Q: Is it permissible for a minority member in a manager-managed LLC to act as a paid manager via a mgmt-services agreement?
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A:
Yes, it is permissible for a minority member in a manager-managed LLC to act as a paid manager via a management-services agreement. However, this arrangement must comply with the LLC’s operating agreement and any applicable state laws. It's important to ensure that the agreement is clearly documented and that all members consent to the terms.
First, review the LLC’s operating agreement to check for any clauses that might restrict or address this type of arrangement. The agreement should outline the roles, responsibilities, and compensation for managers, and it should explicitly allow a member to take on a paid management role if that's the case.
Next, it's crucial to draft a comprehensive management-services agreement that details the scope of services, compensation structure, and duration of the management role. Transparency is key to avoiding conflicts of interest and maintaining good relations among all members. If in doubt, consider seeking legal advice to ensure the arrangement is fair and compliant with all relevant regulations.
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