[§428-409]  General standards of member'sand manager's conduct.  (a)  The only fiduciary duties a member owes to amember-managed limited liability company and its other members are the duty ofloyalty and the duty of care imposed by subsections (b) and (c).

(b)  A member's duty of loyalty to amember-managed limited liability company and its other members is limited tothe following:

(1)  To account to the company and to hold as trusteefor it any property, profit, or benefit derived by the member in the conduct orwinding up of the company's business or derived from a use by the member of thecompany's property, including the appropriation of a company's opportunity;

(2)  To refrain from dealing with the company in theconduct or winding up of the company's business as or on behalf of a partyhaving an interest adverse to the company; and

(3)  To refrain from competing with the company in theconduct of the company's business before the dissolution of the company.

(c)  A member's duty of care to a member-managedlimited liability company and its other members in the conduct of and windingup of the company's business is limited to refraining from engaging in grosslynegligent or reckless conduct, intentional misconduct, or a knowing violationof law.

(d)  A member shall discharge the duties to amember-managed limited liability company and its other members under thischapter or under the operating agreement and exercise any rights consistentwith the obligation of good faith and fair dealing.

(e)  A member of a member-managed limitedliability company does not violate a duty or obligation under this chapter orunder the operating agreement merely because the member's conduct furthers themember's own interest.

(f)  A member of a member-managed limited liabilitycompany may lend money to and transact other business with the company.  As toeach loan or transaction, the rights and obligations of the member are the sameas those of a person who is not a member, subject to other applicable laws.

(g)  This section applies to a person windingup the limited liability company's business as the personal or legalrepresentative of the last surviving member as if the person were a member.

(h)  In a manager-managed limited liabilitycompany:

(1)  A member who is not also a manager owes no dutyto the company or to the other members solely by reason of being a member;

(2)  A manager is held to the same standards ofconduct prescribed for members in subsections (b) to (f);

(3)  A member who pursuant to the operating agreementexercises some or all of the rights of a manager in the management and conductof the company's business is held to the standards of conduct in subsections(b) to (f) to the extent that the member exercises the managerial authorityvested in a manager by this chapter; and

(4)  A manager is relieved of liability imposed by lawfor violation of the standards prescribed by subsections (b) to (f) to theextent of the managerial authority delegated to the members by the operatingagreement. [L 1996, c 92, pt of §1]