Multi-Member LLC Operating Agreement — Georgia

Multi-Member LLC Operating Agreement (Georgia)

Quick-Reference Summary

Article I — Formation

Section 1.1 — Formation Under the Act

This Multi-Member Limited Liability Company Operating Agreement (this "Agreement") is entered into and effective as of [__/__/____] by and among the persons listed in Article III (collectively, the "Members") of [________________________________], LLC (the "Company"), a Georgia limited liability company formed under the Georgia Limited Liability Company Act, O.C.G.A. § 14-11-100 et seq. (the "Act").

Section 1.2 — Articles of Organization

☐ Articles of Organization (Form CD 030) were filed with the Georgia Secretary of State on [__/__/____].
☐ Control Number: [____________]
☐ Effective Date: [__/__/____]
☐ Publication notice published (if required) in the county newspaper of [____________] County on [__/__/____].

Section 1.3 — Name and Principal Office

Section 1.4 — Registered Agent

Section 1.5 — Duration

☐ Perpetual existence (default under O.C.G.A. § 14-11-203)
☐ Limited term, dissolving on [__/__/____]

Article II — Purpose and Powers

Section 2.1 — Purpose

The Company is organized to engage in any lawful business or activity for which a limited liability company may be organized under the Act. The specific intended activities are: [________________________________].

Section 2.2 — Powers

The Company has all powers granted to limited liability companies under O.C.G.A. § 14-11-202, including to sue and be sued, acquire and hold property, enter into contracts, borrow, invest, and do all acts necessary or convenient to its purposes.

Section 2.3 — Limitations

☐ The Company shall not engage in the practice of any profession requiring formation as a Professional Limited Liability Company unless and until properly licensed.

Article III — Members and Membership Interests

Section 3.1 — Initial Members

Section 3.2 — Nature of Membership Interest

Pursuant to O.C.G.A. § 14-11-501, an LLC interest is personal property. A Member has no interest in specific LLC property.

Section 3.3 — Admission of Additional Members

A person may be admitted as a Member only upon the unanimous written consent of all Members and execution of a joinder.

Section 3.4 — Limited Liability

Pursuant to O.C.G.A. § 14-11-303, no Member is liable, solely by reason of being a Member, for any debt, obligation, or liability of the Company.

Section 3.5 — Certificates of Interest

☐ The Company shall not issue certificates evidencing Membership Interests.
☐ The Company shall issue certificates in the form of Exhibit A.

Article IV — Capital Contributions and Capital Accounts

Section 4.1 — Initial Contributions

Each Member shall make the contribution shown in Section 3.1 on or before [__/__/____]. Contributions may take the form of cash, property, services rendered, a promissory note, or any other valuable consideration permitted by O.C.G.A. § 14-11-401.

Section 4.2 — No Interest on Contributions

No Member is entitled to interest on, or return of, any contribution except as expressly provided herein.

Section 4.3 — Capital Accounts

The Company shall maintain a capital account for each Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv).

Section 4.4 — Liability for Promised Contribution

A Member's obligation to make a promised contribution is not excused by death, disability, or other inability to perform, and is enforceable by the Company under O.C.G.A. § 14-11-402.

Article V — Capital Calls

Section 5.1 — Mandatory Capital Calls

☐ Mandatory capital calls require unanimous written consent of the Members.
☐ Capital calls may be made by the [Manager / a majority of Members in Interest] upon [____] days' prior written notice, specifying the aggregate amount and each Member's pro rata share.

Section 5.2 — Default Remedies

Upon a Defaulting Member's failure to fund within [____] days, the non-defaulting Members may elect one or more remedies:
☐ Loan the unfunded amount to the Defaulting Member at [____]% per annum
☐ Make up the shortfall pro rata and dilute the Defaulting Member's Percentage Interest per Exhibit B
☐ Forfeit distributions until restored
☐ Seek specific performance and damages under O.C.G.A. § 14-11-402

Section 5.3 — No Third-Party Beneficiaries

Capital-call obligations are solely for the benefit of the Members and the Company.

Article VI — Allocations and Distributions

Section 6.1 — Allocations

Profits and losses shall be allocated to the Members in proportion to their Percentage Interests, subject to applicable Treasury regulatory allocations under § 1.704-1(b) and § 1.704-2.

Section 6.2 — Operating Distributions — Default Displaced

The Members displace the default equal-sharing rule under O.C.G.A. § 14-11-403. Distributions shall be made in proportion to Percentage Interests, subject to the limitations in O.C.G.A. § 14-11-407.

Section 6.3 — Tax Distributions

The Company shall, to the extent of available cash, distribute amounts sufficient to fund each Member's estimated federal and Georgia income-tax liability arising from Section 6.1 allocations.

Section 6.4 — Limitations on Distributions

Consistent with O.C.G.A. § 14-11-407, no distribution shall be made if it would render the Company unable to pay its debts as they become due in the ordinary course of business or render Company assets less than total liabilities.

Section 6.5 — Distributions in Kind

A Member shall not be compelled to accept a distribution of property other than cash.

Article VII — Management

Section 7.1 — Management Structure

☐ Member-Managed (default under O.C.G.A. § 14-11-301). Each Member has authority to bind the Company.
☐ Manager-Managed. Management is vested in one or more Managers identified in Section 7.2; statutory apparent authority of members is limited per O.C.G.A. § 14-11-301(b)(2).

Section 7.2 — Managers

Section 7.3 — Authority to Bind

Consistent with O.C.G.A. § 14-11-301 and § 14-11-302, the authority of any person to bind the Company is as set forth in the Articles of Organization and this Agreement. Third parties dealing with the Company are subject to those provisions where filed of record.

Section 7.4 — Removal and Replacement

A Manager may be removed, with or without cause, by Members holding a majority of Percentage Interests, except that a Manager who is also a Member may be removed for cause only.

Section 7.5 — Officers

The Members (or Manager) may appoint officers (President, Secretary, Treasurer, etc.) with such authority as expressly delegated.

Section 7.6 — Books and Records

The Company shall maintain books and records under O.C.G.A. § 14-11-313, available for inspection by Members for purposes reasonably related to membership.

Article VIII — Voting Rights and Member Meetings

Section 8.1 — Voting Rights — Default Displaced

The Members displace any default voting rule under O.C.G.A. § 14-11-305. Each Member shall vote in proportion to such Member's Percentage Interest.

Section 8.2 — Ordinary Matters

Ordinary-course matters require approval of Members holding a majority of Percentage Interests.

Section 8.3 — Supermajority Matters

The following require Members holding at least [____]% of Percentage Interests:
☐ Approval of annual budget exceeding $[____________]
☐ Incurrence of indebtedness exceeding $[____________]
☐ Acquisition or disposition of assets exceeding $[____________]

Section 8.4 — Unanimous Matters

Consistent with O.C.G.A. § 14-11-305(2), the following require unanimous written consent:
☐ Amendment of this Agreement
☐ Amendment of Articles of Organization
☐ Merger, conversion, or sale of all or substantially all assets
☐ Admission of a new Member
☐ Voluntary dissolution
☐ Engaging in a new line of business materially different from Section 2.1

Section 8.5 — Meetings and Action Without Meeting

☐ Annual meetings on [____________] of each year
☐ Special meetings on not less than [____] days' written notice
Quorum: Members holding [____]% of Percentage Interests. Action may be taken by written consent signed by Members holding the required Percentage Interests.

Article IX — Fiduciary Duties and Standards of Conduct

Section 9.1 — Statutory Standards

Consistent with O.C.G.A. § 14-11-305, in performing Member or Manager duties, each person shall act in a manner believed in good faith to be in the best interests of the Company.

Section 9.2 — Duty of Loyalty

The Members:
☐ Retain the duty of loyalty in full
☐ Modify the duty of loyalty to permit a Member or Manager to engage in other ventures (including competitive ventures) provided that material facts are disclosed in writing in advance
☐ Eliminate the duty of loyalty to the maximum extent permitted by Georgia law, subject to the duty of good faith

Section 9.3 — Duty of Care

The duty of care is limited to refraining from grossly negligent or reckless conduct, intentional misconduct, or knowing violation of law.

Section 9.4 — Reliance on Reports

A Member or Manager may rely on records, information, opinions, reports, or statements prepared or presented by persons reasonably believed to be reliable and competent.

Section 9.5 — Indemnification

To the fullest extent permitted by O.C.G.A. § 14-11-306, the Company shall indemnify each Member, Manager, and officer against expenses, judgments, fines, and amounts paid in settlement incurred in any proceeding by reason of acting in such capacity, except for acts of bad faith or knowing violation of law.

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

Section 10.1 — General Restriction

No Member may sell, assign, pledge, encumber, or otherwise transfer all or part of such Member's Membership Interest except in compliance with this Article X and O.C.G.A. § 14-11-502 et seq. A transferee acquires only the economic rights and does not become a Member without the required approvals.

Section 10.2 — Right of First Refusal

A Selling Member shall deliver written ROFR Notice. For [____] days, the Company has the right to purchase on those terms; thereafter, for [____] days, the non-selling Members may purchase pro rata.

Section 10.3 — Tag-Along Rights

If Members holding more than [____]% propose to transfer their Interests in a single transaction, each other Member may participate pro rata on the same terms.

Section 10.4 — Drag-Along Rights

If Members holding at least [____]% approve a sale of all or substantially all Interests or assets to a bona fide third party, all Members shall cooperate on the same terms.

Section 10.5 — Permitted Transfers

☐ Transfers to revocable trusts of which the transferor is settlor and primary beneficiary
☐ Transfers to immediate family for estate-planning purposes
☐ Transfers among existing Members
Permitted transferees must execute a joinder.

Section 10.6 — Admission of Transferee

A transferee becomes a Member only upon: (i) consent under Section 8.4; (ii) joinder; and (iii) any transfer fee.

Article XI — Buy-Sell Provisions

Section 11.1 — Triggering Events

Each of the following is a "Triggering Event":
☐ Death of an individual Member
☐ Permanent disability ([____] consecutive months)
☐ Divorce that would award an Interest to a non-Member spouse
☐ Bankruptcy, insolvency, assignment for benefit of creditors, or receivership
☐ Expulsion for cause under Section 11.2
☐ Entry of a charging order in effect more than [____] days

Section 11.2 — Expulsion

A Member may be expelled by unanimous written consent of all other Members for: (i) final, non-appealable judgment of material harm to the Company; (ii) material uncured breach after [____] days' notice; or (iii) felony conviction involving moral turpitude.

Section 11.3 — Withdrawal

A Member's withdrawal in breach of this Agreement may give rise to damages for wrongful dissociation. Unless otherwise provided, a Member's withdrawal does not entitle the Member to a distribution under O.C.G.A. § 14-11-602.

Section 11.4 — Purchase Option and Obligation

The Company has a [____]-day option to purchase the affected Interest at the Purchase Price; if declined, the non-affected Members may purchase pro rata.

Section 11.5 — Valuation Methodology

☐ Annual agreed value (Certificate of Value, Exhibit C)
☐ Formula: [____] times trailing twelve-month EBITDA, less debt, plus cash
☐ Two appraisers, with third-appraiser tiebreaker if differential exceeds [____]%
☐ Book value as of most recent fiscal year-end

Section 11.6 — Payment Terms

☐ Lump-sum cash at closing
☐ [____]% down with balance over [____] years in equal [monthly/quarterly] installments at [____]% per annum

Section 11.7 — Insurance Funding

☐ The Company shall maintain life insurance on each Member with face amount ≥ $[____________].

Article XII — Charging Order

Section 12.1 — Statutory Authority

Pursuant to O.C.G.A. § 14-11-504, on application by a judgment creditor of a Member, a court may charge the Member's LLC interest with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the Member's interest.

Section 12.2 — Creditor Rights Limited

The judgment creditor does not become a Member, acquires no right to participate in management, and has no right to demand information, force distributions, or compel dissolution. The creditor is entitled only to receive distributions to which the judgment debtor would otherwise have been entitled.

Section 12.3 — Exclusive Remedy

Consistent with O.C.G.A. § 14-11-504 and § 14-11-505, the charging order is the exclusive remedy by which a judgment creditor of a Member may satisfy a judgment from the Member's LLC interest, and no order for accounting or other equitable remedy reaching Company assets is available to the judgment creditor.

Section 12.4 — Suspension of Voting Rights

A Member subject to a charging order shall retain Member status but shall not participate in any vote regarding distribution policy.

Article XIII — Deadlock and Dispute Resolution

Section 13.1 — Deadlock Defined

A "Deadlock" exists when the Members (or Managers) are unable, after [____] good-faith attempts at meetings held not less than [____] days apart, to obtain the vote required for any material action.

Section 13.2 — Mediation

Upon written notice of Deadlock, the Members shall promptly engage in non-binding mediation in [____________] County, Georgia.

Section 13.3 — Buy-Sell Trigger

☐ If mediation fails within [____] days, any Member may serve a Buy-Sell Notice stating a per-unit price; the recipient must elect within [____] days to sell at that price or buy the offeror at that price.

Section 13.4 — Arbitration

Other disputes shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, in [____________] County, Georgia. Judgment on the award may be entered in any court of competent jurisdiction.

Section 13.5 — Governing Law and Venue

This Agreement is governed by Georgia law. Subject to Section 13.4, exclusive jurisdiction lies in the Superior Court of [____________] County, Georgia (Business Court division where eligible).

Section 13.6 — Judicial Dissolution Reserved

A Member retains the right under O.C.G.A. § 14-11-603(a) to apply for judicial dissolution when it is not reasonably practicable to carry on the business in conformity with the Articles of Organization and this Agreement.

Article XIV — Dissolution and Winding Up

Section 14.1 — Events of Dissolution

The Company dissolves upon the first to occur of, consistent with O.C.G.A. § 14-11-602:
☐ The time or event specified in the Articles of Organization or this Agreement
☐ Written approval of Members holding ≥ [____]% of Percentage Interests
☐ Entry of a decree of judicial dissolution under O.C.G.A. § 14-11-603(a)
☐ Administrative dissolution by the Secretary of State under O.C.G.A. § 14-11-603(b) and failure to reinstate within five years

Section 14.2 — Winding Up

Upon dissolution, the Company continues solely for winding up. A person designated by the Members shall liquidate assets, discharge liabilities, and distribute remaining assets per Section 14.3, consistent with O.C.G.A. §§ 14-11-604 through 14-11-608.

Section 14.3 — Order of Distribution

Pursuant to O.C.G.A. § 14-11-608:

1. First, to creditors (including Members who are creditors).
2. Second, to establish reserves for contingent liabilities.
3. Third, to Members in accordance with positive capital-account balances after taking into account allocations for the taxable year of liquidation.
4. Fourth, any remainder pro rata by Percentage Interest.

Section 14.4 — Certificate of Termination

Upon completion of winding up, the Company shall file a Certificate of Termination with the Georgia Secretary of State.

Article XV — State-Specific Provisions

Section 15.1 — Annual Registration

The Company shall timely file its annual registration with the Georgia Secretary of State between January 1 and April 1 of each year and pay the applicable fee, currently $50 (online) or $60 (paper), as required by O.C.G.A. § 14-11-1103. Failure to file within 60 days of the due date may result in administrative dissolution under O.C.G.A. § 14-11-603(b).

Section 15.2 — Georgia Tax Filings

The Company shall comply with applicable Georgia tax obligations, including:
☐ Georgia Department of Revenue partnership return (Form 700) for partnership-taxed LLCs
☐ Sales/use tax registration and filing
☐ Employer withholding and unemployment-insurance registration
☐ Net-worth tax (corporate-taxed LLCs only)

Section 15.3 — Publication Notice

☐ Publication of intent to organize (if required by O.C.G.A. § 14-11-206) was completed in a newspaper of general circulation in [____________] County on [__/__/____].

Section 15.4 — No Series LLC

The Members acknowledge that Georgia does not currently authorize series LLCs. A foreign series LLC transacting business in Georgia must qualify and operate consistently with Georgia LLC limitations.

Section 15.5 — Workers' Compensation

☐ If the Company has three or more regular employees (excluding Members in some cases), the Company shall maintain Georgia workers' compensation coverage as required by O.C.G.A. § 34-9-1 et seq.

Article XVI — General Provisions

Section 16.1 — Entire Agreement

This Agreement, together with the Articles of Organization and exhibits, constitutes the entire agreement among the Members concerning its subject matter.

Section 16.2 — Amendments

Amendments require the unanimous written consent of all Members.

Section 16.3 — Severability

If any provision is held invalid, the remainder continues in full force.

Section 16.4 — Notices

All notices shall be in writing, delivered by hand, certified mail, overnight courier, or email to the addresses set forth in Article III.

Section 16.5 — Counterparts and Electronic Signatures

This Agreement may be executed in counterparts; electronic signatures are enforceable under the Georgia Uniform Electronic Transactions Act, O.C.G.A. § 10-12-1 et seq.

Section 16.6 — Successors and Assigns

Binding upon and inuring to the benefit of the Members and their respective heirs, legal representatives, successors, and permitted assigns.

Section 16.7 — Construction

Headings are for convenience only. The singular includes the plural; "including" means "including without limitation."

Signature Block

IN WITNESS WHEREOF, the undersigned Members have executed this Multi-Member LLC Operating Agreement effective as of the date first written above.

THE COMPANY:

[________________________________], LLC

By: [________________________________]
Name: [________________________________]
Title: [Manager / Authorized Member]
Date: [__/__/____]

MEMBER 1:

Signature: [________________________________]
Printed Name: [________________________________]
Address: [________________________________]
Percentage Interest: [____]%
Date: [__/__/____]

MEMBER 2:

Signature: [________________________________]
Printed Name: [________________________________]
Address: [________________________________]
Percentage Interest: [____]%
Date: [__/__/____]

MEMBER 3:

Signature: [________________________________]
Printed Name: [________________________________]
Address: [________________________________]
Percentage Interest: [____]%
Date: [__/__/____]

MEMBER 4:

Signature: [________________________________]
Printed Name: [________________________________]
Address: [________________________________]
Percentage Interest: [____]%
Date: [__/__/____]

Pre-Execution Checklist

☐ Articles of Organization filed with Georgia Secretary of State; control number recorded
☐ Newspaper publication notice published in county of registered office (if required by O.C.G.A. § 14-11-206)
☐ Registered Agent and Georgia registered office (no P.O. box) confirmed
☐ All Members' names, addresses, contributions, and Percentage Interests verified
☐ Federal EIN obtained
☐ Tax classification confirmed (partnership default; S-corp/C-corp election if applicable)
☐ Georgia Department of Revenue registration (sales tax, withholding, unemployment) as applicable
☐ Bank account opened; signature card resolution adopted
☐ Capital contributions actually transferred to Company on or before effective date
☐ Default-rule traps reviewed: equal per capita distribution rule under § 14-11-403 expressly displaced
☐ Buy-sell valuation method selected; insurance funding obtained if applicable
☐ Calendar reminder set for annual registration window (January 1 – April 1)
☐ Workers' compensation policy in place if hiring three or more employees
☐ All Members have reviewed this Agreement with independent counsel
☐ Original executed Agreement stored at principal office; copy to each Member

Sources and References

• Georgia Limited Liability Company Act, O.C.G.A. § 14-11-100 et seq.: https://law.justia.com/codes/georgia/title-14/chapter-11/
• O.C.G.A. § 14-11-305 (Management; voting): https://law.justia.com/codes/georgia/title-14/chapter-11/article-3/section-14-11-305/
• O.C.G.A. § 14-11-403 (Distributions)
• O.C.G.A. § 14-11-407 (Limitations on distributions)
• O.C.G.A. § 14-11-501 (Personal property interest)
• O.C.G.A. § 14-11-502 (Assignment of interest)
• O.C.G.A. § 14-11-504 (Charging order): https://law.justia.com/codes/georgia/title-14/chapter-11/article-5/section-14-11-504/
• O.C.G.A. § 14-11-602 (Dissolution): https://law.justia.com/codes/georgia/title-14/chapter-11/article-6/section-14-11-602/
• O.C.G.A. § 14-11-603 (Judicial and administrative dissolution): https://law.justia.com/codes/georgia/title-14/chapter-11/article-6/section-14-11-603/
• O.C.G.A. § 14-11-1103 (Annual registration): https://law.justia.com/codes/georgia/title-14/chapter-11/article-11/section-14-11-1103/
• Georgia Secretary of State Corporations Division: https://sos.ga.gov/corporations-division-georgia-secretary-state
• Georgia Department of Revenue: https://dor.georgia.gov/