42:2B-24 - Dissociation of membership
42:2B-24 Dissociation of membership.
24.A member shall be dissociated from a limited liability company upon the occurrence of any of the following events:
a.Unless otherwise provided in an operating agreement, or with the written consent of all members,
(1)on the date the limited liability company receives notice of the member's resignation as a member, or on a later date specified by the member;
(2)an event agreed to in the operating agreement as causing the member's dissociation;
(3)a member:
(a)becomes a debtor in bankruptcy;
(b)executes an assignment for the benefit of creditors;
(c)seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or substantially all of that member's properties; or
(d)fails, 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 substantially all of that member's properties, to have the appointment vacated or stayed, or fails within 90 days after the expiration of a stay to have the appointment vacated; or
b. (1) the member's expulsion pursuant to the operating agreement;
(2)the member's expulsion by the unanimous vote of the other members if:
(a)it is unlawful to carry on the limited liability company with that member;
(b)there has been a transfer of all of that member's transferable interest in the limited liability company, other than a transfer for security purposes, or a court order charging the member's interest;
(c)within 90 days after the limited liability company notifies a corporate member that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its charter or its right to conduct business; or
(d)a limited liability company or a partnership that is a member has been dissolved and its business is being wound up;
(3)on application by the limited liability company or another member, the member's expulsion by judicial determination because:
(a)the member engaged in wrongful conduct that adversely and materially affected the limited liability company's business;
(b)the member willfully or persistently committed a material breach of the operating agreement; or
(c)the member engaged in conduct relating to the limited liability company business which makes it not reasonably practicable to carry on the business with the member as a member of the limited liability company;
(4)in the case of a member who is an individual:
(a)the member's death;
(b)the appointment of a guardian or general conservator for the member; or
(c)a judicial determination that the member has become incapable of performing the member's duties under the operating agreement;
(5)in the case of a member that is a trust or is acting as a member by virtue of being a trustee of a trust, distribution of the trust's entire transferable interest in the limited liability company, but not merely by reason of the substitution of a successor trustee;
(6)in the case of a member that is an estate or is acting as a member by virtue of being a personal representative of an estate, distribution of the estate's entire transferable interest in the limited liability company, but not merely by reason of the substitution of a successor personal representative; or
(7)termination of a member who is not an individual, partnership, limited liability company, corporation, trust or estate.
L.1993,c.210,s.24; amended 1997, c.139, s.13; 1998, c.79, s.4.