Contributions and Distributions.

Ala. Code tit. 10A, ch. 5, art. 5

in effect

Ala. Code § 10A-5-5.01 Contribution. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-5.01. Contribution. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. The contributions of a member to the limited liability company may be in cash, property, services previously rendered, or a promissory note or other binding obligation to pay cash, convey property, or to render services. (Acts 1993, No. 93-724, p. 1425, §26; §10-12-26; amended and renumbered by Act 2009-513, p. 967, §232.)

Ala. Code § 10A-5-5.02 Liability for Contributions. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-5.02. Liability for Contributions. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) Except as provided in the certificate of formation, a member is obligated to the limited liability company to perform any promise to pay cash or convey property or to render services, even if the member is unable to perform because of death, disability, or any other reason. A member who does not perform such a promise is obligated at the option of the limited liability company to pay cash equal to the amount or value of the portion of the contribution that has not been paid, conveyed, or rendered. (b) The operating agreement may provide that the interest of any member who fails to make any contribution that the member is obligated to make, or who fails to pay any agreed assessment that the member is obligated to make, shall be subject to a reasonable penalty for such failure. The penalty may take the form of reducing the defaulting member’s proportionate interest in the limited liability company, subordinating the member’s interest to that of nondefaulting members, a forced sale of the member’s interest in compliance with reasonable procedures for notice and disposition, forfeiture of the member’s interest on compliance with reasonable procedures for notice, the lending of the amount necessary to meet the member’s commitment by other members, affixing of the value of the member’s interest by appraisal or by suitable formula and redemption or sale of the member’s interest at that value, or other reasonable penalty. (c) Unless otherwise provided in the operating agreement, the obligation of a member to perform any promise with respect to a contribution to the capital of the limited liability company, or to return money or other property paid or distributed in violation of this chapter, may be compromised only by consent of all the members. Notwithstanding the compromise, a creditor of a limited liability company who extends credit, or whose claim arises, after filing of the certificate of formation 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. (Acts 1993, No. 93-724, p. 1425, §27; §10-12-27; amended and renumbered by Act 2009-513, p. 967, §232.)

Ala. Code § 10A-5-5.03 Sharing of Profits and Losses. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-5.03. Sharing of Profits and Losses. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. The profits and losses, income, deductions, and credits, and items of income, deduction, and credits of the limited liability company shall be allocated among the members in the manner provided in the operating agreement. If the operating agreement does not so provide, profits and losses, income, deductions, and credits, and items of income, deductions, and credits shall be allocated on the basis of the pro rata value of the contributions made by each member to the extent they have been made and not returned. (Acts 1993, No. 93-724, p. 1425, §28; §10-12-28; amended and renumbered by Act 2009-513, p. 967, §232.)

Ala. Code § 10A-5-5.04 Interim Distributions of Property; Impairment of Capital. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-5.04. Interim Distributions of Property; Impairment of Capital. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. (a) Except as provided in this section or in the operating agreement, members are entitled to receive distributions from the limited liability company in proportion to their respective rights to share in profits under Section 10A-5-5.03. (b) Subsection (a) shall not apply to any of the following: (1) Distributions on dissolution. (2) Distributions governed by a contrary provision in the operating agreement. (c) No distribution may be made unless, after the distribution is made, the assets of the limited liability company are sufficient to pay all liabilities of the limited liability company except liabilities to members on account of their contributions. (d) Unless otherwise provided in the operating agreement, a member has no right to receive and may not be required to accept a distribution in kind. (Acts 1993, No. 93-724, p. 1425, §29; Act 97-920, 1st Ex. Sess., p. 312, §1; §10-12-29; amended and renumbered by Act 2009-513, p. 967, §232.)

Ala. Code § 10A-5-5.05 Purchase of Interest of Member Whose Membership Has Ceased. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017.

10A-5-5.05. Purchase of Interest of Member Whose Membership Has Ceased. Repealed in the 2014 Regular Session by Act 2014-144 Effective January 1, 2017. Unless the governing documents of a limited liability company or a private agreement provide for the purchase of the interest of a former member whose membership has ceased, neither the limited liability company nor its members shall be obligated to purchase the interest of a former member whose membership has ceased. (Acts 1993, No. 93-724, p. 1425, §30; Act 97-920, 1st Ex. Sess., p. 312, §1; §10-12-30; amended and renumbered by Act 2009-513, p. 967, §232.)

Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026