Assignment of Limited Liability Company Interest

  1. Law
  2. Georgia Code
  3. Corporations, Partnerships, and Associations
  4. Limited Liability Companies
  5. Limited Liability Company Interests; Admission of Members
  6. Assignment of Limited Liability Company Interest

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Except as otherwise provided in the articles of organization or a written operating agreement:

  1. A limited liability company interest is assignable in whole or in part;
  2. An assignment entitles the assignee to share in the profits and losses and to receive the distributions to which the assignor was entitled, to the extent assigned;
  3. An assignment of a limited liability company interest does not of itself dissolve the limited liability company or entitle the assignee to participate in the management and affairs of the limited liability company or to become or exercise any rights of a member until admitted as a member pursuant to Code Section 14-11-505;
  4. Until the assignee of a limited liability company interest becomes a member, the assignor continues to be a member with respect to the assigned limited liability company interest, subject to the other members' right to remove the assignor pursuant to subparagraph (b)(3)(B) of Code Section 14-11-601 or subparagraph (b)(2)(B) of Code Section 14-11-601.1;
  5. Until the assignee of a limited liability company interest becomes a member, the assignee shall have no liability as a member solely as a result of the assignment;
  6. A member who assigns his or her entire limited liability company interest ceases to be a member or to have the power to exercise any rights of a member when all of the assignees of his or her entire limited liability company interest become members with respect to the assigned limited liability company interest, subject to the other members' right to remove the assignor earlier pursuant to subparagraph (b)(3)(B) of Code Section 14-11-601 or subparagraph (b)(2)(B) of Code Section 14-11-601.1; and
  7. The pledge of, or granting of a security interest, lien, or other encumbrance in or against, any or all of the limited liability company interest of a member is not an assignment and shall not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member.

(Code 1981, §14-11-502, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 2002, p. 1235, § 4.)

Law reviews.

- For article, "The Georgia LLC Act Comes of Age," see 16 (No. 1) Ga. St. B. J. 20 (2010).

JUDICIAL DECISIONS

Interest obtained by transferee.

- Although a bank took only an "economic interest" in a limited liability company by a non-unanimous transfer from a member, it was an interest upon which the bank was entitled to foreclose. Hopson v. Bank of N. Ga., 258 Ga. App. 360, 574 S.E.2d 411 (2002).

Cited in Gaslowitz v. Stabilis Fund I, LP, 331 Ga. App. 152, 770 S.E.2d 245 (2015).

RESEARCH REFERENCES

ALR.

- Construction and application of limited liability company acts - issues relating to formation of limited liability company and addition or disassociation of members thereto, 43 A.L.R.6th 611.


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