Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.
Good afternoon. It depends upon the existing operating agreement. If the existing operating agreement is silent regarding additional amounts needed, then before one party puts in any additional money, the owners need to agree on whether these funds will be treated as capital contributions or loans. If capital contributions, whether the ownership will change and/or the new contributions will be given any preference regarding priority of distributions. If loans, what rate of interest will they bear. If the parties cannot agree, then the one wanting to salvage things should force a dissolution to get the other non-paying party out of the LLC.
I hope this has givenyou information that has been helpful to you. If the information seems moregeneral than specific, please be aware that we are only allowed to provideinformation and not specific advice. If you have a follow-upquestion, please remember that there might be a delay between your follow upquestions and my answers because I may be helping others or taking a break.
If you do have any additional questions aboutmy answer please click the "ContinueConversation Link" so I can provide you with a fullysatisfactory answer. Pleasebe aware that any rating of 1 or 2 is reflected as a negative rating and I receiveno credit for my answers.
Thanks for allowing meto be of service to you. Please be aware that the information provided here isnot legal advice. Rather it is simply general information. All states have intricacies in their lawsand any information given is simply information only and specifically is notintended to be, nor does it constitute, legal advice. This communication doesnot establish an attorney-client relationship with you. I hope this answer has been helpful to you.
If there is no operating agreement, the ownership interests under the Limited Liability Company Act are based upon capital account balances so that the ownership percentages change automatically as capital is contributed. But, before one party continues to take all the risk, the parties should come to a definitive agreement going forward.
Does the LLC have any value now if you were to liquidate all the assets and pay off all the LLC liabilities?
If all is sold (land and building) it may be able to pay off loan. The other owners are willing to put up the money needed to keep the business open but want me to borrow it from them (my share)(make a loan to me) . I do not like this option or their business plan going forward.
If you are not personally liable for the debt, and would get nothing from the dissolution, as long as the other party is willing to put up the additional money, then if it were me, I'd let them in hopes they can turn things around. The limited liability of the LLC would protect me from any personal liability. But, I would not agree to any personal liability by way of a loan...they can either put all the money up or buy your interest or dissolve the LLC, but they cannot force you to sign any loan or unilaterally cause you to be personally liable for anything they fund.
If you are worried about the loan liability, you would want to force the liquidation and dissolution of the LLC to pay off the loan. Otherwise, you are probably well served to continue to get the write offs, but refuse to sign anything creating any further personal liability. If they want to salvage things, it needs to be their risk. Otherwise, file a suit to dissolve and liquidate.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).