79-29-307 - Events of dissociation.
§ 79-29-307. Events of dissociation.
[For all domestic limited liability companies formed on or before June 30, 1998, and which do not duly elect to come under the second tier of this section, this section shall read as follows:]
(1) A person ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:
(a) The member withdraws by voluntary act from the limited liability company as provided in subsection (3) of this section;
(b) The member ceases to be a member of the limited liability company as provided in Section 79-29-702;
(c) The member is removed as a member in accordance with the certificate of formation or limited liability company agreement;
(d) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, the member (i) makes an assignment for the benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is adjudicated a bankrupt or insolvent; (iv) files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceeding of the nature described in this paragraph (1)(d); or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of his properties.
(e) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, if one hundred twenty (120) days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if within ninety (90) days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of his properties, the appointment is not vacated or stayed or within ninety (90) days after the expiration of any stay, the appointment is not vacated;
(f) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member who is an individual:
(i) His death; or
(ii) The entry of an order by a court of competent jurisdiction adjudicating him incompetent to manage his person or his estate;
(g) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member who is a trust or is acting as a member by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee;
(h) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member that is a partnership, limited partnership or limited liability company, the dissolution and commencement of winding up thereof;
(i) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member that is a corporation, the filing of a certificate of its dissolution or the equivalent for the corporation or the revocation of its charter and the lapse of one hundred eighty (180) days after notice to the corporation of revocation without a reinstatement of its charter; or
(j) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company.
(2) The certificate of formation or limited liability company agreement may provide for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.
(3) Unless the certificate of formation or limited liability company agreement provides in writing 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 thirty (30) days' written notice to the other members, or such other notice as is provided for in the certificate of formation or limited liability company agreement. If the member has the power to withdraw but the withdrawal is a breach of the certificate of formation or limited liability company agreement, or the withdrawal occurs as a result of otherwise wrongful conduct of the member, the limited liability company may recover from the withdrawing member damages for breach of the certificate of formation or limited liability company agreement, and may offset the damages against the amount otherwise distributable to him, in addition to pursuing any remedies provided for in the certificate of formation or limited liability company agreement or otherwise available under applicable law. Unless otherwise provided in the certificate of formation or limited liability company 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 certificate of formation or limited liability company agreement.
[For all domestic limited liability companies formed on or after July 1, 1998, or for those previously formed such companies which elect to come under the following provisions by filing with the Secretary of State a certificate of amendment specifically stating that the limited liability company is electing to be subject to the following provisions, this section shall read as follows:]
(1) A person ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:
(a) The member withdraws by voluntary act from the limited liability company in accordance with the limited liability company agreement;
(b) The member ceases to be a member of the limited liability company as provided in Section 79-29-702;
(c) The member is removed as a member in accordance with the certificate of formation or limited liability company agreement;
(d) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, the member (i) makes an assignment for the benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is adjudicated a bankrupt or insolvent; (iv) files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceeding of the nature described in this paragraph (1)(d); or (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of his properties;
(e) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, if one hundred twenty (120) days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, the proceeding has not been dismissed, or if within ninety (90) days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of his properties, the appointment is not vacated or stayed or within ninety (90) days after the expiration of any stay, the appointment is not vacated;
(f) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member who is an individual:
(i) His death; or
(ii) The entry of an order by a court of competent jurisdiction adjudicating him incompetent to manage his person or his estate;
(g) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member who is a trust or is acting as a member by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee;
(h) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member that is a partnership, limited partnership or limited liability company, the dissolution and commencement of winding up thereof;
(i) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of a member that is a corporation, the filing of a certificate of its dissolution or the equivalent for the corporation or the revocation of its charter and the lapse of one hundred eighty (180) days after notice to the corporation of revocation without a reinstatement of its charter; or
(j) Subject to contrary provision in the certificate of formation or limited liability company agreement, or consent of all members at the time, in the case of an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company.
(2) The certificate of formation or limited liability company agreement may provide for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.
(3) Unless the certificate of formation or limited liability company agreement provides that a member has the power to do so, a member has no power to withdraw from a limited liability company.
Sources: Laws, 1994, ch. 402, § 28; Laws, 1998, ch. 376, § 5, eff from and after July 1, 1998.