How to remove a LLC member from managing a business when the partners are experiencing irrevocable differences.

Asked over 1 year ago - Redmond, WA

I'm thinking of hiring a CPA to do the books and a manager to run the store instead of the current business partner since I have an evidence; bank account statements & and loans taken out without my signature (he took my name off the business account long enough to take a loan out in the business name) he is spending company money on himself and doesn't have the company's best interest in mind. How do I go about this and can this be done?

Attorney answers (4)

  1. Michael Thomas Smith

    Contributor Level 12

    5

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    Best Answer
    chosen by asker

    Answered . The starting point for addressing your concerns will be what does your Operating Agreement or LLC Agreement say about the removal of members, or the disassociation of a member (there is usually a list of events that will trigger a member's disassociation). The LLC Agreement provides the rules by which the members have agreed to live by, and each LLC can vary how they address these situations.

    I recommend that you review this document with a knowledgeable business attorney and utilize his or her services to assist the company in addressing these serious issues that you have identified.

    The above response is commentary regarding a general legal question. It is not intended to be legal advice... more
  2. Sean Ryan Kennedy

    Pro

    Contributor Level 8

    5

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    Answered . This is a situation where the LLC Agreement rules the day. Refer to the paragraph regarding removal, disassociation, dissolution, etc. Then, bring it to an attorney to assist with the LLC dissolution.

    My firm has dealt with these types of matters many times before, and it can get messy, so it is always advisable to have an attorney review the LLC agreement and proceed from there.

    Legal disclaimer: The answer provided are for informational purposes only. Responses are not intended to... more
  3. Peter J Weinman

    Pro

    Contributor Level 18

    3

    Lawyers agree

    Answered . Does the LLC have an attorney? The operating agreement should specify how you go about this, and yes it can be done.

    I may be guessing or not licensed in your state. No atty/client relationship exists. I earn my living collecting... more
  4. Saphronia R Young

    Contributor Level 13

    Answered . I agree with Mssrs. Kennedy and Smith. However, I will add that if you never got around to completing, signing and retaining an actual LLC Operating Agreement, then the statutory rules would apply in the State of Washington. Those can be accessed on the internet, at: http://www.leg.wa.gov. Go to the top right of the screen to "search" and type in "limited liability company" and choose the button for "document" and then in the box below choose "RCW". The statutes governing LLC's will come up, and you can save the entire chapter to your computer. Each statute is very short, and I think fairly easy to understand. After reading the entire chapter, you will know the procedures that govern in case you don't have a separate Operating Agreement. In terms of the immediate day, however, I would hire independent counsel. The "company attorney" may advise that s/he cannot represent one of you against the other, and depending upon who hired that attorney in the first place on behalf of the LLC, it just is probably a good idea for you to get some other advice.

    Without knowing all of the details, reviewing documents, and interviewing witnesses, no person should assume that... more

Related Topics

Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).

Business

Business law covers topics such as business structures, common documents, business taxes and finances, insurance, real estate, and government regulations.

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