The events (called "events of dissociation") that are often specified in Operating or LLC Agreements as automatically terminating a member’s membership or giving the other members an option to terminate this membership are these:

 

1. The member’s death (or, in the case of an entity that is a member, its dissolution);  

2. The member’s disability;

3. The member’s resignation;

4. The member’s becoming bankrupt;

5. The member’s expulsion (usually for continuing serious misconduct);

6. The member’s transferring his or her entire economic interest in the LLC to another person; and

7. The member’s divorce.

 

There are two main reasons why it is important for the members of an LLC to properly specify all appropriate events

of dissociation in their LLC agreement:
 

• First, this will ensure that members will not retain their membership rights when events occur that make

their continuation as members impossible or inappropriate.

• Second, dissociation events are usually appropriate events for triggering options by the LLC to buy out

dissociated members or for dissociated members to require the

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