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Can i start my own llc after my business partner filed

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personal bankruptcy...
Can i start my own llc after my business partner filed personal bankruptcy
Submitted: 2 years ago.Category: Bankruptcy Law
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Customer reply replied 2 years ago
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
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10/7/2015
Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago
Ely
Ely, Counselor at Law
Category: Bankruptcy Law
Satisfied Customers: 102,932
Experience: Licensed attorney in private practice.
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Hello and welcome to JustAnswer. Please note: (A) 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; and (B) please wait to rate until I ask you to do so. It may take a few replies for me to be able to render an complete answer. I will let you know when I do.

1) Is the company that you and your partner have/had still operational, or not? Was it a corporation, or an LLC, or neither?
2) Would this LLC be competing against the prior company?

3) What state is this in?

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Customer reply replied 2 years ago
Its operational and an LLC in florida. He filed a chapter 7 personal bankruptcy. he is a silent partner that recieved no profits.The New LLC would be in the same type of business
Customer reply replied 2 years ago
the only asset we have is a truck we own. it is a service based business, with customers with no contracts. i am the only one performing the work
Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago

Thank you.

The fact that he filed a personal bankruptcy really has no bearing on the LLC he partially owns as a silent partner. So this is not an issue.

However, what may be an issue is the breach of fiduciary duty of partners by starting a new LLC that competes in the market. Partners owe each other an inherent duty of LOYALTY. See HERE. Starting an LLC that competes with the existing LLC in which a partner holds interest (silent or not) may be a breach of that.

Unless he agrees to waive this matter in writing and okay it, then this may be a risk as a breach of loyalty may be a basis for a suit.

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. Please 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 by rating me positively.

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Customer reply replied 2 years ago
it would be up to him if it would be a problem? not the trustee of his bankruptcys? he wouldnt be conducting business in this industry once his bankruptcy is complete anyways
Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago

So it would be up to him if it would be a problem?

Yes.

not the trustee of his bankruptcys?

Correct. His personal bankruptcy really does not touch on his interest in the LLC unless his interest in the LLC is somehow part of the bankruptcy.

he wouldnt be conducting business in this industry once his bankruptcy is complete anyways

He has silent interest in the original LLC ("LLC1") that is conducting business and will continue to do so even after his personal bankruptcy ends. Right? So even if he personally is not conducting business in that industry, the LLC1 will be doing so, right? Then as his partner, you cannot start another LLC ("LLC2") that competes with the LLC1 because you owe your partner(s) a duty not to engage in business that hinders your mutually-shared LLC1.

So you would want him to sign a waiver in most circumstances.

Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.

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Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know. Thanks!

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Customer reply replied 2 years ago
just curious where I could obtain said waiver? or do we just write up one? thanks
Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago

This would have to be drafted. Let me know if you need an example.

Gentle Reminder: Please, use REPLY or SEND button to keep chatting, or RATE POSITIVELY and SUBMIT your rating when we are finished. You may always ask follow ups at no charge after rating.

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Bankruptcy Lawyer: Ely, Counselor at Law replied 2 years ago

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know. Thanks!

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Ely
Ely
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