Legal Question in Business Law in New York

This is a complicated issue because it deals with conflicts of laws between states. Generally speaking Delaware law would govern, however because the members specifically elected NY law then New York law may need to be followed.

NY LLC law does not have a default provision that allows for a member to withdraw from an LLC, unless the members agree to such withdrawal. As a result, Delaware law may become operative.

The "partnership" agreement (most likely an operating agreement) needs to be reviewed by an attorney and the complications presented by the choice of law issue need to be taken into consideration.

I strongly suggested that you contact an attorney to review this matter. Feel free to contact me at your earliest convenience. My info is below.

Roman R. Fichman, Esq.

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Disclaimer: This post has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice or be relied upon. The post may contain errors, inaccuracies and/or omissions. You should always consult an attorney admitted to practice in your jurisdiction for specific advice. This post may be deemed as Attorney Advertising.

Roman is substantially correct. I have not seen the partnership agreement nor am I familiar with its provisions, so my response will be based upon general rules, which may differ under facts not presented, but which might exist. The entity has perpetual existance (some laws limit the existance of a LLC) so the entity can exist, technically, forever. You state there are provisions for what happens when someoone withdraws, but imply there are no procedures set forth to evidence the withdrawal. Traditionally, all that is required is written notice to the other partners, and their acceptance thereof. Acceptance is usually withheld if there are obligations for which the withdrawing partner has or could have responsibility. Dissolution and termination of the entity usually require some percentage vote, and could range from a simple majority to unanimity. Traditionally, a simple majority of interests is all its takes. The procedure for formal dissolution of the entity is controlled by the laws of its state of creation, so this will be covered by Delaware law, even if the operating agreement says NY law is to control. I suspect NY law was intended for its operations, as many provisions of NY law are more restrictive. I agree that an attorney familiar with both states' laws be consulted and the current agreement be amended to0 cover these missing parts. I disclaim in the same format that Roman used.