LLC Operating Agreement should clearly spell out Ownership Interests
A situation that came to us recently highlights the importance of having ownership percentage interests spelled out clearly in your Arizona limited liability company's Operating Agreement. Jay and Pat: a cautionary tale A person we'll call “Jay” was in business with his partner “Pat”. The two had met because their kids were in after school activities together. It turns out Pat had a great product but lacked people skills and was not much of a salesperson. Jay, on the other hand, loved people and was born to sell. After sampling the product one day, Jay asked if he could sell the product for Pat and receive a percentage of sales. Pat thought that this was a great idea, to the point of turning around that very day day and forming an…