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RGMacEsq
RGMacEsq, Attorney
Category: Business Law
Satisfied Customers: 16189
Experience:  Licensed Texas General Practice Attorney
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LLC Partnership dissolution agreement question

Customer Question

LLC Partnership dissolution agreement question
Submitted: 1 year ago.
Category: Business Law
Expert:  RGMacEsq replied 1 year ago.
Thank you for using JustAnswer. What is your question?
Customer: replied 1 year ago.
In regards ***** ***** llc partership... if we want 1 partner to not be in the partnership, do we need to pay her back the initial investment capital? eventhough there's no profit?
Customer: replied 1 year ago.
you there? is this like chat?
Expert:  RGMacEsq replied 1 year ago.
A dissolution is just that: dissolving the partnership. It's not a method to take only one partner out of the LLC and the LLC still survive. Now IF the LLC dissolves, and there's not a member agreement that says otherwise, anything left would be distributed to partners based on their final capital account balances after adjusting for all profits and losses. So it's not necessarily true that she gets back "everything" that she contributed, because after losses are taken into account, it might be less.
Expert:  RGMacEsq replied 1 year ago.
Yes I am. I can only type so fast.
Customer: replied 1 year ago.
lol.
Expert:  RGMacEsq replied 1 year ago.
Now if the LLC survives, then it's entirely what you can agree upon for her to exit. That ultimately would be up to her as it would require her voluntary assent (absent a provision in an LLC member agreement that governs forced exits of members).
Customer: replied 1 year ago.
the business started 3 months ago, & we are in debt. but, her partnership has contributed only capital thus far. we are in debt. so, are we obligated to pay back her initial investment if we dissolve partnership tomorrow?
Expert:  RGMacEsq replied 1 year ago.
No. See what I said above. The capital account balances will need to be adjusted for losses (meaning that the debts incurred since she joined will be apportioned in proportion to the percentage ownership of each member). After that adjustment, what is left would need to be paid to her.
Customer: replied 1 year ago.
ok. whats the best way of resolving this? closing or dissolving the llc itself?
Expert:  RGMacEsq replied 1 year ago.
That's the same thing.
Expert:  RGMacEsq replied 1 year ago.
The legal term is dissolving. The everyday term is "closing".
Expert:  RGMacEsq replied 1 year ago.
Did you have any other questions before you rate this answer?
Expert:  RGMacEsq replied 1 year ago.
Hello?