Tricky LLC Partnership Question - Please help

[forest_runner]

What is the name of your state (only U.S. law)? Missouri

Partner A and Partner B both own 50% of an LLC company. Partner A gets a loan from family in order for the business to pay off an immediate debt. Partner A has Partner B sign an agreement that if the business or Partner B cannot pay back Partner A within 30 days, then Partner B's ownership will transfer to Partner A.

1. If the LLC has debts (bank line of credit loans, tax liability, ownership of property under the LLC) what is Partner B's obligation to these debts after Partner A assumes 100% ownership of the LLC?

2. What steps does Partner B need to take to protect himself from any business debts that he was personally liable for?

Thoughts or suggestions?

 

[JoshDom1898]

Q. If the LLC has debts (bank line of credit loans, tax liability, ownership of property under the LLC) what is Partner B's obligation to these debts after Partner A assumes 100% ownership of the LLC?

A. Partner B (actually a member since it's an LLC not a parntership) liability to those company debts (bank line of credit, loans in the company name, credit card debt, tax liablity, ownership of property - mortgages) would be to the extent in which Partner B personally guaranted any of those debts. For example, both Partner A and Partner B had to sign a personal guaranty for a VISA credit card in the company's name, with a limit of $100,000. Partner B transfers all his/her/its ownership in the Company to Partner A. Partner A maxes out the VISA card and cannot pay it back. VISA can sue Partner B for the $100,000 debt because it was personally guaranteed.

Q. What steps does Partner B need to take to protect himself from any business debts that he was personally liable for?

A. Contact all of the Company's creditors in which Partner B signed personal guarantees for, explain the situation, and request they release Partner B, in writing, from the personal guarantee. Keep in mind that they don't have to do this, there is no obligation on them to release Partner B, so ask nicely.