Virginia LLC Operating Agreement Template

Operating Agreement for a Multi-Member LLC Operating in the State of Virginia

1. Recitals and Members

This Multi-Member LLC Operating Agreement ("Agreement") represents [Member1.Company] formed in the State of Virginia and subject to the laws of the State of Virginia, in particular, the Virginia Limited Liability Company Act (hereinafter referred to as the Law”).

The following represents the founding (number of members) Members of the Company and the respective ownership interest that each Member will have in the Company:

Member Name: [Member1.FirstName][Member1.LastName], who has a (percentage of ownership) ownership interest;

Member Address: [Member1.StreetAddress][Member1.City][Member1.State][Member1.PostalCode]​

Member Name:[Member2.FirstName][Member2.LastName], who has a (percentage of ownership) ownership interest;

Member Address: [Member2.StreetAddress][Member2.City][Member2.State][Member2.PostalCode]​

("Members")

The Agreement will become effective once it has been adopted by all Members.

Whereas this Agreement is intended to provide for the regulation and management of the affairs of the Company. Except for the provisions of the Law that may not be modified to the extent of any contradiction between the provisions of this Agreement and the Law or the variation of the general terms of the Law by this Agreement, each Member hereby acknowledges and agrees that the provisions of this Agreement shall govern all management structures and the affairs of the company as set forth herein.

Therefore in terms of all the covenants, agreements, and conditions contained herein, the Members agree as follows:

2. Company and Principal Business Address

2.1 The name of the Company is (registered company name), with its principal place of business located at (company’s main business address).

2.2 The company’s mailing address will be the same as its principal place of business.

2.3 The Members reserve the right to change the name of the Company and operate under such name, subject to a majority vote by the Members being passed and in accordance with Section 13.1-1012 of the Law.

3. Registered Agent

3.1 The name and location of the registered agent remain as stated in the documents filed pursuant to the Company’s formation and in accordance with Section 13.1-1015 of the Law. (“Registered Agent”).

3.2 In accordance with 13.1-1028 of the Law, the Members acknowledge that it is their obligation to keep on file and maintain up-to-date business records at the offices of the Registered Agent.

4. Purpose

The purpose of the Company is to engage in and conduct all lawful business activities or other activities incidental to such purposes and to carry on any other lawful activities as the Members, at their discretion, may determine from time to time.

5. Term

5.1 Subject to Section 13.1-1009 of the Law, the term of the Company shall continue perpetually or until the dissolution of the company by any of the following circumstances:

5.1.1 A unanimous vote in favor of dissolving the Company is passed;

5.1.2 An event occurs that renders the Company’s business unlawful; or

5.1.3 An event occurs that dissolves the Company by operation of law.

5.2. Should the company be dissolved in terms of 5.1.1 to 5.1.3, the Company will be liquidated, and any and all debts will be paid before any remaining funds may be distributed to any Member.

6. Capital Contributions

6.1. Initial Contributions

6.1.1 In accordance with Section 13.1-1027 of the Law, the following initial Capital contributions shall be made by the members:

(member name and amount of contribution in numbers and words. Repeat this step for every member who will be making contributions and record if the contribution is in cash or property valued in cash)

6.1.2 Each member is entitled to an ownership interest expressed as a percentage in terms of their respective contributions.

6.2. Additional Contributions

Unless a vote is passed declaring that all Members are required to make further capital contributions equally, no individual Member may be compelled to make any further contributions.

6.3 Obligation To Contribute

In accordance with Section 13.1-1027 of the Law, the contributions in terms of Section 6.1.1 of this agreement must be made no later than (60) sixty days after they have been called for.

7. Profits/Losses

Pursuant to bookkeeping and taxation considerations, net profits or losses of the Company shall be determined annually before being divided among the members, pursuant to their respective ownership shares and subject to Treasury Regulation 1.704-1.

8. Distributions

8.1 Pursuant to Sections 13.1-1030 and 13.1-1035 of the Law, distributions will be made on a (insert basis – for example: quarterly/yearly), provided there remain sufficient funds to cover any debts or liabilities of the Company about which the Manager(s) ought to reasonably know off or expect.

8.2 No distribution that may result in the Company being unable to cover its debts or liabilities is permitted in terms of this Agreement.

8.3 If the Company or a Member’s interest is liquidated, any related distribution must cater to the positive capital account balances, subject to Treasury Regulation 1.704-1(b)(2)(ii)(b) (2).

8.4 Pursuant to 8.3, any Member left with a negative capital account balance will be entitled to a qualified income offset per Treasury Regulation 1.704-1(b)(2)(ii)(d).

8.5 No distributions in any form are permitted other than those specified under the Agreement.

8.6 Members may vote to opt out of receiving distributions or allow profits to remain with the company for distribution at a later date pursuant to taxation obligations.

9. Management

9.1 In accordance with Section 13.1-1022 of the Law, the Members will manage the daily affairs of the business. A majority vote by membership interest will be called to elect a Chief Executive Member, who will also serve as the Company’s agent.

9.2 The Chief Executive Member may only be terminated, asked to step down, or replaced by a two-thirds majority vote according to an individual membership interest in favor of the same.

9.3 Any decision that involves a sale of the business, a loan, or the acquisition of another company, must have the unanimous consent of all Members; and

9.3.1 If a Member disagrees with the Chief Executive Member’s decision or proposed decision, the Member may call a vote to decide the course of action. A vote by a simple majority must be taken in order for any ordinary member to execute an action on the Company’s behalf, and such votes must be recorded in writing.

9.4 If authorized by a majority vote of the Members and in accordance with Sections 13.1-1009 and 13.1-1022 of the Law, the Chief Executive Member may appoint officers or managers and define their function and authority.

10. Accounting

10.1 Under the Agreement and pursuant to Section 13.1-1028 of the Law, members must maintain accurate bookkeeping records of the Company's finances and business affairs at its principal address or other location that the Members may agree on. The Company’s method of accounting will be chosen by the Members, and it is agreed that the Company's accounting year-end period will be Dec. 31.

10.2 Subject to Section 13.1-1028 of the Law, the Company is legally obliged to keep the following records at its principal address:

10.2.1 An updated list of the full names and last known addresses of all members;

10.2.2 A copy of the Company’s formation documents, this Agreement, with amendments if applicable;

10.2.3 An up-to-date copy of the Company's local, state, and federal income tax returns for the three (3) most recent years;

10.2.4 Copies of all minutes, if any, of each meeting of the Members;

10.2.5 Copies of the Company’s financial statements for the three (3) most recent years; and

10.2.6 Any other information prescribed by Section 13.1-1028 of the Law.

11. Members Accounts

11.1 In accordance with the provisions of Treasury Regulation 1.704-1(b)(2)(iv), the Company must maintain separate capital and distribution accounts for each Member.

11.2 The Member’s capital accounts must reflect relevant increases and decreases in the initial balance as they may have occurred from time to time.

12. Dissolution

Upon dissolution, the Company must pay its debts before distributing assets, cash, or capital to any Members or Members’ interests. Each Member agrees that any distribution that occurs after the dissolution of the Company shall follow the respective process(es) outlined in this Agreement and Section 13.1-1049 of the Act.

12.1 The Company may be dissolved by the Members at any time, subject to unanimous agreement by them in favor of dissolution.

12.2 Pursuant to Section 13.1-1046 of the Law, the Company will automatically be dissolved by operation of law if it has no Members for (90) ninety consecutive days.

12.3 In accordance with the Law, upon application by any person with transferable interests in the Company, an appropriate court may order the dissolution of the Company on the grounds that the Company has no members.

12.4 Upon the Company’s dissolution, all Company debts must be paid before any distributions may be made to Members.

13. Legal Compliance

The Members agree that all matters not specifically addressed in the Agreement will be addressed in accordance with the Law.

14. Acknowledgement and Certification

The Members hereby agree and certify that the Agreement has been duly adopted and approved by each Member as of the [Document.CreatedDate].

IN WITNESS WHEREOF, the Members signed this Agreement on the date shown.