(a) A limited liability company may not make a distribution, if after the distribution: (1) The company would not be able to pay its debts as they become due in the ordinary course of the company's activities and affairs; or (2) the company's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the company were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of members and transferees whose preferential rights are superior to those of persons receiving the distribution.
(b) A limited liability company may base a determination that a distribution is not prohibited under subsection (a) of this section on: (1) Financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or (2) a fair valuation or other method that is reasonable under the circumstances.
(c) Except as provided in subsection (e) of this section, the effect of a distribution under subsection (a) of this section is measured: (1) In the case of a distribution as described in subparagraph (A) of subdivision (8) of section 34-243a, the date money or other property is transferred or debt is incurred by the company; or (2) in all other cases, as of the date: (A) The distribution is authorized, if the payment occurs not later than one hundred twenty days after that date; or (B) the payment is made, if the payment occurs more than one hundred days after the distribution is authorized.
(d) A limited liability company's indebtedness to a member or transferee incurred by reason of a distribution made in accordance with this section is at parity with the company's indebtedness to its general, unsecured creditors.
(e) A limited liability company's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of subsection (a) of this section if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.
(f) In measuring the effect of a distribution under section 34-267f, the liabilities of a dissolved limited liability company do not include any claim that has been disposed of under section 34-267c, 34-267d or 34-267e.
(P.A. 16-97, S. 43.)
History: P.A. 16-97 effective July 1, 2017.
Structure Connecticut General Statutes
Chapter 613a - Uniform Limited Liability Company Act
Section 34-243. - Short title: Connecticut Uniform Limited Liability Company Act.
Section 34-243a. - Definitions.
Section 34-243b. - Knowledge. Notice.
Section 34-243c. - Governing law.
Section 34-243d. - Operating agreement: Scope, function and limitations.
Section 34-243g. - Nature, purpose and duration of limited liability company.
Section 34-243h. - Powers and purposes. Restrictions.
Section 34-243i. - Effective date. Application to existing relationships.
Section 34-243j. - Supplemental principles of law.
Section 34-243k. - Permitted name.
Section 34-243l. - Reservation of name.
Section 34-243m. - Registration of name.
Section 34-243n. - Registered agent.
Section 34-243p. - Resignation of registered agent.
Section 34-243q. - Change of name or address by registered agent.
Section 34-243r. - Service of process, notice or demand.
Section 34-243s. - Delivery of record.
Section 34-243t. - Reservation of power to amend or repeal.
Section 34-243u. - Fees payable to Secretary of the State. Sales tax not imposed.
Section 34-243w. - Savings clause.
Section 34-247. - Formation of limited liability company. Certificate of organization.
Section 34-247a. - Amendment or restatement of certificate of organization.
Section 34-247b. - Signing of records delivered to Secretary of the State for filing.
Section 34-247c. - Signing and filing of record pursuant to judicial order.
Section 34-247d. - Liability for inaccurate information in filed record.
Section 34-247e. - Filing requirements.
Section 34-247f. - Effective date and time.
Section 34-247g. - Withdrawal of filed record prior to taking effect.
Section 34-247h. - Correcting filed record.
Section 34-247i. - Duties of Secretary of the State re filing and delivery of record.
Section 34-247j. - Certificate of legal existence.
Section 34-247k. - Annual report.
Section 34-251. - Effect of person's status as member.
Section 34-251a. - Liability of members and managers.
Section 34-255. - Becoming a member.
Section 34-255a. - Form of contribution.
Section 34-255b. - Liability for contribution.
Section 34-255c. - Sharing of and right to distributions before dissolution.
Section 34-255d. - Limitations on distributions.
Section 34-255e. - Liability for improper distributions.
Section 34-255f. - Management of limited liability company.
Section 34-255g. - Reimbursement, indemnification, advancement and insurance.
Section 34-255h. - Standards of conduct for members and managers.
Section 34-255i. - Rights of member, manager and person disassociated as member to information.
Section 34-259. - Nature of transferable interest.
Section 34-259a. - Transfer of transferable interest.
Section 34-259b. - Charging order.
Section 34-259c. - Power of legal representative of deceased member.
Section 34-263. - Power to dissociate as member. Wrongful dissociation.
Section 34-263a. - Events causing dissociation.
Section 34-263b. - Effect of dissociation.
Section 34-267. - Events causing dissolution.
Section 34-267a. - Winding up.
Section 34-267b. - Reinstatement after dissolution.
Section 34-267c. - Known claims against dissolved limited liability company.
Section 34-267d. - Other claims against dissolved limited liability company.
Section 34-267e. - Court proceedings.
Section 34-267f. - Disposition of assets in winding up.
Section 34-267g. - Dissolution by forfeiture.
Section 34-271. - Direct action by member.
Section 34-271a. - Derivative action.
Section 34-271b. - Derivative action. Proper plaintiff.
Section 34-271c. - Derivative action. Pleading.
Section 34-271d. - Derivative action. Special litigation committee.
Section 34-271e. - Derivative action. Proceeds and expenses.
Section 34-275. - Governing law.
Section 34-275a. - Registration to transact business in this state.
Section 34-275b. - Foreign registration statement.
Section 34-275c. - Amendment of foreign registration certificate.
Section 34-275d. - Activities not constituting transacting business in this state.
Section 34-275e. - Noncomplying name of foreign limited liability company.
Section 34-275f. - Transfer of registration.
Section 34-275g. - Revocation of foreign registration certificate.
Section 34-275h. - Withdrawal of registration of registered foreign limited liability company.
Section 34-275i. - Action by Attorney General.
Section 34-279. - Definitions.
Section 34-279a. - Applicability of other statutes.
Section 34-279b. - Required notice or approval.
Section 34-279c. - Status of filings.
Section 34-279d. - Nonexclusivity.
Section 34-279e. - Plan reference to external facts.
Section 34-279f. - Applicability of appraisal rights.
Section 34-279g. - Excluded entities and transactions.
Section 34-279h. - Merger authorized.
Section 34-279i. - Action on plan of merging limited liability company.
Section 34-279j. - Filings required for merger. Effective date.
Section 34-279k. - Effect of merger.
Section 34-279l. - Interest exchange authorized.
Section 34-279m. - Plan of interest exchange.
Section 34-279n. - Approval of interest exchange.
Section 34-279o. - Amendment or abandonment of plan of interest exchange.
Section 34-279p. - Certificate of interest exchange. Effective date of interest exchange.
Section 34-279q. - Effect of interest exchange.
Section 34-283. - Uniformity of application and construction.
Section 34-283a. - Relation to Electronic Signatures in Global and National Commerce Act.
Section 34-283b. - Savings clause.
Section 34-283c. - Severability clause.