LLC Member Disputes
Lewis resolves LLC member disputes over the ownership of membership interests and financial rights in limited liability companies.
Alabama limited liability company law distinguishes between membership and financial rights. A member is a person reflected in the required records of a limited liability company as the owner of some governance rights of a membership interest in the limited liability company. The governance right is the rights to participate in the management of the limited liability company and to bind the limited liability company.
A Transfer of Governance Rights May be Limited by the Certificate of Formation
A defective transfer purporting to transfer governance rights may result in only a transfer of a financial right to share in profits, receive interim distributions, and receive termination distributions. If the Operating Agreement of an LLC is silent, the consent of all members is required for the admission of a new member.
Because Alabama limited liability company law permits the owners an extraordinary flexibility to write their own rules for the ownership of membership interest, and the rights associated with those rights, the start point for resolving ownership disputes for LLC is the Certificate of Formation and Operating Agreement.
If you need assistance in resolving LLC member disputes, contact Lewis at 205-939-3900 and set up a consultation.