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Ely
Ely, Counselor at Law
Category: Legal
Satisfied Customers: 101731
Experience:  Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Recently an LLC in the state of Texas was created, we

Customer Question

Good morning, recently an LLC in the state of Texas was created, we decided that one of the four partners needs to go, however he does not want to sell, the company has no assets or any capital contribution was stated in the company agreement what can be done? We would like to keep the same company name and EIN.
Regards,
HT
Submitted: 1 year ago.
Category: Legal
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note: This is general information and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

I am sorry to hear about this situation. What is the reason for them going - did they do something illegal? Steal from the company? Etc. Perhaps breach a fiduciary duty?

This is not an answer, but an information request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.

Customer: replied 1 year ago.
There was nothing illegal done, simply we decided that no longer want to work with him.
Expert:  Ely replied 1 year ago.

Thank you. Does the partnership agreement have a buy out clause? Or there is no buy out clause? Or no partnership agreement?

Customer: replied 1 year ago.
There is a partnership agreement, however it does not mention any exit clause perhaps I can add the agreement
Expert:  Ely replied 1 year ago.

No, that is okay. Thank you. On this website, I do not always get to give good news, and this is one of these times. I understand that hearing things less than optimal is not easy, and I empathize. Thanks in advance for not "shooting the messenger."

Without a buy out clause that allows other partners to buy out the one partner in question without his agreement, then there is really no way to force him to quit. If the LLC is not functioning because of him, then the 3 partners can file in Court seeking for some kind of a resolution. The Court would appoint a receiver to control the LLC while the suit is pending to ensure that it does not fail, and would then proceed to work out some kind of equitable (fair) order if the parties simply cannot work together.

However, there is really no other way, otherwise. I am very sorry.

Please note: If I tell you simply what you wish to hear, this would be unfair to you. I want to be honest with you and sometimes this means providing information that is not optimal. Negative ratings are reserved for experts who are rude or for erroneous information. Please rate me on the quality of my information; do not punish me for my honesty.

I hope this helps and clarifies. Gentle Reminder: Use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how I get credit for my time with you. Rating my answer the bottom two faces/stars or failing to submit the rating does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith.