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LLC Ownership Percentage Agreement

LLC Ownership Percentage Agreement Template for Canada

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Key Requirements PROMPT example:

LLC Ownership Percentage Agreement

"I need an LLC Ownership Percentage Agreement for a new technology startup based in Ontario with three founding members, where two members will own 40% each and one member will own 20%, including special provisions for future investor dilution protection and vesting over 3 years."

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Document background
The LLC Ownership Percentage Agreement serves as a fundamental document for businesses operating in Canada that wish to establish clear ownership structures and rights among multiple owners. While Canadian law doesn't recognize LLCs as they exist in the U.S., this agreement type adapts similar principles to work within Canadian corporate and partnership law frameworks. It's particularly crucial for startups, family businesses, professional services firms, and any enterprise with multiple owners. The agreement typically includes detailed provisions for ownership percentages, voting rights, profit distribution, transfer restrictions, and governance mechanisms. It ensures compliance with both federal and provincial regulations while protecting all parties' interests. This document is essential when establishing a new business with multiple owners, restructuring existing ownership, bringing in new investors, or creating a formal ownership structure for an existing business.
Suggested Sections

1. Parties: Identification of all members/owners and the LLC entity

2. Background: Context of the agreement and brief history of the business relationship

3. Definitions: Key terms used throughout the agreement

4. Ownership Structure: Detailed breakdown of ownership percentages and classes of ownership interests

5. Capital Contributions: Initial and ongoing capital contribution requirements and procedures

6. Voting Rights: Voting power of each owner and decision-making thresholds

7. Management Structure: Governance framework and management responsibilities

8. Distributions: Profit sharing and distribution policies

9. Transfer Restrictions: Limitations and procedures for transferring ownership interests

10. Right of First Refusal: Process for existing owners to purchase available ownership interests

11. Meetings and Notices: Procedures for owner meetings and required notifications

12. Books and Records: Requirements for maintaining corporate records and financial statements

13. Dissolution: Procedures for company dissolution and asset distribution

14. Governing Law: Specification of applicable Canadian jurisdiction

15. Dispute Resolution: Procedures for resolving conflicts between owners

16. General Provisions: Standard contractual provisions including amendments, notices, and severability

Optional Sections

1. Tag-Along Rights: Provisions allowing minority owners to join in sale of majority interests

2. Drag-Along Rights: Provisions allowing majority owners to force minority owners to join in sale

3. Anti-Dilution Protection: Protections against ownership dilution in case of new issuances

4. Buy-Sell Provisions: Detailed procedures for buying out owners in specific circumstances

5. Employment Requirements: Conditions requiring owners to maintain employment with the company

6. Intellectual Property Rights: Ownership and usage rights of company intellectual property

7. Non-Compete Provisions: Restrictions on owners competing with the company

8. International Operations: Provisions for companies operating across international borders

Suggested Schedules

1. Schedule A - Current Ownership Table: Detailed breakdown of current ownership percentages and capital contributions

2. Schedule B - Valuation Methodology: Agreed methods for calculating company and ownership interest values

3. Schedule C - Reserved Matters: List of decisions requiring special voting majorities or unanimous consent

4. Schedule D - Initial Capital Contributions: Details of all initial capital contributions, including non-monetary contributions

5. Appendix 1 - Corporate Structure Chart: Visual representation of ownership and corporate structure

6. Appendix 2 - Form of Transfer Notice: Standard form for notifying intent to transfer ownership interests

7. Appendix 3 - Deed of Adherence: Template for new owners to become bound by the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions
















































Clauses








































Relevant Industries

Technology and Software

Professional Services

Manufacturing

Retail and Consumer Goods

Real Estate

Healthcare

Financial Services

Construction

Hospitality

Agriculture

Energy

Transportation and Logistics

Media and Entertainment

Consulting Services

Relevant Teams

Legal

Finance

Executive Leadership

Corporate Governance

Compliance

Board of Directors

Corporate Secretariat

Risk Management

Business Development

Investment

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Corporate Lawyer

Business Owner

Managing Director

Board Member

Company Secretary

Corporate Governance Officer

Managing Partner

Founding Partner

Investment Manager

Business Development Director

Compliance Officer

Legal Counsel

Finance Director

Corporate Controller

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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