Partner has shut off all access to LLC

Asked over 1 year ago - Hollidaysburg, PA

Short history. We do not have an operational agreement, nor proof of shares other than my partner purchasing my former partners assets. Which makes him believe he has full ownership over the new llc he created without my name(which I just found out). I organized and relocated the business, brought my former clientele, employees, our names are on checking, insurance, merchant accounts, etc. After the first week open, he told me hes full owner and shut off all access to emails, checking, etc behind my back. He has taken the business phone and I am not sure what to do in regards to the business staying operational and now legally. How do I show proof what I am entitled to. Can I have the business shut down till this is resolved?

Additional information

I forgot to add, he personally loaned the company to pay for my former partners share of assets as well as the start up cost. My contribution was my share of assets which were purchased from former partner, hours worked, clientele and knowledge of the business operations and construction.

Attorney answers (3)

  1. Stanley Bruce Cheiken

    Pro

    Contributor Level 8

    4

    Lawyers agree

    Answered . You really need to speak to an attorney to get the best possible advice for your specific situation. There are ways to prove you have an ownership interest in the LLC. Even in the absence of an operating agreement, Pennsylvania law has a statutory scheme pertaining to the management of an LLC. It is possible to dissolve an LLC. These questions, and many more, arise in the context of a minority squeezeout, such as you have described. You should get an attorney to assist you in this complicated area.

  2. Nancy L. Lanard

    Contributor Level 13

    3

    Lawyers agree

    Answered . If your partner has acted in a way that violates his fiduciary obligations to the company, he has violated PA laws. Even though you do not have an Operating Agreement, PA statutes provide for how the business is to be managed. You should immediately consult an attorney to protect your interests.

    This response does not create an attorney-client relationship and is not intended to provide legal advice for your... more
  3. Kerry Blasingim

    Contributor Level 12

    2

    Lawyers agree

    Answered . Wow. Go hire a lawyer PRONTO. I mean, no business relationship that begins with "we do not have an operat[ing] agreement" is going to be anything but a mess; those documents exist precisely to prevent these sorts of situations. Now, you're going to have to hire someone to run around trying to establish what is in whose name and who can assert what rights on behalf of the LLC.

    Without reviewing a bunch of documents - some of which you apparently never drafted - I can't give you a good answer. I know this must be a terrifying situation for you; you're going to have to find a lawyer you can trust to work with you in ironing out this situation, because it just isn't going to resolve in any way you like, otherwise.

    No information you obtain from this answer is legal advice, nor is it intended to be. You should consult an... more

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