how is ownership % of an llc determined

Sales, marketing, and having customers are crucial to any business, even a law firm. Sales and marketing can require as much time and work as installation, maintenance and upgrade work. Finding a replacement for an ISP engineer is a lot easier than luring away customers and holding onto them. Distributing profits and distributions of cash in shares that are different from your contributions can have some surprising and unpleasant tax effects. For example, if a 45% share was worth $30K and a 20% share was worth $15K, then the IRS or FTB might decide that a 35% share was worth $20K-$25K. Since it was be earned by services, the IRS and FTB might treat it as a payment-in-kind of $20K-$25K for future services. Since it was not disclosed as income, there is no statute of limitation on the government claiming the taxes on it, plus penalties and interest. If this company was not structured by an attorney who understands these tax rules, you may want to consult with one right away. April 15 is two weeks away. If you appreciate this free advice, please remember to refer me to any friends or acquaintances who need a lawyer. Referrals are still our best source of new business. Do you have a revocable living trust to protect your heirs against probate? Probate takes forever, is expensive, and is annoying. Do your family a favor. Set up a trust, and put all your property, especially any real property, into the trust. Since it is revocable, you can change it, add to it, take property out of it, or even cancel it completely, at any time. We set up such trusts, provide a pour-over will as a back-up for any property that does not make it into the trust, provide you with blank durable powers of attorney for health care and financial decisions, in case you become incapable of making such decisions while still alive, and convey one piece of real property to the trust, usually the family home, for $1500.00. If you would like to hire me to do this, let me know, and I'll send you a list of the information I need. Dana Sack  

It would be very difficult for them to modify your percentage ownership without your consent. Perhaps a compromise of modifying salaries and/or bonuses could accomplish similar goals.