Permits a member or members of a limited-liability company to avoid dissolution by buying the membership interest owned by the other member or members seeking dissolution.

Rhode Island LLC Buyout Bill – Plain English Summary

This bill would change Rhode Island law to give members of a limited-liability company (LLC) a new option when the business faces dissolution — meaning when one or more owners want to shut the company down. Under the proposed change, if some owners want to dissolve the LLC, the remaining owners who want to keep the business going would have the right to buy out the departing owners' shares instead of being forced to close the company entirely.

In practical terms, this means that a disagreement among LLC owners doesn't automatically have to end the business. Rather than dissolving the company when conflict arises, the owners who want to continue operating could purchase the ownership stake of those who want out, allowing the LLC to survive under new or reduced ownership. This gives businesses a path forward that didn't previously exist under Rhode Island's LLC law.

This bill primarily affects people who own and operate LLCs in Rhode Island, which is one of the most common business structures for small and medium-sized businesses. It could be particularly relevant in situations where business partners disagree about the future of a company — protecting jobs, contracts, and ongoing business relationships that might otherwise be lost if the LLC were dissolved. It would also give courts and business owners a clearer legal framework for handling these disputes.

The bill was recently introduced and referred to the House Corporations Committee, which has recommended holding it for further study, meaning it is still in the early stages of the legislative process.