Legal Question in Business Law in Texas

Is varying profit sharing ratio possible in LLC?

Hi, i am planning to start a LLC. Is it possible to do multiple projects, each with different profit sharing ratio between the members of an LLC? Is this also possible in C-Corp. Which would be a better option for an IT consulting firm

Appreciate your response.

Thanks,

Ganesh


Asked on 6/09/05, 7:33 pm

2 Answers from Attorneys
Peter Bradie Bradie, Bradie & Bradie

Re: Is varying profit sharing ratio possible in LLC?

It could work for either one. My preference would be toward a corporation, with the directors making the decision as to the division, and having the minutes of meeting as a permanent record.

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Answered on 6/11/05, 1:04 pm

Re: Is varying profit sharing ratio possible in LLC?

Yes, you can split profits on different amounts on a project by project basis, so long as all members/shareholders/officers/etc agree on the terms. As for which is entity is better, it is highly fact specific. I wouldn't be able to tell you without speaking to you at length. Each entity has plusses and minuses.

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Answered on 6/10/05, 5:11 am


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