31 §692. Events of withdrawal (WHOLE SECTION TEXT EFFECTIVE UNTIL 7/1/11)
Title 31: PARTNERSHIPS AND ASSOCIATIONS
Chapter 13: LIMITED LIABILITY COMPANIES
Subchapter 8: ADMISSION AND WITHDRAWAL OF MEMBERS
§692. Events of withdrawal
(CONTAINS TEXT WITH VARYING EFFECTIVE DATES)
(WHOLE SECTION TEXT EFFECTIVE UNTIL 7/1/11)
1. Withdrawing as a member. A person ceases to be a member of a limited liability company upon the occurrence of any of the following events:
A. The member withdraws by voluntary act from a limited liability company as provided in subsection 3; [1993, c. 718, Pt. A, §1 (NEW).]
B. The member ceases to be a member of a limited liability company as provided in section 687; [1993, c. 718, Pt. A, §1 (NEW).]
C. The member is removed as a member:
(1) In accordance with an operating agreement or articles of organization; or
(2) Subject to a contrary provision in the operating agreement or articles of organization, when the member assigns all of that member's interest in a limited liability company, by an affirmative vote of a majority in interest of the members who have not assigned their interests; [1993, c. 718, Pt. A, §1 (NEW).]
D. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, the member:
(1) Makes an assignment for the benefit of creditors;
(2) Files a voluntary petition in bankruptcy;
(3) Is adjudicated a bankrupt or an insolvent;
(4) Files a petition or answer seeking for that member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or regulation;
(5) Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against that member in a proceeding of that nature; or
(6) Seeks, consents to, or acquiesces in the appointment of a trustee, receiver or liquidator of that member or of all or a substantial part of that member's properties; [1993, c. 718, Pt. A, §1 (NEW).]
E. Subject to a contrary provision in the operating agreement or articles of organization, or written consent of a majority in interest of all members at the time, 120 days after the commencement of a proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or regulation, the proceeding has not been dismissed, or if within 90 days after the appointment without the member's consent or acquiescence of a trustee, receiver or liquidator of the member or of all or a substantial part of the member's properties, the appointment is not vacated or stayed, or if within 90 days after the expiration of a stay, the appointment is not vacated; [1993, c. 718, Pt. A, §1 (NEW).]
F. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, when a member who is an individual:
(1) Dies; or
(2) Is adjudicated incompetent to manage the member's person or estate by a court of competent jurisdiction; [1993, c. 718, Pt. A, §1 (NEW).]
G. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, when a member is a trust or is acting as a member because that member is a trustee of a trust, the termination of the trust, but not solely the substitution of a new trustee; [1993, c. 718, Pt. A, §1 (NEW).]
H. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, when a member is a separate limited liability company, the dissolution and commencement of winding up of the separate limited liability company; [1993, c. 718, Pt. A, §1 (NEW).]
I. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, when a member is a corporation, the filing of a certificate of its dissolution or the equivalent for the corporation or the suspension of its charter and the expiration of 90 days after the date of notice to the corporation of suspension without a reinstatement of its charter; or [1993, c. 718, Pt. A, §1 (NEW).]
J. Subject to a contrary provision in the operating agreement or articles of organization or written consent of a majority in interest of all members at the time, when a member is an estate, the distribution by the fiduciary of the estate's entire interest in a limited liability company. [1993, c. 718, Pt. A, §1 (NEW).]
[ 1993, c. 718, Pt. A, §1 (NEW) .]
2. Other events. The members may provide in the operating agreement or articles of organization for other events the occurrence of which result in a person ceasing to be a member of a limited liability company.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
3. Voluntary withdrawal; damages. Unless the operating agreement or articles of organization provide that a member has no power to withdraw by voluntary act from a limited liability company, the member may do so at any time by giving a 30-day written notice to the other members or such other notice as provided in the operating agreement or articles of organization. If the member has the power to withdraw but the withdrawal is a breach of an operating agreement or articles of organization or the withdrawal occurs as a result of otherwise wrongful conduct of the member, a limited liability company may recover from the withdrawing member damages for breach of the operating agreement or articles of organization including the reasonable costs of obtaining replacement of the services the withdrawn member was obligated to perform and may offset the damages against the amount otherwise distributable to that member, in addition to pursuing any remedies provided for in an operating agreement or otherwise available under applicable law. Unless otherwise provided in the operating agreement, in the case of a limited liability company for a definite term or particular undertaking, a withdrawal by a member before the expiration of that term is a breach of the operating agreement.
[ 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).