the recent tax and financial records described in AS 10.50.860. The records custodian is [____], and the main office where they are kept is [____].

8.9 Inspection and Information. A Member may make a written demand stating a reasonably particular proper purpose to inspect records directly connected to that purpose at the registered or principal office under AS 10.50.870. The Governance Body shall also provide the information required by AS 10.50.880. Delivery contact and method: [____]. This Agreement does not waive those statutory rights.

Article IX — Fiduciary Duties and Standards of Conduct

9.1 Standards. Each Member of a member-managed Company and each Manager of a manager-managed Company shall discharge the Member's or Manager's duties 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.

9.2 Conflicts and Outside Activities. The following provisions govern only to the extent consistent with the statutory duties of a Manager or managing Member:

(a) Outside Activities. A Member who is neither a Manager nor a managing Member may engage in another business, subject to the operating agreement and applicable law. A Manager or managing Member shall disclose a potential Company opportunity or competing activity for disinterested Member review before acting on it.
(b) Interested Transactions. A contract involving a Manager or managing Member with a material financial interest must be disclosed and approved in accordance with AS 10.50.140; the interested person does not vote where that section excludes the vote.
(c) Reliance. A Manager or managing Member may rely on information within the limits stated in AS 10.50.135, including that section's rule against reliance when contrary facts are known.

9.3 Duties Preserved. This Agreement does not waive the good-faith, best-interest, and ordinary-prudence management standard stated in AS 10.50.135.

9.4 Indemnification. The Company shall provide the indemnification required after a successful defense under AS 10.50.148(c). Other indemnification for a Manager, managing Member, employee, or agent requires the standards and Member determination in AS 10.50.148(a), (b), and (d). Any advance of defense expenses must meet AS 10.50.148(e), including the required written undertaking. Membership alone does not create a statutory indemnification right.

Article X — Transfer Restrictions, ROFR, Tag-Along, Drag-Along

10.1 General Transfer Restriction. No Member may sell, assign, pledge, encumber, or otherwise transfer all or any part of the Member's interest, except in accordance with this Article. An assignee acquires only the rights of an assignee under AS 10.50.375 and not the rights of a Member, unless admitted under Section 3.4.

10.2 Permitted Assignments. A Member may assign the economic interest, without other Member consent, to (a) a revocable living trust of which the Member is settlor, (b) the Member's spouse, descendants, or a trust for their benefit, or (c) an entity wholly owned by the Member. The recipient remains an assignee only unless separately admitted under Section 3.4; a joinder to the transfer restrictions does not itself confer membership.

10.3 Right of First Refusal (ROFR). A Selling Member who receives a bona fide third-party offer shall deliver a ROFR Notice to the Company and other Members. The Company has [____] days to elect to purchase; non-selling Members then have [____] additional days to elect pro rata.

10.4 Tag-Along. If Members holding more than 50% of the Percentage Interests propose to sell to a third party, the other Members may tag along pro rata within [____] days on the same terms.

10.5 Drag-Along. If Members holding at least [____]% of the Percentage Interests approve a sale of all membership interests or substantially all of the Company's assets to a bona fide third party, the remaining Members shall sell on the same terms.

10.6 Optional Spousal Acknowledgment. If counsel determines a spouse's acknowledgment is appropriate for a particular Member's interest, use Schedule B. This clause does not represent that every married Member must obtain spousal consent.

Article XI — Buy-Sell Provisions

11.1 Triggering Events. Subject to applicable law and any required court process, a "Triggering Event" for the purchase option in Section 11.2 includes:

(a) death;
(b) Permanent Disability (Section 11.6);
(c) a bankruptcy or assignment for the benefit of creditors, only to the extent a purchase option is enforceable in that circumstance;
(d) divorce affecting the membership interest;
(e) attempted transfer in violation of Article X;
(f) resignation of a Member under AS 10.50.185; or
(g) voluntary withdrawal.

11.2 Company First Right; Other Members Second. Upon a Triggering Event, the Company has the option for [____] days to purchase the affected Member's interest; any unexercised portion is offered to the non-affected Members pro rata for [____] additional days.

11.3 Purchase Price. ☐ Fair market value (Section 11.5); ☐ book value; ☐ [____ × trailing-12-month EBITDA] less debt; or ☐ most-recent value agreed at the annual meeting.

11.4 Payment Terms. [____]% in cash at closing; balance by [____]-year promissory note at [____]% per annum.

11.5 Appraisal Procedure. Each side selects an appraiser; if values differ by 10% or less, the average controls; otherwise the two appraisers select a third whose appraisal controls.

11.6 Permanent Disability Defined. "Permanent Disability" means a Member's inability, by reason of physical or mental impairment, to perform customary services for [____] consecutive days or [____] days in any 12-month period, as determined by a physician selected by the Company.

Article XII — Charging Order (AS 10.50.380)

12.1 Exclusive Remedy for the Interest. Under AS 10.50.380(c), the charging order is the exclusive remedy by which a judgment creditor of a Member or a Member's assignee may satisfy a judgment out of the judgment debtor's Company interest. For that purpose the statute bars foreclosure of the interest and the directions, accounts, and inquiries described there; it does not purport to erase a creditor's unrelated remedies against other property.

12.2 Limited Effect of Charging Order. Under AS 10.50.380(a)–(b), a charging order charges the Member's interest with payment of the unsatisfied judgment, and the judgment creditor has only the rights of an assignee of the Member's interest.

12.3 Single-Member and Multi-Member. Under AS 10.50.380(e), this section applies to limited liability companies with only one member as well as to those with more than one member.

12.4 Exemptions Preserved. Under AS 10.50.380(d), this section does not deprive a Member of the benefit of any exemption applicable to the Member's membership interest.

12.5 No Information Rights; No Dissolution. A charging-order holder has no inspection or information rights and a charging order is not a dissolution event.

Article XIII — Deadlock and Dispute Resolution

13.1 Deadlock Defined. A "Deadlock" exists if (a) the Members or Managers fail to reach the required vote on a Major Decision for [____] consecutive days, or (b) any Member meeting fails to achieve a quorum twice in succession.

13.2 Mediation. For an ordinary internal dispute, the Members will seek one good-faith mediation session with [JAMS / AAA / an agreed Alaska mediator]. This step does not delay an urgent request for court protection or a Member's application under AS 10.50.405.

13.3 Buy-Sell Election (Optional). If Deadlock continues for [____] days after mediation, any Member may deliver an Offer Notice specifying a price per 1% Percentage Interest. The receiving Members must elect within [____] days to either sell to the Initiating Member or buy out the Initiating Member at the stated price.

13.4 Judicial Dissolution. A Member may petition the superior court for judicial dissolution under AS 10.50.405 on the ground that it is impossible for the Company to carry on its purposes.

13.5 Governing Law. This Agreement is governed by Alaska law without regard to conflict-of-laws principles.

13.6 Court Proceedings. A party seeking court relief shall file in a court with jurisdiction and venue under applicable law; the parties may identify a preferred Alaska judicial district here: [____].

13.7 Post-Dispute Agreement. After a dispute arises, the parties may separately agree to arbitration on terms reviewed for that dispute.

Article XIV — Dissolution and Winding Up

14.1 Events Causing Dissolution. The Company is dissolved on the first to occur of:

(a) an event specified in this Agreement;
(b) written consent of all Members under AS 10.50.400(2);
(c) entry of a decree of judicial dissolution under AS 10.50.405; or
(d) an administrative dissolution under the Act, if applicable.

14.2 Winding Up. Upon dissolution, the authorized Members or Managers shall wind up under AS 10.50.410 and apply assets in the order of AS 10.50.425 and Section 6.5, making adequate provision for creditor claims before Member distributions.

14.3 Articles of Dissolution. After dissolution, the Company may file Articles of Dissolution under AS 10.50.430; counsel should confirm the filing and claims-notice sequence for the Company's facts.

14.4 Claims Review. Before closing the winding up, the Governance Body shall identify known claimants, any contingent claims, creditor reserves, and whether the notice procedures in AS 10.50.435 and .440 are appropriate. Claims contact and mailing address: [____].

Article XV — Alaska-Specific Provisions

15.1 Reports and Licensing. The Company shall file its biennial reports under AS 10.50.750 and .760, including the first report required within six months after original organization when the department sends the form under AS 10.50.760(d). The Members shall review with counsel which business licenses its activities require.

15.2 Tax Review. Tax counsel shall review Alaska and federal tax treatment, filing duties, and the consequences of any election for this Company's facts.

15.3 Strong Charging-Order Protection. The Members acknowledge that Alaska affords charging-order-only protection with no foreclosure remedy under AS 10.50.380(c), applicable to both single- and multi-member LLCs.

15.4 Tax Contact. The Members designate [____] to coordinate tax advice and filings. Tax counsel shall determine whether a federal partnership representative is required and document any appointment separately.

Article XVI — General Provisions

16.1 Notices. All notices shall be in writing and delivered by hand, certified mail, overnight courier, or email (with confirmation) to the addresses on Schedule A.

16.2 Amendments. This Agreement may be amended only by a writing signed by all Members.

16.3 Entire Agreement. This Agreement, together with the Articles of Organization and the schedules and exhibits, constitutes the entire agreement among the Members and supersedes all prior agreements, written or oral.

16.4 Severability. If any provision is held invalid or unenforceable, it shall be limited or construed so as to be valid; remaining provisions remain in full force.

16.5 Counterparts. The Members may sign counterpart copies. If electronic signatures are used, counsel shall confirm the method satisfies applicable law for this Agreement and any related filing.

16.6 No Third-Party Beneficiaries. Except for indemnified persons under Section 9.4, this Agreement creates no rights in any person other than the Members and the Company.

16.7 Construction. Captions are for convenience only.

Signature Block

THE COMPANY

[____], an Alaska limited liability company

By: [____]
Name: [____]
Title: [☐ Managing Member / ☐ Manager]
Date: [__/__/____]

MEMBERS

Member 1: [____]
Signature: [____]
Date: [__/__/____]

Member 2: [____]
Signature: [____]
Date: [__/__/____]

Member 3: [____]
Signature: [____]
Date: [__/__/____]

Additional Members sign an additional signature page and the contribution schedule below.

Schedule A — Members, Signed Contribution Promises, and Interests

The Percentage Interests below must total 100%. A promised contribution is enforceable under AS 10.50.280 only if stated in a writing signed by the contributing Member. Attach a description and agreed value of each noncash item or service.

Total Percentage Interests: [____]% (complete as 100%).

Schedule B — Optional Spousal Acknowledgment

Use only if counsel determines that an acknowledgment is appropriate for the named Member's interest. The spouse acknowledges receipt of this Agreement and the transfer restrictions in Article X; this acknowledgment does not make the spouse a Member or waive rights that cannot be waived by this form.

Member: [____] Spouse: [____]

Spouse signature: [____] Date: [__/__/____]

Pre-Execution Checklist

☐ Articles of Organization delivered for filing with Alaska Department of Commerce, Community, and Economic Development (AS 10.50.070, .080)
☐ Applicable Alaska business licenses identified and obtained
☐ EIN obtained from IRS
☐ Alaska registered office and agent information confirmed
☐ Schedule A completed
☐ Schedule B (optional spousal acknowledgment) used if counsel advises it
☐ Buy-sell valuation method selected (Section 11.3)
☐ Major-Decision threshold completed (Section 7.3)
☐ Biennial report calendared
☐ Records custodian and inspection contact identified
☐ Tax contact and any required partnership representative reviewed
☐ Operating Agreement reviewed by Alaska-licensed counsel
☐ Current beneficial-ownership reporting obligations reviewed with counsel
☐ D&O / E&O / general liability insurance needs reviewed

Sources and References

• Current Alaska Revised Limited Liability Company Act, AS 10.50
• Alaska Division of Corporations, Business and Professional Licensing: https://www.commerce.alaska.gov/web/cbpl/Corporations.aspx