QUESTION
Single member LLC in MD. Been sharing my profit 50/50 with someone, who no longer wants to work. Wants 1/2 of money in the account to go away
Asked on Oct 18th, 2013 on Business Litigation - Maryland
More details to this question:
Never on LLC or charter. Previous LLC that I had was paying her 40% profit in 2012. Formed this new one in 2013, intending to add her, but her child became severely disabled and she was out totally for a few months, and is only here sporadically now. Never added her; she never signed anything. She want to not come in any more, but wants me to pay her 1/2 of the money on deposit to go away. Most of that money is deposits on future weddings, booked by me (she does not do the bookings/sales) Is she entitled to anything? I do understand if she were a partner she would be, her atty told her that she is my partner, even if she isn't on the LLC. The child's accident happened the very week we were "starting up"; that's what nothing was done - she was inaccessible for many months, and never did fully start working in the business.
1 ANSWER
Real Property Attorney serving Bethesda, MD
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I regularly assist businesspeople in disputes over the control of their business when one partner/member/etc. wants to leave the business. Were this to go to court, in the absence of an operating or partnership agreement, the court would look at all documents, emails, correspondence, course of dealing, etc. to determine the true nature of your business relationship. Without seeing those documents, it is hard to predict what a court would do or to say what your "partner" would be entitled to.
I am working with a client on a similar matter and we are going over everything so he can preserve control of the company he built in the face of a challenge to a "partner" who did very little and who is seeking to take the company from him. It sounds like you are in a similar situation. If you would like to discuss further, please do not hesitate to reach out to me: 301.654.6570 or stm@morrisesq.com. I'd be happy to share my thoughts from that case and see if anything applies to your case.
Yours,
Sean
Answered on Nov 11th, 2013 at 1:45 PM