Opinion ID: 2823839
Heading Depth: 2
Heading Rank: 3

Heading: Coloradoâs LLC Act

Text: Â¶15Â Â Â Â Â Â The General Assembly enacted Coloradoâs Limited Liability Company Act in 1990, combining features of Coloradoâs limited partnership and corporation statutes.Â Water, Waste & Land, Inc. v. Lanham, 955 P.2d 997, 1000 (Colo. 1998). The current LLC Act also includes some of the same basic features found in the Uniform Limited Liability Company Act of 1996 (âModel Actâ) drafted by the National Conference of Commissioners on Uniform State Laws. Id. Â¶16Â Â Â Â Â Â A dissolved LLC continues its existence for the sole purpose of completing âevery other act necessary to wind up and liquidate its business and affairs.â Â§ 7-80-803(1)(e), C.R.S. (2014). Persons winding up an LLC may âdischarge or provide for obligations of the limited liability company . . . .â Â§ 7-80-803.3(3), C.R.S. (2014). Members and managers of an LLC have a duty to (a) Account to the [LLC] and hold as trustee for it any property, profit, orÂ benefit derived by the member or manager in the conduct or winding upÂ of the [LLC] business . . . [and] (b) Refrain from dealing with the [LLC] in the conduct or winding up of the [LLC] business as or on behalf of a party having an interest adverse to the [LLC] . . . . Â§ 7-80-404(1)(a)â(b), C.R.S. (2014) (emphasis added). Members and managers are required to âdischarge [their] duties to the [LLC] and exercise any rights consistently with the contractual obligation of good faith and fair dealing.â Â§ 7-80-404(3). Â¶17Â Â Â Â Â Â Unlike Coloradoâs Uniform Partnership Law of 1931 (âUPLâ), Â§Â§ 7-60-101 to -154, C.R.S. (2014), the UPA, and the Model Act, the LLC Act does not contain any provision granting members, managers, or surviving partners the right to additional compensation for their services in winding up an LLC. However, an LLC âshall reimburse a person who is or was a member or manager for payments made . . . in theÂ ordinary course of the business of the [LLC] or for the preservation of its business or property . . . .â Â§ 7-80-407, C.R.S. (2014). Â¶18Â Â Â Â Â Â Members or managers may include in the operating agreement any provisions regarding âthe conduct of its business to the extent such provisions are consistent with law.â Â§ 7-80-108(1)(a), C.R.S. (2014). Operating agreements may be written or oral. Â§ 7-80-102(11)(a), C.R.S. (2014). The provisions of an operating agreement âshall control over any provision of this article to the contrary,â with limited exceptions. Â§ 7-80-108(1)(a). âTo the extent the operating agreement does not otherwise provide, this article shall control.â Id. To the extent that a member or manager or other person that is a party to,Â or is otherwise bound by, the operating agreement has duties, including, but not limited to, fiduciary duties, to a[n] [LLC] or to another member, manager, or other person that is a party to or is otherwise bound by an operating agreement, the duties of such member, manager, or other person may be restricted or eliminated by provisions in the operating agreement, as long as any such provision is not manifestly unreasonable. Â§ 7-80-108(1.5) (emphasis added).