1Formation & Foundational Matters

• Entity name, principal office, registered agent
• Effective date and term (perpetual vs. fixed duration)
• Purpose clause (narrow/specific vs. "any lawful purpose")
• State of formation and governing law
• Statement of intent regarding tax classification
• Recitation of members and initial contributions

2Capital Contributions

• Initial capital contributions (cash, property, services, IP)
• Valuation method for non-cash contributions
• Mandatory vs. optional future capital calls
• Consequences of failing to contribute (dilution, forced loan, default interest, forfeiture)
• Member loans to the company (debt vs. equity treatment)
• No right to return of capital / no interest on capital (standard disclaimers)

3Ownership Structure

• Membership units/percentages vs. capital accounts
• Classes of membership interests (voting vs. non-voting, common vs. preferred)
• Capital account maintenance rules (often per IRC 704(b))
• Authorized additional membership interests and dilution mechanics

4Allocations & Distributions

• Allocation of profits and losses (pro rata vs. special allocations)
• Distribution waterfall (return of capital, preferred return, pro rata, or other tiers)
• Timing/frequency of distributions, including mandatory tax distributions
• Board/manager discretion to withhold distributions for reserves
• In-kind distributions
• Clawback provisions

5Management Structure

• Member-managed vs. manager-managed designation
• Appointment, removal, term, and compensation of managers
• Voting rights and authority of members to bind the company
• Officers (titles, duties, appointment/removal)
• Day-to-day authority vs. matters requiring a vote
• Delegation of authority

6Voting Rights & Decision-Making

• Voting power (per capita vs. per unit/percentage)
• Ordinary vs. major/extraordinary matters requiring supermajority or unanimous consent
• Quorum requirements
• Proxy voting
• Deadlock-breaking mechanisms (mediation, buy-sell triggers, swing votes, shotgun clauses)

7Meetings

• Required frequency of member/manager meetings
• Notice requirements
• Action by written consent without a meeting
• Remote/telephonic participation

8Fiduciary Duties & Standard of Care

• Express statement of duties of loyalty and care (modifiable/eliminable by contract in many states)
• Exculpation provisions for good-faith decisions
• Indemnification and advancement of expenses
• Insurance (D&O coverage)
• Corporate opportunity doctrine waiver or carve-out

9Conflicts of Interest & Related-Party Transactions

• Disclosure requirements
• Approval process for related-party deals
• Restrictions on self-dealing

10Restrictive Covenants

• Non-compete provisions (during membership and post-exit)
• Non-solicitation (employees, customers, vendors)
• Confidentiality obligations
• IP assignment for company-related work product

11Transfer Restrictions

• General prohibition on transfer without consent
• Right of first refusal (ROFR) / right of first offer (ROFO)
• Permitted transfers (e.g., estate planning vehicles)
• Tag-along rights
• Drag-along rights
• Effect of transfer on voting rights (economic-only assignee interests)
• Pledge/encumbrance restrictions

12Admission of New Members

• Process and required approvals
• Required documentation (joinder agreements)
• Dilution mechanics

13Withdrawal, Resignation & Expulsion

• Voluntary withdrawal rights and consequences
• Grounds for involuntary expulsion (breach, criminal conduct, bankruptcy, deadlock)
• Effect of a member's death, disability, divorce, bankruptcy, or incapacity

14Buy-Sell Provisions

• Triggering events (death, disability, divorce, termination, bankruptcy, retirement, deadlock)
• Valuation methodology (appraisal, formula-based, agreed value, shotgun clause)
• Funding mechanism (e.g., company-owned life insurance)
• Payment terms (lump sum vs. installment note, interest, security)
• Mandatory vs. optional buyout

15Compensation & Reimbursement

• Guaranteed payments to members for services
• Manager/officer compensation
• Expense reimbursement policies

16Books, Records & Information Rights

• Accounting method (cash vs. accrual) and fiscal year
• Required financial statements and frequency
• Member inspection rights and limits
• Tax matters partner / partnership representative designation
• Bank account and check-signing authority

17Tax Matters

• Tax classification elections
• Allocation of tax items
• Treatment of tax distributions
• Responsibility for tax return preparation and cost allocation
• Section 754 election considerations

18Dispute Resolution

• Governing law and venue
• Mediation/arbitration requirements before litigation
• Attorneys' fees provisions
• Jury trial waiver
• Class action waiver

19Dissolution & Winding Up

• Events triggering dissolution
• Priority of distributions upon winding up
• Appointment of a liquidator
• Continuation of the business by remaining members after a triggering event

20Amendment Procedures

• Voting threshold required to amend
• Provisions requiring unanimous consent to amend (e.g., capital account or economic rights changes)

21Representations & Warranties

• Member authority to enter the agreement
• No conflicting obligations
• Accredited investor status (if relevant)
• Securities law compliance

22Insurance & Risk Management

• Required insurance coverage
• Liability limitations among members

23Boilerplate / General Provisions

• Entire agreement clause
• Severability
• Successors and assigns
• Notice provisions
• Counterparts and electronic signature validity
• Waiver (non-enforcement doesn't waive future enforcement)
• Force majeure
• Confidentiality of the agreement itself

24Special / Industry-Specific Provisions

• Real estate LLCs: property management, rental income distribution, refinancing approval
• Professional services: licensing requirements, ownership restricted to licensed professionals
• Family businesses: succession planning, spousal consents/community property waivers
• Startups: vesting schedules, option pools, investor-specific rights
• Series LLCs: segregation of assets/liabilities between series

Your LLC may not need ALL of these, but it WILL need MOST of these. Don't be lulled into the fact that the state that issued your Articles of Organization has included just enough to make you a legal entity. The state has issued enough to make your LLC a skeleton, but not a living, breathing entity to stand between you, litigation and the IRS.

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