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If 1 partner of a 3 person LLC decides that they no longer want to be in the partnership what is the fastest way to get them out

Asked over 2 years ago - Stockton, CA

We just formed a California L.L.C. about 1 month ago and opened a bank account. We have not made any money and to buy that person out will require less than 200 bucks. What is the easiest way to get that person out. I know we would probably need to make changes to the articles, but is there anything else? Majority votes to add or remove a member and 2 of us want the person out.

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Attorney answers (2)

Steven Alan Fink

Reputation Level 20

Answered over 2 years ago. Real Estate Attorney in Newport Beach, CA.

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The LLC is governed by an Operating Agreement. If the Agreement does not contain a provision for forcing a member out you can always try to dissolve the LLC and form a new one. You can also purchase the third member's interest in the LLC.

Disclaimer: The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.

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Pamela Koslyn

Reputation Level 20

Answered over 2 years ago. Business Attorney in Los Angeles, CA.

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If you have a written LLC Operating Agreement, you have to follow its provisions for resignation and withdrawal or expulsion of a member. Regardless of the procedure, the leaving member is entitled to be bought out for the fair market value of their interest in the LLC.

And yes, the opertive documents governing the LLC may need to be amended if they listed this 3rd person as a member, and a consent documenting the voye/resignation should be prepared. It would also be smart to get a release from the leaving member for the LLC and the other members. You're best off consulting with a business lawyer to make sure these transactuons are handled properly.

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.

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