Legal Question in Business Law in California

Re: Splitting an LLC

You can want and ask for anything you desire, justified or not. So can he. What you will ultimately get is either by negotiated agreement between the parties, with or without attorneys involved, or by a judgment award after trial of the lawsuit you'll have to bring if there is no agreement. That is the consequence of not having correctly done paperwork and written agreements from the beginning. I assume you wanted "to save money on attorney fees". If you have an enforceable written agreement that specifies the dispute winner gets his attorney fees, then you might be able to recover them from your partner and his share, if you win. In the meantime, you probably will end up spending more money on attorneys now than to have done the documents right in the beginning. IF, IF, there are secure assets on which an attorney could place an enforceable lien to cover the fees that will be incurred, you may be able to convince the attorney to take the case without requiring all fees to be paid in advance, as would be customary and sensible in a collapsing business case. If you are serious about pursuing this, either by agreement or suit, feel free to contact me.

Re: Splitting an LLC

Sounds as if he is not dealing in good faith. You may have to litigate. Contact me directly.

Re: Splitting an LLC

Oh, my! Quite a mess. Let me go through your question one aspect at a time, and not necessarily in the order presented or in order of importance.

First, the assets of a business are not necessarily an indicator of its value. True, you may have $163K in assets, but what are the liabilities? $16K, $160K, or $16 million? Also, what is the profitability? The growth? $20,000 may be e generous offer, or a joke, depending upon what a half interest is worth to a possible buyer.

Next, the Statement of Information doesn't determine who owns or has control over an LLC; it merely reports such matters. The documents that tend to prove ownership and control are the Secretary of State forms that are prepared and filed to create the LLC (the Articles of Organization, Form LLC-1) and to modify the LLC (e.g., a Certificate of Amendment on Form LLC-2); also, the Operating Agreement between the members, but if yours is strictly oral it isn't going to be particularly useful to establish your rights.

The other licenses, registrations, etc. that you mention are of some value, probably rather slight, in establishing your legal rights and prevailing in a court contest. Being named on a license does not in itself give you an ownership or management right, but it might be evidence of an intent that you should have been given an interest.

An LLC does not need to file and publish a fictitious business statement if it uses its name as shown on its LLC-1. That's a real name, not a fictitious name.

Calling the County Clerk is not the right approach. You need to request a copy of the LLC's Form LLC-1 and any amendments on Form LLC-2 from the Secretary of State in Sacramento. It may take weeks; they are notoriously slow. Who prepared, signed and filed your LLC's LLC-1? If it was done by or for the ex-boyfriend, he should furnish you a copy on request. It is a simple form, and may be just one page.

If the business was founded by the two of you over two years ago, and moved into an LLC five months ago, it was presumably a general partnership up until the time the LLC was formed. Now, legally, an LLC succeeding a partnership must "buy" each partner's interest in the partnership. This is usually accomplished by the partners formally contributing their interests in the partnership in exchange for memberships in the LLC. If you haven't done anything to transfer YOUR 1/2 interest in the (former) partnership to the LLC, then you, not the LLC, owns half of the business! (Subject to proof, of course, that the partnership was NOT a 50-50 proposition.

So, I think you've got a strong case for 50% of the value of the business. However, knowing its value will take more than a compilation of its assets.

If you contact me directly, I'd be happy to discuss whether going after your rights with a lawsuit (or the threat thereof) makes economic sense for you.