A manager-managed LLC operating agreement is a legal document that outlines how a California Limited Liability Company (LLC) will be run. In this type of LLC, the day-to-day operations are managed by one or more managers, while the owners of the LLC are passive investors. This type of LLC structure is ideal for businesses where the owners do not want to be actively involved in management.
The operating agreement is a crucial document that outlines the rights, responsibilities, and obligations of the managers and members of the LLC. In California, the operating agreement must be in writing, and all members of the LLC must sign it. The agreement must also be kept with the company’s records.
A manager-managed LLC operating agreement in California typically includes provisions related to:
1. Management structure: The agreement must specify the number of managers and their roles and responsibilities. It should also outline how they will be appointed, removed, and replaced.
2. Member meetings: The operating agreement must specify how often member meetings will be held and how notice of these meetings will be given.
3. Voting: The agreement should specify how voting will be conducted, including the number of votes required to take action or make decisions.
4. Profits and losses: The agreement should specify how profits and losses will be allocated among the members.
5. Capital contributions: The agreement should specify the amount of capital contributions needed from each member and how these contributions will be made.
6. Transfer of membership interests: The agreement should specify the procedure for transferring membership interests and any restrictions on such transfers.
7. Dissolution: The agreement should outline the procedure for dissolving the LLC, including how assets will be distributed.
In conclusion, a manager-managed LLC operating agreement in California is a critical legal document that outlines the operations and management structure of an LLC. It is essential that the agreement is carefully drafted to ensure that the agreement is legally binding and enforceable. If you are interested in setting up a manager-managed LLC in California, it is essential to consult with an experienced attorney to draft an operating agreement that is tailored to your specific needs. By doing so, you can protect your business interests and ensure that your LLC runs smoothly.
