Legal Question in Business Law in New Jersey

Is it legal to sign two separate agreements with clients under one LLC ?

We have two partners LLC in NJ. We offer two services (one is handled by him and one is handled by me) and most clients wants to hire us for both. Due to some unfortunate events and disagreements, we are looking to break the partnership. Since we both are making good money out of this business due to strong client base, we are trying to see if there is a way to work together for same clients but still be independent (expenses, losses, income…). Here is my question.

Usually clients contact us via existing LLC website or social media. If a client wants to hire us for both services, can we sign two separate agreements with the client (one between my partner and the client and one between myself and the client) instead of between LLC and the client? This way we have client continue to come in via LLC website but as same time we are still independent since we would have our own entities.


Asked on 6/29/17, 5:13 am

2 Answers from Attorneys

Frank Natoli Natoli-Legal, LLC

There is no good reason why you could not accomplish exactly what you intend here, but it needs to be thought through. If your intention is to no longer remain in business with each other directly then one of you should transfer your interest in the existing LLC to the other. Then that member should set up his own LLC or other entity. There are a number of ways you can approach the use of the existing LLC website, for example, your new LLC enters into an ad agreement for the privilege of continuing to use it. Your clients would be entering into separate agreements and the contracting entities should be made clear on your service agreements. It should always be clear to your clients exactly who they are doing business with and who is taking responsibility for the agreement and service they receive. You take some risk by sharing a website with another business you have no connection with. Should they breach an agreement it is entirely possible that they would name the website/domain along with any entities connected to it and you would now be hiring legal counsel to answer a complaint and submit a motion to dismiss, which can easily cost you into the thousands of dollars.

Before you take any action, I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Our firm is now referred by the American Bar Association (see under the New York section):

http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

[email protected]

DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

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Answered on 6/29/17, 6:19 am
Roman Fichman Esq. Law Practice of Roman Fichman Esq.

Generally speaking, the answer is yes. an LLC can offer multiple services that would be performed by multiple service providers. It would mean that you are going to continue to be partners, so you would need to work out the books (i.e. work out the finances) and make sure that if in the future you do want to separate and establish two different LLCs that it would be easy.

I can definitely help you with that. Call me anytime.

Roman R. Fichman, Esq.

www.TheLegalists.com │ @TheLegalist

email: Info (@) TheLegalists (dot) com

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Disclaimer: This post has been written for educational purposes only and was not meant to be legal advice and should not be construed as legal advice or be relied upon. No intention exists to create an attorney-client relationship or any other special relationship or privilege through this post. The post may contain errors, inaccuracies and/or omissions. You should always consult an attorney admitted to practice in your jurisdiction for specific advice. This post may be deemed as Attorney Advertising.

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Answered on 6/29/17, 7:37 am


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