What is my liability regarding my LLC if it has never conducted business?
Question Details: A year ago, I resigned from mine and my partner's LLC because he breached his fiduciary duties. I hired a lawyer who sent him a mutual release agreement which he never signed or returned. He recently reached out to me via text message saying that he signed the agreement and that he wants me to remove myself from the company or he will sue me. According to the state's comptroller's office, the company status has been forfeited the right to transact business because the annual franchise tax statement was not submitted. The company has never transacted any business to date so it is a LLC in name only. Is my ex business partner's threat something I should be worried about?
A member of an LLC is not liable for the actions of the LLC or of his partner; he can be held liable only for his own actions. And you cannot be compelled to give up your interest in the LLC unless you signed an agreement specifically to remove yourself. That is the law. The practical question is, why would you not formally and fully remove yourself from ownership and all connection to this LLC and your partner? While you cannot be liable for what the LLC does unless you do something wrong, it is certainly not impossible that rightly or wrongly, you may be caught up in any lawsuits, investigations, etc. Remove yourself fully and 100% and stay away.