Legal Question in Business Law in New Jersey

Re: Partner Withdrawl from LLC

Winding up a business doesn't have to be hard or expensive but there are many factors that have to be considered. Commitments to creditors are among the foremost. You should have a lawyer review your business situation and prepare the necessary documents and releases. Not done correctly, a seemingly simple business divorce can come back to haunt you many years later.

My firm handles matters of this type. If I can be of further help to you, call or email.

See also: http://info.corbettlaw.net/lawguru.htm

Re: Partner Withdrawl from LLC

This is not necessarily difficult, but you might need an attorney's help, one who is familiar with these matters. Not having seen the document used for the formation of the entity, I am a little confused as to what was actually done - an actual incorporation, the formation of a LLC and/or the formation of a LLC, but election to be taxed like a corporation? Were shares issued, or membership certificates issued? If some certificate representing ownership has been issued, it can be merely signed over to you, along with a simple letter stating that your "partner" resigns from the entity, turns over all of his interest to you, and that this be effective immediately. The letter is dated, signed and his signature witnessed (by anyone but you). There is no need to wait 30 days for this to be effective. More important is what the registration elections, if any, were made with IRS when you filed for a TIN, which may need to be updated and corrected to show the current status (you as the sole owner). NJ recognizes 1 person LLCs and for income tax reporting purposes (Federal and State) you do not have file a separate return for the LLC, but can simply report its profit or loss on Schedule "C" of your personal return. However, for 2007, since, at least for part of the year, if not the whole year, there were 2 members, either Form 1065 (Partnetship return) or Form 1120 (corporate return) may need to be filed. I suggest everything become effective as of January 1, 2008 to keep things clean, unless your "partner" agrees to withdraw from the inception of the entity formation. If you need more information, contact me directly. This is a response to an Internet question and the reply is not intended to be legal advice or as creating an attorney-client relationship.