Application of the Law to Legal Questions Free Essay Example, 1250 words

John, Lesa, and Tabir form a limited liability company. John contributes 60 percent of the capital, and Lesa and Tabir each contribute 20 percent. Nothing is decided about how profits will be divided. John assumes that he will be entitled to 60 percent of the profits, in accordance with his contributions. Lesa and Tabir, however, assume that the profits will be divided equally. A dispute over the profits arises, and ultimately a court has to decide the issue. What law will the court apply? In most states, what will result? How could this dispute have been avoided in the first place? Discuss fully. The law that the court will apply will definitely come from the application of the law with regard to the state. Since the partners all formed a limited liability company, just because John assumes he will get 60 percent of the profit for having donated 60 percent of the money to the cause, this is not a logical assumption. It might be a natural assumption, but, when a limited liabilit y company forms, it is not necessarily the duty of the company to divide the profits with the ratio of who invested what into the company unless an agreement was written down on paper, which could have avoided problems. Since a court can only go by official records, in most states, the courts would probably find for Lesa and Tabir here. Walter Van Houten and John King formed 1545 Ocean Avenue, LLC, with each managing 50 percent of the business. We will write a custom essay sample on Application of the Law to Legal Questions or any topic specifically for you Only $17.96 $11.86/page