Iowa Code 489.403 – Liability for contributions
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1. A person‘s obligation to make a contribution to a limited liability company is not excused by the person’s death, disability, termination, or other inability to perform personally.
Terms Used In Iowa Code 489.403
- Appraisal: A determination of property value.
- Member: means a person for whom all of the following are true:a. See Iowa Code 489.102
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Operating agreement: means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in section 489. See Iowa Code 489.102
- Person: includes a protected series, however denominated, of an entity if the protected series is established under law that limits, or limits if conditions specified under law are satisfied, the ability of a creditor of the entity or of any other protected series of the entity to satisfy a claim from assets of the protected series. See Iowa Code 489.102
2. If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited liability company to contribute money equal to the value of the part of the contribution which has not been made.3. The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all the members. If a creditor of a limited liability company extends credit or otherwise acts in reliance on an obligation described in subsection 1 without knowledge or notice of a compromise under this subsection, the creditor may enforce the obligation.4. An operating agreement may provide that the interest of any member who fails to make a contribution that the member is obligated to make is subject to specified penalties for, or specified consequences of, such failure. The penalty or consequence may take the form of reducing or eliminating the defaulting member’s proportionate interest in a limited liability company, subordinating the member’s interest to that of a nondefaulting member, a forced sale of the member’s interest, forfeiture of the member’s interest, the lending by other members of the amount necessary to meet the member’s commitment, a fixing of the value of the member’s interest by appraisal or by formula and redemption, or sale of the member’s interest at such value or other penalty or consequence.