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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 55699
Experience:  32 years of experience practicing law and a businessman.
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I am currently a 40% owner of a window and siding franchise

Customer Question

I am currently a 40% owner of a window and siding franchise in Texas. My business partner is full time in the business while i still work a full time job so we do not have to pay me while we are young. My partner is now wanting to buy me out of the company. My question/concern is that because i am not as active in the business as he is are there any laws/loopholes that he can use to take over my shares without paying me a fair valuation for them.
Submitted: 1 year ago.
Category: Business Law
Expert:  Richard replied 1 year ago.

Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

Expert:  Richard replied 1 year ago.

Can you tell me what kind of entity this is? LLC? S Corp? C Corp? Partnership? Thanks.

Customer: replied 1 year ago.
Thank you for your help with this. It is an LLC
Expert:  Richard replied 1 year ago.

You're very welcome...it's my pleasure. The first thing you need to check is your Operating Agreement to see if it addresses this issue and lays out a process for determining the value of your interest. This would control. But, if your Operating Agreement is silent, he has no legal basis to force you to sell your interest for anything less than you are willing to accept. Your ownership interest is vested in you and it belongs to you whether or not you are working in the company full or part time or not at all. If you are working unequal amounts of time, you can deal with that by compensating you differently for the work being done. BUT, with regard to your ownership interest, he can't mandate you sell it to him and unless he wants to pay you an amount you are willing to take, he can't force you to sell.

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