The Operating Agreement, explained
Governs the LLC: decision-making, fair-use, default remedies, sale and replacement rules. We provide a 2-page summary alongside the full document.
The Operating Agreement is the LLC's governance document. It defines how decisions get made, what each member owes the others, and how disputes resolve. Each vehicle's LLC has its own Operating Agreement, but they share the same template.
What it covers
- Member rights and obligations (capital contributions, fair-use rules, voting).
- Decision thresholds (75% supermajority for material decisions like sale, modification, replacement).
- Default remedies (what happens if a member stops paying or repeatedly causes damage).
- Distribution waterfall (how proceeds flow on a sale or total loss).
- Exit terms (12-month minimum hold, member-to-member transfer process, no guaranteed buyer or price).
- Dispute resolution (mandatory mediation, then arbitration under AAA rules).
We always provide a 2-page plain-English summary alongside the full 30–40 page document. Read both before signing. Your accountant or attorney is welcome to review.
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