Utah LLC Member Disputes: Information Rights, Votes, Leaving, and Court Dissolution
General information, not legal advice. Read the full disclaimer.
Short answer: If you and your co-owners fall out, Utah's LLC Act (now Utah Code Title 16, Chapter 20, effective October 1, 2026, after Title 48, Chapter 3a was recodified) supplies default rules that apply unless the operating agreement says otherwise. In a member-managed LLC, each member has equal rights in management, ordinary-course disagreements are decided by a majority of the members, and acts outside the ordinary course (and amending the operating agreement) need all members (§ 16-20-407). Members have information rights (§ 16-20-410). A member can petition a court to dissolve the LLC if it's not reasonably practicable to carry on its business in conformity with its documents, or if the managers or controlling members have acted, are acting or will act in a manner that is illegal, fraudulent or oppressive and directly harmful to the applicant (§ 16-20-701). In a petition based on oppression or fraud, the LLC (or other members) can elect to buy out the petitioning member at fair market value instead of dissolution (§ 16-20-702).
Who this guide is for
Utah LLC owners who disagree with partners about money, control or direction, or want out — and people who never signed a detailed operating agreement.
Start with your operating agreement
Most LLC rules are default rules: your written operating agreement can change them. Read it first. See Utah LLC Operating Agreements. If you don't have one, the statute fills the gaps, as described below.
Management and voting (default rules)
- Member-managed vs. manager-managed. An LLC is member-managed unless the operating agreement says it is manager-managed (§ 16-20-407(1)).
- In a member-managed LLC: management is vested in the members; each member has equal rights; ordinary-course disputes are decided by a majority of the members; acts outside the ordinary course, mergers, conversions and similar transactions need all members; and the operating agreement may be amended only by all members (§ 16-20-407(2)).
- Conduct: members and managers owe standards of conduct (§ 16-20-409).
Your right to information
In a member-managed LLC, a member may inspect and copy records on reasonable notice during business hours, to the extent material to the member's rights and duties, and the LLC must give each member information it knows is material without demand and other information on demand unless unreasonable or improper (§ 16-20-410(1)). In a manager-managed LLC, the managers owe the information duties, and a member can demand full information for a purpose reasonably related to their interest by making a written demand with reasonable particularity — and the LLC must respond within 10 days with what it will provide and when, or its reasons for declining (§ 16-20-410(2)). Keep copies of your demands.
Leaving or being forced out
- Dissociation: a member can withdraw by notice (§ 16-20-601), and certain events cause dissociation (§ 16-20-602). Dissociation doesn't necessarily mean you get paid for your interest unless the operating agreement says so, and a dissociated member becomes a transferee of the economic interest with limited rights.
- Transfers and creditors: a member's transferable interest can be transferred under § 16-20-502, and a charging order is generally the remedy for a member's creditor (§ 16-20-503).
Court dissolution
A member can petition for judicial dissolution under § 16-20-701 on grounds that:
- the LLC's business is unlawful;
- it is not reasonably practicable to carry on the LLC's activities in conformity with the certificate of organization and operating agreement; or
- the managers or members in control have acted or will act in a manner that is illegal or fraudulent, or oppressive and directly harmful to the applicant.
An LLC can also dissolve by agreement (consent of all members), by an event in the documents, after 90 consecutive days with no members, or by administrative dissolution. See Utah Business Dissolution.
The buyout election
When the petition is based on illegal, fraudulent or oppressive conduct, the LLC — or, if it doesn't, one or more members — may elect to purchase the petitioning member's interest at fair market value (§ 16-20-702). The election must be filed within 90 days after the petition (or later if the court allows), and the statute sets how value is determined and how payment is made. That gives a path to resolve the dispute without winding up the company.
Other claims
Members can bring direct or derivative actions in appropriate cases (§§ 16-20-801, -802). A special litigation committee procedure also exists (§ 16-20-805).
Practical steps
- Collect documents: operating agreement, certificate of organization, tax returns, bank statements, meeting notes.
- Make written information requests and keep proof.
- Try mediation. Free and low-cost mediation exists. See How to Find Free or Low-Cost Legal Help in Utah.
- Don't take money out or lock people out without legal advice; self-help can create liability.
- Check deadlines and annual filings so the LLC stays in good standing. See Utah LLC Annual Renewal.
- Consider a lawyer — especially if a court petition is likely.
Frequently asked questions
Can one member force a vote in a Utah LLC?
By default, ordinary decisions in a member-managed LLC are decided by a majority; major actions need all members; your operating agreement can change these rules.
Can I see the LLC's books?
Members have statutory information rights, subject to reasonable limits.
Can a court dissolve my LLC?
On a member's petition if the business is unlawful, impracticable, or controllers are acting illegally, fraudulently or oppressively.
What is the buyout election?
A chance for the LLC or other members to buy the petitioner's interest at fair market value instead of dissolving.