b'Limited Liability Company Agreement or Operating Agreement Thisdocumentdescribeshowalimitedliabilitycompanywillbe operated.Legally,itisthegoverningdocumentforalimitedliability company and describes in detail such things as:The rights and duties of the members (investors) and the asset manager,What investors are buying (units or interests),How meetings and votes of the members will be conducted and the required percentage for a measure to pass,How and when cash distributions will be made and the associated waterfall for distributions in various stages of the company,Management fees,Liquidation of company assets, and admission or disassociation of members, among other things.Whenalimitedliabilitycompanyismanagedbyamanager(i.e., manager-managed), and the members include passive investors (who are notinvolvedinmanagement)theoperatingagreementcreatesan investment contract. As described previously, investment contracts fall within the definition of Securities in The Securities Act of 1933 and all state securities actsand thus all sales of passive interests in a limited liability company to passive investors must comply with securities laws. Whenalimitedliabilitycompanyismanagedbyitsmembers(i.e., member-managed) and all members are actively involved in generating their own profits, the operating agreement is not an investment contract, and 93'