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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 need answers from an LLC lawyer familiar with PA laws

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I need answers from an LLC lawyer familiar with PA laws
Thank you for the post, I am happy to assist you by answering your questions. What question can I answer for you?
Customer: replied 4 years ago.

I was once part of an LLC in PA with my son his wife and my husband. My interest was 15%. I later sent letters to all partners stating I was with drawing. I was told I owed the LLC $12,000 , which was 15% of the company debt. Later the story changed.My son stated he spoke with a PA lawyer. Then he said my debt was equal to 50% of the debt...because my husband and I were in charge of capital contributions to the LLC. We took a second mortgage on our home to start the company(house flipping in PA) Is this true or not?

Thank you, XXXXX XXXXX stated in writing that you and your husband would share liability in the same manner or on the same schedule as capital contributions (i.e. put simply that because you funded the business you would assume liability for its debts as well).
Customer: replied 4 years ago.

i don't know..where would I get that info? on the operating agreement?

Yes, it would be in the operating agreement or a subsequent writing signed by the parties. If no such agreement exists, it would be difficult to hold that your son does not equally share in the liability consistent with his shares in the LLC.
Customer: replied 4 years ago.

found the operating agreement.States that"no members shall be given priority or preference with respect to other members in obtaining a return of capital contributions,distributions or allocations of the income, gain, losses, deductions,credits or other items of the LLc. The profits and losses of the LLC, and all items of it's income ,gain ,loss,deduction and credit shall be allocated to members according to each members percentage interest in this LLC.

Great, that is dispositive, you should send a letter to your son quoting that language and advising that he act consistent with the operating agreement going forward. Please lett me know if this answers your question or if you have any follow up questions. If I have answered your question, please positively rate my answers.
Customer: replied 4 years ago.

When I have pointed out what the operating agreement states..he tells me "the commonwealth of PA states other wise...but will not prove where it says that. I feel like I am being bullied .

I tend to agree with you, PA law states:
§ 8916. Operating agreement. (a) General rule.--The operating agreement of a limited liability company need not be in writing except where this chapter refers to a written provision of the operating agreement. If a written operating agreement provides that it cannot be amended or modified except in writing, an oral agreement, amendment or modification shall not be enforceable. (b) Freedom of contract.--An operating agreement may contain any provision for the regulation of the internal affairs of a limited liability company adopted by the members, whether or not specifically authorized by or in contravention of this chapter, except where this chapter: (1) refers only to a rule as set forth in the certificate of organization; or (2) expressly provides that the operating agreement shall not relax or contravene any provision on a specified subject.
Customer: replied 4 years ago.

so are you saying that the operating agreement that all partners signed is what is followed? Not what the "commonwealth of PA" states????

Yes, and the Commonweath states that the LLC operating agreement is to be followed here. For your reference, see
Customer: replied 4 years ago.

Awesome!!!! thank you for your help...he is not going to be happy when I present this new found info to him...

Thank you, XXXXX XXXXX to positively rate my answers and best of luck.
Customer: replied 4 years ago.

In addition to all this I just realized I never received documentation that I had withdrawn from the LLC. Asked for this..and asked about dissolving the LLC...(his father is now deceased) he stated it was not necessary to do that.

Technically then you are still a member of the LLC.
Customer: replied 4 years ago.

Yes.I have just realized that..and I am not happy. He said he would draw up papers for me...... maybe then I will pay him the 12K

ok, please let me know if I can be of any additional assistance and please remember to positively rate my answers this evening.
MShore Law and 3 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

so..when I receive my letter stating I am no longer a member of the I owe him 15% of the debt of the LLC?????

Not necessarily, it really boils down the terms of the operating agreement, often members walk away without sharing in the debt at all. If he want the 15% in exchange for releasing you from the LLC you would have to make the determination of whether to accept these terms.

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