managers – duties – good faith – liability

Subject to the provisions of Section 2017 of this title:

1. A manager shall discharge the duties as a manager in good faith, with the care an ordinary prudent person in a like position could exercise under similar circumstances, and in the manner the manager reasonably believes to be in the best interests of the limited liability company;

2. In discharging the duties, a manager may rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:

a.one or more employees of the limited liability company whom the manager reasonably believes to be reliable and competent in the matters presented,

b.legal counsel, public accountants, or other persons as to matters the manager reasonably believes are within the person's professional or expert competence, or

c.a committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence;

A manager is not acting in good faith if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by this paragraph unwarranted;

3. Unless otherwise provided in the operating agreement, a manager has the power and authority to delegate to one or more other persons the manager’s rights and powers to manage and control the business and affairs of the limited liability company, including to delegate to the agents, officers and employees of a manager to the limited liability company, and to delegate by a management agreement or another agreement with, or otherwise to, other persons. The delegation by a manager shall not cause the manager to cease to be a manager of the limited liability company;

4. A manager is not liable for any action taken as a manager, or any failure to take any action, if the manager performed the duties of the office in compliance with the business judgment rule as applied to directors and officers of a corporation; and

5. Except as otherwise provided in the articles of organization or operating agreement, every manager must account to the limited liability company and hold as trustee for it any profit or benefit derived by the manager without the informed consent of the members from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by the manager of its property.

Added by Laws 1992, c. 148, § 17, eff. Sept. 1, 1992. Amended by Laws 2001, c. 405, § 32, eff. Nov. 1, 2001.