LLC Operating Agreement — Single Member — RPI Form 372-5

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This form is used by a syndicator when forming a single manager/member limited liability company (LLC) for an investment in income producing property, to set the LLC operating terms and the rights and duties of the manager/member.

Your use of RPI Form 372-5

The single member LLC

A single member LLC (SMLLC) is a California authorized business entity with one owner or member. It has the limited liability protection of a corporation. In this manner, the LLC owner is not liable for any debts or liabilities the business incurs.

To form an SMLLC in California, the owner files the Articles of Organization (Form LLC—1) with the California Secretary of State (SOS).

After that, the LLC owner prepares an Operating Agreement which details how the owner plans to run the business of the LLC and sets the operating terms and the rights and duties of the owner. The owner needs to fill out the Operating Agreement and keep on file, though does not file it with the California SOS. [See RPI Form 372-5]

Taxwise, most SMLLCs elect to be pass-through entities so only the owner reports the income and pays taxes via the owner’s personal income tax return at Schedule C (Form 1040).

Analyzing the LLC Operating Agreement for Single Member

An investor uses the LLC Operating Agreement — Single Member published by RPI — when forming a single manager/member LLC for an investment in income producing property. The form sets the LLC operating terms and the rights and duties of the manager/member. [See RPI Form 372-5]

The LLC Operating Agreement — Single Member contains:

LLC formation details [See RPI Form 372-5 §1];
Capital contributions and distributions of funds [See RPI Form 372-5 §2];
Management, compensation, duties and powers [See RPI Form 372-5 §3];
Accounts and accounting [See RPI Form 372-5 §4];
Dissolution of LLC and distribution of capital [See RPI Form 372-5 §5]; and
Miscellaneous provisions. [See RPI Form 372-5 §6]