(1) In addition to the duties established elsewhere in this article, the duties that each member in a limited liability company in which management is vested in the members and that each manager owes to the limited liability company include the duties to:
(a) Account to the limited liability company and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct or winding up of the limited liability company business or derived from a use by the member or manager of property of the limited liability company, including the appropriation of an opportunity of the limited liability company;
(b) Refrain from dealing with the limited liability company in the conduct or winding up of the limited liability company business as or on behalf of a party having an interest adverse to the limited liability company; and
(c) Refrain from competing with the limited liability company in the conduct of the limited liability company business before the dissolution of the limited liability company.
(d) (Deleted by amendment, L. 2006, p. 857, § 24, effective July 1, 2006.)
(2) Each member in a limited liability company, the articles of organization of which provide that management is vested in the members, and each manager owes to the limited liability company a duty of care in the conduct and winding up of the business of the limited liability company, which shall be limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
(3) Each member and each manager shall discharge the member's or manager's duties to the limited liability company and exercise any rights consistently with the contractual obligation of good faith and fair dealing.
(4) A member in a limited liability company, the articles of organization of which provide that management is vested in the members, or a manager does not violate a duty or obligation to the limited liability company solely because the member's or manager's conduct furthers the member's or manager's own interest.
(5) A member or a manager may lend money to, and transact other business with, the limited liability company, and as to each loan or transaction the rights and obligations of the member or manager may be exercised or performed in the same manner as those of a person who is not a member or manager, subject to other applicable law.
(6) A member is not entitled to remuneration for services performed for the limited liability company except for reasonable compensation for services rendered in winding up the business of the limited liability company.
Source: L. 2004: Entire part R&RE, p. 939, § 6, effective July 1. L. 2006: Entire section amended, p. 857, § 24, effective July 1. L. 2016: (6) added, (HB 16-1329), ch. 242, p. 989, § 4, effective August 10.
Editor's note: This section is similar to former § 7-80-406 as it existed prior to 2004.
Notes of Decisions
Cited in
10
cases (
2 in the last 5 years), 2012–2025 · leading case:
Gagne v. Gagne, 2019 COA 42 (Colo. Ct. App. 2019).
Gagne v. Gagne, 2019 COA 42 (Colo. Ct. App. 2019).
· cites it 6× “The district court’s orders in this case are replete with references to the operating agreements. It’s plain to us that the district court considered them whenever appropriate.”
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
· cites it 12× “{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
JPMorgan Chase Bank, N.A. v. McClure, 2017 CO 22 (Colo. 2017).
“If his membership interests were deemed to be located with him, then the case would involve an Arizona judgment that presumably would be domesticated in New York, followed by the issuance of New York charging orders that would be served on the Colorado LLCs. Such a scenario…”
LaFond v. Sweeney, 345 P.3d 932 (Colo. Ct. App. 2012).
· cites it 6× “R.S.2011. Accordingly, those states' decisions addressing the issue before us have significant persuasive value.”
Long v. Cordain, 343 P.3d 1061 (Colo. Ct. App. 2014).
· cites it 2× “1 Long alleged that Cordain breached the fiduciary duties of good faith and loyalty that each member of an LLC owes to every other member by, among other things, "engaging in self-dealing and appropriating the Company's business opportunities by conducting speaking arrangements,…”
Props. Dev. Corp. v. Hinds, 2019 COA 102 (Colo. Ct. App. 2019).
“2018 (addressing 15 designation of manager of limited liability company); § 7-80-404, C.R.S. 2018 (specifying duties of managers).”
Weinstein v. Colborne Foodbotics, LLC, 302 P.3d 263 (Colo. 2013).
“§§ 7-80-404, 7-80-705. The LLC Act on its face does not call for the application of corporation common law in situations other than piercing the corporate veil.”
Yale v. AC Excavating, Inc., 295 P.3d 470 (Colo. 2013).
· cites it 3× “§ 7-80-404(5), C.R.S. (2012). In this case, the $157,500 that Yale deposited into the LLC's account constituted funds "disbursed" to the LLC, under the plain and ordinary meaning of the term "disbursed.”
In re: Julie Esther Ayaad & Osama Hassan Ayaad (Bankr.D. Colo. 2025).
· cites it 6× “C.R.S. § 7-80-404(1)(a). 57. Julie Ayaad violated her duty of care in the conduct of the Company, including the duty to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.”
John Matthew Ikalowych (Bankr.D. Colo. 2021).
“§ 7-80-404(1)(a). And, as a manager of Hailco, the Debtor has the power to bind Hailco as its agent.”
— Colo. Rev. Stat. § 7-80-404(1)(a) — 4 cases
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
“{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
LaFond v. Sweeney, 345 P.3d 932 (Colo. Ct. App. 2012).
“R.S.2011. Accordingly, those states' decisions addressing the issue before us have significant persuasive value.”
In re: Julie Esther Ayaad & Osama Hassan Ayaad (Bankr.D. Colo. 2025).
“C.R.S. § 7-80-404(1)(a). 57. Julie Ayaad violated her duty of care in the conduct of the Company, including the duty to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.”
John Matthew Ikalowych (Bankr.D. Colo. 2021).
“§ 7-80-404(1)(a). And, as a manager of Hailco, the Debtor has the power to bind Hailco as its agent.”
— Colo. Rev. Stat. § 7-80-404(1)(b) — 1 case
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
“{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
— Colo. Rev. Stat. § 7-80-404(2) — 2 cases
Gagne v. Gagne, 2019 COA 42 (Colo. Ct. App. 2019).
“The district court’s orders in this case are replete with references to the operating agreements. It’s plain to us that the district court considered them whenever appropriate.”
In re: Julie Esther Ayaad & Osama Hassan Ayaad (Bankr.D. Colo. 2025).
“C.R.S. § 7-80-404(1)(a). 57. Julie Ayaad violated her duty of care in the conduct of the Company, including the duty to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.”
— Colo. Rev. Stat. § 7-80-404(3) — 3 cases
Gagne v. Gagne, 2019 COA 42 (Colo. Ct. App. 2019).
“The district court’s orders in this case are replete with references to the operating agreements. It’s plain to us that the district court considered them whenever appropriate.”
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
“{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
In re: Julie Esther Ayaad & Osama Hassan Ayaad (Bankr.D. Colo. 2025).
“C.R.S. § 7-80-404(1)(a). 57. Julie Ayaad violated her duty of care in the conduct of the Company, including the duty to refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.”
— Colo. Rev. Stat. § 7-80-404(5) — 2 cases
Gagne v. Gagne, 2019 COA 42 (Colo. Ct. App. 2019).
“The district court’s orders in this case are replete with references to the operating agreements. It’s plain to us that the district court considered them whenever appropriate.”
Yale v. AC Excavating, Inc., 295 P.3d 470 (Colo. 2013).
“§ 7-80-404(5), C.R.S. (2012). In this case, the $157,500 that Yale deposited into the LLC's account constituted funds "disbursed" to the LLC, under the plain and ordinary meaning of the term "disbursed.”
— Colo. Rev. Stat. § 7-80-404(8) — 1 case
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
“{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
— Colo. Rev. Stat. § 7-80-404(a)(1) — 1 case
LaFond v. Sweeney, 2015 CO 3 (Colo. 2015).
“{42 In 2004, the legislature amended the LLC Act to include section 7-80-404, which states that members and managers of an LLC have a duty to [aJecount to the [LLC] and hold as trustee for it any property, profit, or benefit derived by the member or manager in the conduct of…”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.