LLC Member Dissociation, Withdrawal, and Expulsion Requirements in West Virginia
At a glance
| Governing law, member status exit, and scope | West Virginia Uniform LLC Act, Chapter 31B; ordinary domestic at-will or term LLC. Covers notice, agreement, full transfer, expulsion, insolvency, death/incapacity, trust/estate distribution, and entity termination, with separate buyout/dissolution consequences (§§ 31B-1-101, 31B-6-601 to -603) |
|---|---|
| Operating agreement, articles, and status-exit limits | OA may eliminate express-will dissociation power and controls agreement events, expulsion, valuation/terms, and continuation. It cannot vary § 31B-6-601(6) judicial expulsion, unreasonably restrict information, eliminate/tightly reduce listed duties, vary specified wind-up rules, or impair protected outsiders (§§ 31B-1-103, 31B-6-602, 31B-7-701(c)) |
| Voluntary withdrawal: power, right, notice, and effective date | Unless OA eliminates power, member may dissociate at any time rightfully or wrongfully. LLC notice ends status on notice date or member's stated later date. No universal writing, signature, advance period, acceptance, or consent rule (§§ 31B-6-601(1), -602(a)) |
| Wrongful dissociation, damages, and other liability | If power remains: wrongful for OA breach or, before term-company term expires, express withdrawal, judicial expulsion, bankruptcy, or specified willful entity dissolution/termination. Caused damages run to LLC and members, add to other obligations, and offset later distributions/purchase price (§§ 31B-6-602(b)-(d), 31B-7-701(f)) |
| Agreement-based and unanimous-consent expulsion | OA event or OA expulsion causes exit. Other members may unanimously expel for illegality; substantially-all distributional-interest transfer excluding security/unforeclosed charge; uncured corporate dissolution/charter/suspension after 90 days; or dissolved, winding-up partnership/LLC. Entire economic transfer independently dissociates (§ 31B-6-601(2)-(5)) |
| Judicial expulsion: applicant, procedure, and grounds | LLC or another member may apply. Court may expel for wrongful conduct with adverse material effect; willful/persistent material OA or § 31B-4-409 duty breach; or company-business conduct making continuation with member not reasonably practicable. OA cannot vary this right (§§ 31B-1-103(b)(5), 31B-6-601(6)) |
| Death, incapacity, insolvency, entity, and transaction events | Bankruptcy, creditor assignment, consensual fiduciary appointment, or uncured nonconsensual appointment after stated 90-day periods; individual death, guardian/general-conservator appointment, or incapacity order; trust/estate full-rights distribution; and qualifying entity termination. No separate merger/conversion/domestication/interest-exchange event in § 31B-6-601 (§ 31B-6-601(7)-(11)) |
| Management, voting, authority, and post-exit duties | Member status and management end; former member is treated as transferee. Noncompetition loyalty ends; other loyalty/care continue only for preexit matters unless person winds up. Act states no automatic end to a separately held nonmember-capable manager office; member-manager dissociation has a special dissolution trigger (§§ 31B-3-301, 31B-6-603(b), 31B-8-801(b)(3)) |
| Transferable interest, distributions, buyout, and economics | If no dissolution: at-will LLC buys at dissociation-date fair value; term LLC generally buys at term expiration using then-value. Offer due within 30 days; no agreement within 120 days opens another 120-day enforcement window. Court considers going concern/agreement/appraisal/legal constraints and may order installments, subordination, security, restrictions, and offsets (§§ 31B-6-603(a), 31B-7-701 to -702) |
| Prior liability, information, records, filings, and dissolution | Dissociation adds no liability release; wrongfulness/amounts owing survive and may offset buyout. Former member has transferee status and no member inspection right. Exit itself has no filing; annual report's manager/authorized-member data must be current when signed. Some member-manager/other exits dissolve unless OA or dual-majority continuation occurs within 90 days (§§ 31B-2-211, 31B-5-503(c)-(d), 31B-8-801) |
Requirements one by one
The operating agreement may eliminate withdrawal power
Under W. Va. Code § 31B-6-602(a), a member has power to dissociate at any time, rightfully or wrongfully, unless the operating agreement provides otherwise. West Virginia therefore does not use an unchangeable power-to-exit rule.
If the power remains, § 31B-6-601(1) makes dissociation effective when the LLC has notice of express will, on the notice date or a later date the member states. Chapter 31B sets no universal writing, signature, advance period, acceptance, or company-consent requirement.
The § 31B-1-101 definitions separate at-will companies from term companies whose members agreed to remain through an articles-stated term. Section 31B-1-103 lets the operating agreement govern most internal terms but preserves the listed information, duty, judicial-expulsion, winding-up, and outsider floors.
Wrongfulness turns on agreement breach and the term
If the agreement has not eliminated dissociation power, § 31B-6-602(b) makes an exit wrongful for breach of an express agreement term. Before a term company's term expires, express withdrawal, judicial expulsion, bankruptcy, and specified willful entity dissolution or termination are also wrongful.
The wrongfully dissociating member owes the LLC and other members damages caused, in addition to other obligations. If the LLC continues, company damages must offset later distributions. § 31B-7-701(f) also offsets those damages and all other amounts the former member owes against the purchase price.
Full transfer and expulsion use different triggers
Section 31B-6-601(3) makes transfer of the entire distributional interest an automatic dissociation event, except for a security transfer or an unforeclosed charging order. Separately, the other members may unanimously expel after a transfer of substantially all of the interest under subsection (5).
The other unanimous grounds are illegality; an uncured corporate dissolution, charter revocation, or business suspension after 90 days; and a dissolved, winding-up partnership or LLC. An operating-agreement event or agreement-based expulsion is also effective.
Under § 31B-5-503, a former member treated as a transferee receives distributions but no member management or inspection rights, and transfer does not release the transferor's liabilities to the LLC.
The company or another member may seek judicial expulsion
Under § 31B-6-601(6), the LLC or another member may apply. The grounds are adverse and material wrongful conduct; a willful or persistent material agreement or § 31B-4-409 duty breach; or company-business conduct making continuation with the member not reasonably practicable.
Section 31B-1-103(b)(5) makes this judicial-expulsion right nonwaivable. The statute states no separate valuation or damages procedure within the expulsion subsection.
Insolvency and personal or entity status can end membership
Section 31B-6-601(7)-(11) covers bankruptcy, creditor assignment, a consensual trustee/receiver/liquidator appointment, and a nonconsensual appointment not vacated or stayed within the stated 90-day and post-stay periods. It also covers individual death, guardian or general-conservator appointment, adjudicated incapacity, trust or estate distribution of all distribution rights, and a qualifying entity member's termination.
The event list states no separate merger, conversion, domestication, interest- exchange, charging-foreclosure, or company-termination event. Those matters must not be imported from a newer uniform act.
Dissociation ends member governance and future-event duties
Under § 31B-6-603(b), the person ceases membership, loses member management, and is treated as a transferee. The noncompetition component of loyalty ends; other loyalty and care duties continue only for preexit matters unless the former member participates in winding up.
Chapter 31B's agency rule appears in § 31B-3-301, and current-member duties and information rights appear in §§ 31B-4-408 to 31B-4-409. Dissociation ends member capacity, but the Act does not expressly say it automatically terminates a separate manager office that a nonmember may hold.
A continuing company has a detailed fair-value purchase
Under §§ 31B-6-603 and 31B-7-701, a continuing at-will LLC must buy the former member's distributional interest at fair value measured on the dissociation date. For a term company that does not wind up by term expiration, the purchase occurs at expiration and uses value on that date.
The LLC must make a supported offer within 30 days. If no agreement is made within 120 days, the former member has another 120 days to file an enforcement proceeding. § 31B-7-702 directs the court to consider going-concern value, member valuation agreements, appraiser recommendations, and legal purchase constraints; it may order installments, creditor subordination, security, noncompetition or another restriction, and assignment on payment or the first installment.
Dissociation can instead lead to winding up
Under § 31B-8-801, dissociation of a member-manager—or, when there is none, a member—can dissolve an at-will LLC. A term company uses the narrower listed insolvency, personal-status, and entity events before term expiration. The LLC continues if the agreement supplies a continuation right or the two statutory majority groups agree within 90 days.
The annual report under § 31B-2-211 lists managers and members authorized to execute instruments and must be current when signed, but Chapter 31B states no immediate filing caused solely by ordinary dissociation. Buyout failure is itself a separate judicial-dissolution ground.
What trips people up
- The agreement can eliminate the power to withdraw. West Virginia differs from statutes that preserve the power and regulate only rightfulness.
- Full transfer automatically ends status. The separate unanimous route uses the lower “substantially all” trigger.
- Term-company payment may wait until term expiration. The value date and purchase date ordinarily move together to that future point.
- Dissociation may dissolve the company before buyout rules apply. The continuation analysis under § 31B-8-801 comes first.
Common questions
Is an at-will withdrawal wrongful by default?
No. If the operating agreement preserves the power and the exit does not breach an express term, § 31B-6-602's term-company branch does not apply.
May another member seek judicial expulsion?
Yes. Section 31B-6-601(6) names the company or another member as applicant.
Does every dissociation cause an immediate fair-value payment?
No. Dissolution sends the matter to Article 8, and a continuing term company's purchase ordinarily waits until the specified term expires.
Does the former member retain company records access?
Not as a former member. Section 31B-6-603 treats the person as a transferee, and § 31B-5-503 denies a nonmember transferee inspection and transaction- information rights.
Statutes and sources
- W. Va. Code §§ 31B-1-101 to 31B-1-103, 31B-2-211, 31B-3-301, and 31B-4-408 to 31B-4-409 — company types, agreement control, reporting, agency, records, and duties. Official current Chapter 31B (accessed August 30, 2026).
- W. Va. Code § 31B-5-503 and §§ 31B-6-601 to 31B-6-603 — transferee rights, events, power, wrongfulness, damages, and consequences. Official § 31B-6-601, § 31B-6-602, and § 31B-6-603 (accessed August 30, 2026).
- W. Va. Code §§ 31B-7-701 to 31B-7-702 — fair-value purchase, timing, offer, enforcement, valuation, payment terms, security, assignment, and offsets. Official § 31B-7-701 and § 31B-7-702 (accessed August 30, 2026).
- W. Va. Code § 31B-8-801 — dissociation-linked dissolution, continuation, and buyout-failure relief. Official current text (accessed August 30, 2026).
Source links
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