Can 1 partner in a llc Force the other partner to leave

Llc in Texas
Partnership is 50 each
Can one partner force the other partner
to leave?
What rights does the partner the one
being forced out have?
Can the partner force a dissolution of
the company?

Asked on October 11, 2017 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

50% each, or "50-50," means that neither of you has the upper hand; you are perfectly equal. "Deadlocked" is a good description of your status: neither of you can legally force the other to do anything; any decisions, changes, buy-outs, etc. must be mutual consent. Litigation is apt to be expensive and inconclusive: again, 50-50 means equal power. You are advised to simply sell to the other person even for a relatively small price, or let the other sell to you for an amount equal to at least one year's profit, if not more, just to resolve what could be an expensive stalemate that wastes money and destroys value. In the future, do NOT enter into 50-50 partnerships unless the company's operating agreement contains some clause or provision allowing for a forced buy-out in certain conditions: otherwise, you invite a stalemate. The author has had several LLCs; he has never participated in a 50-50 arrangement for exactly this reason. There is no good conclusion to a struggle between 50-50 owners except one they mutually agree to.


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