How do I go ahead and remove a member of my LLC?

I am currently listed as the Manager of a recently established LLC. There are 3 other members of the llc and including myself, ownership is broken out as follows: Me as the Manage r- 39%; Member 1 – 30%; Member 2 -30%; and Member 3 – 1%. Member 2 has increasingly become difficult to work with and is no longer a trusted member of this company; I want to go ahead and remove this individual. Could Member 1 call for a vote and with his agreement and my agreement (69% voting power) Member 2 is done?

Asked on February 16, 2013 under Business Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

No, you may not vote Member 2 off unless the company's partnership, formation, or operating agreement specifically says that a majority of the ownership can remove a minority owner under certain circumstances and you comply with all requirements for doing so. Otherwise, while you can certainly overrule all his management decisions (since you and the others have a majority of the power), you cannot get him out of the company and take away his ownership interest; this is why well-drafted  LLC agreements will include provisions allowing majority members to "buy out" minority ones against their will, by paying then-fair market value for the minority's ownership interest.

But in the absence of such a provision, you are stuck with Member 2 unless  he agrees to leave or be bought out.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.