LLC Member Dissociation, Withdrawal, and Expulsion Requirements in Rhode Island

At a glance

Requirements one by one

Current law leaves the withdrawal procedure to the agreement

Current Chapter 7-16 recognizes distributions before withdrawal in R.I. Gen. Laws § 7-16-28 and sets post-withdrawal economics in § 7-16-29, but it does not state a general power or right to withdraw, notice form or recipient, advance period, effective-time trigger, acceptance rule, consent requirement, or public filing. The operating agreement must supply that route.

Section 7-16-2 defines the current member, membership interest, and written-or- oral operating agreement. This architecture remains current through December 31, 2027.

Agreement violation affects distributions, not a statutory damages code

Chapter 7-16 has no wrongful-dissociation category or general exit-damages formula. Under § 7-16-29, however, damages recoverable because withdrawal violated the agreement reduce the distributions the former member otherwise receives during continuation and winding up.

Contribution and improper-distribution liabilities under the cross-references in § 7-16-36(d) also remain with an assignor whether or not the assignee becomes a member. Current law therefore does not treat exit as a liability release.

Current law has no general member-expulsion route

Section 7-16-39 names expulsion as one possible event ending membership for dissolution purposes, but Chapter 7-16 states no default majority, unanimous- other-member, illegality, complete-transfer, or no-cause expulsion procedure. Authority must come from the agreement, articles, and other applicable law; the general voting statute, § 7-16-21, alone should not be treated as a removal power.

Current law likewise has no ordinary judicial-expulsion procedure. § 7-16-40 instead lets a member seek dissolution when it is not reasonably practicable to carry on under the articles or agreement. That remedy acts on the company.

Complete assignment is the clearest status-ending event

Under § 7-16-35, assignment of the entire membership interest ends member status and all member powers unless the articles or a written operating agreement provides otherwise. The assignee receives only assigned distributions and does not become a member or gain management merely through assignment.

Admission remains separate under § 7-16-36 and ordinarily requires unanimous consent of the other members. The statute states no universal transfer notice, assignment signature, witness, acknowledgment, notarization, or filing rule.

Death and incapacity shift powers without an express exit clause

Under § 7-16-38, a deceased or incapacitated individual's representative may exercise all member rights for estate settlement or property administration, including a document-supplied admission power. A dissolved or terminated entity member's representative or successor may exercise that member's powers.

The section does not itself say those events terminate membership. Section 7-16-39 treats death, withdrawal, expulsion, bankruptcy, dissolution, and other events that do terminate continued membership as dissolution boundaries, so the actual status event still must be identified in the company record or other law.

Withdrawal keeps assignee economics without a buyout

Unless a written agreement differs, § 7-16-29 gives no distribution merely because withdrawal occurred. The withdrawn member and legal representatives, successors, and assigns instead keep assignee rights to distributions during continuation and after winding up, reduced by recoverable agreement-violation damages.

Current law creates no automatic fair-value purchase, redemption, valuation formula, or payment deadline. § 7-16-22 inspection and information rights are written for a current member and do not create a former-member route.

Management, public records, and dissolution stay separate

A complete assignment ends member powers, but does not automatically decide a separately held manager role. Current manager duties and authority remain in §§ 7-16-17 and 7-16-20, and a manager-of-record change requires an articles amendment under § 7-16-12.

The annual report under § 7-16-66 has no member roster. Section 7-16-39 separately addresses dissolution after member-ending events. A last-member event ordinarily dissolves the LLC unless the documents differ or successors and assignees agree in writing within 90 days to admit at least one member.

A new dissociation regime begins January 1, 2028

2026 R.I. Pub. Laws ch. 247, § 2 says current Chapter 7-16 is hereby repealed in its entirety. It installs replacement Chapter 7-16.1 effective January 1, 2028. Under new § 7-16.1-601, a person has the power to dissociate as a member at any time, rightfully or wrongfully. The new law will make express-will notice a status-ending event, create agreement, closed-list unanimous, and judicial expulsion routes, define wrongful dissociation and caused-damages liability, end member duties for later matters, convert retained economics to transferee status, and preserve prior liabilities.

The future effective date appears in § 4. Those rules are enacted but not current. They must not be used for an exit occurring before their effective date without a separate transition analysis.

What trips people up

• Withdrawal is recognized but not proceduralized. Section 7-16-29 tells what happens economically after withdrawal, not how withdrawal occurs.
• Full assignment ends current membership automatically. The 2028 law reverses that default and ordinarily requires a separate dissociation event.
• Judicial dissolution is not expulsion. Current § 7-16-40 does not merely remove the disputed member.
• The replacement act is enacted but future-effective. Current Chapter 7-16 controls through December 31, 2027.

Common questions

Does current law require written withdrawal notice?

Chapter 7-16 states no general withdrawal-notice form. The operating agreement and complete company record must supply the procedure.

May the other members expel someone by unanimous vote?

Current Chapter 7-16 states no such default route. A uniform-style unanimous expulsion list begins with the replacement law in 2028.

Does withdrawal trigger a fair-value buyout?

No under the current default. The former member keeps assignee distribution rights unless a written operating agreement provides another result.

Does death automatically end membership?

Section 7-16-38 grants the representative member powers for estate or property administration; it does not itself state that death ends status.

Statutes and sources

• R.I. Gen. Laws §§ 7-16-2, -12, -17, -20, -22, and -28 to -29 — current definitions, manager capacity, records, and withdrawal economics. Official § 7-16-29 (accessed August 30, 2026).
• R.I. Gen. Laws §§ 7-16-35 to -40 and -66 — assignment-ending membership, assignee admission, representatives, dissolution, and reporting. Official § 7-16-35 and § 7-16-39 (accessed August 30, 2026).
• 2026 R.I. Public Laws chapter 247, §§ 2-4 — replacement Chapter 7-16.1 and January 1, 2028 effective date. Official enacted act (accessed August 30, 2026).