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LogisticEarth
Mar 28, 2004

Someone once told me, "Time is a flat circle".
This will probably be "talk to a lawyer" situation which I'm looking into, but I figured I'd ask here to maybe get a heads up on what to expect. For reference, the subject is a two-person LLC registered in the state of Pennsylvania:

Early last year, I was planning on starting a business with a friend. Long story short, we got as far as forming a bare bones LLC before I decided that I no longer wanted to pursue the venture with her back in late May/early June. We did not even get to signing an operating agreement, which was part of the reason I decided to bail since she was dragging her feet on signing the draft I proposed. Anyway, I had paid for the LLC formation fees and registered agent fees, plus a deposit on a graphic designer, all of which was paid from my personal account as no LLC existed yet to start a company account. This was not a large amount, all told sub-$800. When I told her I was considering bailing, she told me "ok well if that's what you want to do, I'll pay out your expenses and we'll get it sorted out".

So, I submit a resignation letter to her stating my intent to leave the LLC with the agreement that I be paid out the expenses she verbally agreed to pay me. Again, long story short, when it came time to put it in writing she balked and suddenly she didn't think it was "best practice" to return the funds. Normally I'd wouldn't expect anything but she wanted to continue using the LLC and registered agent that I had paid for, instead of dissolving the firm and having her re-register a new company. Between that and getting jerked around on the expenses reversal, I stood firm. She countered and tried to offer me 1% of the company, which I said was fine. Some documents were supposed to be drafted up to put it in writing, but that never materialized from her, so I basically just wrote the money off.

She then went ahead and continued to use the joint LLC instead of starting her own entity. Opened up a bank account, merchant accounts for credit cards, took and fulfilled orders from customers, etc. Now apparently she's realizing I'm still on the LLC documents and it's causing her a shitload of headaches. Now she's coming back to me and talking about dissolving the company officially and moving stuff over to a new company. I really have no problem with this, but I'm concerned about any liability I might have. I have never actually invested any funds in the business as an entity (e.g. funds put into the bank account, paying vendors, etc.), no have I had any kind of verbal or written communication approving any activities done in the name of the LLC. I really have no idea what's been going on "inside" the company.

So basically, I'm trying to get a feel for what I may be liable for or exposed to at the moment. I realize that the lack of an operating agreement is an issue. Leaving the agreement and the official resignation documents in her court rather than pressing her for responses 6 months ago was probably a bad idea. However, given that my actual interest in the company is $0/0%, and I haven't been part of any official business operation since Day 1, I'm thinking...not much?

TL;DR:
All I have done is the following:
1) Paid a graphic designer for some logo ideas, from a personal account and prior to the LLC formation.
2) Paid fees associated with filing the LLC documents, again from a personal account as no company could exist yet
3) Paid an annual fee for a registered agent firm, as part of filing for point #2.

I am I potentially hosed, do I just leave it as her problem and sign the dissolution documents when she gets them to me?

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PromethiumX
Mar 5, 2003
Sign the dissolution docs when you get them.

Eat the $800 loss.

Learn from your mistakes.

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