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My son and I have a LLC. He recently got into trouble with the law. I want to remove his name from the LLC, how do I do that?

Clinton Township, MI |

I wan to remove my son's name from the LLC I have with him. He's been in trouble and in case my clients inquire,I want them to see he is no longer associated with the business. I am listed as the president and he is the vice president. Can I just write him a letter stating that he is being removed from the office and the business. I don't want to dissolve my LLC. Can his name be removed easily? Any help would be appreciated.

Attorney Answers 2

Posted

Hopefully you all drafted an operating agreement which provides for the procedures to take in the event you need to make changes to the LLC. In the event that you did not, you will need to follow MI law regarding removing a member of an LLC. It is unclear from the question whether he is a member or an employee of the LLC. I am assuming he is a member as you could simply fire him as an employee.

At a minimum, you should consult an attorney or legal aid office in MI to determine if this is something you can do yourself or need to pay for assistance.

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Posted

It appears from the information provided that both you and your son are members and have an ownership interest in the LLC.

MCL 450.4509(2) provides as follows: An operating agreement may provide for the expulsion of a member or for other events the occurrence of which will result in a person ceasing to be a member of the limited liability company.

As such, you are required to follow the terms of your operating agreement if you wish to remove your son as a Member. If your operating agreement is silent on this issue or you do not have an operating agreement, then you cannot remove your son.

Similarly, you may not just be able to dissolve the LLC as easily as you think. MCL 450.4801 provides that an LLC may be dissolved in one of the following manners:

(a) Automatically at the time specified in the articles of organization.

(b) Upon the happening of an event specified in the articles of organization or in an operating agreement, including a vote of members.

(c) Upon the unanimous vote of all members entitled to vote.

(d) Automatically upon the entry of a decree of judicial dissolution.

As such, if the Articles or Organization or an Operating Agreement do not set forth the manner in which the LLC can be dissolved, you may have to take your son to Court to dissolve the LLC unless the two of you can reach an agreement. Additionally, I would highly recommend properly documenting any agreement that you make regarding the removal of your son as a member or the dissolution of the LLC to avoid litigation in the future.

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