Pennsylvania § 8846 Liability for improper distributions

Pennsylvania Statutes

§ 8846 — Liability for improper distributions

Pennsylvania § 8846

JurisdictionPennsylvania

Title 15CORPORATIONS AND UNINCORPORATED ASSOCIATIONS

PartPART III

Ch. 88LIMITED LIABILITY COMPANIES

Subch.RELATIONS OF MEMBERS TO EACH OTHER

This text of Pennsylvania § 8846 (Liability for improper distributions) is published on Counsel Stack Legal Research, covering Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

15 Pa. Cons. Stat. § 8846 (2026).

Text

(a)General rule.--Except as provided in subsection (b), if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of section 8845 (relating to limitations on distributions) and in consenting to the distribution fails to comply with section 8849.1 (relating to standards of conduct for members) or 8849.2 (relating to standards of conduct for managers), the member or manager is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without the violation of section 8845.

(b)Members without authority.--To the extent the operating agreement of a member-managed limited liability company relieves a member of the authority a

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(a) General rule.--Except as provided in subsection (b), if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of section 8845 (relating to limitations on distributions) and in consenting to the distribution fails to comply with section 8849.1 (relating to standards of conduct for members) or 8849.2 (relating to standards of conduct for managers), the member or manager is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without the violation of section 8845.

(b) Members without authority.--To the extent the operating agreement of a member-managed limited liability company relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in subsection (a) applies to the other members and not the member that the operating agreement relieves of authority and responsibility.

(c) Recipients.--A person that receives a distribution knowing that the distribution violated section 8845 is personally liable to the limited liability company but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under section 8845.

(d) Contribution.--A person against which an action is commenced because the person is liable under subsection (a) may:

(1) join any other person that is liable under subsection (a) or otherwise seek to enforce a right of contribution from the person; and

(2) join any person that is liable under subsection (c) or otherwise seek to enforce a right of contribution from the person in the amount the person is liable for under subsection (c).

(e) Statute of repose.--An action under this section is barred unless commenced within two years after the distribution.