To ensure that all members of your LLC (including yourself!) understand their roles and responsibilities, I recommend drafting an enterprise agreement. While most states do not require you to have one, you should consider it. It provides evidence that your personal and business affairs are separate. And an enterprise agreement can help you avoid misunderstandings, arguments and fights between business partners. Controllers often insert compensation provisions into the enterprise contract, so that the LLC compensates the claims control person (members and CLL) for acts committed on behalf of the LLC. A compensation provision should network the fiduciary obligations provisions and not be in conflict, which means that a supervisor should not be entitled to compensation for conduct that violates their obligations to the LLC. You`ll find a corporate LLC agreement template on the Internet. But use creates risks. In some states, such as Delaware, obligations other than the tacit treaty of good faith and fair trade may be waived. Even if the director or members of the majority have waived their obligations to the minority, the minority member should seek the right to approve „interested transactions,“ i.e. transactions between the LLC and a controlling member of a related company after all essential information relating to the transaction has been provided.
If minority members do not have the right to authorize interested transactions, the enterprise agreement should at least stipulate that a „self-interested transaction“ must be „totally fair“ to the LLC and its members. Finally, a person who withdraws from the agreement should indicate what he or she is entitled to when he or she leaves and how the money should be paid. The same goes for the distribution of profits. LLCs offer flexibility in how you can share your corporate profits. While often the percentage of earnings each member receives is directly related to the percentage of ownership, you could enter into another agreement. Your enterprise agreement should clarify this point, so that there is no confusion. Although attractive from the outset, minority licensing rights in more operational cases can be costly for the LLC, especially where there are many minority members. If z.B. the conclusion of a major lease is an important decision, the delay in the authorization may result in the loss of the tenant.
As a result, in most cases, minority members have few rights to accept day-to-day operational issues. Service providers who are members of an LLC who work in a service company often have licensing fees for a greater number of operational decisions, such as the annual budget. B or significant personnel changes. However, as a general rule, only the executive officer or member is entitled to propose a „big decision.“ An LLC enterprise agreement should describe how members make decisions. Are important decisions taken unanimously? Majority voting? Or something else? The inability of a minority member to finance a call for capital can have serious consequences on the interests of the minority member.