Simple Operating Agreement For Two Member LLC for the United Kingdom

Simple Operating Agreement For Two Member LLC Template for England and Wales

A Simple Operating Agreement for a Two-Member LLC is a foundational document that establishes the framework for managing and operating a limited liability company under England and Wales law. While LLCs are not a native UK business structure, this agreement adapts LLC principles to the UK limited company framework, outlining member rights, responsibilities, capital contributions, profit sharing, and decision-making processes. The document ensures compliance with UK company law while maintaining the flexibility and simplicity desired in a two-member business structure.

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What is a Simple Operating Agreement For Two Member LLC?

A Simple Operating Agreement For Two Member LLC serves as the primary governing document for businesses formed by two individuals seeking to establish a formal business structure while maintaining operational flexibility. While structured as an LLC-style agreement, it incorporates provisions compliant with England and Wales company law. This document is particularly useful for small businesses, startups, and professional partnerships where two individuals wish to formalize their business relationship, define their respective rights and obligations, establish capital contributions, and set out management procedures. It includes essential provisions for decision-making, profit distribution, and transfer of interests, while being adaptable to various business types and sectors.

What sections should be included in a Simple Operating Agreement For Two Member LLC?

1. Parties: Identifies the members of the LLC and their contact details

2. Background: Sets out the context and purpose for establishing the LLC

3. Definitions: Defines key terms used throughout the agreement

4. Company Formation: Details of company establishment and structure

5. Capital Contributions: Specifies initial and ongoing capital contributions

6. Membership Interests: Defines ownership percentages and voting rights

7. Management Structure: Outlines how the company will be managed

8. Decision Making: Procedures for company decisions and voting

9. Distributions: Rules for profit distribution

10. Transfer of Interests: Procedures for transferring ownership interests

What sections are optional to include in a Simple Operating Agreement For Two Member LLC?

1. Non-Compete Provisions: Restrictions on competitive activities - use when members may have competing business interests

2. Intellectual Property Rights: Ownership and protection of IP - use when the business involves significant IP assets

3. Additional Capital Calls: Procedures for requesting additional capital - use when future capital needs are anticipated

What schedules should be included in a Simple Operating Agreement For Two Member LLC?

1. Schedule 1: Initial Capital Contributions: Detailed breakdown of members' initial investments

2. Schedule 2: Members' Contact Information: Complete contact details for all members

3. Schedule 3: Company Assets: List of company's initial assets

4. Appendix A: Business Plan: Initial business plan and projections

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Operating Agreement

Sector

Sales

Cost

Free to use
Clauses
Industries

Companies Act 2006: The primary legislation governing company formation, operation, and management in England and Wales. While LLCs don't exist in UK law, this Act provides the fundamental framework for limited companies.

Limited Liability Partnerships Act 2000: Although not directly applicable to LLCs, this legislation contains important principles for member-managed businesses that can be adapted for the operating agreement.

Partnership Act 1890: Contains foundational principles for business partnerships that remain relevant to modern business structures and can inform member relationships in the operating agreement.

Companies House Requirements: Regulatory requirements for business registration, filing obligations, and ongoing disclosure requirements that must be considered in the operating agreement.

UK Corporate Governance Code: Best practices for company management and governance that should be reflected in the operating agreement structure.

Small Business, Enterprise and Employment Act 2015: Legislation affecting reporting and transparency requirements for small businesses, which must be accounted for in the operating agreement.

Corporation Tax Act 2010: Key tax legislation that affects how the company's profits are taxed and should be considered in profit distribution provisions.

Income Tax Act 2007: Tax legislation affecting individual members' income from the business, relevant for provisions about distributions and member payments.

Finance Acts: Various annual acts that update tax and financial regulations, which must be considered for ongoing compliance and financial provisions in the operating agreement.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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