Utah Code 48-3a-408. Reimbursement, indemnification, advancement, and insurance

(1)

A limited liability company shall reimburse a member of a member-managed limited liability company or the manager of a manager-managed limited liability company for any payment made by the member or manager in the course of the member’s or manager’s activities on behalf of the limited liability company, if the member or manager complied with Sections 48-3a-407 and 48-3a-409 in making the payment.

Need help with a review of an LLC operating agreement?
Have it reviewed by a lawyer, get answers to your questions and move forward with confidence.
Connect with a lawyer now

Terms Used In Utah Code 48-3a-408

Manager: means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in Subsection 48-3a-407(3). See Utah Code 48-3a-102
Manager-managed limited liability company: means a limited liability company that qualifies under Subsection 48-3a-407(1). See Utah Code 48-3a-102
Member: means a person that:

(a)	has become a member of a limited liability company under Section 48-3a-401 or was a member in a company when the company became subject to this chapter under Section 48-3a-1405; and

(b)

has not dissociated under Section 48-3a-602. See Utah Code 48-3a-102

Member-managed limited liability company: means a limited liability company that is not a manager-managed limited liability company. See Utah Code 48-3a-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.

Operating agreement: means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in Subsection 48-3a-112(1). See Utah Code 48-3a-102

Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Utah Code 48-3a-102

(2)

A limited liability company shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation, or other liability incurred by the person by reason of the person’s former or present capacity as a member or manager, if the claim, demand, debt, obligation, or other liability does not arise from the person’s breach of Section 48-3a-405, 48-3a-407, or 48-3a-409.

(3)

In the ordinary course of its activities and affairs, a limited liability company may advance reasonable expenses, including attorney’s fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person’s former or present capacity as a member or manager, if the person promises to repay the limited liability company if the person ultimately is determined not to be entitled to be indemnified under Subsection (2).

(4)

A limited liability company may purchase and maintain insurance on behalf of a member or manager of the limited liability company against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, under Subsection 48-3a-112(3)(g), the operating agreement could not eliminate or limit the person’s liability to the limited liability company for the conduct giving rise to the liability.

Enacted by Chapter 412, 2013 General Session

Previous section

Next section

Part 4 Contents