Purchasing My Partner's Half of the LLC

[tommwilson]

My question involves business law in the state of: Colorado

My partner and I have agrreed to part ways and have agreed on a valuation for his 1/2 of the LLC. I had an attorney draft a buyout agreement but it looks very week regarding my partner having knowledge of problems currently going on in the business.

For example there are a few clients which he was the main contact, how do I insure he won't do something after the sale to disrupt that client base?

Any comments are appreciated.

[Scott67]

For example there are a few clients which he was the main contact, how do I insure he won't do something after the sale to disrupt that client base?

It depends on the your actual situation and the relationships involved. One way is a general non-complete clause in which he would agree not to compete with the LLC for a set period of time, say for a period of 1 year, up to 5 years. If that is not strong enough for you, you could be more specific about what activities he is precluded from doing. If you are really concerned about specific clients, you could name the clients and the client companies and specify that he have no contact with them; for this, it would be wise to specify what he is required to do if they contact him. You would need to explore if he has a personal relationship with anyone; it wouldn't be reasonable to say he can have no contact with someone he has played bridge with every Thursday night for the past 10 years (unless he's looking for an excuse to get out of the bridge game).

That's to give you a couple of things to ponder. This is contract law - the contract between the two of you can be anything that you both agree to as long as it is not illegal.