Legal Question in Business Law in Pennsylvania

Re: Co-owner of business transferring money into his personal bank account

You need to meet with an attorney as soon as possible. A major question is who owns 51%. The partner owes a fiduciary obligation to his other partner. The facts must be reviewed in detail. You might want to consider immediate legal action.

Re: Co-owner of business transferring money into his personal bank account

You asked what can be done about the actions of a rogue member of an LLC.

I agree with my colleague that you need to meet with an attorney right away, but diverge there. An LLC is distinctly different from a partnership and each member owes specific duties to the LLC depending on the manner in which the organizational documents allocate responsibility.

There are many different parameters that could have been included in the organizational documents that all must be considered in taking your next steps. Sometimes it can be just a matter of getting the cooperating members to take action and other times it will require a knock-down, drag-out.

A good attorney can step in a mediate between the parties and find out what the cause of the misunderstanding is. There are many steps that can be taken some of which will foster dialogue and others that will start and instant fight. Often a knowledgeable third party can help all sides see the issues more clearly. By getting a lawyer involved you can work towards a final resolution, in the best case with only simple modifications to the LLC's operating agreement or in the worst case with decisive legal manuevers.

Hope this points you in the correct direction.

Regards,

Roger Traversa