If you've established a product&brand as an LLC but never opened a banking acct., is the operating agreement still binding?

Asked over 2 years ago - Pittsburgh, PA

A friend and myself established an LLC in '09.By April 2012 our professional and personal relationship had deteriorated,we no longer wanted to do business together,and decided to go our own ways. We initially agreed to dissolve our 50/50 business agreement. Since that initial discussion communications have soured and one of the owners is choosing to not follow the procedure set forth in our operating agreement.There are two owners, one owner is in possession of our business materials, and has falsely claimed ownership of the business & it's properties. This individual is falsely representing themselves as the sole owner and is attempting to continue business without me. I wish to split the property and dissolve the business without either of us walking away with the business name.

Attorney answers (4)

  1. Christopher Edward Ezold

    Pro

    Contributor Level 17

    6

    Lawyers agree

    Answered . Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, New Jersey or Federal law apply, unless otherwise specified.

    That being said, a banking account isn't necessary for an operating agreement to be binding (unless required in the agreement, which I have never seen). The corporate name should be distributed in the liquidation of the company; if the corporate name is your personal name, that can present some problems. You should see an attorney ASAP to explore your options.

    If you would like to discuss this matter further, please feel free to contact me at the below address(es) or telephone number.

    /Christopher E. Ezold/
    The Ezold Law Firm, P.C.
    One Belmont Avenue,
    Suite 501
    Bala Cynwyd, PA 19004
    (610) 660-5585
    Cezold@Ezoldlaw.com
    www.ezoldlaw.com

  2. Tyler Benjamin Christ

    Contributor Level 10

    4

    Lawyers agree

    Answered . I agree with Attorney Ezold. Unfortunately if your business partner is refusing to cooperate, you may ultimately have to go to court to force the dissolution of the company. It would be best to consult a good business attorney in your area before things get more complicated than they already are.

    The statements made by professionals on Avvo.com are FOR INFORMATIONAL PURPOSES ONLY. They should NEVER UNDER ANY... more
  3. Nancy L. Lanard

    Contributor Level 13

    3

    Lawyers agree

    Answered . The LLC Operating Agreement is what will govern the dissolution of the LLC and the distribution of the funds. A seperate bank account would have made everything cleaner and easier, but does not govern the legality of it. How the dissolution will occur and what happens to the business assets, including the business name is determined by the Agreement that you all entered in 2009.

    This reply is a generic reply and is not specific to your situation and does not create an attorney client relationship.

    This response does not create an attorney-client relationship and is not intended to provide legal advice for your... more
  4. Ray Beckerman

    Pro

    Contributor Level 12

    3

    Lawyers agree

    Answered . You need to retain a business litigation attorney and start taking action to protect your interests. The existence or nonexistence of a bank account is irrelevant.

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 contracts

A contract is an agreement voluntarily entered into by two or more parties that is intended to create legal obligations between them.

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