Q: Legal rights after disassociation letter from LLC partner due to health issues.

A: That’s a painful and complicated situation, especially when health concerns and communication delays are involved. In Hawaii, even without a formal written partnership agreement, a verbal agreement and shared actions—like securing a loan and working toward opening a business—can still create a legal partnership. If the LLC was formed, you may also have certain rights under Hawaii’s LLC laws, including rights to information, financial accounting, and a fair share of the business’s value if it dissolves.

The fact that your partner sent a disassociation letter doesn’t necessarily strip you of those rights, especially if you weren’t aware of it due to your move and didn’t have a chance to respond. It’s also important to determine whether the loan is in both of your names, in the business’s name, or just one of you—because that affects liability and how repayment responsibilities are shared. Even without formal documents, your role and efforts in the business can still be legally recognized.

You have a right to request a full accounting of the business’s assets, debts, and how things have been managed since the disassociation letter. You can also clarify your continued role or exit terms to protect yourself moving forward. If the business used that $50,000 loan, it’s crucial to understand how it was spent and whether your former partner has taken on responsibility—or expects you to. You've invested time, effort, and now face personal risk, so standing up for your interests is more than fair.