N.Y. Limited Liability Company Law § 603: Assignment of membership interest

§ 603. Assignment of membership interest. (a) Except as provided in

the operating agreement,

(1) a membership interest is assignable in whole or in part;

(2) an assignment of a membership interest does not dissolve a limited

liability company or entitle the assignee to participate in the

management and affairs of the limited liability company or to become or

to exercise any rights or powers of a member;

(3) the only effect of an assignment of a membership interest is to

entitle the assignee to receive, to the extent assigned, the

distributions and allocations of profits and losses to which the

assignor would be entitled; and

(4) a member ceases to be a member and to have the power to exercise

any rights or powers of a member upon assignment of all of his or her

membership interest. Unless otherwise provided in the operating

agreement, the pledge of, or the granting of a security interest, lien

or other encumbrance in or against, any or all of the membership

interest of a member shall not cause the member to cease to be a member

or to cease to have the power to exercise any rights or powers of a

member.

(b) The operating agreement may provide that a member's interest may

be evidenced by a certificate issued by the limited liability company

and may also provide for the assignment or transfer of any of the

interest represented by such a certificate. A member's interest may be a

certificated security or an uncertificated security within the meaning

of section 8--102 of the uniform commercial code if the requirements of

section 8--103(c) are met, and if the requirements are not met such

interest shall, for purposes of the uniform commercial code, be deemed

to be a general intangible asset. The existence of the restrictions on

the sale or transfer of a membership interest, as contained in this

chapter and, if applicable, in the operating agreement, shall be noted

conspicuously on the face or back of every certificate representing a

membership interest issued by a limited liability company. Any sale or

transfer in violation of such restrictions shall be void.

(c) Unless otherwise provided in an operating agreement and except to

the extent assumed by agreement, until the time, if any, that an

assignee of a membership interest becomes a member, the assignee shall

have no liability as a member solely as a result of the assignment.