Old 322B law: The old LLC's member's capital contributions determined the proportion of distributions received (including upon termination) unless the member control agreement stated otherwise. This is the same for profits and losses.
New 322C law: The New LLC law defaults to member managed (see New LLC Management Structure) and provides equal voting power (see New LLC Voting Rights) and defaults to distributions made per capita (equal shares among each member) and upon termination equal after return of each members capital contribution. The New LLC Law does not address profit and losses to members considering this a tax matter to be expressed by the members in their operating agreement. Remember the operating agreement includes all agreements verbal, written and even implied by conduct, see New LLC Governing Agreement).
Issues to Consider: The distribution rights of the 322B LLC (including default proportional to contributions) will remain the same unless its operating agreement is amended. However remember that the operating agreement now includes all documents and agreements including verbal and implied by conduct (See New LLC Governing Agreement). Consider how you want distributions to members and that your operating agreement (collectively under the New LLC law) reflects that.
Ronan R. Blaschko, Bankruptcy Attorney primarily serves the Dakota County, Ramsey County, Hennepin County, Washington County and Scott County areas in Minnesota, including cities Saint Paul, West St. Paul, Inver Grove Heights, Eagan, Apple Valley, Burnsville, Cottage Grove, Mendota Heights, Minnetonka, Richfield, Edina, Eden Prairie, Bloomington, Golden Valley, New Hope, Plymouth, Maplewood, Oakdale, Stillwater, Lake Elmo, Roseville, Little Canada, Minneapolis, Woodbury and Afton in in Minnesota.