Removing a member from a Missouri LLC is a common and fairly simple process. Here are some things to know:
Can I remove a member from my Missouri LLC?
Yes. LLCs frequently gain and lose members as the business evolves. You might need to remove an LLC member when someone resigns, engages in wrongful conduct, or even dies. If you need to remove an LLC member, the first thing you should do is consult your operating agreement and follow its procedure for removing a member. For most LLCs, the process of removing a member involves these steps:
- Hold a meeting of all LLC members
- Draft a resolution to remove a member
- Vote on the resolution
- Adopt the resolution if the majority votes “yes”
If there are no steps included in the operating agreement, a member may still withdraw by giving 90 days notice to the other members, per MO Rev Stat § 347.121 (2021). A withdrawn member can no longer participate in management of the company and only has the rights of an assignee of interest.
Do I need to file an amendment of my Missouri Articles of Organization?
No. You aren’t required to include member information on the Missouri LLC Articles of Organization, so you don’t need to file an amendment when you remove a member.
Do I need to update my Missouri LLC operating agreement when I remove a member?
Yes. Your Missouri operating agreement should include your LLC members’ names and addresses, and you will need to update this document whenever you add or remove a member.
If my business goes from a multi-member to a single-member LLC, do I need to contact the IRS?
Yes. When a business changes from a multi-member to a single-member LLC, the tax classification for the business changes. Multi-member LLCs are taxed as partnerships by default, whereas single-member LLCs are, by default, taxed as “disregarded entities.” So if your LLC changes from a multi-member to a single-member LLC, you will need to file IRS Form 8832 to change your entity classification.