So my business partner and I started an LLC in NH back in January. Things were going okay, but he just told me he's moving to Florida and wants out. We don't have an operating agreement (I know, I know). The LLC is registered with the state, we have a bank account, but nothing in writing between us. What are my options here? Can I just buy him out? Do I need a lawyer? I'm freaking out a bit because we have a couple of clients and I don't want this to blow up.
LLC Partnership
My New Hampshire LLC partner is leaving before our first year ends
No operating agreement is rough, but not fatal. NH default rules will apply. You'll want to look up the NH LLC statute, specifically what happens when a member dissociates. Usually you can continue the LLC with the remaining member, but you have to buy out the departing member's interest at fair value.
Get a lawyer. Yesterday. This is exactly the kind of thing that turns into a lawsuit if you try to DIY it
How much is actually at stake? If you have two clients and no major assets, maybe you can just agree on a number and move on. If there's real money or IP involved, lawyer up.
Not a ton of money yet. Maybe $15k in the bank and a couple of ongoing contracts. He's not asking for much, just wants his initial $5k back. I'm just worried about liability if we don't do this right.
If he's willing to walk for $5k, that might be the cheapest lawyer bill you'll ever avoid. But still get something in writing. A simpl purchase agreement and an amendment to the LLC certificate (or whatever NH requires) would cover you.
Florida? In this economy? Good luck to him. But yeah, get it in writing. I've seen too many 'we're friends, we don't need paperwork' situations end bAdly.
Also check your bank account. If it's a two-signature account, you might need his signature to remove him. And make sure he doesn't take the money and run. Not saying he will, but protect yourself.
OP, you said no operating agreement. Did you at least file the LLC with the state as member-managed or manager-managed? That affects who has authority to sign things.
Member-managed. And yeah, the bank account requires both signatures for withdrawals over $1k. He's not a jerk, just moving for family reasons. I think we can work it out, but I want to do it right.