California Corporations Code 17706.01 – (a) A person has the power to dissociate as a member at any …
(a) A person has the power to dissociate as a member at any time, rightfully or wrongfully, by withdrawing as a member by express will pursuant to subdivision (a) of Section 17706.02.
(b) A person’s dissociation from a limited liability company is wrongful only if either of the following apply to the dissociation:
Terms Used In California Corporations Code 17706.01
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Person: includes a corporation as well as a natural person. See California Corporations Code 18
(1) The dissociation is in breach of an express provision of the operating agreement.
(2) The dissociation occurs before the termination of the limited liability company and any of the following:
(A) The person withdraws as a member by express will.
(B) The person is expelled as a member by judicial order under subdivision (e) of Section 17706.02.
(C) The person is dissociated under subdivision (g) of Section 17706.02 by becoming a debtor in bankruptcy.
(D) In the case of a person that is not a trust other than a business trust, an estate, or an individual, the person is expelled or otherwise dissociated as a member because it dissolved or terminated.
(c) A person that wrongfully dissociates as a member is liable to the limited liability company and to the other members for any damages caused by the dissociation. The liability is in addition to any other debt, obligation, or other liability of the member to the limited liability company or the other members.
(Added by Stats. 2012, Ch. 419, Sec. 20. (SB 323) Effective January 1, 2013. Operative January 1, 2014, by Sec. 32 of Ch. 419.)