We've had the LLC for about four years, two members, roughly 50/50. My partner told me last week he wants to shut it down before December 31. He's moving out of state, says he's done. I'm not ready to close, but I also can't buy him out at the number he threw out. Do I have any options here, or is this just going to be a mess through the holidays?
Partnership
My Missouri LLC partner wants to close the business before the end of the year
Is there an operating agreement? That's the first thing anyone's going to ask.
If there IS an operating agreement, read the dissolution section before you do anything else. If there isn't one, Missouri defaults apply and it gets a lot less fun. Either way, don't sign anything he hands you this week.
Slightly off topi but "mess through the holidays" is basically my LLC's business model at this point.
What's the buyout number relative to what the business actually makes? If he's asking for a multiple of revenue on a business that barely clears expenses, that's a different conversation than a real valuation.
You can't force him to stay a member if he wants out, but he also can't unilaterally dissolve and walk if there's an operating agreement with a process. Last time I checked, Missouri LLCs wind up under 347.137-ish — members vote, then you file articles of dissolution. But I'm not a lawyer, just someone who has read too many of these threads.
Yeah the voting threshold matters a lot. 50/50 means neither of you can just steamroll the other in a lot of setups.
Offer to buy him out on a payment plan instead of a lump sum. People who are "done" are usually done with the work, not necessarily done with getting paid.
SourdoughSteve that's actually a solid angle. Also worth checking whether his move triggers anything in the agreement — some have residency or notice clauses that change the timmeline.
Counterpoint: if he moves out of state and you keep operating, you're now doing business with a guy who's checked out and hard to reach. That gets Old fast.
Also — taxes. Closing before year end versus after changes your filing situation. Talk to whoever does your books before you agree to a December date just because he wants one.
Genuinely curious what he thinks "close the business" means. Wind down operations and dissolve the entity? Sell the assets? Just stop showing up? Those are three very different things and I've seen peoPle conflate them.
This. Half the fights I've seen start because nobody defined the word.
Not legal advice but seriously, get a business attorney for one consult. Cheaper than a holiday-season fight with a soon-to-be-former partner.
Or just wait until January and let the holidays do their thing. Nothing bad ever happened from avoiding a hard conversation for six weeks.