Sec. 3. (a) Unless otherwise provided in a written operating agreement, a limited liability company existing under this article on or before June 30, 1999, is governed by this section.

     (b) Except as provided in a written operating agreement:

(1) an interest is assignable in whole or in part;

(2) an assignment entitles the assignee to receive, to the extent assigned, only the distributions to which the assignor would be entitled;

(3) an assignment of an interest does not of itself dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member;

(4) until the assignee of an interest becomes a member, the assignor continues to be a member and to have the power to exercise any rights of a member, subject to the other members’ right to remove the assignor under section 5(a)(3)(B) of this chapter;

(5) until an assignee of an interest becomes a member, the assignee has no liability as a member solely as a result of the assignment; and

(6) the assignor of an interest is not released from liability as a member solely as a result of the assignment.

     (c) Unless otherwise provided in an operating agreement, the pledge of or granting of a security interest, lien, or other encumbrance in or against any or all of the interest of a member is not an assignment and does not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member.

As added by P.L.8-1993, SEC.301. Amended by P.L.269-1999, SEC.7.