Full question:
I am a member of a LLC, my parnter is the other member. We are both own 50% of the LLC. The partnership has gone bad and I have been trying to buy him out. He is not interested. We have no signed contract between each other and we do not have a operating agreement..since he is not interested in a buyout..I have obtained a lawyer to file a petition to dissolve the LLC which i understand, could take some money. I would no longer have a fudiciary resonsiblitly with the company and would then start up a new company after that date, doing the same business with the same customers as currently none of my customers are under written contract...seems like this may be a easy way to get my final result.question is can I give my partner written notice of resignation as a member of the LLC at which time I would be entitled to 1/2 of the value of the company at that time?
- Category: LLC
- Date:
- State: New Jersey
Answer:
To dissolve a New Jersey LLC, a Certificate of Cancellation must be filed. However, before filing this, the LLC must be dissolved. Dissolution can occur in several ways:
- If the Certificate of Formation specifies a dissolution time, it dissolves at that time.
- If no time is specified, dissolution occurs 30 years after formation.
- If an event triggers dissolution, it occurs upon that event happening.
- If all members consent in writing to dissolve, the LLC is dissolved.
- If the LLC has no members for 90 days, it is dissolved.
After dissolution, the LLC enters the winding-up phase, which includes settling debts, closing business, and distributing remaining assets. Assets are distributed in the following order:
- To creditors, including members and managers, for liabilities (except for liabilities to resigning members).
- To members for distributions owed, unless stated otherwise in an operating agreement.
- To members for the return of their contributions, unless stated otherwise.
- To members based on their proportionate interest in the LLC, unless stated otherwise.
A member can receive distributions before resignation and dissolution unless restricted by the operating agreement or state law. If a member resigns and there is at least one remaining member, the resigning member is entitled to distributions as per the operating agreement. If there is no agreement, the resigning member is entitled to the fair value of their interest at the time of resignation, minus any applicable valuation discounts. If the resignation violates an operating agreement, the LLC may seek damages from the resigning member.
Once business affairs are completed, the Certificate of Cancellation is filed with the Department of Revenue.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.