LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in District of Columbia

Short answer D.C. requires an LLC to reimburse a qualifying payment and indemnify a qualifying liability incurred by a member of a member-managed company or manager of a manager-managed company during company activities, if the cited duties were met. It may advance reasonable expenses for a claim against a present or former member or manager on a repayment promise, and may insure status-related liability even when an agreement could not remove the underlying company liability. A member's excess capital advance follows a separate reimbursement and interest-bearing loan rule.
State
District of Columbia
Statute checked
September 23, 2026
Sources
10 statutes

At a glance

Governing LLC law and scopeD.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 capacitiesPayment/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 reimbursementMust 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 limitsMust 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 repaymentMay 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 authorityMay 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 survivalAgreement 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 decideActual 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.

D.C. Code § 29-801.07(a) · accessed 2026-09-23
D.C. Code § 29-801.07(b) · accessed 2026-09-23
D.C. Code § 29-801.07(c)(13) · accessed 2026-09-23
D.C. Code § 29-804.07(b)(3) · accessed 2026-09-23
D.C. Code § 29-804.07(c)(3) · accessed 2026-09-23
D.C. Code § 29-804.07(g) · accessed 2026-09-23
D.C. Code § 29-804.07(h) · accessed 2026-09-23
D.C. Code § 29-804.08(a) · accessed 2026-09-23
D.C. Code § 29-804.08(b) · accessed 2026-09-23
D.C. Code § 29-804.08(c) · accessed 2026-09-23
This page is general legal information about state LLC reimbursement, indemnification, expense advancement, and insurance statutes, not legal advice or a determination that any person is entitled to payment or coverage. An operating agreement, company records, the person's capacity and conduct, the nature and timing of a claim, and an insurance policy may change the answer. The table does not decide expense reasonableness, insolvency, tax treatment, policy terms, disputed facts, or a litigation outcome. Check the current statute and governing documents and seek licensed advice for a particular matter.

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