Changing the partner with majority of shares in an LLC

Question

Q: We currently have a sponsor who holds 51 per cent of the company. He's charging us too high for every renewal. Is it possible for us to change the sponsor? A: Negotiate the exit of your 51% shareholder, his exit fee. Replace him with another partner that you would have a better agreement with…

Ahmed Elnaggar · Accepted Answer

Dear questioner,

Please note that the 51 per cent owner - sponsor - is legally your business partner, even if the actual facts are unlike the registered shares and the official documents.

In the case of any conflict, you may reach a deadlock position that leads to the liquidation of the company.

So, I would advise you to negotiate the exit of your 51% shareholder, his exit fee and to replace him with another partner that you would have a better agreement with.

Regards,

Ahmed Elnaggar

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