LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in District of Columbia
At a glance
| Governing LLC law and scope | D.C. Code §§ 29-804.08, -804.07(g)–(h), -801.07 govern payment, indemnity, expense advance, insurance, member loans and agreement limits |
|---|---|
| Covered people and capacities | Payment/liability: member of member-managed or manager of manager-managed LLC; advance: present/former member or manager; insurance: member or manager (§ 29-804.08) |
| Company-payment reimbursement | Must reimburse company-activity payment if §§ 29-804.05 and -804.09 complied with; member excess-capital advance separately reimbursed and interest-bearing (§§ 29-804.08(a), -804.07(g)–(h)) |
| Indemnification and conduct limits | Must indemnify debt, obligation or other liability from qualifying company activity if §§ 29-804.05 and -804.09 complied with (§ 29-804.08(a)) |
| Expense advancement and repayment | May advance reasonable ordinary-course claim expenses, including attorney fees/costs, for present/former member or manager on promise to repay if finally ineligible (§ 29-804.08(c)) |
| Insurance purchase authority | May insure member/manager capacity or status liability even if agreement could not eliminate underlying company liability (§§ 29-804.08(b), -801.07(c)(13)) |
| Approval and court procedure | § 29-804.08 states no special indemnity vote or court route; ordinary member/manager majority decisions follow § 29-804.07(b)(3), (c)(3) |
| Agreement control and survival | Agreement governs internal relations, chapter fills gaps (§ 29-801.07(a)–(b)); cannot exonerate specified bad-faith/willful/knowing conduct (§ 29-801.07(c)(13)); former capacity express for advances |
| What the statute does not decide | Actual capacity, duty compliance, qualifying liability, reasonable expense, promise and policy terms require case-specific review |
Requirements one by one
Company payments, liabilities and member advances
D.C. Code § 29-804.08(a) requires reimbursement of a payment and indemnity for a debt, obligation or other liability arising during company activities of a member in a member-managed LLC or a manager in a manager-managed LLC, if the person complied with the cited §§ 29-804.05 and 29-804.09 duties. Section 29-804.07(g) separately requires repayment of a member's advance beyond agreed capital. Under § 29-804.07(h), a member's qualifying payment or advance is a company loan bearing interest from the payment or advance date.
Interim expenses, insurance and agreement limits
Section 29-804.08(c) permits reasonable claim expenses in the ordinary course, including attorney fees and costs, for present or former member or manager capacity on a promise to repay if ultimately ineligible under subsection (a). § 29-804.08(b) permits insurance for member or manager status liability even when § 29-801.07(c)(13) bars the agreement from exonerating the underlying conduct. Sections 29-801.07(a) and § 29-801.07(b) make the agreement govern internal relations and the chapter fill gaps.
What trips people up
The member's advance to the company under § 29-804.07(g) is different from a defense-expense advance under § 29-804.08(c). Section 29-804.08 does not prescribe a separate indemnity approval vote or court route; ordinary member- or manager-managed decisions follow § 29-804.07(b)(3) or § 29-804.07(c)(3). Insurance permission does not establish policy coverage.
Common questions
Can a former manager receive a defense-expense advance? Section 29-804.08(c) expressly includes former capacity, subject to its other conditions.
Does a manager's qualifying payment become the interest-bearing loan described here? Section 29-804.08(a) covers managers in the payment rule, but § 29-804.07(h)'s automatic loan treatment names a member's payment or advance.
Statutes and sources
- D.C. Code § 29-801.07(a)–(b), (c)(13): agreement control and the prohibition on exonerating the listed conduct. Official current XML, accessed 2026-09-23.
- D.C. Code § 29-804.07(b)(3), (c)(3), (g)–(h): ordinary decisions, member excess-capital advances and interest-bearing company loans. Official current XML, accessed 2026-09-23.
- D.C. Code § 29-804.08(a)–(c): “shall reimburse” and “indemnify” a qualifying company payment or liability, and permits insurance and conditional interim expenses. Official current XML, accessed 2026-09-23.
Source links
Every statute quoted above, linked, with the date we checked it.
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