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Preventing LLC Takeover
I am the managing member of a two member LLC(myself and one other person). The other member is threatening to empty our business bank account. Although he is not a signer on the account, he does have the LLC EIN and a copy of the Operating Agreement which shows that I am responsible for managing the financial and day to day operations of the business. He has already gone to another branch and set up a checking account in the name of the business using the LLC's EIN number. I closed that account, but am fearful that another branch of the bank will give him access to the funds in the business account, even though his name is not listed as a signer on the account. How can I get my bank to inform local branches to deny him access to this account until we get our differences cleared up?
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 It would seem that the documents you have described should put you in control of the situation for the time being. Make certain that a responsible individual at the bank, a branch manager or officer, for example, is familiar with the provisions of the LLC's Operating Agreement and aware of the current internal rift. Then make it clear that you'd like him or her to notify branches of the situation and direct that they not take direction from or allow transactions by the other LLC member. Also make it clear that you will expect that the bank will make the LLC whole if it allows an unauthorized transaction.
That should get one of two results. Either the bank will comply and refuse access by the other member, or it will ask you to take the account elsewhere to avoid the potential for liability. If the bank does agree to your request, however, it will rightfully expect that you promptly get the matter resolved within the LLC, or it will eventually ask that the account be relocated.
Published on BankingQuestions.com 12/01/10
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