Legal Question in Business Law in California

I have a business with a partner and we have since started another company that the first company has funded the startup costs. I told him that we should split up the companies and LLC the second. He ran out and filed the LLC in his name. So on paper he now owns the company after I've done all the labor of construction and building clientele. Is this a matter of changing the LLC articles? Or do I need to take further steps?


Asked on 2/18/12, 9:34 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Well, the two of you can prepare and file a Form LLC-2 to amend the earlier LLC-1 that omitted you. Then, you need an agreement (or two) amongst you. First, you need an LLC Operating Agreement, which is a contract between LLC owners specifying how the LLC will be managed and who is a manager and who is a member-owner without a management role, and what each will contribute as capital. You probably also need a written partnership agreement covering the first company, maybe mentioning the second company and how the ownership and operation of the two of them are related (assuming they are).

Beyond this, you may also need to re-examine the overall health of your business relationship with your partner. Maybe the LLC was a misunderstanding, a clerical error, or the like; also quite possibly it was a deliberate attempt to grab a business opportunity, or at least a controlling position in it.

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Answered on 2/18/12, 10:31 am


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