September 13, 2019

Rosencrantz and Guildenstern are Dead: Operating Agreements from the Minority Perspective

It is not too broad a generalization to suggest that almost all LLC members fall within one of two categories: those who are members of the control group and those who are not members of the control group.1 Typically the control group dictates, through counsel that it selected, the terms of the operating agreement with potential minority participants then invited to accept those terms by joining the company as minority members or, in the alternative, by passing on the opportunity. Alternatively, the minority participants may be invited, and they are certainly always free to insist, upon modifications to the proposed terms. Following are a few thoughts on representing the potential minority in such a situation.

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