N.D. Cent. Code § 10-32.1-102

10-32.1-102. Series of members, managers, transferable interests or assets - General

powers of series - Governing authority - Distributions - Termination of series.

1. An operating agreement of a limited liability company regulated under this chapter and

not under chapter 10-06.1, 10-31, or 10-36 may establish or provide for the

establishment of a designated series of members, managers, transferable interests, or

assets that:

a. Has separate rights, powers, or duties with respect to specified property or

obligations of the limited liability company or profits and losses associated with

specified property or obligations; or

b. Has a separate business purpose or investment objective.

2. A series established in accordance with subsection 1 may carry on any business,

purpose, or activity which is not prohibited by this chapter. A series may not carry on

any business, purpose, or activity that is required to meet the requirements under

chapter 10-06.1, 10-31, or 10-36.

3. Subject to subsection 4, if an operating agreement establishes or provides for the

establishment of a particular series:

a. The debts, obligations, or other liabilities of the particular series, whether arising

in contract, tort, or otherwise, are enforceable against the assets of the series

only and not against:

(1) The assets of the limited liability company generally or any other series

thereof; or

(2) A member of the limited liability company.

b. The debts, obligations, or other liabilities of the limited liability company generally

or any other series thereof, whether arising in contract, tort, or otherwise, are not

enforceable against the assets of the particular series.

4. The limitations on liabilities in subsection 3 apply if:

a. The records for the particular series accounting for the assets of the series are

separately maintained from the records accounting for the assets of the limited

liability company or any other series thereof. Records that reasonably identify the

assets of a particular series, including by specific listing, category, type, quantity,

computational or allocational formula or procedure such as a percentage or share

of assets, or by any other method in which the identity of the assets is objectively

determinable, is deemed to account for the assets of the particular series

separately from the assets of the limited liability company or any other series

thereof;

b. The operating agreement specifically provides for the limitations on liabilities; or

c. Notice of the limitations on liabilities of the particular series is included in the

articles of organization. Notice is sufficient whether or not the limited liability

company has established or referenced any particular series in the notice.

5. This section, an operating agreement, or articles of organization may not restrict:

a. A series or limited liability company on behalf of a series from agreeing in the

operating agreement or otherwise that any debt, obligation, or other liability of the

limited liability company generally or any other series thereof is enforceable

against the assets of the series;

b. A limited liability company from agreeing in the operating agreement or otherwise

that any debt, obligation, or other liability of a series is enforceable against the

assets of the limited liability company generally; or

c. Notwithstanding section 10-32.1-26, a member or manager from agreeing in the

operating agreement or otherwise to be personally liable for any debt, obligation,

or other liability of a series.

6. A series established under this section may, in its own name, contract, hold title to

assets including real, personal and intangible property, grant liens and security

interests, and sue or be sued. A series may:

a. Have separate rights, powers, or duties with respect to specified property or

obligation of the limited liability company or profit and loss associated with any

specified property or obligation;
ished under this section may, in its own name, contract, hold title to

assets including real, personal and intangible property, grant liens and security

interests, and sue or be sued. A series may:

a. Have separate rights, powers, or duties with respect to specified property or

obligation of the limited liability company or profit and loss associated with any

specified property or obligation;

b. Carry on a lawful purpose regardless of whether for profit, except for the purpose

of acting as a financial institution or acting as an insurer; or

c. Hold assets directly or indirectly, including in the name of the series or the name

of the limited liability company.

7. An operating agreement that establishes or provides for the establishment of a series

may:

a. Provide for classes or groups of members or managers of the series having the

relative rights, powers, and duties specified in the operating agreement;

b. Provide for and specify the future creation of additional classes or groups of

members or managers of the series having the relative rights, powers, and duties

as may be established, including rights, powers, and duties senior to existing

classes and groups of members or managers of the series;

c. Provide for the taking of an action, including the amendment of the operating

agreement, without the vote or approval of a member, manager, class, or group of

members or managers of the series;

d. Provide that a member, class, or group of members of a series do not have voting

rights; and

e. Grant to all or certain identified members, managers, class, or group of members

or managers of the series the right to vote on a matter separately or with all or

any class or group of members or managers of the series. Voting by members or

managers may be on a per capita, number, financial interest, class, group, or

other basis.

8. The management of a series is vested as follows:

a. In the members of the series pursuant to subsection 2 of section 10-32.1-39. A

member shall cease to be a member of a series upon the divestment of all the

member's transferable interests of the series. The fact a person ceases to be a

member of a particular series must not by itself cause the person to cease to be a

member of the limited liability company or any other series thereof or cause the

termination of the series, regardless of whether the person was the last remaining

member of the series; or

b. If the operating agreement provides for the management of the series in whole or

in part by a manager, the management must be vested in one or more managers

who must be chosen as provided in the operating agreement and who must hold

the offices and have the responsibilities as specified in the agreement. A manager

ceases to be a manager of a series as provided in an operating agreement and

subject to subdivision e of subsection 3 of section 10-32.1-39. The fact a person

ceases to be a manager of a particular series must not by itself cause the person

to cease to be a manager of the limited liability company or any other series

thereof.

9. Notwithstanding section 10-32.1-30 and subject to subsections 10 and 12, if a member

of a series becomes entitled to receive a distribution, the member has the status of,

and is entitled to all remedies available to, a creditor of the series with respect to the

distribution. An operating agreement may provide for the establishment of a record

date for allocations and distributions associated with a series.

10. Notwithstanding subsection 1 of section 10-32.1-31, a limited liability company may

make a distribution with respect to a series established under this section unless the

total assets of the series after the distribution would be less than the sum of its total

liabilities plus the amount that would be needed, if the series were to be dissolved,

wound up, and terminated at the time of the distribution, to satisfy the preferential
ion 10-32.1-31, a limited liability company may

make a distribution with respect to a series established under this section unless the

total assets of the series after the distribution would be less than the sum of its total

liabilities plus the amount that would be needed, if the series were to be dissolved,

wound up, and terminated at the time of the distribution, to satisfy the preferential

rights upon winding up and termination of members whose preferential rights are

superior to those of the persons receiving the distribution. A member that receives a

distribution knowing the distribution was made in violation of this subsection is

personally liable to the series for the amount of the distribution.

a. This subsection does not affect an obligation or liability of a member under an

agreement or other applicable law for the amount of a distribution, except an

action under this subsection must be subject to subsection 5 of section

10-32.1-32.

b. For purposes of this subsection, "distribution" does not include amounts

constituting reasonable compensation for present or past services or reasonable

payments made in the ordinary course of business under a bona fide retirement

plan or other benefits program.

11. Subject to section 10-32.1-51, a series established under this section may be

terminated and its affairs wound up without causing the dissolution of the limited

liability company. The termination of the series does not affect the limitations on

liabilities of the series as provided in subsection 3. A series is terminated and its affairs

must be wound up upon the occurrence of any of the following:

a. The dissolution of the limited liability company under section 10-32.1-51;

b. The time or happening of events specified in the operating agreement;

c. The vote or consent of members of the series who own more than two-thirds of

the interests in the profits of the series; or

d. On application by a member or manager of the series, the entry of a court order

terminating the series on the grounds the series is not reasonably practicable to

carry on the purposes of the series in conformity with the operating agreement.

12. A person winding up the affairs of a series may, in the name of the limited liability

company and for and on behalf of the limited liability company and the series, take any

action with respect to the series as authorized by section 10-32.1-51. The person shall

provide for the claims and obligations of the series and distribute the assets of the

series as provided in section 10-32.1-54. Any action taken in accordance with this

subsection does not affect the liability of members and does not impose liability on a

liquidating trustee appointed in accordance with this subsection. Notwithstanding

section 10-32.1-51, the following persons may wind up the affairs of a series:

a. A manager of the series who has not wrongfully terminated the series;

b. If the series has no manager who qualifies under subdivision a, the members of

the series or a person approved by the members;

c. The members who own more than fifty percent of the interests in the profits of the

series; or

d. On application of a member or manager of the series or a personal representative

or assignee of the member or manager, and upon cause shown, a court or a

liquidating trustee appointed by the court.

13. A foreign limited liability company doing business in this state and governed by an

operating agreement that establishes or provides for the establishment of a designated

series of members, managers, transferable interests, or assets shall state the following

on its certificate of authority:

a. That the operating agreement of the foreign limited liability company establishes

or provides for the establishment of series having separate rights, powers, or

duties with respect to specified property or obligations of the foreign limited
establishment of a designated

series of members, managers, transferable interests, or assets shall state the following

on its certificate of authority:

a. That the operating agreement of the foreign limited liability company establishes

or provides for the establishment of series having separate rights, powers, or

duties with respect to specified property or obligations of the foreign limited

liability company or profits and losses associated with specified property or

obligations;

b. If any debt, obligation, or other liability of any particular series, whether arising in

contract, tort, or otherwise, is enforceable against the assets of the particular

series only and not against the assets of the foreign limited liability company

generally or any other series thereof; and

c. If any debt, obligation, or other liability of the foreign limited liability company

generally or any other series thereof, whether arising in contract, tort, or

otherwise, is enforceable against the assets of the particular series.

14. The secretary of state may adopt rules reasonable and necessary to address

requirements related to the secretary of state for registration and continuing existence

of the series limited liability companies established under this section.