Transferable LLC Interests

Corporations Code Title 2.6, Article 5 deals with transferable interests and rights of transferees and creditors under the California Revised Uniform Limited Liability Company Act.

Section 17705.01 specifies that a transferable interest is personal property.

Section 17705.02 states that, with respect to a transfer, in whole or in part, of a transferable interest, all of seven conditions apply, including that a transfer is permissible; it does not cause a member’s dissociation; it give the transferee a right to receive distributions.

Section 17705.03 provides that, on application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order constitutes a lien on a judgment debtor’s transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

Section 17705.04 provides that, if a member dies, the deceased member’s personal representative or other legal representative may exercise the rights of a transferee for the purposes of settling the estate.