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In New York LLC Law, what are the powers and responsibilities of a member who assigns all of his/her membership rights?

Bankruptcy and Debt 4 views 3 answers
I'm one of four partners in a NY LLC without a written operating agreement. Two years ago, one of the partners assigned all of his membership right to the other three members. If we want to adopt a written operating agreement for our existing LLC today, can the three remaining members simply draw one up and sign it, or is the signature of the former partner necessary to create a valid operating agreement? Or do we have to dissolve the LLC and create a totally new LLC in order to adopt a valid operating agreement? If so, can we continue to do business with the same company name? Finally, can we create a new LLC, assign our membership interest in the old LLC to it, thereby making the old LLC a wholly-owned subsidiary of the new LLC?

Attorney Answers

3
Paul R. GoodmanInternet LawyerNew York, NY ·
Is there any written acknowledgement by him (even by email) that he assigned his interest? If so, I would just prepare an operating agreement for the 3 remaining members. If there is no written assignment, you should ask him to sign one. You can create a new LLC, but I am not sure why you would want to go through the expense and the additional reporting burdens.
0 upvotes
Richard J. ChertockReal Estate AttorneyMelville, NY ·
How did he assign his interest in the llc to the others? do you have anything at all in writing that says he surrendered his interest? If so, you just need to execute an operating agreement among the remaining three members. If not, you will need to get the ex partner to sign documents withdrawing from the LLC and surrendering his interest.
0 upvotes
Yan MargolinLitigation LawyerNew York, NY ·
Generally, when you assign your interest (like through a bankrupcy) you cease being a member. However, why not just write up a new operating agreement?
0 upvotes

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