§ 7-64-1004 — Limitations on distributions to general partner

Colorado § 7-64-1004

• Jurisdiction: Colorado
• Title 07: Corporations
• Art.: Colorado Uniform Partnership Act (1997)

Text

(1) A limited
liability partnership or limited liability limited partnership shall not make a
distribution to a general partner to the extent that at the time of the distribution,
after giving effect to the distribution, all liabilities of the limited liability partnership
or limited liability limited partnership, other than liabilities to general partners on
account of their partnership interests and liabilities for which the recourse of
creditors is limited to specified property of the partnership, exceed the fair value of
the assets of the partnership; except that the fair value of property that is subject
to a liability for which the recourse of creditors is limited shall be included in the
assets of the partnership only to the extent that the fair value of that property
exceeds that liability. For purposes of this section and sections 7-62-607 and 7-62-608, the term distribution shall not include payments to the extent that the
payments do not exceed amounts equal to or constituting reasonable
compensation for present or past services or reasonable payments made in the
ordinary course of business pursuant to a bona fide retirement plan or other
benefits program.

(2) A general partner in a limited liability partnership or limited liability
limited partnership who receives a distribution in violation of subsection (1) of this
section, and who knew at the time of the distribution that the distribution violated
subsection (1) of this section, shall be liable to the partnership for the amount of the
distribution. A general partner in a limited liability partnership or limited liability
limited partnership who receives a distribution in violation of subsection (1) of this
section, and who did not know at the time of the distribution that the distribution
violated subsection (1) of this section, shall not be liable for the amount of the
distribution. Subject to subsection (3) of this section, this subsection (2) shall not
affect any obligation or liability of a general partner under an agreement or other
applicable law for the amount of a distribution.

(3) Unless otherwise agreed, a general partner in a limited liability
partnership or limited liability limited partnership who receives a distribution from
the partnership shall have no liability under this article or other applicable law for
the amount of the distribution after the expiration of three years from the date of
the distribution unless an action to recover the distribution from such partner is
commenced prior to the expiration of the said three-year period and an adjudication
of liability against such partner is made in the said action.

Legislative History

Source: L. 97: Entire article added, p. 904, � 1, effective January 1, 1998. L. 2006: Entire section amended, p. 851, � 13, effective July 1.