Which event can trigger dissociation in an LLC?

Which event can trigger dissociation in an LLC?

• A. Merger with another LLC
• B. Voluntary withdrawal of a member
• C. Acquisition by an external corporation
• D. Reduction of membership fees

Answer: (B)

Dissociation in a Limited Liability Company (LLC) typically occurs when a member withdraws from the business, effectively ending their association with the company. The voluntary withdrawal of a member is a clear action that can trigger this legal process. When a member decides to leave the LLC, whether due to personal reasons, strategic business shifts, or other considerations, it creates what is known as dissociation. This can impact the remaining members and the operational structure of the LLC, as it may lead to changes in voting rights, management authority, or distributions of profits. In contrast, events like a merger with another LLC or acquisition by an external corporation do not inherently lead to dissociation of members in the LLC, since the existing members often remain part of the newly formed entity or the acquired company, respectively. Additionally, a reduction of membership fees does not result in dissociation either; it is merely a financial adjustment and does not affect the membership status. Therefore, the voluntary withdrawal of a member is the key event that triggers dissociation in an LLC, making it the correct answer.

Dissociation in a Limited Liability Company (LLC) typically occurs when a member withdraws from the business, effectively ending their association with the company. The voluntary withdrawal of a member is a clear action that can trigger this legal process. When a member decides to leave the LLC, whether due to personal reasons, strategic business shifts, or other considerations, it creates what is known as dissociation. This can impact the remaining members and the operational structure of the LLC, as it may lead to changes in voting rights, management authority, or distributions of profits.

In contrast, events like a merger with another LLC or acquisition by an external corporation do not inherently lead to dissociation of members in the LLC, since the existing members often remain part of the newly formed entity or the acquired company, respectively. Additionally, a reduction of membership fees does not result in dissociation either; it is merely a financial adjustment and does not affect the membership status. Therefore, the voluntary withdrawal of a member is the key event that triggers dissociation in an LLC, making it the correct answer.