Limited Liability Companies

During the last 15 years or so, the limited liability partnership (LLP) and the limited liability company (LLC), have been added to the options for business entities.  An initial consideration in choosing between these forms is the number of participants.  An LLP must have two or more partners, but in many states, an LLC can have a single member (owner).

A limited liability company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.

A particularly attractive feature of the LLC entity is its flexibility of management. The statutes governing LLCs do not set out strict rules for the issuance of ownership interests, recreation of classes of interest or distributions to different classes. There are no requirements for complex hierarchies of directors, shareholders and officers, or delineations of power to amend bylaws, elect managers, or authorize distributions. The members of an LLC are able to determine the entity’s management structure (or lack of it) themselves through the operating agreement that initiates the company.

In addition to the limited liability and flexible management offered by the LLC form, there are significant tax advantages as well. While the participants enjoy the limited liability of a corporate structure, the IRS has chosen to treat LLCs in the same way as it treats partnerships, with the advantages of pass-through of income and losses for federal tax purposes.

Most states follow the Uniform Limited Liability Company Act (ULLC). An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words limited liability company or LLC.

A few states also require that a notice of the intention to form an LLC be published in a local newspaper. The members can decide how to operate the business. If there is no agreement, the state LLC statute will govern the outcome, and if there is no statute on the is­sue, partnership law principles apply.

Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Members may delegate authority to managers who run the LLC much the same way officers of a corporation would run a corporation.  Profits and losses are shared according to the terms of the operating agreement.

Dissociation and Dissolution of an LLC

Dissociation occurs when a member ceases to be associated with the carrying on of a business. A member of an LLC has the power, but may not have the right, to dissociate from the firm. Events that trigger dissociation under the Uniform Limited Liability Company Act are the same as those under the Uniform Partnership Act.

Effect of Dissociation

On dissociation, a member’s right to participate in the firm’s business ends. The duty of loyalty also ends, and the duty of care continues only with respect to events that occurred before dissociation. The member’s interest in the firm must be bought out according to the LLC agreement, or for its “fair” value.

Dissolution

A dissociating member does not normally have the right to force the firm to dissolve (although the other members can dissolve the firm if they want and a court might order dissolution). On dissolution, any member can participate in winding up. After liquidation of the assets, the proceeds are distributed first to creditors (which may include members), second to capital contributors, and finally to members according to the operating agreement or in equal shares.

Limited Liability Partnerships

A limited liability partnership (LLP) is a partnership in which the partners have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence.

All of the owners of an LLP have limited personal liability for business debts. LLPs are particularly well-suited to professional groups, such as lawyers and accountants. In fact, in some states LLPs are only available to professionals.

Professionals often prefer LLPs to general partnerships, corporations, or LLCs because they don’t want to be personally liable for another partner’s problems – particularly those involving malpractice claims. An LLP protects each partner from debts against the partnership arising from professional malpractice lawsuits against another partner. (A partner who loses a malpractice suit for his own mistakes, however, doesn’t escape liability.)

Creating a limited liability partnership is done at the state level. Each state has its own rules, but in general you must pay a fee and file papers with the state, usually a  “certificate of limited liability partnership.” This document is similar to the articles (or certificate) filed by a corporation or an LLC and includes information about the general partners. Filing fees for LLPs are similar to those for corporations and LLCs.

Advantages and Disadvantages 

Liability Protection

One advantage of a limited liability partnership is the liability protection it affords. This type of partnership structure protects individual partners from personal liability for negligent acts of other partners or employees not under their direct control. In addition, individual partners are not personally responsible for company debts or other obligations. This is advantageous for an individual partner when potential lawsuits or claims of negligence against the business are concerned.

Tax Advantages

Individuals in a partnership are normally liable for filing personal income taxes, self-employment taxes and estimated taxes for themselves, according to the Internal Revenue Service. The partnership itself is not responsible for paying taxes. The credits and deductions of the company are passed through to partners to file on their individual tax returns. Credits and deductions are divided by the percentage of individual interest each partner has in the company. This can be beneficial for partners who have a limited interest in the company.

Flexibility

Limited liability partnerships offer participants flexibility in business ownership. Partners have the authority to decide how they will individually contribute to business operations. Managerial duties can be divided equally or separated based on the experience of each partner. In addition, partners who have a financial interest in the company can elect to not have any authority over business decisions but still maintain ownership rights based on their percentage interest in the company.

How Do You Choose between LLCs and LLPs 

One of the most important decisions that an entrepreneur makes is the selection of the form in which to do business.  To make the best decision, a businessperson should understand all aspects of the various forms, including legal, tax, licensing, and business considerations.  It is also important that all of the participants in the business understand their actual relationship, regardless of the or­ganizational structure.

Both LLPs and LLCs can set up whatever management structure the participants desire.  Also, all unincorporated business organizations, including LLPs and LLCs, are treated as partnerships for federal income tax purposes (unless an LLC elects to be treated as a corporation).  This means that the firms are not taxed at the entity level.  Their income is passed through to the partners or mem­bers who must report it on their individual income tax returns.  The chief benefits of electing corporate status for tax purposes are that the members generally are not subject to self-employment taxes, and fringe benefits may be provided to employee-members on a tax-reduced basis.  The tax laws are com­plicated, however, and a tax professional should be consulted about the details.

Frequently Asked Questions

What is the difference between a limited liability company (LLC) and a limited liability partnership (LLP)? An LLP is similar to an LLC? 

The difference between them is that an LLP is designed more for professionals who nor­mally do business as partners in a partnership.  The major advantage of the LLP is that it allows a partner­ship to continue as a pass-through entity for tax purposes but limits the personal liability of the partners.

Why are LLCs and LLPs attractive to businesspersons?

For many business persons, these business forms combine the tax advantages of partnerships with the limited liability of corporations. The income of the firm is passed through to the members or the partners, rather than being taxed at the or­ganization’s level.  Even one-member LLCs may realize the tax advantage that accrues from not being taxed as a corporation (unless the LLC elects otherwise).  Also, the members or the partners of the firm are not usually liable beyond the extent of their investment in the firm for the debts and other obligations of the firm.

Why should the members of an LLC (or the participants in any forms of business organization discussed in this chapter) prefer to put the terms of their operating agreement in writing?

Generally, LLC members should protect their interests by forming a written operating agreement.  If there is no written agreement covering an issue in dispute among the members, the state LLC statute will govern the outcome.  Typically, the principles of partnership law apply.  These statutes and principles may not be to the liking of all, or any, of the members.

What are the characteristics of a limited liability partnership (LLP)?

An LLP is similar to an LLC.  The difference between them is that an LLP is designed more for professionals who nor­mally do busi­ness as partners in a partnership.  The major advantage of the LLP is that it allows a partner­ship to con­tinue as a pass-through entity for tax purposes but limits the personal liability of the partners.

Member Managed Limited Liability Company Operating Agreement

This Agreement, dated (date), made and entered into between XYZ, LLC, a limited liability company organized pursuant to the (Name of State) Limited Liability Company Act, hereinafter called the Company, (Name of Member One), of (street address, city, county, state, zip code), (Name of Member Two), of (street address, city, county, state, zip code), and (Name of Member Three), of (street address, city, county, state, zip code), hereinafter called the Members.

In consideration of the mutual benefits and obligations set forth in this Agreement, the parties agree as follows:

A. Definition of Terms. Unless the context otherwise requires, the terms defined in this Section I shall, for the purposes of this Agreement, have the following meanings:

  • (Name of State) Act means the (Name of State) limited liability company statute, (citation to statute), as amended from time to time.
  • Additional Members has the meaning set forth in Section XIII.
  • Agreement means this Limited Liability Company Agreement of the Company, as amended, modified, supplemented or restated from time to time.
  • Capital Account means, with respect to any Member, the account maintained for such Member in accordance with the provisions of Section IV.
  • Capital Contribution means, with respect to any Member, the aggregate amount of money and the fair market value of any property (other than money) contributed to the Company pursuant to Section IV with respect to such Member’s Interest.
  • Certificate means the Certificate of Formation of the Company and any and all amendments to the Certificate of Formation and restatements of the same filed on behalf of the Company with the office of the Secretary of State of the State of (Name of State) pursuant to the (Name of State) Act.
  • Code means the Internal Revenue Code of 1986, as amended from time to time, or any corresponding federal tax statute enacted after the date of this Agreement. A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date of this Agreement, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Agreement containing such reference.
  • Company means XYZ, LLC, the limited liability company formed and continued under and pursuant to the (Name of State) Act and this Agreement.
  • Covered Person means a Member, any Affiliate of a Member, any officers, directors, shareholders, partners, employees, representatives or agents of a Member, or their respective Affiliates, or any employee or agent of the Company or its Affiliates.
  • Fiscal Year means:
    • The period commencing upon the formation of the Companyand ending on (month and day), (year);
    • Any subsequent 12-month period commencing on (month and day), and ending on (month and day); or
    • Any portion of the period described in Clause 2 above which the Company is required to allocate Profits, Losses and other items of Company income, gain, loss or deduction pursuant to Section VIII.
  • Interest means a Member’s limited liability company interest in the Company which represents such Member’s share of the profits and losses of the Company and a Member’s right to receive distributions of the Company’s assets in accordance with the provisions of this Agreement and the (Name of State) Act.
  • Member means each of (Name of First Member), (Name of Second Member), and (Name of Third Member), and includes any Person admitted as an Additional Member pursuant to the provisions of this Agreement, in such Person’s capacity as a member of the Company; Members means two or more of such Persons when acting in their capacities as members of the Company. For purposes of the (Name of State) Act, the Members shall constitute one class or group of members.
  • Net Cash Flow means, for each Fiscal Year or other period of the Company, the gross cash receipts of the Company from all sources, but excluding any amounts, such as gross receipts taxes, that are held by the Company as a collection agent or in trust for others or that are otherwise not unconditionally available to the Company, less all amounts paid by or for the account of the Company during the same Fiscal Year or other period (including, but not limited to, payments of principal and interest on any Company indebtedness and expenses reimbursed to the Members under Section V-B, and less any amounts determined by the Members to be necessary to provide a reasonable reserve for working-capital needs or any other contingencies of the Company. Net Cash Flow shall be determined in accordance with the cash receipts and disbursements method of accounting and otherwise in accordance with generally accepted accounting principles, consistently applied. Net Cash Flow shall not be reduced by depreciation, amortization, cost recovery deductions, depletion, similar allowances or other non-cash items, but shall be increased by any reduction of reserves previously established.
  • Percentage Interest means the Interest of a Member, expressed as a portion of one hundred percent, as shown on Schedule A.
  • Person includes any individual, corporation, association, partnership (general or limited), joint venture, trust, estate, limited liability company, or other legal entity or organization.
  • Profits and Losses means, for each Fiscal Year, an amount equal to the Company’s taxable income or loss for such Fiscal Year, determined in accordance with Section 703(a) of the Code.
  • Tax Matters Partner has the meaning set forth in Section XI-A
  • Treasury Regulations means the income tax regulations, including temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

II. Formation and Term

A. Formation.

  • The Members have formed the Company as a limited liability company under and pursuant to the provisions of the (Name of State) Act and agree that the rights, duties and liabilities of the Members shall be as provided in the (Name of State) Act, except as otherwise provided in this Agreement.
  • Upon the execution of this Agreement or a counterpart of this Agreement, (Name of Member One), (Name of Member Two), and (Name of Member Three) shall be admitted as Members of the Company.
  • The name and mailing address of each Member and the amount contributed to the capital of the Company shall be listed on the attached Schedule A. The Members shall be required to update Schedule A from time to time as necessary to accurately reflect the information in the schedule. Any amendment or revision to Schedule A made in accordance with this Agreement shall not be deemed an amendment to this Agreement. Any reference in this Agreement to Schedule A shall be deemed to be a reference to Schedule A as amended and in effect from time to time.
  • (Name of Member One), as an authorized person within the meaning of the (Name of State) Act, shall execute, deliver and file the Certificate.

B. Name. The name of the Company is XYZ, LLC. The business of the Company may be conducted upon compliance with all applicable laws under any other name designated by the Members.

C. Term. The term of the Company shall commence on the date the Certificate is filed in the office of the Secretary of State of the State of (Name of State) and shall continue until (date), unless the Company is dissolved before such date in accordance with the provisions of this Agreement. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate in the manner required by the (Name of State) Act.

D. Registered Agent and Office. The Company’s registered agent and office in the State of shall be (Name), of (street address, city, county, state, zip code). At any time, the Members may designate another registered agent or registered office.

E. Principal Place of Business. The principal place of business of the Company shall be at (street address, city, county, state, zip code). At any time, the Members may change the location of the Company’s principal place of business.

F. Qualification in Other Jurisdictions. The Members shall, if required by law or if deemed advisable by the Members, cause the Company to be qualified, formed or registered under assumed or fictitious name statutes or similar laws in any jurisdiction in which the Company transacts business. (Name of Member One) as an authorized person within the meaning of the (Name of State) Act, shall execute, deliver and file any certificates (and any amendments or restatements of such certificates) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business.

III.        Purpose and Powers of the Company

A. Purpose. The Company is formed for the object and purpose of, and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for which limited liability companies may be formed under the (Name of State) Act and engaging in any and all activities necessary, convenient, desirable or incidental to the foregoing, including, but not limited to, acquiring, holding, managing, operating and disposing of securities of corporations, partnerships, limited liability companies and trusts.

B. Powers of the Company. The Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, incidental or convenient to or for the furtherance of the purpose set forth in Section III-A, including, but not limited to, the power:

  1. To conduct its business, carry on its operations and have and exercise the powers granted to a limited liability company by the (Name of State) Act in any state, territory, district or possession of the United States, or in any foreign country that may be necessary, convenient or incidental to the accomplishment of the             purpose of the Company;
  2. To acquire by purchase, contribution of property or otherwise, own, hold, operate, maintain, finance, sell, convey, transfer, or dispose of any securities or other personal property that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company;
  3. To enter into, perform and carry out contracts of any kind, including, but not limited to, contracts with any Member, any Affiliate of a Member, or any agent of the Company necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company;
  4. To purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships (including, but not limited to, the power to be admitted as a partner and to exercise the rights and perform the duties created by such partnerships), trusts, limited liability companies (including, but not limited to, the power to be admitted as a member or appointed as a manager and to exercise the rights and perform the duties created by such admission or appointment), or individuals or direct or indirect obligations of the United States or of any government, state, territory, governmental district or municipality or of any instrumentality of any of them;
  5. To lend money for its proper purpose, to invest and reinvest its funds, to take and hold real and personal property for the payment of funds so loaned or invested;
  6. To sue and be sued, complain and defend, and participate in administrative or other proceedings, in its name;
  7. To appoint employees and agents of the Company, and define their duties and fix their compensation;
  8. To indemnify any Person in accordance with the (Name of State) Act and to obtain any and all types of insurance;
  9. To cease its activities and cancel its Certificate;
  10. To negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, acknowledge or take any other action with respect to any lease, contract or security agreement in respect of any assets of the Company;
  11. To borrow money and issue evidences of indebtedness, and to secure the same by a mortgage, pledge or other lien on the assets of the Company;
  12. To pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities; and
  13. To make, execute, acknowledge and file any and all documents or instruments necessary, convenient or incidental to the accomplishment of the purpose of the Company.
  14. The Company may merge with, or consolidate into, another (Name of State) limited liability company or other business entity as allowed by the limited liability statutes of (Name of State).

IV. Capital Contributions; Interests; Capital Accounts; Advances

A. Capital Contributions.                                                            

  1. Each Member has contributed or is deemed to have contributed to the capital of the Company the amount set forth opposite the Member’s name on the attached Schedule A. The agreed value of the Capital Contributions made or deemed to have been made by each Member shall be set forth on Schedule A.
  2. No Member shall be required to make any additional capital contribution to the Company. However, a Member may make additional capital contributions to the Company with the written consent of all of the Members.

B. Member’s Interest. A Member’s Interest shall for all purposes be personal property. A Member has no interest in specific Company property

C. Status of Capital Contributions.

  1. Except as otherwise provided in this Agreement, the amount of a Member’s Capital Contributions may be returned to it, in whole or in part, at any time, but only with the consent of all of the Members. Any such returns of Capital Contributions shall be made to all Members in proportion to the Percentage Interests. Notwithstanding the foregoing, no return of a Member’s Capital Contributions shall be made if such distribution would violate applicable state law. Under circumstances requiring a return of any Capital Contribution, no Member shall have the right to demand or receive property other than cash, except as may be specifically provided in this Agreement.
  2. No Member shall receive any interest, salary or drawing with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company or otherwise in its capacity as a Member, except as otherwise specifically provided in this Agreement.
  3. Except as otherwise provided in this Agreement and by applicable state law, the Members shall be liable only to make their capital contributions pursuant to Section IV-A, and no Member shall be required to lend any funds to the Company or, after a Member’s Capital Contributions have been fully paid pursuant to Section IV-A, to make any additional capital contributions to the Company. No Member shall have any personal liability for the repayment of any Capital Contribution of any other Member.

D. Capital Accounts.

A. An individual Capital Account shall be established and maintained or each Member.

B. The Capital Account of each Member shall be maintained in             accordance with the following provisions:

  1. To such Member’s Capital Account there shall be credited such Member’s Capital Contributions (consisting of cash or the fair market value of any property net of any liabilities secured by such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code); such Member’s distributive share of Profits; and such Member’s distributive share of other items of income, gain or credits; and
  2. To such Member’s Capital Account there shall be debited the amount of cash and the fair market value of property distributed by the Company to such Member (net of liabilities secured by such distributed property which the Member is considered to assume or take subject to under Section 752 of the Code); such Member’s distributive share of Losses; and such Member’s distributive share of other items of loss or deduction.

E. Advances. If any Member shall advance any funds to the Company in excess of its Capital Contributions, the amount of such advance shall neither increase its Capital Account nor entitle it to any increase in its share of the distributions of the Company. The amount of any such advance shall be a debt obligation of the Company to such Member and shall be subject to such terms and conditions acceptable to the Company and each Member. Any such advance shall be payable and collectible only out of Company assets, and the other Members shall not be personally obligated to repay any part of such advance. No Person who makes any non-recourse loan to the Company shall have or acquire, as a result of making such loan, any direct or indirect interest in the profits, capital or property of the Company, other than as a creditor.

V. Members

  1. Powers of Members. The Members shall have the power to exercise any and all rights or powers granted to the Members pursuant to the express terms of this Agreement and the (Name of State) Act.
  2. Reimbursements. The Company shall reimburse the Members, for all ordinary and necessary out-of-pocket expenses incurred by the Members on behalf of the Company. Such reimbursement shall be treated as an expense of the Company that shall be deducted in computing the Net Cash Flow and shall not be deemed to constitute a distributive share of Profits or a distribution or return of capital to any Member.
  3. Partition. Each Member waives any and all rights that it may have to maintain an action for partition of the Company’s property.
  4. Resignation. A Member may not resign from the Company without the written consent of all of the other Members.

VI. Management

A. Management of the Company.

  • In accordance with Section ____ of the (Name of State) limited liability act, management of the Company shall be vested in the Members. Except as otherwise expressly provided in this Agreement, whenever this Agreement requires or permits actions to be taken by the Members, the decision by Members owning more than ____% of the Percentage Interests shall control.
  • The Members shall have full, exclusive and complete discretion to manage the business and affairs of the Company, to make all decisions affecting the business and affairs of the Company and to take such actions as they deem necessary or appropriate to accomplish the purpose of the Company as set forth in this Agreement. There shall not be a “manager” [within the meaning of the (Name of State) Limited Liability Company Act] of the Company.
  • With respect to third parties, each Member is an agent of the Company’s business, and each Member may bind the Company. If a Member binds the Company, but did not have the authority to so act under this Agreement (including by failing to obtain necessary consents from other Members), in addition to any other remedy (at law or in equity) that may be available against such Member, such Member shall be liable for all damages caused by breaching this Agreement.

C. Reliance by Third Parties. Any Person dealing with the Company or any Member may rely upon a certificate signed by any Member as to:

  1. The identity of a Member;
  2. The existence or nonexistence of any fact or facts which constitute a condition precedent to acts by the Members or in any other manner germane to the affairs of the Company;
  3. The Persons who are authorized to execute and deliver any instrument or document of, or on behalf of, the Company; or
  4. Any act or failure to act by the Company or as to any other matter  whatsoever involving the Company or any Member.

VII.      Amendments and Meetings

A. Amendments. Any amendment to this Agreement shall be adopted and be effective as an amendment to the Agreement if it receives the affirmative vote of all of the Members, provided that such amendment be in writing and executed by all of the Members.

B. Meetings of the Members.

  1. Meetings of the Members may be called at any time by any Member. Notice of any meeting shall be given to all Members not less than (number) days nor more than (number) days prior to the date of such meeting. Each Member may authorize any Person to act for it by proxy on all matters in which a Member is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Member or its attorney-in-fact.
  2. The Members shall establish all other provisions relating to meetings of Members, including notice of the time, place or purpose of any meeting at which any matter is to be voted on by any Members, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy or any other matter with respect to the exercise of any such right to vote.
  3. The Company may take any action contemplated by this Agreement as approved by the unanimous written consent of the Members.

VIII.     Allocations

A. Profits and Losses.

  1. Subject to the allocation rules of Section VIII-B, Profits for any Fiscal Year shall be allocated among the Members in proportion to the Percentage Interests.
  2. Subject to the allocation rules of Section VIII-B, Losses for any Fiscal Year shall be allocated among the Members in proportion to the Percentage Interests.

B. Allocation Rules.

  1. For purposes of determining the Profits, Losses or any other items allocable to any period, Profits, Losses and any such other items shall be determined on a daily, monthly or other basis, as determined by the Members using any method that is permissible under Section 706 of the Code and the Treasury Regulations under that Section.
  2. Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Members in the same proportions as they share Profits and Losses for the Fiscal Year in question.
  3. The Members are aware of the income tax consequences of the allocations made by this Article VIII and agree to be bound by the provisions of this Article VIII in reporting their shares of Company income and loss for income tax purposes.
  4. The Members intend that the allocation provisions set forth in this Agreement are intended to comply with Section 704(b) of the Code and the Treasury Regulations issued under that Section and the provisions are to be interpreted in a manner consistent with those Treasury Regulations.

C. Tax Allocations; Section 704(c) of the Code. In accordance with Section 704(c) of the Code and the Treasury Regulations under that Section, income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall, solely for income tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial fair market value.

IX. Distributions.

A. Net Cash Flow. Except as otherwise provided in Article XV (relating to the dissolution of the Company), any distribution of the Net Cash Flow during any Fiscal Year shall be made to the Members in proportion to the Percentage Interests.

B. Distribution Rules. All distributions pursuant to Section IX-A shall be at such times and in such amounts as shall be determined by the Members.

C. Limitations on Distribution. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make a distribution to any Member on account of its interest in the Company if such distribution would violate the (Name of State) Limited Liability Company Act or other applicable law.

X. Books and Records

A. Books, Records and Financial Statements.

  • At all times during the continuance of the Company, the Company shall maintain, at its principal place of business, separate books of account for the Company that shall show a true and accurate record of all costs and expenses incurred, all charges made, all credits made and received and all income derived in connection with the operation of the Company business in accordance with generally accepted accounting principles consistently applied, and, to the extent inconsistent with such principles, in accordance with this Agreement. Such books of account, together with a copy of this Agreement and of the Certificate, shall at all times be maintained at the principal place of business of the Company and shall be open to inspection and examination at reasonable times by each Member and its duly authorized representative for any purpose reasonably related to such Member’s interest in the Company.
  • The Members shall prepare and maintain, or cause to be prepared and maintained, the books of account of the Company. The Members shall prepare and file, or cause to be prepared and filed, all applicable federal and state tax returns.

B. Accounting Method. For both financial and tax reporting purposes and for purposes of determining Profits and Losses, the books and records of the Company shall be kept on the accrual method of accounting applied in a consistent manner and shall reflect all Company transactions and be appropriate and adequate for the Company’s business.

C. Annual Audit. At any time at a Member’s sole discretion, the financial statements of the Company may be audited by an independent certified public accountant, selected by such Member, with such audit to be accompanied by a report of such accountant containing its opinion. The cost of such audits will be an expense of the Company. A copy of any such audited financial statements and accountant’s report will be made available for inspection by the Members.

XI. Tax Matters

A. Tax Matters Partner.

  • (Name of Member One) is designated as Tax Matters Partner of the Company for purposes of Section 6231(a)(7) of the Code. (Name of Member One) may not choose a forum for the resolution of tax matters or extend any statute of limitation without the written consent of all of the Members.
  • The Tax Matters Partner shall, within (number) days of the receipt of any notice from the Internal Revenue Service in any administrative proceeding at the Company level relating to the determination of any Company item of income, gain, loss, deduction or credit, mail or otherwise deliver a copy of such notice to each Member.

B. Taxation as Partnership. The Company shall be treated as a partnership for U.S. federal income tax purposes.

XII.      Liability; Exculpation; Indemnification                                    

A. Liability. Except as otherwise provided by the (Name of State) Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts, obligations and liabilities of the Company, and no Covered Person shall be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Covered Person.

B. Exculpation.

  1. No Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.
  2. A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, Profits, Losses or Net Cash Flow or any other facts pertinent to the existence and amount of assets from which distributions to Members might properly be paid.

C. Fiduciary Duty. To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and related liabilities to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any Member for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the parties to replace such other duties and liabilities of such Covered Person.

D. Indemnification. To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of gross negligence or willful misconduct with respect to such acts or omissions; provided, however, that any indemnity under this Section XII-D shall be provided out of and to the extent of Company assets only, and no Covered Person shall have any personal liability on account of the same.

E. Expenses. To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person in defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in Section XII-D.

F. Insurance. The Company may purchase and maintain insurance, to the extent and in such amounts as the Members shall, in its sole discretion, deem reasonable, on behalf of Covered Persons and such other Persons as the Members shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the activities of the Company or such indemnities, regardless of whether the Company would have the power to indemnify such Person against such liability under the provisions of this Agreement. The Members and the Company may enter into indemnity contracts with Covered Persons and such other Persons as the Members shall determine and adopt written procedures pursuant to which arrangements are made for the advancement of expenses and the funding of obligations under Section XII-E and containing such other procedures regarding indemnification as are appropriate.

G. Outside Businesses. Any Member or Affiliate of a Member may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Company, and the Company and the Members shall have no rights by virtue of this Agreement in and to such independent ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not be deemed wrongful or improper. No Member or Affiliate of a Member shall be obligated to present any particular investment opportunity to the Company even if such opportunity is of a character that, if presented to the Company, could be taken by the Company, and any Member or Affiliate of a Member shall have the right to take for its own account (individually or as a partner or fiduciary) or to recommend to others any such particular investment opportunity.

XIII.     Additional Members.

A. Admission. By approval of all of the Members, the Company is authorized to admit any Person as an additional member of the Company (each, an Additional Member and collectively, the Additional Members). Each such Person shall be admitted as an Additional Member at the time such Person:

  • Executes this Agreement or a counterpart of this Agreement; and
  • Is named as a Member on the attached Schedule A. The legal fees and expenses associated with such admission shall be borne by the Company.

B. Allocations. Additional Members shall not be entitled to any retroactive allocation of the Company’s income, gains, losses, deductions, credits or other items; provided that, subject to the restrictions of Section 706(d) of the Code, Additional Members shall be entitled to their respective share of the Company’s income, gains, losses, deductions, credits and other items arising under contracts entered into before the effective date of the admission of any Additional Members to the extent that such income, gains, losses, deductions, credits and other items arise after such effective date. To the extent consistent with Section 706(d) of the Code and Treasury Regulations promulgated under that Section, the Company’s books may be closed at the time Additional Members are admitted (as though the Company’s tax year had ended) or the Company may credit to the Additional Members pro rata allocations of the Company’s income, gains, losses, deductions, credits and items for that portion of the Company’s Fiscal Year after the effective date of the admission of the Additional Members.

XIV.     Assignability and Substitute Members

A. Assignability of Interests. No Member may assign the whole or any part of its Interests.

B. Recognition of Assignment by Company. No assignment or pledge of any Interest, or any part of an Interest, that is in violation of this Article XIV shall be valid or effective, and neither the Company nor the Members shall recognize the same for the purpose of making distributions pursuant to this Agreement. Neither the Company nor the Members shall incur any liability as a result of refusing to make any such distributions to the assignee of any such invalid assignment.

C. Pledge. No Member may pledge or otherwise encumber the whole or any part of its Interests.

XV, Dissolution, Liquidation and Termination

A. No Dissolution. The Company shall not be dissolved by the admission of Additional Members in accordance with the terms of this Agreement.

B. Events Causing Dissolution. The Company shall be dissolved and its affairs shall be wound up upon the occurrence of any of the following events:

  • The expiration of the term of the Company, as provided in Section   II-C;
  • The written consent of all Members;
  • The death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member or the occurrence of any other event under the (Name of State) Act that terminates the continued membership of a Member in the Company unless, within (number) days after the occurrence of such an event, all of the remaining Members agree in writing to continue the business of the Company; or
  • The entry of a decree of judicial dissolution under Section ___ of the (Name of State) Limited Liability Company Act).

C. Liquidation. Upon dissolution of the Company, the Members shall carry out the winding up of the Company and shall immediately commence to wind up the Company’s affairs; provided, however, that a reasonable time shall be allowed for the orderly liquidation of the assets of the Company and the satisfaction of liabilities to creditors so as to enable the Members to minimize the normal losses attendant upon a liquidation. The Members shall continue to share Profits and Losses during liquidation in the same proportions, as specified in Article VIII, as before liquidation. The proceeds of liquidation shall be distributed in the following order and priority:

  • To creditors of the Company, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of the liabilities of the Company (whether by payment or the making of reasonable provision for payment); and
  • To the Members in accordance with their Capital Account balances, after giving effect to all contributions, distributions and allocations for all periods.

D. Termination. The Company shall terminate when all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for in this Article XV and the Certificate shall have been canceled in the manner required by the (Name of State) Act.

E. Claims of the Members. The Members and former Members shall look solely to the Company’s assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company or any other Mem

XVI. Miscellaneous                                              

A. Notices. All notices provided for in this Agreement shall be in writing, duly signed by the party giving such notice, and shall be delivered, mailed via an overnight courier service, telecopied or mailed by registered or certified mail, as follows:

  • If given to the Company, at the address specified in Section II-E of this Agreement; or
  • If given to any Member, at the address set forth opposite its name on the attached Schedule A, or at such other address as such Member may designate in the future by written notice to the Company.
  • All such notices shall be deemed to have been given when             received.

B. Failure to Pursue Remedies. The failure of any party to seek redress for violation of, or to insist upon the strict performance of, any provision of this Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation.

C. Cumulative Remedies. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive its right to use any or all other remedies. The rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

D. Binding Effect. This Agreement shall be binding upon and inure to the benefit of all of the parties and, to the extent permitted by this Agreement, their successors, legal representatives and assigns.

E. Severability. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions of this Agreement, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.

F. Counterparts. This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All counterparts shall be construed together and shall constitute one instrument.

G. Governing Law. This Agreement and the rights of the parties under this Agreement shall be interpreted in accordance with the laws of the State of (Name of State), and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws.

In witness, the parties have executed this Agreement the day and year first above written.

XYZ, LLC

                

By:_________________________________                                         (Name of Member One), and Individually

 

By:_________________________________                                (Name of Member Two), and Individually

 

By:__________________________________                                        (Name of Member Three), and Individually

Limited Liability Partnership Agreement of (Name of Partnership), L.L.P.

This Limited Liability Partnership Agreement is made and entered into as of the (date), by and among John Doe, hereinafter called Doe, Mary Smith, hereinafter called Smith, and John Roe, hereinafter called Roe, each of whom is referred to herein as a Partner. The Partners hereby form a limited liability partnership, hereinafter called the Partnership under the laws of the State of (Name of State) for the purpose of (describe business of Partnership) and agree to operate the Partnership pursuant to the terms and provisions hereinafter set forth.

I. Definitions.

A. Capital Account means the Capital Account maintained for each Partner pursuant to Section VII(C).

B. Capital Contribution means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership with respect to the Partnership interest held by such Partner. For purposes of this Paragraph, money contributed to the Partnership does not include increases in any Partner’s share of Partnership liabilities pursuant to Code § 752(a).

C. Code means the Internal Revenue Code of 1986, as amended from time to time.

D. Depreciation means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year of other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deductions for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by a Majority of the Partners.

E. Gross Asset Value means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

  • The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the other General Partners;
  • The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the Partners, as of the following times: (i) the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership Property as consideration for an interest in the Partnership if the Partners shall reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; and (ii) the liquidation of the Partnership within the meaning of Treas. Regs. § 1.704-1(b)(2)(ii)(g);
  • The Gross Asset Value of any Partnership asset distributed to any Partner shall be the gross fair market value of such asset on the date of distribution as determined by the distributee Partner and the other Partners; and
  • The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code § 734(b) or Code § 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts; provided, however, that Gross Asset Values shall not be adjusted pursuant to this paragraph to the extent the Partners determine that an adjustment pursuant to the foregoing Paragraph is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this paragraph. The determination of the Gross Asset Value of an asset shall take into account the premium or discount, if any, of the liabilities associated with such asset. If the Gross Asset Value of an asset has been determined or adjusted pursuant to the foregoing Subparagraphs B or D, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

F. Majority of the Partners means more than 50% of the Partners.

G. Net Cash Flow means for each fiscal year or other period, all revenues (which do not include refundable deposits or unearned rent) of the Partnership received in cash during such fiscal period, including Capital Contributions and the net cash proceeds from a sale or other disposition of a Partnership asset, less the sum of (i) operating expenses of the Partnership paid in cash during such period, (ii) the aggregate of all cash payments during such period with respect to proper liabilities of the Partnership and payments of interest and principal on indebtedness of the Partnership, (iii) amounts paid on account of any loans made to the Partnership by any Partner (interest on which shall be at the rate of one (1) percentage point over the then prevailing prime rate of (Name and Location of Bank), as it varies from time to time, but in no event to exceed the maximum rate permitted by law); and (iv) such reserves, if any, as a Majority of the Partners shall agree upon.

H. Nonrecourse Deductions has the meaning set forth in § 1.704-2(b)(1) of the Treas.Regs. The amount of Nonrecourse Deductions for a Partnership fiscal year equals the excess of (i) net increase, if any, in the amount of partnership minimum gain during that fiscal year over (ii) the aggregate amount of any distributions during such fiscal year of proceeds of a nonrecourse liability that are allocated to any increase in partnership minimum gain, determined according to the provisions of § 1.704-2(c) of the Treas.Regs.

I. Profits and Losses means, for each fiscal year or other period, an amount equal to the Partnership’s taxable income or loss for such year or period, determined in accordance with Code § 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code § 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

  • Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;
  • Any expenditures of the Partnership described in Code § 705(a)(2)(B) or treated as Code § 705(a)(2)(B) expenditures pursuant to Treas.Regs. § 1.704-1(b)(2)(iv)(b), and not otherwise taken into account in computing Profits or Losses pursuant to this paragraph shall be subtracted from such taxable income or loss;
  • In the event the Gross Asset Value of any Partnership asset is adjusted, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;
  • Gain or loss resulting from any disposition of Partnership Property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value; and
  • In lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year or other period.

II. Name. The name of the Partnership shall be XYZ, LLP. The business of the Partnership, however, may be conducted under any other name selected unanimously by the Partners.

III.        Place of Business; Execution of Lease. The location of the principal place of business of the Partnership, and the place where the records of the Partnership shall be kept, shall be (street address, city, state, zip code), or such other place as may from time to time be designated by a Majority of the Partners. It is agreed that the principal place of business shall be maintained by the Partnership under a lease in the form attached hereto as Exhibit A, and each Partner hereby authorizes and ratifies the execution by the Partnership of such lease.

IV. Purpose. The purpose for which the Partnership is organized is to render (describe), which shall consist of any and all work or duties within the scope of (Name of Profession), such as (describe). Such purposes may not be amended except upon unanimous approval of the Partners.

V. Term. The term of the Partnership shall commence on the date hereof and shall continue until (date), unless earlier terminated in accordance with this Agreement or as otherwise provided by law.

VI. Registration and Renewal. The Partners shall acknowledge and cause to be filed in the Office of the (Name of State) Secretary of State a statement of qualification as a limited liability partnership, and annual reports as and when required by applicable law. The Partnership shall cause the publication of the statement of qualification as required by applicable law.

VII.      Capital Contributions and Capital Accounts.

A. Capital Contributions. The Partners’ Capital Contributions shall consist of:

  • An initial capital contribution of $ ___________ each due immediately upon execution hereof, and
  • Additional Capital Contributions, not to exceed $______________ per Partner in the aggregate, due upon demand therefore by a Majority of the Partners. Any demand for additional Capital Contributions shall be made solely in the discretion of a Majority of the Partners as and when they deem the finances of the Partnership to require such a draw. Further, whenever such a demand is made, an equal amount shall be demanded from each Partner.

B. Default. In the event of a default by any Partner in its contribution obligations, the other Partners shall have the right, but not the obligation, to advance extra capital in accordance with the provisions of Section XX hereof.

C. Capital Accounts. The Partnership shall maintain for each Partner a Capital Account in accordance with the rules of Regulations Sections 1.704-1(b) and 1.704-2.

D. Carryover of Capital Account Upon Transfer of Partnership Interest. Upon transfer of all or a part of an interest in the Partnership, the Capital Account of the transferor that is attributable to the transferred interest shall carry over to the transferee partner. Notwithstanding the preceding sentence, if the transfer of an interest in the Partnership causes a termination of the Partnership under § 708(b)(1)(B) of the Code, the Capital Account that carries over to the transferee partner will be adjusted in accordance with Paragraph (b)(2)(iv)(e) of Treas.Regs. § 1.704-1 in connection with the constructive liquidation of the Partnership under Paragraph (b)(1)(iv) of Treas.Regs. § 1.708-1. The constructive reformation of the Partnership shall, for purposes of this Section 7 only, be treated as the formation of a new partnership, and the Capital Accounts of the Partners will be determined and maintained accordingly.

VIII.     Rights, Powers and Liabilities of the Partners.

A. Management of Partnership Day-to-Day Business. The day-to-day business of the Partnership shall be administered at the direction from time to time of a Majority of the Partners. A Majority of the Partners may effect such administration in any manner deemed appropriate by them in their sole discretion, including, without limitation, the appointment of a Partner as Managing Partner with or without established guidelines for authority and action.

B. Extraordinary Partnership Decisions. All Partnership decisions involving matters other than the day-to-day business of the Partnership, including, without limitation, decisions involving or relating to:

  • The sale, lease or other disposition of any property of the Partnership having a value in excess of $5,000;
  • The purchase or contract to purchase, by the Partnership, of any real property, or any asset or service with a cost to the Partnership in excess of $5,000;
  • The settlement, release or compromise of any claims or debts of or in favor of the Partnership;
  • Any transaction with an affiliate of any Partner;
  • The admission of a new Partner to the Partnership (provided that any new Partner admitted under this subparagraph shall execute a counterpart of this Partnership Agreement and shall agree to be bound by all of the terms and provisions hereof to the same extent as if he or she were an original signatory hereto, except that such new Partner shall have no liability with respect to Partnership liabilities arising prior to such new Partner’s admission to the Partnership);
  • Dissolution of the Partnership prior to its stated term; or
  • Any other transaction in connection with which it is anticipated that the Partnership will expend in excess of $5,000, shall, unless a specific provision of this Agreement (such as Section X below or Section IV above) requires unanimous approval, be made only by the written consent of greater than 75% of the Partners, which consent a Partner may give or withhold in each Partner’s sole and absolute discretion. Such consent may be obtained with or without a meeting of all of the Partners.

C. Nonwaiver. Except as expressly set forth in this Paragraph VIII, nothing contained herein shall be construed to limit or modify the duty of care, duty of loyalty or obligations of good faith and fair dealing of any partner, provided that:

  • The following categories of activities shall not be construed as a violation of any partner’s duty of loyalty: (describe);
  • The following shall prescribe the standard by which the performance of the Partners’ duty of care is to be measured: (describe); and
  • The following shall prescribe the standards by which the performance by the partners of the obligations of good faith and fair dealing are to be measured: (describe).

IX. Full Time Service; Competing Activities. Each Partner shall devote all of his or her professional time to the business of the Partnership and shall engage in no competing activity without the written consent of all other Partners. It is agreed that any activity involving (describe) or commercial activity substantially related to (describe) shall be deemed to be a competing activity. Moreover, it is acknowledged that the pursuit by any Partner of business activities that compete with the business of any client of the Partnership is potentially disadvantageous to the Partnership, and therefore prior to engaging in any such activities, a Partner shall submit a written proposal to the Partnership describing in detail the contemplated activities and shall not pursue such activities without the consent of a Majority of the Partners.

X. Decisions Requiring Unanimous Approval. Notwithstanding any other provision hereof, a decision on any of the following matters shall require the unanimous approval of all of the Partners, which approval a Partner may give or withhold in such Partner’s sole and absolute discretion:

  • Amendments of this Agreement, including any amendment to admit a new partner;
  • Any sale or other disposition of substantially all of the assets of the Partnership or disposition of the goodwill of the Partnership’s business;
  • Borrowings by the Partnership in excess of $15,000 in the aggregate;
  • Any assignment of the property of the Partnership in trust for creditors or on the assignee’s promise to pay the debts of the Partnership;
  • Any act which would make it impossible to carry on the ordinary business of the Partnership; or
  • Any confession of a judgment or submission of a Partnership claim or liability to arbitration or reference.

XI. Income, Gain, Losses and Distributions. All Partnership income, loss, gain and credits for each fiscal year shall be allocated to the Partners in accordance with their Participation Percentage as established by the Partnership not later than ninety days following the end of the year in question. The total Participation Percentages shall equal 100%; each Partner shall be assigned a Participation Percentage based on such Partner’s contribution to the Partnership for the year in question. The evaluation of each Partner’s contribution shall take into consideration, among other things, such Partner’s billings and collections for the year in question, the total billed to and collected from clients whose accounts are managed by such Partner, such Partners administrative contribution to the Partnership, and such Partner’s years of service to the Partnership. Participation Percentages shall be established by a Majority of the Partners at a meeting held for that purpose. Notwithstanding any other provision hereof, in the absence of willful disregard of Partnership obligations, no Partner shall be assigned a Participation Percentage which, when applied to Partnership income for the year in question would yield income to such Partner in an amount less than such Partner’s Minimum Income Share. Each Partner’s Minimum Income Share shall be an amount equal to (a) 75% of (b) such Partner’s income for the previous year multiplied by a fraction, the numerator of which is the Partnership’s Net Income Per Partner for the year in question and the denominator of which is the Partnership’s Net Income Per Partner for the previous year. Net Income Per Partner shall be the Partnership’s adjusted income for federal income tax purposes divided by the number of Partners for the year in question (provided that if Partners have been admitted to or left the firm during the year in question, the total number of Partners shall be adjusted appropriately to yield a full time equivalency). All distributions by the Partnership shall be made pro rata to the Partners in accordance with Participation Percentages for the year(s) in question.

XII.      Books, Records, Accounting, Reports and Certain Tax Matters.

A. Fiscal Year. The fiscal year of the Partnership shall be the calendar year.

B. Books of Account. The Partnership shall keep proper and complete books of account adequate for its purposes. The books of account shall be maintained at its principal place of business and shall be open to inspection and copying by any of the Partners or by their authorized representatives at any reasonable time during business hours. Balance sheets and income reports, audited if requested by any Partner, as well as state and federal income tax returns, shall be prepared at Partnership expense at the end of each fiscal year by (name of accounting firm) or such other public accounting firm as hereafter selected by a Majority of the Partners.

C. Basis of Accounting. The Partnership books shall be kept on a cash basis.

D. Bank Accounts. All funds of the Partnership are to be deposited in the Partnership’s name in such bank account or money market account or accounts as may be designated by a Majority of the Partners and may be withdrawn for authorized Partnership purposes on the signature of any Partner and such other person or persons as a Majority of the Partners may authorize.

E, Annual Reports. Within seventy-five (75) days after the close of the Partnership’s fiscal year, the Partnership shall prepare and mail to each Partner a copy of the Internal Revenue Service Form K-1 as attached to the federal partnership tax return to be filed for the Partnership. Upon request by a Partner, the Partnership will provide such Partner, within ninety (90) days following the end of any fiscal year, a written report setting forth the following:

  • The assets and liabilities of the Partnership;
  • The net income or net loss of the Partnership;
  • Such Partner’s Capital Account and the manner of its calculation; and
  • Any other information necessary to enable such Partner to prepare the Partner’s individual income tax returns.

F. Meetings. Meetings of the Partners shall be scheduled for mutually convenient times, and each Partner shall have at least twenty-four (24) hours notice of any meeting. Meetings may be called by any Partner. At any meeting, a quorum shall exist only if all Partners are in attendance, either in person or by phone or by written proxy (including a facsimile transmitted proxy) given to a Partner in attendance.

G. Written Minutes. Written minutes of the business transacted at Partnership meetings (if any) shall be made and retained at the Partnership office only if requested by any Partner.

E. Tax Matters Partner. (Name of Partner) is hereby appointed as the tax matters partner of the Partnership within the meaning of § 6231(a)(7) of the Code.

XIII.     Dealing with Affiliates; Business Opportunities. The Partnership shall not enter into any agreements or transactions with, and shall make no payments to, Affiliates of any of the Partners except as otherwise unanimously agreed by the Partners. It is acknowledged that from time to time Partners shall have presented to them, by clients or by third parties, opportunities for investment or active participation in outside business activities. It is further acknowledged that all such opportunities shall initially constitute assets of the Partnership. When presented with any such opportunity, a Partner shall notify the Partnership thereof in writing, and shall include in such notification a recommendation as to whether the Partnership should pursue such opportunity. If the Partnership elects not to pursue the opportunity, the Partner to whom it was presented shall be free to pursue it, subject to the obligations of such Partner hereunder with respect to, among other things, the devotion of substantially all of his or her professional time to the business of the Partnership.

XIV.     Transfer of Interests. Except with the prior written consent of all other Partners, no Partner shall sell, assign, convey, hypothecate, encumber or otherwise create in any other party an interest in such Partner’s interest in the Partnership, and any attempt to do so shall be void.

XV. Retirement, Withdrawal, Death, Disability, or Bankruptcy of a Partner.

A. Retirement. Each Partner shall be entitled to retire upon reaching the age of 55, and shall be required to retire (unless otherwise agreed in writing by all other Partners) upon reaching age 65. Upon retirement, such Partner’s interest in the Partnership shall be redeemed for an amount equal to his or her then-current Capital Account, which amount shall be paid, with interest at 10% per annum, in 120 equal monthly installments.

B. Withdrawal. Any Partner shall have the right to withdraw from the Partnership at any time. If a Partner elects to withdraw prior to age 55, such Partner’s interest in the Partnership shall be redeemed for an amount equal to his or her then-current Capital Account, which shall be paid, without interest, as follows: one-half of such balance shall be paid in 60 equal monthly installments; the remaining one-half shall be payable on the fifth anniversary of the date of withdrawal. If a Partner withdraws after age 55, such Partner shall be treated as having retired. Notwithstanding any other provision hereof, a Partner shall be deemed to have withdrawn from the Partnership upon revocation or suspension of his or her license to practice (Name of Profession) or the taking of other major disciplinary action against him/her as a (Name of Profession) by any governmental or professional authority.

C. Death. Upon the death of a Partner, such Partner’s interest in the Partnership shall be redeemed for an amount equal to such Partner’s then-current capital account, payable in twenty-four equal monthly installments, with interest at 10% per annum.

D. Disability. If a Partner becomes partially disabled [i.e., if as a result of injury or illness he or she is unable to engage in the full time practice of (Name of Profession) but is still able to engage in such practice on at least a part-time basis), such Partner shall not be required to withdraw from the Partnership, but instead such Partner’s interest in Partnership income and loss shall be appropriately adjusted to reflect such Partner’s reduced contribution to the Partnership. If a Partner becomes totally disabled (which disability shall be determined by an independent treating physician to prevent the Partner from engaging in the practice of accounting for a period of at least three years) such Partner shall be deemed to have retired from the Partnership on the date of disability, and shall be entitled to payment hereunder for his or her interest in the Partnership as if such retirement had occurred at age 55 or later; provided, however, that if a Partner becomes disabled prior to age 55 and within five years from the date of such disability such Partner shall commence the practice of accounting other than with the Partnership, such payments shall be adjusted so that such Partner shall receive no greater amount than would have been payable had such Partner withdrawn from the Partnership prior to age 55.

XVI.     Dissociation and Dissolution

A. Events of Dissociation. A dissociation shall occur upon the occurrence of any event that results in a dissociation with respect to a partner in a partnership at will under (cite state statute), or any successor thereto.

B. Effect of Dissociation. If a partner’s dissociation does not result in a dissolution under Section XVI(C) hereof, then the dissociation shall have the effect set forth in (cite state statute), or any successor thereto, and the dissociated partner’s interest shall be purchased pursuant to (cite state statute), or any successor thereto.

C. Dissolution. The Partnership shall be dissolved:

  • Upon the sale or other disposition of all the assets to which the Partnership has any right, title and interest, and the distribution to the Partners of the cash or cash equivalent proceeds from such sale or other disposition, provided that the Partners acknowledge and agree that upon the sale of substantially all of the Partnership’s assets in connection with which the Partnership receives an installment receivable, no such dissolution shall occur until such receivable is paid in full;
  • Upon an order of dissolution by a court of competent jurisdiction or upon any recognized process of dissolution as provided by the laws of the State of (Name of State);
  • Upon the occurrence of any event that results in the dissolution of a partnership at will under (citation of state statute), or any successor thereto;
  • Upon any partner becoming dissociated by death or for any of the reasons set forth in (citation of state statute), or by wrongful dissociation under (citation of state statute), unless within 90 days of any such dissociation, a majority of the remaining partners vote to not wind up the Partnership;
  • Upon all of the partners voting to wind up the business of the Partnership;
  • Upon any partner electing to wind up the Partnership after expiration of the term set forth herein; or
  • Upon the occurrence of any event specified in (citation of state statute).

XVII.    Distribution upon Liquidation. Upon dissolution of the Partnership pursuant to Section XVI above and unless, pursuant to Section XVI(C) above, the Partnership is not to be liquidated, the Partnership shall be liquidated. Upon liquidation of the Partnership, the assets of the Partnership shall be disposed of pursuant to Section XVIII below and the proceeds employed as follows:

  • To liquidate all debts, liabilities and obligations of the Partnership (including debts owed to Partners) and to establish such reserves as a Majority of the Partners deems necessary for the payment of future, contingent or unforeseen liabilities and obligations of the Partnership. If there is a deficit balance in any Partner’s capital account upon liquidation of such debts, liabilities and obligations, as determined after taking into account all Capital Account adjustments for the Partnership taxable year during which such liquidation occurs (other than those made pursuant to this Section XVII), such Partner shall contribute cash to the Partnership in an amount sufficient to restore such Partner’s Capital Account to zero. Such cash contribution shall be made (but in all events prior to the end of the Partnership taxable year in which such liquidation occurred), provided that at the election of a Majority of the Partners (excluding, for purposes of the calculation thereof, the Partner to whom such distribution is to be made) the amount of such distribution may be reduced by the amount to be contributed to restore such Partner’s Capital Account to zero, whereupon the full distribution and contribution shall be deemed made. The cash so contributed shall be paid to creditors of the Partnership to the extent necessary to discharge all debts, liabilities and obligations of the Partnership; and then,
  • To distribute the remaining assets or proceeds from the sale thereof to the Partners in proportion to their Capital Account balances, to the extent of any positive balances in such Capital Accounts, as determined after taking into account all Capital Account adjustments for the Partnership taxable year during which such liquidation occurs (other than those made pursuant to this Section XVII) (subject, however, to the provisions in Section XX hereof). If there is a deficit balance in any Partner’s Capital Account following such distribution, such Partner shall contribute cash to the Partnership in an amount sufficient to restore such Partner’s Capital Account to zero. Such cash contribution shall be made within ninety (90) days after the date of such liquidation (but in all events prior to the end of the Partnership taxable year in which such liquidation occurred), provided that at the election of a Majority of the Partners (excluding, for purposes of the calculation thereof, the Partner to whom such distribution is to be made) the amount of such distribution may be reduced by the amount to be contributed to restore such Partner’s Capital Account to zero, whereupon the full distribution and contribution shall be deemed made. The cash so received by the Partnership shall be distributed to the other Partners in proportion to the positive balances, if any, in their Capital Accounts. During the period of liquidation, the Partnership shall continue to allocate realized income and losses, including those from the disposition of the Partnership properties, in the same manner as before dissolution.

XVIII.   Procedures on Liquidation of the Partnership or a Partner’s Interest Therein. Promptly following any liquidation of the Partnership, all Partnership receivables and payables shall be liquidated, cash reserves shall be established as agreed by a Majority of the Partners for the payment of unliquidated liabilities, and the Partnership property shall be sold as promptly as possible as is consistent with obtaining the fair value thereof. As soon as practicable thereafter, the then-remaining assets of the Partnership shall be distributed pursuant to Section XVII above. The Partnership shall then be terminated, subject only to the execution and filing of any and all necessary instruments required to complete the dissolution, winding up and termination in accordance with the laws of the State of (name of state). Notwithstanding any other provision in this Agreement to the contrary, upon liquidation of any Partner’s interest in the Partnership (as defined in Paragraph (b)(2)(ii)(g) of Treas.Regs. § 1.704-1), the liquidating distribution made by the Partnership to such Partner shall be made in accordance with, and shall be equal to, the amount of the positive balance in such Partner’s Capital Account, determined after taking into account all Capital Account adjustments for the Partnership taxable year during which such liquidation occurs (other than those made pursuant to this Section XVIII) by the end of such taxable year (or, at the Partnership’s election, within 90 days after the date of such liquidation).

XIX.     Organizational Expenses. All organizational expenses of every kind incurred by the Partnership in connection with the formation of the Partnership (including legal and other expenses but excluding expenses incurred in connection with the formation of any Partner) shall be paid by the Partnership.

XX. Defaulting Partners.

A. Default in Capital Contributions. A defaulting Partner is one who has defaulted in the payment of a Capital Contribution due under the terms of this Agreement and shall be considered as such until the default of such Partner is cured. A Partner shall be considered to have cured the Partner’s default only at such time as the Partner has paid to the Partnership the full amount of the Partner’s Capital Contributions in default and has paid to all Partners which have advanced extra capital with respect to such default all interest accrued thereon under Section XXII(D) hereof. While in default, a Partner shall have no voice or vote whatsoever in the management of the affairs of the Partnership.

B. Right to Advance Extra Capital. In the event any Partner shall fail to advance capital required to be advanced to the Partnership pursuant to the provisions of this Agreement, any or all of the non-defaulting Partner(s) shall have the right (but not the obligation) to advance the capital required to be advanced by the defaulting Partner, pro rata in accordance with the then balances in their Capital Accounts if more than one non-defaulting Partner wishes to make such advances. The sums so advanced to the capital of the Partnership are hereinafter referred to as extra capital. The Partner(s) making such advances shall have certain rights against the defaulting Partner as provided below.

C. Extra Drawing Account. A separate drawing account shall be maintained by the Partnership for each Partner which has advanced extra capital, which account shall reflect extra capital advanced by such Partner, the respective date the extra capital is advanced, the date extra capital is withdrawn or otherwise debited to the account, and the identity of the Partner failing to advance the required Capital Contributions. The extra drawing account of any Partner shall not be reduced, changed or affected, except as set forth in Section XXII(E) hereof, it being intended that the extra drawing account be kept separate and distinguished from the Capital Account of the Partner maintained in accordance with the provisions of Section VII above.

D. Return on Account of Extra Capital. A defaulting Partner shall pay interest on a quarterly basis to any Partner which has advanced extra capital on behalf of the defaulting Partner from the date of the advance until repaid at the higher annual rate from time to time of eighteen percent (18%) per annum or the prime rate of interest charged by (Name of Bank and Location), plus four (4) percentage points, said prime rate to be determined monthly based on the prime rate charged by said bank on the first business day of each month. To the extent the interest is not paid, the distributions to which the defaulting Partner is otherwise entitled under this Agreement shall be paid over to the Partner(s) advancing extra capital on behalf of said defaulting Partner and shall be treated by such non-defaulting Partner(s) as interest income. The defaulting Partner shall treat such payment as interest expense and hereby irrevocably appoints the Managing Partner as the Partner’s agent to make such payment. Amounts so distributed to such non-defaulting Partner(s) under this Subsection (D) shall be deducted from the Capital Account of the defaulting Partner as a distribution to such defaulting Partner.

E. Extra Capital Distributions. Upon the cure by a defaulting Partner of the Partner’s default hereunder, the Capital Contribution made by such defaulting Partner to effect such cure shall be credited to the Partner’s Capital Account and shall immediately be distributed to, and charged to the Capital Accounts of, the non-defaulting Partners who advanced extra capital to cure such default, in the same ratio as such non-defaulting Partners advanced such extra capital. Any distributions to which a defaulting Partner is entitled under this Agreement shall, after any payment thereof to the non-defaulting Partner(s) under Subsection (D) above, automatically be advanced to the capital of the Partnership to the extent the defaulting Partner is in arrears of amounts required of that Partner. The Partner(s) which advanced extra capital shall thereupon be entitled, at their request to receive distributions of such extra capital in the same ratio as the extra capital was advanced by the non-defaulting Partner(s). In the event the extra capital available for withdrawal is not withdrawn as aforesaid, the extra capital account of the Partners entitled to withdraw the same shall continue to be reflected on the Partnership’s books and records and shall remain available for distribution to such Partners upon their request. Such extra capital account shall not bear interest. When distributed, such extra capital shall be charged to the Capital Accounts of the non-defaulting Partners receiving such distribution.

F. Termination of a Defaulting Partner’s Interest. So long as any Partner shall be in default under the provisions of this Agreement, the non-defaulting Partner(s) may elect to pursue any of the options described below against the defaulting Partner:

  • In the event a defaulting Partner fails, within seven (7) days after receipt of written notice stating that said Partner is in default, to cure said default in full, any non-defaulting Partner(s) may, after five (5) days written notice given to the defaulting Partner and before said default is cured in full, (A) expel the defaulting Partner from the Partnership; (B) bring suit against the defaulting Partner for the amount in default, together with interest thereon from the day such amount was due at the prime rate of interest charged by (Name of Bank and Location), as it varies from time to time, plus four (4) percentage points, and collection expenses, including, without limitation, the fees and disbursements of counsel for the Partnership; and/or (C) pursue any other remedy or course of action which the non-defaulting Partners deem to be appropriate.
  • If a Partner is expelled, such expulsion shall be effective without further notice and shall be retroactive to the date the payment was due. A Partner who files a petition in bankruptcy may forthwith be expelled from the Partnership without prior notice or the necessity of any further action by the Partners. Upon the expulsion of any Partner, said Partner shall not have any right to vote or to participate in or receive any net income, net losses, distributions, credits or deductions of the Partnership, commencing with the fiscal year in which such expulsion occurs and thereafter for the term of the Partnership. Notwithstanding any other provision hereof (including the provisions relating to withdrawal from the Partnership) an expelled Partner shall be entitled to the return of its Capital Account in the Partnership, only upon liquidation of the Partnership and after all of the other Partners have received a full distribution of the amount in their Capital Accounts. The rights of an expelled Partner to the return of its Capital Account shall be junior in all respects to those of the remaining Partners.
  • Upon expulsion, the defaulting Partner’s interest in the net income and losses of the Partnership shall automatically be reallocated to the non-defaulting Partners in proportion to the balances of their extra capital accounts on the date of expulsion.nn
  • From and upon the effective date of any expulsion of a Partner hereunder, the Partner(s) who delivered the written notice bringing about such expulsion shall be obligated to make all future Capital Contributions which the expelled Partner would have been obligated to make (provided that such Capital Contributions shall be made pro rata in accordance with the Current Capital Contributions of the Partners so obligated), and such Partner(s) shall be entitled (pro rata in accordance with their Capital Contributions made pursuant to this subsection) to receive all distributions of cash and allocations of income, gain, deduction and loss which the expelled Partner would have been entitled to receive with respect to the Capital Contributions made under this subsection had the expelled Partner not been expelled and had such expelled Partner made such Capital Contributions.

H. No Waiver. Failure of the non-defaulting Partners to promptly exercise any of the rights granted herein for any one default shall not be deemed a waiver of such rights as to such default or any subsequent defaults.

XXI.     Employment of the Partners. Each Partner shall be an employee of the Partnership, and with respect to such employment, it is agreed as follows:

A. Salary. No Partner shall receive a salary from the Partnership. Each Partner’s compensation shall be limited to his or her share of the income of the Partnership. Each Partnership shall receive a twice-monthly draw of $_________ as an advance against such Partner’s share of income for the then-current year. To the extent such draws exceed a Partner’s share of income, the excess shall be a charge against such Partner’s share of income for the following year.

B. Benefits. The Partnership may from time to time establish various employee benefits, all of which shall apply equally to the Partners. The Partnership shall maintain professional liability insurance in limits of coverage not less than $__________ which shall name each Partner as an additional insured. In the event of any professional liability claim in excess of available insurance coverage, the Partner whose actions gave rise to such claim shall be liable to the Partnership for the full amount of such excess.

C. Vacation. Each Partner shall be entitled to (number of days) of vacation per year.

D. Facilities and Support. Each Partner shall be supplied by the Partnership at its expense with reasonable facilities necessary for the effective practice of public accounting, including office facilities, computer and other equipment, access to library and support personnel.

E. Professional Matters. Each Partner shall maintain his or her license to practice public accounting in the State of (name of state) in good standing and shall take all actions necessary to ensure that such Partner’s professional stature [including status as a (Name of Profession), which shall be required of all Partners, licensure and any certification or other statement of qualification by a professional organization] is not impaired. Each Partner shall be entitled to reimbursement from the Partnership for any reasonable expenses incurred in discharging his or her obligations under this Paragraph.

F. Automobile. The Partnership shall provide to each Partner an automobile for such Partner’s business and personal use. Each Partner shall be obligated to maintain appropriate automobile insurance, including liability insurance, and shall be obligated to pay the expenses of operating such automobile, including repair expenses.

G. Competition. It is acknowledged that the Partnership will provide to each Partner significant training and will entrust to each Partner significant proprietary information and confidential information regarding its clientele. The Partnership will be irreparably harmed by any Partner who uses such information or benefits from such training in competition with the Partnership within a period of six (6) months after such Partner’s withdrawal, resignation or expulsion from the Partnership. Therefore, each Partner covenants and agrees that during his or her time as a Partner and for a period of six months after the termination of his or her time as a Partner for any reason, he or she will not engage in the practice of public accounting anywhere in the State of (name of state). In the event of any breach or threatened breach of the foregoing covenant, the Partnership shall have the following remedies, in addition to all other remedies available at law or in equity:

  • The Partnership shall have the right to seek an injunction from any court of competent jurisdiction;
  • The Partnership shall have the right to contact all potential clients of the breaching (or threatened to be breaching) Partner and inform such clients of the foregoing covenant and any liability they might have associated with the breach thereof; and
  • The Partnership shall have the right to recover from the breaching party an amount equal to 50% of the gross billings of the breaching Partner generated during the period of his or her breach of the foregoing covenant. Notwithstanding any other provision hereof, if a court should conclude that the foregoing covenant is unenforceable either because of excessive geographic scope or duration, the following shall apply: (i) with respect to geographic scope, such covenant shall be deemed to be a severable covenant with respect to each county of the State of (name of state), and such covenant shall be reduced in scope by deleting one county at a time (starting with the least populous county and proceeding in inverse order of population) until the covenant is of the greatest permissible geographic scope; and (ii) with respect to duration, such covenant shall be deemed to be a severable covenant with respect to each of the 26 weeks following a Partner’s withdrawal, resignation or expulsion, and such covenant shall be reduced in scope by deleting one week at a time until the covenant is of the maximum permissible duration.

XXII.    Miscellaneous.

A. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

B. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

C. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of (name of state).

D. Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

E. In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party’s attorney fees.

G. Notwithstanding the foregoing, and anything herein to the contrary, any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

XXIII.   This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

XXIV.  Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

XXV.   This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

XXVI.  In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties.

XXVII. Incorporation of Documents and Exhibits. All exhibits referred to herein are by this reference made a part hereof as though fully set forth herein.

Witness our signatures this the _____ day of _______________, 20______.

                        (Signatures of Partners)

 

Author: William Glover

I received my B.B.A. from the University of Mississippi in 1973 and his J.D. from the University of Mississippi School of Law in 1976. I joined the firm of Wells Marble & Hurst in May 1976 as an Associate and became a Partner in 1979. While at Wells, I supervised all major real estate commercial loan transactions as well as major employment law cases. My practice also involved estate administration and general commercial law. I joined the faculty of Belhaven University, in Jackson, MS, in 1996 as Assistant Professor of Business Administration and College Attorney. While at Belhaven I taught Business Law and Business Ethics in the BBA and MBA programs; Judicial Process and Constitutional Law History for Political Science Department; and Sports Law for the Department of Sports Administration. I still teach at Belhaven as an Adjunct both in the classroom and online. In 2004 I left Belhaven for a short stay at Wells Marble & Hurst, PLLC, and then joined the staff of US Legal Forms, Inc., 2006 where I draft forms, legal digests, and legal summaries. My most recent publications and presentations include: • Author: Sports Law Handbook for Coaches and Administrators, Sentia Publishing, 2017. • Co-Author: In the Arena published by the New York State Bar Association in 2013; • Co-Author: Criminal Justice Communications - Corinthian Colleges, Inc. in 2014. • Co-Author: Business Law for People in Business, Sentia Publishing, 2017.