Nebraska Statutes 21-138. Standards of conduct for members andmanagers
(RULLCA 409) (a) A member of a member-managed limited liability company owes to the company and, subject to subsection (b) of section 21-164, the other members the fiduciary duties of loyalty and care stated in subsections (b) and (c) of this section.
Terms Used In Nebraska Statutes 21-138
- Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes. The formal federal spending process consists of two sequential steps: authorization
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Company: shall include any corporation, partnership, limited liability company, joint-stock company, joint venture, or association. See Nebraska Statutes 49-801
- Company shall: include any corporation, partnership, limited liability company, joint-stock company, joint venture, or association. See Nebraska Statutes 49-801
- Fiduciary: A trustee, executor, or administrator.
- 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.
- Person: shall include bodies politic and corporate, societies, communities, the public generally, individuals, partnerships, limited liability companies, joint-stock companies, and associations. See Nebraska Statutes 49-801
- Trustee: A person or institution holding and administering property in trust.
- Violate: shall include failure to comply with. See Nebraska Statutes 49-801
(b) The duty of loyalty of a member in a member-managed limited liability company includes the duties:
(1) to account to the company and to hold as trustee for it any property, profit, or benefit derived by the member:
(A) in the conduct or winding up of the company’s activities;
(B) from a use by the member of the company’s property; or
(C) from the appropriation of a limited liability company opportunity;
(2) to refrain from dealing with the company in the conduct or winding up of the company’s activities as or on behalf of a person having an interest adverse to the company; and
(3) to refrain from competing with the company in the conduct of the company’s activities before the dissolution of the company.
(c) Subject to the business judgment rule, the duty of care of a member of a member-managed limited liability company in the conduct and winding up of the company’s activities is to act with the care that a person in a like position would reasonably exercise under similar circumstances and in a manner the member reasonably believes to be in the best interests of the company. In discharging this duty, a member may rely in good faith upon opinions, reports, statements, or other information provided by another person that the member reasonably believes is a competent and reliable source for the information.
(d) A member in a member-managed limited liability company or a manager-managed limited liability company shall discharge the duties under the Nebraska Uniform Limited Liability Company Act or under the operating agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.
(e) It is a defense to a claim under subdivision (b)(2) of this section and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.
(f) All of the members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.
(g) In a manager-managed limited liability company, the following rules apply:
(1) Subsections (a), (b), (c), and (e) of this section apply to the manager or managers and not the members.
(2) The duty stated under subdivision (b)(3) of this section continues until winding up is completed.
(3) Subsection (d) of this section applies to the members and managers.
(4) Subsection (f) of this section applies only to the members.
(5) A member does not have any fiduciary duty to the company or to any other member solely by reason of being a member.