Is it lawful for a biz owner to collect investment of 10k, form an LLC, then without investors knowledge,not add them to LLC?

Port Orchard, WA Viewed 18 times. Posted about 1 month ago in Limited Liability Company (LLC)
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I invested 10 in a start up business, with the agreement of forming an LLC, and given LLC formation paperwork. The LLC says that I am a Member. Months down the line, I realize owners/managers are embezzling money and abandon the business. They take the investment money and all assets of the business and open a Sole proprietorship with the same business, same name using the LLC funds. I never received a dime. After going to court Judge doesn't want to hear it, sends it to arbitration. I call the sec of state and find out that I am not listed on the LLC..only the owners/managers are. They never added me to the LLC although it appeared that way when I received the paperwork. This is not the first scam this guy has done just differnet business names.
ifferent business names.
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Answers (1)

Robert John Murillo

Robert John Murillo

Contributor Level 7
This attorney is licensed in Colorado and 1 other state. Posted about 1 month ago. Flag as objectionable
Sorry for the problems. As to the claims, that depends on your state law and your agreements. There could be claims for breach of contract, breach of fiduciary duty, civil theft, and on and on. I would strongly recommend that you at least consult with an attorney as to claims given that a full representation may not make sense for this amount of money.

DISCLAIMER—This answer is for informational purposes only and discusses general legal principles, trends, and considerations and is not intended as specific legal advice regarding your question. This answer does not establish an attorney client relationship.
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