Distributions

MCA tit. 35, ch. 8, pt. 6

in effect

Mont. Code Ann. § 35-8-601 Sharing of distributions

35-8-601. Sharing of distributions Except as provided in 35-8-905 , distributions of cash or other assets of a limited liability company must be shared among the members and among classes of members in the manner provided in writing in the articles of organization or the operating agreement. If the articles of organization or the operating agreement does not so provide in writing, each member shall share equally in any distribution. A member is entitled to receive distributions described in this section from a limited liability company to the extent and at the times or upon the happening of the events specified in the articles of organization or the operating agreement or at the times determined by the members or managers pursuant to 35-8-307 (3)(f). En. Sec. 32, Ch. 120, L. 1993; amd. Sec. 24, Ch. 302, L. 1999.

Mont. Code Ann. § 35-8-603 Distribution in kind

35-8-603. Distribution in kind Except as provided in the articles of organization or the operating agreement: (1) a member, regardless of the nature of the member's contribution, may not demand or receive any distribution from a limited liability company in any form other than cash; and (2) a member may not be compelled to accept from a limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the members exceeds a percentage of that asset that is equal to the percentage in which the member shares in distributions from the limited liability company. En. Sec. 34, Ch. 120, L. 1993.

Mont. Code Ann. § 35-8-604 Distributions

35-8-604. Distributions (1) A distribution may not be made if, after giving effect to the distribution: (a) the limited liability company would not be able to pay its debts as they become due in the usual course of business; or (b) the limited liability company's total assets would be less than the sum of its total liabilities plus, unless the articles of organization or 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 of other members upon dissolution that are superior to the rights of the member receiving the distribution. (2) The limited liability company may base a determination that a distribution is not prohibited under subsection (1) on either: (a) financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or (b) a fair valuation or other method that is reasonable under the circumstances. (3) Except as provided in subsection (5), the effect of a distribution under subsection (1) is measured as of: (a) the date the distribution is authorized if the payment occurs within 120 days after the date of authorization; or (b) the date payment is made if it occurs more than 120 days after the date of authorization. (4) A limited liability company's indebtedness to a member incurred by reason of a distribution to be made to that member in accordance with this section is at parity with the limited liability company's indebtedness to its general unsecured creditors, except as otherwise provided by agreement. (5) For purposes of this section: (a) if terms of indebtedness provide that payment of principal and interest is to be made only if and to the extent that payment of a distribution to members could then be made under this section, indebtedness of a limited liability company, including indebtedness issued as a distribution, is not a liability for purposes of determinations made under subsection (2); and (b) if the indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is actually made. En. Sec. 35, Ch. 120, L. 1993.

Mont. Code Ann. § 35-8-605 Liability upon wrongful distribution

35-8-605. Liability upon wrongful distribution (1) A member or manager who votes for or assents to a distribution in violation of the articles of organization, the operating agreement, or 35-8-604 is personally liable to the limited liability company, but not to other persons, for the amount of the distribution that exceeds what could have been distributed without violating 35-8-604 or the articles of organization or the operating agreement if it is established that the member or manager did not perform the member's or manager's duties in compliance with 35-8-310 . (2) A member of a manager-managed company who knew a distribution was made in violation of 35-8-604 , the articles of organization, or the operating agreement is personally liable to the company, but only to the extent that the distribution received by that member exceeded the amount that could have properly been paid to that member under 35-8-604 . (3) A member or manager against whom an action is brought under this section may implead in the action: (a) other members and managers who voted for or assented to the distribution in violation of subsection (1) and may compel contribution from them; and (b) members who received a distribution in violation of subsection (2) and may compel a contribution from the members in the amount received in violation of subsection (2). (4) A proceeding under this section is barred unless it is commenced within 2 years after the date of the distribution. En. Sec. 36, Ch. 120, L. 1993; amd. Sec. 25, Ch. 302, L. 1999.

Mont. Code Ann. § 35-8-606 Right to distribution

35-8-606. Right to distribution Subject to 35-8-905 , when a member becomes entitled to receive a distribution, the member has the status of and is entitled to all remedies available to a creditor of the limited liability company with respect to the distribution. En. Sec. 37, Ch. 120, L. 1993.

Source: Montana Legislative Services Division (mca.legmt.gov)URL: https://mca.legmt.gov/bills/mca/title_0350/chapter_0080/part_0060/sections_index.htmlFetched: 10/20/2026