Michigan Laws 450.4501 – Members; admission; liability for acts, debts, or obligations
Current as of: 2024 | Check for updates
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Terms Used In Michigan Laws 450.4501
- Contribution: means anything of value that a person contributes to the limited liability company as a prerequisite for, or in connection with, membership, including cash, property, services performed, or a promissory note or other binding obligation to contribute cash or property, or to perform services. See Michigan Laws 450.4102
- interest: means a member's rights in the limited liability company, including, but not limited to, any right to receive distributions of the limited liability company's assets and any right to vote or participate in management. See Michigan Laws 450.4102
- Member: means a person that has been admitted to a limited liability company as provided in section 501, or, in the case of a foreign limited liability company, a person that is a member of the foreign limited liability company in accordance with the laws under which the foreign limited liability company is organized. See Michigan Laws 450.4102
- 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 a written agreement by the member of a limited liability company that has 1 member, or between all of the members of a limited liability company that has more than 1 member, pertaining to the affairs of the limited liability company and the conduct of its business. See Michigan Laws 450.4102
- Person: means an individual, partnership, limited liability company, trust, custodian, estate, association, corporation, nonprofit corporation, governmental entity, or any other legal entity. See Michigan Laws 450.4102
- Vote: means an affirmative vote, approval, or consent. See Michigan Laws 450.4102
(1) A person may be admitted as a member of a limited liability company in connection with the formation of the limited liability company in any of the following ways:
(a) If an operating agreement includes requirements for admission, by complying with those requirements.
(b) If an operating agreement does not include requirements for admission, if either of the following are met:
(i) The person signs the initial operating agreement.
(ii) The person’s status as a member is reflected in the records, tax filings, or other written statements of the limited liability company.
(c) In any manner established in a written agreement of the members.
(2) A person may be admitted as a member of a limited liability company after the formation of the limited liability company in any of the following ways:
(a) If the person is acquiring a membership interest directly from the limited liability company, by complying with the provisions of an operating agreement prescribing the requirements for admission or, in the absence of provisions prescribing the requirements for admission in an operating agreement, upon the unanimous vote of the members entitled to vote.
(b) If the person is an assignee of a membership interest, as provided in section 506.
(c) If the person is becoming a member of a surviving limited liability company as the result of a merger or conversion approved under this act, as provided in the plan of merger or plan of conversion.
(3) A limited liability company may admit a person as a member that does not make a contribution or incur an obligation to make a contribution to the limited liability company.
(4) Unless otherwise provided by law or in an operating agreement, a person that is a member or manager, or both, of a limited liability company is not liable for the acts, debts, or obligations of the limited liability company.