Unsigned Operating Agreement

by Pat
(IL)

I have been with a company 14 months where another person filed the company registration papers with the state. A partnership agreement was draw up sent to my attorney we countered and ultimately the agreement was never agreed to or signed. Does that mean there is no partnership? What are my legal rights/risks in IL to walk away from the company?

Answer

Is this a "partnership" or an LLC? I'm going to assume it's an LLC, and that you are using "partnership" in the colloquial and not legal sense.

First off, you really need to see a licensed Illinois attorney who is familiar with LLC and closely held business disputes (e.g. not the guy who fixed your DUI).

But, you can get yourself familiar with the overall picture, so you can follow your lawyer's reasoning.

Without a signed Operating Agreement, you're stuck with the "default" rules in Illinois under the Illinois Limited Liability Company Act.

805 ILCS 180/et. seq.

You can view the entire act here (grab a cup of coffee--you'll have a tough time staying awake reading this):

Illinois Limited Liability Company Act

You want to look at section 805 ILCS 180/35-50&70 (Dissolution/Dissociation).