If I resigned as a member of a LLC, am I still responsible for company work and debt?
Full Question:
Answer:
Removal or resignation of a member of a limited liability company typically is addressed by the terms of the company's operating agreement.
Colorado statutes state: "Unless prohibited in a written operating agreement, a member may resign from a limited liability company at any time by giving written notice to the other members, but, if the resignation violates the operating agreement, the limited liability company may recover from the resigning member damages for breach of the operating agreement and offset the damages against the amount otherwise distributable to him. "
A member can only resign from the LLC under provisions set forth in the articles of organization or operating agreement; these documents also usually specify a minimum period of time a member can be a member before being allowed to resign. LLCs have the option of pursuing remedies for damages suffered by the LLC resulting from a member’s resignation that violates the terms in the operating agreement.
If your resignation was accepted by the other members of the LLC, then you may be able to argue successfully that you are not responsible for any outstanding contracts of the LLC. However, if you have personally guaranteed any debt of the LLC, you may be held responsible for non-payment.
You may wish to consider filing for dissolution of the LLC in order to officially cease business and any liability exposure.
