Who Owns The Clients Of A Professional LLC? Hint: It's Probably Not The LLC.
While not strictly technology related, this matter has some interest among professionals 
and could certainly have some impact on consulting firms in the technology arena.
Doctors, lawyers, accountants and others form limited liability companies (LLCs) under various state laws to conduct their practices. In New Jersey, the Superior Court was called upon to determine whether the clients of a LLC belong to the LLC or to the individual members. Gaines v. Luongo, Superior Court of New Jersey, Docket No. A-3600-09T3, Unpublished Opinion, March 25, 2011.
An accounting firm was organized as an LLC and one member was given a 70% ownership but the two members equally shared income and losses. Shortly after the formation of the LLC, the fun went out of the relationship and the minority member sued under the oppressed minority shareholder rules of the New Jersey corporate code. Part of the complaint alleged that the value of the clients of the firm should be considered when determining the pay out under the dissolution. The Court held that the the "...Partnership's clients were never carried on [the] books as an asset; no value was ever assigned to them on the Company's balance sheets; and they were free to stay in business with either partner or neither." Therefore, the value of the goodwill ascribed to each client belonged to the individual members and would not be considered in the dissolution.
So, unless otherwise stated in the Operating Agreement or otherwise on the books of the LLC, a client's value is not the property of the LLC.
