(a) A member has the power to dissociate from a limited liability company at any time, rightfully or wrongfully, by express will.
lawyer at desk

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Hawaii Revised Statutes 428-602

  • Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
  • Business: includes every trade, occupation, profession, and other lawful purpose, whether or not carried on for profit. See Hawaii Revised Statutes 428-101
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Individual: means a natural person. See Hawaii Revised Statutes 428-101
  • Limited liability company: means a limited liability company organized under this chapter. See Hawaii Revised Statutes 428-101
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Operating agreement: means the agreement under section 428-103 concerning the relations among the members, managers, and limited liability company. See Hawaii Revised Statutes 428-101
(b) A member’s dissociation from a limited liability company is wrongful only if:

(1) It is in breach of an express provision of the operating agreement; or
(2) Before the expiration of the term of a company having a specified term:

(A) The member withdraws by express will;
(B) The member is expelled by judicial determination under section 428-601(5);
(C) The member is dissociated by becoming a debtor in bankruptcy; or
(D) In the case of a member who is not an individual, trust other than a business trust, or estate, the member is expelled or otherwise dissociated because it wilfully dissolved or terminated its existence.
(c) A member who wrongfully dissociates from a limited liability company is liable to the company and to the other members for damages caused by the dissociation. The liability is in addition to any other obligation of the member to the company or to the other members.
(d) If a limited liability company does not dissolve and wind up its business as a result of a member’s wrongful dissociation under subsection (b), damages sustained by the company for the wrongful dissociation shall be offset against distributions otherwise due the member after the dissociation.

  Previous
Next  
 Part VI Contents