Yes, Virginia. You can be thrown out of your own company!

On December 24, 2012, the Appellate Division of the NJ Superior Court issued an opinion concerning the question of when a member (i.e., owner) of an LLC can be expelled from the company. Members of LLCs may, by way of having and operating agreement, fashion their own rules and standards for member expulsion. In the absence of such an agreement, the rules and standards for such are established by LLC law. In the case of All Saints University of Medicine Aruba v. Chilana, the operating agreement did not speak to the issue of expulsion. The court found the failure of a member to advance working capital and causing a deadlock to be reasonable grounds to dissociate a member without regard to whether such conduct is "wrongful."  The case illustrates the importance of having a comprehensive LLC operating agreement to help avoid far more costly litigation and appeals. Please feel free to contact me if you would like a copy of the case or more information. Kindly note that the foregoing is merely for general interest of the reader. It is not legal advice or opinion, or a substitute for same.