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LawyerDavid, Attorney
Category: Business Law
Satisfied Customers: 376
Experience:  Highly experienced attorney in all aspects of Business Law
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If you are a stock holder of an LLC and the majority

Customer Question

If you are a stock holder of an LLC and the majority stockholder if the same company starts a new LLC without you knowing about it and takes the business of the company that I own stock in to the new LLC, is that legal?
Submitted: 1 year ago.
Category: Business Law
Expert:  LawyerDavid replied 1 year ago.

Randy - I am not sure I understand your quesstion exactly, but my assumption is this other person is part owner of the first LLC. This does not preclude that person from starting a competing LLC. However, if business was stolen you should make sure this person did not steal company secrets, or violate confintiality or noncompete provisions in a company contract. There may also be provisions in the operating agreement that were breached. It is important for you to read and understand all of your LLC documentation and see if there is a violation. However, there is not a law in place that will prohibit people from starting a competing business. The law is actually set uo to encourage competition so you wiill need to rely on company documentation to stop it. I hope this helps you. All the best, David

Customer: replied 1 year ago.
I understand. But what if they take your existing business and move to the new LLC.
Expert:  LawyerDavid replied 1 year ago.

The LLC does not own the business and the fact you are majority owner does not give you the ability to control what this other person does. If there is not a confidentiality agreement or noncompete in place I think you are not going to have any say in what happens. I may be misunderstanding, but a company dies not own or contril the business it has.

Expert:  LawyerDavid replied 1 year ago.

From a legal standpoint my question to you is why dont you go get the business back?