Legal Question in Business Law in California

I am partner in a LLC with minority ownership and a large staff I supervise, with my partner being the primary investor thereby taking majority share.

Recently when it has become clear that he is going to lose a large amount of money as the business has become unprofitable, he has become very erratic, paranoid, and difficult to work with, putting our staff in awkward situations. It's become unmanageable and I want to step away, how do I go about forfeiting my share of a LLC and being able to walk away, when my name is on all of the paperwork establishing the corporation?

Can I simply quit, or must I go through legal hoops to disassociate myself from a failing LLC and an uncomfortable management situation?

Thanks.


Asked on 9/19/12, 11:32 am

2 Answers from Attorneys
Richard Jefferson M.E.T.A.L. LAW GROUP, LLP

You would need to legally "unwind" your involvement in the LLC, meaning you would want to resign as the manager, remove yourself from the Secretary of State records, and have your departure documented in the company records. This is all important for liability purposes (i.e., if the company gets sued and the plaintiff names you as a party to the lawsuit then you have evidence to get yourself out of the lawsuit...this happens all the time). Contact me if you need help.

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Answered on 9/19/12, 12:29 pm
Bruce Beal Beal Business Law

Please check your LLC Operating Agreement and minutes to determine whether you are a manager, and the procedures for resigning as such. Also, your Operating Agreement should provide the consequences for withdrawing as a member of the LLC. In absence of an operating agreement, Calfornia LLC law will apply to these issues.

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Answered on 9/24/12, 10:40 am


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