Unit 9 discussion topic: corporate operating agreements throughout

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Unit 9 Discussion Topic: Corporate Operating Agreements

Throughout this course, many discussion opportunities come up where you need

to respond to other people's opinions and comments. Then, respond to your

Discussion topic after you have completed your Reading.

Ron Cardigan, son of Camille and Ray (Camille’s first husband) has met with

Camille and Candie to form a limited liability company designed to be a place

where young future clothing designers can work as part of an internship before

entering fashion design school. Ron contributes 40% of the capital, and Camille

and Candie each contribute 30%. Because it was Ron’s idea, he assumes he will

receive more of the profits than Camille and Candie. Further, his contribution was

greater than each of theirs. Camille and Candie feel they should all split the

profits equally, as everyone has a unique talent that is being brought forth to run

the new business. A dispute over the profits arises, and ultimately a court has to

decide the issue.

Determine the following:

1. What law will the court apply?

2. In most states, what will result?

3. How could this dispute have been avoided in the first place? Assess fully.

Justify your answer using information from your Reading and be sure to:

4. Assess the laws that govern the limited liability companies [Uniform

Limited Liability Company Act (ULLCA)].

5. Evaluate how these laws frame our scenario and how a court would rule.

6. Conclude how Ron, Camille, and Candie could have avoided the dispute

by creating an operating agreement and integrating operating procedures

into a written agreement.

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