Is it possible to structure a dual owner LLC with one person having majority voting rights and also a profit payout that differs from voting right ? Thank you

Structuring an LLC with two owners, who both desire one owner to have majority voting rights for votes only, it is understood each partner can create binding contracts for the business. Profit split currently undecided, but may differ from voting as well as from initial capital paid-in by each member. Thank you

Asked on August 29, 2016 under Business Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes. That is one of the advantages of an LLC over a corporation: management authority and proft participation are not necessarily linked, and can be whatever the owners (the "members") want (whereas in a corporation, both control and profit participation is based on shares of stock owned). Decide what you want and set it out in the operating agreement; a good idea would be to hire an attorney to draft it for you (that's what I did, and I'm a lawyer; but be because operating agreements aren't my specialty, I hired an attorney with more experience than I do draft one for my own, 3-person LLC).

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