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(B) Each individual who renders professional services on behalf of a domestic or foreign limited liability company is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. A member of a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), is not liable; however, for the conduct of other members, managers, agents, or employees of the limited liability company unless he is at fault in appointing, supervising, or cooperating with them.

(C) A domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), whose members, managers, agents, or employees perform professional services within the scope of their employment or of their apparent authority to act for the limited liability company is liable to the same extent those members, managers, agents, or employees who render professional services on behalf of the domestic or foreign limited liability company.

Section 33-43-305. Limited Liability Company Bound by Member's Wrongful Act.

Where, by a wrongful act or omission or other actionable conduct of any member, whether or not a manager, or any manager, acting in the ordinary course of the business of the limited liability company, or otherwise with authority, loss or injury is caused to any person, or any penalty is incurred, the limited liability company is liable therefor to the same extent as the member so acting or omitting to act.

Section 33-43-306. Limited Liability Company Bound by Member's Breach of Trust.

(A) The limited liability company is bound to make good the loss where a member, whether or not a manager, or any manager, acting within the scope of his apparent authority, receives money or property of a person who is not a member or manager of the limited liability company and misapplies it.

(B) The limited liability company is bound to make good the loss where in the course of its business it receives money or property of a third

Section 33-43-401. Management.

(A) Unless the articles of organization vests management of the limited liability company in a manager or managers, management of the business or affairs of the limited liability company is vested in the members.

(B) If the articles of organization vest management of the limited liability company in one or more managers, then the manager or managers shall have exclusive power to manage the business and affairs of the limited liability company except to the extent otherwise provided in an operating agreement. Unless otherwise provided in an operating agreement, managers:

(1) shall be designated, appointed, elected, removed, or replaced by a vote, approval, or consent of more than one-half by number of the members;

(2) except as provided in subsection (C) of this section need not be members of the limited liability company or natural persons; and

(3) unless they are sooner removed or sooner resign, shall hold office until their successors shall have been elected and qualified.

(C) All of the managers of a limited liability company which renders a professional service, as defined in Section 33-43-102(N), shall be individuals who are authorized by law in this or another state to render a professional service which is rendered by the limited liability company.

Section 33-43-402. Fiduciary duties of managers and members.

(A) Duties of loyalty.

A member shall:

(1) account to the limited liability company and hold for it as trustee any property, profit, or benefit derived by the member in the conduct and winding up of the limited liability company business or derived from a use by the member of limited liability company property, including the appropriation of a limited liability company opportunity;

(2) refrain from dealing with the limited liability company in the conduct or winding up of the limited liability company business, as or on behalf of a party having an interest adverse to the limited liability company except upon full disclosure and approval in writing by more than one-half by number of the disinterested members or as otherwise provided in the articles of organization or an operating agreement; and,

In no event may the members, even by unanimous written consent eliminate any of the duties imposed in paragraphs (1), (2), or (3) of this subsection A, but with the unanimous written consent of all the members, the members may specifically authorize specific types or categories of permitted conduct so long as such are not manifestly unreasonable.

(B) Duty of care.

A member, in conducting and winding up the business of the limited liability company, shall refrain from engaging in grossly negligent conduct, intentional misconduct, and knowing violation of the law. Even with the unanimous written consent of all the members, this duty of care may not be reduced.

(C) Good faith and fair dealing.

A member shall discharge the duties to the limited liability company and the other members under this act or under the operating agreement, and exercise any rights consistent with the obligation of good faith and fair dealing. In no event, even with the unanimous written consent of all the members, may the members eliminate the obligation of good faith and fair dealing, but they may by unanimous written consent determine the standards by which performance of the obligation is to be measured, if such standards are not manifestly unreasonable.

(D) A member does not violate a duty or obligation under this act or under the operating agreement merely because the member's conduct furthers the member's own interest.

(E) This section applies to a person winding up the limited liability company business as the personal or legal representative of the last surviving member as if the person were a member.

(F) The standards of conduct expressed in this Section 33-43-402 are applicable to all members in a member-managed limited liability company. In a manger-managed limited liability company:

(1) the managers shall be held to the same standards of conduct set forth in (A) through (E);

(2) a member who is not a manager shall have no duties to the limited liability company or to other members solely by reason of being a member; and,

(3) only the members shall have the right to specifically authorize conduct as provided in subsections (A), (B), and (C).

Section 33-43-403. Voting.

(B) Unless otherwise provided in writing in an operating agreement, the affirmative vote, approval, or consent of all members shall be required to:

(1) amend an operating agreement or articles of organization; or

(2) authorize a manager or member to do any act on behalf of the limited liability company that contravenes a written operating agreement, including any written provision thereof which expressly limits the purpose, business, or affairs of the limited liability company or the conduct thereof.

Section 33-43-404. Indemnification of members and managers.

An operating agreement or a court 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 to the same extent, upon the same terms and limitations, and according to the same procedures as is provided for indemnification of directors of business corporations in Article 5, Chapter 8 of Title 33, and as may be amended from time to time.

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;

(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:

(1) to the extent the circumstances render it just and reasonable, true and full information of all things affecting the members, and

(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

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 who takes an assignment or receives a transfer in reliance on the statement of membership rights.

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

(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

(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 purchase of a dissociated member's interest is reached within one hundred twenty days after a written demand for payment, the limited liability company shall pay, or cause to be paid, in cash to the dissociated member or his personal representative the amount the limited liability company estimates to be the price to be paid according to subsection (B) and accrued interest, reduced by any offsets and accrued interest under subsection (C).

(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;

(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 representative, gives written demand to the limited liability company. Provided, however, if the operating agreement does not require immediate payment, the limited liability company may request an order for deferral of payment which the court may only grant if the limited liability company establishes by clear and convincing evidence that deferred payment is necessary in order to prevent undue hardship to the business of the limited liability company. The court shall determine the length of deferral, the extent and manner to which the deferred payment is secured, and a reasonable fixed or variable rate of interest which shall be regularly paid on the deferred amount. Unless the limited liability company demonstrates by clear and convincing evidence that providing adequate security in regard to a deferred payment to a member who does not wrongfully dissociate will cause undue hardship to the business of the limited liability company, such deferred payment shall be adequately secured.

(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

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 that the member would have shared in a cash distribution equal to the value of the property at the time of distribution.

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:

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