Legal Question in Business Law in Georgia

Closed Business Partnership Paying Creditors

My business partner and I just closed the doors on an LLC. We are still on excellent terms with each other. We owe roughly $70K to creditors (about $35K each), so we are both looking for jobs. We plan to continue to pay our creditors over time rather than file for bankruptcy. I may be able to contribute my half much before my business partner. How do I protect myself and relieve myself of further obligation in the event that this happens?


Asked on 1/29/07, 11:31 am

2 Answers from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Closed Business Partnership Paying Creditors

You can allocate the debts amoung the two of you with a written agreement. However, that does not bind the creditors and they can still go after the liable parties. You don't say whether these debts are solely the debts of the LLC, one or both of you, or whather they are personally guaranteed, so it is hard to go into more detail.

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Answered on 1/29/07, 11:46 am
Glenn M. Lyon, Esq. MacGREGOR LYON, LLC, Business Attorneys

Re: Closed Business Partnership Paying Creditors

The company documents form the LLC should address most of the issues, but I would also recommend a separate agreement setting out who is obligated to pay what and include indemnification if they do not.

If you would like to discuss any issues further, please feel free to contact my office. My contact information is below. Thank you.

The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

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Answered on 1/29/07, 11:48 am


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