(1) In addition to the duties established elsewhere in this article, the duties that each member in a limited liability company in which management is vested in the members and that each manager owes to the limited liability company include the duties to:
(a) Account to the limited liability company and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct or winding up of the limited liability company business or derived from a use by the member or manager of property of the limited liability company, including the appropriation of an opportunity of the limited liability company;
(b) Refrain from dealing with the limited liability company in the conduct or winding up of the limited liability company business as or on behalf of a party having an interest adverse to the limited liability company; and
(c) Refrain from competing with the limited liability company in the conduct of the limited liability company business before the dissolution of the limited liability company.
(d) (Deleted by amendment, L. 2006, p. 857, � 24, effective July 1, 2006.)
(2) Each member in a limited liability company, the articles of organization of which provide that management is vested in the members, and each manager owes to the limited liability company a duty of care in the conduct and winding up of the business of the limited liability company, which shall be limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
(3) Each member and each manager shall discharge the member's or manager's duties to the limited liability company and exercise any rights consistently with the contractual obligation of good faith and fair dealing.
(4) A member in a limited liability company, the articles of organization of which provide that management is vested in the members, or a manager does not violate a duty or obligation to the limited liability company solely because the member's or manager's conduct furthers the member's or manager's own interest.
(5) A member or a manager may lend money to, and transact other business with, the limited liability company, and as to each loan or transaction the rights and obligations of the member or manager may be exercised or performed in the same manner as those of a person who is not a member or manager, subject to other applicable law.
(6) A member is not entitled to remuneration for services performed for the limited liability company except for reasonable compensation for services rendered in winding up the business of the limited liability company.
Source: L. 2004: Entire part R&RE, p. 939, � 6, effective July 1. L. 2006: Entire section amended, p. 857, � 24, effective July 1. L. 2016: (6) added, (HB 16-1329), ch. 242, p. 989, � 4, effective August 10.
Editor's note: This section is similar to former � 7-80-406 as it existed prior to 2004.
7-80-405. Members and managers as agents of the limited liability company. (1) If the articles of organization provide that management of the limited liability company is vested in one or more managers:
(a) A member is not an agent of the limited liability company and has no authority to bind the limited liability company solely by virtue of being a member; and
(b) Each manager is an agent of the limited liability company for the purposes of its business and an act of a manager, including the execution of an instrument in the name of the limited liability company, for apparently carrying on in the ordinary course the business of the limited liability company or business of the kind carried on by the limited liability company binds the limited liability company, unless the manager had no authority to act for the limited liability company in the particular matter and the person with whom the manager was dealing had notice that the manager lacked authority.
(2) If the articles of organization provide that management of the limited liability company is vested in the members, each member is an agent of the limited liability company for the purposes of its business and an act of a member, including the execution of an instrument in the name of the limited liability company, for apparently carrying on in the ordinary course the business of the limited liability company or business of the kind carried on by the limited liability company binds the limited liability company, unless the member had no authority to act for the limited liability company in the particular matter and the person with whom the member was dealing had notice that the member lacked authority.
Source: L. 2004: Entire part R&RE, p. 940, � 6, effective July 1. L. 2006: Entire section amended, p. 858, � 25, effective July 1.
7-80-406. Business transactions of member or manager with the limited liability company. (Repealed)
Source: L. 2004: Entire part R&RE, p. 940, � 6, effective July 1. L. 2006: Entire section repealed, p. 884, � 87, effective July 1.
Editor's note: This section was similar to former � 7-80-409 as it existed prior to 2004.