This Amendment No. 5 (the “Amendment”) to the Limited Liability Company Agreement of Pleasant Valley Property, LLC, dated January 1, 2024 (the “Agreement”), is adopted by Members holding a Majority in Interest pursuant to Section 13.10 of the Agreement. All capitalized terms used and not defined herein have the meanings set forth in the Agreement.
## 1. Standardize & Deadlines for Financial Statements (Amend Section 11.01)
**Replace** Section 11.01 with:
“Section 11.01 Financial Statements. Within ninety (90) days after the end of each Fiscal Year and within thirty (30) days after the end of each Fiscal Quarter, the Managers shall cause the preparation of financial statements on a tax-basis accounting method or another method unanimously approved by the Members. Such statements shall be delivered to each Member within five (5) Business Days of completion and include:
- A Balance Sheet
- Statement of Income & Expenses
- Statement of Cash Flows
- Schedule reconciling tax basis to GAAP, if different.”
## 2. Enhanced Inspection Rights (Amend Section 11.02)
**Amend** Section 11.02 by inserting:
“- Members may conduct inspections up to four (4) times per Fiscal Year without additional Manager approval.
- All reasonable out-of-pocket expenses incurred by a Member in connection with an inspection shall be reimbursed by the Company if discrepancies exceeding 5% of net income are found.
- Remote access to electronic records shall be granted upon request.”
## 3. Oversight of Tax Matters Representative (Amend Section 11.04)
**Amend** Section 11.04 as follows:
1. **Appointment & Removal:** TMR must be elected by Members holding at least 85% of Interests and may be removed only by an 85%-Interest vote.
2. **Consultation Requirement:** TMR shall provide written notice to all Members within ten (10) days of any written IRS notice or proposed audit adjustment, and shall convene a Tax Committee (Manager plus one independent tax advisor) to recommend a course of action.
3. **Election Procedures:** All significant tax elections (including opt-out under Code § 6221(b) or Section 754 elections) require the written consent of Members holding at least 75% of Interests.
4. **Reporting:** TMR shall deliver quarterly written reports summarizing any audit, examination, or settlement activity to each Member within fifteen (15) days after quarter end.”
## 4. Firm Tax Return & K-1 Deadline (Amend Section 11.05)
**Replace** Section 11.05 with:
“Section 11.05 Tax Returns. The Managers shall cause the Company to timely file all required partnership tax returns. The Managers shall deliver to each Member a draft copy of Schedule K-1 for the previous Fiscal Year no later than **ninety (90) days** after the end of such Fiscal Year, and a final K-1 within five (5) Business Days thereafter. If the Company fails to meet these deadlines, any penalty, interest or additional tax liability shall be borne solely by the Company.”
## 5. Dual-Signature Requirement for Distributions (Amend Section 11.06)
**Amend** Section 11.06 by adding:
“- No distribution (including Tax Advances and Withholding Advances) may be made unless authorized by any two Managers or by one Manager and one Member holding at least 25% of the Membership Interests.
- Company funds may only be invested in or withdrawn from deposit accounts with dual-signature requirements.”
With these in place, Article XI will support your tax-planning, reduce audit surprises, and ensure robust Member oversight. Let me know if you’d like further tweak or move on to Article XII (Dissolution & Liquidation).