Updated almost 13 years ago on . Most recent reply
Two partners, One LLC, How to protect one each other
I'm forming an LLC with a friend in Michigan. I will put the 85% of the money, he will put the rest (15%). I will remain as a hands of investor and he will manage and buy the properties (he will earn an extra 50$/house for managing them). According to the operating agreement we are both managers.
The operating agreement says the member whose capital interest exceed the 50% (me) has to approve the sale of any property before the manager can take any action. That's what the agreement says but the manager actually can sell the property without my approval and even withdraw from the bank the money made from the sale since he has full access to the bank account.
What should I do to prevent the other member to steal the properties from the LLC? I know doing that it's not legal and I can take him to court but I want to anticipate to that problem.
Please, don't misunderstand me. I trust my partner at the LLC but I want to have an extra guarantee apart from trust.
I guess you guys have solved this before but I haven't found anything on the forum.
Thank you very Much.