LLC Partner Expulsion

[Prince_Caspian]

What is the name of your state? Michigan

5 partner LLC formed 9 months ago. Ownership in LLC is determined by a partner's performance, i.e. their sales contributions. Everyone has a different ownership % based on this calculation. One partner actually has a negative equity account due to the fact that his contributions have not exceeded his share of bills. Our operating agreement does not cover the expulsion of a partner, only voluntary withdrawl, death etc.
1) Can we expel the partner without instructions for doing so in the operating agreement, and how.
2) If not, should we dissolve the LLC? If we do dissolve the LLC how must we compute the partner's share? Our calculation for all the partners' share in the LLC has evolved since the operating agreement was drafted, yet we haven't officially amended the agreement.

Thanks for your help.

 

[tranquility]

The "partner" is an owner and you cannot expel him without following the proper proceedures per your operating agreement. Since you have none...

You are going to need a professional to help calculate how to wind up the LLC. There are many facts that need be considered and your short question cannot be answered without those facts. I might tell the partner you will buy out his share. If he doesn't want to, let him know he is going to have income when the final K-1 comes out, even if he gets no cash from the closing of the LLC as he has a negative basis. That may motivate him to be more reasonable.