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Is a LLC Operating Agreement considered a Employment Contract?

Creswell, OR |

I am a non-equity (no equity, no liability) member of a LLC in Oregon. The Operating Agreement defines my Guaranteed Payment and share of the profit when the company can pay its bills, and while I am active in the LLC as an 'employee'. I receive a K-1 statement, not a W2. The OA also has a withdrawal clause which states a 100 day written notice is required. The OA does not define any other benefits or address any other employment terms. Can I provide 2 week notice to end my 'employment', and 100 day notice to end my participation in the LLC as a non-equity member?

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Attorney answers 1


An operating agreement and employment agreement are separate agreements representing two distinct relationships: one as a member/owner and the other as an employee. Both relationships need to be terminated. You should follow the notice provisions in the operating agreement and any other provisions it has regarding withdrawal from the LLC. As for terminating your employment, if there is no agreement otherwise, then any amount of notice may be used.