How do I profit from having a share in an LLC?

Question

Sorry in advance if I'm asking this question in a wrong place.

For example, if I posses 10% of shares in an LLC in the US that is worth $10 million, what do I profit from? I mean company profits, dividends etc?

Thanks!

Answer 1

In the US, LLCs do not have shares. LLCs have membership interest. They also have something called "Operating Agreement" which is essentially a contract that governs the relationships between the members (those who have membership interests) and the LLC, and themselves. The OA should spell out how the membership interests are acquired, and what rights they give to their owners, in each area (equity, income, expenses).

For example you may have 10% membership interest that provides you 10% of the equity of the company (net worth), but none of the income or expenses. Or you may buy yourself into an LLC where you'll only be entitled to income, but not equity. Or anything else, the OAs can be whatever the members want them to be, really.