How Are Profits Distributed to the Owners of an LLC?

In most cases (and in the case of Standard Legal’s documents), the Operating Agreement for the Limited Liability Company will normally spell out each member\’s rights and responsibilities with regards to profits, losses, distribution and financial issues.

If an Operating Agreement does not exist for the LLC, or if it is silent as to these issues, state law will generally dictate the member\’s rights to profit and losses.

In most (but not all) cases, profits and losses are based upon the amount or percentage of a member\’s capital contribution to the LLC.

To create a legal and valid Limited Liability Company for any state, see Standard Legal’s LLC legal forms software and instructions.