If I’m half of a 2 person LLC that has no by-laws or operating agreement, what can I do to force cooperation between the partner so I can have fair share of say and profits?

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If I’m half of a 2 person LLC that has no by-laws or operating agreement, what can I do to force cooperation between the partner so I can have fair share of say and profits?

My partner has shut me out of the business by taking over all the accounts and I have no access. He is spending money and operating the business on his own and I have no power to see what is being spent or brought in.

Asked on January 20, 2016 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You can bring a legal action against him in chancery court, forcing him to "account" for his actions and, possibly, compensate the company; compensate you; and/or possbily to get a court order that the company be sold or dissolved and its assets distributed. This is base on the fact that members of an LLC owe a fiduciary duty--or a duty of loyalty and good faith--to one another, which he appears to be violating. An action like this can be much more complex to bring than, say, a simple suit for nonpayment of a contract; you are advised to retain an attorney to help you.


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