Waterfall provisions, also known as waterfalls, allow LLC members to decide how to allocate distributions among investors. While many members usually create an operating agreement that allocates distributions in proportion to the amount of investment an investor made, there are other ways a company can make distributions.
If you just formed an LLC, or are looking to do so, contact an experienced Newburn Law attorney today to learn more about what you should include in your operating agreement and what issues you might initially be overlooking.
A good business partnership is like a marriage. You choose your partner(s) for a reason. Transfer restrictions represent your only defense to ended up with a partner you didn't select. However, transfer restrictions can also limit your ability to sell your interests in the business. Contact an experienced Newburn Law attorney to help you balance these needs and ensure the long-term success of your business.