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.
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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.
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.
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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