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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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I have a llc s corp with no atricals of corperations i am

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I have a llc s corp with no atricals of corperations
i am having issues with a 49% owner i have 51%
my question is can i sell the assets with out consent of the other partner
Not that it matters but the partner is my father and is not in good health and of sain mind.
Submitted: 1 year ago.
Category: Business Law
Expert:  MShore Law replied 1 year ago.
Thank you for the post, I am happy to assist you by answering your questions. Would the sale of the assets be under protest from the minority shareholder? Also, has the minority shareholder been adjudicated as mentally incompetent?
Customer: replied 1 year ago.

the sale of the assets would not be under protest per-say if i sell the assets and he wont agree to a final sale price (witch i foresee), then he would be under protest. and no he ha not been declared incompetent yet, i have to figure that one out next.


 


he had put money in to our llc and is now declaring it a loan


hence the potential sale of some assets


I do not no if it makes a difference but the business is located in Maryland.

Expert:  MShore Law replied 1 year ago.
Thank you Matt, is it the case that your father just wants his money back that was invested in the LLC? If so, then as part of agreement to return the money that he considers to be a loan, you should require that he agree to forfeit his interest in the LLC making you 100% owner of the LLC. To properly execute this arrangement, you should strongly consider having a local attorney draft an agreement to be executed between you and your father whereby in exchange for the proceeds from the sale of certain LLC assets, he agree to forfeit his interest in the LLC considering himself no longer a member per the effective buy out of his interests in the LLC. Please let me know if this would not be a viable solution, or if you have any follow up questions.
Customer: replied 1 year ago.

that will be the most logical option yes. I am getting to that soon, but we cannot reach a nominal figure for the assets to even attempt to pay


 


for instance


john and wane have a saw


john wants to sell it for just below list value


and wane wants above list value


they cant agree on a price to sell the saw for


 


there's my issue


i would like to sell the equipment out right and get cash to pay him


to get him off my business but if i don't have the authority to determine final sale price i can not even attempt on paying him any thing


 


family is usually the worst in situation like this


the articiale of corporations wasn't declared for sale, investment or structure other than persent of ownership


 

Expert:  MShore Law replied 1 year ago.
Thank you for the additional information Matt, do you have an operating agreement in place for the LLC?
Customer: replied 1 year ago.

no

i feel like i don't even have to pay back his investment

sense it was never established that it was a loan

in an operating agreement am i correct?

 

 

Expert:  MShore Law replied 1 year ago.
Yes, you are correct, but depending on the amount of money he claims was a loan it may be worthwhile just to treat it as a loan to rid him of the business. How much is he claiming he loaned the business?
Customer: replied 1 year ago.

$200,000 allegedly, on the books i have found $140,000

i am a small business who is under the 5 year hurdle doing very well but the profits at the end are not there yet

that kind of figure would force me to shut down or be digging out of a hole for a long time. my business has little to no debt

the assets that were purchased add aprox 20% gross sales to my revenue, and selling them would be a feasible option

times are tight and every dollar is accounted for

Expert:  MShore Law replied 1 year ago.
Thank you Matt, as the majority owner of the LLC with no operating agreement you are able to manage the LLC as you reasonable deem fit. you can sell the LLC's assets so long as the sale price of such assets is reasonably in line with the fair market value. Your minority shareholder would not have a viable claim against you in such case as your sale does not breach your fiduciary duty to the LLC or unreasonably diminish the value of the minority owner's interest in the LLC. Prior to such sale you should present a proposal to the minority shareholder laying out the options he has with respect to the sale of the assets in question and release of his interest in the LLC, indicating that if he wants to sell his shares then the LLC would agree to pay a reasonable sum for them. Please let me know if you need additional guidance or have any follow up questions.
Customer: replied 1 year ago.

thanks very helpful


one more though


is there any thing more that i can do to get him off this business with out him suing me for the money invested


i have thought about the mentally incompetent aspect and realized that can be very tough to prove

Expert:  MShore Law replied 1 year ago.
Unfortunately, the only thing you could do to remove him from the business without his consent would be to sue him claiming he is disrupting the business or otherwise breaching his fiduciary duty to the business via negligent or unreasonable acts, and arbitrate the dispute to compel the sale of his interest in the business to you.
Expert:  MShore Law replied 1 year ago.
Do you have any follow up questions? If not, please positive rate my answers as I do not receive any credit for assisting you otherwise.
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience: Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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