Legal

Ask a lawyer and get answers to your legal questions

Ask a Lawyer,
Get an Answer ASAP!

Ive created a Limited Liability Co. Operation Agreement with…

Customer Question
I've created a Limited Liability...
I've created a Limited Liability Co. Operation Agreement with 60% of the shares and now need to remove my 40% partner for non-performance. He was to provide the management of the restaurant remodeling along with materials and labor needed and we are three months late opening (and weeks away) as he has never worked for more then 2-3 days a week and mostly weekends as he has priotized his construction co. clients. He also refused to provide 40% of funds needed to continue towards opening as obligated under the Agreement.
Since the Liquor license and tax permits are for this LLC I would like to keep the Corporation going and remove him - can I do this or is my best option to dissolve the LLC and start again?
Submitted: 8 years ago.Category: Legal
Show More
Show Less
Ask Your Own Legal Question
Answered in 2 minutes by:
6/21/2010
Lawyer: MShore, Attorney replied 8 years ago
MShore
MShore, Attorney
Category: Legal
Satisfied Customers: 25,285
Experience: Negotiate, Draft, and Review many complex commercial agreements each year.
Verified
Thank you for the post, if your operating agreement calls for the forced sale or forfeiture of his ownership interest in the company in light of your 60% majority you can force his hand. Otherwise, you will have to negotiate a buy out, or dissolve the LLC.
Ask Your Own Legal Question
Customer reply replied 8 years ago

Thank you.

But my concern is to maintain continuity and not lose the Liquor License and not being liable to compensate him for 40% of the worth of an open Restaurant when he has caused me to be two months behind and damages by not delivering on his part of the Agreement.

Can you read the following sections and let me know if the Agreement allows me to:

1. remove him as a Manager immediately. (sections 4)

2. negotiate a settlement while continuing to open the Restaurant - and ensure that he does not have a claim or interest in the value of the Restaurant once open.

(Section 7.1)His contribution was limited to $40k - is this the most I would have to repay? - even though much work is left to prepare for opening.

<<>>

4.1 MANAGEMENT OF THE BUSINESS. The name and place of residence of each Manager is attached as Exhibit 1 of this Agreement. By a vote of the Members holding a majority of the capital interests in the Company, as set forth in Exhibit 2 as amended from time to time, shall elect so many Managers as the Members determine, but no fewer than one, with one Manager elected by the Members as Chief Executive Manager.

 

4.2 MEMBERS. The liability of the Members shall be limited as provided under the laws of the Maryland Limited Liability statutes. Members that are not Managers shall take no part whatever in the control, management, direction, or operation of the Company's affairs and shall have no power to bind the Company. The Managers may from time to time seek advice from the Members, but they need not accept such advice, and at all times the Managers shall have the exclusive right to control and manage the Company. No Member shall be

an agent of any other Member of the Company solely by reason of being a Member.

 

POWERS OF MANAGERS. The Managers are authorized on the Company's behalf to make all decisions as to (a) the sale, development lease or other disposition of the Company's assets; (b) the purchase or other acquisition of other assets of all kinds; (c) the management of all or any part of the Company's assets; (d) the borrowing of money and the granting of security interests in the Company's assets; (e) the pre-payment, refinancing or extension of any loan affecting the Company's assets; (f ) the compromise or release of any of the Company's claims or debts; and, (g) the employment of persons, firms or corporations for the operation and management of the company's business. In the exercise of their management powers, the Managers are authorized to execute and deliver (a) all contracts, conveyances, assignments leases, sub-leases, franchise agreements, licensing agreements, management contracts and maintenance contracts covering or affecting the Company's assets; (b) all checks, drafts and other orders for the payment of the Company's funds; (c) all promissory notes, loans, security agreements and other similar documents; and, (d) all other instruments of any other kind relating to the Company's affairs, whether like or unlike the foregoing.

4.10 MEETINGS. The Members shall meet on the first Wednesday of each month and Managers shall report to them as required at such time. Members present having 51% Capital Contribution shall be considered a quorum for all decisions to be made.

 

7.1 ASSIGNMENT. If at any time a Member proposes to sell, assign or otherwise dispose of all or any part of his interest in the Company, such Member shall first make a written offer to sell such interest to the other Members at a price determined by mutual agreement. If such other Members decline or fail to elect such interest within thirty (30) days, and if the sale or assignment is made and the Members fail to approve this sale or assignment unanimously then, pursuant to the Maryland Limited Liability statutes, the purchaser or assignee shall have no right to participate in the management of the business and affairs of the Company. The purchaser or assignee shall only be entitled to receive the share of the profits or other compensation by way of income and the return of contributions to which that Member would otherwise be entitled. Any member proposing to sell, assign or otherwise be compensated for all or any part of his interest in the Company within the first 6 months of operation agrees to receive as selling price no more then the maximum of their Capital Contribution amount.

 

Lawyer: MShore, Attorney replied 8 years ago
Thank you for the post, the language above does not permit you to remove him as Manager, but you can negotiate a "buy out"/settlement with him and continue to operate the restaurant.
Ask Your Own Legal Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a lawyerLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask MShore Your Own Question
MShore
MShore
MShore, Attorney
Category: Legal
Satisfied Customers: 25,285
25,285 Satisfied Customers
Experience: Negotiate, Draft, and Review many complex commercial agreements each year.

MShore 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

Not only did he answer my Michigan divorce question but was also able to help me out with it, too. I have since won my legal case on this matter and thank you so much for it.

LeeMichigan

< Previous | Next >

Meet the Experts:

Ely

Ely

Counselor at Law

24,658 satisfied customers

Private practice with focus on family, criminal, PI, consumer protection, and business consultation.

INFOLAWYER

INFOLAWYER

Attorney

22,843 satisfied customers

Licensed attorney helping individuals and businesses

JPEsq

JPEsq

Attorney

2,132 satisfied customers

Experience as general attorney, in house counsel, SSDI, Family Law attorney, and law professor

Law Educator, Esq.

Law Educator, Esq.

Attorney

44,266 satisfied customers

JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law

Ellen

Ellen

Lawyer, Consultant

8,238 satisfied customers

25 years of experience helping people like you.

Guillermo Senmartin

Guillermo Senmartin

Lawyer

301 satisfied customers

Principal Attorney at Guillermo J. Senmartin, P.A.

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

17,183 satisfied customers

Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.

< Previous | Next >

Related Legal Questions
I registered an llc company named MARINE COMPANY, only 2
hello, I registered an llc company named BRYANT MARINE COMPANY, only 2 members, ***** *****'s and Naudy Javier. I, Naudy Javier, registered the co.pant with my own money, same with opening bank accoun… read more
Law Educator, Esq.
Law Educator, Esq.
Attorney
Doctoral Degree
44,266 satisfied customers
I am being pushed out of an LLC that I am a 30% partner in
Hello, I am being pushed out of an LLC that I am a 30% partner in (3 partners total including me). There was a dispute over a substantial amount of money in the business account being transferred into… read more
Legalease
Legalease
Attorney At Law
Doctor of Law w/ highest honors
15,719 satisfied customers
If following Arizona Revised Statutes Section 29-681 (D)(1)
Customer: If following Arizona Revised Statutes Section 29-681 (D)(1) and (3) can 3 members authorize via their 3 votes vs 1 vote to have the LLC repurchase the 1 members interest (thus basically a fo… read more
Attyadvisor
Attyadvisor
Doctoral Degree
8,366 satisfied customers
Can a partner in a LLC be removed? Our business hasn't actually
Can a partner in a LLC be removed? Our business hasn't actually started. The partner in question hasn't fulfilled his duties and has caused a delay. This partner works full time at another job and say… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
My husband and his business partner had a landscaping business.
My husband and his business partner had a landscaping business. The partner wishes to continue with the business, my husband wants out. They have acquired a large debt and the partners answer is to fi… read more
TexLaw
TexLaw
Attorney
Post-Doctoral Degree
4,347 satisfied customers
Partners in a California C Corporation, one partner owns 60%
Partners in a California C Corporation, one partner owns 60% other two partners split 40% into a 60/40 share . 60% shareholder takes 6 figure single payout with intent to purchase personal residence f… read more
socrateaser
socrateaser
1,031 satisfied customers
I recently moved my practice. The contractor and architect
I recently moved my practice. The contractor and architect knew my budget was $300k. There were countless delays.we opened 2 months behind schedule. About three weeks ago my contractor tells me we are… read more
TaxAttorneytoHelp
TaxAttorneytoHelp
Owner
Doctoral Degree
2,542 satisfied customers
My business partner and I have an business where we are 50
My business partner and I have an business where we are 50 50 owners, but he works for a salary as a working manager and I am a silent partner by which I do not get paid except for our end of year fin… read more
socrateaser
socrateaser
1,031 satisfied customers
I have a business with a friend and we did a llc on legal zoom
I have a business with a friend and we did a llc on legal zoom without a buyout clause. He was supposed to be 100% operator and we did a 50/50 split. I'm the money man and he brought no cash to the ta… read more
LegalPro
LegalPro
Doctoral Degree
563 satisfied customers
What are the options to decreasing the gap in ownership shares
What are the options to decreasing the gap in ownership shares between two business partners in a small start-up llc.… read more
INFOLAWYER
INFOLAWYER
Attorney
Doctoral Degree
22,843 satisfied customers
I started working for a friend (we will call him - Jeff) that
I started working for a friend (we will call him - Jeff) that owns a Debt Management Company. I was paid for keeping spreadsheets updated, and making payments online to clients creditor accounts. I wa… read more
MShore
MShore
Attorney
Doctoral Degree
25,285 satisfied customers
I started a restaurant concept where I created the concept
I started a restaurant concept where I created the concept from an idea into a reality. I opened one unit with partners, where I invested 20% and is the president and founder of the restaurant concept… read more
JBaxLaw
JBaxLaw
Attorney
Doctoral Degree
8,080 satisfied customers
I have a FLA LLC and in the operating agreement mandates that
I have a FLA LLC and in the operating agreement mandates that dissolution requires unanimous written consent of all the members. I have 47.5% ownership, another member has 47.5% and the last member ha… read more
Ely
Ely
Counselor at Law
Juris Doctor
24,658 satisfied customers
I am the majority member of a Calif. LLC. The minority member
I am the majority member of a Calif. LLC. The minority member is disrupting the business and subjecting us to legal action. I put all the capital into the business. How can I best get rid of this indi… read more
MShore
MShore
Attorney
Doctoral Degree
25,285 satisfied customers
I am a small minority owner of a family restaurant (7%) with
I am a small minority owner of a family restaurant (7%) with 2 other owners at 46% &47% respectively. Originally I was named managing partner and most legal documents dealing with vendors, liquor,busi… read more
Attorney Wayne
Attorney Wayne
Attorney-at-Law
JD
1,492 satisfied customers
If a member of an LLC, established to govern the ownership ...
If a member of an LLC, established to govern the ownership of a property defaults on his obligation to pay his share of the mortgage, utilities and the funding of the reserves; and, there are only two… read more
Winston Mortain
Winston Mortain
Doctoral Degree
342 satisfied customers
Can a corporate partner remove books without partners knowle
In Michigan, is it legal for one partner to remove books from premises to be looked at by a third party without the other partner be aware of it?… read more
Jane T(LLC)
Jane T(LLC)
Master's Degree
18 satisfied customers
I am in a partnership that is an LLC. I own 60% of the ...
I am in a partnership that is an LLC. I own 60% of the company and my partner owns 40%. We share the profits 50/50. I want to take sole control of the company because my partner does very little in re… read more
Lawmoe
Lawmoe
Lawyer with 20 years of experience
Juris Doctorate
2,405 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