Identifying the Facts and Issues

Abara and nine others are

members

of Cotillard, LLC$.$ Generally, members$$ liability in the company would be limited to their respective

investments in the company

$.$

Assessment question

Members of a limited liability company

do not

have the right to withdraw from the entity. When a member dissociates from an LLC$,$ he or she

does

possess the right to have his or her interest in the LLC bought out by the other members.

Assessment question

Cotillard$$s operating agreement

select answer

contain provisions establishing a buyout price. In states that

select answer

adopted the ULLCA, the LLC must purchase the interest at fair value within a certain time after a member's withdraw. Therefore, Abara is entitled to receive

select answer

on dissociation from Cotillard, LLC$.$ The amount Abara is entitled to receive represents

select answer

$.$

Assessment question

The operating agreement is

select answer

on whether Abara can form another company after dissociation. Therefore, Abara

select answer

form her new business and has withdrawn from the LLC

select answer

$.$

Assessment question

What If the Facts Were Different?

Assume that the operating agreement explicitly states that a member who withdraws from the LLC may only receive a maximum buyout price of $$50,000.$

Abara

select answer

receive her share of the fair value of the company in this instance because when specific terms are stated in the operating agreement they

select answer

apply instead of default rules about how a dissociating members interest is purchased.