He wants to start up another business in a couple of days. We have jobs that haven't been completed. For the past week hasn't done any work, but is still taking money from the banking account. I don't want to shut LLC business down, I have put everything I have in the business and started establishing credit. I can't loose the gas credit cards that I worked hard to get. Can I just keep working and refuse to dissolve business? Is there any way to remove him if he keeps abandoning is work? There is no operating agreement.
If you had no agreement at all your rights are provided under state LLC statutes. As a general rule, a member can withdraw from the LLC on notice. Normally then they cannot vote, but they still hold the economic interest.
As to the person who wants to start a new business, is that business in the same line as what the LLC is doing? If so, that could be a breach of fiduciary duty.
Normally if one member withdraws the remaining member can elect to continue the business. This, once again, varies by state. That, of course, does not solve all issues because they still hold the economic interest. You cannot just "remove" this member's interest. You will have to buy that out.
You really need to speak with a local business attorney and try to come to a mutual separation agreement. Good luck.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
You really need an attorney. The Texas Business Occupations Code sets out your rights and obligations under a limited liability company. You or your attorney need to negotiate a resolution ASAP before additional damage is done.
You may consider negotiating a business divorce with the assets of the current company being split, or with one of you buying out the other. Maybe the resolution is for you to set up a new company, but you should be careful in doing so to avoid breaching any fiduciary duties that you owe to the current company and your fellow member.
Without an operating agreement, a member is free to withdraw or stop working for the LLC whenever they choose, and retain their membership interest. By the same token, you are free to keep the business going. Both of you will have a right to profits, but only one of you should be paid for work.
The two of you probably need to talk about the details of how you will go forward, and you may want to buy out his interest. While you're at it, you probably want to remove him from having signing authority on the LLC's bank account.
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