Re: Partner wants out of LLC (Company)

No one is "obligated" to buy him out.

The transfer and sale of LLC interest is governed by a membership agreement or a buy-sell agreement. If you did not create any of those documents as part of your business formation, you mnow have a dilemma. You have no rules or restrictions with regard to a sale of the LLC interests.

If that is the case, your friend may sell his interest to any person without restiction.

You are not required to, but could also purchase his interest personally or on behalf of the LLC. This purchase can be structured any way that the parties agree - over time or with a lump sum.

It is always important to draft the proper agreements when starting a business. Visit us online at http://www.minnesota-business.com for business isssues in Minnesota and Western Wisconsin.

Re: Partner wants out of LLC (Company)

Since you and your partner apparently have no buy and sell provisions to the agreements you have signed, neither of you can force this buyout, in which case you also wouldn't end up with control. Therefore, it is incumbent upon both of you to negotiate a resolution, or your enterprise will probably come to an end, since you probably won't want to put in effort that may go one-half to a partner who didn't even want to be in. In the same fashion, he would probably want his money, and wouldn't want to risk loss. In the meantime, you further suffer from the problem that neither of you, alone, can cast a majority vote to do anything. Simply, you and your partner need to work out an acceptable solution for each of you.