Section 10-12-27

Liability for contributions.

(a) Except as provided in the articles of organization, 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 articles of organization 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.)