How are profits and losses apportioned to the limited liability company’s members?
As noted earlier, one of the principal flexibilities of the limited liability company is the ability to structure the division of profits and losses to members in any reasonable manner. Members may be provided their distribution of profits and losses in direct proportion to their contributions of money, services, or property to the company. This, in fact, is most often the clearest method by which to structure distribution. However, this form of business entity allows endless possibilities to tailor such distributions to the circumstances of your business. If a member is contributing a particular expertise, they may be compensated by a greater percentage of share in the profits of the business. If a member chooses not to participate in the management of the company, those members who do manage may earn a greater percentage share in the profits and losses. Look closely at your particular business organization and contributions to decide the fairest manner in which to distribute the proc
