I own a business in NY and an LLC was formed in CT by my partner (where he resides) for this business. His is the only name listed on the LLC, but he is as I said a partner in the NY business. Will the fact that my name is not on the LLC have any repercussions on the business (or me personally for that matter) should the business ever become for sale, or, if there are any possible royalties incoming from an entity that may want to “buy-in” or invest in the property?


Answer

Some questions for you:

1. After the CT limited liability company was formed, did you transfer the assets of the NY business into the CT LLC? In other words, does the CT LLC own anything?

2. What form was the NY business in before your created the CT LLC? (e.g. did you have a partnership, a sole proprietorship, a corporation, etc.).

3. If the NY business was an incorporated entity, are there documents showing a purchase of the the NY business by the CT LLC?

Your interest in the LLC is not determined by who is listed in the Articles of Organization. It is determined by how many membership interests you own.

You should have documentation in your Operating Agreement stating what percentage of the LLC you own. If the LLC started out with your partner owning 100%, and then you purchased 50% of the membership interests, there should be a purchase and sale agreement for the membership interests.

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