Removing Co-founders from LLC
Recently, our team had to make some difficult decisions, and we are losing a co-founder.
Unfortunately, in our state (Georgia), there is no legal way to remove an LLC member. They willingly agreed to withdraw, but I'm having a hard time drafting a document. I just want to send them a form to sign and make things as painless as possible. We don't have to worry about buying them out since they didn't financially commit anything to the company and are not owed anything.
Does anyone have any recommendations of what the document should look like? Either an example or legal verbiage would be helpful
Googling has produced this form, but I'm not sure if I have any other bases I need to cover
https://www.lawdepot.com/contracts/partnership-withdrawal/preview.aspx?loc=USGA&
I understand that money might be tight and it's temping to DIY a legal document. There are so many of them out there.
Seriously, don't do it. The small amount of money that you'll save now will seem trivial compared to what you might need to give up if you get into a legal fight.
My advise is get a lawyer to handle creating the document for you. Use it as an opportunity to build a relationship with that lawyer, which you will need later down the road when your business becomes successful anyway.
Also, I'm no lawyer, but your Operating Agreement should spell out how a member can be withdrawn from the LLC. Georgia law should establish that a written operating agreement controls member withdrawals, without exception. But please confirm this with a lawyer.
If you don't have an Operating Agreement, you should get a lawyer and have them draft one up. It's critical to have that document.
This is great feedback, thank you.
Our team has been in touch with a lawyer who's been lending his advice, but you're right, it's probably best to just bite the bullet and start dealing with the inevitable legal fees. We also don't have an Operating Agreement yet, so perhaps a lawyer will have better insight on the order of things.