How to Remove a Manager From an LLC: A Complete Step-by-Step Legal Guide

How to Remove a Manager From an LLC: A Complete Step-by-Step Legal Guide

Removing a manager from an LLC can be straightforward—or legally complex—depending on how your company is structured and what your operating agreement says. Whether the manager is underperforming, violating duties, or simply no longer aligned with the business, it’s critical to follow the proper process to avoid disputes, lawsuits, or loss of control.

This guide explains how to remove a manager from an LLC, covering manager-managed vs. member-managed LLCs, voting rules, documentation, state filings, and what to do after removal.

First: Understand Your LLC’s Management Structure

Before taking any action, confirm how your LLC is structured. This determines who has the authority to remove a manager.

Manager-Managed LLC

  • Day-to-day operations are handled by one or more managers

  • Managers may or may not be owners (members)

  • Members typically have the power to appoint or remove managers

This is the most common structure where manager removal occurs.

Member-Managed LLC

  • All members manage the business

  • There is usually no separate “manager” role

  • Removing a manager may actually mean removing a member, which is a different and more complex process

👉 If your LLC is member-managed and the person is also an owner, you may need a member removal or buyout, not just manager removal.

Step 1: Review the Operating Agreement

Your Operating Agreement is the controlling document for removing a manager.

Look for sections covering:

  • Appointment of managers

  • Removal of managers

  • Removal “for cause” vs. “without cause”

  • Voting requirements

  • Notice requirements

  • Replacement procedures

Most operating agreements specify:
✔ Who can remove a manager
✔ What vote is required
✔ Whether cause is required
✔ Whether compensation or severance applies

If the operating agreement provides a removal process, you must follow it exactly.

Step 2: Determine Whether the Manager Is a Member or Non-Member

This distinction matters.

Removing a Non-Member Manager

If the manager:

  • Is an employee or contractor

  • Does not own LLC membership interests

Removal is usually simpler and involves:

  • A member vote (if required)

  • Terminating their management authority

  • Ending employment or contract terms

Ownership is not affected.

Removing a Manager Who Is Also a Member

If the manager is also an owner:

  • Removing them as manager does not remove ownership

  • They remain a member unless separately bought out or expelled

  • You may need both:

This is more legally sensitive.

Step 3: Follow Voting and Approval Requirements

The operating agreement will specify the approval method, such as:

  • Majority vote of members

  • Supermajority vote (e.g., 2/3 or 75%)

  • Unanimous consent

  • Written consent instead of a meeting

Best practice:

Document approval through:

  • Meeting minutes

  • Written resolutions

  • Signed member consents

These records protect the LLC if the removal is challenged.

Step 4: Remove the Manager’s Authority Formally

Once approved, the LLC must formally revoke the manager’s authority.

This includes:

  • Terminating authority to sign contracts

  • Removing access to bank accounts

  • Revoking authority over employees or vendors

  • Ending use of the manager title

If the manager is an employee or contractor, follow employment laws and contract terms carefully.

Step 5: Update the Operating Agreement

The Operating Agreement should be amended to reflect:

  • Removal of the manager

  • Appointment of a new manager (if applicable)

  • Updated management structure

  • Revised authority provisions

This ensures your governing document matches reality.

Step 6: File State Amendments (If Required)

Most states do not require listing managers publicly.
However, you must file an amendment if:

  • The manager was listed in the Articles of Organization

  • The manager was listed in a Statement of Information (e.g., California)

  • The LLC is required to update public manager records annually

Examples:

  • California: Update via Statement of Information

  • Florida: Update through Annual Report

  • New York: Usually internal only

Check your state’s specific rules.

Step 7: Notify Banks, IRS, and Third Parties

After removal, update all relevant parties:

Banks

Provide:

  • Resolution removing the manager

  • Updated operating agreement

  • New authorized signer forms

IRS

If the removed manager was the “responsible party,” file:

  • IRS Form 8822-B

Vendors, Clients, and Employees

Notify them that the individual no longer has authority to act for the LLC.

Step 8: Appoint a New Manager (If Needed)

If your LLC still requires a manager:

  • Appoint a replacement according to the operating agreement

  • Document appointment through resolutions

  • Update internal records and authority lists

Some LLCs choose to temporarily operate as member-managed instead.

Common Reasons for Removing a Manager From an LLC

Managers are typically removed due to:

  • Poor performance

  • Breach of fiduciary duty

  • Misuse of company funds

  • Violation of the operating agreement

  • Fraud or illegal activity

  • Conflicts of interest

  • Loss of trust

  • Business restructuring

If removal is “for cause,” document evidence carefully.

Can You Remove a Manager Without Their Consent?

✔ Yes, if:

  • The operating agreement allows removal

  • Members vote according to the agreement

❌ No, if:

  • The operating agreement prohibits removal

  • The manager has contractual protections that are violated

If there is no operating agreement, state law governs—and removal may still be possible, but riskier.

What If the Manager Refuses to Cooperate?

If the manager refuses to step down or return company property:

Options include:

  • Legal demand letter

  • Court injunction

  • Removal of authority with bank and vendors

  • Litigation for breach of duty (last resort)

Act quickly to limit risk.

Common Mistakes to Avoid

❌ Removing a manager without following the operating agreement
❌ Failing to document votes and resolutions
❌ Forgetting to remove banking authority
❌ Not updating public filings
❌ Confusing manager removal with member removal
❌ Ignoring employment or contract terms

These mistakes can expose the LLC to lawsuits or financial harm.

FAQs: Removing a Manager From an LLC

Does removing a manager dissolve the LLC?

No. Removing a manager does not dissolve the LLC.

Can a single-member LLC remove a manager?

Yes. The sole member can remove the manager through written consent.

Does a removed manager still have ownership rights?

Only if they are also a member. Removing a manager alone does not affect ownership.

Is a lawyer required?

Not always—but legal guidance is recommended if disputes are likely or ownership is involved.

Final Thoughts: How to Remove a Manager From an LLC

To remove a manager from an LLC properly:

  1. Confirm the LLC’s management structure

  2. Review the operating agreement

  3. Determine whether the manager is also a member

  4. Follow voting and approval rules

  5. Document the removal

  6. Revoke authority and access

  7. Amend the operating agreement

  8. Update state filings if required

  9. Notify banks, IRS, and third parties

Handled correctly, manager removal protects your business and ensures smooth continuity.

Get Free Consultation with FormLLC 

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