Have Legal Questions? Ask a Lawyer Now.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good evening. Does the Operating Agreement of the LLC address the issue of additional cash needed by the LLC?
There is....I was answering your question while you replied....in the Limited Liability Company Act. If the Operating Agreement is silent, and the members cannot agree upon how any additional funding will affect ownership, then the allocation of profits and losses will be based on the capital accounts of the members, including these additional contributions, and cash distributions will be distributed pursuant to those capital accounts. See Sections 25.15.200 and 25.15.205 of the Act. Typically, however, if the foregoing is not enough of a carrot for the contributing members and the Operating Agreement is silent, the members willing to put up money will mandate an amendment to the Operating Agreement to be signed by all members before putting any money up so that the contributing members get what they demand before they put the money up. This would usually result in these members getting a preferential yield and/or preferential distribution and/or a change on ownership interests.
I hope this has given you information that has been helpful toyou. If the information seems more general thanspecific, please be aware that we are only allowed to provide information andnot specific advice. If you have a follow-upquestion, please remember that there might be a delay between your follow upquestions and my answers because I may be helping others or taking a break.
If you do have any additional questions aboutmy answer please click the "Continue Conversation Link" so Ican provide you with a fully satisfactory answer. Pleasebe aware that any rating of 1 or 2 is reflected as a negative rating and I receiveno credit for my answers.
Thanks for allowing meto be of service to you. Please be aware that the information provided here isnot legal advice. Rather it is simply general information. All states have intricacies in their lawsand any information given is simply information only and specifically is notintended to be, nor does it constitute, legal advice. This communication doesnot establish an attorney-client relationship with you. I hope this answer has been helpful to you.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).