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LLC with no operational agreement and want to know my options in this hostile situation.

Brooklyn, NY |

Some history. I was a partner in my venture for many years before I found my new partner. We formed a new LLC with no operational agreement. My partner made a loan to the LLC which was used to purchase the assets from my former partners and used for startup cost. Our business is finally operational after I have done all the work of relocating and setting up.

We are no longer agreeing on things after the
business has open. She thinks that because she made the loan she owns everything. What are my options?

Attorney Answers 4

Posted

Litigatte is the answer
because your Operation Agreement option is no more

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Posted

This is less an employment law question and more business law. I would suggest posting your question again under the business heading to get additional answers.

This answer does not constitute legal advice and you should contact an attorney to confirm or research further any statements made in this answer. Any statements of fact or law I have made in this answer pertain solely to New York State and should not be relied upon in any way in any other jurisdiction. Additionally, we also encourage you to reach out to us via Twitter (https://twitter.com/#!/WhiteRoseMarks) or Facebook (http://www.facebook.com/WhiteRoseMarks) if you have follow up questions as we do not monitor questions after providing an initial answer.

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Posted

If there is no operating agreement for an LLC you will have to look at what the default LLC rules are for the state in which the LLC is formed.

You should contact an attorney to advise you on how to proceed.

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Posted

The allocation of membership interests in an LLC are not simply determined by capital contributions. A person can commit capital, property or services in support of their value added to the LLC. With no operating agreement to the contrary, profits and are to be allocated on the basis of the value stated in the records of the LLC.

You are going to have to establish the value you added to the LLC, and are going to need a lawyer to help you litigate this case if necessary. Your initial issue is proving that you are a member of the LLC.

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