Member
An owner of a Texas LLC, the LLC equivalent of a shareholder of a corporation or partner of a partnership. Members hold "membership interests" representing economic rights and (in member-managed LLCs) governance rights.
A member is an owner of a Texas LLC, the LLC equivalent of a shareholder of a corporation or a partner of a partnership. Members hold "membership interests" that represent economic rights (to share in profits and distributions) and, in member-managed LLCs, governance rights (to vote on LLC matters). The TBOC distinguishes between "members" and "assignees", an assignee receives the economic rights associated with a transferred membership interest but does not have governance rights unless admitted as a member under the procedure required by the company agreement.
Admission
Under § 101.101, a person becomes a member of a Texas LLC: (1) at the time the LLC is formed, if the person is named as an initial member in the certificate of formation, the company agreement, or a writing executed by the organizer or initial member; or (2) after formation, in the manner provided by the company agreement, or with the consent of all members if the company agreement is silent.
No personal liability
Under § 101.114, a member is not liable for the debts, obligations, or liabilities of the LLC, including those arising under judgment, decree, or court order, except as expressly provided by statute. This is the principal feature distinguishing Texas LLC membership from general partnership.
No right to withdraw
The Texas default rule is that a member has no right to withdraw from a Texas LLC. § 101.107. This is a substantial departure from many other state LLC statutes and from older Texas partnership law. A member who wishes to exit a Texas LLC must rely on (a) a contractual buy-out or withdrawal provision in the company agreement; (b) sale of the membership interest to a third party (subject to transfer restrictions in the company agreement); (c) judicial winding up under § 11.314; (d) derivative or direct claims for breach of fiduciary duty; or (e) negotiated exit with the consent of the LLC and the remaining members.
Assignment of interest
Under § 101.108, a member may assign the member's interest in the LLC unless the company agreement provides otherwise. However, an assignee does not become a member unless admitted in accordance with the procedure required by the company agreement (or, if silent, with the consent of all other members). An assignee is entitled to the economic rights associated with the transferred interest, to receive distributions and allocations, but not to vote, inspect records, or otherwise participate in management.
No vested property right
Under § 101.106, a member or assignee has no interest in any specific property of the LLC. The LLC's property is the LLC's; the member owns the membership interest, not the underlying assets.
Information rights
Under §§ 101.501–101.502, a member has the right to inspect and copy specified LLC records on reasonable demand for any purpose reasonably related to the member's interest as a member.
The combination of § 101.107 (no right to withdraw), § 101.108 (assignee receives only economic rights), and § 101.112 (charging order is exclusive creditor remedy) makes Texas LLC membership one of the most "locked-in" forms of business ownership in U.S. law. A Texas LLC member without a buy-sell provision in the company agreement, without a willing third-party buyer, and without grounds for judicial winding up under § 11.314 may have no practical exit at all. This is the principal reason careful drafting of the company agreement at formation is essential, particularly its exit, transfer, and buy-sell provisions.
Companion article: Starting a Business in Texas