How do I Remove LLC Board Members?

By Jennifer Kiesewetter, J.D.

How do I Remove LLC Board Members?

By Jennifer Kiesewetter, J.D.

One benefit of limited liability companies (LLCs) is management flexibility. Corporations have stricter management requirements, such as the mandatory implementation of a board of directors. However, LLCs do not require a board or directors or can implement a board if its members so choose.

Businessman typing on his laptop

State laws govern the formation of LLCs. Typically, unless otherwise designated, LLC management is vested in the members, or the owners, of the company. However, LLCs can be manager-managed, where the managers running the day-to-day operations of the LLC don't have to be members.

If you decide to appoint specific duties to your members, choosing a corporate structure would be beneficial. By selecting a corporate structure, you can appoint corporate officers, such as a chief executive officer, a chief operating officer, and a chief financial officer. If you elect corporate officers, you'll also need to appoint a board of directors for your c-suite officers to report to.

At some point, you may find that you need to remove a board member. Let's explore some reasons why this may happen.

Reasons to Remove a Board Member

The board of directors, comprised of representatives elected by the LLC members, is critical to the operation of the company. It sets the company's goals and ensures that it operates in compliance with federal and state laws. Beyond setting goals, the board of directors also establishes a strategy for achieving them.

When a board becomes ineffective or dysfunctional, the LLC members may have to remove a member. Additionally, if a board director breaches his or her fiduciary duty to the company, then removal is warranted. Some examples of fiduciary breach include disclosing confidential information to an unauthorized person, using the company for personal gain, participating in illegal activities, or violating the company's code of ethics.

Removal of a Board Member

If you and your fellow LLC members decide a board member should be removed, follow these steps.

  1. Check your articles of organization or your operating agreement to see if either governs how to remove a member from the board of directors. If so, then follow them accordingly. They should outline the procedures for all LLC members to vote on the removal of the board member.
  2. If your articles of organization or your operating agreement do not address the removal of a board member, then consult your state law on your voting procedures. Typically, state law requires a majority vote of all LLC members to remove a board member. However, make sure you follow your state law requirements and document the outcome of your vote.
  3. Once you vote and remove a board member, be sure to amend your LLC's documents, such as your articles of organization or operation agreement. Although you won't need to revise all of your corporate documents, do amend the relevant documents. Also, check with your Secretary of State's office to see if you need to file any additional documents reflecting the change.

As you review your LLC documents or consult your state law, you may have questions on removing a board member as requirements can differ between states. You should consult with an attorney to assist you in answering any questions. An expert's advice can save you time and money and give you more confidence in running your business.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.