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Mar 31, 2017

NOTE: This Operating Agreement is provided by Feel Train, LLC for reference and is not intended as legal, financial, or tax advice. Please consult a lawyer or accountant knowledgeable about worker-owned cooperatives if you’re thinking of starting your own! Hover your mouse over the highlighted bits to see our annotations.

Operating Agreement

This Operating Agreement is entered into and made effective the day of  , by and among:   and   (collectively referred to in this agreement as the "Founding Members").

1 Purpose and Scope

The Company shall be organized and shall conduct its business primarily for the mutual benefit of its Members and the community. The earnings, savings, or benefits of the Company shall be used for the general welfare of the Members and the community, or it shall be proportionately and equitably distributed to its Members.

The Company is democratically controlled and is not organized to make a profit for itself, as such, but primarily for its Members. Its initial scope of operations will be the development of creative technology and all activities related thereto, but the Members may authorize a different or additional scope of operations.

2 Formation of Company

The Company has been organized as an Oregon member-managed limited liability company by the filing of the Articles of Organization pursuant to ORS Chapter 63 with the Oregon Secretary of State.

2.1 Name

The name of the Company is "Feel Train LLC" and all Company business shall be conducted under that name or such other names that comply with applicable law as the Members may select from time to time.

2.2 Term

The Company shall commence on the date the Articles are filed and shall continue until dissolved pursuant to the terms of this Agreement or the Act.

2.3 Office

The Company will maintain its principal business office within the State of Oregon with the following initial mailing address: P.O. Box 42251, Portland, OR 97242-0251.

2.4 Registered Agent

Northwest Registered Agent LLC is the Company's initial registered agent in the State of Oregon, and the registered office is 5305 River Rd N Ste B, Keizer, OR 97303.

3 Members

3.1 Classification of Members

The Company shall have one (1) class of Member, called simply a "Member". A Member has one (1) vote in all voting decisions. The Company shall have no more than eight (8) Members.

3.2 Membership Qualifications

A natural person› may become a Member of this Company by:

  • Working twelve (12) months for the Company (the "Candidacy Period");

  • Being voted in, as set forth in Section 3.3, by the existing Members following the Candidacy Period; and

  • Receiving a copy of the Company’s Articles of Organization and a receipt.

  • Signing a copy of this Operating Agreement.

There is no "buy-in" required to become a Member.

The Founding Members will become Members upon execution of this agreement.

3.3 Acceptance of Members

The Members shall decide by the modified consensus process described in Section 5.1 whether to accept an application for Membership. If an application is not accepted, the applicant’s employment shall be immediately terminated, unless the Members, by the modified consensus process, choose to specify a further Candidacy Period to be followed by a second decision by the Members whether to accept the application. Upon acceptance of an application, the applicant shall immediately become a Member.

In the case of an application by a former Member, the Company may waive the Candidacy Period and accept back the former Member immediately by the affirmative vote of all the Members.

3.4 Member Resignation

A Member shall have the right to resign as a Member of the Company by filing with the Secretary of the Company a written notice of resignation. The resignation shall become effective immediately without any action on the part of the Company unless a future effective resignation date is specified in the written notice. An individual will not be allowed to work for the Company for one month following voluntary termination of Membership unless their Membership is reinstated by the Company. Resignation shall not relieve the resigning Member from any obligation for charges incurred, dues, assessments, or fees, and this section shall not diminish any right of the Company to enforce any such obligation or obtain damages for its breach.

3.5 Removal of Members

No Member may be expelled or suspended, and no Membership or Memberships may be terminated or suspended, except according to procedures satisfying the requirements of this section.

A Member may for any lawful reason be expelled from the Company by a vote of sixty percent (60%) or greater of the Members at a duly called meeting at which a quorum minus one person is present.

If one or more Members wishes to propose the expulsion of a Member, all Members must be given notice of this intent at least 15 days prior to the member meeting at which the proposal will be considered. The notice will state the time and place of a hearing to occur not less than five days before the member meeting at which the proposal will be considered. The Member to be expelled will have the opportunity to be heard orally at that hearing and/or to submit written materials as they elect.

Any notice required under this section may be given by any method reasonably calculated to provide actual notice. Any notice given by mail must be given by first-class or registered mail sent to the last address of the Members shown on the Company’s records.

A Member who is expelled or suspended or whose Membership is terminated shall be liable for any charges incurred, dues, assessments, or fees incurred before expulsion, suspension, or termination or arising from contract or otherwise.

In rare circumstances in which it would not be reasonable to expect a Member to discuss their concerns with another Member, such as a case of alleged sexual harassment, a majority of Members of the Company may make such modifications to this process as are necessary to respect the rights of the alleged victim. Similarly, in cases of alleged extreme misconduct, a majority of Members of the Company may take measures to protect the rights of the Company and its clients, such as suspending the accused’s access to financial assets or authority to work on behalf of the Company, pending investigation. A majority of Members shall impose the terms and duration of suspension. The default shall be that suspension is without pay, but a consensus of Members excluding the suspended Member may provide otherwise.

4 Non-Members

4.1 Third Party Contractors

From time to time Members the may hire external contractors as needed to conduct business. The hiring will be agreed upon through the normal process of decision-making described in Section 5.1.

4.2 Non-Member Candidates

A non-Member Candidate is a person seeking Membership in the Company through the process described in Section 3.2. A natural person may become a non-Member Candidate by:

  • Being a resident of Oregon

  • Possessing legal ability to work long-term in the United States

  • Being approved through the normal process of decision-making described in Section 5.1

5 Voting and Meetings

5.1 Process of Decision-Making for All Meetings

Matters will be discussed with the goal of seeking decision-making by consensus. If it becomes apparent that consensus cannot be reached on any matter, the Members will vote on whether the issue should be tabled for future discussion and decision. If a decision cannot be made by consensus, the Members shall vote on the matter, with a three-fourths vote required to carry any decision, except as otherwise provided in these articles. All consensus decisions are to be made at meetings as defined in this agreement.

5.2 Scope of Meetings

Decisions subject to the process outlined in Section 5.1 include all applicable matters outlined in ORS 63.130. In addition to these matters, examples would include removing Members, contracting with third-party vendors, and the acceptance and dismissal of clients as would be appropriate during regular meetings (Section 5.5).

5.3 Place of Meetings

Meetings shall be held at any place within 50 miles of Portland, Oregon stated in any proper notice of meeting.

5.4 Types of Members at Meetings

All Members must be present at all meetings. Non-Members in their Candidacy Period must also be present at all meetings. These non-Members are encouraged to participate in discussion but do not vote.

5.5 Regular Meetings

Regular meetings of the Members and non-Member Candidates shall be held not less frequently than every calendar month, as the Members may determine from time to time.

5.6 Special Meetings

Special meetings of the Members and non-Member Candidates may be called by any Member. See Section 5.8 for notice and scope of Special Meetings.

5.7 Annual Meetings

An annual meeting of Members and non-Member Candidates shall be held in November each year. If the day fixed for the annual meeting falls on a legal holiday, the meeting shall be held at the same time and place on the following business day. Elections of officers shall be held at the annual meeting. Any other proper business may be transacted at the meeting.

5.8 Notice of Meetings

No notice need be given of regular meetings held at the regular time and place determined by the Members, of which written notice has been given to all Members and non-Member Candidates not less than seven days before the first meeting following any change of such time or place.

Notice of any special meeting shall be given by a written notice given not less than seven days nor more than 30 days before the date of the meeting to each Member or non-Member Candidate. The notice shall state the place, date and hour of the meeting and the general nature of the business to be transacted. No other business may be transacted at such meeting.

Notice of a Members’ meeting shall be given and be deemed to have been given in the manner and at the time specified in Section 10.8.

5.9 Telephonic Meetings

Members entitled to participate in a meeting of the Company may in extenuating circumstances (travel; illness or other incapacitation) do so through the use of conference telephones or similar communications equipment, as long as all Members participating in the meeting can hear one another. Participation in a meeting pursuant to this section constitutes presence in person at that meeting.

5.10 No Proxies

All votes and consents on behalf of Members shall be cast or given by such Member personally and not through any proxy, agent, or other representative.

6 Officers

6.1 Offices

The Company shall have a secretary and a treasurer, and such other officers with such titles and duties as shall be determined by the Members.

6.2 Qualifications

Any number of offices may be held by the same person. The officers of the Company shall be elected from among the Members.

6.3 Election of Officers

The officers shall be elected by the Members for one year terms at the annual meeting by written ballot. The candidate receiving the highest number of votes for an office shall be elected.

Officers may be removed by a vote of the Members.

6.4 Resignation

Any officer may resign at any time upon written notice to the Company without prejudice to the rights, if any, of the Company under any contract to which the officer is a party.

6.5 Vacancy

A vacancy in any office resulting from an officer’s death, resignation, removal, or disqualification, or from any other cause, will be filled by the Members.

6.6 Duties of Secretary

The secretary will keep, or cause to be kept, at the principal executive office or such other place as designated by the Members, a book of minutes of all meetings and actions of the Members.

The secretary will keep, or cause to be kept, at the principal executive office, the records of the Company required to be kept as described in Section 8.1.

The secretary will give notice, or cause notice to be given of all Members’ meetings for which notice is required by statute or by the Articles of Organization. If the secretary or other person authorized by the secretary to give notice fails to act, notice of any meeting may be given by any Member of the Company.

The secretary will have such other powers and perform other duties as prescribed by the Members or by the Articles of Organization.

6.7 Duties of Treasurer

The treasurer will keep, or cause to be kept, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, retained earnings, and shares.

The treasurer will (1) deposit or cause to be deposited Company funds and other valuables in the Company’s name and to its credit with depositaries designated by the Members; (2) make disbursements of Company funds as authorized by the Members; (3) render a statement of the Company’s financial condition and an account of all transactions conducted as treasurer whenever requested by the Members; and (4) have other powers and perform other duties as prescribed by the Members or the Articles of Organization.

The treasurer will be deemed to be the treasurer for purposes of giving any reports or executing any certificates or other documents.

7 Company Capital

7.1 Fiscal Year

The initial fiscal year of the Company shall end on the last day of December of each year.

7.2 Definitions

"Surplus" shall be defined as the excess of revenues over Expenses for a fiscal year attributable to member labor.

"Loss" shall be defined as the excess of Expenses over revenues for a fiscal year.

Surplus and Loss shall be determined on a tax basis. Surplus shall not include cash contributions by members to capital.

"Expenses" shall include Member Guaranteed Payments, payments of any interest and principal on any debts of the Company, and reasonable reserves as determined by the Members.

The "Collective Account" shall be Surplus, Profit, and reserves that are retained in the Company and not distributed to members. The Collective Account is held in a bank account at a Community Credit Union or other financial institution operating on cooperative principles.

7.3 Retained Capital

The Company is not intended to retain a large amount of capital. Capital should be readily redistributed to the community through Members or through other, direct means such as patronage or charity. Capital will be retained in the Collective Account. Every Member will have equal access to the Collective Account. While not a strict requirement, at any given time the bank account should contain operating reserves not more than the amount of capital required to pay for the next six months of Member Guaranteed Payments, where that estimate is provided by the treasurer.

7.4 Member Guaranteed Payments

The Company may, but shall not be obligated to, provide Member Guaranteed Payments to Members. Amount and frequency of Member Guaranteed Payments will be determined at either Regular or Special Member meetings by a vote of the Members.

8 Records

8.1 Maintenance of Records

The Company shall maintain electronic records of all of the following: (a) A current list of the full name and last known business or residence address of each Member set forth in alphabetical order. (b) A copy of the Articles of Organization and all amendments thereto. (c) Copies of the Company’s federal, state and local income tax or information returns and reports, if any, for the six most recent taxable years. (d) Copies of the financial statements of the Company, if any, for the six most recent Fiscal Years. (e) The books and records of the Company as they relate to the internal affairs of the Company for at least the current and past four Fiscal Years.

8.2 Delivery to Members and Inspection

Upon the request of a Member, for purposes reasonably related to the interest of that Person as a Member, the Company shall promptly deliver to the Member, at the expense of the Company, a copy of the information required to be maintained by Section 8.1.

8.3 Reports

The Company shall send or cause to be sent to each Member within 90 days after the end of each taxable year such information as is necessary to complete federal and state income tax or information returns.

8.4 Tax and Accounting Matters

The Company’s taxable year and accounting method for income tax purposes shall be as determined under the Code and Treasury Regulations. The Members shall designate from time to time the "tax matters partner" within the meaning of section 6231(a)(7) of the US Code. The tax matters partner shall have all of the authority granted by the Code to a tax matters partner, provided that the tax matters partner shall keep each Member informed as to the status of any audit of the Company’s tax affairs.

9 Dissolution and Liquidation

9.1 Events of Dissolution

Except as otherwise provided in this Agreement, the Company shall be dissolved and its affairs shall be wound up upon the happening of the first to occur of the following:

(a) Upon the separate vote or consent to dissolve the company of two-thirds of the Members where each Member shall have such voting rights as are provided for in Section 5.1; or

(b) Upon the entry of a decree of judicial dissolution pursuant to ORS 63.661.

9.2 Effect of Dissolution

Upon any dissolution of the Company under this Agreement or the Act, except as otherwise provided in this Agreement, the continuing operation of the Company’s business shall be confined to those activities reasonably necessary to wind up the Company’s affairs, discharge its obligations, and liquidate its assets and properties in a businesslike manner. Upon the occurrence of an event of dissolution, unless the business of the Company is continued as provided herein, the Company shall file Articles of Dissolution under ORS 63.631.

9.3 Liquidation and Termination

(a) If the Company is dissolved, then an accounting of the Company’s assets, liabilities and operations through the last day of the month in which the dissolution occurs shall be made, and the affairs of the Company shall thereafter be promptly wound up and terminated. The Members shall designate a liquidating trustee of the Company. The liquidating trustee will be responsible for winding up and terminating the affairs of the Company and will determine all matters in connection therewith (including, without limitation, the arrangements to be made with creditors, to what extent and under what terms the assets of the Company are to be sold, and the amount or necessity of cash reserves to cover contingent liabilities) as the liquidating trustee deems advisable and proper; provided, however, that all decisions of the liquidating trustee will be made in accordance with the fiduciary duty owed by the liquidating trustee to the Company and each of the Members. The liquidating trustee will liquidate the assets of the Company as promptly as is consistent with obtaining the fair market value thereof. The proceeds therefrom, to the extent sufficient therefor, will be applied and distributed in the following order:

(1) To the payment and discharge of all of the Company’s debts and liabilities to creditors (including Members) in the order of priority as provided by law, other than liabilities for distributions to Members; and

(2) The balance, if any, shall be distributed to one or more organizations as the Members shall select at the time of dissolution, provided that any such organization (i) must be exempt from federal income taxation under Section 501(c)(3) of the Code, and corresponding Oregon statutory provisions, (ii) must be eligible for charitable contributions under Section 170(c)(2), 2055(a)(2) or 2522(a)(2) of the Code and corresponding Oregon statutory provisions, (iii) shall not be a "private foundation" within the meaning of Section 509 of the Code and (iv) no Member shall have any financial or ownership interest in such organization or shall otherwise directly benefit or be subject to any conflict of interest associated with the distribution of these funds to the designated organization. Such distributions shall be made by the end of the Fiscal Year in which the liquidation occurs or, if later, within 90 days after the date of such liquidation.

(b) After all of the assets of the Company have been distributed, the Company shall terminate.

9.4 Articles of Dissolution

Upon the completion of the winding up of the affairs of the Company, the Company shall file with the Oregon Secretary of State articles of dissolution in accordance with ORS 63.631.

9.5 Recourse to Assets

Each Member shall look solely to the assets of the Company for any profits. If the assets remaining after the payment or discharge of the debts and liabilities of the Company are insufficient to return a Member’s profits, the Member shall have no recourse against the Company or any other Member.

10 General Provisions

10.1 Amendments

Amendments to this Agreement may be proposed by any Member. A proposed amendment will be adopted and become effective as an amendment only on the written approval of all of the Members.

10.2 Governing Law

This Agreement and the rights and obligations of the parties under it are governed by and interpreted in accordance with the laws of the State of Oregon (without regard to principles of conflicts of law).

10.3 Entire Agreement; Modification

This Agreement constitutes the full Operating Agreement of the Company. No agreements, understandings, restrictions, representations or warranties not incorporated in this agreement or the Articles or Organizations may contradict or supersede it.

10.4 Attorney Fees

In the event of any suit or action to enforce or interpret any provision of this Agreement (or that is based on this Agreement), the prevailing party is entitled to recover, in addition to other costs, reasonable attorney fees in connection with the suit, action, or arbitration, and in any appeals. The determination of who is the prevailing party and the amount of reasonable attorney fees to be paid to the prevailing party will be decided by the court or courts, including any appellate courts, in which the matter is tried, heard, or decided.

10.5 Further Effect

The parties agree to execute other documents reasonably necessary to further effect and evidence the terms of this Agreement, as long as the terms and provisions of the other documents are fully consistent with the terms of this Agreement.

10.6 Severability

If any term or provision of this Agreement is held to be void or unenforceable, that term or provision will be severed from this Agreement, the balance of the Agreement will survive, and the balance of this Agreement will be reasonably construed to carry out the intent of the parties as evidenced by the terms of this Agreement.

10.7 Captions

The captions used in this Agreement are for the convenience of the parties only and will not be interpreted to enlarge, contract, or alter the terms and provisions of this Agreement.

10.8 Notices

All notices required to be given by this Agreement will be in writing and will be effective when actually delivered or, if mailed, when deposited as certified mail, postage prepaid, directed to the addresses first shown above for each Member or to such other address as a Member may specify by notice given in conformance with these provisions to the other Members.

11 Signature Page

IN WITNESS WHEREOF, the parties to this Agreement execute this Operating Agreement as of the date and year first above written.

Authorized Signature
Name of Member
Authorized Signature
Name of Member
Authorized Signature
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Authorized Signature
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