I'm the majority equity and voting power holder in a multi-member LLC (Three members, I will call partnership). A year ago we had a partner's wife, who is a corporate lawyer, create a boiler-template type partnership agreement for all of us to sign.
Now we have a pool of 7 "Friends and Family" investors who have given us money. At the recommendation of this partner and his wife, we are restructuring the LLC and legally defining the equity structure for all investors in the "Friends and Family" round. They say the agreement "needs to be done right" so we are "restructuring" it. They have hired a lawyer on behalf of the partnership. They will be sending out a draft shortly so I can sign off on.
Truth be told, I can't understand these legal documents. Do I need to hire a lawyer to go over this document or do I trust my partner and sign it? Is amending the partnership agreement to include "Friends and Family" capitalization even common at this stage? For the most part, I trust my partner, but I'd like to avoid getting zuckerberged .
The general advice I can give is -
Trust No One How many times has the time-old tale of "I should of known..." been told? If there is any doubt, then have a lawyer review it to ensure you don't (accidentally or otherwise) get screwed. You are signing some very serious, legally binding contracts that can do some powerful things (even oust you of all ownership!). Be careful, if you cannot read and comprehend what the contract states, I highly recommend having someone who does (and who is not emotionally invested in your well-being nor the well-being of your business partners nor the well-being of the business itself) lookover and review/summarize to you what it does/means.
zuckerberged is around for a reason - he screwed over people who honestly never thought they'd be screwed. When money gets involved (especially lots of money) people and motivations change.
You could even be coy about this and just silently have a 3rd party review the document. The cost of a lawyer to read and explain the document to you is minimal for the peace of mind it may bring - especially if this is going to be a long-term and hopefully financially successful business. If the wife of someone emotionally invested in the business honestly wrote the document, then there could be things in the document that are more favoring your business partners instead of you. Who knows until you read and understand the document?!?!?
Anyways -- that's just my 2 cents. Remember that I'm not a lawyer myself, but this is what I would do if I were in this situation.