Rhode Island General Laws 7-16-18. Limitation of liability of managers
(a) Subject to subsection (b), the articles of organization or operating agreement may eliminate or limit the personal liability of a manager to the limited-liability company or to its members for monetary damages for breach of any duty provided for in § 7-16-17.
Terms Used In Rhode Island General Laws 7-16-18
- Articles of organization: means documents filed under § 7-16-5 for the purpose of forming a limited-liability company. See Rhode Island General Laws 7-16-2
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Managers: means a person or persons designated by the members of a limited-liability company to manage the limited-liability company. See Rhode Island General Laws 7-16-2
- Operating agreement: means any agreement, written or oral, of the members as to the affairs of a limited-liability company and the conduct of its business. See Rhode Island General Laws 7-16-2
(b) No provision permitted under subsection (a) limits or eliminates the liability of a manager for:
(1) Breach of the manager’s duty of loyalty to the limited-liability company or its members;
(2) Acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;
(3) The liability imposed pursuant to the provisions of § 7-16-32; or
(4) Any transaction from which the manager derived an improper personal benefit, unless the transaction was with the informed consent of the members or a majority of the disinterested managers. No provision eliminating or limiting the personal liability of a manager will be effective with respect to causes of action arising prior to the inclusion of the provision in the articles of organization or operating agreement.
History of Section.
P.L. 1992, ch. 280, § 1.