§ 7-16-17 — § 7-16-17. Duties of managers.

§ 7-16-17. Duties of managers.

(a) A manager shall discharge his or her managerial duties in good faith, with the care that an ordinarily prudent person in a similar position would use under the circumstances, and in the manner the manager reasonably believes to be in the best interests of the limited liability company.

(b) In discharging his or her duties, a manager is entitled to rely on information, opinions, reports or statements, including financial statements and other financial data, if prepared or presented by:

(1) One or more employees of the limited liability company who the manager reasonably believes to be reliable and competent in the matters presented;

(2) Legal counsel, public accountants or other persons as to matters the manager reasonably believes are within the person's professional or expert competence; or

(3) A committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence.

(c) A manager is not acting in good faith if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (b) unwarranted.

(d) A manager is not liable for any action taken as a manager, or any failure to take any action, if the manager performed the duties of his or her office in compliance with this section.

(e) Except as otherwise provided in the articles of organization or operating agreement, every manager must account to the limited liability company and hold as trustee for the limited liability company any profit or benefit he or she derived without the informed consent of the members or a majority of the disinterested managers from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by the manager of the limited liability company's property.

Legislative History

P.L. 1992, ch. 280, § 1.