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I am a member in a NY LLC. The operating agreement says I am

responsible for "development of [certain]...
I am a member in a NY LLC. The operating agreement says I am responsible for "development of [certain] software" and that this is an unpaid position, with no specific obligation of time. I have supported myself through project-based consulting work for the LLC's customers.
I recently agreed to a letter from the LLC saying I would be paid $x as Guaranteed Payments on a K-1. It stated my "positions" (exact word) as "head of software development" and "head of consulting". No mention of time commitment. No definition of the positions here or in the operating agreement.
My question is: What time effort am I obligated to put in? I am having a disagreement with my partners on various other issues and don't want to make a specific commitment of time.
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Answered in 4 minutes by:
2/17/2017
Richard - Bizlaw
Category: Business Law
Satisfied Customers: 10,692
Experience: 30 years of corporate, litigation and international law
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Hello, my name is ***** ***** I will try to help you. Please remember I just report or interpret the law, so the outcome may not be what you hoped for.

What activities do each of the positions require? Is it any different from what you have been doing except you are getting paid a specified amount? Are the guaranteed payments against your percentage of the profits in the LLC or just a fixed payment that does not effect your capital account?

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Customer reply replied 9 months ago
There are no specific definitions of the activities. But in the past, I had been doing both software consulting and software development paid as a 1099 and am now being paid on a K-1. The payments are fixed payments that do not effect the capital account as required for the tax definition of Guaranteed Payments.

Essentially you would be continuing to do what you have been doing. The payments you receive are the equivalent of the 1099 payments you got previously. Your time commitment should be what it has been in the past. If they are to be altered that would have to be the subject of a specific agreement with you. Your time commitment should remain the same as it was.

If I have answered all your questions, please highly rate my answer as that is how I receive credit. If you have more questions, please let me know. If the answer was especially helpful you can provide a bonus.

Richard - Bizlaw
Category: Business Law
Satisfied Customers: 10,692
Experience: 30 years of corporate, litigation and international law
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Thank you for positively rating my answer. I am glad I could be of help. If you have questions in the future please ask for me Richard - Bizlaw.

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