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I have a business partner for an LLC in Florida. He is

Hello, I have a...

Hello, I have a business partner for an LLC in Florida. He is withdrawing and says I have to buy him out. Is that correct, do I have to buy him out?

Lawyer's Assistant: Can you tell me what state the LLC is registered in?

Florida

Lawyer's Assistant: Has anything been officially filed? If so, what?

He is not on the legal corporation paperwork but we made a partnership agreement between us.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

I believe that's it. Thank you

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Answered in 5 minutes by:
8/28/2017
Roy Hadavi
Category: Business Law
Satisfied Customers: 1,121
Experience: Attorney at Law Offices of Rosenstein & Associates
Verified

Hi. My name is ***** ***** I am a licensed attorney. I would be happy to provide assistance. Please give me a moment to formulate a response. Also, please keep in mind that our conversation does not include an attorney-client relationship and this is for general information purposes only.

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Customer reply replied 5 months ago
Okay
Customer reply replied 5 months ago
I prefer to text please.

As do I.

The offer for a live phone call was automatically generated by the JustAnswer website, not me. I prefer to save you money, if possible, and answer all your questions through this chat. If at the end you feel that a live phone call would be beneficial, we can set it up at that time.

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Are you able to provide a copy of the partnership agreement (you can attach it to this thread)?

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Customer reply replied 5 months ago
Okay, that is perfect. Thank you. Give me just a minute please to see if I have it on my computer.

No problem. Take your time.

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Customer reply replied 5 months ago
My laptop is currently updating so I cannot get on it right now.

Okay. I can give you general information regarding the matter and I can either view the partnership agreement afterwards or you can review it based on the information I provide.

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Customer reply replied 5 months ago
Ok, thank you sir.

LLC law does not provide a buy-out for a non-member. Under LLC law he would simply be considered an employee, with the same rights and responsibilities as any employee.

However, the agreement you entered into, may provide rights and obligations. It is not uncommon for a partnership agreement to provide for a buy-out of any of the partners. The issue with your specific situation is the relationship of the parties to each other and to the LLC. The agreement may not entitle him to any rights under the LLC and may only provide limited rights relating to the business venture between the two of you. This would change the valuation of his interest that you would be buying out. Additionally, the obligation to buy him out may vary depending on the party requesting the buy-out.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow-up or clarification questions, please ask! There is no additional fee. If you would like me to take a quick look at the agreement to review any of the points I listed above, please let me know. There is no additional fee. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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Customer reply replied 5 months ago
Im working on getting the agreement to you.

No problem.

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Customer reply replied 5 months ago
We're sorry – an unknown error occurred. Please try again.
This is the message I keep getting when I try to send it.

Okay.

Just copy-paste the text into the chat field.

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Customer reply replied 5 months ago
It wont let me because it is a scanned document. The partnership agreement is just a general agreement downloaded from the internet.

Okay.

Look for the following in the agreement:

  • A buy-out provision. This would be closer to the end of the agreement.
  • A provision stating what each of you owns (your interest). This would be closer to the beginning of the agreement.
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Customer reply replied 5 months ago
The only thing it says is he paid $5,000 as a buy in to the company.
It later says We have a right to purchase his interest in the company.

But, not an obligation to buy his interest in the company?

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Customer reply replied 5 months ago
It does not say anything about being obligated to buy him out. He breached the contract we made with him.

If he breached the agreement, then he has no claim under the agreement.

Under contract law, the breaching party can make no claim under the agreement (unless the agreement states otherwise) and the non-breaching party cannot be in breach of the party subsequently. Therefore, you have no obligation to buy him out.

Roy Hadavi
Category: Business Law
Satisfied Customers: 1,121
Experience: Attorney at Law Offices of Rosenstein & Associates
Verified
Roy Hadavi and 87 other Business Law Specialists are ready to help you
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Customer reply replied 5 months ago
Okay, thank you so very much!

You're very welcome.
Thank you so much for the 5-star rating! I know rating takes an additional step and I truly appreciate you taking the extra time! It's been my honor and privilege to help you with this. If I can help you in any way in the future, I'll be happy to help. For easy access, my bookmark is: https://www.justanswer.com/law/expert-royhadavi/ Or, simply request “Roy only” in the first line of your question.

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DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

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