Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
Member-managed LLCs work like this: All members participate in the decision-making process of the LLC. Each member is an agent of the LLC and each member has a vote in business decisions...." (LLRX) Each member has the authority to make decisions on behalf of the company, but contracts and loan agreements must be approved by a majority of the members.
Manager-managed LLCs relinquish the authority of the members to the manager or managers, who become agents of the company. A manager may be a member but does not have to be. A manager may be another LLC or a corporation, unless your state sets restrictions on the types of entities that may be managers of an LLC.
Yes. Under the Franchise Agreement the Franchisor must approve any change in control. There is also a fee associated with the transfer/approval.
The LLC is member managed with myself and the other member each having a 50% membership interest. The operating agreement contains a buy/sell provision with a 30 day notice provision and a right of 1st refusal belonging to the entity.
I wish for the transfer to be temporary, preferably conditional. (Something like after the loan is funded, I must be allowed to repurchase my interest for a designated price.) The goal is not to remove me permanently, just to clear the way for the financing and re-establish my membership in the company without triggering the approval process (or any associated charges) with the Franchisor.
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).