§ 48-249-305 — Sharing of and rights to distributions

(a) LLC documents control. Any distributions by an LLC shall be allocated and distributed among the members and holders of financial rights in the manner provided in the LLC documents. (b) LLC documents silent. If the LLC documents do not provide for the allocations of distributions, then distributions, including distributions on termination of the LLC, except as provided in § 48-249-620 , shall be allocated among the members and holders of financial rights in equal shares. (c) Record date. The LLC documents may provide for a record date with respect to distributions. (d) In kind distributions. Neither a member nor a holder has a right to demand or receive a distribution in kind, regardless of the contribution of the member or holder. Neither a member nor a holder may be compelled to accept a distribution of any asset in kind from an LLC, to the extent that the percentage of the asset distributed to the member or holder exceeds a percentage of that asset that is equal to the percentage in which the member or holder shares in distributions from the LLC. (e) Status of recipient. If a member or holder of financial rights becomes entitled to receive a distribution, the member or holder of financial rights has the status of, and is entitled to all remedies available to, a general, unsecured creditor of the LLC with respect to the distribution. (f) Entitlement to receive distributions. A member or holder of financial rights is entitled to receive distributions before dissolution, only as provided by the LLC documents or by a majority vote of the members of a member-managed LLC, the managers of a manager-managed LLC, or the directors of a director-managed LLC, as applicable.

Legislative History

Acts 2005, ch. 286, § 1; 2006, ch. 620, § 24.