Sent mutual release agreement to business partner and now he wants to sue me

UPDATED: Oct 1, 2022

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Sent mutual release agreement to business partner and now he wants to sue me

A year ago I resigned from my partner’s and my LLC because he breached his
fiduciary duties. I hired a lawyer who sent him a mutual release agreement which
he never signed or returned. He recently reached out to me via text message
saying that he signed the agreement and that he wants me to remove myself from
the company or he will sue me. According to the state’s comptroller’s office, the
company status has been forfeited the right to transact business because the
annual franchise tax statement was not submitted. My question is, the company has
never transacted any business to date so it is a LLC in name only. Is my ex
business partner’s threat something I should be worried about?

Asked on September 23, 2018 under Business Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

A member of an LLC is not liable for the actions of the LLC or of his partner; he can be held liable only for his own actions. And you cannot be compelled to give up your interest in the LLC unless you signed an agreement specifically to remove yourself. That is the law. The practical question is, why would you not formally and fully remove yourself from ownership and all connection to this LLC and your partner? While you cannot be liable for what the LLC does unless you do something wrong, it is certainly not impossible that rightly or wrongly, you may be caught up in any lawsuits, investigations, etc. Remove yourself fully and 100% and stay away.

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.

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