§ 3083 - Effect of member's dissociation - Vermont Statutes

§ 3083. Effect of member's dissociation

(a) If under section 3101 of this title a member's dissociation from a limited liability company results in a dissolution and winding up of the company's business, subchapter 8 of this chapter applies. If a member's dissociation from a company does not result in a dissolution and winding up of the company's business under section 3101 of this title:

(1) in an at-will company, the company must cause the dissociated member's distributional interest to be purchased under subchapter 7 of this chapter; and

(2) in a company having a specified term:

(A) if the company dissolves and winds up its business on or before the expiration of its specified term, subchapter 8 of this chapter applies to determine the dissociated member's rights to distributions; and

(B) if the company does not dissolve and wind up its business on or before the expiration of its specified term, the company must cause the dissociated member's distributional interest to be purchased under subchapter 7 of this chapter on the date of the expiration of the term specified at the time of the member's dissociation.

(b) Upon a member's dissociation from a limited liability company:

(1) the member's right to participate in the management and conduct of the company's business terminates, except as otherwise provided in section 3103 of this title, and the member ceases to be a member and is treated the same as a transferee of a member under section 3072 of this title;

(2) the member's duty of loyalty under subdivision (b)(3) of section 3059 of this title terminates; and

(3) the member's duty of loyalty under subdivisions (b)(1) and (2) of section 3059 of this title and duty of care under subsection (c) of section 3059 of this title continue only with regard to matters arising and events occurring before the member's dissociation, unless the member participates in winding up the company's business pursuant to section 3103 of this title, in which case the member's duty of loyalty will continue unabated. (Added 1995, No. 179 (Adj. Sess.), § 4.)