!Creation Date: 09/16/22> <!Author: Arizona Legislative Council> <!Typist: dbupdate>
29-3502. Transfer of transferable interest
A. A transfer, in whole or in part, of a transferable interest:
1. Is permissible.
2. Does not by itself cause a person's dissociation as a member or a dissolution and winding up of the limited liability company's activities and affairs.
3. Subject to section 29-3504, does not entitle the transferee to either of the following:
(a) Participate in the management or conduct of the company's activities and affairs.
(b) Except as otherwise provided in subsections B and C of this section, have access to records or other information concerning the company's activities and affairs.
B. A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled. Solely for a purpose that is reasonably related to the transferee's right to receive distributions, a transferee has the rights to information under section 29-3410, subsection B.
C. In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the company's transactions only from the date of dissolution.
D. A transferable interest may be evidenced by a certificate of the interest issued by a limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate. A company may not issue a certificate of the interest in bearer form.
E. A limited liability company is not required to give effect to a transferee's rights under this section until the company knows or has notice of the transfer.
F. A transfer of a transferable interest in violation of a restriction on transfer is ineffective if the intended transferee has knowledge or notice of the restriction at the time of the transfer or if the restriction is set forth in an operating agreement embodied in a signed record.
G. Except as otherwise provided in section 29-3602, paragraph 4, subdivision (b), if a member transfers a transferable interest, the transferor retains the rights of a member other than the transferable interest transferred and retains all the duties and obligations of a member.
H. If a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member's obligations under sections 29-3403 and 29-3406 that are known to the transferee when the transferee becomes a member or that are set forth in an operating agreement embodied in a signed record.