Business Law

Ask a business lLawyer. Get business law questions answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

My business partner and I are splitting up. We started an…

Customer Question
My business partner and I...
My business partner and I are splitting up. We started an LLC together for TV production and have not made any money yet. However, I’ve put in a total of $167k… prior to this LLC he started a music library company where most of his money went towards. Initially we both put in $50k (which is stated in the operating agreement).We have been seeking investors for the TV production LLC. He has been seeking out investors for percentages of music publishing for his other LLC (I am not a member of this). Recently I found out he altered some numbers that were sent out to investors. He showed the last 2 quarters at roughly $40k when it was more like $30k. He is claiming it was a mistake and unintentional but I’m not quite sure I believe him. He had one investor put in $15k… which was handed over to the TV production LLC we are both a part of. The investor is his childhood friend who he called and spoke to, seemingly he’s moving forward.Additionally I found out that one of our employees is a woman he has been having an affair with prior to hiring her. She is an average employee, has a good resume and working for half her rate for the last few months. What is frustrating is she is getting paid from the money I put into the company. More so, my partner has been paid around $60k of the $167k I put in. He has brought in an investor for our LLC at $50k and given me a music royalty check for $13k since we created this company.I resigned, sending in a resignation letter, recently. I do not want to be partnered up with someone of this nature. I would like him to pay me back some of the investment money (the $167k I put in to the company) despite what the operating agreement says. Given his actions with the music entity, altering numbers, and his relationship with one of our employees how would i be able to be paid back some of my investment by him?I can prove he altered and forged the investment numbers.
Submitted: 5 months ago.Category: Business Law
Show More
Show Less
Ask Your Own Business Law Question
Answered in 1 hour by:
11/16/2017
Business Lawyer: Phillips Esq., Attorney-at-Law replied 5 months ago
Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Business Law
Satisfied Customers: 21,272
Experience: B.A.; M.B.A.; J.D.
Verified

Hello: This is Phillipsesq. Welcome to JustAnswer! I am reviewing your post, and I will post my response very shortly. Thank you for your patience.

Ask Your Own Business Law Question
Business Lawyer: Phillips Esq., Attorney-at-Law replied 5 months ago

I am sorry, but I am having trouble understanding your post.

Kindly edit, properly identity your issues, and resubmit.

Thank you for your cooperation.

Ask Your Own Business Law Question
Customer reply replied 5 months ago
I have sent in my resignation letter to my business partner recently. I have invested $167k into the company. Initially we both invested $50k which is stated in our operating agreement.He owns another company. An llc which I'm not a member of. He altered investment documents stating the company made 40k over a period of time when it was really 30k. His good friend invested $15k into the co which he then put into our co. Feels like he committed fraud.Additionally he is having an affair with an employee who was being paid through my investment.I want to sue him so he has to pay me back 50 percent of my investment.
Business Lawyer: Phillips Esq., Attorney-at-Law replied 5 months ago

Thank you for the information.

What does your Operating Agreement say as to reimbursement of the capital contribution or buyout?

Thank you for your cooperation.

Ask Your Own Business Law Question
Customer reply replied 5 months ago
It says we both put in $50k initially. Nothing regarding more money being invested into the company by members.The company hasn't brought in any money yet.
Business Lawyer: Phillips Esq., Attorney-at-Law replied 5 months ago

Thank you for the information.

If your Operating Agreement is silent on percentage of reimbursement or buyout, then you would have to file lawsuit against your partner and let the Court decide whether you should get 50% of your investment back. The lawsuit would be filed at your local Courthouse. You should attach a copy of your Operating Agreement to the Complaint so that the Court would get a better idea of what is at stake.

You can obtain complaint forms online.

Goodluck with your case,

Ask Your Own Business Law Question
Customer reply replied 5 months ago
There are 2 LLC's.
One is for TV PRODUCTION, this is the company I am a partner / member of.
The other LLC is music licensing... this is a company he started prior to our partnership. We shop the music library as we try and sell shows and TV production services. I am NOT a member of this LLC.He altered an investment document stating they made $40k over two quarters when they only made $30k. He says it was a mistake but it looks like he was trying to show the company made more for investors. The company had one investor, his childhood friend, who put in $15k. This money was then given to the TV Production LLC. Did he commit fraud by changing these numbers?As for the operating agreement... this is what it says. It also says that we put in $50k each for our initial contribution... nothing else.This is what it says;B. Initial Contribution. Each Member shall make an Initial Contribution to the Company. The Initial Contributions of each shall be as described in Attachment A, Initial Contributions of the Members.
No Member shall be entitled to interest on their Initial Contribution. Except as expressly provided by this Agreement, or as required by law, no Member shall have any right to demand or receive the return of their Initial Contribution.
C. Limited Liability of the Members. Except as otherwise provided for in this Agreement or otherwise required by California law, no Member shall be personally liable for any acts, debts, liabilities or obligations of the Company beyond their respective Initial Contribution. The Members shall look solely to the Company property for the return of their Initial Contribution, or value thereof, and if the Company property remaining after payment or discharge of the debts, liabilities or obligations of the Company is insufficient to return such Initial Contributions, or value thereof, no Member shall have any recourse against any other Member except as is expressly provided for by this Agreement.
Business Lawyer: Phillips Esq., Attorney-at-Law replied 5 months ago

I will opt out to give another Attorney the opportunity to further assist you.

Best wishes,

Ask Your Own Business Law Question
Business Lawyer: Law Educator, Esq., Attorney replied 5 months ago
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 123,230
Experience: All corporate law, including non-profits and charitable fraternal organizations.
Verified

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

I am a DIFFERENT CONTRIBUTOR as your previous contributor has left.

Unfortunately, investing is a risk. This means when partners put money into a company there is no guarantee of money being refunded to them in the event of a dispute. Unless your agreement said you could recover your investment upon resignation from the company, you are not automatically entitled to anything at all.

If you want to argue that his mistake caused damage to the company, you can sue (using an attorney to represent you as this type of suit requires an attorney) for breach of duty to the company and return to the company for any losses.

If he has been sexually harassing any employee of the company, had you not resigned you could have sought to remove him from working for the company.

The problem is once you resigned from the company, as long as there was no agreement in your operating agreement for reimbursement of any funds you put into the company, I am sorry to say you are not automatically entitled to anything from the company.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

Ask Your Own Business Law Question
Was this answer helpful?
Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 123,230
123,230 Satisfied Customers
Experience: All corporate law, including non-profits and charitable fraternal organizations.

Law Educator, Esq. is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,851 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

751 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

646 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

577 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
I am a 50/50 owner in an LLC, with no partnership agreement,
I am a 50/50 owner in an LLC, with no partnership agreement, It is a solon. One partner is a stylist the other is not. She receives free booth rent at $600 a month and all her products/color for clien… read more
RGMacEsq
RGMacEsq
Attorney
Doctoral Degree
751 satisfied customers
Do Operating Agreements or By Laws have any meaning outside
Do Operating Agreements or By Laws have any meaning outside an LLC or other corporate structure? Our principle founder has moved from including all of the founders under one LLC to us all simply being… read more
WiseOwl58
WiseOwl58
JD Honors Graduate
4,028 satisfied customers
I have an LLC with my business partner. We are both
I have an LLC with my business partner. We are both non-resident aliens and don't live in the US. The idea was paying corporate tax in the US and personal tax in Europe, where we reside. Do we still n… read more
Law Educator, Esq.
Law Educator, Esq.
Attorney
123,230 satisfied customers
Do yall draw up LLC operating agreements?. The articles of
hello JA: Hello. How can I help? Customer: do yall draw up LLC operating agreements? JA: Can you tell me what state the LLC is registered in? Customer: Virginia JA: Has anything been officially filed?… read more
Damien Bosco
Damien Bosco
4,124 satisfied customers
Does an LLC business pay the new business tax rates? If not
Does an LLC business pay the new business tax rates? If not what business types could I form to pay the new rates and not my personal tax rate? How is the 20% deduction calculated?… read more
Attorney Wendy
Attorney Wendy
Member
Juris Doctorate
466 satisfied customers
I assigned my patent to an investor. the operating agreement
I assigned my patent to an investor. the operating agreement gave me controlling rights etc however they have now reassigned the patent to another company.… read more
Asad Rahman
Asad Rahman
Attorney
J.D.
2,395 satisfied customers
If an LLC and EIN are in my name do i own the business?
If an LLC and EIN are in my name do i own the business? … read more
Edward Young
Edward Young
Juris Doctor
333 satisfied customers
I am a new business forming an LLC. I wanted to get
I am a new business forming an LLC. I wanted to get information about capital that I have invested into forming the business and how it affects my personally.… read more
Richard
Richard
Owner
Doctoral Degree
4,489 satisfied customers
We are creating an operating agreement (OA) for how our
Hi there, We are creating an operating agreement (OA) for how our Florida-based LLC should be run. Is there anything in law that says a lawyer must write this or can we (non-lawyers) as owners write i… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,748 satisfied customers
FOR LORI ONLY - This is our operating agreement in full,
FOR LORI ONLY - This is our operating agreement in full, just not with signatures. Didn't have access to scanner today to scan with signatures.… read more
Lori
Lori
Juris Doctor
1,041 satisfied customers
What is the best price for making a LLC Operating Agreement?
What is the best price for making a LLC Operating Agreement? I can give a generic template and then I can tell you few things I want added to meet our needs or you can use your template. Let me know. … read more
Law Educator, Esq.
Law Educator, Esq.
Attorney
123,230 satisfied customers
When a partnership owns a business and one of the partners
When a partnership owns a business and one of the partners works in the business is that partner considered an employee?… read more
LegalGems
LegalGems
Juris Doctorate
11,585 satisfied customers
I need help with a business partnership dissolution. I can
I need help with a business partnership dissolution. I can give a detailed account of what I am asking on this or should I wait until I am connected with a lawyer?… read more
DrakeLAW
DrakeLAW
Juris Doctorate
1,037 satisfied customers
What skill or tape does the real estate LLC investment need
What skill or tape does the real estate LLC investment need a full prospectus or to be a registered security? I'm doing my first non-residential commercial project and one of the potential investors p… read more
Richard - Bizlaw
Richard - Bizlaw
Juris Doctor
3,748 satisfied customers
I want to create an operating agreement for an existing LLC
I want to create an operating agreement for an existing LLC in Ketchikan, Alaska. This LLC is principally involved in cultivating cannabis and manufacturing cannabis products. This LLC is a legal and … read more
WiseOwl58
WiseOwl58
JD Honors Graduate
4,028 satisfied customers
I am the 20% owner of an LLC partnership and my partner
I am the 20% owner of an LLC partnership and my partner (super majority) has not paid me for work done in 12 weeks. Our business agreement states that a member can resign with written notice but I wan… read more
KLAW
KLAW
Juris Doctorate
2,029 satisfied customers
I am in a Partnership LLC in PA and my business partner has
I am in a Partnership LLC in PA and my business partner has never paid me her share of the initial purchase of inventory as I paid for it on my personal credit card. Since she has never paid if it her… read more
LegalGems
LegalGems
Juris Doctorate
11,585 satisfied customers
Is an LLC operating agreement between 4 members valid if
Is an LLC operating agreement between 4 members valid if only 3 members signed it ? … read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
1,146 satisfied customers

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).

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).

Show MoreShow Less

Ask Your Question

x