Legal Question in Business Law in Georgia

Starting a company

I am starting a Limited Liability Company. However, I would like to offer someone a small ownership in the company. This person would only own a 10% stake. Would this make the company a partnership. I ask because I downloaded a legal partnership form but I don't think that is correct.


Asked on 12/03/07, 2:25 pm

2 Answers from Attorneys
Andrew Koplan Andrew B Koplan PC

Re: Starting a company

Giving someone a 10% stake in an LLC does not change the LLC into a partnership as that term is understood in the courts. However, once you have another member in an LLC, partnership principles are created, including certain fiduciary duties, that are very similar to a general partnership. This is subject, however, to any operating agreement that the members (you and the 10% owner) may adopt. Thus, you would be best served by seeking legal counsel to fully explore the goals you desire in light of the applicable governing laws and rules.

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Answered on 12/03/07, 2:34 pm
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

Re: Starting a company

No. A partnership is legally different than an LLC, although people tend to use the term "partnership" and "partner" loosely. As such, a partnership would not be sufficient for an operating agreement for an LLC. I would strongly suggest you have a local business attorney draft the LLC agreement because it will determine the owners rights and obligations.

If you would like to discuss any issues further, please feel free to contact my office. My contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

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Answered on 12/03/07, 2:36 pm


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