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INFOLAWYER
INFOLAWYER, Attorney
Category: Business Law
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Experience:  LICENSED BUSINESS LAWYER
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I am the co-owner of a multi-member llc, but we have no operating

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I am the co-owner of a multi-member llc, but we have no operating agreement. We only signed the articles of organization, applied for an EIN, and got a bank account. The business was my idea, but it was kind of dropped until her dad said it sounded like a good idea. We are a magazine that is free as we wanted to offer more media covering cheerleading (a sport that we are heavily involved in). My co-owner was supposed to do half of the work; however, she contributes nothing. I have asked her many times if she would like to leave the business, as this would be best for us both. In addition, throughout the process, she was supposed to help with the start-up costs, but she has had many excuses as to why she couldn't help as we have gone along. We have been in business for less than a year, and I want to keep it going rather than disolve the business. Is there any way that I could recover half, or even some, of what was put into it as we said we were co-owners. I have kept her involved in all of the finacial decisions, and I made sure that she knew how much we were spending and taking in. But, like I said when it came time for her to help, she never did. It was just excuse after excuse. Basically she just tells everybody that she is a co-owner, but does nothing. If the business is going to get out of the red anytime soon, some decisions need to be made, and she is just sitting on the fence hendering the business. If I can't recover anything, is there any way that I can keep the business going?
Submitted: 4 years ago.
Category: Business Law
Expert:  INFOLAWYER replied 4 years ago.
What specifically do you want to know?
Customer: replied 4 years ago.

Do I have any legal leg to stand on when it comes to getting her to split our current liabilities? Also, since there was no operating agreement, she believes that she was never legally the co-owner of the business, saying that she just formed the business and can just walk away, but I want some kind of signature stating that she is in fact no longer co-owner. I don't want her coming back and claiming that she deserves half of the assets. How do I go about this if she refuses to come to any agreement, splitting liabilities or not, she has refused to do anything (work or leave the business). Also, I feel as if I can't make any decisions (and there are some that need to be made within the next 2 weeks) without her because she is co-owner; however, like I said she is just sitting on the fence basically being mum. Can I make the decisions without her saying yes or no? Thanks!!

Expert:  INFOLAWYER replied 4 years ago.
By law a court would split assets and liabilities even without an operating agreement unless proof is provided of another arrangement between you. Consider a lawyer letter to press her to consent and avoid litigation, costly to both sides.
Customer: replied 4 years ago.
What is a lawyer letter?
Expert:  INFOLAWYER replied 4 years ago.
A letter from a lawyer seeking to obtain settlement and avoid a lawsuit.
Customer: replied 4 years ago.

One last thing, as the business continued to need money, we did not want to get a loan, so I personallly kept loaning money to the business. Therefore, I bank account is positive, even though our business lost money. Would we split what the business lost?

Expert:  INFOLAWYER replied 4 years ago.
If you advanced more money, you should be reimbursed and credited for those loans first.
INFOLAWYER, Attorney
Category: Business Law
Satisfied Customers: 50356
Experience: LICENSED BUSINESS LAWYER
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