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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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I live in Louisiana and am a 50% member in an LLC. We each

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I live in Louisiana and am a 50% member in an LLC. We each contributed $500 when we formed the LLC. Several months later, the other member agreed to write a check for $10,000 from a credit card and he deposited into the LLC to use as operating capital. The credit card had one-year interest free terms. We signed an agreement stating that the LLC would pay the full $10,000 back in twelve months without interest. Alternatively, if unable to do so within 12 months, the LLC would make the payment plus interest until paid in full. The LLC has paid $3,000 toward the credit card to date. Without my consent or knowledge, due to financial reasons, he has taken out $7,000 to date for personal expenses. He claims it was his money and needed it to pay his bills. However, did not that money belong to the LLC based on the agreement? Does not the agreement I signed, as 50% owner, make me liable for 1/2 of the $10,000, making the risk equal? In addition, is he now legally responsible for that $7,000 he withdrew? We now have no money to operate the company. He wants me out now because he has been offered $5,000 from a relative to capitalize the business again. This relative has told him they will only lend the money if I am out of the business.
Submitted: 7 years ago.
Category: Business Law
Expert:  MShore Law replied 7 years ago.
ok, thank you for the post. When he deposited the $10,000 in the LLC account, the money because the property of the LLC. He is responsible for repaying the $7000 to the LLC.
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Customer: replied 7 years ago.

Did he have a legal right ot take the money without my consent?

Expert:  MShore Law replied 7 years ago.
Yes he did, so long as the money was to be used for business purposes. Taking the money and using it for personal reasons is why the act was unlawful.

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