How to get split from my business partner if we have an LLC?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

How to get split from my business partner if we have an LLC?

We have a partner who wants out but hasn’t fulfilled their services end of the

agreement. I put in an investment of 500K for my partner’s contractor services, plus his small $7500 investment. Now he wants out for 50% of the value and says that he will still develop in the future but he is retiring. I want him out completely. I’m not sure how to proceed.

Asked on July 29, 2018 under Business Law, Idaho


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you have a "buy out" or similar provision in the operating agreement or other contract with this member (that is the correct term for an owner of  or partner in an LLC), the answer is simple: you follow the terms of the agreement.
Without an agreement, it's up to you and him to work something out. You do NOT have to buy him out without a buyout agreement; you can force him to remain a member. On the other hand, as a member, he'll have the right to profit participation (e.g. a share of any distributions or, if you sell the business, the proceeds of the sale) without working. So there is an incentive for you and him to work out something that works for both of you, so you can rid yourself of a non-performing member and he can retire if that's what he wants, but you have to work it out voluntarily if there is nothing in writing detailing what happens if he wants out.
You mention a "services end of the agreement." That might give you some rights against him, if he is violating an agreement, but you have to review the agreement to see what rights might flow out of it; agreements and contacts are enforced as per their plain or exact language, so it is impossible for us to offer an opinion about this agreement without knowing what it says about his obligations and your remedies for a breach.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption