LLC Member Dissociation, Withdrawal, and Expulsion Requirements in Tennessee

At a glance

Requirements one by one

First identify the governing Tennessee Act

Under Tenn. Code Ann. § 48-249-1002, the Revised Act governs domestic LLCs formed on or after January 1, 2006 and pre-2006 LLCs that unanimously elected it through an articles amendment. A pre-2006 LLC that never elected remains under the Prior Act in chapters 201 through 248. The two regimes cannot be blended.

The Revised Act also has a “family LLC” branch under § 48-249-102. If the statutory definition is met, § 48-249-503(b)(2) bars both the power and right to terminate and prevents the listed withdrawal, transfer, insolvency, death, trust/estate/custodian, and entity-termination events from ending the member's interest.

Revised Act documents can negate the power to withdraw

For an ordinary Revised Act LLC, § 48-249-503(a)(1) makes membership end when the LLC receives the member's written express-will notice, on the notice date or a stated later date. Subsection (b)(1) ordinarily gives both the power and right to terminate at any time.

But if the LLC documents negate the right, they automatically negate the power unless the power is expressly reserved. An attempted termination without power is null and void. That is distinct from an effective but wrongful termination under § 48-249-504.

Wrongful termination forfeits governance and creates an offset

Under Tenn. Code Ann. § 48-249-504, a member who terminates contrary to the LLC documents forfeits every governance right, including in winding up. The member is liable to all other members, all holders, and the LLC for damages caused by the wrongful termination. Those damages and other termination-related amounts owed to the LLC may be offset against any amount the LLC owes the former member.

The section does not confer power where the documents negated it. This survey does not decide whether a termination was void or wrongful, what damages were caused, or what offset applies.

Revised Act expulsion uses documents, a closed vote list, or court

The LLC documents may supply expulsion. Unanimous eligible other members may expel only when continuing with the member is unlawful, a corporation/LLC has the stated dissolution or charter-status problem uncured within 90 days after notice, or a general/limited partnership is dissolved and winding up.

The LLC or another member may seek judicial expulsion for materially adverse wrongful conduct, willful or persistent material LLC-document or statutory-duty breach, or conduct making continuation with the person not reasonably practicable. A full financial-right transfer is a separate automatic event unless it remains a security/charging-order situation or the family-LLC rule blocks it.

The automatic list and death branch have special consequences

Revised § 48-249-503 includes voluntary and uncured 90-day involuntary bankruptcy/creditor/fiduciary events; individual death, personal-representative appointment, or incapacity; specified trust, estate, and custodianship transfers; and termination of most other entity members. The statute states no separate merger, conversion, or domestication termination event.

For the individual/personal-representative branch, § 48-249-505(b) suspends governance if the LLC continues. The representative has a 60-day purchase option, then the LLC has its own 60-day option. If neither acts, governance is restored and the representative becomes a member automatically. Other terminations in a continued LLC ordinarily leave the former member as a holder of financial rights.

Revised Act payout is detailed and exception-heavy

For a continued LLC, § 48-249-505(c) generally requires fair value as of termination, even when termination was wrongful, but excludes terminations by full financial transfer and the listed trust, estate, and custodianship transfers. The wrongful-termination offset still applies. A noncontinued LLC instead uses the liquidation distribution.

Under § 48-249-506, LLC-document value and payment terms control. The LLC communicates its value and proposed terms within 30 days. If no agreement is reached within 120 days, the former member/representative or LLC has another 120 days to start the statutory fair-value proceeding. This page does not calculate value or advise on those deadlines.

Prior Act withdrawal and payout are different

For a pre-2006 nonelecting LLC, Tenn. Code Ann. § 48-216-101 generally gives the power—though not necessarily the right—to withdraw at any time, subject to its narrower pre-July-1999 branch. Withdrawal outside the permitted Act, articles, agreement, or enumerated events is wrongful. Expulsion is unavailable unless the articles provide otherwise.

Wrongful Prior Act withdrawal forfeits governance and creates damages to the LLC and other members, expressly including lost profits, with an offset. If the LLC continues, the payout is the lesser of going-concern and liquidation fair market value; absent governing-document terms, payment follows within six months after the amount is determined. Those are not Revised Act measures.

Information and company continuation survive separately

Under Revised § 48-249-308, a former member may inspect membership-period records for proper purposes on at least five business days' written notice. A holder of financial rights has a narrower tax-information route. Section § 48-249-502(b) also permits an ownership-and-rights statement.

Membership termination ordinarily does not dissolve a Revised Act LLC. Under § 48-249-601, even the last-member event dissolves only when the LLC documents make it a dissolution event and a notice is filed within 90 days. Otherwise the last member's representative—or another document-designated person—is substituted as member, effective at the termination event. Chapter 249 states no ordinary immediate public member-exit filing.

What trips people up

• Power, right, and effectiveness are three separate questions. Revised documents can make an attempted withdrawal void, not merely wrongful.
• The family-LLC rule changes the whole event list. It bars voluntary exit and prevents several automatic events from terminating the interest.
• Death has two 60-day options. If neither the representative nor LLC elects purchase, the representative is automatically admitted.
• The Prior Act uses another value measure. Its lesser-of-two-values rule and six-month payment default do not govern a Revised Act LLC.

Common questions

Can Revised Act documents prohibit a member from leaving?

Yes. Negating the right also negates the power unless the documents expressly reserve power, and an attempted powerless termination is void.

Does every Revised Act termination require a fair-value purchase?

No. Section 48-249-505 excludes full financial transfers and specified trust, estate, and custodianship transfers and has a separate death-representative sequence.

Who may seek judicial expulsion under the Revised Act?

The LLC or another member.

How do I know whether the Prior Act applies?

Check formation date and whether a pre-2006 LLC unanimously elected the Revised Act through the required articles amendment.

Statutes and sources

• Tenn. Code Ann. §§ 48-249-308, -502 to -506, -601, and -1002 — Revised Act governance, information, exit power/events, wrongfulness, payout, continuation, and transition. Permitted current-law Title 48 reproduction (accessed August 30, 2026; bridged through official acts and current bill sweeps).
• Tenn. Code Ann. § 48-216-101 — Prior Act withdrawal, expulsion, wrongfulness, economics, and payment. Permitted current-law Title 48 reproduction (accessed August 30, 2026; bridged through current bill sweeps).
• Tenn. Public Acts ch. 286 (2005) — official enactment of the Revised Act. Official enrolled act (accessed August 30, 2026).