How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Richard Your Own Question
Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 53953
Experience:  32 years of experience practicing law and a businessman.
17027240
Type Your Business Law Question Here...
Richard is online now
A new question is answered every 9 seconds

I am a member of a member-managed LLC and I desire to open

Resolved Question:

I am a member of a member-managed LLC and I desire to open a new business which will not directly compete with my current LLC but would utilize many of the same contact people and is in the same area of business. The members and I have discussed branching into this field in the past, b/c the new venture is a natural extension of what we are doing now, but have never done so. Would I be breaching my duty of loyalty by starting this new business prior to letting anyone know?
Submitted: 4 years ago.
Category: Business Law
Expert:  Richard replied 4 years ago.

Good morning. In these situations, when one doesn't want to let the others know, it's a pretty good indicator that one shouldn't probably do it without disclosure. To avoid this problem in the future, it's good to put a provision such as the following in the Operating Agreement:




Members Engaging in Other Business.

The Members may engage in or possess an
interest in other business ventures of every nature and description,
independently or with others, whether or not competitive with the Company or the Company's business, and neither the Company nor the other Members shall have
any right, by virtue of this Agreement, the relationships through the Company
or otherwise, in and to any such independent ventures or to the income or
profits derived therefrom.





I hope this has given you
information that has been helpful to you. If the information seems more general
than specific, please be aware that we are only allowed to provide information
and not specific advice.
If you have a follow-up question, please
remember that there might be a delay between your follow up questions and my
answers because I may be helping others or taking a break.
If you need additional clarification on this question, please do not
hesitate to click Reply and I will be happy to do what I can to help you
further. Thanks for allowing me to be of service to you. Please be aware that
the information provided here is not legal advice. Rather it is simply general
information. All states have intricacies in their laws and
any information given is simply information only and specifically is not
intended to be, nor does it constitute, legal advice. This communication does
not establish an attorney-client relationship with you. I hope this answer has
been helpful to you.



Richard and 3 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.
Would anyone want to join an LLC with me if I require them to allow me to compete with them?:) Thanks for your help!

Related Business Law Questions