2023 District of Columbia Code › Title 29 - Business Organizations. [Enacted title] › Chapter 8 - Limited Liability Companies › Subchapter VI - Member’s Dissociation › § 29–806.02. Events causing dissociation

§ 29–806.02. Events causing dissociation.
A person shall be dissociated as a member from a limited liability company when:
(1) The company has notice of the person’s express will to withdraw as a member, but, if the person specified a withdrawal date later than the date the company had notice, on that later date;
(2) An event stated in the operating agreement as causing the person’s dissociation occurs;
(3) The person is expelled as a member pursuant to the operating agreement;
(4) The person is expelled as a member by the unanimous consent of the other members if:
(A) It is unlawful to carry on the company’s activities and affairs with the person as a member;
(B) There has been a transfer of all of the person’s transferable interest in the company, other than:
(i) A transfer for security purposes; or
(ii) A charging order in effect under § 29-805.03 which has not been foreclosed;
(C) The person is a corporation and, within 90 days after the company notifies the person that it will be expelled as a member because the person has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, the certificate of dissolution has not been revoked or its charter or right to conduct business has not been reinstated; or
(D) The person is a limited liability company or partnership that has been dissolved and whose business is being wound up;
(5) On application by the company, the person is expelled as a member by judicial order because the person has:
(A) Engaged, or is engaging, in wrongful conduct that has adversely and materially affected, or will adversely and materially affect, the company’s activities and affairs;
(B) Willfully or persistently committed, or is willfully and persistently committing, a material breach of the operating agreement or the person’s duties or obligations under § 29-804.09; or
(C) Engaged in, or is engaging, in conduct relating to the company’s activities which makes it not reasonably practicable to carry on the activities with the person as a member;
(6) In the case of a person who is an individual:
(A) The person dies; or
(B) In a member-managed limited liability company:
(i) A guardian or general conservator for the person is appointed; or
(ii) There is a judicial order that the person has otherwise become incapable of performing the person’s duties as a member under this chapter or the operating agreement;
(7) In a member-managed limited liability company, the person:
(A) Becomes a debtor in bankruptcy;
(B) Executes an assignment for the benefit of creditors; or
(C) Seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the person or of all or substantially all of the person’s property;
(8) 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 a trust, the trust’s entire transferable interest in the company is distributed;
(9) 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;
(10) In the case of a member that is not an individual, unincorporated entity, corporation, trust, or estate, the termination of the member;
(11) The company participates in a merger under subchapter IX of this chapter or transaction under Chapter 2 of this title, if:
(A) The company is not the surviving entity; or
(B) Otherwise as a result of the merger, the person ceases to be a member;
(12) The company participates in a domestication under subchapter IX of this chapter, if, as a result of the domestication, the person ceases to be a member;
(13) The company participates in an interest exchange under Chapter 2 of this title and, as a result of the interest exchange, the person ceases to be a member;
(14) The person’s entire interest is transferred in a foreclosure sale under § 29-805.03(f); or
(15) The company dissolves and completes winding up.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(7)(B), 59 DCR 13171.)
Section References
This section is referenced in § 29-801.02, § 29-802.06, § 29-805.02, and § 29-806.01.
Effect of Amendments
The 2013 amendment by D.C. Law 19-210 substituted “activities and affairs” for “activities” in (4)(A) and (5)(A); substituted “testamentary or inter vivos trust” for “trust” in (8); substituted “unincorporated entity” for “partnership, limited liability company” in (10); redesignated former (13) as present (15); in present (15) substituted “dissolves and completes winding up” for “terminates”; and added present (13) and (14) and made a related change.
Editor's Notes
Uniform Law: This section is based on § 602 of the Uniform Limited Company Act (2006 Act).
Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.