Utah Code 48-1d-505. Liability for improper distributions by a limited liability partnership
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(1) If a partner of a limited liability partnership consents to a distribution made in violation of Section 48-1d-504 and in consenting to the distribution fails to comply with Section 48-1d-405, the partner is personally liable to the limited liability partnership for the amount of the distribution which exceeds the amount that could have been distributed without the violation of Section 48-1d-504.
Terms Used In Utah Code 48-1d-505
- Distribution: means a transfer of money or other property from a partnership to a person on account of a transferable interest or in a person's capacity as a partner. See Utah Code 48-1d-102
- Partner: means a person that:(11)(a) has become a partner in a partnership under Section 48-1d-401 or was a partner in a partnership when the partnership became subject to this chapter under Section 48-1d-1405; and(11)(b) has not dissociated as a partner under Section 48-1d-701. See Utah Code 48-1d-102
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: means an association of two or more persons to carry on as co-owners a business for profit formed under this chapter or that becomes subject to this chapter under Part 10, Merger, Interest Exchange, Conversion, and Domestication, or Section 48-1d-1405. See Utah Code 48-1d-102
- Person: means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. See Utah Code 48-1d-102
- right of contribution: means property or a benefit described in Section 48-1d-501 which is provided by a person to a partnership to become a partner or in the person's capacity as a partner. See Utah Code 48-1d-102
(2) A person that receives a distribution knowing that the distribution violated Section 48-1d-504 is personally liable to the limited liability partnership but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid under Section 48-1d-504.(3) A person against which an action is commenced because the person is liable under Subsection (1) may:(3)(a) implead any other person that is liable under Subsection (1) and seek to enforce a right of contribution from the person; and(3)(b) implead any person that received a distribution in violation of Subsection (2) and seek to enforce a right of contribution from the person in the amount the person received in violation of Subsection (2).(4) An action under this section is barred unless commenced not later than two years after the distribution.