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Llc Ownership Percentage Agreement Template for United States

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Key Requirements PROMPT example:

Llc Ownership Percentage Agreement

"I need an LLC Ownership Percentage Agreement for a tech startup with three founding members having unequal ownership (50%, 30%, and 20%), including provisions for future investor dilution and special voting rights for the majority owner."

Document background
The LLC Ownership Percentage Agreement is a fundamental document used when establishing or modifying ownership structures in Limited Liability Companies within the United States. This document becomes essential when multiple parties invest in or own parts of an LLC, requiring clear documentation of their respective ownership stakes and associated rights. The agreement typically addresses various scenarios including initial ownership allocation, ownership transfers, capital contributions, and profit distribution mechanisms. It must comply with both federal regulations and state-specific LLC laws, particularly those of the state where the LLC is registered. The document serves as a critical reference point for preventing and resolving ownership disputes, managing business transitions, and ensuring transparent governance structures.
Suggested Sections

1. Parties: Identifies all members of the LLC and their contact information

2. Background: Describes the LLC's formation, purpose, and the intent to establish ownership percentages

3. Definitions: Defines key terms used throughout the agreement

4. Ownership Percentages: Specifies the exact ownership percentage held by each member

5. Capital Contributions: Details initial and any required future capital contributions corresponding to ownership percentages

6. Profit and Loss Allocation: Explains how profits and losses are distributed based on ownership percentages

7. Voting Rights: Outlines voting power and procedures based on ownership percentages

8. Transfer Restrictions: Sets forth limitations and procedures for transferring ownership interests

9. Management Rights: Describes management authority and decision-making processes

10. Distributions: Specifies how and when monetary distributions will be made to members

11. Books and Records: Establishes record-keeping requirements and member access rights

12. Representations and Warranties: Contains statements of fact and promises by the parties

13. Term and Termination: Specifies the duration of the agreement and conditions for termination

14. Governing Law: Identifies the state law governing the agreement

15. General Provisions: Includes standard boilerplate provisions such as notices, amendments, and severability

Optional Sections

1. Tag-Along Rights: Include when members want the right to join in the sale of other members' interests

2. Drag-Along Rights: Include when majority owners want the right to force minority owners to join in a sale

3. Right of First Refusal: Include when existing members should have priority to purchase available ownership interests

4. Buy-Sell Provisions: Include when specific trigger events (death, disability, retirement) should force a sale of interests

5. Special Allocations: Include when certain tax items or profits/losses need to be allocated differently from ownership percentages

6. Dispute Resolution: Include when parties want specific arbitration or mediation procedures

7. Non-Compete Provisions: Include when members should be restricted from competing with the LLC

8. Put and Call Options: Include when members want rights to force purchases or sales of interests

Suggested Schedules

1. Schedule A - Member Information: Detailed list of members, contact information, and initial ownership percentages

2. Schedule B - Capital Contributions: Itemized list of initial capital contributions (cash, property, services) by each member

3. Schedule C - Valuation Methodology: Agreed-upon methods for valuing ownership interests for various transfer scenarios

4. Appendix 1 - LLC Operating Agreement: Copy or relevant sections of the LLC's operating agreement

5. Appendix 2 - Transfer Forms: Standard forms for documenting ownership transfers

6. Appendix 3 - Tax Elections: Documentation of any special tax elections affecting ownership interests

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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