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Llc equivalent of what a shareholder agreement is for a corporation

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

Posted

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 establish an attorney-client relationship.

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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. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

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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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