LLC Member Dissociation, Withdrawal, and Expulsion Requirements in Colorado

At a glance

Requirements one by one

Colorado uses resignation and transfer, not a general dissociation code

Colo. Rev. Stat. § 7-80-101 names Article 80 the Colorado Limited Liability Company Act. The complete current article uses “resignation” in §§ 7-80-602 and -603 and expressly ends membership on a full assignment or transfer in § 7-80-702. It has no separate ordinary dissociation subpart or event schedule.

Current Part 12 creates a special artist-company regime, but § 7-80-1222 says that part does not affect the law applicable to a non-artist LLC. This cell therefore applies the ordinary Article 80 rules.

The operating agreement controls within specific floors

Under § 7-80-108, the operating agreement governs the rights, duties, limitations, qualifications, and relations among managers, members, assignees, transferees, and the LLC over contrary Article 80 defaults. The article fills gaps.

The agreement cannot unreasonably restrict § 7-80-408 information rights, eliminate good faith and fair dealing, eliminate the last-member dissolution floor except for its allowed extension, bind outsiders without consent, or use an unwritten term to vary a statutory writing requirement. Those limits matter when an agreement defines departure or its consequences.

Resignation takes notice, not a waiting period

Section 7-80-602 permits a member to resign at any time by giving notice to the other members. Article 80 states no default advance period, writing, signature, delivery address, acceptance, company consent, or specified-later- date rule.

An agreement breach does not undo the resignation. It permits the LLC to recover breach damages from the resigning member and offset them against the amount otherwise distributable. The section does not create a parallel damages claim for another member.

Article 80 has no statutory expulsion route

The complete current article states no agreement-expulsion event, unanimous- other-member closed list, majority removal vote, judicial-expulsion applicant, or wrongful-conduct/material-breach grounds for removing one member.

Section 7-80-108 lets an agreement regulate internal rights and relations consistently with law, but this survey does not infer a no-cause expulsion power from general majority voting. Section 7-80-810(2) instead permits a member or manager to seek dissolution when it is not reasonably practicable to carry on the LLC's business under the agreement. Dissolution is an entity remedy, not statutory member expulsion.

Full transfer is the other express status-ending event

Under § 7-80-702(2), assignment or transfer of the entire membership interest ends membership even if the transferee has not been admitted. Before admission, subsection (1) gives a transferee only the transferred share of profits, other income compensation, and return of contributions, with no management or automatic membership right.

A partial transfer does not itself end all status. If the partial transferee is admitted, subsection (3) ends the transferor's rights and powers only for the transferred portion.

Death and incapacity shift powers without an express cessation clause

Section § 7-80-704 gives an executor, administrator, guardian, conservator, or other representative of a deceased or protected individual member all powers of an assignee or transferee. A dissolved or terminated entity member's legal representative or successor receives the same limited powers.

The section does not say those events themselves cause the person to “cease to be a member,” and Article 80 states no separate bankruptcy, insolvency, merger, conversion, domestication, or completed-winding-up status-exit schedule.

Resignation ends member management but not every separate role

Section 7-80-603 removes the resigned member's right to participate in LLC management and affairs. A manager is separately designated under § 7-80-402, and Article 80 does not state that resignation as a member automatically ends a separate manager, agent, employee, or contract role.

The Act also states no resignation-specific cutoff for duties concerning future events. The governing agreement, capacity-specific provisions, and other law must be reviewed without importing a revised-uniform consequence that Colorado did not enact.

The resigned member retains economics, not a buyout

Section 7-80-603 entitles the resigned member only to the share of profits or other compensation by way of income and return of contributions that would have applied without resignation. It creates no automatic fair-value payment, redemption, liquidation, forfeiture, valuation method, or payment deadline.

The same economic categories apply to a nonmember transferee under § 7-80-702. Actual distributions remain subject to the agreement and Article 80's distribution rules.

Records, liabilities, and memberless dissolution remain separate

Section 7-80-408 gives inspection and accounting rights to a “member” and states no general former-member right. The resignation provisions require no public status-exit filing. A separate manager designation, authority record, articles amendment, periodic report, or dissolution statement follows its own rule.

Section 7-80-502 preserves enforceable contribution promises despite death, disability, or other inability. On full transfer plus transferee admission, § 7-80-702 releases other assignor liabilities but preserves § 7-80-502 contribution liability. § 7-80-606 separately preserves stated unlawful- distribution liability. Under § 7-80-801(1)(c), an LLC without members dissolves on the 91st day unless a member is admitted sooner, or earlier when a dissolution statement becomes effective.

What trips people up

• Resignation does not cash out the interest. Section 7-80-603 preserves economic entitlements rather than compelling fair-value redemption.
• Full transfer can create a memberless LLC. The seller's membership ends, but the buyer is not automatically admitted.
• Representative powers are transferee powers. Section 7-80-704 does not grant the full management rights of a member.
• Judicial dissolution is not expulsion. Section 7-80-810 acts on the LLC, not only on the disputed member's status.

Common questions

Must a Colorado resignation notice be written?

Not under § 7-80-602's statutory default, although the operating agreement may impose a valid writing or delivery procedure.

Does a breaching resignation still end member status?

The statute treats the resignation as effective and gives the LLC breach damages and an offset; it does not make agreement compliance a condition to the fact of resignation.

Does assigning the whole interest admit the buyer?

No. Full transfer ends the seller's membership, while buyer admission remains a separate step under the agreement and admission statute.

Can a deceased member's representative manage the LLC?

Section 7-80-704 grants only the powers of an assignee or transferee, not an automatic right to participate as a member.

Statutes and sources

• Colo. Rev. Stat. §§ 7-80-101, -102, -108, and -1222 — ordinary Act, definitions, agreement control, and artist-company boundary. Official 2026 Title 7 printout (accessed August 30, 2026).
• Colo. Rev. Stat. §§ 7-80-402, -408, -502, and -606 — separate manager designation, member records, contribution duties, and distribution liability. Official 2026 Title 7 printout (accessed August 30, 2026).
• Colo. Rev. Stat. §§ 7-80-602, -603, -702, and -704 — resignation, retained economics, full-transfer cessation, and representative powers. Official 2026 Title 7 printout (accessed August 30, 2026).
• Colo. Rev. Stat. §§ 7-80-801 and -810 — memberless and judicial- dissolution boundaries. Official 2026 Title 7 printout (accessed August 30, 2026).