North Carolina LLC glossary
Judicial dissolution of an LLC
Judicial dissolution is the dissolution of a North Carolina limited liability company by order of the superior court. N.C. Gen. Stat. 57D-6-02 sets the grounds and names who may bring the proceeding.
It is one of three routes to dissolution under Chapter 57D. The others are administrative dissolution by the Secretary of State under N.C. Gen. Stat. 57D-6-06 and dissolution under the operating agreement or by member action under N.C. Gen. Stat. 57D-6-01.
A judicial dissolution proceeding does not automatically end the business. The court may appoint a receiver, and in some cases the other members can stop the dissolution by buying the complaining interest.
Key details
- Grounds and standing are set by N.C. Gen. Stat. 57D-6-02.
- A member may bring the proceeding on either of two grounds under N.C. Gen. Stat. 57D-6-02(2): that it is not practicable to conduct the LLC's business in conformance with the operating agreement and Chapter 57D, or that liquidation is necessary to protect the rights and interests of the member.
- The Attorney General may bring the proceeding on the separate grounds in N.C. Gen. Stat. 57D-6-02(1), which concern articles of organization obtained through fraud, or continued abuse of authority persisting 20 or more days after the Attorney General delivers written notice.
- The North Carolina Supreme Court construed the first member ground in James H.Q. Davis Trust v. JHD Properties, LLC, 387 N.C. 19 (2025), holding that not practicable is synonymous with unfeasible and does not mean impossible.
- The proceeding is brought against the LLC under N.C. Gen. Stat. 57D-6-03(a), and venue lies in the North Carolina county where the LLC's principal office is located under N.C. Gen. Stat. 57D-6-03(b).
- Under N.C. Gen. Stat. 57D-6-03(d), where a member proceeds on the second ground and the court determines dissolution is necessary, the court will not order dissolution if the LLC or one or more other members elect to purchase the complaining member's ownership interest at its fair value.
- Under N.C. Gen. Stat. 57D-6-05, the clerk delivers a certified copy of a decree of dissolution to the Secretary of State for filing, and the court directs the winding up.
- Since October 1, 2025, a deceased or incapacitated member's estate, designated agent, or court-appointed guardian holds that member's standing to seek judicial dissolution under N.C. Gen. Stat. 57D-3-02(c)(3), unless the operating agreement expressly waives it.
According to N.C. Gen. Stat. 57D-6-02, Chapter 57D Article 6, and James H.Q. Davis Trust v. JHD Properties, LLC (N.C. Jan. 31, 2025), as of August 21, 2026.
Related
This glossary entry is for educational purposes only and does not constitute legal advice. It states general North Carolina law as of August 21, 2026 and may not apply to your situation. For advice on a specific LLC or estate, speak with a licensed North Carolina attorney.
