Final answer:
Whether the dissolution of an LLC member leads to automatic dissolution of the LLC depends on the operating agreement and state law. Many state laws now allow LLCs to continue after a member leaves, although historically some states mandated automatic dissolution. It's vital for LLC members to know their specific agreement and applicable state statutes.
Step-by-step explanation:
Can the dissolution of a member lead to the automatic dissolution of an LLC? This can depend on the specific operating agreement of the LLC and the state law governing it. In many cases, the default state law allowed for automatic dissolution upon the departure of a member, but modern LLC statutes often permit the remaining members to decide whether to continue the business or dissolve the LLC.
Typically, an LLC's operating agreement will outline the procedure for handling the withdrawal, death, or incapacity of a member. It may include buyout terms or state that the company will continue with the remaining members. Without an operating agreement, state law will dictate the process, which might indeed lead to dissolution if not otherwise addressed.
Furthermore, many states have revised their LLC laws to adopt the concept of continuity of life, which allows LLCs to remain in existence despite member changes, making automatic dissolution less common. However, it's essential for LLC members to understand their specific operating agreement and state laws to determine the actual implications of a member's dissolution.