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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 37862
Experience:  Run my own successful business/contract law practice.
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I started an LLC company in December of 2008 with another business

Customer Question

I started an LLC company in December of 2008 with another business partner. i personally put $20K in to the start up, plus signed a PG on the RETAIL office space (lease in my name, not company name), i along with the other partner brought previous existing clients to the now new LLC together. I personally opened up the bank accounts using my social security
Submitted: 4 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 4 years ago.

Thank you for your question.

I will do my best to assist you with your issue. While I am permitted to provide you with legal information, I am prohibited by JustAnswer.com as well as various state bar associations from giving specific legal advice, provide representation, or enter into an attorney-client relationship through this open and non-confidential forum. Do you understand and agree to these provisions as well as JustAnswer.com's disclaimer?

Sincerely,


Dimitry Alexander Kaplun, Esq.

Customer: replied 4 years ago.
yes, i understand, just want to make sure that i am not doing anything that will legally get me into trouble. I have no problem walking away and releasing myself from future liability with the company, but by my other partner deciding he can lock me out of a building i have signe a pg on, i feel i am the one that is responsible for the lease and can ask him to leave, let alone locking me out of my working database? this is just ridiculous, it is not his sole decision right?
Expert:  Dimitry K., Esq. replied 4 years ago.
Thank you for your consent.

No, I do not see opening a commercial lease under your name is XXXXX XXXXX is illegal or can get you into trouble. An LLC by itself, if it breaches a contract or breaks the law, and if you are a principal owner in the company, you may then be held liable, but not for anything else.

In terms of a lock out--if the lease on the premises is under your name, you are free to remove him from the premises and he cannot lock you out. You are the lessee, not him--if he chooses to lock you out, you are free to forcibly re-enter (that is, use a lock cutter), remove his items and him as a trespasser, and lock him out of the business.

The database is jointly owned meaning that one should not be able to lock out the other, but that is based on how the DB is actually written and coded. If he locked you out, consider filing a lawsuit against him for tortious interference with your business interest and sue him for damages that you are incuring.

hope that helps.

Edited by Dimitry Alexander Kaplun on 9/3/2010 at 5:26 AM EST
Customer: replied 4 years ago.

Thank You, XXXXX XXXXX better now and will act on that tomorrow. if i chose to release myself from the lease and remove my name from the LLC, all liabilities, do i also have the right to half of the monies in our Profit Account as it sits the day i decide to remove myself from the company?

 

Expert:  Dimitry K., Esq. replied 4 years ago.
You are most welcome. I am truly happy to hear that I helped.

If you choose to release yourself from the lease, you will need the landlord to formally release you. If the property is still under contract, the landlord may choose to keep you on the contract so that you can still be liable in case of late rents. This persists even if you remove yourself from the LLC, as you gave a personal guaranty on the debt. I would suggest that you speak with the landlord first.

In terms of monies, while you are entitled to it, if by removal of those funds you cause harm to the company, your partner can then file suit against you for tortious interference. As you are leaving the entity, you would then have to follow the dissolution rules either set forth in your articles of incorporation or operation, or under state law--you generally cannot remove funds from a working business but must wait until the shareholders agree to buy each other out.

Hope that helps.

Edited by Dimitry Alexander Kaplun on 9/3/2010 at 6:07 AM EST
Customer: replied 4 years ago.

i see, so that i am clear and then i am going to accept your answer and end my endless questions.

 

i have a trust account (the account we remit to our clients for their profit "portion" from the debt our firm collected on a contingency basis), so as long as i dont touch that account and leave him the monies to properly pay the clients i am okay.

 

in other words, the profit account is the account money is transferred to after all expensed paid, so by me taking my half of the balance from that account, i dont feel i am leaving him in a situation that is causing harm to his day to day business activites. am i correct in that assumption? thanks again, your insight and experience is going to make me able to sleep tonight.

Expert:  Dimitry K., Esq. replied 4 years ago.
Thank you for your follow-up.

If you have follow-up questions, that means you are reading my answers. That's a good thing, and please feel free to ask until satisfied.

Yes, if you do not touch money that is used for operating expenses, wages, rents, and other day-to-day remittance, you should be fine. If the "profit" account permit you to pay yourselves a salary, and draw wages, AND you have a right to cut checks from it, then yes, you can pay yourself out of it. Just be aware that until formal dissolution takes place, you remain liable on the debts, and the amount you withdraw may be greater or lesser than what is ultimately owed to you for your interest in the business (once you perform the dissolution calculations).

Good luck.

Edited by Dimitry Alexander Kaplun on 9/3/2010 at 6:37 AM EST
Customer: replied 4 years ago.

we do use that account to pay wages, rent and utilities, we have paid everything for the month of September 2010, so let's say that after those are all accounted for and i decide to walk away in the month of September, all wages, rent etc are paid, i should be able legally to access half of the remaining balance in our account?

 

i am fearful that he is going to go the bank and do something and leave me hanging, can i take my half now, stay on the company (meaning i am acknowledging full liability) and then work out an amicable seperation for a certain dollar figure later?

 

 

Expert:  Dimitry K., Esq. replied 4 years ago.
I really cannot answer that question for you. You are asking me to give you license to remove funds from the operating account, especially after I specifically stated that doing so will bring you at risk of liability. Ultimately that will be your choice, and if the other person believes that his business suffered harm due to your withdrawal, he will have a cause of action.

Good luck.

Edited by Dimitry Alexander Kaplun on 9/3/2010 at 6:57 AM EST
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 37862
Experience: Run my own successful business/contract law practice.
Dimitry K., Esq. and 12 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
my apologies, i understand now reading it back. i understand what you are saying. thanks again for your answers, greatly appreciate.
Expert:  Dimitry K., Esq. replied 4 years ago.
You are most welcome. Good luck to you, and hope everything works out!

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