LLC Agreement (Voting and Non-Voting Units, Managing Member-Managed)

by Practical Law Corporate & Securities

A Standard Document that is a long-form limited liability company (LLC) agreement, also known as an operating agreement, for a Delaware LLC with multiple members. This Standard Document establishes a capital structure with two classes of membership interests: voting and non-voting units. It is drafted for an LLC managed by a single managing member, clearly defining the managing member's authority while specifying major actions that require voting member approval. This Standard Document provides a detailed framework for the company's governance and operations, including capital contributions, capital account maintenance, and complex tax allocations. It also addresses the mechanics of distributions, featuring a waterfall provision and procedures for tax advances. This Standard Document sets out key member rights and transfer restrictions, such as preemptive rights, a right of first refusal (ROFR), drag-along rights, and tag-along rights. It further includes robust exculpation and indemnification clauses, replacing default fiduciary duties with specific contractual standards.