Legal Question in Business Law in Arizona

Re: Adding a new member to my LLC

When others are added to a LLC there needs to be a detailed Member agreement setting forth the respective rights, duties, liabilities and entitlements of the members. This is not a fill-in-the blanks "form." See a business attorney. If you fail to get a detailed agreement, dealing with the myriad issues that can come up, you are taking an unwise risk IMHO.

Possibe issues:

Member dies.

Member wants to sell his interest.

Who is manager?

Who controls company decisions?

What about losses? How are they divided?

Member wants to sell his interest. Right of first refusal for other members? If not, you might have an unwanted member thrust upon you.

What if a member gets a divorce? Files bankruptcy? Gets a judgment against them? Won't work or help out? Who does what and who gets paid what? Who can sign contracts obligating the LLC for the others? Do they need any approval? What percentage is going to be used for votes? What about different kinds of votes? What if a decision causes adverse tax consequences for one or more of the members? What happens upon liquidation? How are assets divided if you cease business? Who owns the company name, good will, phone number, web sites, etc.?

There are other issues also. See what I mean?

Good luck.