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Home Q&A Forum How is profit shared after LLC formation?

Business

LLC

New York

Asked on Oct 27, 2023

How is profit shared after LLC formation?

I am looking to form a LLC with two other partners and we need to understand how profits will be shared between us. We have already agreed on certain terms, such as the amount of capital we will each contribute, but we need help understanding how profits should be distributed in accordance with LLC laws.

1 Attorney answer

Answer

Business

New York

Answered 257 days ago

Damien B.

ContractsCounsel verified

Business Lawyer
Licensed in New York
Free Consultation

Hello: I understand you are forming an LLC and want to know how to distribute profits. Generally, members would share profits based on their percent ownership. For example, if you own 50% of the LLC, you get 50% of the profits. Likewise, with three members, it could be 33.33% each for example. However, LLC's are very flexibile and the distribution of profits and percentage is not set in stone. The members can decide how to distribute profits among them, usually set forth in the Operating Agreement.

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