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LLC Partnership - Partner withholding commissions

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Liberty19

New member
North Carolina

My partner and I formed an LLC under which we sold insurance. It was started in 2018 and we worked together from July to December writing renewable insurance policy contracts. In January I determined that I wanted to move on and moved to another state with the understanding that my portion of the business would be “bought out” by splitting the renewal commissions earned from July to December when the policies renewed in 2019.

My business partner changed our joint bank account into an account in his name only where the commissions get deposited and has so far only paid me for 1 month (August) and will not communicate with me about future payments. He currently owes me about $1200 and it will likely end up being around 3-4K by December

Both our names are on the LLC paperwork. I have signed nothing severing the LLC and there is nothing in writing transferring my rights as a partner

What legal rights/options do I have to claim my share of the renewal commissions?
 


LdiJ

Senior Member
North Carolina

My partner and I formed an LLC under which we sold insurance. It was started in 2018 and we worked together from July to December writing renewable insurance policy contracts. In January I determined that I wanted to move on and moved to another state with the understanding that my portion of the business would be “bought out” by splitting the renewal commissions earned from July to December when the policies renewed in 2019.

My business partner changed our joint bank account into an account in his name only where the commissions get deposited and has so far only paid me for 1 month (August) and will not communicate with me about future payments. He currently owes me about $1200 and it will likely end up being around 3-4K by December

Both our names are on the LLC paperwork. I have signed nothing severing the LLC and there is nothing in writing transferring my rights as a partner

What legal rights/options do I have to claim my share of the renewal commissions?
Your only viable option is to take him to court for breeching your agreement.
 

LdiJ

Senior Member
Are you talking about small claims court? How would that be done from across the country?
If you are that far away, then it could cost you more in travel time and costs than you could gain from the suit. You would have to travel back to the original state for the case.
 

Zigner

Senior Member, Non-Attorney
Why don't you take the operating agreement that shows you have the authority to be on the account and change the account so that you have access?
 

Liberty19

New member
And his "understanding" was something entirely different.

So much for "understandings."

You should have gotten the buy-out agreement in writing.
Hindsight of course but since I haven’t been “bought out” then I have a legal right to the assets of the LLC right?
 

Liberty19

New member
Why don't you take the operating agreement that shows you have the authority to be on the account and change the account so that you have access?
I contacted the bank today where he opened the new account and they said that even though I could produce that document he would have to add me :)
 

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