2 partners in a LLC, how do we pay ourselves?

How do 2 partners in a LLC setup so that we can pay ourselves from the business? is it done any differently then a single member LLC?

Answer

Each member is paid out his or her share of profits (just write a check), based on what you have agreed to in your Operating Agreement.

Don't have an Operating Agreement?

In a multi-member LLC, you really do need one.

While most states do not require your to have an Operating Agreement (or if they do require one, you don't need to prove to the state that you have one), you ought to have one drawn up anyway.

The Operating Agreement is a contract between you and the other members of your LLC. It determines everything about how your LLC is run...from how profits are divided, to whether members can sell shares to outsiders without offering other members the right to purchase first, to what businesses the LLC can perform.

If you and your fellow partners (members) get into a dispute down the road, the first thing your attorney will want to see is a copy of your Operating Agreement.

Without that written document, it's going to be a battle of "he said, she said". As a litigator, I can tell you that these can be the most expensive cases to resolve.

Instead of being able to look at the document to work out the dispute, we have to rely on verbal testimony. Which means that everyone involved has to go through expensive and time-consuming depositions.

The good news is that you can get an Operating Agreement at a reasonable cost.

Legalzoom's LLC formation services include an Operating Agreement as part of their services.

If you already have formed your LLC, Legalzoom can prepare a customized Operating Agreement starting at $99 (as of November, 2008).