New Jersey Statutes 42:2C-42. Transfer of transferable interest
Terms Used In New Jersey Statutes 42:2C-42
- person: includes corporations, companies, associations, societies, firms, partnerships and joint stock companies as well as individuals, unless restricted by the context to an individual as distinguished from a corporate entity or specifically restricted to one or some of the above enumerated synonyms and, when used to designate the owner of property which may be the subject of an offense, includes this State, the United States, any other State of the United States as defined infra and any foreign country or government lawfully owning or possessing property within this State. See New Jersey Statutes 1:1-2
a. A transfer, in whole or in part, of a transferable interest:
(1) is permissible;
(2) does not by itself cause a member’s dissociation or a dissolution and winding up of the limited liability company’s activities; and
(3) subject to section 44 of this act, does not entitle the transferee to:
(a) participate in the management or conduct of the company’s activities; or
(b) except as otherwise provided in subsection c. of this section, have access to records or other information concerning the company’s activities.
b. A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.
c. In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the company’s transactions only from the date of dissolution.
d. A transferable interest may be evidenced by a certificate of the interest issued by the limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.
e. A limited liability company need not give effect to a transferee’s rights under this section until the company has notice of the transfer.
f. A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective as to a person having notice of the restriction at the time of transfer.
g. Except as otherwise provided in paragraph (2) of subsection d. of section 46 of this act, when a member transfers a transferable interest, the transferor retains the rights of a member other than the interest in distributions transferred and retains all duties and obligations of a member.
h. When a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member’s obligations known to the transferee when the transferee becomes a member.
L.2012, c.50, s.42; amended 2013, c.276, s.5.