If you’re managing a Texas LLC and need to remove a member due to disagreement, misconduct, or voluntary withdrawal, you’re probably asking:
“How do I legally remove a member from an LLC in Texas?”
The process is different depending on whether your LLC has an Operating Agreement and whether the member agrees to leave or refuses. Texas law provides a framework, but the safest path is to follow your internal documents and take the right legal steps.
This article walks you through how to remove a member from an LLC in Texas, legally and efficiently.
Can You Remove a Member From a Texas LLC?
Yes, Texas law allows for the removal of an LLC member, but only under certain conditions, such as:
- Following the process in your Operating Agreement, OR
- Mutual agreement and buyout, OR
- Court-ordered removal in serious disputes
- You cannot remove a member unilaterally unless your LLC documents allow it.
Step-by-Step: How to Remove a Member from a Texas LLC
Step 1: Check the Texas LLC Operating Agreement
Your Operating Agreement is your first and most important guide. Look for:
- Conditions under which a member can be removed
- Voting or approval requirements
- Buyout process and valuation method
- Procedures for amending membership
If you have a valid Operating Agreement, you must follow it. If you don’t, Texas law (Texas Business Organizations Code – BOC) will apply by default.
Step 2: Get Member Approval or Consent
In most cases, the remaining members must vote to approve the removal or buyout of the member.
This should be:
- In writing
- Documented via meeting minutes or a resolution
- In accordance with the percentage of votes required (usually a majority or unanimous)
If the member agrees to withdraw, have them sign a Withdrawal Agreement.
Step 3: Draft a Membership Interest Purchase or Buyout Agreement
Whether voluntary or forced, you’ll need a legal agreement to:
- Transfer the departing member’s ownership
- Specify the buyout amount and payment terms
- Release the member from any future claims or liabilities
Tip: Use a licensed business attorney or legal document service to ensure the agreement is enforceable under Texas law.
Step 4: Amend the Operating Agreement
Update the following:
- The member list
- Ownership percentages
- Voting rights
- Capital contributions
All members (including the exiting one, if possible) should sign the amended agreement.
Step 5: File an Amendment With the Texas Secretary of State (If Required)
Texas does not require that you file a member change with the state unless:
- You are also changing the registered agent, or
- You are changing the manager (for manager-managed LLCs)
Otherwise, changes to LLC ownership are handled internally.
Still, you may choose to file an Amendment to the Certificate of Formation (Form 424) to keep public records up to date.
Step 6: Update Internal and Legal Records
Once the member has been removed:
- Remove their access to business bank accounts
- Notify the IRS if the Responsible Party has changed (Form 8822-B)
- Update your CPA, payroll providers, and financial records
- Remove the member from any Texas Comptroller tax accounts
What If the Member Refuses to Leave?
If the member does not voluntarily leave, your options are limited:
1. Use Legal Grounds in the Operating Agreement
If your agreement allows forced removal for misconduct, inactivity, or breach of duties, follow that process. You may need a majority vote or mediation.
2. File a Court Petition Under Texas BOC §101.114
You can ask a Texas court to involuntarily expel a member if:
- They have committed wrongful conduct
- They are willfully or persistently breaching the agreement
- They are acting in a way that makes it no longer practicable to operate the business
This is often costly and time-consuming and should be a last resort.
Common Mistakes to Avoid
- Not reviewing or having an Operating Agreement
- Failing to document the removal in writing
- Not handling a proper buyout or compensation
- Forgetting to update bank, tax, or legal records
- Assuming you can remove a member without consent or cause
Final Thoughts
Removing a member from a Texas LLC is legal—but must be done carefully and correctly. Whether the removal is voluntary or contested, follow these key steps:
- Review your Operating Agreement
- Get member approval or legal grounds
- Draft a proper buyout agreement
- Amend your records and notify the state (if required)
Handled properly, your LLC can continue smoothly—with the right people on board.
