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Ellen, Attorney
Category: Business Law
Satisfied Customers: 36714
Experience:  25 years of experience helping people like you.
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My husband and I started his contracting business as Sole Proprietor

Resolved Question:

My husband and I started his contracting business as Sole Proprietor in 2001 in Prescott Valley, Arizona. This year while working with a CPA to clear up old income tax issues my husband decided to change the structure to a Limited Liability Company, which I believe is a good business idea. My question is regarding the Members of an LLC in the State of Arizona. My husband did not list me as a Member. He did, however, list his mother who also resides in Prescott Valley, AZ, and his son who resides in Calif. Neither of those two work for our company. If I am not listed as a Member, do I have any ownership interest in the company? There is no Operating Agreement. My husband is trying to tell me that because of AZ community property laws that I am "lumped in" with him. I would really like to know where I stand if something were to happen to him. Although we are in our late 40's he has not been very responsible in that department.
Submitted: 7 years ago.
Category: Business Law
Expert:  Ellen replied 7 years ago.

Thank you for your question.

Your husband's interest in the LLC appears to be marital property. However the membership interests transferred to his son and mother are not marital property but theie individual property. The result is that you and your husband own one third, his mother owns one third, and his son owns one third
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Customer: replied 7 years ago.
His portion is 60% and theirs is each 20%. What do you mean by marital property? I am the Office Manager for the company and, therefore, his employee. If he gets in an accident and ends up in the hospital, what is the legal stepladder of who's in charge?
Expert:  Ellen replied 7 years ago.

marital property is property that was acquired during the marriage by either spouse. During your marriage your husband's 60% portion is subject to his control.However in the event of a divorce, you would be entitled to a 50% interest of your husband's 60% interest in the business.
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