Rhode Island General Laws 7-16-35. Assignment of membership interest
(a) Unless otherwise provided in the articles of organization or a written operating agreement:
(1) A membership interest is assignable in whole or in part;
(2) An assignment of a membership interest does not of itself dissolve a limited-liability company or entitle the assignee to participate in the management and affairs of the limited-liability company or to become a member or to exercise any rights or powers of a member;
(3) An assignment entitles the assignee to receive, to the extent assigned, only the distributions to which the assignor would be entitled; and
(4) A member ceases to be a member and to have the power to exercise any rights or powers of a member on assignment of all of the member’s membership interest.
Terms Used In Rhode Island General Laws 7-16-35
- 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
- interest: means a member's rights in the limited-liability company, collectively, including the member's share of the profits and losses of the limited-liability company, the right to receive distributions of the limited-liability company's assets, and any right to vote or participate in management of the limited-liability company. See Rhode Island General Laws 7-16-2
- Lien: A claim against real or personal property in satisfaction of a debt.
- Member: means a person with an ownership interest in a limited-liability company with the rights and obligations specified under this chapter. 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) Unless otherwise provided in the articles of organization or an operating agreement, the pledge of or granting of a security interest, lien or other encumbrance in or against any or all of the membership interest of a member is not deemed an assignment of a membership interest.
(c) Unless otherwise provided in the articles of organization or an operating agreement and except to the extent provided in a written agreement signed by an assignee, until an assignee of a membership interest becomes a member, the assignee has no liability as a member solely as a result of the assignment.
History of Section.
P.L. 1992, ch. 280, § 1.