2009 North Carolina Code
Chapter 57C - North Carolina Limited Liability Company Act.
§ 57C-3-02. Cessation of membership.

§ 57C‑3‑02.  Cessation of membership.

Unless otherwise provided in this Chapter, the articles of organization, or a written operating agreement, a person who has ceased to be a member shall have only the rights of an assignee as provided in G.S. 57C‑5‑02, but shall not be released from his liability to the limited liability company under G.S. 57C‑4‑02 (liability for contribution) and G.S. 57C‑4‑07 (liability upon wrongful distribution). A person ceases to be a member of a limited liability company upon the happening of any of the following events of withdrawal:

(1)        The person's voluntary withdrawal from the limited liability company as provided in G.S. 57C‑5‑06;

(2)        The person's removal as a member in accordance with the articles of organization or an operating agreement;

(3)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, the person's:

a.         Making an assignment for the benefit of creditors;

b.         Filing a voluntary petition in bankruptcy;

c.         Being adjudged bankrupt or insolvent or having entered against him an order for relief in any bankruptcy or insolvency proceeding;

d.         Filing a petition or answer seeking for him any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;

e.         Seeking, consenting to, or acquiescing in, the appointment of a trustee or receiver for, or liquidation of the person or of all or any substantial part of that person's properties; or

f.          Filing an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the person in any proceeding described in this subdivision;

(4)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, the continuation of any proceeding against the person seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation, for 120 days after the commencement thereof or the appointment of a trustee, receiver, or liquidator for the person or all or any substantial part of the person's properties without the person's agreement or acquiescence, which appointment is not vacated or stayed for 120 days or, if the appointment is stayed, for 120 days after the expiration of the stay during which period the appointment is not vacated;

(5)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, in the case of a member who is an individual, the individual's:

a.         Death; or

b.         Adjudication by a court of competent jurisdiction as incompetent to manage his person or property;

(6)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, in the case of a member who 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);

(7)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, in the case of a member that is a domestic or foreign partnership, a domestic or foreign limited partnership, or another domestic or foreign limited liability company, the dissolution and commencement of winding up of the partnership, limited partnership, or limited liability company;

(8)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, in the case of a member that is a domestic or foreign corporation, the dissolution of the corporation or the revocation of its charter; or

(9)        Unless otherwise provided in the articles of organization or a written operating agreement or with the consent of all other members, in the case of a member that is an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company. (1993, c. 354, s. 1; 1995, c. 351, ss. 5, 6; 2001‑387, s. 65.)