(a) A transferee of a distributional interest may become a member of a limited liability company if and to the extent that the transferor gives the transferee such a right in accordance with authority described in the operating agreement or all of the other members consent.
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Terms Used In Hawaii Revised Statutes 428-503

  • Business: includes every trade, occupation, profession, and other lawful purpose, whether or not carried on for profit. See Hawaii Revised Statutes 428-101
  • Distributional interest: means all of a member's interest in distributions by the limited liability company. See Hawaii Revised Statutes 428-101
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • 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
  • Transfer: includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, and gift. See Hawaii Revised Statutes 428-101
(b) A transferee who has become a member, to the extent transferred, has the rights and powers, and is subject to the restrictions and liabilities, of a member under the operating agreement of a limited liability company and this chapter. A transferee who becomes a member also is liable for the transferor member’s obligations to make contributions under section 428-402 and for obligations under § 428-407 to return unlawful distributions; provided that the transferee shall not be obligated for the transferor member’s liabilities unknown to the transferee at the time the transferee becomes a member and shall not be personally liable for any obligation of the company incurred before the transferee’s admission as a member.
(c) Regardless of whether a transferee of a distributional interest becomes a member under subsection (a), the transferor shall not be released from liability to the limited liability company under the operating agreement or this chapter.
(d) A transferee who does not become a member is not entitled to participate in the management or conduct of the limited liability company’s business, require access to information concerning the company’s transactions, or inspect or copy any of the company’s records.
(e) A transferee who does not become a member is entitled to:

(1) Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;
(2) Receive, upon dissolution and winding up of the limited liability company’s business:

(A) In accordance with the transfer, the net amount otherwise distributable to the transferor; and
(B) A statement of account only from the date of the latest statement of account agreed to by all the members; and
(3) Seek under section 428-801(5), a judicial determination that it is equitable to dissolve and wind up the company’s business.
(f) A limited liability company need not give effect to a transfer until the company has notice of the transfer.

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