The only way a member of an LLC may be removed is by submitting a written notice of withdrawal unless the articles of organization or the operating agreement for the LLC details a procedure for members to vote out others.
If the member does not voluntarily leave the company, the next step would be to commence legal proceedings to remove them. This process is usually done with a law firm and requires legal representation for both sides. Since this process can be lengthy and expensive, it is often preferable for both parties to try and come to a resolution outside of court.
You must speak with an attorney from your company law firm if you are considering removing a member from your LLC, as many legal requirements must be followed.
One common reason for a member’s removal from an LLC is a violation of the operating agreement. The operating agreement is a legal document that outlines how the LLC will be run, including the responsibilities and expectations of each member.
The first step in terminating a Tennessee LLC is to file Form SS-4246, Notice of Dissolution (Limited Liability Company) with the Department of State, Division of Business Services (DBS). After you file notice of dissolution and wind up your business, you will have to file the appropriate Articles of Termination.
In most cases, it will be up to the remaining members of the LLC to decide how a member can be removed. Putting an envelope in ballot as a sign of voting.
Removing a member from an LLC can be difficult, especially if the member doesn’t want to go. Check your operating agreement and state laws to guide you through the process.
If the stalemate arises and LLC members cannot agree on how to remove a member from an LLC, you will need to file a petition for judicial dissolution. LLC’s dissolution is often considered the last resort and should only be pursued if all other options are exhausted.
Generally, if the Articles of Organization have protocols governing how to remove a member from an LLC, the simplest method is through a written notice of withdrawal. This formality is easiest when a member is leaving voluntarily. Whether to retire or pursue other interests or opportunities, a notice of withdrawal allows for a smoother split.