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 socrateaser Your Own Question

socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 34170
Experience:  Retired (mostly)
10097515
Type Your Business Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

One of the my business partners in a Texas LLP wants to walk

Resolved Question:

One of the my business partners in a Texas LLP wants to walk away and start a similar business. Does he first need to give up his shares in our current business before he starts to solicit our customers?
Submitted: 1 year ago.
Category: Business Law
Expert:  socrateaser replied 1 year ago.
Hello,

TX Bus. Org. Code Chapter 152 and 153 require that a partner not compete with the partnership (Section 152.205(3)). However, no statute or case law directly applies this duty on limited liability partners.

In Strebel v. Wimberly, 371 S.W.3d 267 (Tex. App. 1/12/2012), the court of appeals extends the duty of loyalty to "limited partners" who engage in the management of an LP. But, no case law has similarly held a general duty of loyalty for partners of an LLP.

It seems logical that LLP partners, who are generally authorized to engage in the management of a partnership would be liable for the duty of loyalty, regardless of whether or not they actually engaged in management -- because unlike with limited partners, limited liability partners are expected to manage the business.

Therefore, the answer here must be "yes," an LLP member breaches his/her duty of loyalty if he/she competes with the LLP, prior to completely dissociated from the LLP.

Hope this helps.
Customer: replied 1 year ago.

Thanks, XXXXX XXXXX be the process for him to dissociate himself from the company?

Expert:  socrateaser replied 1 year ago.
A formal letter of withdrawal from the partnership by the dissociating partner combined with the redemption of the partner's financial interest in the partnership at fair market value are the two requirements. Assuming that the LLP does not, or cannot redeem the dissociating partner's interest, then there is no dissociation, and the partner remains obligated to the LLP.

The dissociating partner could sue the LLP for refusing to redeem in circumstances where the LLP can afford to redeem, under the theory that the LLP was attempting to restrain the dissociating partner from competing. This option would not be available, were there a partnership agreement that prohibits competition for a certain time period. Based upon your previous allegations, I doubt that there is any noncompete in play.

Hope this helps.
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 34170
Experience: Retired (mostly)
socrateaser and 8 other Business Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
< Last | Next >
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Attorney

    Satisfied Customers:

    1426
    20 years experience in business law - sole proprietor, partnership, and corporations
  • http://ww2.justanswer.com/uploads/DC/DCraneEsq/2012-8-14_14436_DCrane.64x64.jpg MShore Law's Avatar

    MShore Law

    Attorney

    Satisfied Customers:

    1233
    Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    1162
    25 years of experience helping people like you.
  • http://ww2.justanswer.com/uploads/dkaplun/2009-05-17_173121_headshot_1_2.jpg Dimitry K., Esq.'s Avatar

    Dimitry K., Esq.

    Attorney

    Satisfied Customers:

    1142
    Run my own successful business/contract law practice.
  • http://ww2.justanswer.com/uploads/ohioatty/2009-1-22_185545_me.jpg J.Hazelbaker's Avatar

    J.Hazelbaker

    Attorney

    Satisfied Customers:

    393
    Experienced and trained in the area of business law.
  • http://ww2.justanswer.com/uploads/scottymacesq/2009-6-10_221523_small.jpg RGMacEsq's Avatar

    RGMacEsq

    Attorney

    Satisfied Customers:

    393
    Licensed Texas General Practice Attorney
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Attorney

    Satisfied Customers:

    301
    13 years practicing attorney, MBA