Major Decisions Clause
(90/10 Joint Venture Agreement)

Summary

This major decisions clause may be included in a limited liability company operating agreement (also referred to as a joint venture agreement). This clause includes practical guidance and drafting notes. This clause should be used when the minority member is the managing member of the joint venture (a common ownership split for two members is 90%/10%) and has the authority to make decisions in the ordinary course for the joint venture while the majority member retains decision rights in certain limited (but important) circumstances. The decisions that the majority member has consent rights to are known as "major decisions." The decisions listed in Section may be made in the sole discretion of the majority member. In this clause, the term "Managing Member" is what is commonly referred to as the minority and operating member of the joint venture and the "Investor Member" is what is commonly referred to as the majority and capital member of the joint venture. The capitalized terms and section references used in this clause should be conformed to the relevant joint venture operating agreement. See Limited Liability Company Operating Agreement (Real Estate Joint Venture) for additional clauses and definitions to be contained in a joint venture agreement and see Management of Limited Liability Companies for guidance on management provisions in joint venture agreements. For a full listing of key content covering real estate joint ventures (90/10 ownership split), see Real Estate Joint Venture Resource Kit (90/10 Real Estate Joint Venture). For a full listing of key content covering commercial real estate, see First Year Associate Resource Kit: Real Estate.