42:2C-42 Transfer of transferable interest.

42. Transfer of Transferable Interest.

a. A transfer, in whole or in part, of a transferable interest:

(1) is permissible;

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

(3) subject to section 44 of this act, does not entitle the transferee to:

(a) participate in the management or conduct of the company's activities; or

(b) except as otherwise provided in subsection c. of this section, have access to records or other information concerning the company's activities.

b. A transferee has 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 is 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 is ineffective as to a person having notice of the restriction at the time of transfer.

g. Except as otherwise provided in paragraph (2) of subsection d. of section 46 of this act, when a member transfers a transferable interest, the transferor retains the rights of a member other than the interest in distributions transferred and retains all duties and obligations of a member.

h. When a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member's obligations known to the transferee when the transferee becomes a member.

L.2012, c.50, s.42; amended 2013, c.276, s.5.