Dissolving an Oklahoma Limited Liability Company When the Operating Agreement is Silent

By: Jennifer A. Brodersen and Heather Rooney McBride

            The operating agreement of a limited liability company generally governs: (1) the relationships among the members as members and between the members and the limited liability company; (2) the rights and duties under the Oklahoma Limited Liability Company Act of a person in the capacity of manager; (3) the activities of the company and the conduct of those activities; and (4) the means and conditions for amending the operating agreement. Okla. Stat. Ann. Tit. 18 § 2012.2 (2019). However, there are times when an operating agreement is silent as to significant issues, including the dissolution of the limited liability company.

            Pursuant to the Oklahoma Limited Liability Company Act, unless otherwise provided in the articles of organization or a written agreement, the unanimous vote or consent of the members is required to approve the following matters: (1) the dissolution of the limited liability company pursuant to paragraph 3 of  subsection A of Section 2037 of title 18; or (2) an amendment to the articles of organization or an amendment to a written operating agreement: (a) which reduces the term of the existence of the limited liability company, (b) which reduces the required vote of members to approve a dissolution, merger or sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company, (c) which permits a member to voluntarily withdraw from the limited liability company, or (d) which reduces the required vote of members to approve an amendment to the articles of organization or written operating agreement reducing the vote previously required on the matters described in this paragraph. Okla. Stat. Ann. Tit. 18 § 2020(D) (2019).

Thus, if the operating agreement is silent as to the dissolution of the limited liability company, the Oklahoma Limited Liability Company Act governs the matter. Okla. Stat. Ann. Tit. 18 § 2012.2 (2019). As such, the unanimous vote or consent of the members is required to dissolve the limited liability company. Okla. Stat. Ann. Tit. 18 § 2020(D) (2019). If that is not possible, Oklahoma law provides that upon application by or for a member, the district court may decree dissolution of a limited liability company. Okla. Stat. Ann. Tit. 18 § 2038 (2019). On application by or for a member, the district court may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or the operating agreement. Okla. Stat. Ann. Tit. 18 § 2038 (2019).

A limited liability company is dissolved upon the earlier of: (1) the occurrence of the latest date on which the limited liability company is to dissolve set forth in the articles of organization; (2) the occurrence of events specified in writing in the operating agreement; (3) the written consent of all the members or, if there is more than one class or group of members, then by the written consent of all of the members of each class or group; (4) at any time there are no members; or (5) the entry of a decree of judicial dissolution under Section 2038 of this title. Okla. Stat. Ann. Tit. 18 § 2037(A) (2019).

            After the dissolution of the limited liability company, pursuant to Section 2037, the limited liability company shall file articles of dissolution in the Office of the Secretary of State upon payment of the filing fee required.  Okla. Stat. Ann. Tit. 18 § 2037 (2019).  The articles of dissolution shall set forth: (1) the name of the limited liability company; (2) the date of filing of its articles of organization; (3) the reason for filing the articles of dissolution; (4) the effective date of the articles of dissolution if they are not to be effective upon the filing; and (5) any other information the members or managers filing the certificate determine. Okla. Stat. Ann. Tit. 18 § 2041 (2019).

The business affairs of the limited liability company may be wound up in one of the following ways: (a) by the managers, or (b) if one or more of the members or managers have engaged in conduct that casts doubt on their ability to wind up the business or affairs of the limited liability company, or upon other cause shown, by the district court on application of any member, his legal representative, or assignee. Okla. Stat. Ann. Tit. 18 § 2039(A)(1) (2019).

            The persons winding up the business or affairs of the limited liability company may, in the name of, and for and on behalf of, the limited liability company: (a) prosecute and defend suits, (b) settle and close the business of the limited liability company, (c) dispose of and transfer property of the limited liability company, (d) discharge the liabilities of the limited liability company, and (e) distribute to the members any remaining assets of the limited liability company. Okla. Stat. Ann. Tit. 18 § 2039(A)(2) (2019).

            Our corporate and business litigation attorneys are well versed in assisting companies and their owners; we are also among the only law firms in southwest Missouri that has an attorney who is also licensed and routinely practices law in the State of Oklahoma. If you are interested in establishing a business entity, dissolving a business entity, or wish to consult with an attorney regarding business litigation pertaining to Missouri, Arkansas, Kansas, or Oklahoma entities, please contact our office to schedule a consultation with one of our experienced attorneys.