llc dissolution question

[cosmo2000]

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

My question involves business law in the state of: Pennsylvania I started a service business operating as a sole proprietorship 11 years ago. Approximately 4 and 1/2 years
ago I decided to take on a partner and we converted my sole proprietorship into llc partnership. I own 1/3 and
he owns 2/3. However in our operating agreement it states we each have 1 voting right. Several months ago my wife lost her job due to illness. She had carried our health ins. Due to the fact the my
partner did not want to pursue acquiring it. I had to start working for someone else. We had a verbal
agreement that I would work at llc when not working other job. This went fine for awhile. Then I stopped hearing from my partner. Come to find out he had hired someone to
replace me. I had no knowledge of this. Yesterday I received letter from attorney stating he was filing for a dissolution. According to our operating
agreement dissolution can only occur the consent of members holding at least 75% or the entry of an order
of judicial dissolution under section 8972 of the act. Any thoughts?

 

[latigo]

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

My question involves business law in the state of: Pennsylvania I started a service business operating as a sole proprietorship 11 years ago. Approximately 4 and 1/2 years
ago I decided to take on a partner and we converted my sole proprietorship into llc partnership. I own 1/3 and
he owns 2/3. However in our operating agreement it states we each have 1 voting right. Several months ago my wife lost her job due to illness. She had carried our health ins. Due to the fact the my
partner did not want to pursue acquiring it. I had to start working for someone else. We had a verbal
agreement that I would work at llc when not working other job. This went fine for awhile. Then I stopped hearing from my partner. Come to find out he had hired someone to
replace me. I had no knowledge of this. Yesterday I received letter from attorney stating he was filing for a dissolution. According to our operating
agreement dissolution can only occur the consent of members holding at least 75% or the entry of an order
of judicial dissolution under section 8972 of the act. Any thoughts?

I suggest that you fully read Pennsylvania’s Limited Liability Company Act. Particularly the following mentioned subsections.

"Pennsylvania Consolidated Statutes Section § 8972. Judicial dissolution.

On application by or for a member, the court may order dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the operating agreement.

§ 8973. Winding up.

(a) General rule.--Except as provided in subsection (b) and unless otherwise provided in the operating agreement, the affairs of a limited liability company shall be wound up by the managers or, if none, by:
(1) the members who have not wrongfully dissolved the company; or
(2) a person approved by the members or, if there is more than one class or group of members, by each class or group of members, in each case by a majority in interest of the members in each class or group.

(b) Judicial supervision.--The court may wind up the affairs of the company upon application of any member, his legal representative or assignee and, in connection therewith, may appoint a liquidating trustee.” (Emphasis added)
________________

Also, considering your restricted involvement in its daily operation, why do you object to dissolving the entity as long as it is properly wound up in accordance with § 8974?

 

[cosmo2000]

I don't object to dissolving llc

I'm not in objection to dissolution. I just wanted some insight on what I can expect too happen. I'm almost certain my partner plans on continuing. Maybe a buyout of my share is more realistic.

 

[cosmo2000]

Other ventures

I'm not seeing how I violated operating agreement. Our agreement states that members have the right to pursue any other venture and llc shall have no rights to income from such venture. I do however see a possible violation by partner hiring someone. When our agreement states that hiring and setting wages shall be done by a majority vote.
He owns 2/3 I own 1/3 but stated in annex A of our agreement we each have 1 voting right.
I'm thinking he is trying to show a violation in attempt to lower my valuation.