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Ownership Agreement LLC Template for England and Wales

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Key Requirements PROMPT example:

Ownership Agreement LLC

"Need an LLC Ownership Agreement for a new tech startup with three founding members, where two members will contribute capital and one will contribute intellectual property, with specific provisions for future funding rounds planned for March 2025."

Document background
The LLC Ownership Agreement serves as the foundational document defining the relationship between business owners in England and Wales. While the LLC structure originated in the US, this agreement adapts these principles to UK legal requirements, typically aligning with LLP regulations. The agreement is essential when establishing a new business entity or restructuring an existing one, providing clear guidelines on ownership stakes, management rights, profit distribution, and dispute resolution. It incorporates provisions from the Companies Act 2006 and related legislation, ensuring compliance with UK company law while maintaining flexibility in business operations.
Suggested Sections

1. Parties: Identification and details of all members/owners

2. Background: Context and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Business Purpose: Defined scope and objectives of the business

5. Capital Contributions: Initial and ongoing capital requirements

6. Membership Interests: Allocation of ownership percentages

7. Management Structure: Governance and decision-making framework

8. Profit and Loss Distribution: How financial benefits and obligations are shared

9. Transfer of Interests: Rules and procedures for transferring ownership

10. Meetings and Voting: Procedures for member meetings and voting rights

11. Dissolution and Winding Up: Process for dissolving the company and distributing assets

12. General Provisions: Miscellaneous legal provisions including governing law and jurisdiction

Optional Sections

1. Non-compete Provisions: Restrictions on competitive activities by members during and after membership

2. Intellectual Property Rights: Ownership and usage of intellectual property created by or for the business

3. International Operations: Provisions governing cross-border activities and compliance

4. Dispute Resolution: Specific procedures for resolving disputes between members

5. Tag-Along and Drag-Along Rights: Rights of members to participate in or be required to join in sale of interests

Suggested Schedules

1. Schedule 1: Initial Capital Contributions: Detailed breakdown of members' initial investments and contributions

2. Schedule 2: Members' Details: Complete member information including contact details and shareholdings

3. Schedule 3: Business Plan: Initial business plan and financial projections

4. Schedule 4: Valuation Methodology: Agreed methods for valuing membership interests

5. Schedule 5: Reserved Matters: List of decisions requiring special approval or unanimous consent

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Industries

Companies Act 2006: Primary legislation governing company formation and operation in the UK, including fundamental company law principles and statutory requirements

Limited Liability Partnerships Act 2000: Core legislation establishing the framework for Limited Liability Partnerships in the UK, providing relevant context for limited liability business structures

Partnership Act 1890: Historical legislation establishing basic partnership principles that still influence modern business relationships and agreements

Limited Liability Partnerships Regulations 2001: Secondary legislation detailing specific requirements and procedures for LLP operation and governance

Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009: Regulations specifying how provisions of the Companies Act 2006 apply to Limited Liability Partnerships

Company Directors Disqualification Act 1986: Legislation governing the disqualification of directors and members involved in company management

Finance Acts: Various acts governing tax implications and financial obligations for business entities

Insolvency Act 1986: Legislation governing business insolvency procedures and creditor rights

Financial Services and Markets Act 2000: Regulatory framework for financial services and markets, applicable if the business involves regulated financial activities

Data Protection Act 2018: UK implementation of GDPR, governing how businesses must handle personal data and ensuring compliance with data protection principles

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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