Question

Jeff is a member of Go Big Red, LLC. Jeff decides he does not like the color red, preferring instead the colors black and gold. Jeff leaves the LLC for that reason. Upon dissociation all of the following apply to Jeff except:________.

a. duty of loyalty immediately ceases in all regards.
b. loses the right to manage the LLC.
c. right to have his interests to be bought out.
d. duty of care immediately ceases in all regards.

Answer 1

Jeff's dissociation from Go Big Red, LLC ends his right to manage and his duty of loyalty, but his duty of care for past actions persists post-dissociation, and his interests in the LLC may still have buyout rights.

Step-by-step explanation:

When Jeff decides to leave Go Big Red, LLC, he ends his active participation in the business and certain repercussions follow. However, one statement among the options provided is not accurate concerning the consequences of his dissociation. The correct answer to what does not apply to Jeff upon dissociation is that his duty of care immediately ceases in all regards. While his duty of loyalty may cease with his departure and he loses the right to manage the LLC, the duty of care typically extends past the point of dissociation to cover past actions while he was still a member of the LLC. His interests also might give him rights for their buyout depending on the LLC's operating agreement and state law.

Answer 2

Option "D" is correct.

Step-by-step explanation:

Option "D" is correct because When a person or member dissociates then the person loses the right to manage, losses the right to act, ceases from their duty of loyalty, ceases from the duty of care immediately if any event occurs after dissociation and the member has the right to find their interest. Therefore, from the given options it can be seen that the duty of care remains intact when only to that event that had occurred before the dissociation.