2011 California Code
Corporations Code
TITLE 2.5. LIMITED LIABILITY COMPANIES [17000 - 17656]
CHAPTER 13. Dissenting Members Rights
Section 17601
(a) If the approval of outstanding membership interests is required for a limited liability company to participate in a reorganization, pursuant to the operating agreement of the limited liability company, or otherwise, then each member of the limited liability company holding those membership interests may, by complying with this chapter, require the limited liability company to purchase for cash, at its fair market value, the interest owned by the member in the limited liability company, if the interest is a dissenting interest as defined in subdivision (b). The fair market value shall be determined as of the day before the first announcement of the terms of the proposed reorganization, excluding any appreciation or depreciation in consequence of the proposed reorganization unless exclusion would be inequitable.
(b) As used in this chapter, dissenting interest means a membership interest that satisfies all of the following conditions:
(1) The membership interest was outstanding on the date for the determination of members entitled to vote on the reorganization.
(2) (A) The membership interest was not voted in favor of the reorganization, or (B) the membership interest was voted against the reorganization; provided, however, that subparagraph (A) rather than subparagraph (B) of this paragraph applies in any event where the approval for the proposed reorganization is sought by written consent rather than at a meeting.
(3) That the member has demanded that the limited liability company purchase at its fair market value in accordance with Section 17602.
(4) That the member submits for endorsement, if applicable, in accordance with Section 17603.
(c) As used in this chapter, dissenting member means the recordholder of a dissenting interest, and includes an assignee of record of that interest.
(Added by Stats. 1994, Ch. 1200, Sec. 27. Effective September 30, 1994.)
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