450.4404 Managers; duties; action for failure to perform duties.

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Sec. 404.

(1)A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best interests of the limited liability company.

(2)In discharging the manager's duties, a manager may rely on information, opinions, reports, or statements, including, but not limited to, financial statements or other financial data, if prepared or presented by any of the following:

(a)One or more other managers or members or employees of the limited liability company whom the manager reasonably believes to be reliable and competent in the matter presented.

(b)Legal counsel, public accountants, engineers, or other persons as to matters the manager reasonably believes are within the person's professional or expert competence.

(c)A committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence.

(3)A manager is not entitled to rely on the information, opinions, reports, or statements described in subsection

(2)if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection

(2)unwarranted.

(4)A manager is not liable for an action taken as a manager or the failure to take an action if the manager performs the duties of the manager's office in compliance with this section.

(5)Except as otherwise provided in an operating agreement or by vote of the members pursuant to section 502(4) and (7), a manager shall account to the limited liability company and hold as trustee for it any profit or benefit derived by the manager from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by the manager of its property.

(6)An action against a manager for failure to perform the duties imposed by this act shall be commenced within 3 years after the cause of action has accrued or within 2 years after the cause of action is discovered or should reasonably have been discovered by the complainant, whichever occurs first.

History: 1993, Act 23, Eff. June 1, 1993 ;-- Am. 1997, Act 52 , Imd. Eff. July 1, 1997 ;-- Am. 2010, Act 290 , Imd. Eff. Dec. 16, 2010