Llc equivalent of what a shareholder agreement is for a corporation

Asked over 1 year ago - Detroit, MI

I understand the concept of a shareholder agreement for a corporation, and would like to know what the equivalent of what a shareholder agreement for a corporation is for an llc? for instance I know that llc's have an operating agreement, and would like to know if a shareholder agreement worded as a membership holder agreement would be done in substitution.

Attorney answers (3)

  1. Robert John Murillo

    Contributor Level 20

    10

    Lawyers agree

    Answered . It's an operating agreement. The issue is what the operating agreement entails. A very complete agreement would include things like buy-sell, dispute resolution, employment terms for members-employees, so on. A very complete agreement can run 50 pages or more.

    You can't just grab a shareholder agreement and try to fit that to an LLC as the form, legal and tax issues can be considerably different. The best advice is simple, namely hire an attorney who has expertise in LLC agreements.

    This answer is for informational purposes only and is not legal advice regarding your question and does not... more
  2. James P. Frederick

    Contributor Level 20

    5

    Lawyers agree

    Answered . I agree with Attorney Murillo that an Operating Agreement would normally serve this function. It is best to have this form prepared by an attorney so that it can be customized for your LLC. There are many issues that need to be addressed.

    James Frederick

    ***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ******... more
  3. Samuel Kenneth Swenson

    Contributor Level 7

    4

    Lawyers agree

    Answered . Apples and Oranges. The Operating Agreement for an LLC spells out the terms of the relationship between the members and dictates the terms of management of the LLC. Shareholder agreements spell out the relationship between the shareholders and the corporation. You should talk to an attorney about drafting an operating agreement for an LLC rather than doing a copy and paste job. Badly written operating agreements are fertile grounds for protracted litigation.

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