Limited liability companies (LLC) generally do not have shareholders. Their contributors are called members, and the agreement between them is the membership, or operating, agreement. Those with specific LLC questions should consult a business law attorney.
In the early stages of forming an LLC, one of the first steps is the membership agreement. Those who form the LLC must decide how the LLC will operate. These issues included who will manage the company, how profits and losses will be divided, how the LLC may terminate and any additional rights that the members will have in making important company decisions.
As a governing document for the company, the membership agreement is a serious legal contract, subject to all requirements of contract law. All members must sign the agreement, as well as any future amendments to the agreement.
When the membership agreement fails to address some event, state law will apply. Many states have enacted their own LLC acts to govern LLC formation and operation. State courts will also often use partnership law in order to fill in gaps not covered by the new LLC law.