Legal Question in Business Law in New Jersey
add/remove member to an LLC part 2
here are the facts. my brother in law formed an LLC with a freind but the business never took off. Now we have an opportunity to move in on a new venture so in order to speed up the process, and instead of applying for a new LLC he suggested we use his and just ask his friend if he would resign his position to which he has already agreed. Once this is done, I am to be added as the new member of the LLC and it will be a 2 member LLC. Since the old business idea never even took off, there is no capitol involvement or pay-outs. We just want to make sure that if our business somehow takes off, which we hope, that the member to be removed will not have any chance of trying to claim any of it. Would a notarized claim of resignation be sufficient to have him completely off? What would I have to fill and do to get on? thanks again
2 Answers from Attorneys
Re: add/remove member to an LLC part 2
It would be smarter and not very expensive to just form a new LLC. there may be problems with the old one that you do not know about, and it is easy to form an LLC online, takes very little time, and the fee is not much, I think $50.00. That is just the start, just the shell that you form to put your business together. The difficult part comes when you want to put together an agreement between you and your partner (you should have a written agreement, I have seen too many messes betweeen friends and even relatives), and later when you start doing business. That is why you hire an attorney to set it up right.
Please call my office if I can assist you. You can then decide how you would like to proceed.
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Re: add/remove member to an LLC part 2
I agree with the previous post that forming a new business entity is the better way to go.
It is not clear, however, from the information you've provided that a LLC is the best option for you. Depending upon your situation, creating a sub-chapter S corporation may be more beneficial.
If you do form a LLC, creating an operating agreement between you and your co-owner is highly recommended. My practice does this work regularly and for very reasonable rates. Please feel free to contact my office for more information.
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