Question: Can a member of a California LLC disassociate (withdraw or terminate membership) from the LLC at any time even if disassociation is prohibited by an Operating Agreement?
Answer: Yes. A good Operating Agreement will contain provisions that prevent a member from dissociating or that allow a member to disassociate only on the occurrence of one or more conditions. See California Corporations Code Sections 17706.01(b)(1) and 17706.02(b). However, even if a member is prohibited from disassociating the member may quit (disassociate) at any time by notifying the other members of the disassociation.
If the disassociation is prohibited by the LLC’s Operating Agreement, the disassociating member may be liable to the LLC for damages. California Corporations Code Sections 17706.01(c). The disassociating member will not be entitled to any money or property unless the Operating Agreement provides otherwise. California Corporations Code Section 17704.04(b).