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LLC operating agreements may be the most commonly document drafted, reviewed and negotiated by transactional counsel. These documents define the governance, information and liquidation rights of members, allocate economic rewards, sometimes establish restrictions on members or their interests, and can assign or alleviate liability. The tax provisions, too, are highly complex, defining allocations of tax attributes and rights to cash and property distributions.
Fiduciary duties may also be modified in a way that is not possible in other types of entities.
This program provides a practical guide to drafting the most important provisions of LLC operating agreements.
Part 1 topics include:
- Drafting the most important provisions of LLC operating agreements
- Planning for different types of capital contributions – capital v. services, current contributions v. future capital calls
- Management provisions depending on whether the LLC is member-managed v. manger-managed LLCs
- Fiduciary duties of members, modifications, and the "LLC opportunity doctrine"
- Restrictions on transfers of capital and profits interests
- Relationship between tax allocation and property distribution provisions, including IRC Section 704(b) accounting