Grants, Redemptions, and Transfers of Membership Rights
Section 304-C:118
304-C:118 Transfers, Etc.-Definitions. –
I. A transfer of membership rights by a member shall mean any voluntary or involuntary transfer or other disposition of all or any part of those rights to another person, with or without consideration, including:
(a) A transfer by sale, exchange, gift, or assignment;
(b) A transfer, whether by will, trust, or otherwise, taking effect upon the death of the member; and
(c) A transfer by operation of law, including a transfer in connection with a merger of a member that is an entity into another entity, by execution of legal process, or under a divorce or bankruptcy decree.
II. The term "transfer" shall not include redemptions or pledges of membership rights.
III. A redemption of a member's membership rights shall mean the extinguishment of those rights in exchange for a distribution of cash, other property, or other consideration from the limited liability company to the member.
IV. A grant of membership rights shall mean their issuance by the limited liability company to a member or other person.
V. A pledge shall mean an arrangement under which a member provides another person with an interest in all or any portion of the member's membership rights in order to secure an obligation of the member.