Talk:Operating agreement

[Your LLC Name] Operating Agreement

The undersigned hereby form a Limited Liability Company (hereinafter referred to as the "Company") pursuant to the laws of the state of Kenya and hereby adopt this Operating Agreement (hereinafter referred to as the "Agreement").

Article I. Company Formation

1.1. Names and Purpose

• 1.1.1. Three provisional names have been preliminarily chosen for the company: "KenyaX," "Kenya Exchange," and "GlobalEdConnectKE." These names are selected to reflect the original intent of offering educational and cultural exchange programs. However, the finalization of the company's name depends on confirmation from the registration authority.
• 1.1.2. The Company shall be established as a Limited Liability Company (LLC).
• 1.1.3. The Company's purpose is to generate income. The Company shall engage in any lawful business activity for which limited liability companies may be organized in accordance with the laws of Kenya.

1.2. Registered Office

• 1.2.1. The Company's registered office shall be located at [street address] in Eldoret, Kenya.
• 1.2.2. The address specified in Sub-section 1.2.1. above shall serve as the principal place of business of the Company for official correspondence and legal matters.
• 1.2.3. The Company's business activities may be conducted at any location deemed appropriate by the management.

1.3. Conditions for Continuation

• 1.3.1. Perpetual Existence. The Company shall continue perpetually unless any of the following events occur:
  • (a) Dissolution. The Company may be dissolved in accordance with the provisions outlined in #Article VIII. Company Dissolution of this Agreement.
  • (b) Legal Prohibition. The Company's existence becomes unlawful under applicable state laws due to any event.
• 1.3.2. Compliance. Owners and/or managers of the Company shall ensure that the Company operates in compliance with all relevant laws and regulations to maintain its lawful existence, as well as with this Agreement.
• 1.3.3. Notice. In the event of circumstances potentially leading to the Company's dissolution or any action rendering its existence unlawful, owners and/or managers of the Company shall promptly notify each other and take appropriate actions as outlined in this Agreement.

Article II. Membership

2.1. Members and Ownership

• 2.1.1. Definition of the Member. Any owner or anyone that has Membership Interest as it is defined in the #2.5. Membership Interest section of this Agreement is called the Company member (hereinafter referred to as "Member").
• 2.1.3. Types of Members. The Member can be either an individual or a legal entity that has Ownership Interest in the Company.
• 2.1.4. Limited Liability. The Members enjoy limited liability, meaning the Member's personal assets are generally protected from the debts and liabilities of the Company.
• 2.1.5. Founding Members. The undersigned constitute the initial membership of the Company.
• 2.1.6. Contemporary Members. Additional members may be admitted upon the unanimous consent of the existing members.
• 2.1.7. Member Listing. The #Exhibit B. Listing of Members attached to this Agreement shall list the Members most accurately and promptly. The Listing shall reflect the ownership percentages and be subsequently adjusted through capital contributions or transfers.

2.2. Capital Contributions

• 2.2.1. Contributions to Company's Capital. In order to have a say in the management and decision-making processes of the Company according to the #Article III. Management and share in the profits and losses according to the #Article V. Profits, Losses, and Distributions of this Agreement, the Members shall contribute capital.
• 2.2.2. Initial Contributions. Each Member of the Company shall make an initial capital contribution to the Company upon its formation, as determined by the Members collectively.
• 2.2.3. Forms of Contribution. Capital contributions may be made in the following forms:
  • (a) Cash. The Members may contribute cash to the Company's capital in an amount determined by mutual agreement among the Members.
  • (b) Work. The Members may contribute work or services to the Company, which shall be assigned a cash value as determined by mutual agreement among the Members.
  • (c) Other Resources. Members may contribute resources other than cash, which are convertible to cash, to the Company's capital. The cash value of such resources shall be determined by mutual agreement among the Members.
• 2.2.4. Approval. The amount of cash and the cash value of work and other resources contributed by each Member shall be subject to approval by a unanimous vote of all Members.
• 2.2.5. No Interest. No interest shall be paid on any capital contributions made to the Company by the Members.
• 2.2.6. Withdrawal of Contributions. Except as provided in this Agreement or as required by law, no Member shall have the right to withdraw any part of their capital contribution to the Company without the unanimous consent of all other Members.
• 2.2.7. Recording Contributions. The #Exhibit C. Listing of Capital Contributions attached to this Agreement shall list the capital contributions of the Members most accurately and promptly. The Company's books and other records that the Company shall manage according to the #Article VI. Records and Bookkeeping of this Agreement shall also reflect eligible contributions made by the Members.

2.3. Member Rights

• 2.3.1. Voting Rights. Subject to the provisions of the #2.7. Good Standing section of this Agreement, each Member in a good standing shall have the right to participate in the management of the Company and shall be entitled to cast votes on matters that this Agreement specifies and/or those that are brought before the Members for decision according to the #Article III. Management. Voting rights shall correspond to the Percentages owned by each Member.
• 2.3.2. Financial Rights. Subject to the provisions of the #2.7. Good Standing section of this Agreement, each Member in a good standing shall have the right to receive distributions from the Company in proportion to their respective membership interests as provided for in this Agreement and in accordance with applicable law.
• 2.3.3. Access to Records. Subject to the provisions of the #2.7. Good Standing section of this Agreement, each Member in a good standing shall be entitled to access and examine the Company's records described in the #Article VI. Records and Bookkeeping of this Agreement.
• 2.3.4. Right to Resign. Subject to the provisions of the #2.5. Member Withdrawal, each Member shall have the right to resign from the Company upon written notice to the other Members, subject to any restrictions or requirements set forth in this Agreement or applicable law.
• 2.3.5. Right to Transfer Membership Interest. Subject to the provisions of the #2.5. Membership Interest section of this Agreement, each Member shall have the right to transfer all or any portion of their membership interest in the Company.
• 2.3.6. Right to Call for Dissolution. Subject to the provisions of the #2.7. Good Standing section of this Agreement, each Member in a good standing reserves the right to call for the dissolution of the Company according to the #Article VIII. Company Dissolution of this Agreement.
• 2.3.7. Right to Inspect. Subject to the provisions of the #2.7. Good Standing and #3.5. Inspections sections of this Agreement, each member in a good standing reserves the right to inspect the Company's digital premises and assets.
• 2.3.8. Right to Bring Suit. Each Member shall have the right to bring suit on behalf of the Company to enforce its rights or to seek redress for any harm suffered by the Company, subject to the limitations set forth in this Agreement and applicable law.

2.4. Member Withdrawal

• 2.4.1. Voluntary Withdrawal. A Member may withdraw from the Company voluntarily by providing written notice to the remaining Members and the Company. The effective date of withdrawal shall be specified in the notice, which shall not be less than [number] days from the date of delivery of such notice, unless otherwise agreed upon by the Members.
• 2.4.2. Withdrawal Upon Termination of Membership. In the event of the termination of a Member's participation as it is outlined in the #2.8. Termination of Membership section of this Agreement, the interest held by the departing Member's estate or the dissolved organization's successor shall transition accordingly. The estate or successor organization shall have the option to sell the interest to the remaining Members at its fair market value or nominate a substitute Member, subject to the approval of the remaining Members.
• 2.4.3. Distribution of Interest. Upon withdrawal, whether voluntary or due to termination of membership, the withdrawing Member or the estate of the deceased Member shall be entitled to receive the fair market value of their interest in the Company as of the date of withdrawal or death, as the case may be.
• 2.4.4. Payment Terms. The fair market value of the withdrawing Member's interest shall be paid in cash or, at the election of the remaining Members, in accordance with a reasonable payment plan to be agreed upon by the parties involved. In the event that the fair market value cannot be paid in full at the time of withdrawal or death, the withdrawing Member or the estate of the deceased Member shall be entitled to receive payments in accordance with the agreed-upon payment plan, along with interest at the rate of [X]% per annum on the unpaid balance.
• 2.4.5. Effect on Voting Rights. Upon withdrawal, whether voluntary or due to death, the withdrawing Member or the estate of the deceased Member shall cease to have any voting rights in the Company's affairs, except as otherwise provided by law or this Operating Agreement.
• 2.4.6. Restrictions on Withdrawal. Notwithstanding anything to the contrary herein, no Member shall have the right to withdraw from the Company if such withdrawal would cause the Company to be in violation of any law, regulation, or agreement to which it is a party, or if such withdrawal would render the Company unable to carry on its business in the ordinary course.
• 2.4.7. Assignment of Rights. A withdrawing Member or the estate of the deceased Member shall have no right to assign their interest in the Company to any third party without the prior written consent of the remaining Members, which consent may be withheld in their sole discretion.
• 2.4.8. Tax Consequences. The withdrawing Member or the estate of the deceased Member shall be solely responsible for any tax consequences arising from their withdrawal from the Company or the transfer of their interest, as the case may be, and shall indemnify and hold harmless the Company and the remaining Members from any and all claims, liabilities, damages, or expenses arising therefrom.
• 2.4.9. Effect of Withdrawal. Upon the effective date of withdrawal, whether voluntary or due to death, the withdrawing Member or the estate of the deceased Member shall cease to be a Member of the Company and shall have no further rights or obligations hereunder, except as otherwise provided herein or by law.
• 2.4.10. Survival of Obligations. The withdrawal of a Member, whether voluntary or due to death, shall not relieve such Member or their estate from any obligations or liabilities incurred prior to their withdrawal or death, which shall survive such withdrawal or death and remain enforceable against the withdrawing Member or their estate to the fullest extent permitted by law.

2.5. Membership Interest

• 2.5.1. Definition of Membership Interest. For the purposes of this Agreement, "Membership Interest" or "Ownership Interest" of the Members shall mean the combination of the Member's participation in the Company's management and obtaining economic benefits when and if the Company generates profits. The rights are outlined in the #2.3. Member Rights section of this Agreement.
• 2.5.2. Ownership Percentages. Membership Interests shall be represented by the percentage of ownership (hereinafter, the "Percentage") in the Company held by a Member.
• 2.5.3. Transfer Rights. Each Member shall have the right to transfer all or any portion of their Membership Interest subject to the provisions of this Agreement.
• 2.5.4. Right of First Refusal. Before a Member may offer any portion of their Membership Interest to a third party, they must first offer such interest to the Company and the other Members on a pro-rata basis, subject to the terms and conditions set forth herein. The Company and the other Members shall have [insert number] days from the date of the offer to exercise their right of first refusal by notifying the transferring Member in writing of their intent to purchase the offered Membership Interest.
• 2.5.5. Right of Second Refusal. If the Company and the other Members choose not to exercise their right of first refusal, the transferring Member shall have the right to offer the Membership Interest to the proposed transferee. However, the Company and the other Members shall have the right to buy the Membership Interest by providing written notice to the transferring Member within [insert number] days of receiving notice of the proposed transfer, and by paying a price that is 10% higher than the price offered to the proposed transferee.
• 2.5.6. Effect of Transfer. Upon a valid transfer of Membership Interest, the transferee shall become a Member of the Company with all the rights and obligations associated therewith, subject to the terms of this Agreement.
• 2.5.7. Percentage Records. Most accurate and prompt Percentages shall be stated in the #Exhibit B. Listing of Members attached to this Agreement.

2.6. Fair Market Value

• 2.6.1. Initial Valuation. The fair market value of a Membership Interest shall initially be determined by the Managers in good faith, using methods deemed appropriate under the circumstances.
• 2.6.2. Independent Valuation. If any party disagrees with the initial valuation proposed by the Managers, they may hire an independent appraiser or appraisers at their own expense to determine the fair market value.
• 2.6.3. Arbitration. In the event that several independent appraisers disagree on the value and the parties cannot reconcile on their own, they shall submit the matter to arbitration/mediation for resolution. The decision of the arbitrator/mediator shall be final and binding on all parties.

2.7. Good Standing

• 2.7.1. Definition of Good Standing. A Member shall be deemed to be in "Good Standing" if they fulfill all obligations, responsibilities, and requirements as set forth in this Agreement and applicable state laws, regulations, and requirements governing the operation and management of the Company.
• 2.7.2. Member Obligations. Each Member shall maintain their Good Standing status throughout the duration of their membership in the Company.
• 2.7.3. Maintenance of Good Standing. To maintain Good Standing, a Member shall:
  • (i) Timely fulfill all financial obligations, including but not limited to capital contributions, membership interest purchases, and any other financial commitments as outlined in this Agreement.
  • (ii) Comply with all Company policies, procedures, and decisions made pursuant to this Agreement, provided that such policies and decisions are lawful and reasonable, and comply with applicable laws.
  • (iii) Promptly provide all necessary information and documentation as requested by the Company to ensure compliance with state laws, regulations, and requirements.
  • (iv) Not engage in any activities that could harm the reputation, interests, or operations of the Company.
• 2.7.4. Verification of Good Standing. The Managers shall be responsible for verification of the Good Standing status of any Member at any time.

2.8. Termination of Membership

• 2.8.1. Definition of Termination. For the purposes of this Agreement, Termination of Membership shall mean termination of a Member's participation in the Company as it is outlined in this section below.
• 2.8.2. Automatic Termination. Membership in the Company shall be terminated automatically upon the death or legal incapacity of a Member. If a Member is an organizational entity, such as a corporation, partnership, or trust, membership in the Company shall be terminated automatically upon the dissolution or liquidation of the organizational Member.
• 2.8.3. Termination Due to Failure to Maintain Good Standing. Membership in the Company may be terminated if a Member fails to maintain Good Standing as defined in the #2.7. Good Standing section of this Agreement.
• 2.8.4. Responsibility for Enforcement. In the event that a Member fails to maintain Good Standing as defined in Section #2.7. Good Standing, the Managers shall reinforce the measures as defined in this section below.
• 2.8.5. Warning of Bad Standing. Upon determination by the Managers that a Member has failed to meet the requirements for Good Standing, the Member shall be issued a written warning detailing the specific issues that need to be addressed to regain Good Standing status.
• 2.8.6. 30-days Period to Rectify. The Member shall have a period of 30 days from the date of the warning to rectify the identified issues and come into compliance with the requirements for Good Standing.
• 2.8.7. Termination Procedure. If the Member fails to rectify the identified issues and regain Good Standing status within the specified 30-day period, their membership in the Company may be subject to termination as outlined in the "Termination of Membership" provision of this Operating Agreement.
• 2.8.8. Decision Execution. Upon termination of membership, the Member shall forfeit all rights, interests, and privileges associated with membership in the Company, as outlined in this Operating Agreement.
• 2.8.9. Other Actions. In addition to or in lieu of termination of membership, the Managing Member(s) may take other appropriate actions deemed necessary to address the failure to maintain Good Standing, including but not limited to suspension of membership rights, imposition of fines or penalties, or any other measures deemed necessary to protect the interests of the Company and its Members.
• 2.8.10. Compliance with Applicable Laws. All enforcement measures taken pursuant to this Section, #2.8. Termination of Membership, shall be carried out in accordance with applicable laws governing the operation and management of limited liability companies and the rights of Members.

Article III. Management

3.1. Management Structure

• 3.1.1. Two-Tier Management Structure. The Company shall operate under a two-tier management structure.
• 3.1.2. Upper Tier. The upper tier of the Company's management structure shall be referred to as the "Owners" or "Board of Directors". Subject to the provisions of this Article, #Article III. Management, below, the Owners make significant decisions and override those made by the managers.
• 3.1.3. Lower Tier. The lower tier of the Company's management structure shall be referred to as the "Managers" or "Administration". Subject to the provisions of the #Article IV. The Managers, the Managers run day-to-day operations.

3.2. Decisions by the Owners

• 3.2.1. Authority of the Owners. The Owners reserve the authority to make significant decisions that impact the direction and operation of the company. Such decisions include but are not limited to the following:
  • a) Changes to the Company's formation documents and organizational structure.
  • b) Entering into contracts above [a specified monetary threshold].
  • c) Determining investments and capital expenditure.
  • d) Acquisition or disposal of major assets.
  • e) Approval of the annual budget, strategic plans, and significant business transactions.
  • f) Election or removal of the Managers.
  • g) Overseeing the lower tier, which handles day-to-day operations.
  • h) Resolving disputes among Members.
  • i) Other decisions deemed significant by the Owners.
• 3.2.2. Decision-Making Process. Subject to the provisions of the #3.3. Owners' Meetings section of this Agreement, the Owners' decisions shall be made during Members' meetings.
• 3.2.3. Limitation of Owner Authority. The authority of the owners to make decisions as outlined in this section shall not extend to day-to-day operational matters, which remain within the purview of the managers as specified in the #Article IV. The Managers of this Agreement.

3.3. Owners' Meetings

• 3.2.1. Types of the Meetings.
  • a) Annual Meetings. An annual meeting shall be convened by the Members each year, determined by mutual agreement, to review the Company's affairs and address any pertinent business matters.
  • b) Special Meetings. Special meetings may be called by any Member with at least 7 days' notice to all Members. A quorum shall be constituted by the presence of 50% of the Members.
• 3.2.2. Notice of Meetings. Written notice of each meeting shall be distributed to each Member via personal delivery, mail, email, or other electronic means at least 7 days prior to the scheduled meeting.
• 3.2.3. Quorum. A quorum for any meeting of the Members shall comprise 50% of the Members. In the absence of a quorum, a majority of the present Members may adjourn the meeting as necessary without further notice.
• 3.2.4. Action Without Meeting. Any action required or permitted to be taken at a meeting of the Members may be executed without a formal meeting if consent in writing, detailing the action taken, is endorsed by all Members.
• 3.2.5 Meeting Platforms. The Meetings may be conducted in person, via telephone, electronically, and/or other communication means enabling effective engagement by all participants. Such participation shall constitute presence in person at the meeting.

• • 3.1 Minutes and Decision Making**

All decisions made by the Owners, including instances where owner override authority is exercised, shall be documented and recorded in the minutes of the meeting or written consent. These records shall be maintained as part of the company's official records.

Each member shall possess equal voting rights on all matters concerning the Company's operations. Decisions shall be reached by a simple majority vote, unless otherwise specified in this Agreement.

• • 3.2 Owner Override Provision**

In situations where decisions made by the managers are deemed significant by the owners, the owners reserve the right to override such decisions. This override authority extends to decisions falling within the purview of the managers' responsibilities as outlined in the operating agreement.

• • 3.2.1 Notification:** Managers shall promptly inform the owners of any decision that may be subject to override, providing all relevant information necessary for owners to make an informed decision.

• • 3.2.2 Meeting or Written Consent:** The owners may exercise their override authority through a vote during a meeting convened for that purpose or through written consent. The decision to override must be approved by a majority vote of the owners, as outlined in Section 2b.

• • 3.3 Decision-Making Process**

• • 3.3.1 Managerial Decisions:** Day-to-day decisions within the scope of the managers' authority shall be made by a majority vote of the managers. In the event of a tie, the managing member shall have the deciding vote.

• • 3.3.2 Owner Override Decisions:** Decisions subject to owner override shall require approval by a majority vote of the owners, with each owner having one vote per ownership interest held.

• • 3.5 Communication and Reporting**

Managers shall promptly inform owners of any decisions that may be subject to override, providing all relevant information necessary for owners to make informed decisions. Owners shall have access to all documentation and records related to decision-making processes.

Each member shall possess equal voting rights on all matters concerning the Company's operations. Decisions shall be reached by a simple majority vote, unless otherwise specified in this Agreement.

Decisions shall be reached by a majority vote, unless otherwise stated in this Agreement.

Meetings may be convened at times and locations agreed upon by the members. Notice of meetings shall be provided to all members at least [insert time frame] in advance, detailing the date, time, and agenda.

Member Voting

• • 3.4 Voting Mechanism**

In the event that owners need to override manager decisions as outlined in Section 2, a majority vote of the owners shall be required. Owners may cast their votes in person, by proxy, or through written consent.

  b. **Voting:** Each owner shall have one vote per ownership interest held. Decisions shall be made by a majority vote of the owners present at the meeting, with each owner's vote carrying equal weight.

  c. **Proxy Voting:** Owners may vote in person or by proxy. A proxy must be in writing, signed by the owner, and submitted to the designated individual or entity before the meeting.

• 3.2.6. Meeting Minutes. All decisions made by the Owners, including instances where owner override authority is exercised, shall be documented and recorded in the minutes of the meeting or written consent. These records shall be maintained as part of the company's official records.

3.5. Inspections

These member rights are subject to any limitations, restrictions, or qualifications set forth elsewhere in this Agreement or as required by law.

3.6. Compensations

• 3.6.1. Management Compensation. Any Manager providing services to the Company shall receive compensation commensurate with the value of such services rendered.
• 3.6.2. Reimbursement. The Company shall reimburse Managers or Members for all legitimate direct out-of-pocket expenses incurred in the course of managing the Company.

Article IV. The Managers

This tier is responsible for executing the strategies set by the upper tier, handling day-to-day operations, making routine decisions, and implementing policies and directives from the governing body. Again, the specific term used may depend on the context and preferences of the organization.

Yes, "administration" could also be used to refer to the lower tier in a two-tier management structure. The term "administration" typically conveys the idea of overseeing day-to-day operations, handling routine tasks, and implementing policies and procedures set by the higher tier. It's a commonly used term to describe the operational management level within an organization. Therefore, "administration" is a suitable term for the lower tier in a two-tier management structure.

The managers shall be responsible for day-to-day operations and decision-making, while the owners shall have the authority to establish policies and regulations, as well as to override certain decisions made by the managers, as outlined in Section 2 below.

  The LLC shall be managed by [Number] managers appointed by the members. The managers shall have full authority to handle the day-to-day operations and decision-making of the LLC, including but not limited to financial management, hiring and termination of employees, and entering into contracts on behalf of the LLC. However, certain major decisions as outlined in Section 2 below shall require approval from the owners.

• 3.4.1. The members reserve the right to delegate specific managerial authority to designated managers, who shall act in accordance with this Agreement. Such delegation shall be formalized in writing and ratified by the Members.

4.1. Appointment of The Manager

• 4.1.1. The initial Manager of the Company shall be [Name of Manager], who shall serve until a successor is appointed by the Members.

4.2. Powers and Duties of The Manager

• 4.2.1. The Manager shall be vested with the following powers and duties:
  • a. Managing the day-to-day operations and affairs of the Company.
  • b. Executing contracts, agreements, and transactions on behalf of the Company.
  • c. Recruiting, terminating, and supervising employees and agents.
  • d. Signing checks and other financial instruments.
  • e. Preparing and presenting financial statements to the Members.
  • f. Exercising all other powers necessary for effective business management.

Compliance. and/or managers of the Company shall ensure that the Company operates in compliance with all relevant laws and regulations to maintain its lawful existence, as well as with this Agreement.

Notice. In the event of circumstances potentially leading to the Company's dissolution or any action rendering its existence unlawful, and/or managers of the Company shall promptly notify each other and take appropriate actions as outlined in this Agreement.

4.3. Limitations on Manager's Authority

• 4.3.1. Notwithstanding the foregoing, the Manager shall refrain from:
  • a. Borrowing money or incurring debt on behalf of the Company.
  • b. Selling, leasing, or disposing of Company assets.
  • c. Admitting new Members or approving the Percentage transfers.
  • d. Taking actions resulting in Company termination.

4.4. Removal of The Manager

• 4.4.1. The Manager may be removed with or without cause by a majority vote of the Members.

4.5. Resignation of The Manager

• 4.5.1. The Manager may resign at any time by submitting written notice to the Members. The resignation shall become effective upon receipt by the Members, unless a later date is specified.

Article V. Profits, Losses, and Distributions

5.1. Allocation of Profits and Losses

• 5.1.1. Profits and losses of the Company shall be allocated among the members in accordance with their respective ownership interests.

5.2. Distribution Procedure

• 5.2.1. Distributions: Profits and losses shall be distributed to the Members in proportion to their ownership interests in the Company.
• 5.2.2. Restrictions on Distributions: No distribution shall be made if, upon making such distribution, the Company would be unable to meet its debts in the ordinary course of business or if the distribution would result in the Company's total assets being less than its total liabilities.

Note: Distributions will be determined and distributed annually or as decided by the Members, based on available funds after covering expenses and liabilities. Upon liquidation, distributions will be made in accordance with positive capital account balances or as specified by relevant regulations.

Article VI. Records and Bookkeeping

Documentation and Record-Keeping:**

  Managers and owners shall maintain accurate records of all decisions made, including instances where owners override manager decisions. Minutes of meetings, votes, and written consents shall be recorded and maintained for record-keeping purposes.

6.1. Company Records

• 6.1.1. Record-Keeping. Records shall be diligently kept by the Manager at the primary location of the Company, encompassing:
  • a. A comprehensive list of Members' names and contact details.
  • b. Copies of the Company's formation documents and any subsequent amendments.
  • c. Financial statements and tax returns from the preceding three years.
• 6.1.2. Record Maintenance. The Managers hold the responsibility for maintaining meticulous and complete accounting records of the Company's activities at its primary location. The Managers possess the discretion to select the accounting method, with the Company's accounting period designated as the calendar year.

6.2. Member Accounts

• 6.2.1. Separate capital and distribution accounts shall be maintained for each member by the Managers. Each member's capital account shall be calculated and managed in accordance with Treasury Regulation 1.704-l(b)(2)(iv) and shall include:
  • (a) Initial capital contribution by the member;
  • (b) Any additional capital contributions made by the member;
  • (c) Credit balances transferred from the member's distribution account to their capital account; and shall be reduced by: (x) Distributions made to the member reducing the Company's capital; (y) The member's portion of Company losses charged to their capital account.

6.3. Financial Reports

• 6.3.1. At the conclusion of each calendar year, the Managers shall close the accounting books and prepare statements detailing each member's distributive share of income and expenses for income tax reporting purposes. These statements shall be provided to each member.

Article VII. Dispute Resolution

The fair market value shall be determined by an independent appraiser mutually agreed upon by the parties involved, or if no agreement can be reached, by a third-party appraiser chosen by a court of competent jurisdiction.

7.1. Dispute Resolution Process

• 7.1.1. In the event of any dispute arising among the members regarding the Company's affairs, the parties shall initially endeavor to resolve the dispute through sincere negotiations.
• 7.1.2. Recognizing the diversity of ownership Percentages among the members, if a resolution cannot be achieved through negotiations within 10 days, the parties agree to engage in mediation facilitated by a mutually agreed-upon mediator.
• 7.1.3. Should mediation prove unsuccessful in resolving the dispute, the parties hereby consent to binding arbitration in accordance with the rules of the Kenyan Arbitration Association, with due consideration given to the respective ownership percentages of the members.

7.2. Conflict Resolution Process

• 7.2.1. Any member with a conflict of interest concerning any Company matter must disclose such conflict to the other members.
• 7.2.2. A member facing a conflict of interest shall refrain from voting on any related matter, and the decision regarding such matter shall be made by the members without conflicts of interest.

Article VIII. Company Dissolution

The resignation, expulsion, bankruptcy, retirement of a Member or the occurrence of any other event that terminates the continued membership of a Member of the Company; or

• • 4. Valuation:** In the absence of unanimous agreement on the valuation of work or other non-cash assets, an independent valuation may be sought, the cost of which shall be borne by the Members equally or as otherwise agreed upon.

8.1. Dissolution Procedure

• 8.1.1. The Company may be dissolved under the following circumstances:
  • a. The affirmative vote of a majority of the Members;
  • b. The issuance of a judicial dissolution decree under the Act; or
  • c. Any other event stipulated by law necessitating the Company's dissolution.

8.2. Company Dissolution Process

• 8.2.1. Upon dissolution, unless otherwise mandated by law or agreed upon by the Members, the Manager shall oversee the winding up of the Company's affairs, including the liquidation of assets and settlement of liabilities.
• 8.2.2. Following the satisfaction of all debts, liabilities, and obligations, the remaining assets shall be distributed among the Members in proportion to their respective ownership interests.
• 8.2.3. The Manager is responsible for filing Articles of Dissolution with the Secretary of State or relevant governmental body as per statutory requirements.
• 8.2.4. Despite the dissolution, continuation of the Company's business may occur upon agreement by a majority of the Members.

• • Right to Call for Dissolution**

• • 1. Invocation of Dissolution:**

  a. Any Member holding at least [XX]% ownership interest in the Company shall have the right to call for the dissolution of the Company.
  b. The Member invoking dissolution must provide written notice to all other Members, specifying the reasons for seeking dissolution and proposing a dissolution date.

• • 2. Unanimous Consent Requirement:**

  a. Dissolution shall only be effectuated upon the unanimous consent of all Members, unless otherwise agreed upon in writing by all Members prior to the invocation of dissolution.
  b. If unanimous consent is not achieved within [XX] days from the date of the notice of dissolution, the Member invoking dissolution may petition the relevant court for judicial dissolution, subject to applicable law.

• • 3. Procedure for Winding Up:**

  a. Upon the decision to dissolve the Company, the Members shall proceed with the winding-up process in accordance with the applicable laws of the jurisdiction governing the Company.
  b. The Members shall appoint a designated representative or a dissolution committee to oversee the winding-up process, including the liquidation of assets, settlement of liabilities, and distribution of remaining assets.

• • 4. Allocation of Assets:**

  a. Upon completion of the winding-up process, the remaining assets shall be distributed among the Members in accordance with their respective ownership interests or as otherwise agreed upon by the Members.
  b. Any assets remaining after the satisfaction of Company liabilities and obligations shall be distributed to the Members in proportion to their ownership interests, unless otherwise agreed upon by all Members.

• • 5. Dissolution Costs:**

  a. The costs incurred in connection with the dissolution and winding-up of the Company, including but not limited to legal fees, shall be borne by the Company and treated as part of the Company's liabilities.
  b. Any Member initiating dissolution shall be responsible for their proportionate share of dissolution costs, unless otherwise agreed upon by all Members.

• • 6. Effect of Dissolution:**

  a. Upon the completion of the winding-up process and distribution of assets, the Company shall be deemed dissolved, and its existence shall cease, subject to any continuing obligations as required by law or as otherwise agreed upon by the Members.
  b. The Members shall execute and file all necessary documents to terminate the Company's existence in accordance with the laws of the jurisdiction governing the Company.

• • 7. Survival of Certain Provisions:**

  a. Notwithstanding the dissolution of the Company, the provisions of this Operating Agreement necessary to wind up the affairs of the Company and distribute its assets shall survive the dissolution and remain binding upon the Members.

• • 8. Indemnification:**

  a. Each Member shall indemnify and hold harmless the other Members, the Company, and its agents, officers, and employees from and against any claims, liabilities, losses, damages, or expenses incurred as a result of the dissolution, unless such claims arise out of willful misconduct or gross negligence.

Article IX. Amendments

9.1. Amendment Procedure

• 9.1.1. Any amendments to this Agreement must be approved by written consent from all Members.

9.2. Process for Amending the Agreement

• 9.1.2. This Agreement may only be amended through unanimous written consent from all members.

Article X. Miscellaneous

10.1. Law, Severability, Entirety

• 10.1.1. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Kenya.
• 10.1.2. Severability. If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall remain in full force and effect.
• 10.1.3. Entire Agreement. This Agreement constitutes the entire understanding between the Members regarding the Company and supersedes all prior agreements, discussions, and understandings, whether written or oral.

10.2. Indemnification

• 10.2.1. The Company shall indemnify and defend each member, manager, officer, employee, and agent against any claims, liabilities, or losses incurred during the performance of their duties on behalf of the Company, to the extent permitted by law.
• 10.2.2. Each member agrees to indemnify and hold harmless the Company, its managers, officers, and other members from any claims arising out of the member's execution of documents or certification of information.

Limitation of Liability

• 3.10.1. Members shall not be personally liable for Company debts or obligations, except as mandated by law.

10.3. Additional Provisions

• 10.3.1. Any notices required or permitted under this Agreement shall be in writing and considered duly given if delivered personally or sent by certified mail with return receipt requested to the addresses provided below.
• 10.3.2. This Agreement embodies the complete understanding and agreement among the members concerning its subject matter. It may be executed in multiple counterparts, each of which shall be considered an original, but all of which together shall constitute one and the same instrument.

Article XI. Execution and Certification by Members

11.1. Execution of Documents

• 11.1.1. Signature Authority. Any document, agreement, or resolution requiring the signature of the members of the LLC may be signed by any member or members duly authorized by the Agreement or a resolution of the Members.
• 11.1.2. Execution. Each member may execute such documents individually or collectively through an authorized representative.

11.2. Member Certifications

• 11.2.1. Certification of Signatures. By signing any document on behalf of the LLC, each member certifies that their signature is genuine and that they have the authority to execute the document on behalf of the LLC.
• 11.2.2. Accuracy of Information. Each member certifies that any information provided in the document is true, accurate, and complete to the best of their knowledge.

11.3. Date of Execution

• 11.3.1. Effective Date. The date of execution of any document by a member shall be deemed the effective date of such document unless otherwise specified.

11.4. Counterparts

• 11.4.1. Execution in Counterparts. This agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

11.5. Signatures

In Witness Whereof, the undersigned have executed this Agreement as of the date first above written.

[Signature section]

Exhibit A. Listing of Managers

By a majority vote of the Members the following Managers were elected to operate the Company pursuant to ARTICLE 4 of the Agreement: __________________________________________ Printed Name ___________________________ Chief Executive Manager __________________________ Address __________________________ __________________________ ______________________________ Printed Name ___________________________ Title ______________________ __________________________ Address __________________________ __________________________ The above listed Manager(s) will serve in their capacities until they are removed for any reason by a majority vote of the Members as defined by ARTICLE 4 or upon their voluntary resignation. Signed and Agreed this _______day of ________________________, 20______. _____________________________ _____________________________ Signature of Member Signature of Member _____________________________ _____________________________ Signature of Member Signature of Member

Exhibit B. Listing of Members

As of the ____ day of _______________, 20____ the following is a list of Members of the Company: Name____________________________ Percent ______% X____________________________ Address ____________________________________________ Name____________________________ Percent ______% X____________________________ Address ____________________________________________ Name____________________________ Percent ______% X____________________________ Address ____________________________________________ Name____________________________ Percent ______% X____________________________ Address ____________________________________________

Exhibit C. Listing of Capital Contributions

Pursuant to ARTICLE 2, the Members' initial contribution to the Company capital is stated to be $______________________. The description and each individual portion of this initial contribution is as follows: __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ __________________________________________________________ $______________ SIGNED AND AGREED this _____ day of ________________, 20____. ____________________________________ ____________________________________ Signature of Member Signature of Member ____________________________________ ____________________________________ Signature of Member Signature of Member

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