2023 Pennsylvania Consolidated & Unconsolidated Statutes › Title 15 - CORPORATIONS AND UNINCORPORATED ASSOCIATIONS › Chapter 88 - Limited Liability Companies › Section 8861 - Events causing dissociation

§ 8861. Events causing dissociation.
A person is dissociated as a member when any of the following occurs:
(1) The limited liability company knows or has notice of the person's express will to withdraw as a member, except that if the person specified a withdrawal date later than the date the company knew or had notice, on that later date.
(2) An event stated in the operating agreement as causing the person's dissociation occurs.
(3) The person's entire interest is transferred in a foreclosure sale under section 8853(f) (relating to charging order).
(4) The person is expelled as a member pursuant to the operating agreement.
(5) The person is expelled as a member by the affirmative vote or consent of all the other members if:
(i) it is unlawful to carry on the company's activities and affairs with the person as a member;
(ii) there has been a transfer of all the person's transferable interest in the company, other than:
(A) a transfer for security purposes; or
(B) a charging order in effect under section 8853 which has not been foreclosed;
(iii) the person is an entity and:
(A) the company notifies the person that it will be expelled as a member because:
(I) the person has filed a certificate of dissolution or the equivalent;
(II) the person has been administratively dissolved;
(III) the person's charter or its equivalent has been revoked; or
(IV) the person's right to conduct business has been suspended by the person's jurisdiction of formation; and
(B) within 90 days after the notification:
(I) the certificate of dissolution or the equivalent has not been withdrawn, rescinded or revoked;
(II) the person has not been reinstated;
(III) the person's charter or the equivalent has not been reinstated; or
(IV) the person's right to conduct business has not been reinstated; or
(iv) the person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up.
(6) On application by the company or a member in a direct action under section 8881 (relating to direct action by member), the person is expelled as a member by judicial order because the person:
(i) has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the company's activities and affairs;
(ii) has committed willfully or persistently, or is committing willfully or persistently, a material breach of the operating agreement or a duty or obligation under section 8849.1 (relating to standards of conduct for members); or
(iii) has engaged or is engaging in conduct relating to the company's activities and affairs which makes it not reasonably practicable to carry on the activities and affairs with the person as a member.
(7) In the case of an individual:
(i) the individual dies; or
(ii) in a member-managed limited liability company:
(A) a guardian for the individual is appointed; or
(B) a court orders that the individual has otherwise become incapable of performing the individual's duties as a member under this title or the operating agreement.
(8) In a member-managed limited liability company, the person:
(i) becomes a debtor in bankruptcy;
(ii) executes an assignment for the benefit of creditors; or
(iii) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the person or of all or substantially all the person's property.
(9) In the case of a person that is a testamentary or inter vivos trust or is acting as a member by virtue of being a trustee of such a trust, the trust's entire transferable interest in the company is distributed.
(10) In the case of a person that is an estate or is acting as a member by virtue of being a personal representative of an estate, the estate's entire transferable interest in the company is distributed.
(11) In the case of a person that is not an individual, the existence of the person terminates.
(12) The company participates in a merger under Chapter 3 (relating to entity transactions) and:
(i) the company is not the surviving entity; or
(ii) otherwise as a result of the merger, the person ceases to be a member.
(13) The company participates in an interest exchange under Chapter 3 and, as a result of the interest exchange, the person ceases to be a member.
(14) The company participates in a conversion under Chapter 3.
(15) The company participates in a division under Chapter 3 and:
(i) the company is not a resulting association; or
(ii) as a result of the division, the person ceases to be a member.
(16) The company participates in a domestication under Chapter 3 and, as a result of the domestication, the person ceases to be a member.
(17) The company dissolves and completes winding up.
Cross References.
Section 8861 is referred to in sections 8812, 8852, 8862 of this title.