I Want Him Out

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“I want him out.” “I want her gone.” I hear this a lot from clients. They co-own a limited liability company (an “LLC”) with another person or another couple, and things just aren’t working out. They have equal voting power, or decisions require unanimous votes, and each side has a different, strongly-held opinion about how the business should be running. Now they want to kick the other owner or owners out and run the show.

Unfortunately, you may not be able to get rid of that member. He or she is also an owner of the business. The Washington Limited Liability Company Act (the “Act”) doesn’t have a default provision which allows LLC members to expel another member. On the other hand, the Act does allow LLC members to agree that they can expel each other from the company. If the members agree on the terms and circumstances under which they can be expelled, they can write an expulsion provision into their LLC agreement. In other words, the right to expel a member must be something that the members all agreed to be subject to in advance.

If you are not at a place of active disagreement, you may be able to amend your LLC agreement to allow for expulsion, but you should be aware that any such move will likely be met with some resistance from the other members of the company. On the other hand, if you are at the point of active disagreement, your best bet is a negotiated agreement with the other members in which one member or group of members buys out the other. We can help in either situation, so please contact us with questions.


About the Authors

Andrew Clapp

Andy’s practice spans business, finance, securities and real estate law. Andy advises companies throughout the entire life cycle of the company – from formation, early-round fund raising, corporate governance, operations and management, to merger, sale or succession.

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