Ala. Code § 10A-5A-5.02

Current through the 2024 Regular Session.

Section 10A-5A-5.02 - Transfer of transferable interest

(a) A transfer, in whole or in part, of a transferable interest:

(1) is permissible;

(2)

(A) does not by itself cause a member to cease to be a member of the limited liability company; and

(B) does not by itself cause a member to cease to be associated with a series of the limited liability company;

(3) does not by itself cause a dissolution and winding up of the limited liability company, or a series thereof; and

(4) subject to Section 10A-5A-5.04, does not entitle the transferee to:

(A) participate in the direction or oversight of the activities and affairs of the limited liability company, or a series thereof; or

(B) have access to records or other information concerning the activities and affairs of the limited liability company, or a series thereof.

(b) A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.

(c) A transferable interest may be evidenced by a certificate of transferable interest issued by the limited liability company, or a series thereof. A limited liability company agreement may provide for the transfer of the transferable interest represented by the certificate and make other provisions with respect to the certificate. No certificate of transferable interest shall be issued in bearer form.

(d) A limited liability company, or a series thereof, need not give effect to a transferee's rights under this section until the limited liability company, or a series thereof, has notice of the transfer.

(e) Except as otherwise provided in Sections 10A-5A-6.02(d)(2), 10A-5A-6.02(k), and 10A-5A-6.02(l) when a member transfers a transferable interest, the transferor retains the rights of a member other than the right to distributions transferred and retains all duties and obligations of a member.

(f) When a member transfers a transferable interest to a person that is admitted as a member with respect to the transferred interest, the transferee is liable for the member's obligations under Sections 10A-5A-4.04, 10A-5A-4.06(a)(2), and 10A-5A-4.06(b)(2) to the extent that the obligations are known to the transferee when the transferee voluntarily accepts admission as a member.

Ala. Code § 10A-5A-5.02 (1975)

Added by Act 2014-144,§ 1, eff. 1/1/2015.