SECTIONS 17350-17357

17350.  A limited liability company shall be dissolved and itsaffairs shall be wound up upon the happening of the first to occur ofthe following: (a) At the time specified in the articles of organization, if any,or upon the happening of the events, if any, specified in thearticles of organization or a written operating agreement. (b) By the vote of a majority in interest of the members, or agreater percentage of the voting interests of members as may bespecified in the articles of organization or a written operatingagreement. (c) Entry of a decree of judicial dissolution pursuant to Section17351.17350.5.  (a) Notwithstanding any other provision of this division,if a domestic limited liability company has not conducted anybusiness, only a majority of the members, or, if there are nomembers, the majority of the managers, if any, or if no members ormanagers, the person or a majority of the persons signing thearticles of organization, may execute and acknowledge a certificateof cancellation of articles of organization, on a form prescribed bythe Secretary of State, stating all of the following: (1) The name of the domestic limited liability company and theSecretary of State's file number. (2) That the certificate of cancellation is being filed within 12months from the date the articles of organization were filed. (3) That the limited liability company does not have any debts orother liabilities, except as provided in paragraph (4). (4) That a final franchise tax return, as described by Section23332 of the Revenue and Taxation Code, or a final annual tax return,as described by Section 17947 of the Revenue and Taxation Code, hasbeen or will be filed with the Franchise Tax Board, as required underPart 10.2 (commencing with Section 18401) of Division 2 of theRevenue and Taxation Code. (5) That the known assets of the limited liability companyremaining after payment of, or adequately providing for, known debtsand liabilities have been distributed to the persons entitled theretoor that the limited liability company acquired no known assets, asthe case may be. (6) That the limited liability company has not conducted anybusiness from the time of the filing of the articles of organization. (7) That a majority of the managers or members voted, or, if nomanagers or members, the person or a majority of the persons signingthe articles of organization, voted to dissolve the limited liabilitycompany. (8) If the limited liability company has received payments forinterests from investors, that those payments have been returned tothose investors. (b) A certificate of cancellation executed and acknowledgedpursuant to subdivision (a) shall be filed with the Secretary ofState within 12 months from the date that the articles oforganization were filed. The Secretary of State shall notify theFranchise Tax Board of the cancellation. (c) Upon filing a certificate of cancellation pursuant tosubdivision (a), a limited liability company shall be cancelled andits powers, rights, and privileges shall cease. (d) A domestic limited liability company that filed articles oforganization on or after January 1, 2004, and that meets all of theconditions described in subdivision (a) may file a certificate ofcancellation under this section.17351.  (a) Pursuant to an action filed by any manager or by anymember or members, a court of competent jurisdiction may decree thedissolution of a limited liability company whenever any of thefollowing occurs: (1) It is not reasonably practicable to carry on the business inconformity with the articles of organization or operating agreement. (2) Dissolution is reasonably necessary for the protection of therights or interests of the complaining members. (3) The business of the limited liability company has beenabandoned. (4) The management of the limited liability company is deadlockedor subject to internal dissention. (5) Those in control of the company have been guilty of, or haveknowingly countenanced persistent and pervasive fraud, mismanagement,or abuse of authority. (b) (1) In any suit for judicial dissolution, the other membersmay avoid the dissolution of the limited liability company bypurchasing for cash the membership interests owned by the members soinitiating the proceeding (the "moving parties") at their fair marketvalue. In fixing the value, the amount of any damages resulting ifthe initiation of the dissolution is a breach by any moving party orparties of an agreement with the purchasing party or parties,including, without limitation, the operating agreement, may bededucted from the amount payable to the moving party or parties;provided, that no member who sues for dissolution on the grounds setforth in paragraph (3), (4), or (5) of subdivision (a) shall beliable for damages for breach of contract in bringing that action. (2) If the purchasing parties (A) elect to purchase the membershipinterests owned by the moving parties, (B) are unable to agree withthe moving parties upon the fair market value of the membershipinterests, and (C) give bond with sufficient security to pay theestimated reasonable expenses, including attorneys' fees, of themoving parties if the expenses are recoverable under paragraph (3),the court, upon application of the purchasing parties, either in thepending action or in a proceeding initiated in the superior court ofthe proper county by the purchasing parties, shall stay the windingup and dissolution proceeding and shall proceed to ascertain and fixthe fair market value of the membership interests owned by the movingparties. (3) The court shall appoint three disinterested appraisers toappraise the fair market value of the membership interests owned bythe moving parties, and shall make an order referring the matter tothe appraisers so appointed for the purpose of ascertaining thatvalue. The order shall prescribe the time and manner of producingevidence, if evidence is required. The award of the appraisers or amajority of them, when confirmed by the court, shall be final andconclusive upon all parties. The court shall enter a decree thatshall provide in the alternative for winding up and dissolution ofthe limited liability company unless payment is made for themembership interests within the time specified by the decree. If thepurchasing parties do not make payment for the membership interestswithin the time specified, judgment shall be entered against them andthe surety or sureties on the bond for the amount of the expenses,including attorneys' fees, of the moving parties. Any memberaggrieved by the action of the court may appeal therefrom. (4) If the purchasing parties desire to prevent the winding up anddissolution of the limited liability company, they shall pay to themoving parties the value of their membership interests ascertainedand decreed within the time specified pursuant to this section, or,in the case of an appeal, as fixed on appeal. On receiving thatpayment or the tender thereof, the moving parties shall transfertheir membership interests to the purchasing parties. (5) For the purposes of this section, the valuation date shall bethe date upon which the action for judicial dissolution wascommenced. However, the court may, upon the hearing of a motion byany party, and for good cause shown, designate some other date as thevaluation date.17352.  In the event of a dissolution of a limited liabilitycompany: (a) The managers who have not wrongfully dissolved the limitedliability company or, if none, the members may wind up the limitedliability company's affairs, unless the dissolution occurs pursuantto subdivision (c) of Section 17350, in which event the winding upshall be conducted in accordance with the decree of dissolution. Thepersons winding up the affairs of the limited liability company shallgive written notice of the commencement of winding up by mail to allknown creditors and claimants whose addresses appear on the recordsof the limited liability company. (b) Upon the petition of any manager or of any member or members,or three or more creditors, a court of competent jurisdiction mayenter a decree ordering the winding up of the limited liabilitycompany if that appears necessary for the protection of any partiesin interest. The decree shall designate the managers or members whoare to wind up the limited liability company's affairs. (c) Except as otherwise provided in the articles of organizationor a written operating agreement, the managers or members winding upthe affairs of the limited liability company pursuant to this sectionshall be entitled to reasonable compensation.17353.  (a) Except as otherwise provided in the articles oforganization or the written operating agreement, after determiningthat all the known debts and liabilities of a limited liabilitycompany in the process of winding up, including, without limitation,debts and liabilities to members who are creditors of the limitedliability company, have been paid or adequately provided for, theremaining assets shall be distributed among the members according totheir respective rights and preferences as follows: (1) To members in satisfaction of liabilities for distributionspursuant to Section 17201, 17202, or 17255. (2) To members of the limited liability company for the return oftheir contributions. (3) To members in the proportions in which those members share indistributions. (b) If the winding up is by court proceeding or subject to courtsupervision, the distribution shall not be made until after theexpiration of any period for the presentation of claims that has beenprescribed by order of the court. (c) The payment of a debt or liability, whether the whereabouts ofthe creditor is known or unknown, has been adequately provided forif the payment has been provided for by either of the followingmeans: (1) Payment thereof has been assumed or guaranteed in good faithby one or more financially responsible persons or by the UnitedStates government or any agency thereof, and the provision, includingthe financial responsibility of the person, was determined in goodfaith and with reasonable care by the members or managers of thelimited liability company to be adequate at the time of anydistribution of the assets pursuant to this section. (2) The amount of the debt or liability has been deposited asprovided in Section 2008. This subdivision shall not prescribe the exclusive means of makingadequate provision for debts and liabilities.17354.  (a) A limited liability company that is dissolvednevertheless continues to exist for the purpose of winding up itsaffairs, prosecuting and defending actions by or against it in orderto collect and discharge obligations, disposing of and conveying itsproperty, and collecting and dividing its assets. A limited liabilitycompany shall not continue business except so far as necessary forthe winding up thereof. (b) No action or proceeding to which a limited liability companyis a party abates by the dissolution of the limited liability companyor by reason of proceedings for the winding up and dissolutionthereof. (c) Any assets inadvertently or otherwise omitted from the windingup continue in the dissolved limited liability company for thebenefit of the persons entitled thereto upon dissolution and onrealization shall be distributed accordingly.17355.  (a) (1) Causes of action against a dissolved limitedliability company, whether arising before or after the dissolution ofthe limited liability company, may be enforced against any of thefollowing: (A) Against the dissolved limited liability company, to the extentof its undistributed assets, including, without limitation, anyinsurance assets held by the limited liability company that may beavailable to satisfy claims. (B) If any of the assets of the dissolved limited liabilitycompany have been distributed to members, against members of thedissolved limited liability company to the extent of the limitedliability company assets distributed to them upon dissolution of thelimited liability company. Any member compelled to return distributed assets in an amountthat exceeds the sum of the member's pro rata share of the claim andthe amount for which the member could otherwise be held liable underSection 17254 or 17255 may seek contribution for the excess from anyother member or manager, up to the sum of that other person's prorata share of the claim and that other person's liabilities underSection 17254 or 17255. (2) Except as set forth in subdivision (c), all causes of actionagainst a member of a dissolved limited liability company arisingunder this section are extinguished unless the claimant commences aproceeding to enforce the cause of action against that member of adissolved limited liability company prior to the earlier of thefollowing: (A) The expiration of the statute of limitations applicable to thecause of action. (B) Four years after the effective date of the dissolution of thelimited liability company. (3) As a matter of procedure only, and not for purposes ofdetermining liability, members of the dissolved limited liabilitycompany may be sued in the name of the limited liability company uponany cause of action against the limited liability company. Thissection does not affect the rights of the limited liability companyor its creditors under Sections 17254 and 17255, or the rights, ifany, of creditors under the Uniform Fraudulent Transfer Act, that mayarise against the member of a limited liability company. (b) Summons or other process against a limited liability companymay be served by delivering a copy thereof to a manager, member,officer, or person having charge of its assets or, if no such personcan be found, to any agent upon whom process might be served at thetime of dissolution. If none of those persons can be found with duediligence and it is so shown by affidavit to the satisfaction of thecourt, then the court may make an order that summons or other processbe served upon the dissolved limited liability company by personallydelivering a copy thereof, together with a copy of the order, to theSecretary of State or an assistant or deputy Secretary of State.Service in this manner is deemed complete on the 10th day afterdelivery of the process to the Secretary of State. Upon receipt ofprocess and the fee therefor, the Secretary of State shall givenotice to the limited liability company as provided in Section 1702. (c) Every limited liability company shall survive and continue toexist indefinitely for the purpose of being sued in any quiet titleaction. Any judgment rendered in any such action shall bind each andall of its members or other persons having any equity or otherinterest in the limited liability company, to the extent of theirinterest therein, and the action shall have the same force and effectas an action brought under the provisions of Sections 410.50 and410.60 of the Code of Civil Procedure. Service of summons or otherprocess in any action may be made as provided in Chapter 4(commencing with Section 413.10) of Title 5 of Part 2 of the Code ofCivil Procedure or as provided in subdivision (b). (d) For purposes of Article 4 (commencing with Section 19071) ofChapter 4 of Part 10.2 of Division 2 of the Revenue and TaxationCode, the liability described in this section shall be considered aliability at law within respect to a dissolved limited liabilitycompany.17356.  (a) (1) The managers shall cause to be filed in the officeof, and on a form prescribed by, the Secretary of State, acertificate of dissolution upon the dissolution of the limitedliability company pursuant to Chapter 8 (commencing with Section17350), unless the event causing the dissolution is that specified insubdivision (c) of Section 17350, in which case the managers ormembers conducting the winding up of the limited liability company'saffairs pursuant to Section 17352 shall have the obligation to filethe certificate of dissolution. (2) The certificate of dissolution shall set forth all of thefollowing: (A) The name of the limited liability company and the Secretary ofState's file number. (B) Any other information the managers or members filing thecertificate of dissolution determine to include. (3) If a dissolution pursuant to subdivision (b) of Section 17350is made by the vote of all of the members and a statement to thateffect is added to the certificate of cancellation of articles oforganization pursuant to subdivision (b), the separate filing of acertificate of dissolution pursuant to this subdivision is notrequired. (b) (1) The managers or members who filed the certificate ofdissolution shall cause to be filed in the office of, and on a formprescribed by, the Secretary of State, a certificate of cancellationof articles of organization upon the completion of the winding up ofthe affairs of the limited liability company pursuant to Chapter 8(commencing with Section 17350), unless the event causing thedissolution is that specified in subdivision (c) of Section 17350, inwhich case the managers or members conducting the winding up of thelimited liability company's affairs pursuant to Section 17352 shallhave the obligation to file the certificate of cancellation ofarticles of organization. (2) The certificate of cancellation of articles of organizationshall set forth all of the following: (A) The name of the limited liability company and the Secretary ofState's file number. (B) That a final franchise tax return, as described by Section23332 of the Revenue and Taxation Code, or a final annual tax return,as described by Section 17947 of the Revenue and Taxation Code, hasbeen or will be filed with the Franchise Tax board, as required underPart 10.2 (commencing with Section 18401) of Division 2 of theRevenue and Taxation Code. (C) Any other information the managers or members filing thecertificate of cancellation of articles of organization determine toinclude. (3) The Secretary of State shall notify the Franchise Tax Board ofthe filing.17357.  (a) Notwithstanding the filing of a certificate ofdissolution, a majority in interest of the members may cause to befiled, in the office of, and on a form prescribed by, the Secretaryof State, a certificate of continuation, in any of the followingcircumstances: (1) The business of the limited liability company is to becontinued pursuant to a unanimous vote of the remaining members. (2) The dissolution of the limited liability company was by voteof the members pursuant to subdivision (b) of Section 17350 and eachmember who consented to the dissolution has agreed in writing torevoke his or her vote in favor of or consent to the dissolution. (3) The limited liability company was not, in fact, dissolved. (b) The certificate of continuation shall set forth all of thefollowing: (1) The name of the limited liability company and the Secretary ofState's file number. (2) The grounds provided by subdivision (a) that are the basis forfiling the certificate of continuation. (c) Upon the filing of a certificate of continuation, thecertificate of dissolution shall be of no effect from the time of thefiling of the certificate of dissolution.