Economy
Can You Get Out of an LLC Partnership? Here’s What You Should Know
An LLC, or limited liability company, is a business structure that provides limited liability protection to its owners. This means that the personal assets of the owners are protected in the event that the company faces legal action. LLCs are popular among small business owners because they are relatively easy to set up and offer a high level of protection from personal financial risk.
One of the key features of an LLC is that the owners are jointly and severally liable for the debts and actions of the company. This means that each owner is equally responsible for the financial stability of the LLC and can be held liable for any legal issues that may arise. This joint and several liability is one of the main reasons why partners may want to dissolve an LLC partnership.
If one partner wants to dissolve an LLC partnership, there are a few options available.
1) Buy out interest
The first option is to buy out the other partner’s interest in the company. This can be done through a variety of methods, such as negotiating a price for the buyout or taking out a loan to finance the purchase. Once the buyout is complete, the partner who purchased the other partner’s interest will be the sole owner of the LLC.
For example, imagine that John and Jane are partners in an LLC. John decides that he wants to dissolve the partnership and buy Jane’s interest in the company. They agree on a price of $100,000 for the buyout. John takes out a loan for $100,000 and uses the money to purchase Jane’s interest in the company. He is now the sole owner of the LLC.
2) Sell interest to a third party
Another option is to sell the partner’s interest in the company to a third party. This can be done through a variety of methods, such as negotiating a price for the sale or holding an auction. Once the sale is complete, the partner who sold their interest will no longer be a part of the LLC.
Additionally, the partner who buys the interest in the company will become a part of the LLC and will be subject to the same joint and several liabilities as the other partners.
For example, imagine that John and Jane are partners in an LLC. John decides that he wants to dissolve the partnership and sell Jane’s interest in the company. They agree on a price of $100,000 for the sale. John sells Jane’s interest in the company to a third party for $100,000. Jane is no longer a part of the LLC, and the third party is now a part of the LLC and subject to joint and several liabilities. Also, if you were to remove an LLC member in Texas, for example, keep in mind that you’ll need to file a certificate of termination with the Texas Secretary of State. On the other hand, if you’re based in California, then you’ll file a certificate of dissolution with the California Secretary of State instead.
3) Dissolve the LLC
If both partners agree, they can dissolve the LLC entirely. This means that the company will be wound up and all of its assets will be sold off. The proceeds from the sale of the assets will be divided among the partners according to their ownership stake in the company.
Plus, any debts or liabilities of the company will be divided among the partners according to their ownership stake in the company.
4) File for bankruptcy
If the LLC is facing financial hardship, the partners may decide to file for bankruptcy. This will allow the LLC to restructure its debts and liabilities and may provide some relief from creditors.
However, it is important to note that filing for bankruptcy will have a negative impact on the personal credit of the partners.
Not only that but the LLC will be dissolved and all of its assets will be sold off to repay creditors.
Overall, the options available to partners looking to dissolve an LLC partnership are fairly limited. But by understanding the implications of each option, partners can make a decision that is best for them and their business. The bottom line is that if one partner wants out of an LLC, the best thing to do is to negotiate a buyout with the other partner. This will allow the LLC to remain in business and avoid any potential legal issues. If a buyout is not possible, then the next best option is to file for bankruptcy.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange closed flat on Wednesday, August 5, as the market witnessed weaker trading activity with only two deals executed.
In the midweek session, the volume of securities exchanged by investors dropped 99.9 per cent to 802 units from the 1.6 million units recorded on Tuesday. The value of securities further decreased by 99.6 per cent to N208,240 from the preceding session’s N47.6 million, and the number of deals significantly went down by 93.9 per cent to two deals from the 33 deals recorded a day earlier.
Great Nigeria Insurance (GNI) Plc remained the most traded stock by value on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.9 million units transacted for N5.5 billion.
GNI Plc was also the most active stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
There were no price gainers or losers yesterday.
As a result, the market capitalisation stood unmoving at N2.739 trillion, while the NASD Security Index (NSI) remained unchanged at 4,563.96 points.
By Adedapo Adesanya
The Naira slid against the US Dollar by N2.28 or 0.17 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, August 5, to N1,363.85/$1 from N1,362.55/$1.
The local currency also declined against the Pound Sterling in the official market during the session by N5.97 to close at N1,837.38/£1 compared with Tuesday’s closing rate of N1,831.41/£1, and against the Euro, it crashed by N6.54 to quote at N1,575.25/€1 versus the preceding session’s N1,568.71/€1.
But at the black market, the Nigerian Naira traded flat against the greenback yesterday at N1,400/$1, and also remained unchanged at the GTBank FX desk at N1,373/$1.
The Central Bank of Nigeria (CBN) says rates have narrowed to below two per cent, while the country’s external reserves have risen above $52.5 billion, reflecting the impact of its ongoing monetary and foreign exchange reforms.
CBN Governor Yemi Cardoso, represented by the Acting Director of Corporate Communications and Investor Relations, Mrs Hakama Sidi-Ali, disclosed this on Tuesday during the CBN Fair in Gombe. He noted that reforms introduced since 2023 had significantly reduced the disparity between the official FX market and the parallel market.
“The Naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said, adding that reserves at $52.5 billion were supported by sustained inflows and renewed investor confidence in the economy.
Interbank FX transactions slid as weaker market activities dropped total Dollar volume exchanged to $75.35 million, a 51.8 per cent decline from $156.23 million in turnover quoted at the previous close.
The deals at the NFEM window also fell as data from the central bank put Wednesday’s quote at 82 from 139.
In the cryptocurrency market, major were down as global risk sentiment softened as a key world equity index slipped and chipmakers fell.
The MSCI All Country World Index snapped a five-day run to fall 0.2 per cent as chipmakers retreated on both sides of the Pacific. South Korea’s Kospi, a bellwether for the AI trade, dropped 4.4 per cent.
Ripple (XRP) depleted by 1.7 per cent to $1.05, Binance Coin (BNB) decreased by 1.0 per cent to $594.87, Cardano (ADA) depreciated by 0.9 per cent to $0.1884, TRON (TRX) shrank by 0.2 per cent to $0.3261, Solana (SOL) crumbled by 0.1 per cent to $74.00, and Dogecoin (DOGE) went down by 0.1 per cent to $0.0697.
On the flip side, Ethereum (ETH) gained 2.3 per cent to trade at $1,911.41, and Bitcoin (BTC) rose by 0.8 per cent to $64,759.28, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The domestic stock exchange rebounded by 0.05 per cent on Wednesday on the back of renewed bargain-hunting by investors, though the level of activity waned.
After bleeding for a few days, the Nigerian Exchange (NGX) Limited heaved a sigh of relief yesterday, as the All-Share Index (ASI) gained 109.41 points to close at 244,912.24 points compared with the previous day’s 244,802.83 points, and the market capitalisation garnered N71 billion to settle at N158.087 trillion versus Tuesday’s N158.016 trillion.
Business Post reports that despite the rebound recorded by Customs Street at midweek, the market breadth index remained negative, as there were 20 price advancers and 29 price decliners, implying bearish investor sentiment.
Linkage Assurance appreciated by 9.94 per cent to N1.77, AVA Capital rose by 9.55 per cent to N10.90, Fortis Global Insurance advanced by 7.69 per cent to N2.80, McNichols gained 7.34 per cent to finish at N5.85, and Coronation Insurance surged by 5.51 per cent to N2.49.
Conversely, Honeywell Flour depreciated by 9.94 per cent to N16.30, PZ Cussons gave up 9.94 per cent to trade at N74.75, Zichis crashed by 9.74 per cent to N20.76, Learn Africa slipped by 9.62 per cent to N9.40, and Neimeth tumbled by 8.33 per cent to N8.25.
The busiest equity was FCMB, with a turnover of 369.2 million units valued at N4.1 billion. Chams transacted 46.7 million units worth N201.8 million, First Holdco transacted 43.5 million units for N5.7 billion, Access Holdings sold 29.8 million units worth N778.0 million, and Linkage Assurance exchanged 19.6 million units valued at N33.5 million.
At the close of transactions, market participants bought and sold 824.1 million units worth N25.5 billion in 48,114 deals, in contrast to the 1.6 billion units sold for N28.7 billion in 54,160 deals a day earlier, showing a shortfall in the trading volume, value, and number of deals by 48.49 per cent, 11.15 per cent, and 11.16 per cent, respectively.
