QUESTION

How to dissolve a LLC partnership when one partner does not want to end the relationship?

Asked on Jul 12th, 2014 on Business Law - Virginia
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I formed an LLC in 2011 as a partnership and took on a partner. She is not on any original paperwork for the LLC but we have completed partnership taxes each year. She refused to sign the operating agreement and so now we have no OA or anything that spells out the responsibilities or details of the partnership. Since she's not on the original paperwork for the LLC, is she even a legal partner? I want to end the partnership, but she also refuses to do so with the terms I offered. What is my next step?
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1 ANSWER

Assault and Battery Attorney serving Forest, VA at Fairchild & Yoder Law Office
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Title 50 of the Virginia Code addresses the rights and responsibilities surrounding dissociation of a partner. It appears from your information that you admit and in fact acted as a partnership. Therefore you default to partnership. I would suggest that you continue to try and negotiate a buy out where the terms are sufficient to complete the deal. The code does provide for reasons why a partner can and should be dissociated but does provide that there should be payment for the partners equity. I often tell my clients that in a situation where termination is imminent, both parties will likely end up being equally unhappy. There may be no winner here so get through this tough negotiation so that you can focus on rehabilitating the business. It may be beneficial to discuss why the partner should be dissociated with an attorney to see if your situation meets criteria for forcing a termination of the partnership. This may give you a stronger bargaining position. However, working to force a partner out versus structuring a buy out will breed more conflict and may result in arbitration or litigation. All the time spent on terminating the partnership is likely having a negative effect on day to day operation of the business.   Note: This answer is for general information only and does not constitute legal advise nor does it create an attorney client relationship.
Answered on Jul 14th, 2014 at 8:17 PM

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