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This entry was published on 2014-09-22
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Assignment of membership interest
Limited Liability Company Law (LLC) CHAPTER 34, ARTICLE 6
§ 603. Assignment of membership interest. (a) Except as provided in
the operating agreement,

(1) a membership interest is assignable in whole or in part;

(2) an assignment of a membership interest does not dissolve a limited
liability company or entitle the assignee to participate in the
management and affairs of the limited liability company or to become or
to exercise any rights or powers of a member;

(3) the only effect of an assignment of a membership interest is to
entitle the assignee to receive, to the extent assigned, the
distributions and allocations of profits and losses to which the
assignor would be entitled; and

(4) a member ceases to be a member and to have the power to exercise
any rights or powers of a member upon assignment of all of his or her
membership interest. Unless otherwise provided in the operating
agreement, the pledge of, or the granting of a security interest, lien
or other encumbrance in or against, any or all of the membership
interest of a member 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

(b) The operating agreement may provide that a member's interest may
be evidenced by a certificate issued by the limited liability company
and may also provide for the assignment or transfer of any of the
interest represented by such a certificate. A member's interest may be a
certificated security or an uncertificated security within the meaning
of section 8--102 of the uniform commercial code if the requirements of
section 8--103(c) are met, and if the requirements are not met such
interest shall, for purposes of the uniform commercial code, be deemed
to be a general intangible asset. The existence of the restrictions on
the sale or transfer of a membership interest, as contained in this
chapter and, if applicable, in the operating agreement, shall be noted
conspicuously on the face or back of every certificate representing a
membership interest issued by a limited liability company. Any sale or
transfer in violation of such restrictions shall be void.

(c) Unless otherwise provided in an operating agreement and except to
the extent assumed by agreement, until the time, if any, that an
assignee of a membership interest becomes a member, the assignee shall
have no liability as a member solely as a result of the assignment.