LLC Member Dissociation, Withdrawal, and Expulsion Requirements in Delaware

At a glance

Requirements one by one

Member resignation is agreement-controlled

The Delaware Limited Liability Company Act uses the agreement and interest definitions in 6 Del. C. § 18-101(9)-(10) to separate member status from the economic LLC interest.

Under 6 Del. C. § 18-603, a member may resign only at a time or event specified in the LLC agreement and in accordance with it. Unless the agreement provides otherwise, resignation before dissolution and winding up is barred. The agreement may also bar assignment before winding up.

The statute states no independent resignation notice, delivery recipient, advance period, acceptance, company-consent, later-date, or filing route. LLCs whose original certificate became effective on or before July 31, 1996 retain the July 31, 1996 version of the section unless their agreement differs.

Delaware defines no wrongful member-resignation category

Chapter 18 supplies no independent wrongful-dissociation schedule and no member- resignation damages or offset formula. An attempted exit outside § 18-603 should not be treated as a completed statutory resignation merely because notice was sent.

Agreement and law or equity may supply remedies under §§ 18-1101 and 18-1104. The separate manager-resignation section has a written-notice power and breach- damages rule, but those manager provisions must not be imported into member resignation.

Expulsion depends on the agreement or other law

Section 18-801(b) recognizes expulsion as a possible membership-ending event but does not create a default majority, unanimous-other-member, illegality, complete-transfer, or no-cause expulsion procedure. The LLC agreement must supply the authority and process.

Chapter 18 also has no ordinary judicial member-expulsion statute. Under § 18-802, a member or manager may instead seek Court of Chancery dissolution when it is not reasonably practicable to carry on under the LLC agreement. That remedy acts on the company, not only the disputed member's status.

Bankruptcy and full assignment end membership by default

Unless the agreement or all-member consent provides otherwise, § 18-304 ends membership for listed bankruptcy, insolvency, creditor-assignment, relief- petition, admission, and consensual trustee/receiver/liquidator events. An involuntary case has a 120-day dismissal period; a nonconsensual appointment uses the stated 90-day and post-stay periods.

Under § 18-702, assignment of the entire LLC interest also ends membership and member powers unless the agreement differs. A pledge, security interest, lien, or encumbrance alone does not.

Death and entity termination shift powers

Section 18-705 gives the personal representative of a deceased or incompetent individual member all rights needed for estate settlement or property administration. A dissolved or terminated corporation, trust, or other entity member's representative receives that member's powers.

The section does not itself state that death, incapacity, or entity termination ends membership. Chapter 18 also states no separate member-level merger, conversion, domestication, or interest-exchange event schedule.

Resignation carries a fair-value fallback

Under § 18-604, the LLC agreement controls the resignation distribution. If it supplies no rule, the resigning member receives fair value of the LLC interest within a reasonable time after resignation, measured on the resignation date from the member's right to share in distributions.

Full assignment separately transfers assigned profits, losses, distributions, and tax-item allocations. Expulsion has no statutory buyout or valuation default because Chapter 18 supplies no ordinary expulsion procedure.

Information, liability, filing, and dissolution stay separate

Under § 18-704(c), the assignor remains liable to the LLC under the contribution and distribution subchapters whether or not the assignee becomes a member. The general information right in § 18-305 belongs to a current member and states no former-member route.

Delaware's minimal certificate and annual-tax system have no event-driven public member-exit or owner-report filing. Section 18-801 says a member event does not itself dissolve the LLC by default. If no members remain, the Act supplies a 90-day or agreement-period representative/admission route before dissolution is required.

What trips people up

• Member and manager resignation are different. The manager's written- notice power does not create a member withdrawal right.
• Completed resignation has a payout even though resignation power is narrow. Section 18-604's fair-value fallback applies after a valid resignation.
• Full assignment ends membership automatically by default. Assignee admission remains a separate question.
• Freedom of contract is broad. The LLC agreement can materially change nearly every result summarized here.

Common questions

May a member resign if the agreement is silent?

Not before dissolution and winding up under § 18-603's default.

Does a valid resignation produce a fair-value payment?

Yes under § 18-604's fallback, within a reasonable time, unless the LLC agreement provides another distribution rule.

May the other members expel someone by a default vote?

No default member-expulsion vote appears in Chapter 18. The agreement must supply authority and process.

Does full assignment release the seller's liabilities?

No. Section 18-704(c) preserves the assignor's contribution and distribution liabilities to the LLC.

Statutes and sources

• 6 Del. C. §§ 18-101, -304 to -305, and -603 to -604 — agreement, bankruptcy cessation, member records, resignation, legacy cohort, and fair- value distribution. Official Subchapter VI (accessed August 30, 2026).
• 6 Del. C. §§ 18-702 and -704 to -705 — full assignment, retained liability, and representative powers. Official Subchapter VII (accessed August 30, 2026).
• 6 Del. C. §§ 18-801 to -802 and -1101 — member-event continuation, memberless rescue, judicial dissolution, and agreement freedom/floors. Official Subchapter VIII and Subchapter XI (accessed August 30, 2026).