Print

The Vermont Statutes Online



Title

11

:
Corporations, Partnerships and Associations






Chapter

025

:
LIMITED LIABILITY COMPANIES






Subchapter

004
:
RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED LIABILITY COMPANY










 

§

4054. Management of limited liability company

(a) A limited

liability company is a member-managed limited liability company unless the

operating agreement:

(1) expressly

provides that:

(A) the company

is or will be "manager-managed";

(B) the company

is or will be "managed by managers"; or

(C) management

of the company is or will be "vested in managers"; or

(2) includes

words of similar import.

(b) In a

member-managed limited liability company:

(1) the

management and conduct of the company are vested in the members;

(2) each member

has equal rights in the management and conduct of the company's activities; and

(3) except as

otherwise provided in subsection (d) of this section, any matter relating to

the activities of the company may be decided by a majority of the members.

(c) In a

manager-managed limited liability company:

(1) Except as

otherwise provided in subsection (d) of this section, the managers have the

exclusive authority to manage and conduct the company's activities.

(2) Each manager

has equal rights in the management and conduct of the company's activities.

(3) Except as

specified in subsection (d) of this section, any matter relating to the

activities of the company may be exclusively decided by the manager or, if

there is more than one manager, by a majority of the managers.

(4)(A) A manager

may be chosen at any time by the affirmative vote or consent of a majority of

the members and remains a manager until a successor has been chosen, unless the

manager at an earlier time resigns, is removed, or dies, or, in the case of a

manager that is not an individual, terminates.

(B) A manager

may be removed at any time by the affirmative vote or consent of a majority of

the members without notice or cause.

(5)(A) A person

need not be a member to be a manager, but the dissociation of a member that is

also a manager removes the person as a manager.

(B) If a person

that is both a manager and a member ceases to be a manager, that cessation does

not by itself dissociate the person as a member.

(6) A person's ceasing

to be a manager does not discharge any debt, obligation, or other liability to

the limited liability company or members which the person incurred while a

manager.

(d) Except as

provided in the operating agreement, the affirmative vote or consent of all the

members is required to:

(1) amend the

operating agreement of a limited liability company;

(2) amend the

articles of organization under section 4024 of this title;

(3) compromise

an obligation to make a contribution under section 4053 of this title;

(4) compromise,

as among members, an obligation of a member to make a contribution or return

money or other property paid or distributed in violation of this chapter;

(5) make interim

distributions under subsection 4055(a) of this title;

(6) admit a new member;

(7) use the

company's property to redeem an interest subject to a charging order;

(8) waive the

right to have the company's business wound up and the company terminated under

subsection 4102(b) of this title; and

(9) sell, lease,

exchange or otherwise dispose of all, or substantially all, of the company's

property with or without goodwill.

(e)(1) A member

or manager may appoint a proxy to vote or otherwise act for the member or

manager by signing an appointment instrument, either personally or by the

member's or manager's attorney-in-fact.

(2) An

appointment of a proxy is valid for 11 months unless a different time is

specified in the appointment instrument.

(3) An

appointment is revocable by the member or manager unless the appointment form

conspicuously states that it is irrevocable and the appointment is coupled with

an interest, in which case the appointment is revoked when the coupled interest

is extinguished.

(f)(1) An action

requiring the affirmative vote or consent of members under this title may be

taken without a meeting if the action is approved in a consent by members

having not less than the minimum number of votes that would be necessary to

authorize or take the action at a meeting at which all members entitled to vote

thereon were present and voted.

(2) A member may

appoint a proxy or other agent to consent or otherwise act for the member by

signing an appointing record, personally or by the member's agent.

(g)(1) An action

that may be taken at a meeting of the managers may be taken without a meeting

if the action is approved by consent of all managers entitled to vote on the

action.

(2) The action

must be evidenced by one or more consents reflected in a record describing the

action taken and signed by all managers entitled to vote on the action.

(h) The

dissolution of a limited liability company does not affect the applicability of

this section. However, a person that wrongfully causes dissolution of the

company loses the right to participate in management as a member and a manager.

(i) This chapter

does not entitle a member to remuneration for services performed for a

member-managed limited liability company, except for reasonable compensation

for services rendered in winding up the activities of the company. (Added 2015,

No. 17, § 2.)