Rhode Island § 7-16-32 § 7-16-32. Liability upon wrongful distribution.

Rhode Island Statutes

§ 7-16-32 — § 7-16-32. Liability upon wrongful distribution.

Rhode Island § 7-16-32

Title 7Corporations, Associations and Partnerships

Ch. 7-16The Rhode Island Limited Liability Company Act

This text of Rhode Island § 7-16-32 (§ 7-16-32. Liability upon wrongful distribution.) is published on Counsel Stack Legal Research, covering Rhode Island primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

R.I. Gen. Laws § 7-16-32 (2026).

Text

§ 7-16-32. Liability upon wrongful distribution.
(a) A member or manager who votes for or assents to a distribution in violation of the
            operating agreement or of § 7-16-31 is personally liable to the limited liability company for the amount of the distribution
            that exceeds what could have been distributed without violating the operating agreement
            or § 7-16-31.
         
(b) Each member or manager held liable under subsection (a) for an unlawful distribution
            is entitled to contribution:
         
(1) From each other member or manager who could be held liable under subsection (a) for
        

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§ 7-16-32. Liability upon wrongful distribution.

(a) A member or manager who votes for or assents to a distribution in violation of the operating agreement or of § 7-16-31 is personally liable to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating the operating agreement or § 7-16-31.

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

(1) From each other member or manager who could be held liable under subsection (a) for the unlawful distribution; and

(2) From each member for the amount the member received knowing that the distribution was made in violation of the operating agreement or § 7-16-31.

(c) A proceeding under this section is barred unless it is commenced within two (2) years after the date on which the effect of the distribution is measured under § 7-16-31.