The High-touch Legal Services® Blog…for Startups!

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Can a Partnership Have Just One Partner?

Picture of courthouse

This post’s title question about a one-partner partnership might seem silly: The common-sense answer is “No”, because one cannot be one’s own partner. As I learned recently working with a client who wants to dissolve a partnership, this is one situation where the law (in California, at least) and common sense agree.

To start, Corporations Code Section 16101(9) states that a partnership requires two or more partners.

Last year, in Corrales v. Corrales, the Court of Appeal for the Fourth District, Division 3 (courthouse pictured) answered an interesting question: What happens to a two-person partnership when one partner withdraws?

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A Member can Withdraw from an LLC, Despite the Operating Agreement

Photo of an exit sign, symbolizing the right of a member to withdraw from an LLCFrom time to time, I am asked how a member of a limited liability company (LLC) can stop being a member. In legal terms, this is referred to as a member wishing to withdraw from an LLC.

Section references below have been updated to reflect California’s new LLC law that took effect on January 1, 2014 (see RULLCA Brings New LLC Laws to California in 2014).

Under this new law, the term “withdraw from a limited liability company” was changed to “dissociate as a member” or “withdraw as a member”.

A well-written Operating Agreement will address this question directly. It will specify the circumstances under which members may withdraw from an LLC, and the consequences of withdrawal.

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