What Happens When An LLC Member Dies?

To every member of a limited liability company who is a natural person, death will come "soon or late".   The California Revised Uniform Limited Liability Company Act provides that an individual dissociates as a member when that person dies.  Cal. Corp. Code § 177006.02(f)(1).  The effects of a member's dissociation are set forth in Corporations Code Section 17706.03 and include the loss of the deceased member's rights to vote and participate as a member in the management and conduct of the LLC.  One, of course, might be forgiven for wondering how it might be otherwise.  See Jeremy Bentham - Present But Not VotingAlthough it has been said that in certain parts of Illinois the dead have continued to vote.

Section 17706.03  specifically provides a deceased member's executor or other legal representative may exercise all of the member's rights for the purpose of settling the member's estate, including any power the member had under the articles of organization or an operating agreement to give a transferee the right to become a member.  Separately, the RULLCA bestows the following two rights on the departed member's personal or other legal representative:

  • The representative is entitled to an account of the LLC's transactions from the date of dissolution; and
  • The representative may exercise the rights of a current member to information pursuant to Corporations Code Section 17704.10 for the purposes of settling the estate.

Cal. Corp. Code § 17705.04.   

Finally, the operating agreement may include specific provisions with respect to the effect(s) of the death of a member.