Legal Question in Business Law in California

Disputes from one LLC partner

Hie have operated a business for almost a 1yr now, we have an operating agrmt signed however no partnership agrmt signed (i know shoot me now!)

The problem is, one of the partners (who on paper owns 51% of the company due to a certification we obtained) is grossly incompetent and demanding. By default this person was to perform acctng duties, and basically be the CFO, however because of personal issues and other issues, they have failed to do so. ( i have been performing these duties and picking up the slack along with my other duties to maintain a running business) They have started, speding money with out concent (even though they are small amounts) although we dont care for such transactions, personal responsibility is a must. When confronted they are irratical and un responsive, now they have choosen to work from ''home'' that was not opposed and were given specific instructions of what needed to happen. They have taken the company checks home, locked up access to company financials, and continue to create issues where there shouldnt be any, all this on the basis that they are the ones responsible for acctg duties, this wouldnt be a problem if it were done originally, where responsible from the get go. What can we do? LLC


Asked on 2/03/09, 5:42 pm

2 Answers from Attorneys
Daniel Bakondi The Law Office of Daniel Bakondi

Re: Disputes from one LLC partner

Have an attorney review your facts and circumstances. Then, your attorney should send the other party a letter requiring they comply with requirements, and agree to a detailed partnership agreement or else you will separate yourself from the entity, divide its value, and he will owe you for your 49%, including clients, good will, etc. I have not reviewed your operating agreement to know whether there are provisions for the various economic and other ownership interests and what to do in the event of dispute, buyout terms, etc. I also dont know how much money is involved.

Let me know if you want help.

Best,

Daniel Bakondi, Esq.

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Answered on 2/03/09, 6:09 pm
Terry A. Nelson Nelson & Lawless

Re: Disputes from one LLC partner

Either resolve it among the parties by negotiation, or bring action to dissolve the business if it is that important. Consider hiring an attorney to, first, try to clear up the problems and educate everybody about their duties and responsibilities and risks. If that doesn't work, then he can take appropriate legal action. If you are in SoCAL, feel free to contact me if serious about doing so.

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Answered on 2/03/09, 6:53 pm


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