Colorado LLC
To remove a member from an LLC, the remaining members typically need to follow the operating agreement's provisions or state law requirements, which may involve a buyout or member vote, and update the LLC's operating agreement and official records.
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Last Updated: March 24, 2026
People choose to go into business together over a shared vision. However, as a limited liability company (LLC) grows or faces hardship, the goals of business owners may change, resulting in the need to remove an LLC member (in the context of an LLC, “member” means “owner”). This guide discusses how to remove a member from an LLC.
Removing a member from an LLC can be straightforward if the company has a detailed operating agreement that specifies how a member may be removed. However, if the operating agreement doesn’t cover the scenario listed, the LLC members will have to follow the state’s default procedure and maybe even consult a business lawyer to ensure a legally compliant removal of a member. Many LLC owners opt to hire an experienced formation business attorney to help them create an operating agreement during the start-up phase to help avoid a complicated member removal scenario.
When someone forms an LLC, hopefully, they create an LLC operating agreement that covers how to remove members. Whether the situation calls for a voluntary or involuntary removal, the operating agreement should contain all the requirements for notice, voting, valuation methods, grounds for removal, and any other details surrounding the removal process.
If an LLC doesn’t have an operating agreement covering how to remove a member, the members will have to follow the procedures in their state’s LLC statutes. It may also be helpful to consult a local business attorney to see what options exist.
In either scenario, the LLC members will need to buy out the ownership interest of the member being ousted. Ideally, the operating agreement would include the terms of a buy/sell agreement that can be used in this situation.
It’s also possible that, in some states, the members’ only option would be to dissolve the LLC and start a new one with the members who still want to be in business together. If that’s the case, the members will have to follow their operating agreement’s procedures and the laws of their state for LLC dissolution. These likely include paying remaining taxes and other debts, filing Articles of Dissolution, and divvying up the LLC’s assets among the members.
A detailed and thorough operating agreement will spell out the different protocols to follow in a variety of scenarios. The LLC may need to remove a member due to wrongful conduct, a member may voluntarily withdraw, or a member might be removed involuntarily. The process for removal under the LLC operating agreement may include a buyout agreement, a majority vote, or steps for judicial dissolution. Whatever the case may be, the LLC needs to follow its operating agreement procedures as precisely as possible.
The formal process to legally remove a member from an LLC will vary by state and the company’s operating agreement. The operating agreement will need to be changed to reflect the new ownership and ownership percentages of each member, along with any other information that needs to be updated, such as voting rights and how profit sharing will be adjusted in the absence of the departing member.
In order for a member to request removal, also known as voluntary dissociation, they’ll likely need to submit a formal letter withdrawing from the LLC membership. Some LLC operating agreements don’t allow LLC members to voluntarily withdraw, requiring the business to go through dissolution instead.
After the member has been removed, there are a few additional steps that must be taken. First, the LLC needs to file Articles of Amendment to update the information in the LLC’s original Articles of Organization or other LLC formation documents. By filing this, the LLC helps ensure that the state has up-to-date information about the LLC’s ownership.
Next, the LLC operating agreement must be updated to reflect current ownership rights, processes, voting rights, how profits will be divided among the remaining members, and other details.
ZenBusiness can help anyone start an LLC today with the help of their experts to ensure smooth business operations down the line. If an entrepreneur currently has a single-member LLC that needs to add members or a multi-member LLC that needs to remove members, they’ll need to file Articles of Amendment and get a new operating agreement, both of which ZenBusiness can help with.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. For specific questions about any of these topics, seek the counsel of a licensed professional.
LLC members always need to follow the rules established in their operating agreement for removing members. In the absence of an operating agreement, they’ll need to comply with all their state’s LLC laws for removing members. The IRS will need to be notified so they can update the company’s tax information. The Secretary of State (or similar office) will need to be notified of any changes to the LLC’s membership using the Articles of Amendment showing the removal of a member. Those changes will also need to be reflected in the LLC’s annual or biennial report. The operating agreement will also need to be updated to accommodate the new membership situation. A business attorney can provide guidance for the entire process.
LLC owners will need to consult their operating agreement regarding the procedures for a member who wishes to voluntarily leave the LLC. The agreement should also specify what happens to the departing member’s ownership interest in the company; usually, the remaining members purchase the departing member’s interest through a buyout agreement, but some LLCs might have a different approach. If there’s no operating agreement, the LLC will need to follow its state’s LLC laws for removing a member who wants to leave the business.
If a member doesn’t want to withdraw from the LLC voluntarily, the other members will need to consult their operating agreement to determine the procedures to follow in such a scenario. If there’s no written procedure listed, the members must follow the state’s default laws for removing another member.
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