Fremont, CA asked in Business Formation and Business Law for California

Q: As a limited partner, what happens if I vote no to the amended operating agreement but the majority partners vote yes?

I'm a limited partner in a partnership. The managing partners who are also majority shareholders are amending the operating agreement which includes clause that changes how limited partner can exit. I want to understand my position. Can the amendment get approved if I vote no but the majority of shareholders vote yes? By voting no, would the old clause still be effective for me?

The amendment got rid of the language of how limited partners can exit if the company dissolves. If the amendment becomes effective, how will my capital be paid back? According to the percentage of ownership?

1 Lawyer Answer
Shawn R. Jackson Esq.
Shawn R. Jackson Esq.
Answered
  • Rohnert Park, CA
  • Licensed in California

A: Well, the first item on our review list would be … what does the current LLC Operating Agreement state regarding such "votes" and "changes" to the current agreement. Often times, such changes require a unanimous vote … and even in the absence of a requirement of a unanimous vote, if the majority adversely affects the minority interest, there are remedies. Let us know your thoughts. … Shawn Jackson - Business Development Attorney

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