Hey, I need help figuring out how to amend my LLC operating agreement to remove two partners who are voluntarily leaving. They’ve already emailed saying they’re giving up their equity, so I’m just unsure about the next steps. Do I need any special paperwork to do this, or can I just update the agreement and redistribute their equity among the other partners?
Hey, I’ve done something similar before. You’ll definitely need the partners to sign a withdrawal letter saying they’re leaving and giving up their equity. Then you can update your operating agreement to reflect the new LLC structure.
@Arun
Got it! So just a simple letter with that language? Thanks for clearing that up.
You can use your current operating agreement as a base and just remove those partners. Then don’t forget to file an amended annual report with the Secretary of State.
Lior said:
You can use your current operating agreement as a base and just remove those partners. Then don’t forget to file an amended annual report with the Secretary of State.
Nice, didn’t think about the report! Thanks!
Just to clarify, there isn’t a standard ‘boilerplate’ letter for this. It’s basically just a letter saying they’re withdrawing and surrendering their equity. Super simple.
Arun said:
Just to clarify, there isn’t a standard ‘boilerplate’ letter for this. It’s basically just a letter saying they’re withdrawing and surrendering their equity. Super simple.
That makes sense, I’ll keep it short and simple then. Thanks!
Is it really just that easy? No special legal stuff needed?
Mackenzie said:
Is it really just that easy? No special legal stuff needed?
Yep, it’s pretty straightforward if the partners are voluntarily leaving. Just get them to sign the withdrawal letter and update the operating agreement. Make sure you file everything properly with the state.
Thanks everyone, really helpful! I’ll get to drafting that letter and updating the agreement now.