Purchase Solution

Corporate Operating Agreements

Not what you're looking for?

Ask Custom Question

Limited Liability Companies. John, Lesa, and Trevor form a limited liability company. John contributes 60% of the capital, and Lesa and Trevor each contribute 20%. Nothing is decided about how profits will be divided. John assumes that he will be entitled to 60% of the profits, in accordance with his contribution. Lesa and Trevor, however, assume that the profits will be divided equally. A dispute over the profits arises, and ultimately a court has to decide the issue. What law will the court apply? In most states, what will result? How could this dispute have been avoided in the first place? Assess fully.

Justify your answer using information from your Reading and be sure to:

Assess the laws that govern the limited liability companies (Uniform Limited Liability Company Act ULLCA).
Evaluate how these laws frame our scenario and how a court would rule.
Conclude how John, Lesa, and Trevor could have avoided the dispute by creating an operating agreement and integrating operating procedures into a written agreement.

Purchase this Solution
Solution Summary

This solution of 682 words discusses operating agreements and distribution of cash, property, or services and also explains the legal rules of operating agreements. It also discusses the limitations and benefits of operating agreements in the case study.

Solution Preview

http://www.nolo.com/legal-encyclopedia/llc-operating-agreement-30232.html

http://www.nolo.com/legal-encyclopedia/making-special-allocations-29029.html

Limited Liability Companies. John, Lesa, and Trevor form a limited liability company. John contributes 60% of the capital, and Lesa and Trevor each contribute 20%. Nothing is decided about how profits will be divided. John assumes that he will be entitled to 60% of the profits, in accordance with his contribution. Lesa and Trevor, however, assume that the profits will be divided equally. A dispute over the profits arises, and ultimately a court has to decide the issue. What law will the court apply? In most states, what will result? How could this dispute have been avoided in the first place? Assess fully.

Justify your answer using information from your Reading and be sure to:

Owners of an LLC's must allocate financial contributions such as cash, property, or services to the business with each member receiving a percentage of ownership in the assets of the LLC. It is mandated that members receive ...

Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Motivation

This tests some key elements of major motivation theories.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Corporate Debt Expansion

    What are some specific features of bond agreements? 3. What is the difference between a bond agreement and a bond indenture? 1. Why has corporate management become increasingly sensitive to the desires of large institutional investors? 2.

  • Government Assistance and Influence

    Government assistance to companies, often referred to as Corporate Welfare, is a very controversial issue in trade agreements. Research and discuss how governments influence and effect national competitiveness.

  • Small Business Decisions on Legal Agreements

    The proper notices of operating status are additionally imperative for the business management to follow and adhere towards proper training employees.

  • Business Ethics Within an Organization

    Try and think of the leadership role as following the corporate or organization's vision to following appropriate procedures in assuring ethical decisions made within daily business activities honing on proper conduct (ethical contractual agreements,

  • small businessperson in Des Moines, Iowa

    The exporter is operating in the international business environment and the policies and agreements framed in the international business environment and different nations are a result of efforts of such international institutions.

  • World Trade Organization Effects

    This is because the WTO is driven by narrow corporate interests, like genetic engineering companies and the agri-business.

  • Corporate Social Responsibility (CSR)

    Several authors proposed some conceptual changes to the CSR in the previous decades until we have come up to its present definition: a set of activities or program that a company voluntarily undertakes for the purpose of operating in an economic as well

  • resolving legal disputes in international transactions

    When the local customers and laws conflict with the customs and laws of an organization operating abroad, which should prevail? Why? 4. What factors could work against a company's decision to grant sublicensing agreements? 1.

  • Tax Considerations and Franchise Payments

    In general, Franchise Agreements cover the following main provisions: 1. Training and/or ongoing support provided by the franchisor.

View More Related Solutions