Is an LLC drawn up under false pretenses still valid?

UPDATED: May 28, 2009

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: May 28, 2009Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Is an LLC drawn up under false pretenses still valid?

My husband an two partners drew up an LLC. The other two partners knew that the monies and shares they were claiming to own were false. Is the LLC still binding?

Asked on May 28, 2009 under Real Estate Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

No. If they made material  (or important) mistatements, while knowing that the statements were false and intending for you to rely on those statements, the partners committed fraud. When a contract--and an LLC agreement is a contract--is based on fraud, it can be voided (which means it's legally treated as if it never happened). You also should be able to sue for any damages (loss of money, income, or other assets, for example) you suffered.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption