What to do if my partner and I started an LLC of which I’m the president and he’s the CFO but we don’t agree on how to run things?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
What to do if my partner and I started an LLC of which I’m the president and he’s the CFO but we don’t agree on how to run things?
The company is still in its infancy he is a co-founder. Verbally he has 13% of the company and I have the rest. We don’t agree on much of the decisions and he doesn’t contribute at all in any aspects. Can I legally terminate him from this LLC, as we don’t have any written contracts or signed agreements?
Asked on September 23, 2015 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
You can fire him as the CFO, since you are the president and also have a controlling interest. However, you cannot eliminate or remove his ownership interest--the 13%--unless you had buy-out agreement or provision, which you apparently do not the problem is, regardless of the control you have over the company, you can't take away another person's property, and his interest is his property. So you can remove him from decision making and run the show yourself, but he'll still be a 13% owner and able to profit in that way if the company profits and there are distributions of profits or if you sell the business. And you have to treat him fairly as a minority owner majority owners have a fiduciary duty to minority owners, which means, for example, that if there are distirbutions, you have to give him his share. Of course, you can pay yourself a salary as President for the work you do, and do not need to give a salary to someone who is not an employee of the LLC.
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 AttorneyPages.com 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.