2005 North Carolina Code - General Statutes Article 6 - Dissolution.

Article 6.

Dissolution.

§ 57C‑6‑01.� Dissolution.

A limited liability company is dissolved and its affairs shall be wound up at or upon the first to occur of the following:

(1)������ The time specified in the articles of organization or a written operating agreement;

(2)������ The happening of an event specified in the articles of organization or a written operating agreement;

(3)������ The written consent of all members;

(4)������ Unless otherwise provided in the articles of organization or a written operating agreement, at such time that the limited liability company no longer has any members. The foregoing to the contrary notwithstanding, unless otherwise provided in the articles of organization or a written operating agreement, a limited liability company shall not be dissolved and is not required to be wound up by reason of any event of withdrawal of the last remaining member if, within 90 days after the event of withdrawal, the assignee or the fiduciary of the estate of the last remaining member agrees in writing that the business of the limited liability company may be continued until the admission of the assignee or the fiduciary of the estate of the member or its designee to the limited liability company as a member, effective as of the occurrence of the event that causes the withdrawal of the last remaining member; or

(5)������ Entry of a decree of judicial dissolution under G.S. 57C‑6‑02, or the filing by the Secretary of State of a certificate of dissolution under G.S. 57C‑6‑03. (1993, c. 354, s. 1; 1995, c. 351, s. 12; 1999‑189, s. 5.1; 2000‑140, s. 101(t).)

 

§ 57C‑6‑02.� Grounds for judicial dissolution.

The superior court may dissolve a limited liability company in a proceeding by the following:

(1)������ The Attorney General if it is established that (i) the limited liability company obtained its articles of organization through fraud; or (ii) the limited liability company has, after written notice by the Attorney General given at least 120 days prior thereto, continued to exceed or abuse the authority conferred upon it by law;

(2)������ A member if it is established that (i) the managers, directors, or any other persons in control of the limited liability company are deadlocked in the management of the affairs of the limited liability company, the members are unable to break the deadlock, and irreparable injury to the limited liability company is threatened or being suffered, or the business and affairs of the limited liability company can no longer be conducted to the advantage of the members generally, because of the deadlock; (ii) liquidation is reasonably necessary for the protection of the rights or interests of the complaining member, (iii) the assets of the limited liability company are being misapplied or wasted; or (iv) the articles of organization or a written operating agreement entitles the complaining member to dissolution of the limited liability company; or

(3)������ The limited liability company to have its voluntary dissolution continued under court supervision. (1993, c. 354, s. 1; 1995, c. 351, s. 11; 1999‑189, s. 5.2; 2000‑140, s. 101(t); 2001‑387, s. 73.)

 

§ 57C‑6‑02.1.� Procedure for judicial dissolution.

(a)������ Venue for a proceeding to dissolve a limited liability company lies in the county where the limited liability company's principal office (or, if none in this State, its registered office) is or was last located.

(b)������ It is not necessary to join members as parties to a proceeding to dissolve a limited liability company unless relief is sought against them individually, however the court shall order that appropriate notice of the dissolution proceeding be given to all members by the party initiating the proceeding.

(c)������ A court in a proceeding brought to dissolve a limited liability company may issue injunctions, appoint a receiver with all powers and duties the court directs, take other action required to preserve the assets of the limited liability company, wherever located, and carry on the business of the limited liability company.

(d)������ In any proceeding brought by a member under G.S. 57C‑6‑02(2)(ii) in which the court determines that dissolution would be appropriate, the court shall not order dissolution if, after the court's determination, the limited liability company elects to purchase the membership interest of the complaining member at its fair value, as determined in accordance with any procedures the court may provide. (1999‑189, s. 5.3; 2000‑140, s. 101(t).)

 

§ 57C‑6‑02.2.� Receivership.

(a)������ A court in a judicial proceeding brought to dissolve a limited liability company may appoint one or more receivers to wind up or to manage the business and affairs of the limited liability company. Before appointing a receiver, the court shall hold a hearing after notifying all parties to the proceeding and any interested persons designated by the court. The court appointing a receiver has exclusive jurisdiction over the limited liability company and all of its property, wherever located.

(b)������ The court may appoint an individual or other person as a receiver. The court may require the receiver to post bond, with or without sureties, in an amount the court directs.

(c)������ The court shall describe the powers and duties of the receiver in its appointing order, which may be amended from time to time. The powers may include the authority to:

(1)������ Dispose of all or any part of the assets of the limited liability company wherever located, at a public or private sale, if authorized by the court;

(2)������ Sue and defend in the receiver's own name as receiver of the limited liability company in all courts of this State; and

(3)������ Exercise all of the powers of the limited liability company, through or in place of its managers, to the extent necessary to manage the affairs of the limited liability company in the best interests of its members and creditors.

(d)������ From time to time during the receivership, the court may order compensation paid and expense disbursements or reimbursements made to the receiver and the receiver's counsel from the assets of the limited liability company or proceeds from the sale of the assets. (1999‑189, s. 5.4; 2000‑140, s. 101(t).)

 

§ 57C‑6‑02.3.� Decree of dissolution.

(a)������ If, after a hearing, the court determines that one or more grounds for judicial dissolution described in G.S. 57C‑6‑02 exist, it may enter a decree dissolving the limited liability company and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of State, who shall file it.

(b)������ After entering the decree of dissolution, the court shall direct the winding up of the limited liability company's business and affairs in accordance with G.S. 57C‑6‑04 and G.S. 57C‑6‑05 and the notification of claimants in accordance with G.S. 57C‑6‑07 and G.S. 57C‑6‑08. The limited liability company's name becomes available for use by another entity as provided in G.S. 55D‑21. (1999‑189, s. 5.5; 2000‑140, s. 101(t); 2001‑358, s. 31; 2001‑387, ss. 173, 175(a); 2001‑413, s. 6.)

 

§ 57C‑6‑03.� Administrative dissolution.

(a)������ The Secretary of State may administratively dissolve a limited liability company if the Secretary of State determines that:

(1)������ The limited liability company has not paid within 60 days after they are due any penalties, fees, or other payments due under this Chapter;

(2)������ The limited liability company does not deliver its annual report to the Secretary of State on or before the date it is due;

(3)������ The limited liability company has been without a registered agent or registered office in this State for 60 days or more;

(4)������ The limited liability company has not notified the Secretary of State within 60 days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued; or

(5)������ The limited liability company's period of duration stated in its articles of organization has expired.

(b)������ If the Secretary of State determines that one or more grounds exist under subsection (a) of this section for dissolving a limited liability company, the Secretary of State shall mail the limited liability company written notice of that determination. If, within 60 days after the notice is mailed, the limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the Secretary of State that each ground does not exist, the Secretary of State shall administratively dissolve a limited liability company by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The Secretary of State shall file the original certificate of dissolution and mail a copy to the limited liability company.

(c)������ A limited liability company administratively dissolved under this section may apply to the Secretary of State for reinstatement. The procedures for reinstatement and for the appeal of any denial of the limited liability company's application for reinstatement shall be the same procedures applicable to corporations under G.S. 55‑14‑22, 55‑14‑23, and 55‑14‑24. If, at the time the limited liability company applies for reinstatement, the name of the limited liability company is not distinguishable from the name of another entity authorized to be used under G.S. 55D‑21, then the limited liability company must change its name to a name that is distinguishable upon the records of the Secretary of State from the name of the other entity before the Secretary of State may prepare a certificate of reinstatement. The effect of reinstatement of a limited liability company shall be the same as for a corporation under G.S. 55‑14‑22. (1993, c. 354, s. 1; 1996, 2nd Ex. Sess., c. 17, s. 15.1(e); 1997‑485, s. 3; 2001‑387, s. 74; 2001‑390, s. 11; 2001‑413, s. 7.4; 2001‑487, s. 62(ee).)

 

§ 57C‑6‑03.1.� Repealed by Session Laws 1998‑228, s. 17.

 

§ 57C‑6‑04.� Winding up.

(a)������ Except as otherwise provided in this Chapter, the articles of organization, or a written operating agreement, the managers shall wind up the limited liability company's affairs following its dissolution. If the dissolved limited liability company has no managers, and provision is not otherwise made in the articles of organization or a written operating agreement, the legal representative of or successor to the last remaining member may wind up the limited liability company's affairs. The court may wind up the limited liability company's affairs, or appoint a person to wind up its affairs, on application of any member, his legal representative, or assignee.

(b)������ As promptly as reasonably possible following dissolution as is consistent with obtaining the fair market value for the limited liability company's assets, the persons charged with winding up the limited liability company shall collect its assets, dispose of its properties that will not be distributed in kind to its members, discharge or make provision for discharging its liabilities, and distribute its remaining assets as provided in G.S. 57C‑6‑05. The limited liability company shall continue in existence following its dissolution and during its winding up, but shall carry on only that business appropriate to wind up and liquidate its business and affairs.

(c)������ The dissolution of the limited liability company does not transfer title to its assets, prevent assignment of its member interests, subject its managers to standards of conduct different from those prescribed in Article 3 of this Chapter, change any provisions of its operating agreement except as provided in subsection (b) of this section, prevent commencement of a proceeding by or against the limited liability company in its own name, abate or suspend a proceeding by or against the limited liability company, or terminate the authority of the registered agent of the limited liability company. (1993, c. 354, s. 1; 2001‑387, s. 75.)

 

§ 57C‑6‑05.� Distribution of assets.

Upon the winding up of a limited liability company, its assets shall be applied as follows:

(1)������ To creditors, including members who are creditors, to the extent permitted by law, in satisfaction of liabilities of the limited liability company other than liabilities for distributions to members under G.S. 57C‑4‑04;

(2)������ Except as provided in the articles of organization or a written operating agreement, to members or former members in satisfaction of liabilities for distributions under G.S. 57C‑4‑04; and

(3)������ Except as provided in the articles of organization or a written operating agreement, by distribution to the members and to any former member whose event of withdrawal resulted in the dissolution in proportion to the agreed value, as stated in the limited liability company records required to be kept pursuant to G.S. 57C‑3‑04(a)(5), of the contributions made by each such member and former member, after such agreed values are adjusted by: (i) adding thereto the person's share of the profits of the limited liability company, and (ii) deducting therefrom the person's share of the losses of the limited liability company and all distributions previously received by the person. (1993, c. 354, s. 1.)

 

§ 57C‑6‑06.� Articles of dissolution.

Upon the dissolution and the commencement of winding up of the limited liability company, articles of dissolution shall be filed in the Office of the Secretary of State and shall set forth:

(1)������ The name of the limited liability company;

(2)������ The dates of filing of its articles of organization and all amendments thereto;

(3)������ The reason for filing the articles of dissolution;

(4)������ The effective date (which shall be a date certain) of the dissolution, as determined in accordance with G.S. 57C‑6‑01; and

(5)������ Any other information the managers filing the articles of dissolution determine. (1993, c. 354, s. 1; 2001‑387, s. 76.)

 

§ 57C‑6‑06.1.� Cancellation of articles of dissolution.

After the filing of articles of dissolution by a limited liability company dissolved pursuant to G.S. 57C‑6‑01(4) because of the happening of an event of withdrawal, the articles of dissolution may be cancelled if, within 90 days after the event of withdrawal, all remaining members agree in writing that the business of the limited liability company should be continued and the limited liability company files articles of cancellation with the Secretary of State. The articles of cancellation shall set forth:

(1)������ The name of the limited liability company;

(2)������ The date of the event of withdrawal described in the articles of dissolution;

(3)������ The date of filing of the company's articles of dissolution;

(4)������ A statement that within 90 days after the event of withdrawal all remaining members have agreed in writing that the business of the limited liability company may be continued; and

(5)������ Any other information the managers filing the articles of cancellation determine. (1997‑485, s. 19; 2001‑387, s. 77.)

 

§ 57C‑6‑07.� Known claims against dissolved limited liability company.

(a)������ A dissolved limited liability company may dispose of the known claims against it by following the procedure described in this section.

(b)������ The dissolved limited liability company shall notify its known claimants in writing of the dissolution at any time after it has filed its articles of dissolution.� The written notice must:

(1)������ Describe information that must be included in a claim;

(2)������ Provide a mailing address where claims may be sent;

(3)������ State the deadline, which may not be fewer than 120 days from the date of the written notice, by which the dissolved limited liability company must receive the claim; and

(4)������ State that the claim will be barred if not received by the deadline.

(c)������ A claim against the dissolved limited liability company is barred:

(1)������ If the limited liability company does not receive the claim by the deadline from a claimant who received written notice under subsection (b) of this section; or

(2)������ If a claimant whose claim was rejected by written notice from the dissolved limited liability company does not commence a proceeding to enforce the claim within 90 days from the date of receipt of the rejection notice.

(d)������ For purposes of this section, "claim" does not include a contingent liability or a claim based on an event occurring after the filing of the articles of dissolution. (1993, c. 354, s. 1.)

 

§ 57C‑6‑08.� Unknown and certain other claims against dissolved limited liability company.

(a)������ A dissolved limited liability company that has filed articles of dissolution may also publish notice of its dissolution and request that persons with claims against the limited liability company present them in accordance with the notice.

(b)������ The notice must:

(1)������ Be published one time in a newspaper of general circulation in the county where the dissolved limited liability company's principal office (or, if none in this State, its registered office) is or was last located;

(2)������ Describe the information that must be included in a claim and provide a mailing address where the claim may be sent; and

(3)������ State that a claim against the limited liability company will be barred unless a proceeding to enforce the claim is commenced within five years after the publication of the notice.

(c)������ If the dissolved limited liability company publishes a newspaper notice in accordance with subsections (a) and (b) of this section, the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved limited liability company within five years after the publication date of the newspaper notice:

(1)������ A claimant who was known but did not receive written notice under G.S. 57C‑6‑07;

(2)������ A claimant whose claim was timely sent to the dissolved limited liability company but not acted on; or

(3)������ A claimant whose claim is contingent or based on an event occurring after the filing of the articles of dissolution. (1993, c. 354, s. 1.)

 

§ 57C‑6‑09.� Enforcement of claims.

(a)������ A claim under G.S. 57C‑6‑07 or G.S. 57C‑6‑08 may be enforced:

(1)������ Against the dissolved limited liability company, to the extent of its undistributed assets, including coverage under any applicable insurance policy; or

(2)������ If the assets have been distributed in winding up, against a member of the dissolved limited liability company to the extent of his pro rata share of the claim or the limited liability company assets distributed to him in winding up, whichever is less, but a member's total liability for all claims under this section may not exceed the total amount of assets distributed to him.

(b)������ Nothing in G.S. 57C‑6‑07 or G.S. 57C‑6‑08 shall extend any applicable period of limitation. (1993, c. 354, s. 1.)