Colorado § 7-80-606 Limitations on distribution

Colorado Statutes

§ 7-80-606 — Limitations on distribution

Colorado § 7-80-606

Title 07Corporations

Art.Limited Liability Companies

This text of Colorado § 7-80-606 (Limitations on distribution) is published on Counsel Stack Legal Research, covering Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Colo. Rev. Stat. § 7-80-606 (2026).

Text

(1)A limited liability company shall not make a distribution to a member to the extent that at the time of distribution, after giving effect to the distribution, all liabilities of the limited liability company, other than liabilities to members on account of their membership interests and liabilities for which the recourse of creditors is limited to a specific property of the limited liability company, exceed the fair value of the assets of the limited liability company; 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 limited liability company only to the extent that the fair value of that property exceeds that liability. For purposes of this subsection (1), the term distr

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(1) A limited liability company shall
not make a distribution to a member to the extent that at the time of distribution,
after giving effect to the distribution, all liabilities of the limited liability company,
other than liabilities to members on account of their membership interests and
liabilities for which the recourse of creditors is limited to a specific property of the
limited liability company, exceed the fair value of the assets of the limited liability
company; 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
limited liability company only to the extent that the fair value of that property
exceeds that liability. For purposes of this subsection (1), 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 member 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 limited liability company for the
amount of the distribution. A member 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 member under an agreement or
other applicable law for the amount of a distribution.

(3) Unless otherwise agreed, a member who receives a distribution from a
limited liability company 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
member is commenced prior to the expiration of the said three-year period and an
adjudication of liability against such member is made in the said action.

Legislative History

Source: L. 90: Entire article added, p. 432, � 1, effective April 18. L. 2006: Entire section amended, p. 860, � 28, effective July 1. L. 2007: (1) amended, p. 227, � 18, effective May 29.