LLC Reimbursement, Indemnification, Advancement, and Insurance Requirements in West Virginia

At a glance

Requirements one by one

Payments, liabilities and member advances

W. Va. Code § 31B-4-403(a) uses “shall” for both reimbursement of a member's or manager's payment and indemnity for that person's liability, tied to the ordinary course of company business or preserving its business or property. Under § 31B-4-403(b), the LLC must reimburse a member who advances more than the agreed contribution. For a member's qualifying payment or advance, § 31B-4-403(c) makes the amount a company loan bearing interest from the payment or advance date; that loan rule refers to a member, even though subsection (a) also covers managers.

Agreement, management and general powers

Under § 31B-1-103(a), all members may make an operating agreement governing company affairs and relations; the chapter fills gaps. § 31B-1-103(b)(2) protects loyalty, § 31B-1-103(b)(3) limits reductions in care, and § 31B-1-103(b)(4) protects good faith and fair dealing, subject to their stated qualifications. Sections 31B-4-404(a)(2) and § 31B-4-404(b)(2) supply the ordinary member or manager decision rules. Section 31B-1-112(b) gives general necessary-or-convenient business powers, including property powers under § 31B-1-112(b)(2) and contract powers under § 31B-1-112(b)(5); those words alone do not establish the terms of any indemnity-insurance policy.

What trips people up

The “advance to the company” in § 31B-4-403(b) is the member's excess contribution advance, not an interim payment of defense costs. Section 31B-4-403(a)–(c) does not specify a defense-expense undertaking, an indemnity approval procedure or a court application. It also does not identify former members or managers or state a special rule for insuring nonindemnifiable conduct. Those limits matter when comparing it with states that expressly address each subject.

Common questions

Does a manager's qualifying payment become an interest-bearing loan under this section? Section 31B-4-403(a) includes managers in the reimbursement rule, but subsection (c)'s automatic loan rule describes a payment or advance made by a member.

Does a liability have to involve a lawsuit? Section 31B-4-403(a) speaks of “liabilities incurred” and does not make filing a lawsuit a stated condition.

Statutes and sources

• W. Va. Code § 31B-1-103(a), (b)(2)–(4): “To the extent the operating agreement does not otherwise provide, this chapter governs relations among the members, managers and company.” Official current chapter, accessed 2026-09-23.
• W. Va. Code § 31B-1-112(b): “a limited liability company has the same powers as an individual to do all things necessary or convenient to carry on its business or affairs.” Official current chapter, accessed 2026-09-23.
• W. Va. Code § 31B-4-403(a)–(c): “A limited liability company shall reimburse a member or manager for payments made and indemnify a member or manager for liabilities incurred” within the stated business or preservation scope. Official current section, accessed 2026-09-23.
• W. Va. Code § 31B-4-404(a)(2), (b)(2): company business decisions generally follow the majority of members or managers, as applicable, subject to the stated exceptions. Official current chapter, accessed 2026-09-23.