Legal

Ask a lawyer and get answers to your legal questions

Ask a Lawyer,
Get an Answer ASAP!

I am a 30% partner in a NY State LLC. The LLC was formed in…

Customer Question
I am a 30% partner...
I am a 30% partner in a NY State LLC. The LLC was formed in December of 2010. Note: We have still not filed our articles of publication as required by Section 206 of the New York State Limited Liability Company Law.
We have 2 paying clients, one that pays $50/month for access to our website and one that paid $1000.00 up front for two years of access to our website. There is still approx 18 months left in that (verbal) contract. Our income from those clients has been and is being used to pay for our web server space, which keeps the website up and running. My partner (CEO at 70% interest) has decided that instead of being in business with me, he would like to work directly with a web developer and has asked that I step down from my current role as COO and co-founder. He offered either 2% lifetime equity as a non-participatory founding member or a negotiated buy out amount (which is absurd as the value of the company now is close to zero.) He has also mentioned just dissolving the current LLC entirely and starting over the exact same business on his own, although I believe he knows that he can't do that exactly. Or can he?
Note: Our LLC Operating Agreement has the following clause concerning dissolution:
"8.1 Dissolution. The Company shall be dissolved upon the first to occur of the following events:
(a) The vote of Members holding a majority of the outstanding Membership Interests to dissolve the Company.
(b) Entry of a decree of judicial dissolution under Section 702 of the New York Limited Liability Company Law.
(c) At any time there are no Members, provided that, the Company is not dissolved and is not required to be wound up if, within 180 days after the occurrence of the event that terminated the continued membership of the last remaining member, the legal representative of the last remaining Member agrees in writing to continue the Company and to the admission of the legal representative of such Member or its assignee to the Company as a Member, effective as of the occurrence of the event that terminated the continued membership of the last remaining Member.
8.2 No automatic dissolution upon certain events. Neither the death, incapacity, disassociation, bankruptcy or withdrawal of a Member shall automatically cause a dissolution of the Company."

SO, my questions (finally!) are these - Can he dissolve without my input? Can he keep the LLC in tact and force me out? It looks like he can dissolve the company without me being able to do much. Is that the case? Also, is there a way to accept a 2% lifetime interest and still maintain the option to buy back in to the company or ensure that the interest amount isn't subject to further dissolution at a later date?
Submitted: 6 years ago.Category: Legal
Show More
Show Less
Ask Your Own Legal Question
Answered in 8 minutes by:
3/13/2012
Lawyer: Dimitry K., Esq., Attorney replied 6 years ago
Dimitry K., Esq.
Category: Legal
Satisfied Customers: 41,221
Experience: Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
Verified
Thank you for your questions. I will be happy to answer your questions in order, and be happy to assist with your follow-up concerns.

Can he dissolve without my input?
Based on the language, he can. The language discusses "majority" meaning votes, rather than how many partners may be in the business. Even if he was a 70% owner and there were two partners sharing the 30%, he as a 70% owner could still dissolve.

Can he keep the LLC in tact and force me out?
No, he would have to pay you for your share, as you do own 30% of the current assets and future profit (from today's date, or date of dissolution or buyout).

It looks like he can dissolve the company without me being able to do much. Is that the case?
Yes.

Also, is there a way to accept a 2% lifetime interest and still maintain the option to buy back in to the company or ensure that the interest amount isn't subject to further dissolution at a later date?
That is up to the other owner, if he chooses not to provide such an option, you cannot compel him to take that option. It would be at your discretion and his to accept, you could not unilaterally push that option on him.

Good luck.
Dimitry K., Esq.
Category: Legal
Satisfied Customers: 41,221
Experience: Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
Verified
Dimitry K., Esq. and 87 other Legal Specialists are ready to help you
Ask your own question now
Customer reply replied 6 years ago
Thank you for your help!
Lawyer: Dimitry K., Esq., Attorney replied 6 years ago
You are most welcome and good luck to you!
Ask Your Own Legal Question
Customer reply replied 6 years ago
Sorry Dimitri, one question in my original post that you didn't address...are you able to respond to that here?
"He has also mentioned just dissolving the current LLC entirely and starting over the exact same business on his own, although I believe he knows that he can't do that exactly. Or can he?"
Lawyer: Dimitry K., Esq., Attorney replied 6 years ago
Thank you for your follow-up.

Sure thing, I will be happy to address it for you.

To answer that question, while he can dissolve, he cannot re-start the same entity and cut you out--you would be entitled to the 30% of the equity and/or good will until you sign off on the new business, or frankly take it over the same date he "dissolves" it by applying to reinstate it under your own name.

Good luck.
Ask Your Own Legal Question
Customer reply replied 6 years ago
OK Good to know. Thanks very much again for your quick and thorough responses!
Lawyer: Dimitry K., Esq., Attorney replied 6 years ago
You are most welcome and good luck to you!!
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 Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41,221
41,221 Satisfied Customers
Experience: Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.

Dimitry K., 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

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

24,657 satisfied customers

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

INFOLAWYER

INFOLAWYER

Attorney

22,408 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

44,066 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

300 satisfied customers

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

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

41,221 satisfied customers

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

< Previous | Next >

Related Legal Questions
If a contract for purchase of a horse is created and signed
if a contract for purchase of a horse is created and signed by both parties with full payment made and the contract is created and signed by an individual using a once married name but the horse is re… read more
Barrister
Barrister
Attorney/Landlord/Realtor
Doctoral Degree
37,472 satisfied customers
General construction contractor contract, If the contract
General construction contractor contract, If the contract signed for date of completion of project is overdue, is that breach of contract? And what are the steps to and result of subsequent litigation… read more
Bill Attorney
Bill Attorney
law
2,451 satisfied customers
General construction contractor contract,If the contract
Second opinion] General construction contractor contract,If the contract signed for date of completion of project is overdue, is that breach of contract?And what are the steps to and result of subsequ… read more
INFOLAWYER
INFOLAWYER
Attorney
Doctoral Degree
22,408 satisfied customers
I contracted with a contractor to complete a house
I contracted with a contractor to complete a house renovation. The first contracted did not complete the job after paying over 86,000,00 thus once said he will complete it for 25,000. that was paid on… read more
Phillips Esq.
Phillips Esq.
Attorney
JD
19,873 satisfied customers
The situation is the following: I'm by contract with a
Good afternoon. The situation is the following:I'm by contract with a recruiter. The job that I now have is with WMATA. I work under the orders of an engineer, but since I joined, I have not been give… read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
12,222 satisfied customers
I signed a contract to purchase of. Purchase an RV. Contract
purchase an RV. Contract have a no cool of clause. I am in Florida. Found an RV at a lesser price. Can they force me to buy it. … read more
Olivia Kent
Olivia Kent
Managing Partner
Doctoral Degree
3,591 satisfied customers
But the contract in Question is bound by Florida law. This
I'm Canadian but the contract in Question is bound by Florida law … read more
RobertJDFL
RobertJDFL
Attorney
Juris Doctorate
5 satisfied customers
If a contract is signed with a finance company is it a
Good morning, if a contract is signed with a finance company is it a binding contract … read more
LegalKnowledge
LegalKnowledge
Juris Doctor
30,220 satisfied customers
Recently entered into a contract to start an online
Recently entered into a contract to start an online business. Using my credit card capital for investment. The person I talked to convinced me to do this. Come to find out he is the owner on the compa… read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
12,222 satisfied customers
On a funeral contract can a non contracting party request a
on a funeral contract can a non contracting party request a copy of funeral goods and services … read more
INFOLAWYER
INFOLAWYER
Attorney
Doctoral Degree
22,408 satisfied customers
I am a contract employee of a contract company with a
I am a contract employee of a contract company with a government contract. I have concerns about how several positions on this contract have been "appointed" and not posted for all of us to apply for.… read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
12,222 satisfied customers
Contracted' (no written contract - just online) with a
39;Contracted' (no written contract - just online) with a company (AA Motorcycle Transport) to ship a cycle from FL to NM. They advertise 'door-to-door'. That's false right there - we would have to ge… read more
INFOLAWYER
INFOLAWYER
Attorney
Doctoral Degree
22,408 satisfied customers
Can i resind a short sale contract. Maryland. Contract has
I'm filing a chapter bankruptcy and I go to court in May. I wanted to do a short sale but now I want to keep my house.… read more
Ray
Ray
Lawyer
Doctoral Degree
33,031 satisfied customers
I may a contract to get my roof fix, the contract was made
i may a contract to get my roof fix, the contract was made on 3-27-18. the work have not started i wan to cancel the contract … read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
12,222 satisfied customers
In Illinois ,if an element of a contract is illegal or
in Illinois ,if an element of a contract is illegal or unconstitutional does that void that element or does it void the entire contract? … read more
INFOLAWYER
INFOLAWYER
Attorney
Doctoral Degree
22,408 satisfied customers
In contract law, the first party breaching a contract cannot
In contract law, the first party breaching a contract cannot hold the other party to enforcement of the terms of the contract, as the contract was broken by the first party. … read more
Legal Eagle
Legal Eagle
Attorney
Doctoral Degree
12,222 satisfied customers
Does a second, updated contract void the original contract?
Does a second, updated contract void the original contract? … read more
Olivia Kent
Olivia Kent
Managing Partner
Doctoral Degree
3,591 satisfied customers
Public Adjuster Contract- I signed a contract with a public
Public Adjuster Contract- I signed a contract with a public adjuster just after Hurricane Irma in Florida in Sept 2017. This would allow them to speak on my behalf and negotiate our claim for damages.… read more
Bill Attorney
Bill Attorney
law
2,451 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