Hey guys,

I am part of a multi-member LLC that we started a couple of years ago. One of the members with a minority share helped contribute some initial capital, but then stopped being involved in the LLC at all. During further periods of capital investment they did not put in further money, nor did they assist with managing the LLC.

The LLC failed to become profitable (partially due to the above and other factors). I and the other members want this other member to leave the LLC since he is no longer locally based and it is difficult to do things such as swapping business bank accounts while keeping him on.

The other members and I decided that it would be fair to sum all the money that they've contributed and give them back that exact amount. However, the LLC member in question is telling us that they want to be cashed out "based on the overall status of the business" and seems to want more money.

I've checked with our state's SOS and we don't need their consent to drop them from the LLC, we just don't list them in our next annual report and that seems to be all we need to do.

The way I see it, we can either:

a) treat it like an investment, in which case it was a bad investment (LLC lost money and made no profit) and they get nothing

b) pay out every dollar they directly contributed back and make them "whole". (this is what we want to do)

Am I calculating this wrong? Is this member entitled to more money? Am I missing something obvious here?