§428-603 Effect of a member's dissociation. (a) Upon a member's dissociation from a limited liability company:

(1) In an at-will company, the company shall cause the dissociated member's company interest to be purchased under part VII; and

(2) In a company having a specified term:

(A) If the company dissolves and winds up its business on or before the expiration of its specified term, part VIII applies to determine the dissociated member's rights to distributions; and

(B) If the company does not dissolve and wind up its business on or before the expiration of its specified term, the company must cause the dissociated member's distributional interest to be purchased under part VII on the date of the expiration of the term specified at the time of the member's dissociation.

(b) Upon a member's dissociation from a limited liability company:

(1) The member's right to participate in the management and conduct of the company's business terminates, except as provided in section 428-803, and the member ceases to be a member and is treated the same as a transferee;

(2) The member's duty of loyalty under section 428-409(b)(3) terminates; and

(3) The member's duty of loyalty under section 428-409(b)(1) and (2) and duty of care under section 428-409(c) continue only with regard to matters arising and events occurring prior to the member's dissociation, unless the member participates in winding up the company's business pursuant to section 428-803. [L 1996, c 92, pt of §1; am L 1999, c 164, §6]