i'm working with a client on a project, and he wants to reward my hard work by writing me in to own 1% of the LLC, and receive 1% of the profits from the company. i am doing this work under my own company, receiving a check written to my business, and am now very confused about the whole ownership thing. there are 10 other owners written into the operating agreement, some will be decision makers and some are just investing, i suppose. it's a legitimate business, i'm masterminding the whole framework that will be making the profit (scary, i know...) and i know it will do well. customers are already lined up and ready to pay for the service.

rather than having any ownership, i would much rather take a bonus amount of money, even if it's less than 1%, so if i decide to cease working on the project, no matter what the reason is, i can split and that's that. you never know, aliens abduct people all the time.

my question for you guys is: what am i liable for as far as having any ownership in that company? if something happens and the company does get in trouble, or go under, what would i be liable for?

any help would be appreciated greatly... i can run a business, but i don't know shit about forming them with other people.

10/22/2009 5:08:40 AM

Pretty sure it's something you can google.

Plus 'biz' majors probably have no idea.

10/22/2009 7:28:34 AM

You should get an attorney to look at the contract...because most of your questions are based on how your ownership is worded in the contract.

There's a really good possibility you won't be liable for anything if something were to happen to the business. If you aren't putting any money into it, then they can't get any from you if the business were to go under. And that 1% might lead to a shit-ton more money than whatever bonus you might be thinking about receiving.

Get an attorney friend that want charge you to give it a look. I'd probably be more worried about them promising me 1% and then re-nigging when they start making bank. That's happens pretty often in those situations...and contracts can be worded where those guys have "outs" and the person expecting a percentage of profits is screwed.

10/22/2009 7:29:32 AM

Unless your contract state's otherwise, a legal owner in an LLC is only liable for his/her investment. If you don't put any money in, you don't lose. But you shouldn't have a say in the business proceedings, just an investor status.

10/22/2009 9:26:47 AM

paging adumb

10/22/2009 9:45:38 AM

^^that's what the Limited Liability means. It means they can only go after the assets of the LLC and not your personal assets.

10/22/2009 2:00:22 PM

Go with the 1% LLC ownership. Its the only guarantee that you will actually own anything.

10/22/2009 2:34:11 PM

its an LLC...you're good to go. It doesn't hurt you to be 1% owner and it might benefit you greatly. If the company tanks you lose nothing. Now if this were instead of reimbursing you for your time now i'd say f that.

10/22/2009 3:12:32 PM

thanks for the answers, guys... jrb599, jesus still loves you.

i'm more concerned with the commitment than with the money. cash is nice, but freedom is nicer.

i'll talk it over with my attorney and see what he says... thanks again!

10/22/2009 7:28:36 PM