Q: I formed a 50-50 business partnership LLC with a friend.
He has taken another job and now is saying he doesn't want a buy out, but wants to dissolve the LLC and have me start a new company - can he do that?
A: Yes, but if you do not consent it requires a court order. There is some other issue here.
A: You are deadlocked, it's a very common situation among 50/50 partners, best thing to do would be to talk it through with him as to why he won't accept a buyout for his interest. Alternatively, dissolving then creating a successor company isn't too big of a deal either.
A:
The short answer is yes. But, as my colleague notes, you will need a court order to dissolve the LLC if it is done involuntarily.
If you decide to voluntarily dissolve the LLC, starting a new LLC can be accomplished fairly easily. In order to voluntarily dissolve your LLC voluntarily, you first should look to the company’s operating agreement. In most cases, it will contain a section with rules for how to dissolve the company. Typically the rules will require a vote of the LLC members on a resolution to dissolve and a requirement that some percentage of members vote in favor of the resolution. Make sure you follow any specific procedural requirements that may be part of the dissolution rules, such as setting a specific time to meet and vote and giving advance notice to all members regarding the meeting. Be sure to record the decision to approve the resolution in the official minutes of the dissolution meeting or on a written consent form. Within 90 days of taking the necessary action to dissolve your LLC, you must file articles of dissolution with the New York Department of State. Also, you will have to take care of any winding up tasks required by New York law and deal with any tax issues. Given the various steps that have to be taken care of, you and your friend should consider hiring lawyer to assist you.
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