Distinguish between rightful and wrongful disassociation from an LLC (limited liability company). What are the consequences of disassociation?
What will be an ideal response?
Unless an LLC's operating agreement provides otherwise, a member has the power to withdraw from the LLC, whether it is an at-will LLC or a term LLC. The disassociation of a member from an at-will LLC is not wrongful unless the power to withdraw is eliminated in the operating agreement. Wrongful disassociation occurs when a member withdraws from (a) a term LLC prior to the expiration of the term or (b) an at-will LLC when the operating agreement eliminates a member's power to withdraw. A member who wrongfully disassociates himself or herself from an LLC is liable to the LLC and to the other members for any damages caused by his or her wrongful disassociation. A member's disassociation from an LLC terminates that member's right to participate in the management of the LLC, act as an agent of the LLC, or conduct the LLC's business. Disassociation also terminates the disassociating member's duties of loyalty and care to the LLC.
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