- Operating Agreement
- The governing document of an LLC that sets out members' rights, obligations, voting procedures, and the rules for adding or removing members.
- Member
- An owner of an LLC who holds a membership interest, which typically carries both economic rights (profit share) and governance rights (voting).
- Removal for Cause
- Expulsion of a member based on documented grounds specified in the operating agreement, such as breach of fiduciary duty, criminal conduct, or material non-performance.
- Membership Interest
- A member's ownership stake in the LLC, expressed as a percentage or unit count, representing their share of profits, losses, and distributions.
- Capital Account
- An accounting record tracking each member's net contributions, allocated income or loss, and distributions — used to calculate what a departing member is owed.
- Effective Date
- The specific date on which the member's removal becomes legally operative and their rights and obligations under the operating agreement cease.
- Quorum
- The minimum percentage or number of member votes required to be present or participating for a removal vote to be valid under the operating agreement.
- Dissociation
- The legal process by which a member ceases to be associated with an LLC — removal is one form of involuntary dissociation under most state LLC statutes.
- Buyout Provision
- A clause in the operating agreement that sets the formula or process for purchasing a removed or departing member's interest at a defined price.
- Notice Period
- The advance written notification required by the operating agreement or state law before a removal vote can be held or before removal becomes effective.