Selectively Adding Limited Partners To Your LLC

LLC entities vary from state to state but there are no partners, just holders of interest in the LLC. They can have whatever percentage of the LLC they purchase and generally there cannot be more than 25 principals. Partnerships (general or limited liability) work differently. In a general partnership each partner is personally liable legally and financially for the activities of the partnership - not a good idea. Generally, an LLC can only be for licensed professionals, accountants, lawyers, physicians, etc.

If you form an LLC, it cost a few hundred dollars per year but gives liability protections. Check out Nolo Press or legalzoom.com for legal information.

Thanks, Bill.

Seemingly, I threw around the word PARTNER too lightly.

I used it to mean someone who takes part in a business venture and is "in it together" with me or you, to whatever degree is pre-determined ...

Let's call it MEMBERS of the LLC, then.

Returning to that original question --- can you please share some light on ways of establishing percentages/shares of member ownership? And so forth.

You sound informed. Thanks in advance.

~ Sherri

P.S. In my case, I have already established two LLC's and am curious about advancing to the next level with "members". But I'm sure many others are equally interested in your advice about start-up. (Please steer all of us, if you can.)

With an S corp you issue stock - can be done very crudely but you must issue stock. With an LLC you just put in writing all the variables. Who is a member and in what percentage? It can change every week. You need not have yearly meetings and file reports of these meetings, you keep track of the details and percentages and amounts of money in your own system - sound loose? It is. Just make sure you put everything in writing any time anything changes and do not depend on pundits like me when you talk about investments of real cash exceeding about 10K - go to an attorney that specializes in these forms of business and they will likley give you templates that they will warrant if legal challenges are brought using their documents. There are general guidelines that apply everywhere but spring the $500-$1,000 dollars to have an attorney set you up when you start to make or invest significant funds. One or two hours of their time and you should be fine. Use legal web sites for forms and such but do not depend on their without some guidelines from a real estate or tax attorney (I suggest the latter is preferable).