How to remove a cofounder from an LLC

Removing a cofounder from an LLC starts with your operating agreement, not a vote. If the agreement has a removal clause, you follow its terms and buy out their interest. If it does not, your state's default LLC law controls, and in many states that default has no clean mechanism at all.

Where do you start?

Open the operating agreement before you do anything else. LegalZoom's guide to removing an LLC member is blunt about this: the agreement is the first place to look, and if it covers removal, you follow its terms exactly, including the vote and any buyout formula. If it does not mention removal, the decision falls to your state's LLC statute, and those rules vary a lot from state to state.

Do not skip this step because you already know, roughly, what the agreement says. "Roughly" is how a removal gets challenged later.

What if the operating agreement says nothing?

Then you are relying on default state law, and that is a weaker position than most founders expect. ZenBusiness's guide to removing an LLC member notes that without a removal clause, the remaining members have to fall back on state default rules, and several states offer no straightforward way to vote a member out at all. Your practical options narrow to two: negotiate a voluntary exit, or dissolve the LLC and re-form it with the members who want to stay.

Neither is fast. Both are better than a removal that gets reversed in court six months later because the vote did not meet your state's threshold.

What vote do you actually need?

It depends on your agreement and your state, and there is no single answer. Thresholds in real operating agreements range from a simple majority to a supermajority to full unanimity among the remaining members. A removal that falls short of whatever threshold applies is vulnerable to challenge, whether that threshold comes from the agreement or the statute. Read the exact clause, not your memory of it, before you count votes.

What happens to their ownership after removal?

Removal and ownership are two separate questions. Voting a cofounder out of management or decision rights does not automatically erase their economic interest in the company. Most operating agreements require a buyout: the LLC or the remaining members purchase the departing cofounder's units at a price set by the agreement's formula, or by a professional valuation when the agreement does not specify one. Until that buyout closes, the removed cofounder may still hold a stake and a claim on distributions.

A few things worth settling before you start:

1. Confirm whether the operating agreement has a removal clause, and read its exact vote threshold and buyout formula.
2. If it is silent, look up your state's default LLC statute, since the fallback rule differs by state.
3. Document the specific, factual reasons for removal, not the narrative version of events.
4. Decide whether a negotiated exit is realistic before you force a vote. It is almost always cheaper and faster.
5. Get a business attorney licensed in your state to review the agreement and the planned process before anyone is told.
6. Line up how the buyout will be funded and valued, so the removal is not stalled by an unresolved payout.

When is this actually a conflict, not a procedure?

Most LLC removals that end up in this situation are not really document problems. They are a cofounder relationship that broke down long before anyone opened the operating agreement, and the legal mechanics are just the last step. If you are at this point because of a slower breakdown, trust gone, roles disputed, decisions you can no longer make together, treat the underlying problem with the same seriousness as the paperwork. Our guide to cofounder conflict resolution walks through separating facts from the story you are telling yourself, which matters even more once lawyers are involved.

If removal still looks like the right call once that is sorted, a structured Conflict Session can get both sides to a written agreement on what happens next before anyone files anything. And if the buyout number itself is the sticking point, see our breakdown of how cofounder share buybacks get valued.

Is there a faster, less adversarial path?

Usually, yes, and it is worth trying first. A voluntary exit, where the departing cofounder agrees to resign and negotiates their own buyout terms, avoids the vote threshold problem entirely and is far less likely to end in litigation. Our guide on when to fire a cofounder covers how to tell whether you have reached the point where removal, forced or negotiated, is the right call rather than one more hard conversation.

Whatever path you take, write down what you agree to. An LLC removal that is clean on paper is far cheaper than one that gets relitigated a year later.