Norristown, PA asked in Business Formation, Business Law and Contracts for Pennsylvania

Q: I have formed an llc and bought 25% share in a produce store. Now I want to open Another produce store on my own, can I?

I have registered an LLC called XYZ INVESTMENTS. With this newly registered entity, I have invested in a produce store called FRESH PRODUCTS, and bought 25% share under XYZ INVESTMENTS in FRESH PRODUCTS business. Now FRESH PRODUCTS has 4 business partners (which also includes my LLC - XYZ INVESTMENTS as a Fourth business partner, every partner has equal 25% share each).

Since I am already a part of an active partnership business, can I open another new business (which will be a Produce store again) by myself with out any partners ?

I am planning to open a new business under different new LLC all by myself without any partners from FRESH PRODUCTS. Is it legal to do so? Please let me know or help me with other alternatives on how can I open another similar business legally by continuing being a partner of the existing business as-well.

I am planning to open this new business at-least 20 miles away from the existing partnership business.

1 Lawyer Answer
Nancy L Lanard
Nancy L Lanard
  • Plymouth Meeting, PA
  • Licensed in Pennsylvania

A: There are two issues here. The first is whether the new business should be run under the same LLC. I would think the new business should be a new and separate LLC to run the new produce business unless the original LLC is only used to hold the 25% interest in the other business. This should be discussed with legal counsel so he or she can learn all of the facts. The second issue is whether you signed a non-compete when you became a 25% owner. If you signed a non-compete you will need to have that reviewed to determine if you are violating that non-compete or not. Even if there is no non-compete you have to determine if your new produce business is likely to directly compete with the other business (although I would think that 20 miles away is unlikely to be a competitor if you are in suburban Philadelphia). If you were out in a rural area that might be a competitive business. The issue is whether your new business can be accused of "tortious interference" with the other business. It really depends on the facts of the situation, including the type of area - urban, suburban or rural. You should consult legal counsel.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.