Can we vote on payment for services rendered.. Three member llc.. All equal partners. two do all of the work.

Asked 10 months ago - Los Angeles, CA

can we vote on a guaranteed payment for active working members of an llc, if we can vote on this can we base this on a percentage of the profits or does it have to be just on a number we decide.. we have one member that does not work, but also does not want us to get paid for working.. looking for CA default rule. can we also vote to back pay members for the service rendered last year., if we keep this ambiguous
and say the llc will back pay each member $10 dollars an hour for services rendered last year. Two partners put in over 1500 hours last year while one put in maybe 20. we all own 33 percent of the company but have no operating agreement. i know we can vote on activities that are in the day to day course of business f, so would this count.?. looking for ca default rule

Attorney answers (3)

  1. Michael Charles Doland

    Contributor Level 20


    Lawyers agree

    Answered . The answer is in your Operating Agreement, and the default is in the California Corporations code.
    Majority rule is the default with a quorum of 50 percent. There appears to be a rational business reason for your actions.
    Get a lawyer, a CPA, an operating agreement and as importantly a buy sell agreement setting for the obligation to purchase the membership interest in the event of death, disability or desire to retire. Find a formula for value in advance. That is the big lawsuit that awaits you.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  2. Pearlette Vivian Toussant


    Contributor Level 17


    Lawyers agree

    Answered . Hi there, read and listen to Atty. Doland's advise as it is sound. You need to have professionals on your team, including a CPA and an attorney. Best of luck.

    Answer given for general advice and is not a legal opinion, which would require an analysis of the facts and... more
  3. Dana Howard Shultz

    Contributor Level 20


    Lawyers agree

    Answered . I agree with my colleagues:

    A majority of the membership interests generally can set compensation so long as it is fair to the LLC and its members. To minimize the likelihood of problems down the road, however, you should retain a lawyer to help ensure that the proper paperwork will be in place.

    This information does not constitute legal advice and does not establish an attorney-client relationship.

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Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).


Business law covers topics such as business structures, common documents, business taxes and finances, insurance, real estate, and government regulations.

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