This chapter may be cited as the "Uniform Limited Liability Company Act of 2010".
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 101 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
For the purposes of this chapter, the term:
(1) "Certificate of organization" means the certificate required by § 29- 802.01. The term "certificate of organization" shall include the certificate as amended or restated.
(2) "Contribution" means any benefit provided by a person to a limited liability company:
(A) To become a member upon formation of the company and in accordance with an agreement between or among the persons that have agreed to become the initial members of the company;
(B) To become a member after formation of the company and in accordance with an agreement between the person and the company; or
(C) In the person's capacity as a member and in accordance with the operating agreement or an agreement between the member and the company.
(3) "Distribution", except as otherwise provided in § 29-804.05(g), means a transfer of money or other property from a limited liability company to another person on account of a transferable interest.
(4) "Effective", with respect to a record required or permitted to be delivered to the Mayor for filing under this chapter, means effective under § 29- 102.03.
(5) "Foreign limited liability company" means an unincorporated entity formed under the law of a jurisdiction other than the District and denominated by that law as a limited liability company.
(6) "Manager" means a person that under the operating agreement of a manager-managed limited liability company is responsible, alone or in concert with others, for performing the management functions stated in § 29-804.07(c).
(7) "Manager-managed limited liability company" means a limited liability company that qualifies under § 29-804.07(a).
(8) "Member" means a person that has become a member of a limited liability company under § 29-804.01 and has not dissociated under § 29-806.02.
(9) "Member-managed limited liability company" means a limited liability company that is not a manager-managed limited liability company.
(10) "Operating agreement" means the agreement, whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in § 29-801.07. The term includes the agreement as amended or restated.
(11) "Organizer" means a person that acts under § 29-802.01 to form a limited liability company.
(12) "Transferee" means a person to which all or part of a transferable interest has been transferred, whether or not the transferor is a member.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 102 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) A person knows a fact when the person:
(1) Has actual knowledge of it; or
(2) Is deemed to know it under subsection (d)(1) of this section or law other than this chapter.
(b) A person has notice of a fact when the person:
(1) Has reason to know the fact from all of the facts known to the person at the time in question; or
(2) Is deemed to have notice of the fact under subsection (d)(2) of this section;
(c) A person notifies another of a fact by taking steps reasonably required to inform the other person in ordinary course, whether or not the other person knows the fact.
(d) A person that is not a member shall be deemed to:
(1) Know of a limitation on authority to transfer real property as provided in § 29-803.02(g); and
(2) Have notice of a limited liability company's:
(A) Dissolution, 90 days after a statement of dissolution under § 29-807. 02(b)(2)(A) becomes effective;
(B) Termination, 90 days after a statement of termination § 29- 807.02(b)(2)(F) becomes effective; and
(C) Merger or domestication, 90 days after articles of merger or domestication under subchapter IX of this chapter becomes effective.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 103 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) A limited liability company is an entity distinct from its members.
(b) A limited liability company may have any lawful purpose, regardless of whether for profit.
(c) A limited liability company shall have perpetual duration.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 104 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
A limited liability company shall have the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 105 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
The law of the District shall govern:
(1) The internal affairs of a limited liability company; and
(2) The liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 106 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) Except as otherwise provided in subsections (b) and (c) of this section, the operating agreement shall govern:
(1) Relations among the members as members and between the members and the limited liability company;
(2) The rights and duties under this chapter of a person in the capacity of manager;
(3) The activities of the company and the conduct of those activities; and
(4) The means and conditions for amending the operating agreement.
(b) To the extent the operating agreement does not otherwise provide for a matter described in subsection (a) of this section, this chapter shall govern the matter.
(c) An operating agreement shall not:
(1) Vary a limited liability company's capacity under § 29-801.05 to sue and be sued in its own name;
(2) Vary the law applicable under § 29-801.06;
(3) Vary the power of the court under § 29-802.04;
(4) Subject to subsections (d) through (g) of this section, eliminate the duty of loyalty, the duty of care, or any other fiduciary duty;
(5) Subject to subsections (d) through (g) of this section, eliminate the contractual obligation of good faith and fair dealing under § 29-804.09(d);
(6) Unreasonably restrict the duties and rights stated in § 29-804.10;
(7) Vary the power of a court to decree dissolution in the circumstances specified in § 29-807.01(a)(4) and (5);
(8) Vary the requirement to wind up a limited liability company's business as specified in § 29-807.02(a) and (b)(1);
(9) Unreasonably restrict the right of a member to maintain an action under Subchapter 8 of this chapter;
(10) Restrict the right to approve a merger or domestication under § 29- 809.10 or Chapter 2 of this title of a member that will have personal liability with respect to a surviving, converted, or domesticated organization; or
(11) Except as otherwise provided in § 29-801.09(b), restrict the rights under this chapter of a person other than a member or manager.
(d) If not manifestly unreasonable, the operating agreement may:
(1) Restrict or eliminate the duty:
(A) As required in § 29-804.09(b)(1) and (g), to account to the limited liability company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company's business, from a use by the member of the company's property, or from the appropriation of a limited liability company opportunity;
(B) As required in § 29-804.09(b)(2) and (g), to refrain from dealing with the company in the conduct or winding up of the company's business as or on behalf of a party having an interest adverse to the company; and
(C) As required by § 29-804.09(b)(3) and (g), to refrain from competing with the company in the conduct of the company's business before the dissolution of the company;
(2) Identify specific types or categories of activities that do not violate the duty of loyalty;
(3) Alter the duty of care, except to authorize intentional misconduct or knowing violation of law;
(4) Alter any other fiduciary duty, including eliminating particular aspects of that duty; and
(5) Prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under § 29-804.09(d).
(e) The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.
(f) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under this chapter and imposes the responsibility on one or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility.
(g) The operating agreement may alter or eliminate the indemnification for a member or manager provided by § 29-804.08(a) and may eliminate or limit a member or manager's liability to the limited liability company and members for money damages, except for:
(1) Breach of the duty of loyalty;
(2) A financial benefit received by the member or manager to which the member or manager is not entitled;
(3) A breach of a duty under § 29-804.06;
(4) Intentional infliction of harm on the company or a member; or
(5) An intentional violation of criminal law.
(h) The Superior Court shall decide any claim under subsection (d) of this section that a term of an operating agreement is manifestly unreasonable. The court:
(1) Shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
(2) May invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:
(A) The objective of the term is unreasonable; or
(B) The term is an unreasonable means to achieve the provision's objective.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 110 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) A limited liability company shall be bound by, and may enforce, the operating agreement, whether or not the company has itself manifested assent to the operating agreement.
(b) A person that becomes a member of a limited liability company shall be deemed to assent to the operating agreement.
(c) Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that upon the formation of the company the agreement will become the operating agreement. One person intending to become the initial member of a limited liability company may assent to terms providing that, upon the formation of the company, the terms will become the operating agreement.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 111 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
(a) An operating agreement may specify that its amendment requires the approval of a person that is not a party to the operating agreement or the satisfaction of a condition. An amendment shall be ineffective if its adoption does not include the required approval or satisfy the specified condition.
(b) The obligations of a limited liability company and its members to a person in the person's capacity as a transferee or dissociated member shall be governed by the operating agreement. Subject only to any court order issued under § 29-805.03(b)(2) to effectuate a charging order, an amendment to the operating agreement made after a person becomes a transferee or dissociated member shall be effective with regard to any debt, obligation, or other liability of the limited liability company or its members to the person in the person's capacity as a transferee or dissociated member.
(c) If a record that has been delivered by a limited liability company to the Mayor for filing and has become effective under this chapter contains a provision that would be ineffective under § 29-801.07(c) if contained in the operating agreement, the provision shall likewise be ineffective in the record.
(d) Subject to subsection (c) of this section, if a record that has been delivered by a limited liability company to the Mayor for filing and has become effective under this chapter conflicts with a provision of the operating agreement:
(1) The operating agreement shall prevail as to members, dissociated members, transferees, and managers; and
(2) The record shall prevail as to other persons to the extent they reasonably rely on the record.
(July 2, 2011, D.C. Law 18-378, § 2, 58 DCR 1720.)
HISTORICAL AND STATUTORY NOTES
Legislative History of Laws
For history of Law 18-378, see notes under § 29-101.01.
Uniform Law
This section is based on § 112 of the Uniform Limited Company Act (2006 Act). See Vol. 6B , Uniform Laws Annotated, Master Edition or ULA Database on Westlaw.
