Walking away from business

stayj

New Member
Jurisdiction
Nevada
I am 75% owner of a 2 Member LLC that owns and operates a service oriented franchise. My partner is managing member and operator, and we have been in operation approximately 1 year. I am primarily an investor, but I do look at the books. We have no loans or debt; however, we only break even and have not much revenue.

I am increasingly discontent with our relationship, due to his management style and poor communication with me. I am concerned about his management style because he is not aggressive with marketing as much as I think he should be, he misses important payments such as the Visa bill and filing states sales tax returns on time, so we have been assessed penalties and late fees. It drives me bonkers. He does not return most my calls/texts/emails requesting we sit down and chat to discuss his practices and our vision. I don't care about the money I invested, I just want to get this business off my plate and never worry about the franchise. Do we need a separation agreement if I am not asking for assets, money, or future income?

Our operating agreement states "A Member may not withdraw, retire, or resign as a Member unless, after receiving written notice requesting same, the Members shall have unanimously consented thereto in writing, which consent may be granted or denied in the Members' sole and absolute discretion." Can my partner prevent me from leaving the LLC if for some strange reason he does not want me to leave?

Thanks ahead of time, look forward to comments.
 
Can my partner prevent me from leaving the LLC if for some strange reason he does not want me to leave?

How do you think anyone, much less the dummy you have for a partner, could prevent you from quitting?

Marriages are dissolved, and partnerships can be dissolved, too.

I have no idea if you even possess a valid partnership agreement, as in legal, or if you've been operating under some document you created purporting it to a partnership agreement.

I suggest you talk to your attorney, or retain one, about how you could legally dissolve your partnership, or whatever "ship" you've allegedly created.
 
Do we need a separation agreement if I am not asking for assets, money, or future income?

I don't understand the question. Despite your use of the term "partner," you and the other owner are not, in fact, partners. Rather, each of you owns a share of an LLC. If you want out, then sell or give your interest to the other owner or find a third party willing to buy your interest. Of course, your ability to sell (or even give) your interest to anyone other than the other owner may be limited by the LLC's articles of operation, by-laws or other governing documents or any side agreement between you and the other owner, none of which I have the ability to read.

Our operating agreement states. . . . Can my partner prevent me from leaving the LLC if for some strange reason he does not want me to leave?

Only a fool would attempt to opine about the impact of the single sentence you quoted for us without reading the agreement in its entirety (as well as all other applicable documents). You need to take all of the relevant documents to a local business attorney for review and advice.
 
If I signed a franchise agreement as a member of a LLC, am I obligated to the terms of that agreement after I leave the LLC?
 
If I signed a franchise agreement as a member of a LLC, am I obligated to the terms of that agreement after I leave the LLC?


It depends on what the agreement you signed reveals.

I suggest you take the agreement to a local attorney and seek a WRITTEN legal opinion.
 
He does not return most my calls/texts/emails requesting we sit down and chat to discuss his practices and our vision.

You know where he lives or whence he operates the business. Go there and discuss. That you are having no luck contacting him other than in person is on you.
 
If I signed a franchise agreement as a member of a LLC, am I obligated to the terms of that agreement after I leave the LLC?

To paraphrase what I told you previously: Only a fool would attempt to opine about the legal effect of a contractual agreement without reading the agreement in its entirety.
 
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