My partners and I formed an LLC and I worked numerous months by myself on that company to make it happen. During those months, we did not have employees and all the other partners were working on their own companies not paying too much attention to the new one.
When we got employees, I took care to manage them and make sure everyone was on target. I recently took a 5-month leave due to some personal issues.
Now there is an opportunity to take the product that was created for that company and sell it wholesale for a bigger contract than we've ever got. One of my partners (also my husband) threatened with taking me out of the new deal saying they would create a new company to handle the new contracts and because I took a leave I would not participate. Can he do that after all I've worked?
Probably not without legal repercusions. Unless there is an agreement to the contrary, it would most likely be a breach of their fiduciary duty to do what you describe. However, this area of law is very complicated and fact sensitive. You should speak with a local business attorney to determine your best course of action.
That member is an idiot. Now, a bit more calm reflection.
I assume you do not have a written operating (mistake). I also assume you do not have an oral agreement that would allow these two members to just pick contracts (even assuming this would be even allowable under state LLC fiduciary duties).
If you don't have an agreement, your rights and duties flow from state statutes and case law. In many states LLC members have fiduciary duties which may include the duty of loyalty. This means that the individual members cannot just take opportunities for their own benefit, as these two members apparently want to do. I can't speak to GA law, so these are general principles only.
So what needs to happen is to try to resolve these differences calmly. Discuss your role in the LLC and its benefits and tell the other members that you need to have an operating agreement so you can resolve these kinds of disputes and other issues. Then hire a local business attorney to draft the agreement. Good luck with the members and in your venture. Please, hire an attorney now or this will fall apart into a gigantic mess.
This answer is for informational purposes only and is not legal advice regarding your question and does not establish an attorney-client relationship.
In a word, no. That scheme would be a breach of the fiduciary duty of loyalty owed you by your co-members (not partners) of the LLC. You should consult with a business lawyer who will explain this aspect of the law to the other members and negotiate in your behalf.
DISCLAIMERâ€”This answer is for informational purposes only under the AVVO system, its terms and conditions. It is not intended as specific legal advice regarding your question. The answer could be different if all the facts were known. This answer does not establish an attorney client relationship. I am admitted only in California. (Bryant) Keith Martin sbbizlaw.com
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