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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24870
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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Is there a way to remove a member of a Texas LLC for drug use

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Is there a way to remove a member of a Texas LLC for drug use and theft

Welcome to JustAnswer! My goal is to do my very best to understand your situation and to provide a full and complete excellent answer for you.

My name is XXXXX XXXXX I'm going to assist you with your question.

Please bear with me if you believe my answer isn’t coming fast enough because I’m also working with other customers too. I apologize for any seemingly late response.

Sorry for your situation - are they stealing from the LLC?

What do the By-Laws and Articles say about transferability of ownership interests?
Customer: replied 4 years ago.

don't see any faces. He left with needed parts during a job and refused to return them except for cash. He is smoking something called cush. I retrieved most parts after contacting DA and told him it would be felony theft. Just trying to regroup after this incident.

He took the LLC's parts wrongfully and without authority?
Customer: replied 4 years ago.

The parts are patented and covered by a confidentially agreement.They belonged to Tank Mate Inc and had not yet been purchased by Tank Mate Technology LLC.He was merely delivering them and decided to take off after driving within 50 feet of the job site.He is not part of Tank Mate Inc.He then offered to sell them back to us.

What do your By-Laws and Articles of Incorporation say about transferability of ownership?

What is his interest in the LLC's approximate value - any idea?
Customer: replied 4 years ago.

State of Texas bylaws never thought drug use or theft would come up.Right now the LLC is debt and about to take on additional debt. Don't think he will voluntarily sign over interest.

Is there a prohibition in the LLC's By-Laws as to transferability of the shares?

Will he sell his shares?

How important is it for you to keep the same company name?

Have criminal charges been filed against him for theft?
Customer: replied 4 years ago.

Don't want to send him to jail just want him out. Looking to see if we could do something short of winding up the LLC and reforming we need to keep the name as its our brand

Then, because you need to keep the name, what I would recommend is that you make him a nominal offer for his interest in the company or threaten him with criminal action if he won't agree. I would explain to him that if criminally convicted eventually - then you can get him ousted with a court order from the LLC.

I would explain to him that it's either or.

Then when he agrees - which he will or be liable for theft - then it's a simple matter of transferring his interest.

there are some standard considerations when looking to change one or more ownership interests in an LLC. It is imperative to understand that unless the business has a buy-sell agreement or clearly describes buyout provisions in the articles of organization, the LLC could terminate if one owner decides to leave, retires, declares bankruptcy or dies.

You will need to review the Articles of organization.

Step 1

Read the articles of organization and any buy-sell agreements describing the provisions set forth by the LLC members at the inception of the company. These provisions will state under what circumstances ownership may change, what type of person may assume or buy another owner's interest and what parties maintain control after a buyout.

Step 2

Write a contract describing the change of ownership. List the provisions set forth in the articles of organization and the buy-sell agreement. Describe which owner is leaving and for what reasons and list the new owner's name, ownership interest and responsibilities in the LLC. The contract should transfer all liabilities from the original owner to the new owner.

Step 3

Contact the secretary of state where the LLC is registered. Request a "certificate of amendment" to change the ownership of the LLC. Fill out the form to reflect the new ownership change and describe the percentage of ownership of all LLC owners.

Step 4

Sign and submit the certificate of amendment to the secretary of state. Pay any filing fees as indicated on the form instructions.

But that would be my recommendation - that his illegal and wrongful act could and would result in a criminal conviction. If he doesn't agree to transfer his ownership interest in the LLC you will have no recourse but to pursue criminal charges against him.

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