31 §685. Assignment of membership interest (WHOLE SECTION TEXT EFFECTIVE UNTIL 7/1/11)
Title 31: PARTNERSHIPS AND ASSOCIATIONS
Chapter 13: LIMITED LIABILITY COMPANIES
Subchapter 7: OWNERSHIP AND TRANSFER OF PROPERTY
§685. Assignment of membership interest
(CONTAINS TEXT WITH VARYING EFFECTIVE DATES)
(WHOLE SECTION TEXT EFFECTIVE UNTIL 7/1/11)
1. Assignment of membership interest. Except as provided in an operating agreement or articles of organization:
A. A membership interest is assignable in whole or in part; [1993, c. 718, Pt. A, §1 (NEW).]
B. An assignment entitles the assignee to share in profits and losses, to receive the distribution or distributions and to receive the allocation of income, gain, loss, deduction or credit or similar item to which the assignor was entitled, to the extent assigned; [1993, c. 718, Pt. A, §1 (NEW).]
C. An assignment of a membership interest does not of itself dissolve a limited liability company or entitle the assignee to participate in the management and affairs of a limited liability company or to become or exercise any rights of a member; [1993, c. 718, Pt. A, §1 (NEW).]
D. Until the assignee of a limited liability company interest becomes a member, the assignor continues to be a member and to have the power to exercise any rights of a member, subject to the member's right pursuant to section 692, subsection 1, paragraph C, subparagraph (2); [1993, c. 718, Pt. A, §1 (NEW).]
E. Until an assignee of a membership interest becomes a member, the assignee has no liability as a member solely as a result of the assignment; and [1993, c. 718, Pt. A, §1 (NEW).]
F. The assignor of a membership interest is not released from liability as a member solely as a result of the assignment. [1993, c. 718, Pt. A, §1 (NEW).]
[ 1993, c. 718, Pt. A, §1 (NEW) .]
2. Membership evidenced by certificate. An operating agreement or articles of organization may provide that a member's interest in a limited liability company may be evidenced by a certificate of membership interest issued by a limited liability company and may also provide for the assignment or transfer of a membership interest represented by such a certificate and make other provisions with respect to the certificates.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
3. Encumbered membership interest. Unless otherwise provided in an operating agreement, the pledge of or granting of a security interest, lien or other encumbrance in or against any or all of the membership interest of a member is not an assignment and does not cause the member to cease to be a member or to cease to have the power to exercise the rights or powers of a member.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
SECTION HISTORY
1993, c. 718, §A1 (NEW). 2009, c. 629, Pt. A, §1 (RP). 2009, c. 629, Pt. A, §3 (AFF).