Legal Question in Business Law in New York

What do your articles of organization say about this? The company does not have assets or profits to share, so unless you agreed otherwise she is entitled to nothing. Bupkes, Garnichts.

I agree with Mr. Connolly. One more idea if you do not want to burn bridges and have a special relationship with the partner who wants out: you may offer him partial payment for any profits generated within a reasonable time hereinafter; for instance, one or maximum two years. He really does not have a reasonable way out.

This is a fairly easy and straightforward matter. Though you should consider using an attorney because there could be future tax and liability issues if not done correctly. You should also complete the buy out or dissolution before the end of the year to avoid having to file taxes for the LLC for 2015 as well.

Because this is a fairly straightforward matter the cost of an attorney is not going to be high. Please ping me offline for further help.

Roman R. Fichman, Esq.

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The other member is not entitled to anything based solely on the facts presented. It might be in your best interest to buy her our at some price pegged to the initial investment otherwise she can hang on and not do anything then later claim profits as the business moves forward and assuming it is successful. You will need to create an LLC Membership Interest Transfer Agreement and consider some other aspects like for example, whose SS number supports the EIN? Amending the business bank account, etc.

I would probably not do this without consulting a lawyer in private just to make sure you are handling everything correctly and protecting your interests moving forward.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Our firm is now referred by the American Bar Association (see under the New York section):

http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

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DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.