Brooklyn, NY asked in Business Formation and Business Law for New York

Q: Is the operation agreement of an LLC binding if no one has signed it? And can you then vote a member out if it isn't?

There are three members in the LLC, of which no one ever signed the operating agreement. It was formed to handle business for a podcast. One member left the podcast has left, and he wants to keep the LLC since he paid for the legal fees associated with the formation of the business. The two other members would like to keep the LLC to continue the podcast and affiliated business with the same name.

2 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: If there is no operating agreement, then you would need to seek a court ordered dissolution. There is no way to throw somebody out.

Mathew Paulose Jr.
Mathew Paulose Jr.
PREMIUM
Answered
  • Bronxville, NY
  • Licensed in New York

A: Greetings, it appears your LLC is having a member dispute. Member disputes are common in LLCs, indeed in any type of group venture. Member disputes must be resolved for the sake of the business. If the business is being driven to the ground because of the dispute however then dissolution may be the only answer. If your LLC is a NY LLC, dissolution is not an easy matter to obtain judicially. You must show that the business is truly incapable of operating to obtain a dissolution through a judge. If the business is capable of operating, then a judicial dissolution will not be possible. One may want to instead explore obtaining consent or a buy out, among other options. One should also look at the operating agreement itself, which may have provisions both to resolve disputes and concerning dissolution. Please speak with a good New York attorney for more information. Good luck.

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