1. Obligation to perform enforceable promise. Except as provided in the operating agreement or the articles of organization, a member, the personal representative of the member's estate or the member's successors or assigns is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability or other reason.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
2. Conditions to obligation. A conditional obligation of a member to make a contribution or pay money or other property to a limited liability company may not be enforced unless the conditions to the obligation have been satisfied or waived for or by that member. Conditional obligations include contributions payable upon a discretionary call of a limited liability company before the time the call occurs.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
3. Contribution of property, services or cash. If a member does not make the required contribution of property or services, that member is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value of the stated contribution that has not been made. The option of the limited liability company is in addition to, and not in lieu of, other rights, including the right to specific performance, that that limited liability company may have against that member under the operating agreement or applicable law.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
4. Compromise of promise. Unless otherwise provided in section 672, the operating agreement or the articles of organization, the obligation of a member to make a contribution may be compromised only with the unanimous consent of the members.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
5. Creditors' rights. Notwithstanding the compromise or the availability or exercise of any other remedy including any remedy created pursuant to subsection 6, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation after the member signs a writing that reflects the obligation and before the compromise or exercise of the remedy may enforce the original obligation.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
6. Remedies. An operating agreement or articles of organization may provide that the interest of a member who fails to make any contribution or other payment that the member is required to make is subject to specified remedies for, or specified consequences of, the failure. The remedy or consequence may take the form of reducing the defaulting member's interest in the limited liability company, subordinating the defaulting member's interest in the limited liability company to that of the nondefaulting members, a forced sale of the interest in the limited liability company, forfeiture of the interest in the limited liability company, the lending by the nondefaulting members of the amount necessary to meet the commitment, a fixing of the value of the member's interest in the limited liability company by appraisal or by formula and redemption and sale of the member's interest in the limited liability company at that value or other remedy or consequences. Except as provided in subsection 3, the availability or exercise of any of these remedies does not preclude the exercise by any creditor of the limited liability company of the rights conferred by subsection 5.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
SECTION HISTORY
1993, c. 718, §A1 (NEW). 2009, c. 629, Pt. A, §1 (RP). 2009, c. 629, Pt. A, §3 (AFF).
1. Obligation to perform enforceable promise. Except as provided in the operating agreement or the articles of organization, a member, the personal representative of the member's estate or the member's successors or assigns is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability or other reason.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
2. Conditions to obligation. A conditional obligation of a member to make a contribution or pay money or other property to a limited liability company may not be enforced unless the conditions to the obligation have been satisfied or waived for or by that member. Conditional obligations include contributions payable upon a discretionary call of a limited liability company before the time the call occurs.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
3. Contribution of property, services or cash. If a member does not make the required contribution of property or services, that member is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value of the stated contribution that has not been made. The option of the limited liability company is in addition to, and not in lieu of, other rights, including the right to specific performance, that that limited liability company may have against that member under the operating agreement or applicable law.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
4. Compromise of promise. Unless otherwise provided in section 672, the operating agreement or the articles of organization, the obligation of a member to make a contribution may be compromised only with the unanimous consent of the members.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
5. Creditors' rights. Notwithstanding the compromise or the availability or exercise of any other remedy including any remedy created pursuant to subsection 6, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation after the member signs a writing that reflects the obligation and before the compromise or exercise of the remedy may enforce the original obligation.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
6. Remedies. An operating agreement or articles of organization may provide that the interest of a member who fails to make any contribution or other payment that the member is required to make is subject to specified remedies for, or specified consequences of, the failure. The remedy or consequence may take the form of reducing the defaulting member's interest in the limited liability company, subordinating the defaulting member's interest in the limited liability company to that of the nondefaulting members, a forced sale of the interest in the limited liability company, forfeiture of the interest in the limited liability company, the lending by the nondefaulting members of the amount necessary to meet the commitment, a fixing of the value of the member's interest in the limited liability company by appraisal or by formula and redemption and sale of the member's interest in the limited liability company at that value or other remedy or consequences. Except as provided in subsection 3, the availability or exercise of any of these remedies does not preclude the exercise by any creditor of the limited liability company of the rights conferred by subsection 5.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
SECTION HISTORY
1993, c. 718, §A1 (NEW). 2009, c. 629, Pt. A, §1 (RP). 2009, c. 629, Pt. A, §3 (AFF).
1. Obligation to perform enforceable promise. Except as provided in the operating agreement or the articles of organization, a member, the personal representative of the member's estate or the member's successors or assigns is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability or other reason.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
2. Conditions to obligation. A conditional obligation of a member to make a contribution or pay money or other property to a limited liability company may not be enforced unless the conditions to the obligation have been satisfied or waived for or by that member. Conditional obligations include contributions payable upon a discretionary call of a limited liability company before the time the call occurs.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
3. Contribution of property, services or cash. If a member does not make the required contribution of property or services, that member is obligated, at the option of the limited liability company, to contribute cash equal to that portion of value of the stated contribution that has not been made. The option of the limited liability company is in addition to, and not in lieu of, other rights, including the right to specific performance, that that limited liability company may have against that member under the operating agreement or applicable law.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
4. Compromise of promise. Unless otherwise provided in section 672, the operating agreement or the articles of organization, the obligation of a member to make a contribution may be compromised only with the unanimous consent of the members.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
5. Creditors' rights. Notwithstanding the compromise or the availability or exercise of any other remedy including any remedy created pursuant to subsection 6, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation after the member signs a writing that reflects the obligation and before the compromise or exercise of the remedy may enforce the original obligation.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
6. Remedies. An operating agreement or articles of organization may provide that the interest of a member who fails to make any contribution or other payment that the member is required to make is subject to specified remedies for, or specified consequences of, the failure. The remedy or consequence may take the form of reducing the defaulting member's interest in the limited liability company, subordinating the defaulting member's interest in the limited liability company to that of the nondefaulting members, a forced sale of the interest in the limited liability company, forfeiture of the interest in the limited liability company, the lending by the nondefaulting members of the amount necessary to meet the commitment, a fixing of the value of the member's interest in the limited liability company by appraisal or by formula and redemption and sale of the member's interest in the limited liability company at that value or other remedy or consequences. Except as provided in subsection 3, the availability or exercise of any of these remedies does not preclude the exercise by any creditor of the limited liability company of the rights conferred by subsection 5.
[ 1993, c. 718, Pt. A, §1 (NEW) .]
SECTION HISTORY
1993, c. 718, §A1 (NEW). 2009, c. 629, Pt. A, §1 (RP). 2009, c. 629, Pt. A, §3 (AFF).
