How do I Remove LLC Board Members?

By Salvatore Jackson

A limited liability company, or LLC, is a form of business organization that provides the benefits of pass-through federal taxation, limited liability and relaxed filing requirements. Unlike a corporation, the owners, or members, of an LLC do not need to appoint a board of directors. However, larger LLCs frequently appoint managers -- who do not have an ownership stake in the LLC -- to a board of directors to manage day-to-day operations. While the procedure varies among states, removing a board member from an LLC requires a vote by LLC members.

A limited liability company, or LLC, is a form of business organization that provides the benefits of pass-through federal taxation, limited liability and relaxed filing requirements. Unlike a corporation, the owners, or members, of an LLC do not need to appoint a board of directors. However, larger LLCs frequently appoint managers -- who do not have an ownership stake in the LLC -- to a board of directors to manage day-to-day operations. While the procedure varies among states, removing a board member from an LLC requires a vote by LLC members.

Step 1

Determine if the LLC has a clause in its operating agreement or articles of organization that provides a procedure for removing a board member. The articles of organization is the document submitted to the state agency responsible for business associations; it officially creates the LLC. An operating agreement is a contract signed by LLC members that governs how the LLC is run. Either the operating agreement or the articles of organization may contain a provision on how to remove LLC board members. If not, the LLC act in the state where the LLC is organized provides a default procedure for removing LLC managers.

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Step 2

Conduct a vote among LLC members. If the LLC’s operating agreement or articles of organization provides a procedure for removing board members, follow that provision. If not, the typical state statute allows for the removal of an LLC board member by the agreement of a majority of LLC members.

Step 3

Report the change in management of your LLC. Depending on your state, you may be required to provide a list of LLC managers in either the LLC’s articles of organization or the LLC’s annual report or franchise tax report. Check with the state agency where you organized your LLC to determine the filing requirements after a change in the management of your LLC.

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How to Change Ownership of a California LLC

References

Related articles

How to Omit a Member of an LLC

Since business relationships don’t always work out as planned, it may become necessary to terminate certain relationships. In a limited liability company, or LLC, the owners, known as members, may change periodically. When one of those members wants to leave the LLC, doesn’t live up to his responsibilities or passes away, the other members may remove him from membership by following the LLC’s operating agreement.

Can I Change an LLC From Members to Managers?

A limited liability company is an independent legal entity formed under your state’s laws. If you choose to organize your business as an LLC, you must also decide whether your LLC should be managed by its members or by non-member managers. While it can be a hassle to alter this decision later, you can change your management structure after you start your business.

Do All LLC's Have Operating Agreements?

An LLC, or limited liability company, is a business that combines the features of a corporation and a business partnership. LLCs can be composed of several members, not shareholders or partners as in corporations or partnerships, whose assets are distinctly separate from the business itself; therefore, unlike in partnerships or corporations, members of an LLC have limited liability for the debts of the company. Operating agreements are an important key to determining the relationships among members in an LLC and delineate business responsibilities and protocols.

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