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BryanWNY

Withdrawal from LLC

2 posts in this topic

Hello,

 

I formed an LLC with my father ~15 years ago to start a construction/remodeling business.  The original "Units of Membership Interest" certificates show him as owning nine units, and I own one.  In 2011, apparently his wife decided that they would be better off for tax purposes to shift it to 60/40 (with him still having the majority), but nothing was ever written down/filed/etc; except the K-1's have shown 60/40 since then.  The 90/10 vs 60/40 may be a moot point, but from reading other posts on here, I figured more info was better than not enough :)

 

I'm looking to withdraw from the LLC, and I'm not sure where exactly to start.  I'm hoping for an uncontested withdrawal (he is unaware of my desire to leave yet), especially considering I don't want anything, other than to separate from the company.  Is some type of a "Separation Agreement" what I need?  What is typically included in one?

 

I noticed in the "Dissolution" section of our Operating Agreement that the company shall be dissolved and wound up if there is but one Member remaining.  Is it possible for him to transfer 1 unit to someone else (ie: his wife) without my approval?  I don't necessarily want to force him to wind up the LLC, but is it in my best interests as far as removing my personal guarantees/liabilities to vendors/bank/etc?  Is there a way to be removed from those guarantees/liabilities while leaving the LLC intact?  As far as debts, it would just be monthly statements from a few vendors, ~$1200 on a van loan, and the line of credit (current at $0).

 

Any help would be greatly appreciated!  I'm sure I'll hire a lawyer to help with this and make sure to cover my butt; I just wanted to get some input from people with more knowledge on the subject than myself before proceeding.

 

Thank you!

Bryan

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In order to intelligently respond to your inquiry in a substantive way, one would need to read the LLC's operating agreement and any other governing documents.  You told us what the operating agreement says about winding up the company, but you didn't tell us what, if anything, it says about a member withdrawing.  I suggest you take the documents to a local attorney for advice and assistance.

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