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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 54708
Experience:  32 years of experience practicing law and a businessman.
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I have a question about LLC. I'm about to open an LLC with

Customer Question

Hello, I have a question about LLC. I'm about to open an LLC with four members. The purpose of the LLC is to invest in startup companies. The issue is that each member might want to invest a different percentage in each company. So we might start with 25/25/25/25 split for our first investment, but on the second we might want to do 20/30/25/25.
How this issue can be addressed without opening a new LLC for each new investment?
Thank you
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.

Good evening. My name is ***** ***** I look forward to helping you.

It complicates your Operating Agreement a bit, but what you would need to do is to draft your capital account and allocation of income, loss, and distribution provisions so that basically each investment deal is a separate division within your LLC so that separate capital accounts and allocation provisions are maintained for each deal separately within your one LLC and then consolidated at the end of the year to allocate the totals to the respective members. On the members' ownership percentage interests on the tax return, you simply put "various."

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