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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 117378
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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Need an answer now please! Im trying to create an operating

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Need an answer now please!

I'm trying to create an operating agreement for my LLC.

So is there any way to structure an agreement with my employees that gives them 1% interest in the LLC, but I can take it back (without paying just compensation) if they leave before 5 years?
Thank you for your new question. I look forward to working with you to provide you the information you are seeking.

Is this an LLC for the law practice or is this for some type of business other than the practice of law?

If it is for law, are all of the employees attorneys?
Customer: replied 4 years ago.

This is not for the practice of law. It's a media company.

Thank you for your response.

Yes, in your operating agreement, you can give each member a 1% share and then state in the agreement that their 1% share will not vest until they have completed 5 years and until that time each 1% share has a value of only $1 if they leave prior to 5 years and after 5 years the 1% value is the actual 1% value of the net value of the company.

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Customer: replied 4 years ago.

Thank you. So just to be clear, I put in the operating agreement something like:


If the member is also an employee of the Company, their share in the Company will not vest until they completed 5 years of employment with the Company. Until that time, each 1% share has a value of only $1 if they leave prior to 5 years and after 5 years the 1% value is the actual 1% value of the net value of the company.


Also, I can have a provision in the operating agreement that says the majority shareholder can force a repurchase of the interest for $1 within those 5 years correct?

Thank you for your follow up.

Yes, that is correct. You can have a provision stating that at any time before their 1% share vests the majority shareholder can purchase that interest from them without recourse for $1.
Customer: replied 4 years ago.
Thanks. And this will work for future employees as well? Is this something that has to be in the employment agreement?
Yes, as long as you have the future employees sign onto the operating agreement or sign a contract agreeing to those terms it will work for them as well.
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