Kiritsis & Associates



Law Offices of Kiritsis & Associates

212 922 0005

Author: John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M


The distribution of profits and losses among members of a limited liability company (LLC) is a crucial aspect of the business that should be addressed in the operating agreement. The operating agreement should include the following information related to the distribution of profits and losses:


Profit and loss allocation: The operating agreement should specify how profits and losses will be allocated among the members. This could be based on a set percentage, a tiered structure, or some other agreed-upon method.


Distributions: The operating agreement should specify when distributions will be made and the method for calculating the amount of the distribution. This could be based on a set schedule, such as quarterly or annually, or based on the financial performance of the business.


Capital accounts: The operating agreement should establish individual capital accounts for each member, which will reflect their contributions to the business and their share of profits and losses.


Minimum distributions: The operating agreement may specify a minimum amount that must be distributed to each member, even if the business is not profitable.


Right of first refusal: The operating agreement may include a right of first refusal provision, which gives existing members the right to purchase an outgoing member's share of the business before it is sold to a third party.


Distributions to non-members: The operating agreement should specify if and how profits or losses will be distributed to non-members, such as investors, partners, or other stakeholders.


Having a clear and detailed operating agreement can help ensure that the distribution of profits and losses is handled fairly and transparently among members, and can minimize the potential for disputes. It's important to review the operating agreement periodically and make updates as necessary to reflect changes in the business or the members involved.


New York Business Corporation Law

New York Limited Liability Company

New York General Obligations Law

NYS Office of Professions

U.S. Constitution


Whether you are a new business startup or a well-established company, our law firm can help you with all of your business law legal needs. For a free consultation, you can call us at 212 922 0005.


Law Offices of Kiritsis & Associates

Phone # 212 922 0005

Manhattan Office (Main Office):

633 Third Avenue

New York, NY 10017

Suite 1306

Brooklyn Office (By Appointment Only):

1023 74th Street

Brooklyn, NY 11228

1st Floor

New Jersey Office:

7309 Ventnor Avenue

Ventnor, NJ 08406

2nd Floor



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Phone# 212-922-0005


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