QUESTION

Leaving an LLC registered in the State of Washington

Asked on Feb 13th, 2016 on Business Law - Washington
More details to this question:
My ex wife and I are equal owners of a business which is registered in the state of Washington as an LLC. The operating agreement of the LLC contains no provisions relating to the ending of the business or the withdrawal of a member. I want to exit the business, I am 66 years old and want to retire. My ex wife and I are in an adversarial relationship, she is suing me on issues relating to our separation agreement. I do not want to pursue court ordered dissolution of the business, I just want to stop working and retire. Can I do so without being in breach of my fiduciary duty, or am I obligated to work until I die?
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Owning an llc, like being a shareholder of a corporation, neither requires you to work for it nor requires it to employ you, although the operating agreement or side agreements may have provisions dealing with employment.  Assuming there is no such agreemernt in place, absent a legal withdrawal from the llc, you would still have fiduciary obligations to the llc as a member, but you don't have to work for it.  However, if you just stop working, there are likely to be other disputes which arise.   For example, how much can your ex take as salary now that you are no longer working for the llc?  What if the business needs money and your ex wants to make a capital call?  How much of a share should you receive from the sale of the llc?  Can your ex hire her new boyfriend to work for the llc without your consent, and, if so, how much can she pay him?  Do you have the right to work for a competitor?  Have you guaranteed any of the llc's obligations, such as (as is often the case) rent?  It may be better to get these issues resolved now.
Answered on Feb 16th, 2016 at 8:56 AM

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