My LLC partner who owns 51% of the business has filed a final tax return and wrongly stated that all members voted yes.

Asked over 1 year ago - Pasadena, CA

Last year my LLC partner removed me from running the business and started making false claims against me in an effort to force me to give up my shares (49%). Our lawyers traded letters, but when pressed to prove her claims she has not pursued any further action.

I just received a copy of the LLC tax return which states that it is final and she checked the 'yes' box for all members voted as such. This is 100% wrong. Furthermore, she is now taking the product and manufacturing under a new business entity but with the same product IP. Are there any actions can I take with regards to the State Franchise tax board that will help me build a stronger case? Our OA states that a member must be bought out or all members vote to dissolve, however, there is no 'non-compete'

Attorney answers (3)

  1. Michael Charles Doland

    Contributor Level 20


    Lawyers agree

    Answered . You did the correct thing by hiring an attorney to write your demand letters. The complexity of what your former "partner" did is beyond a public forum. An attorney can advise you on your strategy to "help me bring a stronger case" but on your facts I am not sure what needs to be stronger. You may have several different claims, including but not limited to breach of fiduciary duty.

    The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may... more
  2. Robert Jan Suhajda

    Contributor Level 17


    Lawyers agree

    Answered . You have to take your partner to court to force an accounting and distribution of the assets according to the OA agreement. It probably will require an an appraisal.

    Disclaimer of California Attorney. Laws differ from state to state. Although the above response is believed to be... more
  3. Matthew P. Blair

    Contributor Level 11


    Lawyers agree

    Answered . In your question you mention "our lawyers." Do you already have a lawyer to represent you personally or does the lawyer represent the LLC? I agree that you would be best served by an attorney to represent your personal interests.

    Matthew Blair

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