(a) Subject to § 29-805.03(f), a transfer, in whole or in part, of a transferable interest:

(1) Is permissible;

(2) Shall not by itself cause a member’s dissociation or a dissolution and winding up of the limited liability company’s activities and affairs; and

(3) Subject to § 29-805.04, shall not entitle the transferee to:

(A) Participate in the management or conduct of the company’s activities and affairs; or

(B) Except as otherwise provided in subsection (c) of this section, have access to records or other information concerning the company’s activities and affairs.

(b) A transferee shall have the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

(c) In a dissolution and winding up of a limited liability company, a transferee shall be entitled to an account of the company’s transactions only from the date of dissolution.

(d) A transferable interest may be evidenced by a certificate of the interest issued by the limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.

(e) A limited liability company need not give effect to a transferee’s rights under this section until the company has notice of the transfer.

(f) A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement shall be ineffective as to a person having notice of the restriction at the time of transfer.

(g) Except as otherwise provided in § 29-806.02(4)(B), when a member transfers a transferable interest, the transferor shall retain the rights of a member other than the interest in distributions transferred and shall retain all duties and obligations of a member.

(h) If a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee shall be liable for the member’s obligations under §§ 29-804.03 and 29-804.06(c) known to the transferee when the transferee becomes a member.

(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(6)(B), 59 DCR 13171.)

This section is referenced in § 29-804.04, § 29-805.03, § 29-805.04, and § 29-807.05.

The 2013 amendment by D.C. Law 19-210 substituted “Subject to § 29-805.03(f), a transfer” for “A transfer” in the introductory language of (a); substituted “activities and affairs” for “activities” throughout (a); and substituted “If” for “When” at the beginning of (h).

Uniform Law: This section is based on § 502 of the Uniform Limited Company Act (2006 Act).

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.