2006 Minnesota Statutes

322B.31 ASSIGNMENT OF FINANCIAL RIGHTS.
    Subdivision 1. Assignment of financial rights permitted. Except as provided in subdivision
3, a member's financial rights are transferable in whole or in part.
    Subd. 2. Effect of assignment of financial rights. An assignment of a member's financial
rights entitles the assignee to receive, to the extent assigned, only the share of profits and losses
and the distributions to which the assignor would otherwise be entitled. An assignment of a
member's financial rights does not dissolve the limited liability company and does not entitle or
empower the assignee to become a member, to exercise any governance rights, to receive any
notices from the limited liability company, or to cause dissolution.
    Subd. 3. Restrictions of assignment of financial rights. (a) A restriction on the assignment
of financial rights may be imposed in the articles, in a member control agreement, in the bylaws,
by a resolution adopted by the members, or by an agreement among or other written action by
members or among them and the limited liability company. A restriction is not binding with
respect to financial rights reflected in the required records before the adoption of the restriction,
unless the owners of those financial rights are parties to the agreement or voted in favor of the
restriction.
(b) Subject to paragraph (c), a written restriction on the assignment of financial rights that is
not manifestly unreasonable under the circumstances and is noted conspicuously in the required
records may be enforced against the owner of the restricted financial rights or a successor or
transferee of the owner, including a pledgee or a legal representative. Unless noted conspicuously
in the required records, a restriction, even though permitted by this section, is ineffective against a
person without knowledge of the restriction.
(c) With regard to restrictions on the assignment of financial rights, a would-be assignee
of financial rights is entitled to rely on a statement of membership interest issued by the limited
liability company under section 322B.30. A restriction on the assignment of financial rights,
which is otherwise valid and in effect at the time of the issuance of a statement of membership
interest but which is not reflected in that statement, is ineffective against an assignee who takes
an assignment in reliance on the statement.
(d) Notwithstanding any provision of law, articles of organization, member control
agreement, bylaws, other agreement, resolution, or action to the contrary, a security interest in a
member's financial rights may be foreclosed and otherwise enforced, and a secured party may
assign a member's financial rights in accordance with chapter 336, without the consent or approval
of the member whose financial rights are subject to the security interest.
History: 1992 c 517 art 2 s 28; 1993 c 137 s 35; 1999 c 85 art 2 s 13,96; 2006 c 250 art 2 s 15