This questionnaire will assist with the preparation of your LLC Operating Agreement.  You may not have a strong opinion on every item described below, but all of them should be adequately addressed in your Operating Agreement.

I. GENERAL INFORMATION ABOUT THE LLC
1. Name  
2. Mailing Address
3. Physical Address  
4. Registered Agent  
5. Registered Address  
6. Business Purpose  
7. Identify the Initial Members
8. What level of approval is required to amend the Operating Agreement?  

II. RIGHTS AND DUTIES OF MEMBERS
1. Will all Members be involved in the LLC’s business? 
2. Will Members own “Membership Interests,” “Membership Units,” “Shares” or some other denomination?  
3. How many class of Membership Interests?  
4. What distinguishes classes of Membership Interests?  
5. Will the LLC issue Membership Certificates?
6. Will any class of membership interest have preemption rights?  Which ones?  
7. What will be required for the admission of new Members?    
8. What Capital Contributions will be required from the Members?    
9. Can the LLC’s require Capital Calls from the Members? 
 Under what circumstances?     
10. What happens if a Member fails to pay its share of a Capital Call?  (Usually, the Defaulting Member’s Membership Interest is reduced, the Defaulting Member is treated as having made a loan, or either.)  
11. Do Members have an exclusive duty to work for the LLC? 
12. Can Members compete against the LLC? 
 How long are Members prohibited from competing against the LLC?     
13. Describe any special duties owed by the Members to the LLC.      
14. Describe any special restrictions on the Membership Interest of any Member.  
  
III. MANAGEMENT
1. Will the day-to-day activities of the LLC be managed by the Members or Managers?   
2. How many Managers will the LLC have?  
3. Must the Managers be Members?  
4. How will Managers be appointed?    
5. How many votes will each Manager have?  
6. Will actions by the Managers require majority (greater than 50%) approval or some other level of approval?  
7. Do any actions by the Managers require a different level of approval?    
8. Do actions by the Managers without a meeting require unanimous approval or the same approval that would be required at a meeting?     
9. Who decides how much the Managers are paid as management fees?  
10. What happens when a Manager ceases to be manager?
11. Will the LLC have officers (for example, President, CEO, etc.)? 
12. What actions can only be taken by the Members? (Typically, these are “big” actions that affect the purpose of the LLC, the ability of the LLC to meet its purpose, or the ownership of the LLC.)  
13. Will actions by the Members require approval by Members holding a majority (greater than 50%) of the Membership Interests or some other level of approval?  
14. Do any actions by the Members require a different level of approval?  
15. Do actions by the Members without a meeting require unanimous approval or the same approval that would be required at a meeting?   
  
IV. PROFITS AND DISTRIBUTIONS
1. Are profits and losses of the LLC generally allocated pro rata among the Members or by some other method?  
2. Describe any circumstances in which profits and losses are not allocated pro rata.  
3. Identify any Members entitled to the return or its Capital Contribution prior to the general allocation of profits among the Members.  
4. Identify any members entitled to a guaranteed return on investment prior to the general allocation of profits among the Members.  
5. Who will decide when distributions of cash are paid to the Members?  
6. Is the LLC required to make distributions from available cash to cover the income tax liabilities of the Members resulting from their ownership of Membership Interests? 

V. TRANSFER OF MEMBERSHIP INTERESTS
1. Are Members prohibited from transferring Membership Interests without approval of the other Members? 
2. What level of approval is required for transfers of Membership Interests?  
3. Are Members permitted to transfer Membership Interests to other Members? 
4. Are Members permitted to transfer Membership Interests to a trust for estate planning purposes? 
5. Describe any other permitted transfers of Membership Interests.  
6. For the situation where a Member dies, describe the right or obligation of the LLC or the other Members to purchase the deceased Member’s Membership Interest?  
7. For the situation where a Member becomes disabled, describe the right or obligation of the LLC or the other Members to purchase the disabled Member’s Membership Interest.  
8. Describe whether the LLC or the Members will carry key man life and/or disability insurance?  
9. For the situation where a Member voluntarily or involuntarily attempts to transfer its Membership Interest (including through a division of marital property in a divorce), describe the right or obligation of the LLC or the other Members to purchase the Member’s Membership Interest.  
10. For the situation where a Member’s employment by the LLC is terminated, describe the right or obligation of the LLC or the other Members to purchase the Member’s Membership Interest.  
11. For the situation were a Member breaches the Operating Agreement, describe the right or obligation of the LLC or the other Members to purchase the Member’s Membership Interest.  
12. For each situation described above, describe the manner for determining the price for purchase of the Membership Interest.  
13. Describe any discount in the price for purchase of the Membership Interest in the event a Member breaches the Operating Agreement or is terminated from employment by the LLC.  
14. For each situation described above, describe the manner for determining the payment terms for purchase of the Membership Interest.  
15. Should the Operating Agreement including a “shotgun” buy/sell option?  (This deadlock-breaking option allows any Member to offer to sell to any other Member the offeror’s Membership Interest for the price stated by the offeror, or to purchase the offeree’s Membership Interest for the same price, whichever option is decided by the offeree.) 
16. Should the Operating Agreement including a “drag along” option?  (This option allows Members wanting to sell a majority of the Membership Interests to force the other Members to go along with the sale on the same terms.)
17. Should the Operating Agreement include a “tag along” option?  (This option allows minority Members to required Members wanting to sell a majority of the Membership Interests to allow them to participate in the sale on the same terms.)

VI. TAXES
1. Should the LLC be taxed like a partnership, S corporation, or C corporation?  
2. Which Member should be designated as the LLC’s representative for tax purposes?
  
VII. OTHER PROVISIONS
Describe any other provisions that should be address in the Operating Agreement.