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An operating agreement may provide for indemnification of a member or manager for judgments, settlements, penalties, fines, or expenses incurred in a proceeding to which a person is a party because the person is or was a member or manager.

Section 33-43-405. Records and information.

(A) A limited liability company shall keep at its principal place of business the following:

(1) a current and a past list, setting forth the full name and last known mailing address of each member and manager, if any, set forth in alphabetical order;

(2) a copy of the articles of organization, all amendments thereto, and all other documents filed with the Secretary of State, together with executed copies of any powers of attorney pursuant to which the articles of amendment or any filed document has been executed;

(3) copies of the limited liability company's federal, state, and local tax returns and financial statements, if any, for the six most recent years or, if those returns and statements were not prepared for any reason, copies of the information and statements provided to, or which should have been provided to, the members to enable them to prepare their federal, state, and local tax returns for the period;

(4) copies of any effective written operating agreements, and all amendments thereto, and copies of any written operating agreements no longer in effect;

(5) unless contained in writing in an operating agreement:

(a) a writing setting out the amount of cash, if any, and a statement of the agreed value of other property or services, if any, contributed by each member and the times at which or events upon the happening of which any additional contributions are to be made by each member;

(b) a writing stating events, if any, upon the happening of which the limited liability company is to be dissolved and its affairs wound up; and

(c) other writings prepared pursuant to a requirement, if any, in any operating agreement.

(B) Upon reasonable request, a member or personal representative of any deceased member or of any member under legal disability, at the member's own expense, may inspect and copy during ordinary business hours any limited liability company record, wherever the record is located.

(C) At the request of any member, or the personal representative of any deceased member or of any member under legal disability, the limited liability company shall provide:

(2) in writing, a description of the particular membership rights owned by that member as of the date the limited liability company makes the statement, which statement must describe the member's

(i) right to vote;

(ii) right to share in profits and losses;

(iii) right to share in distributions;

(iv) restrictions on the member's right to assign any or all of his interest in the limited liability company pursuant to Section 33-43-406; and

(v) any assignment of the member's interest then in effect other than a security interest.

(D) Upon reasonable request and for a proper purpose, a former member (including the estate of a deceased member) may at his or her own expense, inspect and copy during ordinary business hours any limited liability company record pertaining to the period during which he was a member.

(E) Failure of the limited liability company to keep or maintain any of the records or information required pursuant to this section shall not be grounds for imposing liability on any member or manager for the debts and obligations of the limited liability company.

Section 33-43-406. Restrictions on the transfer of any rights in the member's interest.

(A) Transfer or assignment of any rights in a member's interest in a limited liability company may be restricted, provided, however, such restriction is not binding unless the member either is a party to the agreement imposing the restriction or voted in favor of the restriction.

(B) A written restriction on the transfer or assignment of all or part of the rights of the member's interest (which may be entered into for any reason) that is noted conspicuously in a requested statement of membership rights may be enforced against the owner of the interest or a successor or transferee of the owner, including a pledgee or legal representative. Unless noted conspicuously in a requested statement of membership interest, a restriction is ineffective against a person without knowledge of the restriction.

(C) A would-be assignee or transferee is entitled to rely on a statement of membership rights issued by the limited liability company under Section 33-43-405(C). A restriction on the assignment or transfer of all or a part of the member's interest, which is otherwise valid and in effect at the time of the issuance of a statement of membership rights but which is not reflected in that statement, is ineffective against an assignee or transferee

Section 33-43-501. Contributions to capital.

A limited liability company interest may be issued in exchange for anything of value including, cash, property, services rendered, or a promissory note, or other written obligation to contribute cash or property or to perform services.

Section 33-43-502. Liability for contributions.

(A) A promise by a member to contribute to the limited liability company is not enforceable unless set forth in a writing signed by the member.

(B) Unless otherwise provided in an operating agreement, a member is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability, or other reason.

(C) If a member does not make the required contribution of property or services, the member is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value of the stated contribution that has not been made.

(D) Unless otherwise provided in an operating agreement, the obligation of a member to make a contribution may be compromised only with the unanimous consent of the members.

(E) Notwithstanding the compromise, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation after the member signs a writing which reflects the obligation and before the compromise may enforce the original obligation.

Section 33-43-503. Allocation of profits and losses.

Profits and losses of a limited liability company shall be allocated among the members in the manner provided in the operating agreement. If the operating agreement does not so provide, profits and losses shall be allocated on a per capita basis.

Section 33-43-504. Remuneration.

A member is not entitled to remuneration for services performed for the limited liability company, except as provided in an operating agreement and except for reasonable compensation for services rendered in winding up the business of the limited liability company.

Section 33-43-601. Sharing of interim distributions.

Except as otherwise provided in Sections 33-43-602 and 33-43-905, distributions of cash or other assets of a limited liability company shall be shared among the members and among classes of members in the manner provided in writing in an operating agreement. If an operating agreement does not so provide in writing, each member shall share on a per capita basis in any distribution. A member is entitled to receive distributions described in this section from a limited liability company to the extent and at the times or upon the happening of the events specified in an operating agreement or at the times determined by the members or managers pursuant to Section 33-43-403.

Section 33-43-602. Distributions on an event of dissociation.

(A) Upon the occurrence of an event of dissociation under Section 33-43-802 which does not result in winding up, other than an event of dissociation described in Section 33-43-802(A)(3)(b) or Section 33-43-802(A)(2), a dissociating member is entitled to receive any distribution which the member was entitled to receive prior to the event of dissociation. The dissociating member shall also receive any other amount as provided in an operating agreement. If an operating agreement does not provide the amount of, or a method for determining the distribution to a dissociating member, the member shall additionally receive the fair value of the member's interest in the limited liability company as of the date of dissociation determined as provided in subsection (B) and based upon the member's right to share in distributions from the limited liability company.

(B) The `fair value' of the dissociating member's interest shall be determined on the basis of the amount that would be paid by a willing buyer to a willing seller, neither being under any compulsion to buy or sell, and with knowledge of all relevant facts. Interest must be paid from the date of dissociation to the date of payment.

(C) Damages for wrongful dissociation under Section 33-43-803 and all other amounts owing, whether or not presently due, from the dissociated member to the limited liability company, must be offset against the buyout price as determined in subsection (A). If damages and other amounts owing exceed the amount owed under subsection (A), interest must be paid on such excess from the date the amount owed becomes due to the date of payment.

(D) Unless otherwise provided in an operating agreement and subject to the provisions of subsections (E) and (G), if no agreement for the

(E) If a deferred payment is authorized under subsection (G)(1), or the limited liability company reasonably and in good faith determines deferred payment may be made pursuant to subsection (G)(2), the limited liability company may tender a written offer to pay the amount it estimates to be the price owed under subsection (B) and accrued interest, reduced by any offsets under subsection (C), stating the amount of payment, the amount and type of security for payment, and the other terms and conditions of the obligation.

(F) The payment or tender required by subsection (D) or (E) must be accompanied by the following:

(1) a statement of limited liability company's assets and liabilities as of the date of dissociation;

(2) the latest available limited liability company balance sheet and income statement, if any;

(3) an explanation of how the estimated amount of payment was calculated; and

(4) a written notice that the payment is in full satisfaction of the obligation to purchase unless, within one hundred twenty days after the written notice, the dissociated member commences an action to determine the price, any offsets under subsection (C), or other terms of the reacquisition obligation.

(G) A deferred payment may be made only according to the following conditions:

(1) A member who wrongfully dissociates before the expiration of the duration of the limited liability company is not entitled to payment for any portion of the buyout price until the expiration of the then stated duration unless the member establishes to the satisfaction of the court that earlier payment will not cause undue hardship to the business of the limited liability company. The court shall determine the extent and manner to which such deferred payment is secured and the amount, if any, of interest to be paid on the deferred payment.

(2) A member who dissociates, but not wrongfully, before the expiration of the limited liability company, is entitled to payment of the buyout price within one hundred twenty days after the member, of his

(H) A dissociated member may maintain an action against the limited liability company, pursuant to Section 33-43-1203 to determine the value of that member's interest, any offsets under subsection (C), or other terms. The action must be commenced within one hundred twenty days after the limited liability company has tendered payment or an offer to pay, or within one year after written demand for payment if no payment or offer to pay is tendered. The court shall determine the fair market value using the formula in subsection (B), any offset due under subsection (C), and accrued interest, and enter judgment for any additional payment or refund. If deferred payment is authorized under subsection (G), the court shall also determine the security for payment and other terms of the obligation to purchase. The court may assess reasonable attorney's fees and the fees and expenses of appraisers or other experts for a party to the action, in amounts the court finds equitable, against any other party, if the court finds that the other party acted arbitrarily, vexatiously, or not in good faith, including the limited liability company's failure to tender payment or an offer to pay or to comply with the requirement of subsection (F), or any unsupported or unreasonable request to defer payment pursuant to subsection (G)(2).

Section 33-43-603. Distribution in kind.

Unless otherwise provided in an operating agreement:

(A) A member, regardless of the nature of the member's contribution, has no right to demand and receive any distribution from the limited liability company in any form other than cash.

(B) A member may not be compelled to accept from the limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds the percentage

Section 33-43-604. Restrictions on distributions.

(A) No distribution may be made if, after giving effect to the distribution:

(1) the limited liability company would not be able to pay its debts as they become due in the usual course of business; or

(2) the limited liability company's assets would be less than the sum of its liabilities plus, unless otherwise provided in an operating agreement, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution.

(B) The limited liability company may base a determination that a distribution is not prohibited under subsection (A) either on:

(1) financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or

(2) a fair valuation or other method that is reasonable under the circumstances.

(C) The effect of a distribution under subsection (A) is measured:

(1) in the case of distribution by purchase or other acquisition of the member's interest in the limited liability company, as of the date money or other property is transferred or debt incurred by the limited liability company;

(2) in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed;

(3) in all other cases, as of (i) the date the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization, or (ii) the date the payment is made if it occurs more than one hundred twenty days after the date of authorization.

(D) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors except to the extent subordinated by agreement.

Section 33-43-605. Liability upon wrongful distribution.

(A) A member or manager who votes for or assents to a distribution in violation of an operating agreement or Section 33-43-604 is personally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating Section 33-43-604 or an operating agreement if it is established that such member or manager did not comply with Section 33-43-604 or the

(B) Each member or manager held liable under subsection (A) for a wrongful distribution is entitled to contribution:

(1) from each other member or manager who could be held liable under subsection (A) for the wrongful distribution; and

(2) from each member for the amount the member received in violation of Section 33-43-604 or an operating agreement.

(C) A proceeding under this section is barred unless it is commenced within two years after the date on which the effect of the distribution is measured under Section 33-43-604.

Section 33-43-701. Ownership of limited liability company property.

(A) Property transferred to or otherwise acquired by a limited liability company is property of the limited liability company and not of the members individually.

(B) Property is limited liability company property if acquired:

(1) in the name of the limited liability company; or

(2) in the name of one or more members or managers with an indication in the instrument transferring title to the property of:

(i) the person's capacity as a member or manager, or

(ii) of the existence of a limited liability company,

but without an indication of the name of the limited liability company.

(C) Property is acquired in the name of the limited liability company by a transfer to:

(1) the limited liability company in its name; or

(2) one or more members or managers in their capacity as either members or managers in the limited liability company, if the name of the limited liability company is indicated in the instrument transferring title to the property.

(D) Property is presumed to be limited liability company property if purchased with limited liability company assets, even if not acquired in the name of the limited liability company or of one or more members with an indication in the instrument transferring title to the property of the person's capacity as a member or of the existence of a limited liability company.

(E) Property acquired in the name of one or more of the members, without an indication in the instrument transferring title to the property of the person's capacity as a member or of the existence of a limited liability company and without use of limited liability company assets, is presumed

Section 33-43-702. Transfer of property.

(A) Except as provided in subsection (D), property of the limited liability company held in the name of the limited liability company, as provided in Section 33-43-701(C), may be transferred by an instrument of transfer executed by any member in the name of the limited liability company.

(B) Property of the limited liability company that is held in the name of one or more members or managers with an indication in the instrument transferring the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, if the name of the limited liability company is not indicated, may be transferred by an instrument of transfer executed by the persons in whose name title is held.

(C) Property of the limited liability company held in the name of one or more persons other than the limited liability company without an indication in the instrument transferring title to the property to them of their capacity as members or managers of a limited liability company or of the existence of a limited liability company, may be transferred free of any claims of the limited liability company or the other members by the persons in whose name title is held to a transferee who gives value without having notice that it is property of the limited liability company.

(D) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) title to property of the limited liability company that is held in the name of the limited liability company, as provided in Section 33-43-701(C), may be transferred by an instrument of transfer executed by any manager in the name of the limited liability company; and

(2) a member, solely by reason of being a member, shall not have authority to transfer property of the limited liability company.

Section 33-43-703. Nature of limited liability company interest.

A limited liability company interest is personal property.

Section 33-43-704. Assignment of limited liability company interest.

(A) Unless otherwise provided in writing in an operating agreement:

(1) a limited liability company 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 a limited liability company interest does not dissolve the limited liability company or entitle the assignee to participate

(4) until the assignee of a limited liability company 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 pursuant to Section 33-43-802(A)(3)(b);

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

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

(B) 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 limited liability company interest of a member is not an assignment and shall 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.

Section 33-43-705. Rights of judgment creditor.

On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's limited liability company interest with payment of the unsatisfied amount of judgment with interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the member's limited liability company interest. This chapter does not deprive any member of the benefit of any exemption laws applicable to his limited liability company interest.

Section 33-43-706. Right of assignee to become a member.

(A) An assignee of a limited liability company interest may become a member only if the other members unanimously consent at the time of the assignment. A member's consent may be withheld for any reason whatsoever. The consent of a member may be evidenced in any manner specified in writing in an operating agreement, but in the absence of such specification, consent shall be evidenced by a written instrument dated and signed by the member.

(B) An assignee who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this chapter. An assignee who becomes a member also is liable for any obligations of the assignor to make contributions under Section 33-43-502. However, the assignee is not obligated for liabilities of which the assignee had no knowledge at the time he became a member and which could not

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