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§4081. Events causing member's dissociation


Published: 2015

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The Vermont Statutes Online



Title

11

:
Corporations, Partnerships and Associations






Chapter

025

:
LIMITED LIABILITY COMPANIES






Subchapter

006
:
MEMBER'S DISSOCIATION










 

§

4081. Events causing member's dissociation

A person is

dissociated from a limited liability company upon the occurrence of any of the

following events:

(1) the

company's having notice of the member's express will to withdraw upon the date

of notice or, if a later withdrawal date is specified by the member, on the

later date;

(2) an event

agreed to in the operating agreement as causing the member's dissociation;

(3) the member's

expulsion pursuant to the operating agreement;

(4) the member's

expulsion by unanimous vote of the other members if:

(A) it is

unlawful to carry on the company's business with the person as a member;

(B) there has

been a transfer of substantially all of the member's distributional interest,

other than a transfer for security purposes, or a court order charging the

member's distributional interest, which has not been foreclosed;

(C) a

corporation that is a member fails to obtain a revocation of its certificate of

dissolution or a reinstatement of its charter or its right to conduct business

within 90 days after the company notifies such 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charter has been revoked, or its right to conduct business has been suspended by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; or

(D) a

partnership or a limited liability company that is a member has been dissolved

and its business is being wound up;

(5) on

application by the company or another member, the member's expulsion by

judicial determination because the member:

(A) engaged in

wrongful conduct that has adversely and materially affected, or will adversely

and materially affect, the company's business;

(B) willfully or

persistently committed a material breach of the operating agreement or of a

duty owed to the company or the other members under section 4059 of this title;

or

(C) engaged in

conduct relating to the company's business which makes it not reasonably

practicable to carry on the business with the person as a member;

(6) in a member-managed

limited liability company, the 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 the member's

property; or

(D) fails,

within 90 days after the appointment, to have vacated or stayed the appointment

of a trustee, receiver, or liquidator of the member or of all or substantially

all of the member's property obtained without the member's consent or

acquiescence, or fails within 90 days after the expiration of a stay to have

the appointment vacated;

(7) in the case

of a member who is an individual:

(A) the member's

death; or

(B) in a

member-managed limited liability company:

(i) the

appointment of a guardian or general conservator for the member; or

(ii) a judicial

determination that the member has otherwise become incapable of performing the

member's duties under the operating agreement;

(8) 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 rights to receive

distributions from the company, but not merely by reason of the substitution of

a successor trustee;

(9) 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

distributional interest in the company, but not merely the substitution of a

successor personal representative;

(10) termination

of the existence of a member if the member is not an individual, partnership,

limited liability company, corporation, estate, or trust;

(11) the company

participates in a merger under subchapter 10 of this chapter and:

(A) the company

is not the surviving entity; or

(B) the person

otherwise ceases to be a member as a result of the merger;

(12) the company

participates in a conversion under subchapter 10 of this chapter;

(13) the company

participates in a domestication under subchapter 10 of this chapter, and, the

person ceases to be a member as a result of the domestication; or

(14) termination

of a member's continued membership in a limited liability company for any other

reason. (Added 2015, No. 17, § 2.)