LLC Member Dissociation, Withdrawal, and Expulsion Requirements in Mississippi
At a glance
| Governing law, member status exit, and scope | Revised Mississippi Limited Liability Company Act, Miss. Code ch. 29; separates membership/governance from financial interests. Covers document/unanimous withdrawal, document expulsion, bankruptcy events, full-interest assignment, withdrawal fair-value distribution, information, reporting, and 180-day memberless continuation (§§ 79-29-101, -105, -303, -313, -603, -703, -801) |
|---|---|
| Operating agreement, articles, and status-exit limits | Certificate/written OA may create and regulate withdrawal, expulsion, bankruptcy consequences, payout, rights, and duties; most Chapter 29 provisions are variable. Mandatory floors include unanimous initial agreement, good faith, information reasonableness, court/dissolution powers, filing rules, and listed misconduct/liability limits (§ 79-29-123) |
| Voluntary withdrawal: power, right, notice, and effective date | Only at time/event in written OA and in accordance with it, or on written consent of all members. Unless certificate/written OA differs, no pre-wind-up withdrawal without unanimous written consent. Act states no independent notice, later-date, acceptance, or filing route; ‘withdrawal’ means a document-authorized voluntary act (§§ 79-29-105(bb), -303) |
| Wrongful dissociation, damages, and other liability | No statutory wrongful-dissociation category or member-withdrawal damages/offset formula. An attempted exit outside § 79-29-303 is not the defined ‘withdrawal’ event; do not assume notice alone ends status. Agreement and other law may supply breach remedies (§§ 79-29-105(bb), -303) |
| Agreement-based and unanimous-consent expulsion | LLC has no power to expel unless certificate or written OA provides otherwise. Chapter states no default majority, unanimous-other-member, illegality, full-transfer, or no-cause expulsion vote. Full financial-interest assignment instead ends seller membership directly (§§ 79-29-303, -703(2)(c)) |
| Judicial expulsion: applicant, procedure, and grounds | No ordinary judicial member-expulsion procedure or grounds in Chapter 29. Member-filed judicial dissolution concerns impracticability, persistent/pervasive fraud or abuse, misapplication/waste, or court-supervised voluntary dissolution; it dissolves LLC rather than expelling member (§ 79-29-803) |
| Death, incapacity, insolvency, entity, and transaction events | Unless certificate/written OA or unanimous written consent differs: creditor assignment, voluntary bankruptcy/insolvency and listed relief/receiver events end membership; involuntary case has 120-day cure, nonconsensual appointment 90-day/post-stay cure. Death/incapacity/entity termination are not default cessation events; heir is admitted on estate distribution. Full financial-interest assignment ends status; security interest does not (§§ 79-29-301(2)(d), -313, -703(2)(c)) |
| Management, voting, authority, and post-exit duties | Withdrawal, expulsion, bankruptcy cessation, or full-interest assignment ends member governance. Bankruptcy former member keeps preevent financial rights. Chapter states no general postexit-duty cutoff or automatic end to a separately held manager office; documents should coordinate capacities (§§ 79-29-303, -313(2), -703(2)(c)) |
| Transferable interest, distributions, buyout, and economics | Withdrawal payout follows OA; absent rule, fair value of financial interest on exit date within reasonable time, using customary current methods with no marketability/minority discount, plus current financial statements. Expulsion has no statutory buyout; bankruptcy former member retains financial rights; full assignment transfers economics (§§ 79-29-603, -313(2), -703) |
| Prior liability, information, records, filings, and dissolution | Full-interest assignor remains liable to LLC for Article 5/6 obligations. General information right belongs to current member/manager; no former-member route. No event-driven exit filing; annual report lists all managers or at least one member and must be current. No members triggers dissolution unless representative/agreement admission occurs within 180 days or document period (§§ 79-29-215, -315, -707(3), -801(1)(d)) |
Requirements one by one
Withdrawal needs a written agreement event or unanimous consent
Miss. Code § 79-29-303 permits withdrawal only at a time or event specified in a written operating agreement and in accordance with it, or on written consent of all members. Unless the certificate or written agreement differs, there is no pre-wind-up withdrawal without unanimous written consent.
Under § 79-29-123, the certificate and operating agreement control most internal terms subject to the section's mandatory limits.
Chapter 29 states no independent notice, acceptance, later-date, or filing route. Its definition of “withdrawal” is a voluntary act authorized by the certificate or written operating agreement, so an attempted unilateral notice outside those rules should not be treated as a completed statutory exit.
Expulsion also requires the governing documents
The LLC has no power to expel a member unless the certificate or written operating agreement provides otherwise. Chapter 29 states no default majority, all-other-member, illegality, complete-transfer, or no-cause expulsion vote.
It also states no ordinary judicial member-expulsion procedure. § 79-29-803 governs judicial dissolution for impracticability, persistent and pervasive fraud or abuse, misapplication or waste, and court-supervised voluntary dissolution. That is an LLC-level remedy, even though § 79-29-805 preserves the court's inherent power to fashion alternatives.
Bankruptcy and full assignment are separate exit events
Unless the documents or unanimous written consent provide otherwise, § 79-29-313 ends membership for listed voluntary bankruptcy, insolvency, relief-petition, admission, and consensual receiver/trustee/liquidator events. An involuntary proceeding has a 120-day dismissal period; a nonconsensual appointment has the stated 90-day and post-stay vacation periods.
Assignment of the entire financial interest also automatically ends membership, governance, and member powers under § 79-29-703; a security interest or other encumbrance does not. Death itself is not a default cessation event. An heir becomes a member when the inherited interest is distributed from the estate under § 79-29-301.
Withdrawal has a detailed fair-value payout
The operating agreement controls the withdrawal distribution. If it supplies no rule, § 79-29-603 requires payment within a reasonable time of fair value of the financial interest on the withdrawal date. The statute requires customary, current valuation methods and bars discounts for lack of marketability or minority status. Current financial statements must accompany the distribution.
The statutory payout is for withdrawal, not expulsion. An expelled person loses membership and governance, but Chapter 29 states no default expulsion buyout; the certificate or agreement must address the retained financial interest.
Governance, financial rights, and manager office are distinct
Withdrawal, expulsion, bankruptcy cessation, and full-interest assignment end member governance. A bankruptcy-event former member keeps the financial rights held at the event, while a full assignment moves the assigned economics to the assignee.
Chapter 29 states no general postexit-duty cutoff and does not say that every membership cessation automatically ends a separately held manager office. The certificate and agreement should coordinate those capacities and any continuing duties expressly.
Information, liability, reporting, and dissolution stay separate
The full-interest assignor remains liable to the LLC for the contribution and distribution obligations in Articles 5 and 6. The general information right under § 79-29-315 is written for current members and managers; Chapter 29 states no separate former- member inspection route.
There is no event-driven member-exit filing. The annual report lists all managers if manager-managed or at least one member if member-managed and must be current when executed. If the LLC has no members, the representative or agreement route has 180 days—or the documents' different period—to restore membership retroactively before dissolution is required.
What trips people up
- A unilateral notice is not the statutory withdrawal route. The written agreement or unanimous written consent must authorize the exit.
- Withdrawal and expulsion have different economics. Withdrawal has a detailed fair-value rule; expulsion has no statutory buyout default.
- Full financial assignment ends membership automatically. Mississippi does not wait for assignee admission or a separate expulsion vote.
- Bankruptcy retains economics by default. The former member loses governance but keeps financial rights held at the event.
Common questions
May a member withdraw if the written agreement is silent?
Only with every member's written consent before dissolution and winding up, unless the certificate supplies a different permitted rule.
Can the LLC expel a member without an agreement provision?
No. Chapter 29 says the LLC has no expulsion power unless the certificate or written operating agreement provides it.
Does withdrawal require a discounted valuation?
No. The statutory fallback bars discounts for minority status and lack of marketability.
Does full assignment release the seller's prior LLC liabilities?
No. § 79-29-707 preserves the assignor's Article 5 and 6 liabilities to the LLC whether or not the assignee becomes a member.
Statutes and sources
- Miss. Code §§ 79-29-101, -105, -115, -123, -301, -303, -313, and -315 — definitions, document control, withdrawal/expulsion, bankruptcy, death admission, records, and information. Official Mississippi HB 683 sent to the Governor (accessed August 30, 2026).
- Miss. Code §§ 79-29-603, -703, and -707 — withdrawal fair value, full- interest assignment, assignee economics, and surviving liability. Official HB 683 (accessed August 30, 2026).
- Miss. Code §§ 79-29-801, -803, and -805 — memberless continuation, non-dissolution events, judicial dissolution, and alternative remedies. Official HB 683 (accessed August 30, 2026).
- Miss. Code § 79-29-215 — current annual-report roles. Official 2021 SB 2204 sent to the Governor (accessed August 30, 2026).
Source links
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