Melinda,Brett,and Phil are the members of a "manager-managed" limited liability company.Melinda and Brett each contributed $1,000 in capital.Phil contributed $10,000 in capital.All of the members agreed to hire Betty to manage the company.Three months after she starts,however,Melinda and Brett have become dissatisfied with her.Phil wants her to stay.Which of the following is true?

Question

Quizplus · Accepted Answer

In a manager-managed LLC, the manager is typically appointed by a vote of the members. However, the manager can be removed by a vote of the members as well. The specific voting requirements for removing a manager should be set out in the LLC's operating agreement. In this scenario, it is not specified in the question what the voting requirements are for removing a manager. Therefore, it can be assumed that the standard default rule applies, which is that the manager can be removed by a majority vote of the members. Melinda and Brett, who together contributed less capital than Phil, would be sufficient to form a majority and have Betty removed, even if Phil opposes her removal. Therefore, option A is correct.

Melinda,Brett,and Phil Are the Members of a "Manager-Managed" Limited Liability