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Ask a Lawyer -- LLCs
LLC Question 160
Question:
I have a minority membership interest in a Nevada LLC. I am going to seek dissolution pursuant to NRS 86.495. What process will the Nevada court use to value the LLC for distribution of assets?
Response: If you are successful in arguing to the court that it is "not reasonably practicable to carry on the business of the company in conformity with the articles of organization or operating agreement" under NRS §86.495, then the next step is winding up the business (which usually means ending business operations and selling all non-liquid assets of the LLC), payment of liabilities, and distribution of any remaining assets to the members in accordance with NRS § 86.521. This process, to my knowledge, is carried out by the LLC managers or, if member managed, by the members. When the process is complete, articles of dissolution are filed with Nevada Secretary of State's office. See NRS §86.531.
"What process will the Nevada court use to value the LLC for distribution of assets?" I'm not sure what this question means in that "the LLC" is not valued by the court to my knowledge. Any going-concern value of the business is pretty much destroyed in a dissolution. All that is salvaged is the underlying value of the assets (other than goodwill) owned by the LLC. Maybe another lawyer would see it differently but that is my take on the situation outlined above. Note: There could be omitted facts that materially effect my above comments. Best to have the situation thoroughly reviewed by local counsel.
Submitted: 01/13/2008; Kevin, New York
Response: 01/13/2008; JJR
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