What if the LLC has to wind down?
Triggered by total loss, 75% co-owner vote, or insolvency. Vehicle is sold, debts paid, remaining proceeds distributed pro-rata. RYDA handles all paperwork.
When dissolution happens
- Total loss: vehicle is destroyed and the group doesn't elect to roll proceeds into a replacement.
- Voluntary: a 75% co-owner vote elects to wind down (e.g., the group decides to sell the car and end the LLC).
- Forced: the LLC becomes insolvent, or the members determine continued operation is no longer viable.
Sequence of events
Per the Operating Agreement and the Management Services Agreement, RYDA performs the wind-down operations: marshalling assets (insurance proceeds or sale proceeds), paying outstanding liabilities (carrier balances, vendor invoices, taxes), and distributing the remainder pro-rata to co-owners according to their shares held. The dissolution decision itself is a member vote; RYDA executes it. Distribution happens within 60 days of the decision.
Tax implications
The dissolution generates a final K-1 for the year, including any gain or loss on the disposition. Co-owners report it on their personal tax returns. As always, talk to your CPA, RYDA does not provide tax advice.
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