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Who is the default manager of an LLC?

Denver, CO |

Don't have an operating agreement. I filed paperwork with the state wherein I indicated that the LLC would be manager managed. Now the individual I hired is claiming an ownership interest because he was around at the beginning and wants to be 'bought out'. He contributed no capital but only took a salary. Who is the manager? Is the other guy a member because he claims he is? I'm the one responsible for filing the articles of organization, but he was listed as the person delivering them. Who is the manager?

Attorney Answers 5

Posted

A manager is not necessarily a "Manager" as defined in the law on LLCs. (Manager in law in an LLC is like a Director on the Board of Directors for a corporation).

It sounds like a bluff to me, but you really need to speak with a local Colorado attorney, have your LLC books looked at and "perfected", and discuss in depth the factual and legal situation.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

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Posted

Woah, you need to sit down with an attorney to straighten this out. Just because you filed your Articles of Organization with the Secretary of State does not even necessarily mean that you are a valid LLC. There should be bylaws as well for how your business is to be run and possibly even declarations. You might call yourself an LLC. However, the government might not even see it that way for tax purposes. You need an attorney's assistance on this.

The information provided in this answer does not create an attorney-client relationship and is not considered to be legal advice. Mr. Leroi answers questions on Avvo because he strongly believes in public service from his years as a judge, magistrate, and prosecutor. If you need to ask any follow up questions because my answer did not fully address your question, feel free to call Chris or post an additional question. Thank you.

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Posted

A message board is not going to yield the sort of advice you need in this complicated situation!! You need counsel pronto! Look for an attorneyt aht works int eh area of business formation and entity law for the help you need!

In no way am I offering you legal advice, and in no way has my comment created an attorney-client relationship. You are not to rely upon my note above in any way, but insted need to sit down with counsel and share all relevant facts before receiving fully-informed legal advice. If you want to be completely sure of your rights, you must sit down with an experienced criminal defense attorney to be fully aware of your rights.

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Posted

who put in the capital to the business?
who signed the paperwork as member?
who opened the bank accounts as owner and signatory?
are there written documents that speak to who is the owner and who is an employee?
was the "manager" given a form K-1 or a Form W-2 to report compensation paid?
who signed any lease obligation or other credit facilities as a member?
who filed for SS-4 tax EIN and reported the ownership of the LLC?

Answers to the above questions is the starting point to start to figure out this mess and advise on next steps.

My answer is not intended to be giving legal advice and this topic can be a complex area where the advice of a licensed attorney in your State should be obtained. Please click "helpful" or "best answer" if my answer added any value or add a "comment" if you have more info for me to help you get a better answer.

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Posted

The gambit by the employee "manager" borders on the ludicrous. A LLC is owned by its members. When you filed the articles you should have stated that it had at least one member, that member should have been you. The members vote for the manager. So unless you actually voted for this person to be the manager of the LLC in some plausible fashion, the employee's claims should not go very far.

Now, as noted by my colleagues, you need to speak with an attorney quickly to resolve this and to draft an appropriate operating agreement and other contracts to avoid problems like this.

This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.

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