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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
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Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I started an LLC with 3 other people; however I am the only

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I started an LLC with 3 other people; however I am the only one that has invested $10k. I am looking at brining in another person that will add alot of value to the company but now wants some ownership/share of the company greater than 15%. Is this normal? what is the best way to divide shares of the company?
Submitted: 3 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 3 years ago.
The percentage of ownership is negotiable of course, but if they are bringing in that type of value to the LLC then that is something the members must weigh. As far as is it normal, there is no real "normal" here, it is based on what they believe their contributions are worth and what you believe they will be worth to the LLC.

It will require the members to negotiate as to what percentage of the LLC they will be willing to give up to attract this asset to the LLC. Generally, if there are 5 members, each member would get an equal interest of 20% unless they negotiate for different percentages.


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Customer: replied 3 years ago.

I always thought the Founder of the business should hold onto 51%. If that is the case what are some ways to divy up the remaining 49% so to not insult any of the original members that have contributed to the development of the business? Any suggestions?

Expert:  Law Educator, Esq. replied 3 years ago.
That is not by any law. That is something people forming LLC's do to try to retain control over the LLC. But again, the presumption in the law is if there are 5 members, each would be presumed to have 20% unless there is some written agreement to the contrary.

In a case like this, it is all negotiation as to percentages and if the founder refuses to give up any shares of interest, then you may not be able to give this person what they want and you will have to pass. As I said, it depends on how bad you want the person and how little they are willing to take.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 88673
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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