A Member can Withdraw from an LLC, Despite the Operating Agreement
A well-written LLC Operating Agreement will address this question directly. It will specify the circumstances under which members may withdraw, and the consequences of withdrawal.
However, irrespective of what the Operating Agreement says, California law gives every member the right to withdraw from an LLC.
Corporations Code Section 17252(a) provides, in relevant part, that “Notwithstanding any restriction upon the right of a member to withdraw, resign, or retire, a member may withdraw from a limited liability company at any time by giving written notice to the other members.”
Upon providing notice, the withdrawn member retains a right to any economic distributions from the LLC but is no longer a member. However, if withdrawal constitutes a breach of the Operating Agreement, the LLC may reduce economic distributions by the amount of any damages suffered as a result of the breach.
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Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
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