Indiana § 23-18-5-7 Unlawful distributions; liability

Indiana Statutes

§ 23-18-5-7 — Unlawful distributions; liability

Indiana § 23-18-5-7

Title 23BUSINESS AND OTHER ASSOCIATIONS

Art. 18LIMITED LIABILITY COMPANIES

Ch. 5Finance

This text of Indiana § 23-18-5-7 (Unlawful distributions; liability) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 23-18-5-7 (2026).

Text

(a)A member or manager who votes for or assents to a distribution in violation of the operating agreement or section 6 of this chapter is personally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating the operating agreement or section 6 of this chapter or if it is established that the member or manager did not act in compliance with section 6 of this chapter.

(b)Each member or manager held liable under subsection (a) for an unlawful distribution is entitled to contribution from the following:

(1)Each other member or manager who could be held liable under subsection (a) for the unlawful distribution.

(2)Each member for the amount the member received knowing that the distribution was made i

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(a) A member or manager who votes for or
assents to a distribution in violation of the operating agreement or
section 6 of this chapter is personally liable to the limited liability
company for the amount of the distribution that exceeds the amount
that could have been distributed without violating the operating
agreement or section 6 of this chapter or if it is established that the
member or manager did not act in compliance with section 6 of this
chapter.
(b) Each member or manager held liable under subsection (a) for an
unlawful distribution is entitled to contribution from the following:
(1) Each other member or manager who could be held liable
under subsection (a) for the unlawful distribution.
(2) Each member for the amount the member received knowing
that the distribution was made in violation of the operating
agreement or section 6 of this chapter.
(c) A proceeding under this section is barred unless it is commenced
not more than two (2) years after the date on which the effect of the
distribution is measured under section 6 of this chapter.