In an LLC, which statement about transfer of a member's interest is true?

In an LLC, which statement about transfer of a member's interest is true?

• A. Transfer requires majority consent
• B. Transfers are prohibited
• C. Transfer is freely transferable
• D. Transfer requires unanimous consent

Answer: (D)

In an LLC, transfers of a member’s interest are tightly controlled to protect who sits as a member and how the company is run. Typically, any transfer that would change the membership—bringing in a new member or altering management rights—requires unanimous consent of the existing members, unless the operating agreement provides a different standard. This prevents a single dissenter from allowing an unwanted person into the LLC and preserves the agreed-upon balance of ownership and control. While a member may sometimes transfer their economic rights, such transfers often do not make the transferee a member unless all members approve. The unanimous-consent requirement is the standard rule that explains why this option is correct.

In an LLC, transfers of a member’s interest are tightly controlled to protect who sits as a member and how the company is run. Typically, any transfer that would change the membership—bringing in a new member or altering management rights—requires unanimous consent of the existing members, unless the operating agreement provides a different standard. This prevents a single dissenter from allowing an unwanted person into the LLC and preserves the agreed-upon balance of ownership and control. While a member may sometimes transfer their economic rights, such transfers often do not make the transferee a member unless all members approve. The unanimous-consent requirement is the standard rule that explains why this option is correct.