doggiedoos
Junior Member
What is the name of your state (only U.S. law)? WA
I invited a friend to join in to my LLC. She spent hours of labor while she learned the business. After a couple months of that I gave her 20% membership for no cash, just expecting that she would continue putting in time and maybe do my accounting too.
After 3 months our new location was a bit slow and she began demanding more pay. Up to know I had just been giving her $200, 300 every other week or so. If she asked I would give her a draw anytime. Not considering hours at all as to the amount of a draw. When she asked when would her percentage of the business be made up to her, I replied "at the end of the year or tax time".
One day I sent her home early, as she was being moody and not busy, and neither was I. Why have us both just sitting around waiting for business. I am the cheapest employee I can have! Next thing I know she shows up at my house with a list of days she worked all the last 6 months. She dropped her keys and the appointment book on the table too. After tearing into me about every little thing that had bothered her (unknown to me), she tore out of here po'd more than ever. I could not get a word in edge wise.
We began sending letters back n forth expressing every detail of our entire relationship.
Sorry for the story, but you can see that she quit without resigning in writing other than the letters. But that's ok with me, she had eluded to the fact that she was entitled to 20% even if she was on a beach somewhere not working.
The next business day I sent in the form and fee to the state to remover her.
I returned every thing she had brought into the business and paid her a couple hundred dollars for a computer I kept.
She now wants to know what my plans are to pay her for all her time she invested prior to and including the LLC.
Our state does not require us to file an operating agreement or provide cert of ownership. I do have an operating agreement but she never signed it, just me. I did show her a draft at the beginning of our LLC I just did not type it all up at that time.
THE QUESTION
So my question to you is: Do I have to buy out a member who quit? And pay her $2,000. worth of time she invested in the business? Or is that at my discretion?
I am preparing a P&L for the 3 months she was in the LLC, she may owe the company based on the net.
By the way I already had a successful business that I operated for 20 years. I opened a new location and lumped them both into the LLC, She only really worked in the new location.
I invited a friend to join in to my LLC. She spent hours of labor while she learned the business. After a couple months of that I gave her 20% membership for no cash, just expecting that she would continue putting in time and maybe do my accounting too.
After 3 months our new location was a bit slow and she began demanding more pay. Up to know I had just been giving her $200, 300 every other week or so. If she asked I would give her a draw anytime. Not considering hours at all as to the amount of a draw. When she asked when would her percentage of the business be made up to her, I replied "at the end of the year or tax time".
One day I sent her home early, as she was being moody and not busy, and neither was I. Why have us both just sitting around waiting for business. I am the cheapest employee I can have! Next thing I know she shows up at my house with a list of days she worked all the last 6 months. She dropped her keys and the appointment book on the table too. After tearing into me about every little thing that had bothered her (unknown to me), she tore out of here po'd more than ever. I could not get a word in edge wise.
We began sending letters back n forth expressing every detail of our entire relationship.
Sorry for the story, but you can see that she quit without resigning in writing other than the letters. But that's ok with me, she had eluded to the fact that she was entitled to 20% even if she was on a beach somewhere not working.
The next business day I sent in the form and fee to the state to remover her.
I returned every thing she had brought into the business and paid her a couple hundred dollars for a computer I kept.
She now wants to know what my plans are to pay her for all her time she invested prior to and including the LLC.
Our state does not require us to file an operating agreement or provide cert of ownership. I do have an operating agreement but she never signed it, just me. I did show her a draft at the beginning of our LLC I just did not type it all up at that time.
THE QUESTION
So my question to you is: Do I have to buy out a member who quit? And pay her $2,000. worth of time she invested in the business? Or is that at my discretion?
I am preparing a P&L for the 3 months she was in the LLC, she may owe the company based on the net.
By the way I already had a successful business that I operated for 20 years. I opened a new location and lumped them both into the LLC, She only really worked in the new location.