2011 California Code
Corporations Code
TITLE 2.5. LIMITED LIABILITY COMPANIES [17000 - 17656]
CHAPTER 3. Members
Section 17100

(a) After formation of a limited liability company, a person may become a member:

(1) In the case of a person acquiring a membership interest directly from the limited liability company, at the time provided in and upon compliance with the articles of organization or the operating agreement or, if the articles of organization or operating agreement do not so provide, only upon the vote of a majority in interest of the members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the operating agreement.

(2) In the case of an assignee of a membership interest, upon compliance with subdivision (a) of Section 17303 and at the time provided in and upon compliance with the articles of organization or the operating agreement or, if the articles of organization or operating agreement do not so provide, when the assignee becomes a party to the operating agreement.

(b) In each case under subdivision (a), the person acquiring the membership interest shall be added as a member to the list required by paragraph (1) of subdivision (a) of Section 17058.

(c) The operating agreement may provide for the termination in whole or in part of the membership interest or economic interest of a member in the limited liability company. If a member s economic interest in the limited liability company is terminated pursuant to the operating agreement, the member may demand and shall be entitled to receive a return of that member s contribution. Any provision in an operating agreement governing the termination of a member s interest and the return of a member s contribution shall be enforceable in accordance with its terms unless the member seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the agreement was made. Upon any termination of a membership interest, the list required by paragraph (1) of subdivision (a) of Section 17058 shall be amended accordingly.

(d) Sections 406 and 407 of the Labor Code shall not apply to membership interests issued by any foreign or domestic limited liability company to the following persons:

(1) Any employee of the limited liability company or of any parent or subsidiary thereof, pursuant to a membership interest purchase plan or agreement or membership interest option plan or agreement.

(2) In any transaction in connection with securing employment, to a person, who is or is about to become an officer of the limited liability company or a manager (as appointed or elected by the members) of the limited liability company, or of any parent or subsidiary thereof.

(Amended by Stats. 1996, Ch. 57, Sec. 10. Effective June 6, 1996.)