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How to resign as a member from an LLC in California

Vacaville, CA |

I am a member of a 2 member LLC in California. The other partner is making horrible decisions and when all is said and done he wants to keep the LLC open. I just want out.

I dont want any money or property, I simply want out. In our Articles of Organization it states that all a member must do to resign is "announce the decision to the other members and agree upon financial obligations".

The other member is fine with me leaving, is glad i dont want money, and will not hold me liable for any additional costs.

However what forms must I file with state/federal? Because I do not trust this person any longer and just giving him a formal resignation does not legal take my name off the llc or in the eyes of the government.

Thank you.

Attorney Answers 4


  1. There are two things that you should do. First, you should provide the LLC with a written resignation - make sure you keep a copy for your records. Second, you should make sure that Form LLC-12 or Form LLC-12R is filed with the Secretary of State (both are available on the Secretary of State's website; make sure that only the other member is listed as a manager/member.


  2. In addition to filing the Statement of Information with the CA Secretary of State (linked below),you should make sure that your LLC co-member signs an acknowledgement of your resignation, and his and the the LLC's agreement to release you from, and indemnify you for, any LLC debts and obligations to date and in the future. This indemnity agreement is only as good as the LLC is solvent (unless the LLC also has insurance?), but an LLC is supposed to limit liability to the principals anyway, and it's better to have an express indemnity agreement than than to not have it.

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.


  3. I agree with the other two attorneys. Also, make sure you take your self off as a signer on any bank accounts. If you can make sure that all outstanding payroll and sales taxes are paid. You could have future liability for these fiduciary taxes during the time your were a responsible party if they are not paid.

    Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.


  4. I agree with my colleagues and will add the following:

    If, for any reason, the other member becomes difficult (perhaps changes his mind) and does not agree to your proposed treatment of financial obligations, you have the right to withdraw unilaterally, irrespective of requirements set forth in the operating agreement - please see the post at the link below.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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