BILL NUMBER: AB 506	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Maienschein

                        FEBRUARY 23, 2015

   An act to amend Section 17706.03 of the Corporations Code,
relating to business.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 506, as introduced, Maienschein. Limited liability companies.
   Existing law, the California Revised Uniform Limited Liability
Company Act, authorizes one or more persons to form a limited
liability company by, among other things, signing and delivering
articles of organization with the Secretary of State. The act
authorizes a person, as defined, to dissociate as a member of a
limited liability company at any time by withdrawing as a member by
express will. The act deems a person to be dissociated from a limited
liability company upon the occurrence of certain events, including,
among others, an individual's death. The act provides the effects
when a person, including an individual, is dissociated from a limited
liability company.
   This bill would specify that upon dissociation a person's right to
vote as a member in the management and conduct of the limited
liability company's activities terminates. The bill would authorize,
if a member dies or a guardian or general conservator is appointed
for the member, the member's executor, administrator, guardian,
conservator, or other legal representative to exercise all of the
member's rights for the purpose of settling the member's estate or
administering the member's property, including any power the member
had under the articles of organization or an operating agreement to
give a transferee the right to become a member.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17706.03 of the Corporations Code is amended to
read:
   17706.03.  (a) When a person is dissociated as a member of a
limited liability company all of the following apply:
   (1) The person's right to  vote or  participate as a
member in the management and conduct of the limited liability company'
s activities terminates.
   (2) If the limited liability company is member-managed, the person'
s fiduciary duties as a member end with regard to matters arising
and events occurring after the person's dissociation.
   (3) Subject to Section 17705.04 and Article 10 (commencing with
Section 17710.01), any transferable interest owned by the person
immediately before dissociation in the person's capacity as a member
is owned by the person solely as a transferee.
   (b) A person's dissociation as a member of a limited liability
company does not of itself discharge the person from any debt,
obligation, or other liability to the limited liability company or
the other members that the person incurred while a member. 
   (c) If a member dies or a guardian or general conservator is
appointed for the member, the member's executor, administrator,
guardian, conservator, or other legal representative may exercise all
of the member's rights for the purpose of settling the member's
estate or administering the member's property, including any power
the member had under the articles of organization or an operating
agreement to give a transferee the right to become a member.