Profit distribution in LLC – please help

Discussion in 'Starting a Business' started by michaelgh, Dec 13, 2013.

  1. michaelgh

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    Feb 12, 2013
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    Hi there!

    There is a company (LLC) that sells art works that consists of me and my friend. We have several incoming cash flows. E.g. I work on online sales, we are both sell on different art shows, some of them together, some separately.

    Now, we need to distribute profits based on our agreement which is more complicated a simple percentage formula. E.g., I get 100% from online sales, she gets %100 from her events, I am %100 from my events, plus we share in some proportion in some other cases.

    Can we distribute profits according our own agreement? Do we need to write it down or it can be a verbal agreement?

    How does it work, in practice, we just write ourselves a check?

    Thank you
  2. RoseAb

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    Dec 7, 2013
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    My understanding is this: Legally, you can write yourselves checks according to your verbal agreement. However, you are really setting yourself up for big trouble if you don't have a written agreement. The written agreement should work out all the details. First, it will keep you two from having arguments and maybe even splitting up if things go too far wrong between you. Second, in case it ever ends up in court then you need that legal contract. I know you believe nothing will go wrong but many other people thought that and then they get in big trouble later. Save yourself all the trouble and make up a contract between you two.

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