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Thread: Profit Splitting Question

  1. #1

    Default Profit Splitting Question

    hi i recently became a partner in a llc with 13 other guys. we all put up 1000.00 initially and 50 dollars per month. i went out and found a a house to buy as a way to raise money for the llc. the house was purchased for 5000.00 the question i have is, is that only 2 members have done all the work as it pertains to rehabbing the property. in some cases invested money in the rehab of the property. some members haven't paid dues since the beginning of the organization and haven't attended meetings as well. how do you suggest we split the profit when we sell it . thanks

  2. #2

    Default

    First, you should have decided that upfront. Anything you try to do now is possibly going to be hard to get any agreement on.

    I believe that any partnership needs to compensate both the contributions of capital and the value of the services provided by the partners. Unfortunately, most default provisions of LLC statutes are not very helpful on that score. And trying to agree how to value services after the fact is never easy.

    The best I can tell you is to raise the issue as soon as possible, before you put in any more time or money without any assurance that you will benefit from your efforts or cash.

  3. #3

    Default

    thanks for you timely and helpful response

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