Family LLC Exit Strategy

Family LLC Exit Strategy

I am 3.08% part owner of a Family LLC [limited liability company] that owns property. I want to get out of it. Am I able to? I live in State X. What are the laws on this?


Start by reviewing with a corporate/business attorney the operating agreement which is the governing legal document for the LLC. What does it say? Most require approval of some or all other members and have a host of other restrictions. Check these out first. You should also review the state LLC law (statute) with your attorney. You can take a crack at this on your own first. You can usually get a copy of the state statute from the state web site (or the library). The LLC statute is not that long and the contents sections should direct you to the sale, termination, dissolution type provisions. You may luck out and find an answer in the operating agreement or statute. Next, once you have the knowledge of the governing legal documents and law (which will apply where/if the operating agreement doesn't address an issue) and the advice of the attorney, try the nice guy approach. You did say its a family LLC. Talk to the family and see if you can tactfully ask to be bought out, etc. It is family after all. It would really be tragic if your getting out also means you're out of family Thanksgiving dinners as well. If and only if you cannot work out something amicably, then you might choose to assert the rights/provisions of the operating agreement or state law. If the family still tells you to buzz off you could hire a litigator to pursue your rights. For example, state law may provide you an exit strategy. But bear in mind the total ramifications of that decision. Suing family can give you the exit you want, but it may give you a lot more you don't want.

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