Iowa Code 489.603 – Effect of person’s dissociation as member
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1. When a person is dissociated as a member of a limited liability company, all of the following apply:
a. The person’s right to participate as a member in the management and conduct of the company’s activities terminates.
b. If the company is member-managed, the person’s fiduciary duties as a member end with regard to matters arising and events occurring after the person’s dissociation.
c. Subject to section 489.504 and article 10, any transferable interest owned by the person immediately before dissociation in the person’s capacity as a member is owned by the person solely as a transferee.
Terms Used In Iowa Code 489.603
- Fiduciary: A trustee, executor, or administrator.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Member: means a person that has become a member of a limited liability company under section 489. See Iowa Code 489.102
- 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: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Iowa Code 489.102
- Transferable interest: means the right, as originally associated with a person's capacity as a member, to receive distributions from a limited liability company in accordance with the operating agreement, whether or not the person remains a member or continues to own any part of the right. See Iowa Code 489.102
- Transferee: means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member. See Iowa Code 489.102
2. A person’s dissociation as a member of a limited liability company does not of itself discharge the person from any debt, obligation, or other liability to the company or the other members which the person incurred while a member.