RCW 25.15.231
Limitations on distribution.
(1) A limited liability company must not make a distribution in violation of the limited liability company agreement.
(2) A limited liability company must not make a distribution to the extent that at the time of the distribution, after giving effect to the distribution (a) the limited liability company would not be able to pay its debts as they became due in the usual course of its activities, or (b) all liabilities of the limited liability company, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specified property of the limited liability company, exceed the fair value of the assets of the limited liability company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited is included in the assets of the limited liability company only to the extent that the fair value of that property exceeds that liability.
(3) A limited liability company may base a determination that a distribution is not prohibited under subsection (2) of this section on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.
(4) Except as otherwise provided in subsection (7) of this section, the effect of a distribution under subsection (2) of this section is measured:
(a) In the case of distribution by purchase, redemption, or other acquisition of a transferable interest in the limited liability company, as of the date money or other property is transferred or debt incurred by the limited liability company; and
(b) In all other cases, as of the date:
(i) The distribution is authorized, if the payment occurs within one hundred twenty days after that date; or
(ii) The payment is made, if payment occurs more than one hundred twenty days after the distribution is authorized.
(5) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general, unsecured creditors.
(6) A limited liability company's indebtedness, including indebtedness issued in connection with or as part of a distribution, is not considered a liability for purposes of subsection (2) of this section if the terms of the indebtedness provide that payment of principal and interest are made only to the extent that a distribution could then be made to members under this section.
(7) The effect of a distribution of indebtedness under subsection (2) of this section is measured:
(a) In the case of a distribution of indebtedness described in subsection (6) of this section, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is actually made; and
(b) In the case of a distribution of any other indebtedness, the effect of the distribution is measured as of the date the indebtedness is distributed.
[ 2015 c 188 § 46.]
Structure Revised Code of Washington
Chapter 25.15 - Limited Liability Companies.
25.15.011 - Name of limited liability company.
25.15.018 - Effect of limited liability company agreement—Nonwaivable provisions.
25.15.026 - Service of process, notice, or demand.
25.15.031 - Purpose and powers.
25.15.033 - Law of this state governs.
25.15.036 - Business transactions of member or manager with the limited liability company.
25.15.038 - General standards—Limitation of liability.
25.15.046 - Professional limited liability companies.
25.15.048 - Professional limited liability company—Licensing.
25.15.051 - Foreign professional limited liability company.
25.15.054 - Membership residency.
25.15.061 - Piercing the veil.
25.15.071 - Formation—Certificate of formation.
25.15.076 - Amendment to certificate of formation.
25.15.081 - Restated certificate.
25.15.091 - Execution or amendment by judicial order.
25.15.096 - Duty of secretary of state to file—Review of refusal to file.
25.15.106 - Initial and annual reports.
25.15.116 - Admission of members.
25.15.121 - Voting and classes of membership.
25.15.126 - Liability of members and managers to third parties.
25.15.131 - Member dissociation.
25.15.136 - Records and information.
25.15.141 - Remedies for breach of limited liability company agreement by member.
25.15.151 - Member-managed limited liability companies.
25.15.154 - Manager-managed limited liability companies.
25.15.157 - Delegation of rights and powers to manage.
25.15.161 - Manager—Member's rights and duties.
25.15.166 - Voting and classes of managers.
25.15.171 - Remedies for breach of limited liability company agreement by manager.
25.15.176 - Resignation of manager.
25.15.181 - Loss of sole remaining manager.
25.15.191 - Form of contribution.
25.15.196 - Liability for contribution.
25.15.206 - Allocation of distributions.
25.15.211 - Interim distributions.
25.15.216 - Distribution following dissociation.
25.15.221 - Distribution in-kind.
25.15.226 - Right to distribution.
25.15.231 - Limitations on distribution.
25.15.236 - Liability for improper distributions.
25.15.246 - Nature of limited liability company interest—Certificate of interest.
25.15.251 - Transfer of transferable interest.
25.15.256 - Rights of judgment creditor.
25.15.269 - After dissolution under RCW 25.15.265.
25.15.274 - Judicial dissolution.
25.15.279 - Administrative dissolution—Commencement of proceeding.
25.15.289 - Administrative dissolution—Reinstatement.
25.15.294 - Voluntary dissolution—Revocation of dissolution—When effective—Effect.
25.15.301 - Disposition of known claims—Definition.
25.15.305 - Distribution of assets.
25.15.309 - Remedies available after distribution.
25.15.321 - Registration required.
25.15.331 - Name—Registered agent.
25.15.336 - Amendments to application.
25.15.341 - Withdrawal of registration.
25.15.346 - Doing business without registration.
25.15.351 - Enjoinder from doing business in this state.
25.15.356 - Activities not constituting transacting business.
25.15.361 - Service of process on registered foreign limited liability companies.
25.15.367 - Service of process on unregistered foreign limited liability companies.
25.15.371 - Termination of registration.
25.15.386 - Right to bring action.
25.15.421 - Merger—Plan—Approval.
25.15.426 - Articles of merger—Filing—Effective date.
25.15.441 - Action on plan of conversion by converting limited liability company.
25.15.446 - Filing required for conversion—Effective date.
25.15.451 - Effect of conversion.
25.15.456 - Restrictions on approval of conversions.
25.15.471 - Member—Dissent—Payment of fair value.
25.15.476 - Dissenters' rights—Notice—Timing.
25.15.481 - Member—Dissent—Voting restriction.
25.15.486 - Members—Dissenters' notice—Requirement.
25.15.491 - Member—Payment demand—Entitlement.
25.15.496 - Members' interests—Transfer restriction.
25.15.501 - Payment of fair value—Requirements for compliance.
25.15.506 - Merger—Not effective within sixty days—Transfer restrictions.
25.15.511 - Dissenter's estimate of fair value—Notice.
25.15.516 - Unsettled demand for payment—Proceeding—Parties—Appraisers.
25.15.521 - Unsettled demand for payment—Costs—Fees and expenses of counsel.
25.15.801 - Construction and application of chapter and limited liability company agreement.
25.15.806 - Applicable fees, charges, and penalties.
25.15.811 - Authority to adopt rules.