Section 11Part 3 — LLC Agreement
Transfer of a limited liability company interest
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A LLC interest is, subject to the provisions of subsection 10(11), capable of being transferred in whole or in part as may be expressly permitted in the limited liability company’s LLC agreement, provided that any requirements for or conditions to an admission contained in the LLC agreement have been complied with or waived.
An assignee of a member’s LLC interest that is not admitted as a member shall have no right to participate in the management of the business or affairs of the limited liability company except as provided in a LLC agreement or otherwise upon —
the approval of all of the members of the limited liability company w hich may be given (including in the LLC agreement) in advance of any transfer either generally or specifically; and
compliance with the terms of the LLC agreement.
Unless otherwise provided in and subject to the provisions of the LLC agreement —
a member’s rights to receive any payments or distributions in respect of that member’s LLC interest are capable of assignment;
an assignment of all or part of a member’s rights to receive any payments or distributions in respect of that member’s LLC interest does not entitle the assignee to become, or to exercise any rights (other than the right to receive such payments or distributions to which the assignor was entitled) or powers of, a member;
a member ceases to be a member and to have the power to exercise any rights or powers of a member upon transfer of all of the member’s LLC interest in accordance with the provisions of this Act ; and
a member may grant a security interest to a third party (a “secured party”) in respect of any or all of t he LLC interest of that member and any such security interest shall not cause the member to cease to be a member or to cease to have the power to exercise any rights or powers of a member (other than those rights or powers the subject of the security inter est which security interest has become enforceable and in respect of which the limited liability company has received written notice at its registered office, such notice being signed by each of the secured party and the relevant member) unless that member transfers all of the member’s LLC interest to the secured party in accordance with the provisions of this Act .
Unless otherwise provided in a LLC agreement and except to the extent assumed by agreement, unless and until an assignee of a LLC interest b ecomes a member, the assignee shall have no liability as a member solely as a result of the assignment.
Any security interest over the whole or any part of a LLC interest granted in accordance with subsection (3) shall have priority according to the ti me that the written notice of such security interest, signed by each of the secured party and the relevant member, is validly served at the registered office of the limited liability company and such notice shall not be validly given unless it specifies the agreement pursuant to which the security interest is granted including the date thereof and the parties thereto, the identity of the grantor and the grantee of the security interests and the LLC interest or part thereof that is subject to that security i nterest.
A limited liability company shall maintain at the registered office of the limited liability company a register of security interests which shall contain the time and date of receipt of any notices validly served at the registered office pursu ant to subsection (5) and that register shall be updated within twenty - one days of receipt of a validly served notice and that register, or an extract thereof, shall be open to inspection by a person —
expressly provided for in the LLC agreement; or
permitted by the manager.