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I am a 25% owner/member of an 8-month old LLC in AZ with no

Customer Question
OA. There are four partners...
I am a 25% owner/member of an 8-month old LLC in AZ with no OA. There are four partners. I wish to resign/leave the LLC immediately without verbal discussion with the Partners (past discussions have been quite ugly!) What steps do I take to resign? Am I entitled to 25% of the money in the bank accounts that was not paid out to the partners? Will I still be liable for my portion of the lease upon resignation?
Submitted: 8 years ago.Category: Business Law
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7/3/2009
Business Lawyer: J.Hazelbaker, Attorney replied 8 years ago
J.Hazelbaker
J.Hazelbaker, Attorney
Category: Business Law
Satisfied Customers: 4,385
Experience: Experienced and trained in the area of business law.
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The terms of the OA provide the only mechanism for you to exit the LLC, short of litigation. There should be several paragraphs that address the exit by a member and buyout procedure.

 

Typically, the terms include the exiting member recuping his/her initial contribution. Where the LLC has been profitable, it could include a share of those profits equal to the members % interest. Again, however, these issues will be addressed in the OA.

 

To initiate the process, I would send a certified letter return receipt requested to each of the other members stating your withdrawal and demanding the distribution you are entitled to based on the OA's terms. In the rare event that the OA is silent on the matter, then I would demand the monetary equivalent of my full membership interest.

 

As long as you did not personally guarantee the lease, you will not be responsible for it upon leaving the LLC.

 

Please let me know what follow-up questions you may have.

 

 

The information is provided for discussion and entertainment purposes only. I believe in helping people and answering their questions and providing information and solutions. To encourage and facilitate this practice, it is understood and agreed by the recipient that by opening, reading, accepting, and viewing this information, no attorney-client relationship has been discussed, agreed to or otherwise established. It is understood that by posting to this site, your information is made public and no attorney-client confidence is created or possible.

 

I appreciate your "Accepting" my answer if it has been helpful to you. Doing so allows me to continue helping in this manner. I will be available for follow-up questions should you have them after you click "Accept". Thank you.

 

In legal matters, time is of the essence. As such, you should contact an experienced lawyer right away to protect your legal rights!

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Customer reply replied 8 years ago
Thank you for your answer, but there is NO Operating Agreement.

What are the liabilities for the exiting Member?
Business Lawyer: J.Hazelbaker, Attorney replied 8 years ago

Here are the statutes that govern your situation:

 

29-734. Withdrawal of member

A member may withdraw from a limited liability company at any time on mailing or delivering written notice of withdrawal to the other members at their last known addresses set forth in the list maintained by the limited liability company pursuant to section 29-607, subsection A, paragraph 1, but if the withdrawal violates an operating agreement, the limited liability company may recover from the withdrawing member damages for breach of an operating agreement and offset the damages against any amount otherwise distributable to him.

 

29-707. Distributions on withdrawal

On any event of withdrawal of a member, except as otherwise provided in an operating agreement, the withdrawn member and the withdrawn member's personal representatives, successors and assigns do not have the right to receive any distribution by reason of the withdrawal but do have the rights of an assignee of the withdrawn member's interest in the limited liability company to receive distributions with respect to the member's interest during any continuation of the business of the limited liability company and during and on completion of winding up less any damages recoverable against the withdrawn member if the event of withdrawal violated an operating agreement.

 

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Business Lawyer: J.Hazelbaker, Attorney replied 8 years ago

Please let me know, if you have any follow-up questions.

 

If my answers have been helpful, I hope you will Accept it so that I get credit. That helps the service to continue.

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