(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.

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Terms Used In Rhode Island General Laws 7-16-32

  • Member: means a person with an ownership interest in a limited-liability company with the rights and obligations specified under this chapter. See Rhode Island General Laws 7-16-2
  • Operating agreement: means any agreement, written or oral, of the members as to the affairs of a limited-liability company and the conduct of its business. See Rhode Island General Laws 7-16-2

(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.

History of Section.
P.L. 1992, ch. 280, § 1.