2023 District of Columbia Code › Title 29 - Business Organizations. [Enacted title] › Chapter 8 - Limited Liability Companies › Subchapter IV - Relations of Members to Each Other and to Limited Liability Company › § 29–804.07. Management of limited liability company

§ 29–804.07. Management of limited liability company.
(a) A limited liability company shall be a member-managed limited liability company unless the operating agreement:
(1) Expressly provides that:
(A) The company is or will be “manager-managed”;
(B) The company is or will be “managed by managers”; or
(C) Management of the company is or will be “vested in managers”; or
(2) Includes words of similar import.
(b) In a member-managed limited liability company, the following rules shall apply:
(1) Except as otherwise expressly provided in this chapter, the management and conduct of the company shall be vested in the members.
(2) Each member shall have equal rights in the management and conduct of the company’s activities and affairs.
(3) A difference arising among members as to a matter in the ordinary course of the activities and affairs of the company may be decided by a majority of the members.
(4) An act outside the ordinary course of the activities and affairs of the company may be undertaken only with the consent of all members.
(5) The operating agreement may be amended only with the consent of all members.
(c) In a manager-managed limited liability company, the following rules apply:
(1) Except as otherwise expressly provided in this chapter, any matter relating to the activities and affairs of the company shall be decided exclusively by the managers.
(2) Each manager shall have equal rights in the management and conduct of the activities and affairs of the company.
(3) A difference arising among managers as to a matter in the ordinary course of the activities and affairs of the company may be decided by a majority of the managers.
(4) The consent of all members shall be required to:
(A) Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the company’s property, with or without the good will, outside the ordinary course of the company’s activities and affairs;
(B) Approve a merger or domestication under subchapter IX of this chapter or transaction under Chapter 2 of this title;
(C) Undertake any other act outside the ordinary course of the company’s activities and affairs; and
(D) Amend the operating agreement.
(5) A manager may be chosen at any time by the consent of a majority of the members and shall remain a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates. A manager may be removed at any time by the consent of a majority of the members without notice or cause.
(6) A person need not be a member to be a manager, but the dissociation of a member that is also a manager shall remove the person as a manager. If a person that is both a manager and a member ceases to be a manager, that cessation shall not by itself dissociate the person as a member.
(7) A person’s ceasing to be a manager shall not discharge any debt, obligation, or other liability to the limited liability company or members which the person incurred while a manager.
(d) An action requiring the consent of members under this chapter may be taken without a meeting, and a member may appoint a proxy or other agent to consent or otherwise act for the member by signing an appointing record, personally or by the member’s agent.
(e) The dissolution of a limited liability company shall not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.
(f) This chapter shall not entitle a member to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities and affairs of the company.
(g) A limited liability company shall reimburse a member for an advance to the company beyond the amount of capital the member agreed to contribute.
(h) A payment or advance made by a member which gives rise to an obligation of the limited liability company under subsection (g) of this section or under § 29-804.08(a) constitutes a loan to the company which accrues interest from the date of the payment or advance.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720; Mar. 5, 2013, D.C. Law 19-210, § 2(h)(5)(F), 59 DCR 13171.)
Section References
This section is referenced in § 29-801.02, § 29-802.06, and § 29-807.02.
Effect of Amendments
The 2013 amendment by D.C. Law 19-210 substituted “Except as otherwise expressly provided in this chapter, the” for “The” at the beginning of (b)(1); substituted “activities and affairs” for “activities” in (b), (c) and (f); substituted “activities and affairs of the company may” for “activities of the company shall” in (b)(4); substituted “may” for “shall” in (b)(5); and added (g) and (h).
Editor's Notes
Uniform Law: This section is based on § 407 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.