Question

Matt and Chad form an LLC, and Matt later decides to withdraw as a member. They do not have a provision in their operating agreement regarding withdrawal of a member, but they do live in a state that has adopted the ULLCA, which means that:
a. Matt must find a new member to purchase his interest at a fair value.
b. Matt will lose all of his interest in the LLC.
c. the LLC must dissolve within 120 days.
d. the LLC must purchase Matt's interest at fair value within 120 days.

Answer 1

Answer:

D) the LLC must purchase Matt's interest at fair value within 120 days.

Explanation:

The Uniform Limited Liability Company Act (ULLCA) has been adopted by the states of California, Pennsylvania, Florida, Idaho, Iowa, Nebraska, New Jersey, Utah, Wyoming, and the District of Columbia.

The ULLCA refers to the creation of limited liability companies (LLCs) and how the LLCs would treat partnership tax and partnership benefits. One of the ULLCA's clauses establishes that when one partner decides to exit the LLC, the LLC must purchase his share within 120 days.