Interest in Limited Liability Company; Assignment

of Interests. § 15117 (A). Membership Interest as Personal Property. A membership interest and an economic interest in a limited liability company constitute personal property of the member or assignee. A member or assignee has no interest in specific limited liability company property. § 15117 (B). Assignment of Membership Interest or Economic Interest; Pledge or Lien Against Membership Interest.

(a)Except as provided in the articles of organization or the operating agreement:

(1)A membership interest or an economic interest is assignable in whole or in part, provided, however, that no membership interest may be assigned without the unanimous vote of members required pursuant to Subsection 15117 (D).

(2)An assignment of an economic interest does not of itself dissolve the limited liability company or, other than as set forth in the articles of organization or operating agreement, entitle the assignee to vote or participate in the management and affairs of the limited liability company or to become or exercise any rights of a member.

(3)An assignment of an economic interest merely entitles the assignee to receive, to the extent assigned, the distributions and the allocations of income, gains, losses, deductions, credit, or similar items to which the assignor would be entitled.

(4)Upon the assignment of all or part of an economic interest, the assignor shall provide the manager or member of the limited liability company responsible for maintaining its books and records with the name and address of the COL6/24/2021 CH. 15 LIMITED LIABILITY COMPANIES assignee, together with details of the interest assigned. Upon receipt of that notice, the limited liability company shall amend the list required by paragraph

(1)of subdivision

(a)of § 15115

(K)accordingly. Until the assignee of that interest becomes a member, the assignor continues to be a member and to have the power to exercise any rights and powers of a member, including the right to vote which, in the case of a member who has assigned his entire economic interest in the limited liability company, shall include the right to vote in proportion to the interest in current profits that the assigning member would have, had the assignment not been made.

(b)Except to the extent assumed by agreement, until an assignee of an economic interest in a limited liability company becomes a member, the assignee shall have no liability to the limited liability company under § 15113 and § 15116 solely as a result of the assignment. The assignor of a membership interest is not released from liability as a member solely as a result of the assignment.

(c)The pledge of, or granting of, a security interest, lien, or other encumbrance in or against any or all of the membership interest of a member shall not cause the member to cease to be a member or to grant to anyone else the power to exercise any rights or powers of a member. § 15117 (C). Unsatisfied Amount of Judgment to be Charged Against Membership Interest. On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the membership interest of the member with payment of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the membership interest. This section does not deprive any member of the benefit of any exemption laws applicable to the member=s membership interest. § 15117 (D). Membership of Assignee.

(a)Except as otherwise provided in the articles of organization or the operating agreement, an assignee of an COL6/24/2021 CH. 15 LIMITED LIABILITY COMPANIES interest in a limited liability company may become a member only if the other members unanimously vote in favor of the assignee's admission to the limited liability company as a member.

(b)An assignee who has become a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this title. An assignee who becomes a member also is liable for the obligations of the assignor to make contributions as provided in § 15113, and to return any unlawful distributions made to the assignee under § 15116. However, the assignee is not obligated for liabilities unknown to the assignee at the time the assignee became a member and that could not be ascertained from the articles of organization or operating agreement.

(c)Whether or not an assignee of a membership interest becomes a member, the assignor is not released from the assignor's liability to the limited liability company under '§ 15113 and 15116. § 15117 (E). Deceased Member; Member Adjudged Incompetent by Court.

(a)If a member who is an individual dies or is adjudged by a court of competent jurisdiction to be incompetent to manage the member=s person or property, the member's executor, administrator, guardian, conservator, or other legal representative may exercise all of the member's rights for the purpose of settling the member's estate or administering the member=s property, including any power the member had under the articles of organization or an operating agreement to give an assignee the right to become a member.

(b)If a member is a corporation, trust, or other entity and is dissolved or terminated, the powers of that member may be exercised by its legal representative or successor.