What is the name of your state (only U.S. law)? Michigan
My husband became 1 of 4 partners in an LLC. His contribution was $30,000 and machinery. At the time, a 51% Managing Partner had to be named, as well as, the divvying up of the other percentage of membership. It was agreed that "Ron" would be the 51% Mgng Partner, and the other three were 17%, 16%, and 16% (of which my husband is a 16% member). The 51% named partner - Ron - had no monetary investment into the company, and borrowed it from Partner #4 (who invested $100,000-not an active/hands-on member). #4 is a silent partner, still yet to be reimbursed fully. My husband (partner #2) a 16% owner and partner #3 (16% owner) have since found (6 years later, with lots of suspicion in between), that Ron 51 is an out-of-control gamblaholic, thief, liar, and manipulator. Unfortunately we did not "know" him as good as we should have. BIG MISTAKE. We have copies of canceled checks as documentation and proof of stolen funds via "Petty Cash" ($700,000 worth at least!), as well as, receipts from 4 company credit cards he used for Cash Advances, and a HUGE expense report he allotted himself. Over the course of these last six years, we have insisted on Meetings, being shown the books, the financial statements (accountant is Ron's friend, so he is just as guilty, because I have called him stating I knew what was going on, and he NEVER denied it). We always got a pacifying answer and half-baked reasoning on where the money was going. Being the company was prospering in good times, there was hardly the time to investigate, all the while we were recieving an only 16%-share salary from profits, and even though it was agreed (with a handshake) by the three working members to split all company profits three ways, and that was not happening. Fast-forward to 2009: Economical crisis, the LLC is automotive-related -- come to find out Ron 51 has ALWAYS owed the IRS (now it is at $300,000), and he has been paying his monthly payments from company profits as well. ALL ROADS lead to Ron and his debt. The company owes no debt to banks, but does owe to customers (around $300,000). We personally have been cheated and swindled, and since there is no cash value left to the company (just machinery) and no cash in any accounts (as he drains every paycheck from a customer to his own bank account to pay personal debt), and virtually no control left to the other partners, my husband JUST WANTS OUT, and some demands. My husband and I had considered reporting this Ron SEVERAL times to the IRS and voting unanimously to get him out of the company; however, an audit would have shut down operations, unemploy everyone, and shut down the company probably for good. Partner #4 (silent) is friends with the accountant and never returned phone calls. Partner #3 is nice, but spineless, and did not want any confrontations !!!! We didn't have much of a choice, and in good faith, tried every option possible to make things right. My question: We are drained financially because we were notified of "back taxes" the company was to have paid! We owe nothing in personal taxes now. Anyway, we do not have big personal debt (small mortgage), but have little liquid cash left. Litigation would be too expensive. Company can't even pay for that tab, or an audit. I (the wife) have made copies of every Petty Cash check stolen from the company for the last four years, in addition to the credit card receipts. How can my husband just RESIGN, naming simple demands, so as not to be associated in any way, shape or form to this LLC any longer? (All 12 employees are laid off due to lack of work in this economy -- all company taxes and rent are up-to-date currently) My husband just wants out !!! What do we do?
My husband became 1 of 4 partners in an LLC. His contribution was $30,000 and machinery. At the time, a 51% Managing Partner had to be named, as well as, the divvying up of the other percentage of membership. It was agreed that "Ron" would be the 51% Mgng Partner, and the other three were 17%, 16%, and 16% (of which my husband is a 16% member). The 51% named partner - Ron - had no monetary investment into the company, and borrowed it from Partner #4 (who invested $100,000-not an active/hands-on member). #4 is a silent partner, still yet to be reimbursed fully. My husband (partner #2) a 16% owner and partner #3 (16% owner) have since found (6 years later, with lots of suspicion in between), that Ron 51 is an out-of-control gamblaholic, thief, liar, and manipulator. Unfortunately we did not "know" him as good as we should have. BIG MISTAKE. We have copies of canceled checks as documentation and proof of stolen funds via "Petty Cash" ($700,000 worth at least!), as well as, receipts from 4 company credit cards he used for Cash Advances, and a HUGE expense report he allotted himself. Over the course of these last six years, we have insisted on Meetings, being shown the books, the financial statements (accountant is Ron's friend, so he is just as guilty, because I have called him stating I knew what was going on, and he NEVER denied it). We always got a pacifying answer and half-baked reasoning on where the money was going. Being the company was prospering in good times, there was hardly the time to investigate, all the while we were recieving an only 16%-share salary from profits, and even though it was agreed (with a handshake) by the three working members to split all company profits three ways, and that was not happening. Fast-forward to 2009: Economical crisis, the LLC is automotive-related -- come to find out Ron 51 has ALWAYS owed the IRS (now it is at $300,000), and he has been paying his monthly payments from company profits as well. ALL ROADS lead to Ron and his debt. The company owes no debt to banks, but does owe to customers (around $300,000). We personally have been cheated and swindled, and since there is no cash value left to the company (just machinery) and no cash in any accounts (as he drains every paycheck from a customer to his own bank account to pay personal debt), and virtually no control left to the other partners, my husband JUST WANTS OUT, and some demands. My husband and I had considered reporting this Ron SEVERAL times to the IRS and voting unanimously to get him out of the company; however, an audit would have shut down operations, unemploy everyone, and shut down the company probably for good. Partner #4 (silent) is friends with the accountant and never returned phone calls. Partner #3 is nice, but spineless, and did not want any confrontations !!!! We didn't have much of a choice, and in good faith, tried every option possible to make things right. My question: We are drained financially because we were notified of "back taxes" the company was to have paid! We owe nothing in personal taxes now. Anyway, we do not have big personal debt (small mortgage), but have little liquid cash left. Litigation would be too expensive. Company can't even pay for that tab, or an audit. I (the wife) have made copies of every Petty Cash check stolen from the company for the last four years, in addition to the credit card receipts. How can my husband just RESIGN, naming simple demands, so as not to be associated in any way, shape or form to this LLC any longer? (All 12 employees are laid off due to lack of work in this economy -- all company taxes and rent are up-to-date currently) My husband just wants out !!! What do we do?