N.D. Cent. Code § 10-32.1-32
This is the official text of N.D. Cent. Code § 10-32.1-32, part of North Dakota’s Cent. Code — part of the compiled statutory law of North Dakota, published by the state as "Cent. Code." Browse the sections below, each linked to its official government source.
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10-32.1-32. Liability for improper distributions
Official statutory text
10-32.1-32. Liability for improper distributions
1. Except as otherwise provided in subsection 2, if a member of a member-managed
limited liability company, manager of a manager-managed limited liability company, or
governor of a board-managed limited liability company consents to a distribution made
in violation of section 10-32.1-31 and in consenting to the distribution fails to comply
with section 10-32.1-41, then the member, manager, or governor is personally liable to
the company for the amount of the distribution that exceeds the amount that could
have been distributed without the violation of section 10-32.1-31.
2. To the extent the operating agreement of a member-managed limited liability company
expressly relieves a member of the authority and responsibility to consent to
distributions and imposes that authority and responsibility on one or more other
members, the liability stated in subsection 1 applies to the other members and not the
member that the operating agreement relieves of authority and responsibility.
3. A person that receives a distribution knowing that the distribution to that person was
made in violation of section 10-32.1-31 is personally liable to the limited liability
company but only to the extent that the distribution received by the person exceeded
the amount that could have been properly paid under section 10-32.1-31.
4. A person against which an action is commenced because the person is liable under
subsection 1 may:
a. Implead any other person that is subject to liability under subsection 1 and seek
to compel pro rata contribution from the person in that action to the extent of the
liability of the person as provided in subsection 1; and
b. Implead any person that received a distribution in violation of section 10-32.1-31
and seek to compel contribution from the person in the amount by which the
distribution received by the person exceeded the amount that could have been
properly paid under section 10-32.1-31.
5. An action under this section is barred if not commenced within two years after the
distribution.
1. Except as otherwise provided in subsection 2, if a member of a member-managed
limited liability company, manager of a manager-managed limited liability company, or
governor of a board-managed limited liability company consents to a distribution made
in violation of section 10-32.1-31 and in consenting to the distribution fails to comply
with section 10-32.1-41, then the member, manager, or governor is personally liable to
the company for the amount of the distribution that exceeds the amount that could
have been distributed without the violation of section 10-32.1-31.
2. To the extent the operating agreement of a member-managed limited liability company
expressly relieves a member of the authority and responsibility to consent to
distributions and imposes that authority and responsibility on one or more other
members, the liability stated in subsection 1 applies to the other members and not the
member that the operating agreement relieves of authority and responsibility.
3. A person that receives a distribution knowing that the distribution to that person was
made in violation of section 10-32.1-31 is personally liable to the limited liability
company but only to the extent that the distribution received by the person exceeded
the amount that could have been properly paid under section 10-32.1-31.
4. A person against which an action is commenced because the person is liable under
subsection 1 may:
a. Implead any other person that is subject to liability under subsection 1 and seek
to compel pro rata contribution from the person in that action to the extent of the
liability of the person as provided in subsection 1; and
b. Implead any person that received a distribution in violation of section 10-32.1-31
and seek to compel contribution from the person in the amount by which the
distribution received by the person exceeded the amount that could have been
properly paid under section 10-32.1-31.
5. An action under this section is barred if not commenced within two years after the
distribution.
Status: in_force · Read it on the official government site
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