Posted by: Apr 16, 2020

Remove a Member from LLC in Texas

If you have a limited liability company (“LLC”) in Texas, you might be wondering how to remove one of your LLC members.

Many circumstances may warrant your desire to remove someone.

Often, LLC members retire. They may also simply wish to give up their interest in the LLC to do something else. There may also have been a disagreement between the LLC members, and perhaps one wants to sever their ties with the business. 

No matter the reason, removing an LLC member is quite common for companies. It’s vital that you do everything lawfully and within the bounds of the LLC’s procedures.

In this article, we’ll discuss how to remove a member from an LLC in Texas. 

How To Remove a Member from an LLC in Texas

How you remove an LLC member from your company will depend on the internal procedures of the company.

Review the Operating Agreement

First, review the LLC operating agreement. The operating agreement is the document that controls the day-to-day operations of the company. Usually, operating agreements are created when the LLC is formed.

Members may have to vote on the removal or follow specific procedures to do so. If the member who is leaving is choosing to resign voluntarily, they may also have certain formalities they need to meet.

All relevant parties should keep a written record of the procedures through an LLC members’ meeting.

Review Any Additional Written Agreements, Such as a Buyout Agreement

If the LLC has other written agreements, such as a buyout agreement, you’ll need to review that as well. The buyout agreement may have information about how to pay out a member who is leaving. It may also discuss what the other members should do about the departing member’s interest.

Complete the Membership Change

Based on what is contained within the documents, do everything required to complete the Texas LLC change of ownership. This will include keeping a written record of the events for the removal, as well as adequately paying out the departing member.

Inform the State of Texas

There is no requirement for the remaining LLC members to amend their documents with the Texas Secretary of State. You would need to update the Secretary of State if the registered agent or office address changed, however.

What you will need to do is update the list of LLC members with the Texas Comptroller’s office through an annual Public Information Report. 

Get an Attorney’s Help 

Just like filing an LLC, the process for how to remove a member from an LLC in Texas can be quite technical. It’s a good idea to get an experienced attorney’s help, not just to review the LLC’s documents, but also to complete the ownership change.

The Curley Law Firm can help with your Texas LLC change of ownership or answer any questions that you may have. Contact our office conveniently located in The Heights today.