LLC Operating Agreement Question about Capital Interests

[Sean S.]

Hello All,

I am currently completing the paperwork for my LLC. I am splitting the LLC 49(me)/51(partner) with a partner that will be able to acquire sign the personal guarantee since he owns the majority of the LLC in order for the LLC to acquire the loans needed for purchasing properties. I will be handling the operations of the LLC. For my operating agreement I am filling out a section about capital interests. Would I be correct in only listing my partner's commitment to the loan acquisition to fund the purchase and the rehab? Will the fact that I don't have any capital interests be an issue?

[Ashish Acharya]

Originally posted by @Sean S.:

Hello All,

I am currently completing the paperwork for my LLC. I am splitting the LLC 49(me)/51(partner) with a partner that will be able to acquire sign the personal guarantee since he owns the majority of the LLC in order for the LLC to acquire the loans needed for purchasing properties. I will be handling the operations of the LLC. For my operating agreement I am filling out a section about capital interests. Would I be correct in only listing my partner's commitment to the loan acquisition to fund the purchase and the rehab? Will the fact that I don't have any capital interests be an issue?

You do have a capital interest of 49% based on what you say. I think you are mixing up the terminologies here. 

That is why you work with attorney to draft these if you are working on partnership. This will create so much headache if not drafted properly. 

If capital interest is not not intended for you, you should specify that you only have profit and loss interest.