LLC decision making: LLCs are unique in that “ownership” has two different meanings. First, it means the right to make decisions about how the business is operated. That’s called “Membership” and “Management”. Second is a right to receive profits from the LLC, that’s called an “Economic Interest” (the term varies by state). You can have one right without the other, or if you have both they don’t have to be proportional. It’s fun and it can get really complicated, really fast. You can see that LLC decision making can get complicated quickly. As always, consult a business lawyer like myself for drafting this complex document that can and will control the relationship among owners for years to come.
Contact me if you have any questions on business transactions. In western North Carolina, Asheville, Waynesville, Hendersonville at (312) 671-6453.
Email me at: palermo@palermolaw.com.
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