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LLC Operating Agreement With Investors for the United Kingdom

LLC Operating Agreement With Investors Template for England and Wales

This document serves as the primary governing agreement for a private limited company in England and Wales, establishing the relationship between the company, its founders, and investors. It sets out the company's operational framework, management structure, capital arrangements, and investor rights. While using LLC terminology, it's adapted to comply with UK company law requirements, particularly the Companies Act 2006, and includes provisions for share transfers, voting rights, and profit distribution.

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LLC Operating Agreement With Investors

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What is a LLC Operating Agreement With Investors?

The LLC Operating Agreement with Investors is essential when establishing a private limited company in England and Wales that involves external investment. While the term LLC is more commonly used in the US, this agreement adapts these principles to comply with UK company law. It's particularly crucial when bringing in investors, as it defines ownership structures, management rights, profit sharing, and exit strategies. The document should be implemented at company formation or when first accepting external investment, ensuring all parties understand their rights and obligations under English and Welsh law.

What sections should be included in a LLC Operating Agreement With Investors?

1. Parties: Identification of the company, members, and investors

2. Background: Context of the agreement and company formation

3. Definitions: Key terms used throughout the agreement

4. Company Formation: Details of company structure and business purpose

5. Capital Contributions: Initial and subsequent investment terms

6. Management Structure: Governance and decision-making processes

7. Profit and Loss Distribution: How financial returns are shared

8. Transfer of Shares: Rules for selling or transferring ownership

What sections are optional to include in a LLC Operating Agreement With Investors?

1. Tag-Along Rights: Minority shareholder protection provisions enabling them to join in the sale of shares on the same terms as majority shareholders

2. Drag-Along Rights: Provisions allowing majority shareholders to force minority shareholders to join in the sale of the company

3. Anti-dilution Provisions: Protective measures for investors against ownership dilution in future funding rounds

4. Intellectual Property Rights: Detailed provisions regarding IP ownership, protection, and usage rights within the company

What schedules should be included in a LLC Operating Agreement With Investors?

1. Share Capital Table: Detailed breakdown of share ownership and classes of shares

2. Business Plan: Company's strategic plans, financial projections, and operational objectives

3. Reserved Matters: Comprehensive list of decisions requiring special majority or investor approval

4. Initial Directors: List of first appointed directors and their details

5. Deed of Adherence: Template agreement for new members joining the company

Authors

Alex Denne

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

Jurisdiction

England and Wales

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions





































Clauses

































Industries

Companies Act 2006: Primary legislation governing company formation, operation, management, directors' duties, shareholder rights, share capital structures, and company meetings procedures in England and Wales

Small Business, Enterprise and Employment Act 2015: Legislation covering transparency requirements in company ownership and maintaining PSC (People with Significant Control) register

Financial Services and Markets Act 2000: Regulatory framework for financial services and investment activities, including provisions for regulated business activities and investment operations

Corporate Governance Code: Guidelines and best practices for company management, board structure, and corporate governance principles

Shareholders' Rights Regulations 2009: Regulations governing the protection of investor rights and voting procedures in companies

Limited Liability Partnerships Act 2000: Reference legislation for partnership structures, though not directly applicable to limited companies

Financial Services Act 2012: Legislation governing financial investments and services, including regulatory requirements for financial operations

Corporation Tax Act 2010: Tax legislation governing corporate taxation and related financial obligations

UK GDPR and Data Protection Act 2018: Data protection legislation governing the handling and protection of personal data within the company

Anti-Money Laundering Regulations: Regulations designed to prevent money laundering and ensure proper financial compliance in business operations

Teams

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

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