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Maverick, Attorney
Category: Business Law
Satisfied Customers: 5735
Experience:  20 years of professional experience
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I have a Delaware registered LLC where Im the sole owner.

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I have a Delaware registered LLC where I'm the sole owner. I'm planning on seeking angel funding to expand my business. How do I go about structuring the business from a legal perspective? Do I need to make the investors partners in the LLC (if so, what kind of documentation do I need to prepare) or are investors and their allocations handled in a different way? BotXXXXX XXXXXne, how do I from a legal perspective give the investors their allocations (which will be preferred stock or a convertible note)? Is there a step-by-step guide to this?
Submitted: 5 years ago.
Category: Business Law
Expert:  Maverick replied 5 years ago.

Welcome to Just Answer! My name isXXXXX very much enjoy what I do and I hope that you will benefit from this information.


If you give them a note then they are not really going to be "members" in your LLC. They are just going to be a lender like a bank and not have any say in management of the company. But, they will also not have a duty to share losses or have a right to any % of the profits.



If you want them to be investors where they get a direct or indirect say in management and share in profits and losses then you make the members of the LLC. To do this you will need to have a LLC operating agreement for them to sign and you will need to issue membership certificates:





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