(a) A member of a member-managed limited liability company owes to the company and, subject to subsection (b) of section 34-271, the other members the duties of loyalty and care set forth in subsections (b) and (c) of this section.
(b) The fiduciary duty of loyalty of a member in a member-managed limited liability company includes the duties:
(1) To account to the company and to hold as trustee for it any property, profit or benefit derived by the member: (A) In the conduct or winding up of the company's activities and affairs; (B) from a use by the member of the company's property; or (C) from the appropriation of a company opportunity;
(2) To refrain from dealing with the company in the conduct or winding up of the company's activities and affairs as or on behalf of a person having an interest adverse to the company; and
(3) To refrain from competing with the company in the conduct of the company's activities and affairs before the dissolution of the company.
(c) (1) A member of a member-managed limited liability company shall discharge the duties of such member as a member, including duties as a member of a committee of the members of the limited liability company: (A) In good faith; (B) with the care an ordinarily prudent person in a like position would exercise under similar circumstances; and (C) in a manner the member reasonably believes to be in the best interests of the limited liability company.
(2) In discharging such duties, the member is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by: (A) One or more officers or employees of the limited liability company whom the member reasonably believes to be reliable and competent in the matters presented; (B) legal counsel, public accountants or other persons as to matters the member reasonably believes are within the person's professional or expert competence; or (C) a committee of members of the limited liability company of which the member is not a member if the member reasonably believes the committee merits confidence.
(3) In discharging such duties under subsection (a) of this section and the operating agreement, a member or manager shall not be liable to the limited liability company or to any other member for actions or failure to act pursuant to the provisions of the operating agreement, except that a member is not acting in good faith if the member has knowledge concerning the matter in question that makes reliance otherwise permitted by this subsection unwarranted.
(d) A member shall discharge the duties and obligations under sections 34-243 to 34-283d, inclusive, or under the operating agreement and exercise any rights consistently with the implied contractual obligation of good faith and fair dealing.
(e) A member, other than in the capacity of a manager, does not violate a duty or obligation under sections 34-243 to 34-283d, inclusive, or under the operating agreement solely because the member's conduct furthers the member's own interest.
(f) A majority in interest of disinterested members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.
(g) It is a defense to a claim under subdivision (2) of subsection (b) of this section and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.
(h) If, as permitted by subsection (f) of this section, subdivision (5) of subsection (i) of this section or the operating agreement, a member enters into a transaction with the limited liability company which otherwise would be prohibited by subdivision (2) of subsection (b) of this section, the member's rights and obligations arising from the transaction are the same as those of a person that is not a member.
(i) In a manager-managed limited liability company, the following rules apply:
(1) Subsections (a), (b), (c) and (g) of this section apply to the manager or managers and not the members.
(2) Subsection (d) of this section applies to managers and members.
(3) Subsection (e) of this section applies only to members.
(4) The power to ratify under subsection (f) of this section applies only to the members.
(5) Subject to subsection (d) of this section, a member does not have any duty to the company or to any other member solely by reason of being a member.
(P.A. 16-97, S. 47.)
History: P.A. 16-97 effective July 1, 2017.
Structure Connecticut General Statutes
Chapter 613a - Uniform Limited Liability Company Act
Section 34-243. - Short title: Connecticut Uniform Limited Liability Company Act.
Section 34-243a. - Definitions.
Section 34-243b. - Knowledge. Notice.
Section 34-243c. - Governing law.
Section 34-243d. - Operating agreement: Scope, function and limitations.
Section 34-243g. - Nature, purpose and duration of limited liability company.
Section 34-243h. - Powers and purposes. Restrictions.
Section 34-243i. - Effective date. Application to existing relationships.
Section 34-243j. - Supplemental principles of law.
Section 34-243k. - Permitted name.
Section 34-243l. - Reservation of name.
Section 34-243m. - Registration of name.
Section 34-243n. - Registered agent.
Section 34-243p. - Resignation of registered agent.
Section 34-243q. - Change of name or address by registered agent.
Section 34-243r. - Service of process, notice or demand.
Section 34-243s. - Delivery of record.
Section 34-243t. - Reservation of power to amend or repeal.
Section 34-243u. - Fees payable to Secretary of the State. Sales tax not imposed.
Section 34-243w. - Savings clause.
Section 34-247. - Formation of limited liability company. Certificate of organization.
Section 34-247a. - Amendment or restatement of certificate of organization.
Section 34-247b. - Signing of records delivered to Secretary of the State for filing.
Section 34-247c. - Signing and filing of record pursuant to judicial order.
Section 34-247d. - Liability for inaccurate information in filed record.
Section 34-247e. - Filing requirements.
Section 34-247f. - Effective date and time.
Section 34-247g. - Withdrawal of filed record prior to taking effect.
Section 34-247h. - Correcting filed record.
Section 34-247i. - Duties of Secretary of the State re filing and delivery of record.
Section 34-247j. - Certificate of legal existence.
Section 34-247k. - Annual report.
Section 34-251. - Effect of person's status as member.
Section 34-251a. - Liability of members and managers.
Section 34-255. - Becoming a member.
Section 34-255a. - Form of contribution.
Section 34-255b. - Liability for contribution.
Section 34-255c. - Sharing of and right to distributions before dissolution.
Section 34-255d. - Limitations on distributions.
Section 34-255e. - Liability for improper distributions.
Section 34-255f. - Management of limited liability company.
Section 34-255g. - Reimbursement, indemnification, advancement and insurance.
Section 34-255h. - Standards of conduct for members and managers.
Section 34-255i. - Rights of member, manager and person disassociated as member to information.
Section 34-259. - Nature of transferable interest.
Section 34-259a. - Transfer of transferable interest.
Section 34-259b. - Charging order.
Section 34-259c. - Power of legal representative of deceased member.
Section 34-263. - Power to dissociate as member. Wrongful dissociation.
Section 34-263a. - Events causing dissociation.
Section 34-263b. - Effect of dissociation.
Section 34-267. - Events causing dissolution.
Section 34-267a. - Winding up.
Section 34-267b. - Reinstatement after dissolution.
Section 34-267c. - Known claims against dissolved limited liability company.
Section 34-267d. - Other claims against dissolved limited liability company.
Section 34-267e. - Court proceedings.
Section 34-267f. - Disposition of assets in winding up.
Section 34-267g. - Dissolution by forfeiture.
Section 34-271. - Direct action by member.
Section 34-271a. - Derivative action.
Section 34-271b. - Derivative action. Proper plaintiff.
Section 34-271c. - Derivative action. Pleading.
Section 34-271d. - Derivative action. Special litigation committee.
Section 34-271e. - Derivative action. Proceeds and expenses.
Section 34-275. - Governing law.
Section 34-275a. - Registration to transact business in this state.
Section 34-275b. - Foreign registration statement.
Section 34-275c. - Amendment of foreign registration certificate.
Section 34-275d. - Activities not constituting transacting business in this state.
Section 34-275e. - Noncomplying name of foreign limited liability company.
Section 34-275f. - Transfer of registration.
Section 34-275g. - Revocation of foreign registration certificate.
Section 34-275h. - Withdrawal of registration of registered foreign limited liability company.
Section 34-275i. - Action by Attorney General.
Section 34-279. - Definitions.
Section 34-279a. - Applicability of other statutes.
Section 34-279b. - Required notice or approval.
Section 34-279c. - Status of filings.
Section 34-279d. - Nonexclusivity.
Section 34-279e. - Plan reference to external facts.
Section 34-279f. - Applicability of appraisal rights.
Section 34-279g. - Excluded entities and transactions.
Section 34-279h. - Merger authorized.
Section 34-279i. - Action on plan of merging limited liability company.
Section 34-279j. - Filings required for merger. Effective date.
Section 34-279k. - Effect of merger.
Section 34-279l. - Interest exchange authorized.
Section 34-279m. - Plan of interest exchange.
Section 34-279n. - Approval of interest exchange.
Section 34-279o. - Amendment or abandonment of plan of interest exchange.
Section 34-279p. - Certificate of interest exchange. Effective date of interest exchange.
Section 34-279q. - Effect of interest exchange.
Section 34-283. - Uniformity of application and construction.
Section 34-283a. - Relation to Electronic Signatures in Global and National Commerce Act.
Section 34-283b. - Savings clause.
Section 34-283c. - Severability clause.