48-232-101 - Authorization, form and acceptance of contributions.
48-232-101. Authorization, form and acceptance of contributions.
(a) Permissible Forms. The contributions of a member to an LLC may be in cash, property, or services rendered or a promissory note.
(b) Authority. Subject to any restrictions in the articles or operating agreement, an LLC through its organizers, members or board of governors may accept contributions, make contribution agreements under § 48-233-101, and make contribution allowance agreements under § 48-234-101. The action of the members or board of governors shall be by such number or interest as required to admit a member under § 48-232-102.
(c) Obligation to Perform. Except as provided in the articles or an operating agreement, a member or a party to a contribution agreement is obligated to the LLC to perform any enforceable promise to contribute cash or property, even if the member or a party to a contribution agreement is unable to perform because of death, disability or any other reason. If a member or a party to a contribution agreement does not make the required contribution of property or services, such person is obligated at the option of the LLC to contribute cash equal to that portion of the value of such contribution that has not been made. The foregoing option shall be in addition to, and not in lieu of, any other rights, including the right to specific performance, that the LLC may have against such person under the articles or the operating agreement or applicable law.
(d) Compromise of Obligation. Unless otherwise provided in the articles or an operating agreement, the obligation of a member or party to a contribution agreement to make a contribution may be compromised only by consent of all the members or the board of governors (if the LLC is board-managed). Notwithstanding the compromise, a creditor of an LLC who extends credit after the filing of articles or execution of an operating agreement or an amendment thereto which, in either case, reflects the obligation, and before the amendment thereof to reflect the compromise, may enforce the original obligation to the extent that, in extending credit, the creditor reasonably relied on the obligation of a member or party to a contribution agreement to make a contribution. A conditional obligation of a member to make a contribution to an LLC may not be enforced unless the conditions to the obligation have been satisfied or waived as to or by such member. Conditional obligations include contributions payable upon a discretionary call of the members of an LLC or the board of governors, if applicable, prior to the time the call occurs.
(e) Remedies upon Default. The articles or an operating agreement may provide that the interest of any member who fails to make any contribution that the member is obligated to make shall be subject to specified penalties for, or specified consequences of, such failure. Such penalty or consequence may take the form of:
(1) Reducing or eliminating the defaulting member's proportional interest in the LLC;
(2) Subordinating the member's membership interest to that of non-defaulting members;
(3) A forced sale of the member's membership interest;
(4) Forfeiture of the member's membership interest;
(5) The lending by other members of the amount necessary to meet the member's commitment and the charging of interest thereon of up to the highest rate allowed by law with the repayments of such made from the first distributions from the member's interest;
(6) A fixing of the value of the member's membership interest by appraisal or by formula and redemption or sale of the member's membership interest at such value; or
(7) Other penalty or consequence.
[Acts 1994, ch. 868, § 1; 1995, ch. 403, §§ 37-39.]