Legal Question in Business Law in California

Re: Business partner situation

Buy him out. Either negotiate it, or file suit for appraisal and purchase of his interest if he refuses, and get a restraining order if you have grounds for it. Feel free to contact me for the legal help you'll need, if the case is in SoCAL.

Re: Business partner situation

Your situation depends on the Operating Agreement. I often include a put/call option to resolve situations like this. Your Operating Agreement may contain a similar provision.

Does the LLC pay the rent for the space? If so, you may have a difficult time to exclude one of the members. If you, individually, are paying the rent as an individual, you could keep the disrupting partner from entering the premises.

A method that is sometimes employed to dispose of undesirable LLC members is to not distribute any of the profits, but rather to retain them within the company. This way the LLC member sill have to pay taxes on the profits, but will not receive any distributions to pay the taxes with. One caveat here is that some Operating Agreements require that a certain percentage of net profits be distributed to help the members pay their taxes. Once a member has to pay taxes, but receives no funds to pay them with, they are usually more willing to be bought out.

The key is to read the Operating Agreement, to understand what you can and cannot do to dispose of the undesirable member.