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When operating an LLC, kicking one of the partners out can be a tricky operation. Generally speaking, the business has three options when looking to force someone out. You may follow a procedure that was previously outlined within your operating agreement, come up with an entirely separate deal or take the matter up in court.
"If you have an operating agreement, it doesn't matter whether your partner wants to be bought out or not," Nina Kaufman wrote for Entrepreneur magazine.
"If you have the requisite percentage of majority votes, you can make it happen. The matter can become tricky if your operating agreement lacks a valuation clause. Without it, you could have a dispute about how much her share of the business is worth," she added.
However, an LLC that does not have an operating agreement will have a difficult time, particularly if the business partner is refusing to come to terms. In this case, it may be necessary to take the partner to court to have a judge settle the dispute and determine how much each party is owed.
This article is brought to you by Vcorp Services – Vcorp offers executives, attorneys, accountants, and entrepreneurs an extensive suite of services including entity formations, state filings, document retrieval, tax-exempt filings, UCC filings and searches, 501c3 filings and more. www.vcorpservices.com
"If you have an operating agreement, it doesn't matter whether your partner wants to be bought out or not," Nina Kaufman wrote for Entrepreneur magazine.
"If you have the requisite percentage of majority votes, you can make it happen. The matter can become tricky if your operating agreement lacks a valuation clause. Without it, you could have a dispute about how much her share of the business is worth," she added.
However, an LLC that does not have an operating agreement will have a difficult time, particularly if the business partner is refusing to come to terms. In this case, it may be necessary to take the partner to court to have a judge settle the dispute and determine how much each party is owed.
This article is brought to you by Vcorp Services – Vcorp offers executives, attorneys, accountants, and entrepreneurs an extensive suite of services including entity formations, state filings, document retrieval, tax-exempt filings, UCC filings and searches, 501c3 filings and more. www.vcorpservices.com
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