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2017 Mississippi Code
Title 79 - Corporations, Associations, and Partnerships
Chapter 29 - Revised Mississippi Limited Liability Company Act
Article 6 - Distributions
§ 79-29-609. Limitations on distribution
Universal Citation: MS Code § 79-29-609 (2017)
- (1) No distribution may be made if, after giving effect to the distribution:
- (a) The limited liability company would not be able to pay its debts as they become due in the usual course of business; or
- (b) The limited liability company's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution.
For purposes of this section, the term "distribution" shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.
- (2) The limited liability company may base a determination that a distribution is not prohibited under subsection (1) of this section either on:
- (a) Financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances; or
- (b) A fair valuation or other method that is reasonable under the circumstances.
- (3) The effect of a distribution under subsection (1) of this section is measured as of: (a) the date the distribution is authorized if the payment occurs within one hundred twenty (120) days after the date of authorization; or (b) the date payment is made if it occurs more than one hundred twenty (120) days after the date of authorization.
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