How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Maverick Your Own Question
Maverick
Maverick, Attorney
Category: Business Law
Satisfied Customers: 6391
Experience:  20 years of professional experience
16823287
Type Your Business Law Question Here...
Maverick is online now
A new question is answered every 9 seconds

Bill,Lester,and john formed a limited liability company. John

Resolved Question:

Bill,Lester,and john formed a limited liability company. John contribute 50% of the capital and Lester and Bill each contribute 25%. A dispute over the profits arises. a court has to decide the issue,. what law will the court apply? How could this dispute have been avoided in the first place
Submitted: 7 years ago.
Category: Business Law
Expert:  Maverick replied 7 years ago.

The best way to avoid these types of problems is to cover them in an operating agreement from the get go. There are a host of issues one must cover in the LLC operating agreement, some of which will depend on the type of business being run. Most operating agreements include the following:

  • the members' percentage interests in the LLC
  • the members' rights and responsibilities
  • the members' voting powers
  • how profits and losses will be allocated
  • how the LLC will be managed
  • rules for holding meetings and taking votes, and
  • buyout, or buy-sell, provisions, which establish a framework for what happens when a member wants to sell his or her interest, dies, or becomes disabled.

Most likely the court will allocate profit/loss according to ownership percentages unless the LLC operating agreement states otherwise.

 

 

Please click "Accept" so that I can get credit for this answer. We can continue our conversation after that at no additional charge.

Maverick and other Business Law Specialists are ready to help you

Related Business Law Questions