Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Single-Member, Member-Managed LLCs taxed under the default status.
Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Multi-Member, Member-Managed LLCs taxed under the default status.
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Do you need an operating agreement in Nebraska?
No, it's not legally required in Nebraska under § 21-110. Single-member LLCs need an operating agreement to preserve their corporate veil and to prove ownership. And multi-member LLCs need one to help provide operating guidance, determine voting rights and contributions.
Read on to learn more about Nebraska operating agreements, including:
What's included in a Nebraska operating agreement?
Here are some key components that are typically included in a Nebraska LLC operating agreement:
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Name and Purpose
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LLC Management - Member or Manager
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Registered Agent
-
LLC Duration
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Capital Contributions
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Indemnification
-
LLC Tax Status
-
Profit and Loss Distributions
-
Amending your LLC
-
Corporate Formalities Waiver
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Dissolution
-
Effective Date
How do I write my operating agreement?
Let's dive deep into the regular stipulations, providing examples for better understanding.
1. Name and Purpose of your LLC
By this point, you're already decided on your LLC's name (the one you've registered with Nebraska), but it's also crucial to define your LLC's mission. There's no need for an overly detailed description—maintain a general approach to keep your options open for future business possibilities without the need to update your documents.
OPERATING AGREEMENT of [COMPANY NAME]
This operating agreement is adopted as of [Date] (the “Effective Date”), by [Member’s Name], an individual and the sole member (the “Member”) of [Company Name] (the “Company”).
The Member hereby adopts this agreement as the operating agreement of the Company, which agreement sets forth the entire understanding of the Member regarding its subject matter and supersedes all prior understandings and agreements regarding its subject matter.
The purpose of the Company is [Company Purpose], and the conduct of other activities as may be necessary or appropriate to promote the stated purposes, and to engage in any other lawful business or activity for which a limited liability company may be organized under the Act.
2. LLC Management - Member or Manager
This segment is to state whether your LLC will be managed by the members themselves or through an appointed manager. It also defines each member's rights and responsibilities, such as the amount they contribute (capital contributions), their voting rights, and the setup of the management structure. This might seem trivial if you're the sole member, but it's a vital part of legitimizing your single-member LLC.
Member-Managed LLC.
The business and affairs of the Company will be managed by the Member. The vote, action, decision, or consent of the Member will constitute a valid decision of the Member and the Company. The Member may appoint one or more officers (including the Member, if the Member is an individual) who will have such powers and authority to act on behalf of the Company granted to them by the Member.
OR
Manager-Managed LLC.
The business and affairs of the Company will be managed by the manager of the Company and any successor thereto appointed by the Member, which manager may also be referred to as the Company’s president (the “Manager”). The initial Manager will be [Manager Name], who will serve until the Manager’s death, removal by the Member (for any reason or no reason), or resignation. The Manager will have the right and authority to manage the affairs of the Company and make decisions and take action with respect thereto without further approval or consent of any kind by the Member. Except as otherwise required by this agreement and in lieu of any limitations set forth in [State Name]’s laws for limited liability companies (the “Act”), the Manager will be solely responsible for and is hereby authorized to manage and operate the business of the Company. Except to the extent that the authority of the Manager is expressly limited by the Member, the vote, action, decision, or consent of the Manager will constitute a valid decision of the Manager and the Company.
3. Registered Agent
The registered agent's role is to handle any significant paperwork on behalf of your business. Although it can appear in some LLC operation agreements, it isn’t a prerequisite because you would have already declared this when you filed your documents in Nebraska.
The Company’s registered agent in State is: Registered Agent Name, Address. The members may designate other registered agents or offices at any time in this state or, if necessary, in other states.
4. Duration of Your LLC
When you think of "term of an LLC," consider it as your Limited Liability Company's lifespan—the duration for which it was created to function, as declared in your founding documents. While numerous entrepreneurs form LLCs with the intention of perpetual existence, you also have the leeway to set an expiration date.
Typically, LLCs are considered "endless," which means they last as long as you want them to. The majority of Nebraska LLCs prefer an endless duration.
The duration of the Company will be perpetual.
5. Capital Contributions
Capital contributions are the resources—cash, property, or services—that you put into getting your LLC off the ground, much like an initial investment to your business. In the case of a single-member LLC, these contributions are entirely up to you, meaning you choose how much capital you want to allocate to your business.
It's crucial to keep records of these contributions. This enables an accurate understanding of the financial structure and is key for tax-related purposes.
The Member’s capital contribution(s) to the capital of the Company for the Member’s membership interest in the Company will be reflected on the books and records of the Company.
OR
The members have made or shall make the contributions of cash, property or services to the LLC as set forth on Exhibit A attached
6. Indemnification
Within an LLC's Operating Agreement, indemnification provisions serve as a safety cushion, guarding the company's members against particular expenses linked to potential legal hurdles resulting from their work for the company. It implies that the LLC will shoulder any legal expenses or damages if a member is sued because of their duties to the business.
It’s vital that the agreement precisely states when and in what circumstances the LLC will provide this safety net, as well as any exclusions. Customarily, indemnification doesn't cover deliberate misconduct or egregious negligence. It's important that these terms are tailored to your business's unique risks to guarantee appropriate coverage.
The Member, the Manager, the officers, and the organizer of the Company and their respective affiliates, stockholders, members, managers, directors, officers, partners, employees, agents, trustees, and representatives (individually, an “Indemnitee”) will be indemnified by the Company against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits, or proceedings, civil, criminal, administrative, or investigative, in which the Indemnitee may be involved, or threatened to be involved, as a party or otherwise by reason of the Indemnitee’s status as any of the foregoing, which relates to or arises out of the Company or its assets, business, or affairs, if in each of the foregoing cases (A) the Indemnitee acted in good faith and in a manner the Indemnitee believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal proceeding, had no reasonable cause to believe the Indemnitee’s conduct was unlawful, and (B) the Indemnitee’s conduct did not constitute gross negligence or willful or wanton misconduct. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere, or its equivalent, will not, of itself, create a presumption that the Indemnitee acted in a manner contrary to that specified in clause (A) or (B) above. Any indemnification under this section 5 will be made only out of the assets of the Company, and the Member will not have any personal liability on account thereof.
Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Single-Member, Member-Managed LLCs taxed under the default status.
Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Multi-Member, Member-Managed LLCs taxed under the default status.
Get access to all our operating agreements, 100+ other important contract templates, and a step-by-step, interactive platform that will help you build a solid legal foundation for your business. All included in Legal GPS Pro.
7. LLC Tax Status
Your Nebraska LLC could be taxed in one of four ways: as a sole proprietorship, partnership, S corporation, or C corporation. The way your LLC is taxed depends on the number of members and the tax classification chosen with the IRS.
Your LLC's operating agreement should have sections related to tax status. These sections describe your chosen tax status, how you may change it, and how you manage tax returns and allocations, if applicable. This aids in having a plan on how to handle business finances—including profits, losses, dividends, and taxes. The key is to provide a clear game plan to tackle any tax-related issues that might come up in your business.
The Company will be disregarded for federal and state income tax purposes. The admission of one or more additional members, however, will cause the Company to be recognized for tax purposes, and to be taxed, as a partnership.
OR
The Member acknowledges that the Company has elected to be taxed as a corporation for federal tax purposes pursuant to the regulations currently in effect under Section 7701 of the Code, and to be taxed as an electing small business corporation under the provisions of Subchapter S of the Code. Notwithstanding such tax treatment, the Member acknowledges and agrees that the Company will be a limited liability company, for state law purposes, under the provisions of the Act, the Articles of Organization, and this operating agreement.
The Member acknowledges that the Company has filed or will timely file a Form 2553 (Election by a Small Business Corporation) with the Internal Revenue Service and that the election made pursuant to the filing is or will be in force and effect covering all periods since the date of this operating agreement. Except as otherwise provided in this operating agreement, during the term of this operating agreement and the continuation of the Company’s “S” corporation election under Section 1362 of the Internal Revenue Code, no Member shall take any action which would cause the revocation or termination of the Company’s “S” election (under Section 1362(a) of the Internal Revenue Code) and any attempt to take such an action will be null and void and without effect. Without limiting the foregoing, and notwithstanding any provision hereof to the contrary, any transfer or attempt to transfer any membership interest to any of the following will be null, void, and without effect:
(a) a person whose ownership thereof would cause the Company to have a number of Members and assignees of membership interests (shareholders of an “S” corporation) greater than the number permitted by Section 1361(b)(1)(A) of the Internal Revenue Code;
(b) an individual who is not a United States citizen or resident;
(c) a trust (or the trustee thereof) which fails to satisfy the requirements of Section 1361(c)(2)(A) or 1361(d) of the Internal Revenue Code;
(d) a corporation; and
(e)any other entity whose ownership would cause the termination or revocation of the Company’s tax status as an “S” corporation.
8. Profit and Loss Distributions
Your clause on profit and loss distribution simply dictates when your LLC will share the profits it earns. For single-member LLCs, it's less vital. But for multi-member LLCs, you want to precisely indicate when, the prerequisites, and the manner of distributions.
As the sole member of the LLC, the Member is entitled to all profits of the LLC and is responsible for all its losses. Profits and losses shall be determined annually and will be allocated to the Member's capital account. Distributions of cash or other assets will be made at such times and in such amounts as deemed appropriate by the Member.
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9. Agreement Amendments
Change is inevitable, and sometimes you may need to modify some terms in your LLC. So how do you do that? Simply follow your LLC amendment clause. Note that for single-member LLCs, the process is much smoother. However, for multi-member LLCs, it’s important to consider factors like voting percentages and the necessities for amending the operating agreement.
This agreement and the articles of organization of the Company may not be altered, modified, or changed, and no provision of this agreement may be waived, except by an amendment or waiver, as applicable, approved by the Member.
10. Corporate Formalities Waiver
In nature, LLCs usually aren't compelled to observe corporate formalities, which are typically associated with corporations. However, there are instances where skipping on these formalities may jeopardize your corporate veil. Hence, it's wise to include a clause waiving all formalities in the operating agreement.
The failure of the Company or the Member to observe any formalities or requirements relating to the exercise of its powers or management of its business or affairs under this operating agreement or the laws in the state in which the Company is which govern limited liability companies will not be grounds for imposing personal liability on the Member for liabilities of the Company.
11. Dissolution
Not all ventures go according to plan and there might be a point where dissolution is the only way forward. This section outlines how to properly dissolve your LLC and delineate who will control the LLC in cases like the passing of the owner.
Upon the occurrence of any event which terminates the continued membership of the Member in the Company, the Company will not be dissolved, and the business of the Company will continue. The Member hereby specifically consents to such continuation of the business of the Company upon any such event. The Member’s legal representative, assignee, or successor will automatically become an assignee of the Member’s interest and will automatically become a substitute Member in place of the withdrawn Member.
12. Effective Date
The effective date of your operating agreement is the day the agreement activates. In other words, it's the day your agreement officially "goes live."
Do I need to file my Agreement?
Actually, you don't! Contrary to your Articles of Organization (or Certificate of Formation, depending on your state laws), your operating agreement is an internal resource you keep within your own company records. Just sign it and store a copy, and make sure you can easily access it when the need arises.
What if I need to add another member to my LLC later?
Businesses grow and evolve, and there comes a times when you need a hand or two to manage everything. When you're ready to welcome another member into your LLC, you'll need to revisit and revise the operating agreement in accordance with the stipulated terms between you and your new partner. In most cases, you'll probably create an entirely new agreement, as the dynamics and considerations of a multi-member operating agreement differ significantly from a single-member operating agreement.
And there you have it — your comprehensive guide to crafting a robust LLC operating agreement, leaving no stone unturned. Remember, crafting your operating agreement gives you the chance to detail your business operations, understandings, and the future direction of your company, and to ensure a smoother sailing ahead.
Nebraska LLC Operating Agreement Laws
- Nebraska Revised Statute § 21-110: Nebraska does not legally require an Operating Agreement when creating an LLC. However, it's highly recommended to draft one, as it outlines member roles, business operations, and assists in managing potential future disputes within the LLC.
- Nebraska Revised Statute § 21-126: To form an LLC in Nebraska, you must file a Certificate of Organization with the Secretary of State. This statute specifies the required information, such as the LLC's name, address of the initial designated office, and name of the initial agent for service of process.
- Nebraska Revised Statute § 21-142: This law governs the management of the LLC. In the absence of specific provisions in an Operating Agreement, members possess equal rights in the management and conduct of the company's business and affairs.
- Nebraska Revised Statute § 21-111: The "Limited Liability" section states that members and managers are not personally liable for the debts, obligations, or liabilities of the LLC. This helps protect their personal assets from business-related risks.
- Nebraska Revised Statute § 21-197: This statute outlines the dissolution process of an LLC. It covers the circumstances under which voluntary dissolution occurs, how to achieve judicial dissolution, and provides guidance on winding up the LLC's affairs.
Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Single-Member, Member-Managed LLCs taxed under the default status.
Member-Managed
Operating Agreement Template
(Default)
$35
Template for Nebraska Multi-Member, Member-Managed LLCs taxed under the default status.
Get access to all our operating agreements, 100+ other important contract templates, and a step-by-step, interactive platform that will help you build a solid legal foundation for your business. All included in Legal GPS Pro.
