West Virginia LLC governance: an older uniform act that still sorts companies into at-will and term

West Virginia governs LLCs under the 1996 uniform act, a generation behind the versions most states now use, and it keeps a feature those newer acts dropped: it sorts every LLC into an at-will company or a term company. That classification is not cosmetic. Under the older act, an at-will member who leaves can trigger a buyout of their interest, a right the modern acts curtailed, which means a West Virginia operating agreement has to address dissociation and buyout directly or live with a default that can force a payout. The duties members owe are the 1996 formulation of loyalty and care. Those are the features worth understanding before the general mechanics on the site’s default rules and freedom of contract guides.

At-will versus term, and the buyout that follows

Start with the classification the older act still uses.

Every West Virginia LLC is either an at-will company or a term company, and the difference affects what happens when a member leaves.

The 1996 uniform act, in W. Va. Code Section 31B-1-101, classifies each LLC as an at-will company, one with no fixed term, or a term company, one that specifies a definite term in its articles. Most states abandoned this distinction when they modernized their acts, but West Virginia retains it, and it matters most at dissociation. Under the older act, when a member of an at-will company dissociates, the company can be obligated to purchase that member’s interest at fair value, a buyout right that the modern acts narrowed or eliminated. So a West Virginia at-will LLC carries a default that a departing member may be able to cash out, which for a real estate holding company with illiquid property can be a serious problem, because the company may have no cash to fund a buyout without selling the asset.

Because an at-will member may be able to force a buyout on leaving, a West Virginia operating agreement has to address dissociation directly.

The practical response is that a West Virginia operating agreement should not leave dissociation and buyout to the default. It should specify what happens when a member leaves, whether there is a buyout, how the interest is valued, and on what timeline the company must pay, so that a departing member cannot invoke a default buyout the company cannot afford. This is a place where the older act’s defaults are genuinely consequential, and where an agreement drafted from a modern-state template, which assumes the newer buyout rules, can miss the West Virginia default entirely. It is the kind of gap that surfaces only when a member actually leaves, which is exactly when it is too late to fix.

The duties and the split

On duties and economics, West Virginia follows the 1996 pattern.

Members and managers owe duties of loyalty and care, and distributions default to equal shares.

Under W. Va. Code Section 31B-4-409, members of a member-managed West Virginia LLC, and managers of a manager-managed one, owe duties of loyalty and care and an obligation of good faith, in the 1996 act’s formulation, which is less extensively mapped by case law than the modern versions. Distributions default to equal shares among the members, not by contribution, so an LLC with unequal contributions needs an explicit distribution provision, and management defaults to the members. The recurring theme in a West Virginia LLC is that the older act’s defaults, on buyout especially but also on duties and distributions, need to be handled in the agreement rather than relied on, because they were written for a model of the LLC that the rest of the country has largely moved past.

The bottom line

West Virginia uses the 1996 uniform act, which sorts every LLC into an at-will company or a term company, a distinction most states dropped.

An at-will member who dissociates may be able to trigger a buyout of their interest at fair value, a right modern acts curtailed.

A West Virginia operating agreement should address dissociation and buyout directly, so a departing member cannot force a payout the company cannot fund.

Members and managers owe duties of loyalty and care in the 1996 formulation, and distributions default to equal shares regardless of contribution.

An agreement drafted from a modern-state template can miss West Virginia’s older defaults, so the buyout terms should be written explicitly.

What this page does not cover

This page is about the rules that run your company from the inside. How creditors reach a member’s interest, the low homestead, and the missing entireties shield are on the protection page. West Virginia’s falling income tax, the municipal gross-receipts tax, and the lack of a series LLC are on the structure and cost page. The $100 formation fee, the veteran fee waiver, and the July 1 annual report are on the filing page.

Last verified August 2026.