A limited liability company (LLC) is often formed by its members to conduct business as the members see fit.  Its organization and structure is generally left to the discretion of the members who are free to negotiate any terms which they deem are appropriate for the operation of the LLC.

When their business concludes, or when the LLC is to be dissolved either voluntarily or judicially, the members’ main task is to engage in the “winding up” of the LLC.  This involves concluding all business of the LLC prior to dissolving it.

The responsibilities of the members in winding up the LLC should be outlined in the LLC’s operating agreement. However, if the operating agreement does not specifically set forth those responsibilities, the members may proceed to conduct such activities associated with the winding up as is defined by New York law.  Specifically, New York’s Limited Liability Company Law §703 states that members, in winding up an LLC, may “prosecute and defend suits, whether civil, criminal or administrative, settle and close the limited liability company’s business, dispose of and convey the limited liability company’s property, discharge the limited liability company’s liabilities and distribute to the members any remaining assets of the limited liability company, all without affecting the liability of members including members participating in the winding up of the limited liability company’s affairs”.

Where the terms of an operating agreement do not contain practical terms for winding up an LLC, the members may ask a court to intervene and exercise its discretion in allowing those activities which are reasonable to effectuate the winding up of the LLC.