Skip to main content

Sue partner in LLC

Alpharetta, GA |
Filed under: Starting an LLC

can i sue my partner in an llc. we agreed to share profits and losses 50-50/. I put up the money for the business. the business hasfailed. can i sue my partner for 1/2 themoney i put in?

Attorney Answers 2


You can sue anyone for anything. Whether you can prevail is a different question entirely.

As to whether you have a viable claim against your partner in the business will depend on what you agreed to, how you agreed to it, and what evidence you have of the agreement. If you had developed a business plan and operating agreement, what do those documents say about how you'll handle the failure of the business, or a break up of the members of the LLC? Do you have an agreement in place for how to handle start-up costs, and how members will cash out, if there is any cash left? Did you put up the money in exchange for the other member (your partner) to put in his share in sweat equity, etc.?

I recommend that you consult a local lawyer who works with small business issues. If I can be of assistance, please call on me.

This is general information only, and is not provided as legal advice for any particular situation.

Mark as helpful

1 lawyer agrees


It's possible; however, the default rule is that when you contribute money to an LLC in exchange for an ownership interest, you're not entitled to anything if the business fails. To overcome the default rule, you must show something special, such as:
- The contributed money was a loan that was to be repaid by the company or the other member;
- The company or the other member guaranteed you a specific return on your investment;
- The company or the member failed to honor their obligations, perhaps by breaching a specific provision of the operating agreement or by failing to act with loyalty and in good faith; or
- The company or the other member violated a federal or state law, and, as a result, you're entitled to rescind / "undo" the transaction.

There are some other possibilities as well, but these are among the most common. You would need to contact a local business attorney to determine your rights.

Best of luck --

Disclaimer: I'm not your attorney, and this isn't legal advice. This is merely background information that can help you understand this area a bit more.

Mark as helpful

1 lawyer agrees

Business topics

Recommended articles about Business

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics