[{"data":1,"prerenderedAt":530},["ShallowReactive",2],{"document-s-corp-operating-agreement-D12800":3},{"document":4,"label":21,"preview":11,"thumb":22,"thumb600":23,"description":24,"descriptionCustom":6,"apiDescription":5,"pages":8,"extension":10,"parents":25,"breadcrumb":29,"related":35,"customDescModule":179,"customdescription":24,"mdFm":180,"mdProseHtml":529},{"description":5,"descriptionCustom":6,"label":7,"pages":8,"size":9,"extension":10,"preview":11,"thumb":12,"svgFrame":13,"seoMetadata":14,"parents":16,"keywords":15},"S CORP OPERATING AGREEMENT This S Corp Operating Agreement is entered into as of the [DATE], BETWEEN: [INDIVIDUAL NAME] (the \"Managing Members\"), an individual with their main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [COMPANY NAME] (the \"Non-Managing Members\"), an individual with their main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] The Managing Members and the Non-Managing Members are referred to herein collectively as the \"Members\". The Members have formed the Company by causing a Certificate of Formation (the \"Certificate\") conforming to the requirements of the [STATE] and are taxed under the Subchapter S of Chapter 1 of the Internal Revenue Code (the \"Code\"). NAME, PURPOSE AND PRINCIPAL OFFICE OF COMPANY Name The name of the Company is [COMPANY NAME]. The affairs of the Company shall be conducted under such name or such other name as the Managing Members may, in their discretion, determine. [COMPANY NAME] hereby grants the Company the right, at no cost, to use the [SPECIFY] name for the term of the Company as set forth in Article [SPECIFY] hereof. Agreement In consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Members executing this Agreement hereby agree to the terms and conditions of this Agreement, as it may be amended from time to time. It is the express intention of the Members that this Agreement shall be the sole statement of agreement among them, and, except to the extent a provision of this Agreement expressly incorporates matters by express reference, this Agreement shall govern even when inconsistent with or different from the provisions of the Code or any other provision of law. Purpose; Powers Purpose. To engage in any lawful act or activity for which a limited liability company may be organized under the laws of the State of ___________ including, but not limited to, make lots of money. Powers. Subject to all of the terms and provisions hereof, the Company shall have all powers necessary, suitable or convenient for the accomplishment of the purpose of the Company, including, without limitation, the following: to purchase, sell, invest, and trade in securities of every kind, including, without limitation, capital stock, bonds, notes, debentures, securities convertible into other securities, trust receipts and other obligations, instruments, or evidence of indebtedness, as well as in rights, warrants and options to purchase securities. to make and perform all contracts and engage in all activities and transactions necessary or advisable to [SPECIFY] out the purposes of the Company, including, without limitation, the purchase, sale, transfer, pledge and exercise of all rights, privileges and incidents of ownership or possession with respect to any Company asset or liability; the borrowing or lending of money and the securing of payment of any Company obligation by hypothecation or pledge of, or grant of a security interest in, Company assets; and the guarantee of or becoming surety for the debts of others; and otherwise, to have all the powers available to it as an S Corporation under the Code. Registered Office and Agent The initial address of the Company registered office in [STATE] is, and its initial agent at such address for service of process is Incorporating Services Limited. The Managing Members may change the registered office and agent for service of process as they from time to time may determine. Principal Office The principal office of the Company shall initially be located at [ADDRESS]. The Managing Members may change the location of the principal office of the Company at any time. Definitions Additional Members. This term shall have the meaning ascribed to it in Paragraph 3.2. Affiliate. With reference to any person, any other person controlling, controlled by or under direct or indirect common control with such person. Agreement. This Operating Agreement of [COMPANY NAME], a [STATE] S Corporation. Assignee. This term shall have the meaning ascribed to it in Paragraph 5.3. Bankruptcy. A person or entity shall be deemed bankrupt if: any proceeding is commenced against such person or entity as debtor for any relief under bankruptcy or insolvency laws, or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions and such proceeding is not dismissed within [NUMBER] days after such proceeding has commenced, or such person or entity commences any proceeding for relief under bankruptcy or insolvency laws or laws relating to the relief of debtors, reorganizations, arrangements, compositions or extensions. Book Value. This term shall have the meaning ascribed to it in Paragraph 6.2.1. By Laws. By Laws shall mean the By Laws of the Corporation and incorporated as reference herein as Exhibit B to the present Agreement. Capital Account. This term shall have the meaning ascribed to it in Paragraph 6.2.2. Capital Commitment. This term shall have the meaning ascribed to it in Paragraph 5.1. Capital Contribution. This term shall have the meaning ascribed to it in Paragraph 5.1.2. Certificate. The Certificate of Formation of [COMPANY NAME], a [STATE] S Corporation. Code. [SPECIFY YOUR COUNTRY INTERNAL REVENUE ACT/CODE/LAW], as amended from time to time (and any corresponding provisions of succeeding law). Defaulting Member. This term shall have the meaning ascribed to it in Paragraph 5.4.1 Fiscal Quarter. This term shall have the meaning ascribed to it in Paragraph 6.2.1. Fiscal Year. This term shall have the meaning ascribed to it in Paragraph 6.2.4. Management Fee. The management fee receivable by the Company from the Fund. Net Income or Net Loss. This term shall have the meaning ascribed to it in Paragraph 6.2.5. Percentage Interest. This term shall have the meaning ascribed to it in Paragraph 6.2 (h). Sale or Exchange. This term shall have the meaning ascribed to it in Paragraph 6.2 (i) Securities Act. [YOUR COUNTRY ACT/CODE/LAW] as amended from time to time. Securities. Securities of every kind and nature and rights and options with respect thereto, including stock, notes, bonds, debentures, evidences of indebtedness. Termination Date. This term shall have the meaning ascribed to it in Paragraph 2.1. Treasury Regulations. The Income Regulations promulgated under the Code, as such Regulations may be amended from time to time (including corresponding provisions of succeeding Regulations). TERM AND TERMINATION OF THE COMPANY Term The term of the Company shall continue until [NUMBER] year after the dissolution of the Fund unless sooner terminated as provided in Paragraph 2.2 or by operation of law or extended as provided in Paragraph 2.3. The last day of the term of the Company, as such may be extended as provided herein, is referred to herein as the \"Termination Date.\" Termination The Company shall terminate prior to the end of the period specified in Paragraph 2.1 at the election of the Managing Members. The Managing Members shall deliver notice of such termination to the Non-Managing Members. Extension of Term The term of the Company may be extended by the Managing Members. The Managing Members shall provide notice of any such extension to the Non-Managing Members. INITIAL MEMBERS; CHANGES IN MEMBERSHIP Name and Address The persons listed on Exhibit A are hereby admitted as Members of the Company. Exhibit A shall be amended from time to time to reflect changes in the membership of the Company (including the admission of Additional Members)",null,"S Corp Operating Agreement","21",513,"doc","https://templates.business-in-a-box.com/imgs/1000px/s-corp-operating-agreement-D12800.png","https://templates.business-in-a-box.com/imgs/250px/12800.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12800.xml",{"title":15,"description":6},"s corp operating agreement",[17,20],{"label":18,"url":19},"Legal Agreements","/templates/business-legal-agreements/",{"label":18,"url":19},"S Corp Operating Agreement Template","https://templates.business-in-a-box.com/imgs/400px/12800.png","https://templates.business-in-a-box.com/imgs/600px/12800.png","\u003Ch4>Enhancing Corporate Governance with an S Corporation Operating Agreement\u003C/h4>\n\u003Cp>In the realm of corporate structures, an S Corporation offers unique advantages, particularly regarding taxation and shareholder flexibility. To maximize these benefits, an S Corporation Operating Agreement is crucial. This key document formalizes the operational framework, outlining the governance, financial, and managerial protocols that guide the corporation's activities. It ensures that all parties understand their roles and obligations, fostering a structured and efficient corporate environment.\u003C/p>\n\u003Cp>An S Corporation Operating Agreement is essential for defining the parameters of the corporation's operations, including shareholder rights, management responsibilities, profit distribution, and procedures for resolving disputes. It provides a legal framework supporting transparent and effective corporate governance, ensuring compliance with federal and state regulations.\u003C/p>\n\u003Ch5>What is an S Corporation Operating Agreement Template?\u003C/h5>\n\u003Cp>An S Corporation Operating Agreement template is a comprehensive guide for drafting detailed agreements that govern the operation of an S Corporation. It ensures that all critical elements are addressed, including shareholder roles, voting rights, profit allocation, and dispute resolution mechanisms. Utilizing a template streamlines the creation process, ensuring consistency and thoroughness while allowing for customization to fit the specific needs and requirements of the corporation.\u003C/p>\n\u003Ch5>Key Elements of an S Corporation Operating Agreement\u003C/h5>\n\u003Cp>A robust S Corporation Operating Agreement should thoroughly address the following key elements:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>Identification of Parties\u003C/strong> - Clearly identifies the corporation and its shareholders, including their respective roles and ownership interests.\u003C/li>\n\u003Cli>\u003Cstrong>Purpose and Scope\u003C/strong> - This defines the corporation's purpose, including its specific goals, objectives, and scope of activities.\u003C/li>\n\u003Cli>\u003Cstrong>Shareholder Contributions\u003C/strong> - Details the initial capital contributions of each shareholder, whether in the form of cash, assets, or services, and outlines procedures for additional contributions.\u003C/li>\n\u003Cli>\u003Cstrong>Management Structure\u003C/strong> - Outlines the governance structure, including the roles of officers and directors, and the decision-making processes.\u003C/li>\n\u003Cli>\u003Cstrong>Voting Rights\u003C/strong> - Specifies shareholders' voting rights, including the procedures for casting votes and making major corporate decisions.\u003C/li>\n\u003Cli>\u003Cstrong>Profit and Loss Distribution\u003C/strong> - Details how profits and losses will be allocated among shareholders, typically in proportion to their ownership interests.\u003C/li>\n\u003Cli>\u003Cstrong>Meetings and Quorums\u003C/strong> - Establishes the procedures for holding shareholder and board meetings, including quorum requirements and voting thresholds.\u003C/li>\n\u003Cli>\u003Cstrong>Transfer of Shares\u003C/strong> - Outlines the procedures for transferring shares, including any restrictions on share transfers, to ensure compliance with S Corporation requirements.\u003C/li>\n\u003Cli>\u003Cstrong>Dispute Resolution\u003C/strong> - Includes provisions for resolving disputes among shareholders, typically through mediation or arbitration, to avoid litigation and maintain a cooperative relationship.\u003C/li>\n\u003Cli>\u003Cstrong>Dissolution\u003C/strong> - Defines the conditions under which the corporation can be dissolved, including procedures for winding down and distributing remaining assets.\u003C/li>\n\u003C/ul>\n\u003Ch5>Supporting Documents for Structuring an S Corporation Operating Agreement\u003C/h5>\n\u003Cp>To enhance the functionality and comprehensiveness of an S Corporation Operating Agreement, integrating the following supporting documents is advisable:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/shareholders-agreement-D1016/\">Shareholder Agreement\u003C/a>\u003C/strong> - Provides additional details on the rights and obligations of shareholders, complementing the operating agreement.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/general-by-laws-D1008/\">General Bylaws\u003C/a>\u003C/strong> - Establishes the internal rules and procedures for the corporation’s governance, aligning with the operating agreement.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/minutes-for-a-formal-meeting-D13/\">Meeting Minutes\u003C/a>\u003C/strong> - Records the discussions and decisions made during shareholder and board meetings, ensuring transparency and accountability.\u003C/li>\n\u003Cli>\u003Cstrong>\u003Ca href=\"https://www.business-in-a-box.com/template/non-disclosure-agreement-nda-D12692/\">Non-Disclosure Agreement (NDA)\u003C/a>\u003C/strong> - Protects sensitive corporate information exchanged among shareholders and management.\u003C/li>\n\u003C/ul>\n\u003Ch5>Why Employ a Detailed Template for an S Corporation Operating Agreement?\u003C/h5>\n\u003Cp>Utilizing a detailed template for drafting your S Corporation Operating Agreement offers significant benefits:\u003C/p>\n\u003Cul>\n\u003Cli>\u003Cstrong>Clarity and Precision\u003C/strong> - Ensures that all necessary information is clearly presented, reducing the likelihood of misunderstandings or miscommunications.\u003C/li>\n\u003Cli>\u003Cstrong>Professionalism\u003C/strong> - Projects a professional image, demonstrating to stakeholders that the corporation is well-governed and that operations are conducted systematically and transparently.\u003C/li>\n\u003Cli>\u003Cstrong>Efficiency\u003C/strong> - Streamlines the agreement preparation process, saving time and resources that can be better allocated to strategic initiatives.\u003C/li>\n\u003Cli>\u003Cstrong>Compliance\u003C/strong> - Ensures that the agreement adheres to legal and regulatory requirements, reducing the risk of non-compliance and potential legal issues.\u003C/li>\n\u003Cli>\u003Cstrong>Risk Mitigation\u003C/strong> - Reduces potential legal disputes by clearly defining roles, responsibilities, and profit-sharing agreements.\u003C/li>\n\u003C/ul>\n\u003Cp>Adopting a comprehensive S Corporation Operating Agreement is essential for effective corporate governance. It provides a clear, enforceable framework that aligns shareholders and management with their mutual goals, ensuring that the corporation operates smoothly and complies with legal requirements. This fundamental document facilitates operational efficacy and solidifies the commitment to strategic growth and corporate integrity.\u003C/p>\n\u003Cp>Updated in May 2024\u003C/p>\n",[26,17,20],{"label":27,"url":28},"Templates","/templates/",[30,31,32],{"label":27,"url":28},{"label":18,"url":19},{"label":33,"url":34},"Incorporation & Bylaws","/templates/incorporation-and-bylaws/",[36,40,44,48,52,56,60,64,69,73,77,81,85,102,115,132,146,161],{"label":37,"url":38,"thumb":39,"extension":10},"Operating Agreement","/template/operating-agreement-D12798","https://templates.business-in-a-box.com/imgs/250px/12798.png",{"label":41,"url":42,"thumb":43,"extension":10},"LLC Operating Agreement","/template/llc-operating-agreement-D5209","https://templates.business-in-a-box.com/imgs/250px/5209.png",{"label":45,"url":46,"thumb":47,"extension":10},"Real Estate Operating Agreement","/template/real-estate-operating-agreement-D14043","https://templates.business-in-a-box.com/imgs/250px/14043.png",{"label":49,"url":50,"thumb":51,"extension":10},"Non-Profit Operating Agreement","/template/non-profit-operating-agreement-D14021","https://templates.business-in-a-box.com/imgs/250px/14021.png",{"label":53,"url":54,"thumb":55,"extension":10},"PLLC Operating Agreement","/template/pllc-operating-agreement-D12979","https://templates.business-in-a-box.com/imgs/250px/12979.png",{"label":57,"url":58,"thumb":59,"extension":10},"LLC Multiple Members Operating Agreement","/template/llc-multiple-members-operating-agreement-D12871","https://templates.business-in-a-box.com/imgs/250px/12871.png",{"label":61,"url":62,"thumb":63,"extension":10},"Equipment Operating Lease","/template/equipment-operating-lease-D1145","https://templates.business-in-a-box.com/imgs/250px/1145.png",{"label":65,"url":66,"thumb":67,"extension":68},"Operating Budget","/template/operating-budget-D13027","https://templates.business-in-a-box.com/imgs/250px/13027.png","xls",{"label":70,"url":71,"thumb":72,"extension":10},"Standard Operating Procedures","/template/standard-operating-procedures-D12673","https://templates.business-in-a-box.com/imgs/250px/12673.png",{"label":74,"url":75,"thumb":76,"extension":10},"Checklist Standard Operating Procedure","/template/checklist-standard-operating-procedure-D13219","https://templates.business-in-a-box.com/imgs/250px/13219.png",{"label":78,"url":79,"thumb":80,"extension":10},"Hotel Standard Operating Procedure","/template/hotel-standard-operating-procedure-D13703","https://templates.business-in-a-box.com/imgs/250px/13703.png",{"label":82,"url":83,"thumb":84,"extension":10},"Restaurant Standard Operating Procedure","/template/restaurant-standard-operating-procedure-D13765","https://templates.business-in-a-box.com/imgs/250px/13765.png",{"description":86,"descriptionCustom":6,"label":87,"pages":88,"size":9,"extension":10,"preview":89,"thumb":90,"svgFrame":91,"seoMetadata":92,"parents":94,"keywords":100,"url":101},"General By-Laws Your business slogan here. Prepared By: [YOUR NAME] [YOUR JOB TITLE] Phone 555.555.5555 Email info@yourbusiness.com www.yourbusiness.com GENERAL BY-LAWS OF [YOUR COMPANY NAME] TABLE OF CONTENTS Pages 1. SEAL AND OFFICES 5 1.1. Corporate Seal 5 1.2. Registered Office 5 1.3. Other Offices 5 2. MEMBERSHIP 5 2.1. Definition of Person 5 2.2. Membership 5 2.3. Condition of Membership 6 2.4. Application for Membership 6 2.5. Membership Dues 6 2.6. Registration of System Members 6 2.7. Withdrawal 6 2.8. Removal 7 2.9. Regional Associations 7 3. MEETINGS 7 3.1. Fiscal Year and Time of Annual Meeting 7 3.2. Annual Meeting 7 3.3. Auditors' Report 7 3.4. General and Special General Meetings 7 3.5. Regional Meetings 8 3.6. Vote Allocation to Each Voting Member 8 3.7. Majority of Votes to Determine Question 8 3.8. Notice of Meeting Quorum 8 3.9. Error or Omission 8 3.10. Rules 8 4. BOARD OF DIRECTORS 9 4.1. Range 9 4.1.1. Directors - System Members 9 4.1.2. Directors - Service Members 9 4.1.3. Director - Trade Members 9 4.1.4. Certain Ex-officio Directors 9 4.1.5. Directors - Regions 10 4.1.6. Regions 10 4.2. Directors - Qualification 10 4.3. Directors - Re-election 10 4.4. Chairman Ex-officio Director 11 4.5. Vacation of Office 11 4.6. Directors' Meetings 12 4.7. Remuneration 12 4.8. Resignation 12 4.9. Powers - General 12 4.10. Agents, Employees 12 4.11. Remuneration - Agents, Employees 13 4.12. Delegation 13 4.13. Borrowing 13 4.14. Delegation Borrowing 13 4.15. No Restriction - Borrowing 13 4.16. Committees 13 5. EXECUTIVE COMMITTEE 14 5.1. Executive Committee 14 5.2. Powers 14 5.3. Meetings 15 5.4. Quorum 15 6. OFFICERS 15 6.1. Officers 15 6.2. Chairman 15 6.3. President 15 6.4. Secretary 16 6.5. Treasurer 16 6.6. Immediate Past Chairman 16 6.7. Absence of Chairman 17 6.8. Directors to Occupy Offices 17 6.9. Removal 17 6.10. Remuneration 17 7. INDEMNITIES TO DIRECTORS, OFFICERS AND OTHERS 17 7.1. Indemnity 17 8. NOMINATING COMMITTEE 17 8.1. Nominating Committee 17 8.2. Duties 17 9. EXECUTION AND CERTIFICATION OF DOCUMENTS 18 9.1. Execution 18 10. RULES AND REGULATIONS 18 10.1. Rules 18 10.2. Construction 18 11. AMENDMENT OF BY-LAWS 18 11.1. Amendment 18 11.2. Previous By-Laws 18 GENERAL BY-LAWS OF [YOUR COMPANY NAME] These General By-Laws are made and effective [DATE]. SEAL AND OFFICES Corporate Seal The corporate seal shall have inscribed thereon the name of [YOUR COMPANY NAME], referred hereto as the \"Corporation\". Registered Office The head office of the Corporation shall be in the City of [NAME OF THE CITY] in State/Province of [STATE/PROVINCE] or elsewhere in COUNTRY/STATE/PROVINCE] as may be determined from time to time by by-law of the Corporation pursuant to the applicable provisions of the [COUNTRY] Corporations [ACT/LAW/RULE] (the \"Act\"). Other Offices The Corporation may establish such other offices and agencies elsewhere within [COUNTRY/STATE/PROVINCE] as the board of directors of the Corporation (the \"Board of Directors\" or the \"Board\") may designate. MEMBERSHIP Definition of Person For the purposes of this By-law \"person\" includes a corporation, a subsidiary or division thereof, a partnership, joint venture, an individual or other entity. Membership Membership in the Corporation shall be limited to persons directly or indirectly engaged in, or supplying goods, equipment and services to the [INDUSTRY/MARKET] and shall consist of the following classes Voting members (the \"Voting Members\"): system members (the \"System Members\"), being persons engaged in the operation of the business; and service members (the \"Service Members\"), being persons engaged in the operation of services offered. Voting Members shall be entitled to receive notice of, to attend and to vote at all meetings of members as provided in this By-law. Non-voting members (the \"Non-Voting Members\"): trade members (the \"Trade Members\"), being persons engaged in the supply of goods, equipment, non-licensed services and other licensed distribution services to System Members; and associate members (the \"Associate Members\"), being persons who qualify for membership in the Corporation as described in Article [NUMBER] above, but are ineligible for membership as a System, Service or Trade Member. Subject to the provisions of Article [NUMBER], Non-Voting Members may receive notice of and attend all meetings of members provided that, they shall not be entitled to vote thereat. Condition of Membership A condition of membership in either of the [PERCENTAGE %] classes shall be that such membership shall not in the determination of the Board, either at the time of application or at any other time, prejudice the best interests of the Corporation or of a majority of its members. Application for Membership Application for membership shall be made in writing addressed to the Secretary in such form as the Board of Directors may from time to time prescribe. Election to membership shall be by majority vote of the directors (the \"Directors\" or \"Director\") present at any meeting of the Board. All applicants approved for membership shall abide by the Letters Patent, Supplementary Letters Patent and by [YOUR COUNTRY LAW] of the Corporation. Membership Dues Membership dues for each class or sub-class of members shall be that sum as is fixed by the Board of Directors from time to time. Registration of System Members Each and every System Member of the Corporation operating [NUMBER] or more systems, or having a sole or controlling interest in [NUMBER] or more persons operating such systems shall, as a condition of membership in the Corporation, register each and every one of such persons as System Members. For the purposes of this By-law, a System Member is deemed to control or have controlling interest in a person operating a [SYSTEM] where the System Member beneficially owns more than [PERCENTAGE %] percent: of the share capital (having full voting rights under all circumstances) of such person, if a corporation; or of any other ownership interest (having full voting rights under all circumstances) of such person, if not a corporation. Withdrawal Any members may withdraw from the Corporation by delivering a written resignation to the Secretary. Such member shall pay all membership dues due at the date of his, her or its resignation. Removal Any member may be required to resign by resolution of the Board of Directors. Prior to the adoption of such resolution the member affected shall have the right to appear before the Board of Directors and to be heard. Regional Associations The System Members of the Corporation may from time to time form an additional association of a regional or provincial nature. The Board of Directors, by resolution, may recognize such an association as an affiliate of the Corporation, provided that [PERCENTAGE %] percent of the subscribers served by those System Members constituting such association are also served by System Members of the Corporation and that the letters patent, supplementary letters patent, by-laws, rules, regulations or actions of such association, do not, at any time, prejudice the best interests of the Corporation or a majority of its members. The Board of Directors may, by resolution, revoke its recognition of any affiliate of the Corporation at any time, provided that such affiliate shall have the right to appear before the Board of Directors and to be heard. MEETINGS Fiscal Year and Time of Annual Meeting The fiscal year of the Corporation shall end on the last day of [MONTH] in each year and the annual meeting of the members (the \"Annual Meeting\") shall be held in [COUNTRY] within the [NUMBER] months following in such place and at such time and date as shall be designated by the Board of Directors. The Voting Members may resolve that a particular meeting of members be held outside [COUNTRY]. Annual Meeting At each Annual Meeting the Voting Members shall:","General By-Laws","19","https://templates.business-in-a-box.com/imgs/1000px/general-by-laws-D1008.png","https://templates.business-in-a-box.com/imgs/250px/1008.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1008.xml",{"title":93,"description":6},"general by-laws",[95,97],{"label":18,"url":96},"business-legal-agreements",{"label":98,"url":99},"Incorporation Agreements","incorporation-agreement","general by laws","/template/general-by-laws-D1008",{"description":103,"descriptionCustom":6,"label":104,"pages":105,"size":9,"extension":10,"preview":106,"thumb":107,"svgFrame":108,"seoMetadata":109,"parents":111,"keywords":110,"url":114},"SHAREHOLDERS AGREEMENT This Shareholders Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Company\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [FIRST SHAREHOLDER NAME] (the \"First Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [SECOND SHAREHOLDER NAME] (the \"Second Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] AND: [THIRD SHAREHOLDER NAME] (the \"Third Shareholder\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WITNESSETH: WHEREAS, the present distribution of shares of the Company is as follows: Name Number of Shares WHEREAS, in order to insure the harmonious and successful management and control of the Company, and to provide for an orderly and fair disposition of shares of common stock of the Company now or hereafter owned by any Shareholder; NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and intending to be legally bound, the parties hereby agree as follows: Definitions and organisation of the company \"Offering Shareholder\" means any Shareholder, or his personal representatives, heirs, administrators, and executors, as the case may be, who pursuant to this Agreement must or does offer all or any of his Shares to the Company or the Continuing Shareholders. \"Continuing Shareholders\" means all Shareholders other than an Offering Shareholder. \"Shares\" means shares of Common Stock of the Company now or hereafter owned by any Shareholder. \"Buyer\" means the Company or those Continuing Shareholders who purchase an Offering Shareholder's Shares pursuant to this Agreement. \"Management Shareholder\" means First Shareholder, Second Shareholder and Third Shareholder. ORGANISATION OF THE COMPANY The affairs of the Company will be managed by a board of [NUMBER] directors unless changed by a unanimous Directors' Resolution. The present directors of the Company are [DIRECTORS' NAMES]. It is agreed that [SHAREHOLDERS' NAMES] shall each be entitled to elect one director to the board of directors of the Company so long as each is a Shareholder. Two (2) directors shall constitute a quorum for the transaction of any business at any meeting of the board of directors. At all meetings of the board of directors, every motion to be carried must receive a majority of the votes cast, subject to the provisions of subparagraphs 2.4 and 2.5. Unless otherwise agreed, board meetings will be held at the head office of the Company. In the event that a nominee to the Board of one of the Shareholders shall fail to vote and act as a director to carry out the provisions of this agreement, then the shareholders agree to exercise their right as shareholders of the Company and in accordance with the Articles of the Company to remove such nominee from the Board and to elect in the place or stead thereof such individual who will use his/her best efforts to carry out the provisions of this agreement but only in the event that the Shareholder whose nominee has been removed fails to appoint a successor within a period of fourteen days from the date such nominee has been removed. The election, appointment and determination of officers and the auditors and advisors of the Company, the defining of their duties and functions and the salaries and remuneration to be paid to them will be a function of the board of directors. Until changed by the board of directors, the Officers of the Company and their annual salaries shall be: Office Held: Director: [NAME] [SALARY] Secretary: [NAME] [SALARY] All direct out-of-pocket expenses will be reimbursed provided these falls within guidelines set out by the Board of Directors from time to time. Until otherwise agreed, each officer of the Company will commit to spending his/her full time on the affairs of the Company. Until changed by the board of directors, the auditors and advisors of the Company shall be: Auditor: Legal Advisors: There shall be kept, in such bank or banks (including trust companies) as may be determined by the board of directors, bank accounts of the Company in which shall be deposited all monies received by the Company in the course of carrying on business from time to time. All payments on account of the Company shall be made by cheques drawn on the bank account and all cheques, drafts or other instruments drawn and made for the purposes of the business of the Company shall be executed by such directors, officers or employees as may from time to time be authorized so to do by the board of directors. Subject to paragraph 2.6, all decisions relating to the management and control of the business of the Company shall be determined by the board of directors of the Company, provided always that the following matters shall be determined by a Special Directors' Resolution: any capital expenditures greater than xxxx; any lease commitments greater than xxxx; the acquisition of any business interests by the Company; the elections of officers of the Company; the payment of any cash dividends or stock dividends to Shareholders of the Company; the issuance of any debt obligations of the Company; the disposal of the whole or any part of the business, undertaking, or assets of the Company outside the normal course of business of the Company the transfer of any shares of the Company; changes or variations in the objects or powers of the Company; the liquidation or winding up of the Company; the approval of any contracts or transactions outside the normal course of business; the execution of any contract involving a consideration greater than xxxx within the normal course of business; the lending of money by the Company; the guarantee by the Company of the debts or obligations of any other person, firm or body corporate; any non-budgeted expenditures greater than xxxx; business plan and/or budgets. The following decisions shall be determined by a Unanimous Directors' Resolution: alterations, variations or changes to the authorized or issued capital of the Company; the salaries and bonuses of officers and directors of the Company; the issue, redemption or purchase of any Shares; and changes in the number of directors of the Company The Shareholders may pledge any of their Shares as security for any borrowings by them provided the pledgee executes an agreement, in writing, providing that the pledgee shall be subject to all of the terms of this Agreement. The board of directors shall meet at least four times during each fiscal year of the Company. Any director can call a meeting provided 10 days notice is given. Notice may be waived. During the first year from the date of this agreement, the board of directors shall meet on a monthly basis. Directors may elect to attend a board meeting by telephone conference call. Each Shareholder shall, for so long as s/he is the owner of shares of the Company devote such of his/her business, time and energy as may be reasonably required to carry on the business of the Company and the Shareholder shall use his/her best efforts, skill and abilities to promote the interests of the Company. Each Shareholder agrees that he/she will not engage, without the consent of the other Shareholders, in a business which is directly competitive to that of the Company. Purchase for Investment","Shareholders Agreement","16","https://templates.business-in-a-box.com/imgs/1000px/shareholders-agreement-D1016.png","https://templates.business-in-a-box.com/imgs/250px/1016.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#1016.xml",{"title":110,"description":6},"shareholders agreement",[112,113],{"label":18,"url":96},{"label":98,"url":99},"/template/shareholders-agreement-D1016",{"description":116,"descriptionCustom":6,"label":117,"pages":118,"size":9,"extension":10,"preview":119,"thumb":120,"svgFrame":121,"seoMetadata":122,"parents":124,"keywords":123,"url":131},"BUY-SELL AGREEMENT This Buy-Sell Agreement (this \"Agreement\") is made and effective this [Date], BETWEEN: [COMPANY NAME], a corporation organized and existing under the laws of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: Each of the Parties listed below (each a \"Shareholder\" and collectively, the \"Shareholders\"). The Shareholders desire to promote and protect their mutual interests and the interests of the Company. Therefore, the parties hereby agree as follows: ARTICLE I PARTIES AND PURPOSE PARTIES The Shareholders own all the outstanding shares (the \"Shares\") of the [COMPANY NAME] in the amount outlined below. At this time, each Shareholder's interest in the Company is as follows: __________________ owns _________________ % __________________ owns _________________ % __________________ owns _________________ % __________________ owns _________________ % While this agreement is in effect, no Shareholder shall have any right to assign, encumber or dispose of his interest in the Company except as provided herein. PURPOSE The purpose of this Agreement is to protect the Corporation's management and control from persons not acceptable to all Shareholders. The other purpose is to provide a ready market in the event of the death, disability, or lifetime transfer of Shares by a Shareholder. To this end, the Shareholders have entered into this agreement to: Restrict the transfer or sale of the Shares by the Shareholders; Ensure any sale of the Shares is in the accordance with established procedures; Provide stability and continuity in the management of the Company; Maintain ownership or control of the Company ARTICLE II SALES TRANSFER RESTRICTION ON SHARES No Shareholder (or any party acting on behalf of a Shareholder) may sell or transfer its Shares, whether owned or subsequently acquired, except in accordance with the provisions of this Agreement or with the written consent of the Company and all other Shareholders. Any attempt to sell or transfer Shares (or an interest in Shares) that contravenes the terms of this agreement is null and void and is not binding on or recognized by the Company or the Shareholders. Definition of sale or transfer. The term \"sale or transfer\" includes any sale, pledge, encumbrance, gift, bequest, or other transfer of any Shares, whether or not the transfer would be made for value, or to another Shareholder, or voluntarily or involuntarily or by operation of law, or during his lifetime or upon his death Exception. A sale or transfer of a Shareholder's Shares to a trust that is wholly revocable by that Shareholder and for which that Shareholder is the sole trustee is not a prohibited sale or transfer. However, any subsequent attempted sale or transfer by the trustee of such trust shall be subject to all of the terms of this Agreement with the Shareholder (and not the trust) deemed as the Shareholder of such Shares. Legend on share certificates. Each share certificate whether presently owned or subsequently acquired, shall have the following statement conspicuously printed on its face: \"The transfer, sale, assignment of the Shares represented by this certificate is restricted by a Buy-Sell Agreement among all the Shareholders and the Corporation dated [SPECIFY]. A copy of the Buy-Sell Agreement is available for inspection during normal business hours at the principal office of the Corporation. All the terms and provisions of the Buy-Sell Agreement are incorporated by this reference and made a part of this certificate.\" ARTICLE III VOLUNTARY TRANSFER PERMITTED SALE OR TRANSFER DURING LIFETIME Any Shareholder wishing to sell or transfer its Shares must first notify each of the other Shareholders in writing. Such Shareholder (a \"Seller\") will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The notice must indicate the name of the party (the \"third party purchaser\") to whom the seller wishes to sell or transfer the offered Shares and the terms of the proposed sale or transfer. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of the notice to choose to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. During this 30-day period, the other Shareholders must collectively agree to purchase all or none of the Offered Shares. If the other Shareholders exercise their call option, they must acquire the Offering Shares on the same terms as those set out in the proposed notice of sale or transfer. These conditions will be supplemented, as necessary, by the payment conditions described in Article VI below. Notice of proposed sale. Any Shareholder wishing to sell his/her Shares shall provide a Notice of Proposed Sale. The notice must specify: the name and address of each proposed transferee; the number of Shares or the interest in Shares to be transferred; the price per Share; the terms of the proposed sale, assignment, or transfer. Permitted sale or transfer to third party purchaser. When the other Shareholders do not exercise their right to purchase all the Shares offered within the 30-day period, the seller may then conclude the sale or transfer to the third-party purchaser. However, the sale or transfer must be made on the same terms and conditions as those set out in the notice to other Shareholders. In addition, the third-party buyer must agree in writing to be bound by the terms of this contract before or at the time of the sale or transfer. If the sale or transfer to the third-party acquirer is not completed within sixty (60) days of the expiry of the other Shareholder's 30-day option period, then the authorization to sell or transfer under this agreement shall be deemed to have been withdrawn as if no sale or transfer had been considered and no notice given. ARTICLE IV INVOLUNTARY TRANSFER INVOLUNTARY LIFETIME SALE OR TRANSFER Any Shareholder who holds information that could reasonably be expected to result in an involuntary lifetime sale of his or her Shares and any person or entity that has acquired or may acquire an interest in such Shares must promptly notify each of the other Shareholders in writing. The notice must describe the nature and details of the involuntary lifetime sale and must indicate the name of the party (the \"third party transferee\"). The Shareholder will be deemed to have offered to sell its Shares (the \"Offering Shares\") to other Shareholders. The following events shall each constitute an \"Involuntary\" transfer event: the death of a Shareholder; the total mental or physical disability of a Shareholder; the termination of a Shareholder's employment with [COMPANY NAME]; and the bankruptcy or insolvency of a Shareholder. First option to other Shareholders. Each of the other Shareholders will have thirty (30) days from the effective date of this notice to elect to purchase the Offered Shares in proportion to their respective ownership of all outstanding Shares (excluding the Offered Shares) or in such other proportion as the other Shareholders may agree. If the other Shareholders exercise their option to purchase some or all of the offered Shares, they must then acquire these Shares at the purchase price and on the payment, terms described in Articles VI and VII below. Permitted sale or transfer to third party transferee. If the other Shareholders do not validly exercise their option to buy all of the Offered Shares within the 30-day period, then any remaining Offered Shares may be transferred to the third-party transferee. However, the transfer must be made on the same terms and conditions as those contained in the notice to the other Shareholders","Buy Sell Agreement","8","https://templates.business-in-a-box.com/imgs/1000px/buy-sell-agreement-D12611.png","https://templates.business-in-a-box.com/imgs/250px/12611.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12611.xml",{"title":123,"description":6},"buy sell agreement",[125,128],{"label":126,"url":127},"Finance & Accounting","finance-accounting",{"label":129,"url":130},"Buy & Sell Shares","buy-sell-shares","/template/buy-sell-agreement-D12611",{"description":133,"descriptionCustom":6,"label":134,"pages":135,"size":136,"extension":10,"preview":137,"thumb":138,"svgFrame":139,"seoMetadata":140,"parents":141,"keywords":144,"url":145},"STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the \"Agreement\") is made and effective [DATE] BETWEEN: [YOUR COMPANY NAME] (the \"Seller\"), a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [PURCHASER NAME] (the \"Purchaser\"), an individual with his main address located at OR a company organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] RECITALS WHEREAS, the Seller is the record owner and holder of the issued and outstanding shares of the capital stock of the Company, a [STATE/PROVINCE] company, which Company has issued capital stock of [NUMBER] shares of [AMOUNT] par value common stock; and WHEREAS, the Purchaser desires to purchase said stock and the Seller desires to sell said stock, upon the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this Agreement, and in order to consummate the purchase and the sale of the Company's Stock aforementioned, it is hereby agreed as follows: PURCHASE AND SALE Subject to the terms and conditions hereinafter set forth, at the closing of the transaction contemplated hereby, the Seller shall sell, convey, transfer, and deliver to the Purchaser certificates representing such stock, and the Purchaser shall purchase from the Seller the Company's Stock in consideration of the purchase price set forth in this Agreement. The certificates representing the Company's Stock shall be duly endorsed for transfer or accompanied by appropriate stock transfer powers duly executed in blank, in either case with signatures guaranteed in the customary fashion, and shall have all the necessary documentary transfer tax stamps affixed thereto at the expense of the Seller. The closing of the transactions contemplated by this Agreement (\"Closing\"), shall be held at [ADDRESS], on [DATE], at [TIME], or such other place, date and time as the parties hereto may otherwise agree. AMOUNT AND PAYMENT OF PURCHASE PRICE The total consideration and method of payment thereof are fully set out in Exhibit \"A\" attached hereto and made a part hereof. REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby warrants and represents: Organization and Standing. Company is a company duly organized, validly existing and in good standing under the laws of the [State/Province] of [STATE/PROVINCE] and has the corporate power and authority to carry on its business as it is now being conducted. Restrictions on Stock:","Stock Purchase Agreement","4",42,"https://templates.business-in-a-box.com/imgs/1000px/stock-purchase-agreement-D349.png","https://templates.business-in-a-box.com/imgs/250px/349.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#349.xml",{"title":6,"description":6},[142,143],{"label":126,"url":127},{"label":129,"url":130},"stock purchase agreement","/template/stock-purchase-agreement-D349",{"description":147,"descriptionCustom":6,"label":148,"pages":149,"size":9,"extension":10,"preview":150,"thumb":151,"svgFrame":152,"seoMetadata":153,"parents":155,"keywords":154,"url":160},"NON-DISCLOSURE AGREEMENT (NDA) This Non-Disclosure Agreement (the \"Agreement\") is made and effective [DATE], BETWEEN: [YOUR COMPANY NAME] (the \"Disclosing Party\"), a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] AND: [RECEIVING PARTY NAME] (the \"Receiving Party\"), an individual with his main address located at OR a corporation organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [COMPLETE ADDRESS] WHEREAS, Receiving Party has been or will be engaged in the performance of work on [DESCRIBE]; and in connection therewith will be given access to certain confidential and proprietary information; and WHEREAS, Receiving Party and Disclosing Party wish to evidence by this Agreement the manner in which said confidential and proprietary material will be treated. NOW, THEREFORE, it is agreed as follows: NON-DISCLOSURE OF CONFIDENTIAL INFORMATION Both Parties understand and agree that each Party may have access to the confidential information of the other party. For the purposes of this Agreement, \"Confidential Information\" means proprietary and confidential information about the Disclosing Party's (or it's suppliers') business or activities. Such information includes all business, financial, technical, and other information marked or designated by such Party as \"confidential\" or \"proprietary.\" Confidential Information also includes information which, by the nature of the circumstances surrounding the disclosure, ought in good faith to be treated as confidential. For the purposes of this Agreement, Confidential Information does not include: Information that is currently in the public domain or that enters the public domain after the signing of this Agreement. Information a Party lawfully receives from a third Party without restriction on disclosure and without breach of a non-disclosure obligation. Information that the Receiving Party knew prior to receiving any Confidential Information from the Disclosing Party. Information that the Receiving Party independently develops without reliance on any Confidential Information from the Disclosing Party. Each Party agrees that it will not disclose to any third Party or use any Confidential Information disclosed to it by the other Party except when expressly permitted in writing by the other Party. Each Party also agrees that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other Party in its possession or control. TERM The term of this Agreement is [number] of [years/months] from the date of execution by both Parties. TITLE The Receiving Party agrees that all Confidential Information furnished by the Disclosing Party shall remain the sole property of the Disclosing Party. DISCLAIMER","Non Disclosure Agreement Nda","3","https://templates.business-in-a-box.com/imgs/1000px/non-disclosure-agreement-nda-D12692.png","https://templates.business-in-a-box.com/imgs/250px/12692.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#12692.xml",{"title":154,"description":6},"non disclosure agreement nda",[156,157],{"label":18,"url":96},{"label":158,"url":159},"Confidentiality Agreements","confidentiality-agreement","/template/non-disclosure-agreement-nda-D12692",{"description":162,"descriptionCustom":6,"label":163,"pages":164,"size":9,"extension":10,"preview":165,"thumb":166,"svgFrame":167,"seoMetadata":168,"parents":170,"keywords":169,"url":178},"EMPLOYMENT AGREEMENT - AT WILL EMPLOYEE This Employment Agreement for \"At Will\" Employee (the \"Agreement\") is made and effective this [DATE], BETWEEN: [EMPLOYEE NAME] (the \"Employee\"), an individual with his main address at: [COMPLETE ADDRESS] AND: [YOUR COMPANY NAME] (the \"Corporation\"), an entity organized and existing under the laws of the [State/Province] of [STATE/PROVINCE], with its head office located at: [YOUR COMPLETE ADDRESS] RECITALS In consideration of the covenants and agreements herein contained and the moneys to be paid hereunder, the Corporation hereby employs the Employee and the Employee hereby agrees to perform services as an employee of the Corporation, on an \"at will\" basis, upon the following terms and conditions: APPOINTMENT The Employee is hereby employed by the Corporation to render such services and to perform such tasks as may be assigned by the Corporation. The Corporation may, in its sole discretion, increase or reduce the duties, or modify the title and job description, of the Employee from time to time, and any such increase, reduction or modification shall not be deemed a termination of this Agreement. ACCEPTANCE OF EMPLOYMENT Employee accepts employment with the Corporation upon the terms set forth above and agrees to devote all Employee's time, energy and ability to the interests of the Corporation, and to perform Employee's duties in an efficient, trustworthy and business-like manner. DEVOTION OF TIME TO EMPLOYMENT The Employee shall devote the Employee's best efforts and substantially all of the Employee's working time to performing the duties on behalf of the Corporation. The Employee shall provide services during the hours that are scheduled by the Corporation management. The Employee shall be prompt in reporting to work at the assigned time. NO CONFLICT OF INTEREST Employee shall not engage in any other business while employed by the Corporation. Employee shall not engage in any activity that conflicts with the Employees duties to the Corporation. Employee shall not provide any service or lend any aid or assistance to any party that competes with the services offered by the Corporation. Employee shall not provide any services to clients or prospective clients of the Corporation outside of the provision of services for the Corporation, whether such services are provided with or without compensation or remuneration. CORPORATION PROPERTY Employee acknowledges and agrees that while employed by the Corporation the Employee may be provided with use of computer equipment and other property of the Corporation. The use and possession of the such items shall be subject to any policies, requirements or restrictions established by the Corporation. Such items may only be used in performance of the Employee's duties for the corporation. On request of the Corporation, the Employee shall immediately deliver any such items to the Corporation. Upon termination of employment, Employee shall have the affirmative duty to return any such item to the Corporation whether a request is made or not. The obligation to return Corporation property shall extend and include any and all work product, client property, proprietary rights, intangible property, and all other property of the corporation regardless of the form or medium. COMPENSATION The Corporation shall pay the Employee such hourly compensation as determined by the Corporation. Payment shall be at the same time as the Corporations usual payroll to other employees. BONUS & BENEFITS Payment of any bonuses shall be at the complete discretion of the Corporation. No guarantee or representation that any bonuses will be paid has been made to the Employee. Standard benefits that are provided to other non-management employees shall be offered to the Employee, subject to the Corporation's policies and the terms and conditions of such benefits. WITHHOLDING All sums payable to Employee under this Agreement will be reduced by all federal, state, local, and other withholdings and similar taxes and payments required by applicable law. QUALIFICATIONS OF EMPLOYEE The employee shall satisfy all of the qualification that are established by the Corporation. TERM OF AGREEMENT There shall be no guaranteed term of employment. Employer acknowledges and agrees that Employee shall be an \"At Will\" Employee and that Employee's employment may be terminated at any time by the Corporation, with or without cause. FEES FROM EMPLOYEE'S WORK The Corporation shall have exclusive authority to determine the fees, or a procedure for establishing the fees, to be charged to clients by the Corporation for services that are provided by the Employee. All sums paid to the Employee or the Corporation in the way of fees, in cash or in kind, or otherwise for services of the Employee, shall, except as otherwise specifically agreed by the Corporation, be and remain the property of the Corporation and shall be included in the Corporation's name in such checking account or accounts as the Corporation may from time to time designate. CLIENTS AND CLIENT RECORDS The Corporation shall have the authority to determine who will be accepted as clients of the Corporation, and the Employee recognizes that such clients accepted are clients of the Corporation and not the Employee. All client records and files of any type concerning clients of the Corporation shall belong to and remain the property of the Corporation, notwithstanding the subsequent termination of the employment. POLICIES AND PROCEDURES The Corporation shall have the authority to establish from time to time the policies and procedures to be followed by the Employee in performing services for the Corporation. This may include, but is not necessarily limited to, employment policies, computer use policies, Internet access policies, email policies, and all other policies, procedures, directives, and mandates established by the Corporation, whether or not in written form or formally adopted. Employee shall abide by the provisions of any contract entered into by the Corporation under which the Employee provides services. Employee shall comply with the terms and conditions of any and all contracts entered by the Corporation. TERMINATION Employee acknowledges and agrees that Employee is an \"at will\" employee of the Corporation. As such, no term of employment is created hereby and employee may be terminated at any time in the sole discretion of the Corporation, whether there exists any cause for termination or not. CREATIONS AND INVENTIONS Employee acknowledges and agrees that any and all work product of the Employee that is conceived or created during the Employee's employment with the Corporation is the exclusive property of the Corporation. This shall include any and all copyrights, trade secrets, confidential information, patents, trademarks, trade dress, ideas, concepts, plans, business plans, business concepts, techniques, inventions, drawings, artwork, logos, graphics, web pages, databases, software, programs, CGI's, plug ins, applications, brochures, inventions, marketing plans and concepts, and all other ideas and work product of the Employee. The Employee acknowledges and agrees that all creations shall be \"works made for hire\" as defined in the [ACT OR CODE]. Notwithstanding the fact that this material may be considered to be a work made for hire, Employee agrees, during Employee's employment and thereafter, which covenant shall survive any termination of the employment relationship, to execute any and all documents requested by the Corporation to confirm the Corporation's ownership and control of all such material, including but not limited to assignments of copyright, confirmations of work for hire status, waivers of proprietary rights, copyright application, and any other documents requested by Corporation. RESTRICTIVE COVENANTS","Employment Agreement_At Will Employee","7","https://templates.business-in-a-box.com/imgs/1000px/employment-agreement_at-will-employee-D541.png","https://templates.business-in-a-box.com/imgs/250px/541.png","https://templates.business-in-a-box.com/svgs/docviewerWebApp1.html?v6#541.xml",{"title":169,"description":6},"employment agreement_at will employee",[171,174,177],{"label":172,"url":173},"Human Resources","human-resources",{"label":175,"url":176},"Hire an Employee","hire-employee",{"label":18,"url":96},"/template/employment-agreement_at-will-employee-D541",true,{"seo":181,"reviewer":193,"legal_disclaimer":179,"quick_facts":197,"at_a_glance":200,"personas":204,"variants":229,"glossary":254,"clauses":291,"how_to_fill":342,"common_mistakes":378,"faqs":403,"industries":434,"comparisons":459,"diy_vs_lawyer":472,"jurisdictions":485,"related_template_ids_curated":506,"schema":516,"classification":517},{"meta_title":182,"meta_description":183,"primary_keyword":184,"secondary_keywords":185},"S-Corp Operating Agreement Template (Free Word)","Free S-Corp operating agreement template covering shareholder rights, transfer restrictions, distributions, voting, and S-election preservation. Free Word and PDF download.","s-corp operating agreement template",[186,187,188,189,190,191,192],"s corporation operating agreement","s-corp shareholder agreement template","s corp operating agreement free","s corporation governance agreement","s-corp operating agreement word","s corporation agreement template download","s-corp shareholder rights agreement",{"name":194,"credential":195,"reviewed_date":196},"Bruno Goulet","CEO, Business in a Box","2026-05-02",{"difficulty":198,"legal_review_recommended":179,"signature_required":179,"notarization_required":199},"advanced",false,{"what_it_is":201,"when_you_need_it":202,"whats_inside":203},"An S-Corp Operating Agreement is an internal governance document signed by all shareholders of an S-corporation that defines how the business is owned, managed, and operated — while preserving the company's S-election eligibility under IRS rules. This free Word download covers shareholder rights, transfer restrictions, distributions, voting procedures, officer appointments, and tax matters in a single structured document you can edit online and export as PDF.\n","Use it when forming a new S-corporation, adding a shareholder, restructuring governance, or replacing an informal or outdated agreement that no longer reflects how the business operates. Any equity transfer or new investor should trigger a review and amendment.\n","Shareholder identification and ownership percentages, S-election eligibility requirements, share transfer restrictions and right of first refusal, voting rights and quorum rules, officer roles and authority, profit and loss allocations, distribution policy, buy-sell triggers, and governing law.\n",[205,209,213,217,221,225],{"title":206,"use_case":207,"icon_asset_id":208},"S-corp founders","Establishing governance rules and preserving S-status at formation","persona-startup-founder",{"title":210,"use_case":211,"icon_asset_id":212},"Small business owners","Formalizing ownership rights and management roles without an in-house legal team","persona-small-business-owner",{"title":214,"use_case":215,"icon_asset_id":216},"Multi-shareholder S-corps","Documenting voting thresholds, deadlock resolution, and buy-sell triggers before disputes arise","persona-operations-director",{"title":218,"use_case":219,"icon_asset_id":220},"Family-owned businesses","Structuring succession and transfer restrictions to keep shares within the family","persona-family-business",{"title":222,"use_case":223,"icon_asset_id":224},"CPAs and tax advisors","Ensuring a client's agreement contains provisions that protect S-election eligibility","persona-accountant",{"title":226,"use_case":227,"icon_asset_id":228},"Business attorneys","Using a structured starting point for drafting or reviewing client S-corp governance documents","persona-attorney",[230,234,237,240,244,247,251],{"situation":231,"recommended_template":232,"slug":233},"Single-shareholder S-corp needing basic governance documentation","S-Corp Operating Agreement (Single Shareholder)","s-corp-operating-agreement-D12800",{"situation":235,"recommended_template":236,"slug":233},"Multi-shareholder S-corp with complex voting and deadlock provisions","S-Corp Operating Agreement (Multi-Shareholder)",{"situation":238,"recommended_template":239,"slug":233},"LLC electing S-corp tax treatment","LLC Operating Agreement with S-Election",{"situation":241,"recommended_template":242,"slug":243},"S-corp shareholders needing a standalone buy-sell mechanism","Buy-Sell Agreement","buy-sell-agreement-D12611",{"situation":245,"recommended_template":134,"slug":246},"Bringing on a new shareholder via share purchase","stock-purchase-agreement-D349",{"situation":248,"recommended_template":249,"slug":250},"Documenting corporate officer roles and authority separately","Corporate Bylaws","corporate-governance-policy-D13943",{"situation":252,"recommended_template":104,"slug":253},"S-corp converting to a C-corp and needing updated governance","shareholders-agreement-D1016",[255,258,261,264,267,270,273,276,279,282,285,288],{"term":256,"definition":257},"S-Election","The IRS designation under Subchapter S of the Internal Revenue Code that allows a corporation to pass income, losses, deductions, and credits through to shareholders' personal tax returns, avoiding double taxation.",{"term":259,"definition":260},"Pass-Through Taxation","A tax structure in which the entity's income is not taxed at the corporate level but is instead reported on each shareholder's individual tax return in proportion to ownership.",{"term":262,"definition":263},"Eligible Shareholder","Under IRS rules, an S-corp shareholder must be a US citizen or permanent resident individual, a qualifying trust, or a qualifying estate — corporations and partnerships cannot hold S-corp shares.",{"term":265,"definition":266},"Right of First Refusal (ROFR)","A contractual provision requiring a shareholder who wants to sell their shares to offer them to existing shareholders at the same price and terms before selling to an outside party.",{"term":268,"definition":269},"Buy-Sell Provision","A clause establishing the conditions and valuation method under which a departing, deceased, or disabled shareholder's shares must be purchased by the company or remaining shareholders.",{"term":271,"definition":272},"Pro Rata Distribution","A distribution of profits to shareholders in exact proportion to their ownership percentage, as required by S-corp rules — unlike an LLC, an S-corp cannot make disproportionate distributions.",{"term":274,"definition":275},"Reasonable Compensation","The IRS requirement that S-corp shareholder-employees receive a salary comparable to what a third party would be paid for the same work before taking distributions — to prevent avoidance of payroll taxes.",{"term":277,"definition":278},"Quorum","The minimum percentage of shareholders or shares represented at a meeting required before any binding vote can be taken.",{"term":280,"definition":281},"Deadlock","A situation in a multi-shareholder company where shareholders holding equal voting power cannot reach agreement on a material decision, requiring a pre-agreed resolution mechanism.",{"term":283,"definition":284},"Transfer Restriction","A contractual limitation on a shareholder's ability to sell, gift, pledge, or otherwise dispose of their shares — used in S-corps to prevent transfers to ineligible shareholders that would terminate the S-election.",{"term":286,"definition":287},"Basis","A shareholder's adjusted investment in the S-corp for tax purposes; losses passed through can only be deducted up to the shareholder's current basis, and distributions in excess of basis are taxable.",{"term":289,"definition":290},"Inadvertent Termination","An unintended loss of S-election status caused by a prohibited transfer, an excess shareholder count, or an ineligible shareholder — which can trigger corporate-level tax liability if not corrected promptly.",[292,297,302,307,312,317,322,327,332,337],{"name":293,"plain_english":294,"sample_language":295,"common_mistake":296},"Shareholder identification and ownership schedule","Lists every shareholder, their legal name, share count, ownership percentage, and initial capital contribution — the foundational ownership record of the corporation.","Schedule A attached hereto sets forth the name, address, number of shares held, percentage interest, and initial capital contribution of each Shareholder as of the Effective Date: [SHAREHOLDER NAME] — [X] shares — [X]% — $[AMOUNT].","Omitting the capital contribution amounts from the schedule. Without contribution records, disputes over basis calculations and disproportionate distribution claims become difficult to resolve.",{"name":298,"plain_english":299,"sample_language":300,"common_mistake":301},"S-election eligibility requirements","Obligates every shareholder to remain an eligible S-corp shareholder under IRS rules and requires immediate notice if their eligibility status changes — protecting the corporation's pass-through tax treatment.","Each Shareholder represents that they are an Eligible Shareholder as defined under IRC §1361 and agrees to promptly notify the Corporation in writing if any event occurs that would cause them to cease to qualify as an Eligible Shareholder.","Failing to define 'Eligible Shareholder' by reference to IRC §1361. Vague language leaves the obligation unenforceable and makes inadvertent termination harder to remediate with the IRS.",{"name":303,"plain_english":304,"sample_language":305,"common_mistake":306},"Transfer restrictions and right of first refusal","Prohibits transfers of shares to ineligible persons and requires a selling shareholder to first offer their shares to the corporation and then to remaining shareholders before selling to any outside party.","No Shareholder may transfer any Shares to any person who is not an Eligible Shareholder. Prior to any proposed transfer, the transferring Shareholder shall deliver written notice to the Corporation offering the Shares at a price of $[X] per share. The Corporation shall have [30] days to exercise its right of first refusal, followed by [15] days for the remaining Shareholders.","Setting the ROFR price by formula reference without defining the valuation method. 'Fair market value' without a defined appraisal mechanism leads to disputes on every attempted transfer.",{"name":308,"plain_english":309,"sample_language":310,"common_mistake":311},"Voting rights and shareholder meetings","Establishes each share's voting weight, the quorum required to hold a meeting, the vote thresholds for ordinary and extraordinary resolutions, and the procedure for calling and conducting meetings.","Each Share shall carry one (1) vote. A quorum requires Shareholders holding at least [X]% of the outstanding Shares. Ordinary resolutions require a majority of votes cast. The following matters require approval of Shareholders holding at least [X]% of outstanding Shares: [LIST EXTRAORDINARY MATTERS].","Treating all decisions as ordinary resolutions. Without supermajority requirements for major transactions — asset sales, new share issuances, or amendments to the agreement — minority shareholders have no protective threshold.",{"name":313,"plain_english":314,"sample_language":315,"common_mistake":316},"Officer appointments, roles, and authority","Names the initial officers (at minimum a President and Secretary), defines their duties and signing authority, and establishes the process for appointing, removing, or replacing officers.","The initial Officers of the Corporation shall be: President — [NAME]; Secretary — [NAME]; Treasurer — [NAME]. Officers shall be elected annually by majority vote of the Shareholders. The President is authorized to execute contracts and instruments up to $[X] without further Shareholder approval.","Setting no dollar threshold on officer signing authority. An unlimited authority clause allows an officer to bind the corporation to material contracts without shareholder knowledge or approval.",{"name":318,"plain_english":319,"sample_language":320,"common_mistake":321},"Profit and loss allocations","Specifies that taxable income, losses, deductions, and credits are allocated to shareholders strictly in proportion to their pro rata share ownership — as required by S-corp rules, which prohibit special allocations.","All items of income, gain, loss, deduction, and credit of the Corporation shall be allocated among the Shareholders in proportion to their respective Percentage Interests as set forth in Schedule A for each taxable year, consistent with IRC §1366.","Attempting to create preferred or special allocations of income to specific shareholders. S-corps are prohibited from making disproportionate allocations — doing so voids the S-election and triggers C-corp taxation.",{"name":323,"plain_english":324,"sample_language":325,"common_mistake":326},"Distribution policy","Defines when and how cash distributions are made to shareholders, typically including a mandatory tax distribution to cover each shareholder's personal tax liability on pass-through income.","The Corporation shall make an annual Tax Distribution to each Shareholder no later than [March 15] in an amount equal to such Shareholder's allocable share of taxable income for the prior year multiplied by the Assumed Tax Rate of [X]%. Additional distributions may be declared by majority vote of the Shareholders, pro rata in accordance with Percentage Interests.","No mandatory tax distribution clause. Shareholders owe personal income tax on S-corp income whether or not cash is distributed — without a tax distribution provision, minority shareholders can be left with a tax bill and no cash to pay it.",{"name":328,"plain_english":329,"sample_language":330,"common_mistake":331},"Buy-sell triggers and valuation","Lists the events — death, disability, divorce, bankruptcy, or voluntary departure — that trigger an obligation for the corporation or remaining shareholders to purchase the affected shareholder's shares, and specifies how the purchase price is determined.","Upon a Triggering Event affecting any Shareholder, the Corporation shall have the option, exercisable within [60] days, to purchase all (but not less than all) of such Shareholder's Shares at the Buy-Out Price. The Buy-Out Price shall be determined by [mutual agreement / a certified appraiser / the formula set forth in Schedule B].","Listing triggering events without specifying a timeline for exercise or a valuation method. A buy-sell clause with no exercise deadline or pricing mechanism is unenforceable and converts every triggering event into litigation.",{"name":333,"plain_english":334,"sample_language":335,"common_mistake":336},"Restrictions on indebtedness and new share issuances","Requires shareholder approval for the corporation to incur debt above a defined threshold or to issue new shares, preventing unilateral dilution or leverage that could impair existing shareholders.","The Corporation shall not incur any indebtedness exceeding $[X] in the aggregate without approval of Shareholders holding at least [X]% of outstanding Shares. The Corporation shall not issue any additional Shares or any other equity interests without prior approval of Shareholders holding at least [X]% of outstanding Shares.","Omitting this clause entirely and relying on the officer authority limit alone. Officers may legally bind the corporation to debt or equity transactions within their statutory authority unless the agreement expressly restricts them.",{"name":338,"plain_english":339,"sample_language":340,"common_mistake":341},"Governing law, amendments, and entire agreement","States the jurisdiction whose law governs the agreement, requires any amendment to be in writing and signed by all shareholders, and confirms that this document supersedes all prior informal arrangements.","This Agreement shall be governed by the laws of the State of [STATE]. No amendment shall be effective unless executed in writing by all Shareholders. This Agreement constitutes the entire agreement among the parties and supersedes all prior understandings, whether oral or written.","Allowing amendments by majority vote instead of requiring unanimous written consent. A majority-amendable agreement means minority shareholders can have their protections stripped without their approval.",[343,348,353,358,363,368,373],{"step":344,"title":345,"description":346,"tip":347},1,"Enter the corporation's legal name, state of incorporation, and EIN","Use the exact name from your Articles of Incorporation and confirm your Employer Identification Number. Cross-reference your IRS Form 2553 (S-election filing) to ensure the entity name matches exactly.","A mismatch between the agreement and your Articles of Incorporation can create ambiguity about which entity is bound — check the state registry before finalizing.",{"step":349,"title":350,"description":351,"tip":352},2,"Complete Schedule A with all shareholders and ownership percentages","List each shareholder's full legal name, address, share count, ownership percentage, and initial capital contribution. Confirm the percentages sum to exactly 100% and that each shareholder is an IRS-eligible S-corp owner.","Flag any shareholder who holds shares through a trust or estate — only qualifying trusts (ESBT, QSST, or grantor trusts) are eligible S-corp shareholders under IRC §1361.",{"step":354,"title":355,"description":356,"tip":357},3,"Set transfer restriction thresholds and ROFR procedures","Define the notice period, ROFR exercise windows (typically 30 days for the corporation, 15 for remaining shareholders), and the valuation method for determining the transfer price.","Book value, a fixed formula, and independent appraisal each have trade-offs — a fixed formula is predictable but can diverge from market value; independent appraisal is accurate but slow and expensive.",{"step":359,"title":360,"description":361,"tip":362},4,"Define voting thresholds for ordinary and extraordinary matters","Set a quorum percentage and list the specific decisions that require a supermajority (typically 66.7% or 75%). At minimum, require supermajority approval for share issuances, major asset sales, debt above a threshold, and agreement amendments.","Calibrate supermajority thresholds to your ownership split — if one shareholder holds 51%, a 66.7% supermajority gives the minority meaningful protection without creating a permanent veto.",{"step":364,"title":365,"description":366,"tip":367},5,"Confirm the allocation and distribution provisions comply with S-corp rules","Verify that all income, loss, and deduction allocations are strictly pro rata to ownership percentage. Add a mandatory tax distribution clause specifying the assumed tax rate and the payment deadline before each April 15 individual filing.","Use the highest combined federal and state marginal rate applicable to any shareholder as the assumed tax rate — this ensures no shareholder is underfunded for their tax liability.",{"step":369,"title":370,"description":371,"tip":372},6,"Populate the buy-sell schedule with triggering events and valuation method","List every event that should trigger a forced purchase: death, permanent disability, divorce proceedings, bankruptcy, termination of employment if applicable, and voluntary resignation. Choose one valuation method and apply it consistently.","Consider using a rolling agreed value — shareholders update the Schedule B valuation annually at a set meeting — to avoid expensive appraisals at emotionally fraught triggering events.",{"step":374,"title":375,"description":376,"tip":377},7,"Obtain signatures from all shareholders before any share is issued or transferred","Every current shareholder must sign before the agreement takes effect. Execution must precede any share issuance, transfer, or distribution to ensure the restrictions bind from day one.","Use Business in a Box eSign to timestamp each shareholder's signature and store the fully executed copy — you will need it for any future transfer, financing, or buyer due diligence.",[379,383,387,391,395,399],{"mistake":380,"why_it_matters":381,"fix":382},"Allowing share transfers to ineligible shareholders","A single transfer to a non-US resident, a corporation, or a partnership immediately and automatically terminates the S-election — converting the entity to a C-corporation and triggering corporate-level tax on all future income.","Include an explicit eligibility representation by each shareholder and a transfer restriction clause that voids any purported transfer to an ineligible person, combined with an immediate notice obligation and a right of the corporation to repurchase the shares.",{"mistake":384,"why_it_matters":385,"fix":386},"No mandatory tax distribution clause","S-corp shareholders owe personal income tax on their allocable share of corporate income whether or not the corporation distributes cash — minority shareholders can be left with a five- or six-figure tax bill funded entirely from personal assets.","Add a mandatory annual tax distribution equal to each shareholder's allocable income multiplied by the highest applicable marginal rate, payable no later than March 15 of the following year.",{"mistake":388,"why_it_matters":389,"fix":390},"Attempting special or disproportionate allocations","S-corps are legally prohibited from making disproportionate income or loss allocations — any provision that attempts preferred returns or special distributions to specific shareholders constitutes a second class of stock and automatically terminates the S-election.","Confirm that every allocation and distribution clause explicitly ties amounts to pro rata ownership percentage. If preferred economic arrangements are needed, restructure as an LLC or consult a tax attorney before proceeding.",{"mistake":392,"why_it_matters":393,"fix":394},"Omitting a valuation method from the buy-sell clause","A buy-sell trigger without a defined valuation mechanism turns every death, disability, or departure into a contested appraisal process — litigation costs can exceed the value of the shares being transferred.","Choose one valuation method (agreed value, formula, or independent appraisal) and document it in a Schedule that shareholders review and update at each annual meeting.",{"mistake":396,"why_it_matters":397,"fix":398},"Allowing amendments by majority vote","If a majority shareholder can amend the agreement unilaterally, every minority protection — transfer restrictions, supermajority thresholds, mandatory distributions — can be removed without the minority's consent.","Require unanimous written consent for any amendment to the operating agreement, and consider requiring supermajority consent for specific high-impact provisions such as the buy-sell valuation method and distribution policy.",{"mistake":400,"why_it_matters":401,"fix":402},"Executing the agreement after shares are already issued","Restrictions imposed on shares that were issued before the agreement was signed may be unenforceable as an unreasonable restraint on alienation, since no consideration was given at the time of issuance.","Execute the operating agreement simultaneously with or before the initial share issuance. If shares were already issued, provide documented additional consideration — a bonus, additional equity, or other benefit — to each shareholder at the time of signing.",[404,407,410,413,416,419,422,425,428,431],{"question":405,"answer":406},"Does an S-corporation need an operating agreement?","Technically, most states do not legally require S-corporations to have a written operating agreement — corporate bylaws are the statutory baseline. However, an operating agreement (or a combined bylaws-and-shareholder agreement) is practically essential for any S-corp with more than one shareholder. Without one, share transfers are uncontrolled, buy-sell events become litigation, and there is no written record of the governance rules shareholders agreed to follow — courts apply default state law, which rarely matches what the parties intended.\n",{"question":408,"answer":409},"What is the difference between S-corp bylaws and an S-corp operating agreement?","Corporate bylaws cover the procedural mechanics of the corporation — board meetings, officer elections, record-keeping, and the like. An operating agreement (or shareholder agreement) goes deeper: it governs the economic relationship between shareholders, including transfer restrictions, buy-sell triggers, distribution policy, and S-election preservation. Many S-corps use a single integrated document that covers both. The critical S-corp protections — transfer restrictions and mandatory tax distributions — are almost always found in the operating or shareholder agreement, not in standard bylaws.\n",{"question":411,"answer":412},"How does an S-corp operating agreement protect the S-election?","The S-election can be inadvertently terminated by a transfer of shares to an ineligible person, by exceeding 100 shareholders, or by issuing a second class of stock. A properly drafted operating agreement prevents all three: transfer restrictions block transfers to ineligible shareholders, a cap on total shareholders can be written in, and provisions confirming that all shares carry identical economic and voting rights prevent the creation of a de facto second class. The agreement also requires immediate notice if any shareholder loses eligible status, giving the corporation time to remedy the situation before the IRS terminates the election.\n",{"question":414,"answer":415},"Can an S-corp have different classes of shares?","No. Under IRC §1361, an S-corporation may have only one class of stock — all outstanding shares must be identical in economic rights. Shares can differ in voting rights (voting vs. non-voting shares are permitted), but they cannot differ in liquidation or distribution preferences. Any agreement provision that creates a preferred distribution right or a different liquidation preference for any shareholder effectively creates a second class of stock and terminates the S-election. This is the single most common drafting error in S-corp governance documents.\n",{"question":417,"answer":418},"What happens if a shareholder who is not eligible holds S-corp shares?","The moment an ineligible person holds even one share, the S-election terminates automatically. The corporation becomes a C-corporation, subject to entity-level taxation on all income going forward, and re-electing S-status typically requires a five-year waiting period. The IRS does provide a relief procedure for inadvertent terminations under IRC §1362(f), but relief is not guaranteed, requires prompt action, and involves filing fees and potential penalties. Prevention through robust transfer restrictions is far less costly than remediation.\n",{"question":420,"answer":421},"How should an S-corp handle distributions to avoid IRS scrutiny?","The IRS requires that shareholder-employees of an S-corp receive reasonable compensation — a salary comparable to what the market would pay for their work — before taking distributions. Paying nominal salary and large distributions to minimize payroll taxes is a well-known audit trigger. The operating agreement should define the distribution policy and require distributions to be strictly pro rata to ownership percentage. Including a mandatory tax distribution clause also demonstrates to the IRS that the corporation is administering distributions in a structured, good-faith manner.\n",{"question":423,"answer":424},"How many shareholders can an S-corporation have?","Under IRC §1361, an S-corporation may not have more than 100 shareholders. However, members of the same family — defined broadly to include six generations descended from a common ancestor — may elect to be treated as a single shareholder for this purpose. The operating agreement should include a provision capping total shareholders at 100 (or fewer, for closely-held companies) and requiring shareholder approval before any new shares are issued.\n",{"question":426,"answer":427},"Do I need a lawyer to draft an S-corp operating agreement?","For a two-shareholder S-corp with a simple ownership split and no outside investors, a high-quality template reviewed by a CPA for tax distribution mechanics is often sufficient. Engage a business attorney when there are more than three shareholders, when shareholders have materially different economic expectations, when equity is part of employee compensation, when the company is in a regulated industry, or when a buy-sell event is reasonably foreseeable in the near term. A 2–3 hour attorney review typically costs $600–$1,200 and is worthwhile for any S-corp with meaningful enterprise value.\n",{"question":429,"answer":430},"What triggers termination of an S-election, and what does the agreement do about it?","The five most common termination triggers are: a transfer to an ineligible shareholder, exceeding 100 shareholders, having a non-individual entity as a shareholder (with limited exceptions for qualifying trusts), issuing a second class of stock, and failing to maintain US residency or citizenship for all shareholders. A well-drafted operating agreement addresses each one directly — transfer restrictions, shareholder caps, eligibility representations, single-class-of-stock confirmations, and ongoing notification obligations collectively cover all five risks.\n",{"question":432,"answer":433},"Can an LLC use this S-corp operating agreement?","No. An LLC that has elected S-corp tax treatment is still governed as an LLC under state law — it needs an LLC operating agreement, not a corporate operating agreement. The two documents have different statutory foundations: corporate law (with shareholders, directors, and officers) vs. LLC law (with members and managers). A corporate S-corp operating agreement used for an LLC would reference incorrect legal structures and could create governance ambiguity. Use an LLC operating agreement that incorporates S-election preservation provisions instead.\n",[435,439,443,447,451,455],{"industry":436,"icon_asset_id":437,"specifics":438},"Professional services","industry-professional-services","Accounting, law, and consulting firms frequently operate as S-corps; transfer restrictions must address partner retirement and buy-out in industries where client relationships are the primary asset.",{"industry":440,"icon_asset_id":441,"specifics":442},"Construction and trades","industry-construction","Contractor S-corps typically have shareholder-employees taking both salary and distributions; the agreement must define reasonable compensation benchmarks and clarify buy-sell valuation for tool and equipment-heavy businesses.",{"industry":444,"icon_asset_id":445,"specifics":446},"Healthcare and medical practices","industry-healthtech","Many states restrict ownership of medical practices to licensed professionals — the operating agreement must tie eligible shareholder status to active licensure and include automatic transfer triggers if a shareholder loses their license.",{"industry":448,"icon_asset_id":449,"specifics":450},"Retail and e-commerce","industry-retail","Family-owned retail S-corps benefit from family-attribution rules allowing up to six generations to count as a single shareholder; the agreement should document the family election and define succession for estate planning purposes.",{"industry":452,"icon_asset_id":453,"specifics":454},"Technology and SaaS","industry-saas","Startups that begin as S-corps may need to convert to C-corps before institutional funding rounds; the agreement should include a conversion provision and specify the vote threshold required to terminate the S-election voluntarily.",{"industry":456,"icon_asset_id":457,"specifics":458},"Manufacturing and wholesale","industry-manufacturing","Capital-intensive businesses need clear debt-authorization thresholds in the operating agreement to prevent any single officer from pledging company assets as collateral without full shareholder consent.",[460,463,466,469],{"vs":41,"vs_template_id":461,"summary":462},"llc-operating-agreement-D12816","An LLC operating agreement governs a limited liability company under state LLC statutes — with members and managers rather than shareholders and officers. An S-corp operating agreement operates under corporate law and must also satisfy IRS S-election eligibility rules that have no equivalent in an LLC. If pass-through taxation is the goal, an LLC with an S-election can achieve similar tax treatment; however, the governance documents are structurally different and are not interchangeable.",{"vs":104,"vs_template_id":464,"summary":465},"shareholders-agreement-D12809","A shareholders agreement governs the relationship between shareholders in a C-corporation or generic corporation and addresses equity rights, voting, and exit — but it is not written around S-corp eligibility requirements. The S-corp operating agreement includes specific IRS-compliance provisions — eligible shareholder representations, single-class-of-stock protections, and mandatory transfer restrictions — that a standard shareholders agreement lacks. Use the shareholders agreement if you are not maintaining an S-election.",{"vs":249,"vs_template_id":467,"summary":468},"corporate-by-laws-D12795","Corporate bylaws cover procedural governance — meeting rules, officer elections, quorum requirements, and record-keeping obligations. They do not address the economic relationship between shareholders, buy-sell mechanics, distribution policy, or S-election preservation. An S-corp needs both: bylaws for procedural compliance with state corporate law, and an operating agreement for the shareholder-level protections that bylaws were never designed to provide.",{"vs":242,"vs_template_id":470,"summary":471},"buy-sell-agreement-D12714","A standalone buy-sell agreement covers only the purchase and sale of shares on a triggering event — death, disability, or departure — and the valuation method. An S-corp operating agreement includes buy-sell provisions within a broader governance framework that also addresses transfer restrictions, voting, allocations, and S-election compliance. Use a standalone buy-sell agreement only if an existing operating agreement already covers the other governance provisions and you need to update the buy-sell terms specifically.",{"use_template":473,"template_plus_review":477,"custom_drafted":481},{"best_for":474,"cost":475,"time":476},"Two-shareholder S-corps with equal ownership, simple governance needs, and no outside investors","Free","2–4 hours",{"best_for":478,"cost":479,"time":480},"S-corps with three or more shareholders, unequal ownership splits, or employee equity arrangements","$600–$1,200 (attorney or CPA review)","3–5 business days",{"best_for":482,"cost":483,"time":484},"S-corps with complex buy-sell valuations, regulated industries, pending ownership transitions, or anticipated conversion to C-corp","$2,000–$6,000+","2–4 weeks",[486,491,496,501],{"code":487,"name":488,"flag_asset_id":489,"note":490},"us","United States","flag-us","S-corporation eligibility is governed by IRC §1361 at the federal level — 100 shareholder maximum, one class of stock, and US citizen or resident individual shareholders only (with limited trust and estate exceptions). State law governs the corporate governance mechanics; some states (notably New York and New Jersey) impose state-level S-corp taxes or recognition requirements that require a separate state S-election filing. California imposes a 1.5% state franchise tax on S-corp net income regardless of federal S-status.",{"code":492,"name":493,"flag_asset_id":494,"note":495},"ca","Canada","flag-ca","Canada does not recognize the US S-corporation structure — the equivalent Canadian vehicle is a Canadian-Controlled Private Corporation (CCPC), which accesses the small business deduction under the Income Tax Act rather than pass-through taxation. Canadian residents holding shares in a US S-corp must report their allocable share of income on Canadian returns and cannot claim the US pass-through treatment to offset Canadian tax. US S-corps with Canadian shareholders will typically lose S-election eligibility, as Canadian residents are not eligible shareholders.",{"code":497,"name":498,"flag_asset_id":499,"note":500},"uk","United Kingdom","flag-uk","The UK has no equivalent to the S-corporation structure. UK residents holding shares in a US S-corp are generally ineligible shareholders, meaning their acquisition of even one share would terminate the US S-election. UK businesses seeking pass-through equivalent taxation typically use a partnership or LLP structure. A US S-corp conducting business in the UK may also be subject to UK corporate tax on UK-source profits under standard permanent establishment rules.",{"code":502,"name":503,"flag_asset_id":504,"note":505},"eu","European Union","flag-eu","EU member state residents are generally not eligible S-corp shareholders under IRC §1361, which requires US citizens or permanent residents. Any transfer of shares to an EU-resident non-US-citizen terminates the S-election automatically. EU-based businesses seeking pass-through taxation structures use partnership, GmbH & Co. KG (Germany), SAS (France), or similar transparent entities under local law. GDPR requirements may apply to the extent the operating agreement records personal data about EU-resident shareholders or employees.",[507,253,508,243,246,509,510,511,512,513,514,515],"general-by-laws-D1008","llc-operating-agreement-D5209","non-disclosure-agreement-nda-D12692","employment-agreement_at-will-employee-D541","employment-agreement-executive-D543","independent-contractor-agreement-D160","partnership-agreement-D12551","minutes-of-meeting-of-incorporators-D17","stock-certificate-and-common-stock-D97",{"emit_how_to":179,"emit_defined_term":179},{"primary_folder":96,"secondary_folder":518,"document_type":519,"industry":520,"business_stage":521,"tags":522,"confidence":528},"incorporation-and-bylaws","agreement","general","startup",[523,524,525,526,527],"governance","incorporation","s-corp","operating-agreement","shareholder-rights",0.95,"\u003Ch2>What is an S-Corp Operating Agreement?\u003C/h2>\n\u003Cp>An \u003Cstrong>S-Corp Operating Agreement\u003C/strong> is a legally binding internal governance document signed by all shareholders of an S-corporation that defines how the company is owned, managed, and operated — while expressly preserving the entity's S-election eligibility under IRC §1361. Unlike generic corporate bylaws, which cover procedural mechanics, an S-corp operating agreement governs the economic relationship between shareholders: ownership percentages, transfer restrictions designed to prevent shares from reaching ineligible holders, pro rata distribution policy, buy-sell triggers and valuation, officer authority limits, and the obligations each shareholder undertakes to keep the pass-through tax election intact. It functions as the authoritative record of every material governance decision the shareholders have agreed to follow.\u003C/p>\n\u003Ch2>Why You Need This Document\u003C/h2>\n\u003Cp>Without a written S-corp operating agreement, the S-election that gives your corporation its pass-through tax treatment is one uninformed transaction away from automatic termination — a single share transfer to a non-US resident, a corporation, or a disqualified trust converts the entity to a C-corporation immediately, with no grace period and no easy reversal. Beyond tax risk, the absence of a written agreement means that buy-sell events — a shareholder's death, disability, or departure — are resolved by default state corporate law rather than terms the shareholders negotiated, which routinely produces outcomes no party wanted. Distribution disputes between shareholders with different cash needs go unresolved because there is no written policy to enforce. Officer authority is undefined, leaving the corporation potentially bound by contracts a shareholder-employee had no mandate to sign. This template closes all four gaps in a single document, giving every S-corp shareholder a clear, enforceable record of exactly what they agreed to — before a dispute makes that record essential.\u003C/p>\n",1781185947866]