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Partner leaves (abandons) an LLC

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What is the name of your state? Washington

I am part of a 3 person LLC partnership. After 1.5 years of time, and minimal financial investment, one of the partners has, of his own volition, withdrawn from the partnership. At the time of his resignation, the company was several thousand in debt and has no assets. What is the obligation of the remaining two partners to the one who has resigned? Are we obligated to buy him out somehow?

Also, how does one evaluate the worth of a company if it does not possess any hard assets?

Thanks for any help,
Steve Adams



A company is usually evaluated by adding to the value of its good will the value of its net assets (assets minus liabilities). In your case, it sounds like the company has a negative value; therefore, the person who resigned has nothing coming unless there are agreements to the contrary.

More specifically, under 25.05.250(2) of the Revised Washington Code, the buyout price of a dissociated partner's interest is the amount that would have been distributable to the dissociating partner under RCW 25.05.330(2) , which you can find at http://www.leg.wa.gov/RCW/index.cfm?fuseaction=section&section=25.05.330. If, on the date of dissociation, the assets of the partnership were sold at a price equal to the greater of the liquidation value or the value based on a sale of the entire business as a going concern without the dissociated partner and the partnership were wound up as of that date. Interest must be paid from the date of dissociation to the date of payment. This rule, although in the partnership code, applies also to LLCs.

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