{"id":6785,"date":"2014-03-12T21:14:42","date_gmt":"2014-03-13T04:14:42","guid":{"rendered":"http:\/\/www.keytlaw.com\/azllclaw\/?p=6785"},"modified":"2019-06-15T07:38:05","modified_gmt":"2019-06-15T14:38:05","slug":"expel-member","status":"publish","type":"post","link":"https:\/\/www.keytlaw.com\/azllclaw\/2014\/03\/expel-member\/","title":{"rendered":"Can One Member of an Arizona LLC Expel Another Member?"},"content":{"rendered":"

Question<\/strong>:\u00a0 I am named in the original Articles of Organization of an Arizona limited liability company as a member.\u00a0 Another member of the LLC signed an amendment to the Articles of Organization that removed me as a member.\u00a0 Is that legal and does it terminate my membership in the LLC?<\/p>\n

Answer<\/strong>:\u00a0 No and no unless the member who signed the amendment had a contractual right to sign and file the amendment that removes you as a member of the LLC.\u00a0 Arizona LLC law does not give a member of an Arizona LLC the right or power to unilaterally terminate the membership interest of another member.<\/p>\n

As an Arizona limited liability company attorney who formed my first AZ LLC in October of 1992 and who has formed 10,000+ LLCs since then I must say that this is a very common scenario.\u00a0 People think that the mere fact they file an amendment to the Articles of Organization that removes a member that the filed document has legal significance, i.e., that the person or entity that was a member yesterday is suddenly no longer a member today merely because the Articles were amended.<\/p>\n

When a person or an entity acquires a membership interest in an Arizona LLC that person or owner has a property right recognized by Arizona law.\u00a0 The owner of a property right cannot be divested of the property merely because somebody files a false document.\u00a0 Example<\/strong>:\u00a0 Homer Simpson owns a parcel of Arizona land.\u00a0 Ned Flanders signs a deed that says Homer Simpson conveys the land to Ned and then records the deed.\u00a0 This false deed does not transfer title to the property to Ned.\u00a0 Ned’s deed is a legal nullity because it was not signed by the owner of the property.<\/p>\n

The same concept applies to the property right that attaches to the member of an Arizona LLC.\u00a0 If Ned Flanders signs and files an amendment to the Articles of Organization that removes Homer Simpson as a member that document does not cause Homer to cease to be a member.\u00a0 There are four ways that Homer can cease to be a member of the company:<\/p>\n