Content Overview
Form Breakdown
| Fact Name | Description |
|---|---|
| Purpose | The Michigan Operating Agreement outlines the management structure and operating procedures of a limited liability company (LLC). |
| Governing Law | This form is governed by the Michigan Limited Liability Company Act, Act 23 of 1993. |
| Members | The agreement should list all members of the LLC and their respective ownership percentages. |
| Management Structure | It can specify whether the LLC will be member-managed or manager-managed, providing clarity on decision-making authority. |
| Amendments | The Operating Agreement can include provisions for how it can be amended, ensuring flexibility for future changes. |
| Dispute Resolution | It often contains clauses for resolving disputes among members, which can help avoid costly litigation. |
| Importance | A well-drafted Operating Agreement is crucial for protecting the interests of members and ensuring smooth operations of the LLC. |
Sample - Michigan Operating Agreement Form
Michigan Operating Agreement Template
This Operating Agreement is made effective as of [Effective Date], by and between the following members:
- [Member Name 1] - Address: [Address]
- [Member Name 2] - Address: [Address]
- [Member Name 3] - Address: [Address]
This Operating Agreement is designed to comply with Michigan laws governing Limited Liability Companies (LLCs), including the Michigan Limited Liability Company Act, 1993 PA 23, MCL 450.4101 et seq.
Article I: Formation
The members hereby form a Limited Liability Company under the name [LLC Name] (the “Company”). The principal office shall be located at [Office Address].
Article II: Purpose
The purpose of the Company is to [Describe Business Purpose] and to engage in any lawful activity permitted by Michigan law.
Article III: Term
The term of the Company shall commence upon the filing of the Articles of Organization with the Michigan Department of Licensing and Regulatory Affairs and shall continue until dissolved in accordance with this agreement.
Article IV: Management
The Company shall be managed by its members. Each member shall have the authority to act on behalf of the Company, unless otherwise specified in this agreement.
Article V: Capital Contributions
- Initial Contributions:
- [Member Name 1] shall contribute [Amount].
- [Member Name 2] shall contribute [Amount].
- [Member Name 3] shall contribute [Amount].
- Additional Contributions:
Additional contributions may be made upon mutual agreement by all members.
Article VI: Distributions
Distributions of profits and losses shall be made to the members in proportion to their respective percentage interests, which are as follows:
- [Member Name 1] - [Percentage]%
- [Member Name 2] - [Percentage]%
- [Member Name 3] - [Percentage]%
Article VII: Indemnification
The Company shall indemnify any member or manager to the fullest extent provided by Michigan law for any actions taken on behalf of the Company.
Article VIII: Amendments
This Operating Agreement may be amended only by a written agreement signed by all members.
Article IX: Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of Michigan.
IN WITNESS WHEREOF, the undersigned hereby execute this Operating Agreement as of the date first above written.
[Member Name 1] _________________________ Date: ___________
[Member Name 2] _________________________ Date: ___________
[Member Name 3] _________________________ Date: ___________
Common mistakes
Filling out the Michigan Operating Agreement form is a crucial step for any business entity, particularly for limited liability companies (LLCs). However, many individuals make common mistakes that can lead to complications down the line. One prevalent error is failing to provide accurate member information. Each member's name and address must be clearly stated. Omitting or misspelling this information can create confusion and legal issues later.
Another frequent mistake involves neglecting to outline the management structure of the LLC. The form requires clarity on whether the company will be member-managed or manager-managed. Without this specification, disputes may arise regarding decision-making authority. It is essential to explicitly define roles to avoid misunderstandings among members.
Additionally, many people overlook the importance of including the effective date of the agreement. This date indicates when the operating agreement becomes enforceable. If the date is left blank or inaccurately stated, it can lead to complications regarding the rights and responsibilities of the members. Ensuring that this date is correctly filled out is vital for legal clarity.
Lastly, failing to have the operating agreement properly signed can invalidate the document. All members must sign the agreement to indicate their consent and understanding of its terms. Without these signatures, the agreement may not hold up in a legal context. Taking the time to ensure all members sign the document is a critical step in the process.
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