# How to Remove a Member From an LLC in California > How to remove a member from a California LLC: operating agreement expulsion, the statutory grounds, court expulsion, what a removed member keeps, and buyouts. Source: https://ridleylawoffices.com/how-to-remove-member-from-llc-california/ **Short answer:** You can’t vote a member out of a California LLC unless the operating agreement gives you that power or one of a few narrow statutory grounds applies. The other routes are a court order expelling the member for serious misconduct, or a negotiated buyout. Even a removed member usually keeps a right to distributions, so removing a member without buying the interest changes who votes, not who gets paid. - A member can be expelled under the operating agreement (Corp. Code § 17706.02(c)). - Without an agreement clause, the other members can expel only by unanimous consent and only on listed grounds (Corp. Code § 17706.02(d)). - On the LLC’s application, a court can expel a member for wrongful conduct or a willful or persistent material breach (Corp. Code § 17706.02(e)). - Once a member is dissociated, the right to vote ends and the interest is owned solely as a transferee (Corp. Code § 17706.03(a)). Most calls I get about removing an LLC member start with “we never signed an operating agreement” or “ours came from a template.” California’s statute gives the remaining members less power than they expect. This page covers every way a member leaves a California LLC, what the departing member keeps, and the paperwork afterward. I draft expulsion clauses, withdrawal agreements, and buyout documents; once a removal turns into a lawsuit, the members need litigation counsel. ## Can LLC members vote to remove another member in California? Only if the operating agreement says so. A person is dissociated as a member when the person is expelled as a member pursuant to the operating agreement ([Corp. Code § 17706.02(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17706.02)). A majority vote to expel works only because the agreement created it. The statute doesn’t. If your agreement is silent, a majority, or even every other member, can’t remove someone because that member stopped working, disagrees about strategy, or is hard to deal with. The operating agreement governs relations among the members, and the statute governs only where the agreement doesn’t provide otherwise ([Corp. Code § 17701.10](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17701.10)). My [operating agreement guide](https://ridleylawoffices.com/california-llc-operating-agreement/) covers the defaults that apply when there’s no agreement at all. ## How can a member leave or be removed from a California LLC? California lists the events that end a person’s membership. The ones that come up in small LLCs are in this table. | Route | Who decides | Authority | | --- | --- | --- | | Member withdraws | The member, by notice to the LLC | § 17706.02(a) | | An event the operating agreement says causes dissociation | The agreement | § 17706.02(b) | | Expulsion under the operating agreement | Whoever the agreement names | § 17706.02(c) | | Expulsion on statutory grounds | All the other members | § 17706.02(d) | | Expulsion by court order | A judge, on the LLC’s application | § 17706.02(e) | | Death, or in a member-managed LLC, a conservatorship or incapacity order | The event | § 17706.02(f) | | Bankruptcy, in a member-managed LLC | The event | § 17706.02(g) | ## Can a member quit an LLC in California? Yes, but it may cost them. A person has the power to dissociate as a member at any time, rightfully or wrongfully, by withdrawing by express will ([Corp. Code § 17706.01(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17706.01)). The dissociation takes effect when the LLC has notice of the member’s express will to withdraw, or on a later date the member specifies (Corp. Code § 17706.02(a)). California’s version of the statute treats a mid-life withdrawal as wrongful. A dissociation is wrongful if it breaches an express provision of the operating agreement, or if it occurs before the LLC terminates and the person withdraws as a member by express will (Corp. Code § 17706.01(b)). A person who wrongfully dissociates is liable to the LLC and the other members for damages caused by the dissociation (Corp. Code § 17706.01(c)). That surprises members who read older articles. Some sites still cite a withdrawal section from California’s earlier LLC act, which the current act replaced. Under current law, a member who walks away keeps an economic interest and may owe damages. A written withdrawal agreement that the others sign avoids that fight. ## On what grounds can the other members expel a member without a court? Only four, and they’re narrow. The other members, acting unanimously, can expel a member when any of the following applies (Corp. Code § 17706.02(d)): - It’s unlawful to carry on the LLC’s activities with the person as a member. - The person has transferred all of their transferable interest, other than a transfer for security purposes or a charging order that hasn’t been foreclosed. - The member is a corporation that has dissolved or lost its charter or its right to do business, and didn’t cure it within 90 days after the LLC’s notice. - The member is an LLC or partnership that has dissolved and is winding up. The second ground matters most in practice. A member who has sold or assigned their entire economic interest to someone else can be expelled by the others, which cleans up a membership where the vote and the money have split. The statute requires the consent of the other members, so in a two-member LLC the one remaining member’s consent is enough when a ground applies. None of the grounds covers a member who has stopped contributing work or money. ## When will a court expel an LLC member? When the LLC applies and proves serious misconduct. On application by the LLC, a court may expel a member who has engaged in wrongful conduct that has adversely and materially affected the LLC’s activities, has willfully or persistently committed a material breach of the operating agreement or the member’s statutory duties, or has made it not reasonably practicable to carry on the activities with that person as a member (Corp. Code § 17706.02(e)). The statutory duties a member owes in a member-managed LLC are loyalty and care. The duty of loyalty includes refraining from competing with the LLC and from dealing with it on behalf of an adverse party ([Corp. Code § 17704.09(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17704.09)). A member who diverts customers to a competing business is the classic case. A judicial expulsion is also a wrongful dissociation, which exposes the expelled member to damages (Corp. Code § 17706.01(b)). Getting there means a lawsuit, evidence, and months of time. That’s litigation, and I refer those cases to litigation counsel. What I can do beforehand is help document the problem and draft a buyout offer that may make the lawsuit unnecessary. ## What does a removed member keep? The money, unless someone buys it. When a person is dissociated as a member, the person’s right to vote or participate in management terminates ([Corp. Code § 17706.03(a)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17706.03)). Any transferable interest the person owned as a member is then owned solely as a transferee (Corp. Code § 17706.03(a)(3)). A transferee is entitled to receive the distributions the member would have received. Unless the articles or a written operating agreement provide otherwise, a member’s dissociation doesn’t entitle the member to a distribution ([Corp. Code § 17704.04(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17704.04)). If the dissociation violated the operating agreement, the LLC can offset its damages against amounts otherwise distributable to that person (Corp. Code § 17704.04(b)). So California has no statutory buyout of a removed LLC member, unlike the partnership statute. The removed member can’t force the LLC to pay for the interest, and the LLC can’t force the member to sell it. What’s left is a former member who shares in every future distribution and has no vote. That’s why a removal usually ends in a negotiated purchase. Dissociation also doesn’t discharge the person from any debt or liability to the LLC or the other members incurred while a member (Corp. Code § 17706.03(b)). Take a Simi Valley example. Three friends own a property management LLC in equal thirds with no written agreement. One stops working in the business and moves out of state. The other two can’t expel her for that, because none of the statutory grounds applies. If she withdraws, she keeps her one-third share of distributions as a transferee and may owe damages for a wrongful withdrawal. The realistic answer is a purchase of her third, at a price and over a schedule the three negotiate, with releases on both sides. ## What should a buyout of a departing member include? A signed agreement that ends every tie between the member and the company. The one I draft usually covers these terms. 1. **Price and payment.** Cash at closing, or a promissory note with interest and security in the purchased interest. 2. **Who buys.** The LLC redeems the interest, or the remaining members buy it, which changes the tax result. Ask your CPA first. 3. **Resignation.** From any manager or officer role, and removal as a bank signer. 4. **Releases.** Mutual releases of claims, with any carve-outs stated. 5. **Guarantees.** Release of the departing member’s personal guarantees on leases and loans, or an indemnity if the lender won’t release. 6. **Tax items.** How the year’s income is allocated, who prepares the final Schedule K-1, and tax distributions for the year of exit. 7. **Non-competition.** California allows a member who sells all of their ownership interest to agree with the buyer not to carry on a similar business within a specified area where the business was carried on ([Bus. & Prof. Code § 16601](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=BPC§ionNum=16601)). See my [non-compete guide](https://ridleylawoffices.com/non-compete-california/) for the limits. 8. **Confidentiality and return of property.** Client lists, passwords, and company devices. Valuing the interest is often the hard part. My guide to [valuing a small business](https://ridleylawoffices.com/how-to-value-a-small-business-california/) covers the methods, and a [buy-sell agreement](https://ridleylawoffices.com/buy-sell-agreement-california/) signed in advance avoids the argument entirely. ## Is removing a manager the same as removing a member? No. A manager is a role, and a member is an owner. In a manager-managed LLC, a manager may be removed at any time by the consent of a majority of the members without cause, subject to the rights, if any, of the manager under any service contract with the LLC ([Corp. Code § 17704.07(c)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17704.07)). If the manager is also a member, ceasing to be a manager doesn’t by itself dissociate the person as a member (Corp. Code § 17704.07(c)(6)). My guide to [member-managed and manager-managed LLCs](https://ridleylawoffices.com/member-managed-vs-manager-managed-llc-california/) covers the structure. ## What if the members are deadlocked? Then the dispute may end up in a judicial dissolution case. A court may dissolve an LLC on an action by a manager or member when, among other grounds, the management is deadlocked or subject to internal dissension, or when those in control have been guilty of persistent and pervasive fraud, mismanagement, or abuse of authority ([Corp. Code § 17707.03(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17707.03)). The other members can avoid dissolution by buying the moving members’ interests for cash at fair market value, with the value set by three court-appointed appraisers if they can’t agree (Corp. Code § 17707.03(c)). That’s a litigated exit, and I refer it to litigation counsel. The options short of it are covered in my guide to [business divorce and partner buyouts](https://ridleylawoffices.com/business-divorce-partner-buyout-california/), and the voluntary route is in my guide to [dissolving an LLC](https://ridleylawoffices.com/how-to-dissolve-llc-california/). ## What paperwork follows a member’s removal? - **Amended operating agreement.** Restate the members, percentages, and management. - **Member records.** The LLC keeps a current list of each member and transferee with each one’s contribution and share in profits and losses ([Corp. Code § 17701.13(d)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17701.13)). A dissociated member who kept an economic interest stays on that list as a transferee. - **Statement of Information.** The LLC may file an updated statement when the listed managers or members change ([Corp. Code § 17702.09(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17702.09)). See my [Statement of Information guide](https://ridleylawoffices.com/statement-of-information-california/). - **Bank and vendors.** New signature cards and authority letters. - **Taxes.** If one member remains, the LLC may become a disregarded entity for federal tax. Your CPA handles the final partnership return. - **Real property.** When a person obtains a majority ownership interest in an LLC that owns California real property through a purchase or transfer of interests, that transfer is a change in ownership of the property (Rev. & Tax. Code § 64(c)(1)). A redemption that leaves one member with a majority raises the same question, so check it before closing. ## How I help I draft expulsion and withdrawal provisions before anyone needs them, and withdrawal agreements, redemption agreements, and amended operating agreements when a member is leaving by agreement. I’ll also review a buyout offer you’ve received. If a member refuses to leave and the next step is a lawsuit for expulsion or dissolution, you need litigation counsel, and I can refer you. ## Frequently asked questions ### Can I remove a member from my LLC without their consent? Only if the operating agreement allows it, if one of the four statutory grounds applies and every other member agrees, or if a court orders it. Disagreement or poor performance alone isn’t a statutory ground. ### Does a removed LLC member still get paid? Usually, yes. A dissociated member keeps the economic interest as a transferee and receives any distributions the LLC makes on it. The LLC isn’t required to buy the interest unless the operating agreement says so. ### What form do I file with the state when a member leaves? No filing is required for the departure itself. The LLC may file an updated Statement of Information if the managers or members listed on it change, and I usually do. A change of agent for service of process does require a new statement. ### Can an LLC member be removed for not contributing money? Not under the statute alone. The operating agreement can make a failure to fund a required contribution a ground for expulsion or for diluting that member’s percentage. Without that clause, the remedy is to enforce the contribution obligation or negotiate a buyout. ### What happens to a removed member’s personal guarantee? It stays in place until the lender or landlord releases it. Leaving the LLC doesn’t end a personal guarantee, so the buyout agreement should require the remaining members to get a release or indemnify the departing member. ### Does the LLC dissolve when a member leaves? No. Dissociation doesn’t dissolve the LLC. A California LLC dissolves on events like a vote of the members, an event in the operating agreement, 90 consecutive days with no members, or a court decree. More in this series - [Buy-sell agreements for California businesses](https://ridleylawoffices.com/buy-sell-agreement-california/) - [Business divorce and partner buyouts](https://ridleylawoffices.com/business-divorce-partner-buyout-california/) - [Adding a member to an LLC](https://ridleylawoffices.com/how-to-add-member-to-llc-california/) - [Assigning an LLC membership interest](https://ridleylawoffices.com/llc-membership-interest-assignment-california/) - [Partnership agreements in California](https://ridleylawoffices.com/partnership-agreement-california/) - [All business owner guides](https://ridleylawoffices.com/business-guides/) Withdrawal agreements, redemption agreements, and operating agreement amendments are billed at $500 per hour. My rates are on the [fees page](https://ridleylawoffices.com/fees/), and the rest of my business work is on the [business law attorney](https://ridleylawoffices.com/business-law-attorney/) page. [Talk to Eric](https://ridley.click/eric-60) Book a consultation at [ridley.click/eric-60](https://ridley.click/eric-60) or call 805-244-5291. I work with business owners in Ventura, Santa Barbara, and Los Angeles counties by Zoom or phone. **Please read:** This page is general information about California law as of September 2026. It isn’t legal, tax, or financial advice, and reading it doesn’t make you my client. The tax treatment of a buyout depends on facts this page can’t see, so talk with your CPA as well. An attorney-client relationship starts only with a signed engagement agreement.