§ 17-29-409 — Standards of conduct for members and managers

Wyoming § 17-29-409

• Jurisdiction: Wyoming
• Title 17: Corporations, Partnerships and Associations
• Ch. 29: WYOMING LIMITED LIABILITY COMPANY ACT
• Art. 4: RELATIONS OF MEMBERS TO EACH OTHER AND TO THE

Text

(a) A member of a member-managed limited liability company
owes to the company and, subject to W.S. 17-29-901(b), the other
members the fiduciary duties of loyalty and care stated in
subsections (b) and (c).
(b) The duty of loyalty of a member in a member-managed
limited liability company includes the duties:
(i) To account to the company and to hold as trustee
for it any property, profit or benefit derived by the member:
(A) In the conduct or winding up of the
company's activities;
(B) From a use by the member of the company's
property; or
(C) From the appropriation of a limited
liability company opportunity;
(ii) To refrain from dealing with the company in the
conduct or winding up of the company's activities as or on
behalf of a person having an interest adverse to the company;
and
(iii) To refrain from competing with the company in
the conduct of the company's activities before the dissolution
of the company.
(c) Subject to the business judgment rule, the duty of
care of a member of a member-managed limited liability company
in the conduct and winding up of the company's activities is to
act with the care that a person in a like position would
reasonably exercise under similar circumstances and in a manner
the member reasonably believes to be in the best interests or at
least not opposed to the best interests of the company. In
discharging this duty, a member may rely in good faith upon
opinions, reports, statements or other information provided by
another person that the member reasonably believes is a
competent and reliable source for the information.
(d) A member in a member-managed limited liability company
or a manager-managed limited liability company shall discharge
the duties under this chapter or under the operating agreement
and exercise any rights consistently with the contractual
obligation of good faith and fair dealing.
(e) It is a defense to a claim under paragraph (b)(ii) of
this section and any comparable claim in equity or at common law
that the transaction was fair to or at least not opposed to the
limited liability company.
(f) All of the members of a member-managed limited
liability company or a manager-managed limited liability company
may authorize or ratify, after full disclosure of all material
facts, a specific act or transaction that otherwise would
violate the duty of loyalty.
(g) In a manager-managed limited liability company, the
following rules apply:
(i) Subsections (a), (b), (c) and (e) of this section
apply to the manager or managers and not the members;
(ii) The duty stated under paragraph (b)(iii) of this
section continues until winding up is completed;
(iii) Subsection (d) of this section applies to the
members and managers;
(iv) Subsection (f) of this section applies only to
the members;
(v) A member does not have any fiduciary duty to the
company or to any other member solely by reason of being a
member.