Alabama § 10A-5A-7.06 Application of Assets in Winding Up Limited Liability Company’s Activities and Affairs

Alabama Statutes

§ 10A-5A-7.06 — Application of Assets in Winding Up Limited Liability Company’s Activities and Affairs

Alabama § 10A-5A-7.06

Title 10AAlabama Business and Nonprofit Entities Code

Ch. 5AAlabama Limited Liability Company Law of 2014

Art. 7Dissolution, Winding Up, and Reinstatement

This text of Alabama § 10A-5A-7.06 (Application of Assets in Winding Up Limited Liability Company’s Activities and Affairs) is published on Counsel Stack Legal Research, covering Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ala. Code § 10A-5A-7.06 (2026).

Text

Upon the winding up of a limited liability company, the assets shall be applied as follows:

(a)Payment, or adequate provision for payment, shall be made to creditors, including, to the extent permitted by law, members who are creditors, in satisfaction of liabilities of the limited liability company.

(b)After a limited liability company complies with subsection (a), any surplus must be distributed:

(1)first, to each person owning a transferable interest that reflects contributions made on account of the transferable interest and not previously returned, an amount equal to the value of the person’s unreturned contributions; and

(2)then to each person owning a transferable interest in the proportions in which the owners of transferable interests share in distributions before dissolution.

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Upon the winding up of a limited liability company, the assets shall be applied as follows:
(a) Payment, or adequate provision for payment, shall be made to creditors, including, to the extent permitted by law, members who are creditors, in satisfaction of liabilities of the limited liability company.
(b) After a limited liability company complies with subsection (a), any surplus must be distributed:
(1) first, to each person owning a transferable interest that reflects contributions made on account of the transferable interest and not previously returned, an amount equal to the value of the person’s unreturned contributions; and
(2) then to each person owning a transferable interest in the proportions in which the owners of transferable interests share in distributions before dissolution.
(c) If the limited liability company does not have sufficient surplus to comply with subsection (b)(1), any surplus must be distributed among the owners of transferable interests in proportion to the value of their respective unreturned contributions.