Does my silent partners needs to be in my LLC

[Brenda B.]

Hello everyone! I have a silent partnership agreement with a friend in where we established the I will be the managing partner and he will be the silent partner. Me as the Managing Partner shall have full and sole authority and responsibility for managing and operating the business of buying, flipping, and renting of real estate properties.

He as the Silent Partner shall not participate in the day-to-day management or decision-making of the business of buying, flipping, and renting of real estate properties.

My question is, when establishing my LLC to buy the property do I have to add him as a member of the LLC in the certificate of formation? Thanks!

[Andrew Syrios]

If he's an equity partner than yeah, he or his LLC should be in the LLC as a member. The LLC operating agreement should spell out each of your roles and make clear you are the decision making partner and he is the silent partner. You'll also want to come up with the process for dissolution if that comes to be as it often does in partnerships unfortunately.