Indiana § 23-18-5-2 - Obligation to make capital contribution or other payment; compromise; effect; remedies or consequences of nonpayment

§ 23-18-5-2. Obligation to make capital contribution or other payment; compromise; effect; remedies or consequences of nonpayment

Sec. 2. (a) The obligation of a member to make a capital contribution or return money or other property paid or distributed in violation of this article may be compromised only:

(1) in compliance with a written operating agreement; or

(2) if a written operating agreement does not so provide, with the unanimous consent of the members.

(b) Any compromise does not affect the rights, if any, of any creditor of a limited liability company who, before the compromise, extends credit or acts in reliance on the obligation after the member signs a writing that reflects the obligation.

(c) An operating agreement may provide that a member who fails to make a capital 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 include the following form:

(1) Reducing the defaulting member's interest in the limited liability company.

(2) Subordinating the defaulting member's interest in the limited liability company to that of nondefaulting members.

(3) A forced sale of the defaulting member's interest in the limited liability company.

(4) Forfeiture of the defaulting member's interest in the limited liability company.

(5) A loan by the nondefaulting members of the amount necessary to meet the commitment.

(6) A determination of the value of the member's interest in the limited liability company by appraisal or by formula and redemption and sale of the defaulting member's interest in the limited liability company at that value.

As added by P.L.8-1993, SEC.301.