I own 51 percent of an LLC. If I plan to split with my business partner what am I responsible to pay him?
Am I obligated to pay him 49 percent of our total assets or just repay the cash amount he put into the business for startup? I'm the veteran, and since we used an SBA Veterans Express loan, I was required to be the 51 percent owner. All assets we have acquired have been through the SBA Veteran Express loan except our initial cash investments before we secured the loan.
Your operating agreement should have set out the way to value the interest of the departing business owner. Sometimes, those amounts can vary depending on the reason for the split: Did you catch your partner with his hand in the till? Or is there another reason (less ominous) for your split?
Best to speak to your accountant and a business attorney to determine whats fair to split and how you may be able to pay it over time.
Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.