Montana Code 35-8-804. Member’s power to dissociate — wrongful dissociation
35-8-804. Member’s power to dissociate — wrongful dissociation. (1) Unless otherwise provided in the operating agreement, a member has the power to dissociate from a limited liability company at any time, rightfully or wrongfully, pursuant to 35-8-803(1)(a).
Terms Used In Montana Code 35-8-804
- 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, or other lawful purpose, whether or not carried on for profit. See Montana Code 35-8-102
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Member: means a person who has been admitted to membership in a limited liability company, as provided in 35-8-703, and who has not dissociated from the limited liability company. See Montana Code 35-8-102
- 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 an agreement, including amendments, as to the conduct of the business and affairs of a limited liability company and the relations among the members, managers, and the company that is binding upon all of the members. See Montana Code 35-8-102
- Term company: means a limited liability company designated as a term company in its articles of organization. See Montana Code 35-8-102
- Willfully: when applied to the intent with which an act is done or omitted, means a purpose or willingness to commit the act or make the omission referred to. See Montana Code 1-1-204
(2)If the operating agreement has not eliminated a member’s power to dissociate, the member’s dissociation from a limited liability company is wrongful only if:
(a)it is in breach of an express provision of the agreement; or
(b)before the expiration of the specified term of a term company:
(i)the member withdraws by express will;
(ii)the member is expelled by judicial determination under 35-8-803(1)(f);
(iii)the member is dissociated by becoming a debtor in bankruptcy; or
(iv)in the case of a member that is not an individual, trust, other than a business trust, or estate, the member is expelled or otherwise dissociated because it willfully dissolved or terminated its existence.
(3)A member that 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.
(4)If a limited liability company does not dissolve and wind up its business as a result of a member’s wrongful dissociation under subsection (2), damages sustained by the company for the wrongful dissociation must be offset against distributions otherwise due the member after the dissociation.