2010 Maryland Code
CORPORATIONS AND ASSOCIATIONS
TITLE 4A - LIMITED LIABILITY COMPANY ACT
Subtitle 5 - Finance
Section 502 - Liability for capital contribution.
§ 4A-502. Liability for capital contribution.
(a) Required contribution.-
(1) Except as provided in the operating agreement, a member is obligated to the limited liability company to perform any promises set forth in the articles of organization or operating agreement to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability, or other reason.
(2) If a member does not make the required contribution of property or services, the member is obligated, at the option of the limited liability company, to contribute cash equal to the value of that portion of the capital contribution that has not been made.
(b) Compromise of obligation.-
(1) The obligation of a member to make a capital contribution or return money or other property paid or distributed in violation of this title may be compromised only:
(i) In compliance with the operating agreement; or
(ii) If the operating agreement does not so provide, with the unanimous consent of the members.
(2) Any compromise does not affect the rights, if any, of any creditor of a limited liability company to enforce the obligation or to require the obligation to be enforced.
(1) An operating agreement may provide that a member who fails to make any capital contribution or other payment that the member is required to make shall be subject to specified remedies for, or specified consequences of, the failure.
(2) The remedy or consequence may take the form of:
(i) Reduction of the defaulting member's interest in the limited liability company;
(ii) Subordination of the defaulting member's interest in the limited liability company to that of the nondefaulting members;
(iii) A forced sale of the defaulting member's interest in the limited liability company;
(iv) Forfeiture of the defaulting member's interest in the limited liability company;
(v) A loan by the nondefaulting members of the amount necessary to meet the commitment;
(vi) 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; or
(vii) Any other remedy or consequences.
[1992, ch. 536.]
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