LLC needing advice on growth and partnership info

[daoven]

I currently own a single member LLC in Kentucky. We are growing and I am looking at adding an Employee or Partner. The person I am looking to add as a potential employee or partner is a guy that has been with us since day one as an "independent contractor". I trust him and he is very loyal and I need to find a way to retain him. He is currently in a place in his life where he can up root and move to my location and we can open an office together and be much more efficient, organized and productive with us both working in the same location. I do not have alot of capital right now to hire him as an employee and I dont think financially with having to pay him a set wage I could do that. That is why I am entertaining the option of making him a minority owner in the LLC. I also think its something I should do be cause he is an important part to the business. I will list some important details below and look forward to any feedback anyone can help with.

Right now as an independent contractor he maxes XXX per person that signs up with our service that he sends to us.

Questions Im trying to figure out.

Can I still take distributions of profits through out the year if I am the LLC MANAGER and its stated so in the operating agreement?

Can I pay him extra in distribution of profits each month based on his performance ?

Can my DOP be larger than his if states in the Operating Agreement?

Being the LLC Manager Can I still have the LLC cover my health insurance? Can I cover his health insurance if I so choose?

Can I set an annual amount to go towards his buy in stake in the operating agreement?

If I mover forward with all of this does he have to go on the bank account?


Thanks again for any and all feedback.

[vangogh]

Welcome to the forum daoven. This isn't my area of expertise, so I apologize for not having any good answers to your questions. I did want to welcome you though and also reply here to help get the attention of those who will be able to provide answers.

The general idea of making this contractor a limited partner makes a lot of sense to me. If he's as important to the success of your business as you say, then it definitely seems like a good idea to get him into the business. Again I'm not the expert on this, but I would think the answer to all your questions (except the last) is yes. I don't think his name has to go on the bank account. That should be specifically for the business and not the individuals anyway. I don't think you'd have to give him access to it. The money part where you're getting paid and he's getting paid should have some workable solution. Similar to the health insurance questions.

Hopefully someone with more expertise with LLCs will be able to provide the details.