I am starting a business with my business partner (and we have 2 investors that are related to the business partner and they have 10% shares each). I have signed an operating agreement (did not go through a lawyer although I should have) that him and I are going to split 40% of shares each. I have put in my portion $80k, and the investors put the money in and we filed taxes. However, until this day my business partner did not contribute his share. He hasn't been showing good work ethic since he hasn't been contributing much to the business (he has one full time job and one part time job) and at the same time he has hobbies that takes away practice (for the business). I've always told him that he should quit one of his job since December to dedicate to his work, but ended up still working.
You should take your operating agreement to a business attorney so that they can review it and answer your questions. It may be that this person was never admitted as a member of the LLC. That would resolve your situation rather simply.
I disclaim everything and make no represention of the applicability or accuracy of anything I said here. You are not my client; i am not your attorney. I thought about making this disclaimer as a poem and quickly decided not to do so. Robert Frost can sleep easy.
The time has come to see an attorney. You will need the attorney's assistance to resolve your issue. I have noted that the two investors are related to your partner thus I presume they will be on your partner's side.
My response above is only general, legal and business analysis. It is not "legal advice." It is my own analysis based on the limited brief summary you presented. Other attorneys may have a different analysis and opinion especially if more facts are considered. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in the State of New Jersey.
Yes take the operating agreement to an attorney. It may be a simple fix or you may have to take legal action to resolve it. Also take your companies bylaws if you have any and board operation policies and procedures, if any.
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