If I sue for dissolution of a CA LLC for which I'm a member, does the company have to be named in the lawsuit?

Asked almost 2 years ago - Irvine, CA

My partner and I are in a dead lock on how to operate the company, so I need to push for dissolution to force a buyout. However, if I'm required to name the company in the lawsuit, what is to stop my partner from using the company to pay his legal fees?

Attorney answers (4)

  1. Michael Charles Doland

    Contributor Level 20


    Lawyers agree

    Answered . Yes, the LLC must be named. A judge will supervise how the LLC assets are accounted for and distributed.

    You both need to consult a CPA to determine the tax consequences of what you are attempting and consult a mediator to see if you can fashion a "win-win" solution which will be much less expensive than litigation.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  2. Scott Aron Thompson Kron

    Contributor Level 9


    Lawyer agrees

    Answered . The company must be named as a nominal defendant. As a nominal defendant, it pretty much takes a back seat.

    Depending on the allegations against your partner, your partner could be forced to hire independent counsel.

    Feel free to contact me for a free consultation--my office is in Laguna Hills.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each... more
  3. Kermit M Milburn


    Contributor Level 8


    Lawyers agree

    Answered . The Manager of the LLC should decide how company funds are to be used. You should contact a corporate litigation attorney to help you.

  4. Ronald L Coleman

    Contributor Level 7

    Answered . Why not start with the company attorney to see if there is a way to resove the issues before you start litigatopm? If you do not have a company attorney, consult with a corportate attorney as there may well be a way to resolve the issue and save everyone a lot of money. There are ways to resolve such dsputes witout lititgation, assuming there is some degree of reasonableness between the parties.

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).

Small business partnerships

A business partnership is an arrangement whereby parties enter an agreement to cooperate for their mutual benefit.

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