Uniform Limited Liability Company Act

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Reference no: EM134039073

Question

Ten individuals through an operating agreement form Cotillard, LLC, a limited liability company, in a state that has adopted the Uniform Limited Liability Company Act (ULLCA). The purpose of the LLC is to develop and sell new computer hardware systems. Each individual invested $1,000 and received 10% ownership of the LLC. Five years later, Cotillard became a successful company with a fair value of $10 million. Ashwini Abara, a member of the limited liability company, decided to withdraw from the partnership to start up a sustainable waste disposal business. The other members of Cotillard offer to return her initial investment of $1,000. Abara disagrees and wants compensation equivalent to the fair value of her interest in the limited liability company. The other members of Cotillard also claim that Abara's withdrawal was wrongful and that she violated her duty of loyalty to the company by starting her new business. The operating agreement is silent on how funds are distributed when a partner withdraws. The operating agreement is also silent on what a partner can or cannot do after withdrawing from the LLC.

Reference no: EM134039073

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