Questanda

provide boilerplate operating agreement clauses for distributions of cash

Clause 1: Purpose

The purpose of this clause is to establish the rules and procedures for distributing cash to the Members of the Company.

Clause 2: Distributions

Subject to the provisions of this Agreement and applicable law, the Company may distribute cash to the Members from time to time as determined by the Board of Directors.

Clause 3: Determining Distributions

The Board of Directors shall determine the amount and timing of distributions based on the following factors:

  • The financial performance of the Company
  • The availability of cash
  • The needs of the Company
  • The interests of the Members

Clause 4: Priority of Distributions

Distributions shall be made in the following order of priority:

  1. To pay any outstanding obligations or liabilities of the Company
  2. To pay any expenses or costs incurred by the Company
  3. To distribute cash to the Members in proportion to their ownership interests

Clause 5: Form of Distributions

Distributions may be made in any form deemed appropriate by the Board of Directors, including:

  • Cash
  • Checks
  • Electronic transfers

Clause 6: Frequency of Distributions

The frequency of distributions shall be determined by the Board of Directors. However, the Company shall endeavor to make distributions at least annually.

Clause 7: Restrictions on Distributions

The Company shall not make any distributions that would:

  • Violate any applicable law or regulation
  • Impair the capital of the Company
  • Render the Company insolvent

Clause 8: Special Distributions

The Board of Directors may declare special distributions to the Members under exceptional circumstances. Such distributions shall be subject to the same terms and conditions as ordinary distributions.

Clause 9: Taxation

The Members shall be responsible for any taxes or other assessments imposed on distributions received from the Company.