Limited Liability Company Member Removal

LLC Member Expulsion LawyersA limited liability company often has the right to expel or remove an individual member of a limited liability company when the member has engaged in wrongful conduct or when it necessary to preserve the interests of the company.

Attorneys for LLC Member Expulsion

In those states in which a court order of expulsion, known as the involuntary dissociation of the member is available, the member may lose his or her right to participate in management or may be forced to sell their interest for “fair value”.

The remedies that are available to the majority members of a limited liability company seeking to expel a member vary from state and according to the terms of the LLC’s operating agreement.

Removal of a Member or Manager of an LLC

Contact the Business Divorce Lawyers at 973-602-3915 with your questions or concerns, or use our on-line form to arrange an initial consultation.  There is no charge for our initial discussion and we will be happy to give you an overview of your options.

If your LLC is involved in a dispute involving the removal of a member of the limited liability company, an experienced business divorce lawyer with a practice focused on LLC disputes will assist you to protect your investment, and your rights.  We frequently represent the owners of limited liability companies in cases involving claims seeking to involuntarily dissociate a member of the LLC

Rights of a Limited Liability Company in New Jersey

The laws that determine the rights of LLC members vary widely by state.  As experienced limited liability company disputes attorneys, we will help you understand your rights as a minority member or majority member of the LLC.

In New Jersey requires an order of “involuntary dissociation” from the Chancery Court, unless the LLC members agreed differently in the operating agreement that governs the business.

Unlike some other states, New Jersey law permits the expulsion, known as “involuntary dissociation” of an LLC member for wrongful conduct or when it is simply no longer reasonably practicable for the members of the LLC to stay in business together.

Under the laws of states that followed the examples of Delaware or New York, the LLC would have to be dissolved or sold to terminate the interest of an individual member.

New Jersey Limited Liability Company Laws

New Jersey’s limited liability company act, however, permits a court to involuntary dissociate — that is, to expel — an LLC member under the following circumstances.

(a) the member engaged in wrongful conduct that adversely and materially affected the limited liability company’s business;

(b) the member willfully or persistently committed a material breach of the operating agreement; or

(c) the member engaged in conduct relating to the limited liability company business which makes it not reasonably practicable to carry on the business with the member as a member of the limited liability company. N.J.S.A. 42:2B(3)(3)(a)-(c).

Fair Value Payments To Expelled Member

A member whose interest has been terminated as a result of involuntary dissociation may be entitled to be paid fair value for their interest.  If the member resigns, the limited liability company must pay fair value for the interest.  Fair value is a value of the member’s share of the limited liability company.  Fair value may be reduced because the member is a minority owner or because the business would be difficult to sell in an ordinary transaction.

We regularly represent parties in New Jersey courts in lawsuits involving the the expulsion or removal of members, assuring that the rights of the LLC members and the limited liability company are protected.

Contact the Business Divorce Lawyers at 888-602-5990 to have an experienced attorney consult with you on issued related to your rights as a limited liability company member.


Contact Information