What is my recourse if as member of a 2 year old LLC that has found out that other members have used company finances to pay personal bills and subsidize a separate business?
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What is my recourse if as member of a 2 year old LLC that has found out that other members have used company finances to pay personal bills and subsidize a separate business?
I have independent audit results backing this information and want to dissolve the LLC or withdraw membership; however the other members are not in agreement.
Asked on December 22, 2012 under Business Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
You can take legal action: the members of an LLC have fiduciary duties to each other. What you describe has violated this duty. You may be able to seek legal compensation from your fellow members. You can also petition the court to dissolve the LLC and apportion the assets and liabilities; you have a right to do this, and cannot be "trapped" into remaining in the LLC
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