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Loren
Loren, Attorney
Category: Business Law
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Experience:  30 years experience representing clients .
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50% owner/managing membner of LLC is paying personal expenses

Resolved Question:

50% owner/managing membner of LLC is paying personal expenses out of company funds without informing other 50% owner/managing member. What to watch for in confronting him about this obvious embezzlement. His wife is also involved, as she keeps books for the company. Possible conspiracy as well?
Submitted: 5 years ago.
Category: Business Law
Expert:  Loren replied 5 years ago.
Hello,

As a member of the LLC, you have the right to sue for the manager for fraud and breach of the operating agreement and the fiduciary duty owed the company. The wife would be liable, as well, if she is complicit in the improper activity against the company. If they have misallocated funds from the company, the court could force them to not only pay back the funds, but also damages.

The operating agreement of the LLC controls the rights and duties of the members and manager. Review it carefully. The manager will no doubt claim these are reimbursable expenses.

In any event, you are urged to consult local counsel to protect your rights in this matter before taking any action.

Good luck. I hope it turns out ok for you.

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Loren, Attorney
Category: Business Law
Satisfied Customers: 20323
Experience: 30 years experience representing clients .
Loren and 10 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.
Thanks:

By the way, the credit card you have on file for me is no longer valid. Please let me know how to replace with a different one.   

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