Ohio Code 1706.41 – Wrongful dissociation
(A) A person shall not voluntarily dissociate from a limited liability company.
Terms Used In Ohio Code 1706.41
- Assignment: means a transfer, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law. See Ohio Code 1706.01
- 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.
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Member: means a person that has been admitted as a member of a limited liability company under section 1706. See Ohio Code 1706.01
- 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: includes any amendments to the operating agreement. See Ohio Code 1706.01
- Person: means an individual, entity, trust, estate, government, custodian, nominee, trustee, personal representative, fiduciary, or any other individual, entity, or series thereof in its own or any representative capacity, in each case, whether foreign or domestic. See Ohio Code 1706.01
- Tribunal: means a court or, if provided in the operating agreement or otherwise agreed, an arbitrator, arbitration panel, or other tribunal. See Ohio Code 1706.01
(B) A person’s dissociation from a limited liability company is wrongful only if one of the following applies:
(1) The dissociation is in breach of an express provision of the operating agreement.
(2) The person is expelled as a member by a determination of a tribunal under division (D) of section 1706.411 of the Revised Code.
(3) The person is dissociated by becoming a debtor in bankruptcy or making a general assignment for the benefit of creditors.
(C) A person that wrongfully dissociates as a member is liable to the limited liability company and, subject to section 1706.61 of the Revised Code, to the other members for damages caused by the dissociation. The liability is in addition to any other debt, obligation, or liability of the member to the limited liability company or the other members.