AN ACT RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE ISLAND LIMITED-LIABILITY COMPANY ACT (Permits a member or members of a limited-liability company to avoid dissolution by buying the membership interest owned by the other member or members seeking dissolution.)

H7339

2026 -- H 7339
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LC004316
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE
ISLAND LIMITED-LIABILITY COMPANY ACT

Introduced By:
Representatives Place, Hopkins, Fascia, Santucci, and Quattrocchi

Date Introduced:
January 28, 2026

Referred To:
House Corporations
It is enacted by the General Assembly as follows:
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SECTION 1. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited-
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Liability Company Act" is hereby amended by adding thereto the following section:
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7-16-40.1. Avoidance of dissolution by buyout.

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(a) Whenever a petition for dissolution of a LLC is filed by one or more members as a
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petitioner, pursuant to § 7-16-40 or a right to compel dissolution, which is authorized under § 7-
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16-39 or is otherwise valid, one or more of its other members may avoid the dissolution by filing
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with the court, prior to the commencement of the hearing, or, in the discretion of the court, at any
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time prior to a sale or other disposition of the assets of the LLC, an election to purchase the
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membership interest owned by the petitioner at a price equal to the membership interest's fair
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market value.
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(b) If the membership interest owned by the petitioner is to be purchased by another
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member, notice shall be sent to all members of the LLC other than the petitioner, providing any or
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all other members, other than the petitioner, with an opportunity to join in the election to purchase
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a pro rata share of the petitioner's membership interest.
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(c) If the parties are unable to reach an agreement as to the fair market value of the
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membership interest, the court shall, upon the posting of a bond or other security sufficient to assure
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to the petitioner payment of the value of the membership interest, stay the proceeding and determine
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the value of the membership interest, in accordance with the procedure set forth in § 7-1.2-1202,

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as of the close of business on the day on which the petition for dissolution was filed. Upon
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determining the fair market value of the membership interest, the court shall state in its order
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directing that the membership interest be purchased, the purchase price and the time within which
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the payment is to be made, and may decree any other terms and conditions of sale that it determines
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to be appropriate and not objected to by the parties, including payment of the purchase price in
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installments extending over a period of time, and, if the membership interest is to be purchased by
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multiple members, the allocation of the membership interest among members electing to purchase
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the interest, which, so far as practicable, unless otherwise agreed, shall be pro rata to the
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membership interest owned by each member at the time the petition was filed.
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(d) The petitioner is entitled to interest, at the rate on judgments in civil actions, on the
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purchase price of the membership interest from the date of the filing of the election to purchase the
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membership interest, and all other rights of the petitioner as owner of the membership interest
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terminate on that date. The costs of the proceeding, which include reasonable compensation and
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expenses of appraisers, but not fees and expenses of counsel or of experts retained by a party, shall
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be allocated between or among the parties as the court determines.
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(e) Upon full payment of the purchase price, under the terms and conditions specified by
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the court, or at any other time that is ordered by the court, the petitioner shall transfer the
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membership interest to the purchasers.
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SECTION 2. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO CORPORATIONS, ASSOCIATIONS, AND PARTNERSHIPS -- THE RHODE
ISLAND LIMITED-LIABILITY COMPANY ACT
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This act would permit a member or members of a limited-liability company to avoid
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dissolution by buying the membership interest owned by the other member or members seeking
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dissolution.
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This act would take effect upon passage.
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LC004316
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