Unless otherwise provided by the articles of organization or an operating agreement:
A. a member who is not a manager and is not vested with particular management responsibilities by the articles of organization or an operating agreement shall not be liable to the limited liability company or to the other members solely by reason of his act or omission in his capacity as a member;
B. a member who is vested with particular management responsibilities by the articles of organization or an operating agreement or a manager shall not be liable, responsible or accountable in damages or otherwise to the limited liability company or to the other members solely by reason of his act or omission on behalf of the limited liability company in his capacity as a member having particular management responsibilities or as a manager, unless such act or omission constitutes gross negligence or willful misconduct;
C. a member or manager may lend money to and transact other business with the limited liability company, and except as otherwise provided in Subsection D of this section and subject to other applicable law, he shall have the same rights and obligations with respect to such loan or transaction of business as he would have if he were not a member or manager;
D. every member who is vested with particular management responsibilities by the articles of organization or an operating agreement and every manager shall account to the limited liability company and hold as trustee for it any profit or benefit he derives from:
(1) any transaction connected with the conduct or winding up of the limited liability company; or
(2) any use by such member or manager of the company's property, including confidential or proprietary information of the limited liability company or other matters entrusted to him as a result of his status as a member or manager unless:
(a) the material facts of the relationship of the interested manager or member to the contract, transaction or use were disclosed or known to all of the other managers or members who, in good faith, authorized or approved the contract, transaction or use by: 1) the affirmative vote of a majority of all of the disinterested managers; or 2) the affirmative vote of all of the disinterested members, even though all of the disinterested managers were less than a majority of all of the managers or even though all of the disinterested members did not have a majority share of the voting power of all of the members; or
(b) the contract, transaction or use was fair to the limited liability company when it was authorized or approved.
History: Laws 1993, ch. 280, § 16; 1995, ch. 213, § 2.
ANNOTATIONSThe 1995 amendment, effective June 16, 1995, substituted "Subsection D" for "Subsections D and E" in Subsection C.
Breach of fiduciary duty. — In a case where a plaintiff challenges expenditures that do not themselves create a presumption of self-dealing and the plaintiff is involved in the financial affairs of the partnership or LLC such that plaintiff has access to the entity's records, the burden of proving a breach of fiduciary duty is on the plaintiff. Mayeux v. Winder, 2006-NMCA-028, 139 N.M. 235, 131 P.3d 85.