Adjusting LLC Ownership Share


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We have an LLC with 5 members. The breakdown of ownership is that three people have 27%, one person has 6%, and the last has 13%. Because we have to take the money out each year, we'd like to be able to adjust the ownership each year based on annual contribution. For instance, the member that currently owns 6% did very little and we would like to reduce his ownership to 2%. This is a mutual decision and the varying ownership is based off a contribution formula which we have each accepted.

The crux of the question is, can we change our ownership annually? And maybe the follow-up question is whether there is a reason that we shouldn't.

Thank you.

/rich
 

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