Is it possible to structure a dual owner LLC with one person having majority voting rights and also a profit payout that differs from voting right ? Thank you
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Is it possible to structure a dual owner LLC with one person having majority voting rights and also a profit payout that differs from voting right ? Thank you
Structuring an LLC with two owners, who both desire one owner to have majority voting rights for votes only, it is understood each partner can create binding contracts for the business. Profit split currently undecided, but may differ from voting as well as from initial capital paid-in by each member. Thank you
Asked on August 29, 2016 under Business Law, Pennsylvania
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Yes. That is one of the advantages of an LLC over a corporation: management authority and proft participation are not necessarily linked, and can be whatever the owners (the "members") want (whereas in a corporation, both control and profit participation is based on shares of stock owned). Decide what you want and set it out in the operating agreement; a good idea would be to hire an attorney to draft it for you (that's what I did, and I'm a lawyer; but be because operating agreements aren't my specialty, I hired an attorney with more experience than I do draft one for my own, 3-person LLC).
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.