Membership in the LLC
An LLC is required to have one or more members; each member must be either a natural person or a business entity. Members may become a member of or acquire an interest in the LLC when it is first started (using the method set forth in the operating agreement), or with the written approval of all the LLC’s members.
To join the LLC, the prospective member usually needs to make a contribution of some kind-for instance, pay cash or transfer property to the LLC-or make a binding obligation to do so. However, a member may be admitted to the LLC without acquiring a membership interest if the rules in the articles of organization and operating agreement permit it, or if the members vote to do so and the admission is documented in the LLC’s records.
An LLC member can only resign in accordance with procedures stated in the articles of organization or the operating agreement. In Idaho, a member may resign after giving 30 days’ written notice to all the other members, or as specified in the operating agreement. Some operating agreements prohibit withdrawal for the life of the LLC.
If the member has the right to withdraw, but the withdrawal still breaches the operating agreement, or if the withdrawal occurs as a result of the member’s wrongful conduct, the LLC can recover damages, including the costs of replacing the services the withdrawn member was obligated to perform. The LLC may also offset these damages against the amount otherwise distributable to the member, in addition to pursuing any remedies provided for in an operating agreement or otherwise available under law.
Unless the operating agreement states otherwise, the dissociation (loss of membership rights) of an LLC member automatically causes the LLC to dissolve unless all the remaining members vote to continue the LLC within 90 days of the dissociation.
Unless otherwise stated in the operating agreement, managers are elected, removed, or replaced by a vote of more than half the members, and serve for an indefinite term.