Can my business partner add someone else to the LLC without consulting with me first?
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Can my business partner add someone else to the LLC without consulting with me first?
My business partner just went behind my back and added another person to the LLC without consulting with me first and threatened to dissolve the LLC without me agreeing to it. Is this legal? Can he dissolve the LLC legally without giving me the option of a payment plan to buy him out?
Asked on May 31, 2019 under Business Law, New Jersey
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
No, none of what you describe is legal. He cannot add someone to the LLC without your consent because it reduces your ownership interest, and he cannot reduce your ownership interest (take away something you own) without your consent. (Note: he could have given someone else part of his share or interest in the company, since then he is just reducing what he owns and not affecting you.) Also, in a 50-50 partnership, which is what you apparently had, neither partner can unilaterally make a major decision without the other, since neither one has majority control. The adding another person would be void.
And in a 50-50 partnership, since neither partner is a majority owner, neither has the power to dissolve the business with the other one's consent.
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