Except as approved by the written consent of all members at the time, a person ceases to be a member of a limited liability company on the occurrence of any of the following events of withdrawal:
1. The member withdraws from the limited liability company as provided in section 29-734.
2. On assignment of all of the member’s interest and admission of one or more of the assignees as a member, but an operating agreement may permit the assigning member to remain a member until all assignees of the member’s interest have been admitted as members.
3. The member is expelled as a member pursuant to the articles of organization or an operating agreement.
4. Unless otherwise provided in an operating agreement, the member does any of the following:
(a) Makes an assignment for the benefit of creditors.
(b) Files a voluntary petition in bankruptcy.
(c) Is adjudicated as bankrupt or insolvent.
(d) Files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or rule.
(e) Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in a bankruptcy, insolvency, reorganization or similar proceeding.
(f) Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of his property.
5. Unless otherwise provided in an operating agreement, if one hundred twenty days after the beginning of any proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or rule the proceeding has not been dismissed, or if within ninety days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of his property the appointment is not vacated or stayed or within ninety days after the expiration of any such stay, the appointment is not vacated.
6. If a member is a natural person:
(a) His death.
(b) Unless otherwise provided in an operating agreement, the entry of an order or judgment by a court of competent jurisdiction adjudicating him incompetent to manage his person or his estate.
7. Unless otherwise provided in an operating agreement, if a member is acting as a member by virtue of being a trustee of a trust, the termination of the trust but not merely the substitution of a new trustee.
8. If a member is a general or limited partnership, the dissolution and commencement of winding up of the partnership, but an operating agreement may permit a partnership to remain a member until it ceases to exist as a legal entity.
9. If a member is a corporation, the filing of a certificate of dissolution or its equivalent for the corporation or revocation of its charter, but an operating agreement may permit a corporation to remain a member until it ceases to exist as a legal entity.
10. If a member is an estate, the distribution by the fiduciary of the estate’s entire interest in the limited liability company, but an operating agreement may permit the estate to remain a member until all distributees of the member’s interest have been admitted as members.
11. If a member is another foreign or domestic limited liability company, the filing of articles of dissolution or termination or their equivalent for the foreign or domestic limited liability company, but an operating agreement may permit a limited liability company to remain a member until it ceases to exist as a legal entity.
Caution: The above language was taken from Arizona’s statutes on November 13, 2016. Check the Arizona legislature’s website to determine if this statute changed after November 13, 2016.
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