Legal Question in Business Law in New York

I am in the process of setting an LLC up with a friend. Our LLC is planning on investing in another LLC for a 1/3 share in a website. I am currently working on the Operating Agreement and had a few thoughts. To fund our LLC to invest, I am setting up a short-term loan with interest and a balloon payment. I am going to have a 25% share and my partner will have a 75% share as he will be the hands on guy (sweat equity) and I am looking to collect a distribution for minimal work once the loan is paid off. The only thing I am concerned about is my voting power. Is there anyway we can have a 25/75 ownership split with a 50/50 voting power? What is the proper way to set this up?


Asked on 3/29/10, 6:51 pm

2 Answers from Attorneys
Michael Markowitz Michael A. Markowitz, PC

Your are setting up a company, not a corporation, and are confusing the two entities. For a limited liability company, voting percentage is not based on units owned - as compared to shares are for a corporation. Therefore, I suggest you draft an agreement that manager / members have equal decision making while distribution is 75 / 25.

Frankly, you should have an attorney draft the documents.

Mike.

Read more
Answered on 4/04/10, 6:10 am
Steven Czik CZIK LAW PLLC

Yes you can have the ownership differ from the voting rights. We have substantial experience handling in these mattershowever, we would need some more information before making a complete and proper determination. You are welcome to contact us for a free consultation.

Law Offices of

STEVEN J. CZIK, P.C.

101 Avenue of the Americas, 15th Floor

New York, New York 10013

212.413.4462

[email protected]

The information provided by The Law Offices of Steven J. Czik, P.C. (LOSJC) is for general educational purposes only. There is no attorney-client relationship established by this communication and no privilege attaches to such communication. LOSJC is not taking and will not take any action on your behalf and will not be considered your attorney until both you and LOSJC have signed a written retainer agreement. There are strict deadlines, called statutes of limitation, within which claims or lawsuits must be filed. Therefore, if you desire the services of an attorney and decide not to retain LOSJC on terms acceptable to LOSJC, you are advised to immediately seek the services of another attorney.

Read more
Answered on 4/08/10, 3:00 pm


Related Questions & Answers

More Business Law questions and answers in New York