35-8-802. Events of dissociation. (1) A person ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:
     (a) the member withdraws by voluntary act from the limited liability company as provided in subsection (3);
     (b) the member ceases to be a member of the limited liability company as provided in 35-8-706;
     (c) the member is removed as a member:
     (i) in accordance with the articles of organization or the operating agreement; or
     (ii) subject to contrary written provisions in the articles of organization or the operating agreement, by an affirmative vote of a majority of the members who have not assigned their interests when the member assigns all the member's interest in the limited liability company;
     (d) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, the member:
     (i) makes an assignment for the benefit of creditors;
     (ii) files a voluntary petition in bankruptcy;
     (iii) is adjudicated as bankrupt or insolvent;
     (iv) files a petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;
     (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding under subsection (1)(d); or
     (vi) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of the member or of any substantial part of the member's properties;
     (e) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time if:
     (i) 120 days after the commencement of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, the proceeding has not been dismissed;
     (ii) within 90 days after the appointment without the member's consent or acquiescence of a trustee, receiver, or liquidator of the member or of any substantial part of the member's properties, the appointment is not vacated or stayed; or
     (iii) within 90 days after the expiration of any stay, the appointment is not vacated;
     (f) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, in the case of a member who is an individual:
     (i) the member's death; or
     (ii) the entry of an order by a court of competent jurisdiction adjudicating the member incompetent to manage the member's person or estate;
     (g) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, in the case of a member who is a trustee or is acting as a member by virtue of being a trustee of a trust, the termination of the trust but not merely the substitution of a new trustee;
     (h) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, in the case of a member that is a separate limited liability company, the dissolution and commencement of winding up of the separate limited liability company;
     (i) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, in the case of a member that is a corporation, the filing of articles of dissolution, or the equivalent for the corporation, or involuntary dissolution and the lapse of 90 days after notice to the corporation of revocation without a reinstatement of its charter;
     (j) subject to contrary written provisions in the articles of organization or the operating agreement or written consent of all members at the time, in the case of an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company; or
     (k) if the limited liability company is a professional limited liability company, a member becomes a disqualified person.
     (2) The members may provide in writing in the articles of organization or the operating agreement for other events that result in a person ceasing to be a member of the limited liability company.
     (3) Unless the articles of organization or the operating agreement provides in writing that a member may not withdraw by voluntary act from a limited liability company, the member may withdraw at any time by giving 30 days' written notice to the other members or other notice required in the articles of organization or the operating agreement. Unless otherwise provided in the articles of organization or the operating agreement, in the case of a limited liability company for a definite term or particular undertaking, a withdrawal by a member before the expiration of that term is a breach of the articles of organization or the operating agreement. If a member has the power to withdraw but the withdrawal violates a provision of the articles of organization or is a breach of the operating agreement or the withdrawal occurs as a result of otherwise wrongful conduct of the member, the limited liability company may:
     (a) recover from the withdrawing member damages for violation of the articles of organization or for breach of the operating agreement, including the reasonable cost of obtaining replacement of the services the withdrawn member was obligated to perform;
     (b) offset the damages against the amount otherwise distributable to the member; and
     (c) pursue any other remedies provided for in the articles of organization or the operating agreement or otherwise available under applicable law.

     History: En. Sec. 45, Ch. 120, L. 1993.