Limited Liability Company – General – Pennsylvania
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A LLC is dissolved and its affairs must be wound up upon the happening of the first to occur of the following events:
1. At the time or upon the happening of events specified in the certificate of organization.
2. At the time or upon the happening of events specified in writing in the operating agreement.
3. By the unanimous written agreement or consent of all members.
4. Upon a member becoming a bankrupt or executing an assignment for the benefit of creditors or the death, retirement, resignation, expulsion or dissolution of a member or the occurrence of any other event that terminates the continued membership of a member in the LLC unless the business of the LLC is continued by the consent of all the remaining members given within 90 days following such event or under a right to do so stated in the operating agreement.
Entry of an order of judicial dissolution.
On application by or for a member, the court may order dissolution of a LLC whenever it is not reasonably practicable to carry on the business in conformity with the operating agreement.
Unless winding up of the LLC’s affairs is pursuant to court order or is otherwise provided for in the operating agreement, the LLC’s affairs are wound up by the managers. If there are no managers, then winding up is done by:
1. The members who have not wrongfully dissolved the LLC; or
2. A person approved by the members or, if there is more than one class or group of members, by each class or group of members, in each case by a majority in interest of the members in each class or group.
A court may wind up the affairs of an LLC upon the application of any member, his legal representative or assignee. A court may appoint a liquidating trustee.
In settling accounts after dissolution of the LLC, the liabilities of the limited liability LLC are to be satisfied in the following order:
Creditors, including members or managers who are creditors, in the order of priority as provided by law, in satisfaction of the liabilities of the LLC, whether by payment or the making of reasonable provision for payment, other than liabilities for distributions to members under §8932 (relating to distributions) or §8933 (relating to distributions upon an event of dissociation).
Unless otherwise provided in the operating agreement, to members and former members in satisfaction of liabilities for distributions under §8932 or §8933.
Unless otherwise provided in the operating agreement, to members in respect of:
1. Their contributions to capital.
2. Their share of the profits and other compensation by way of income on their contributions.
A LLC that has dissolved must pay or make reasonable provision to pay all claims and obligations, including all contingent, conditional or unmatured claims and obligations, known to the LLC and all claims and obligations that are known to the LLC but for which the identity of the claimant is unknown. If there are sufficient assets, claims and obligations must be paid in full. If there are insufficient assets, claims and obligations are to be paid or provided for according to their priority and, among claims and obligations of equal priority, ratably to the extent of assets available for payment.
After the payment of liabilities, and unless otherwise provided in the operating agreement, any remaining assets are to be distributed as provided by PENNSYLVANIA CONSOLIDATED STATUTES ANNOTATED, Title 15, Chapter 89, §§ 8971-8978.
A liquidating trustee winding up the affairs of a LLC is not personally liable to the claimants of the dissolved LLC by reason of his actions in winding up the LLC.
When a certificate of dissolution is filed, the existence of the limited liability LLC ceases except for the purpose of legal actions, other proceedings, and appropriate action as provided by law.
The manager or managers in office at the time of dissolution or the survivors of them or, if management of the LLC is retained by the members, then all members are thereafter trustees for the members and creditors of the dissolved LLC. As trustees, they have the authority to distribute any LLC property discovered after dissolution, convey real estate, and take such other action as may be necessary on behalf of and in the name of such dissolved LLC.
The dissolution of a LLC does not eliminate or impair any remedy available to or against the LLC or its managers or members for any right or claim existing or liability incurred prior to the dissolution, if an action thereon is brought on behalf of:
1. The LLC within the time otherwise limited by law; or
2. Any other person before or within two years after the date of the dissolution or within the time otherwise limited by law, whichever is less.
Once a LLC has been dissolved, actions may be prosecuted against and defended by the LLC in the name of the LLC.
The dissolution of a LLC does not affect the limited liability of members with respect to transactions occurring or acts or omissions done or omitted in the name of or by the LLC. Provided, however, that each member is liable for his pro rata portion of the unpaid liabilities of the LLC up to the amount of the net assets of the LLC distributed to the member in connection with the dissolution.
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