Missouri Laws 347.109 – Limitations upon distributions — date of measurement of effective ..
1. A limited liability company shall not make any distribution to one or more members with respect to their interests in the limited liability company, and no member shall be entitled to receive any such distribution, to the extent that, after giving effect to the distribution:
(1) The limited liability company would not be able to pay its debts as they became due in the usual course of business; or
Terms Used In Missouri Laws 347.109
- 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 any section of the statutes, mean the section next preceding or next following that in which the reference is made, unless some other section is expressly designated in the reference. See Missouri Laws 1.020
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- person: may extend and be applied to bodies politic and corporate, and to partnerships and other unincorporated associations. See Missouri Laws 1.020
(2) The limited liability company’s total assets would be less than the sum of its total liabilities to which such assets are subject plus, unless the operating agreement provides otherwise, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of members whose rights to receive distributions are superior under the operating agreement to the rights of the members receiving the distribution, except that, for purposes of making such determination, liabilities to members or former members in their status as such shall be excluded.
2. The limited liability company may base a determination that its distribution is not prohibited under subsection 1 of this section on:
(1) Financial statements prepared on the basis of generally accepted accounting principles and practices that are reasonable under the circumstances; or
(2) A fair valuation or other method that is reasonable under the circumstances.
3. The effective distribution under subsection 1 of this section is measured as of:
(1) The date the distribution is authorized, if the distribution in fact occurs within one hundred twenty days after the date of authorization; or
(2) The date the payment is made, if it occurs more than one hundred twenty days after the date of authorization.
4. If a member shall receive any distribution with respect to his interest in a limited liability company in violation of this section or the operating agreement, such member and the person or persons who are vested with authority under the operating agreement to make distributions to the members and who knowingly authorized or permitted such distribution to the member shall be liable, for a period of three years following the date of the distribution, to the limited liability company for the value of the wrongful distribution, but only to the extent necessary to discharge the limited liability company’s liabilities incurred prior to the date of such distribution. If more than one such person who authorized or permitted such wrongful distribution is held liable therefor pursuant to this subsection, each such person shall be entitled to contribution from the other persons who are held so liable therefor pursuant to this subsection.