Iowa Code 489.708 – Distribution of assets in winding up limited liability company’s activities
Current as of: 2023 | Check for updates
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1. In winding up its activities, a limited liability company must apply its assets to discharge its obligations to creditors, including members that are creditors.
Terms Used In Iowa Code 489.708
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Member: means a person that has become a member of a limited liability company under section 489. See Iowa Code 489.102
- Person: means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Iowa Code 489.102
- Transfer: includes an assignment, conveyance, deed, bill of sale, lease, mortgage, security interest, encumbrance, gift, or transfer by operation of law. See Iowa Code 489.102
- Transferable interest: means the right, as originally associated with a person's capacity as a member, to receive distributions from a limited liability company in accordance with the operating agreement, whether or not the person remains a member or continues to own any part of the right. See Iowa Code 489.102
2. After a limited liability company complies with subsection 1, any surplus must be distributed in the following order, subject to any charging order in effect under section 489.503:
a. To each person owning a transferable interest that reflects contributions made by a member and not previously returned, an amount equal to the value of the unreturned contributions.
b. In equal shares among members and dissociated members, except to the extent necessary to comply with any transfer effective under section 489.502.
3. If a limited liability company does not have sufficient surplus to comply with subsection 2, paragraph “a”, any surplus must be distributed among the owners of transferable interests in proportion to the value of their respective unreturned contributions.
4. All distributions made under subsections 2 and 3 must be paid in money.