(1) A distribution may be made by a limited liability partnership to any partner only if, after giving effect to the distribution, in the judgment of the partners approving the distribution:
(a) The partnership would be able to pay its debts as they become due in the ordinary course of business; and
(b) The fair value of the total assets of the partnership would equal or exceed its total liabilities.
(2) The partners of a limited liability partnership may base a determination that a distribution is not prohibited under subsection (1) of this section either on:
(a) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or
(b) A fair valuation or other method that is reasonable in the circumstances.
(3) For purposes of this section, the amount, if any, by which a liability as to which the recourse of creditors is limited to specific property of the limited liability partnership exceeds the fair value of such specific property shall be disregarded as a liability of the partnership.
(4) This section shall not apply to distributions to the partners that are regularly and customarily paid and constitute reasonable compensation for services performed by the partners in the business of the partnership.
(5) If a partner receives a distribution in violation of the partnership agreement or this section, the partner is liable to the limited liability partnership for a period of two years after the receipt of such distribution for that portion of the distribution that violates the partnership agreement or this section. [1997 c.775 §60]
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