Uniform Limited Liability Company Act (1996):
SECTION 405. SHARING OF AND RIGHT TO DISTRIBUTIONS.
(a) Any distributions made by a limited liability company before its
dissolution and winding up must be in equal shares.
(b) A member has no right to receive, and may not be required to accept,
a distribution in kind.
(c) If a member becomes entitled to receive a distribution, the member
has the status of, and is entitled to all remedies available to, a creditor of the limited
liability company with respect to the distribution.
Comment
Recognizing the informality of many limited liability companies, this
section creates a simple default rule regarding interim distributions. Any interim
distributions made must be in equal shares and approved by all members. See
Section 404(c)(6). The rule assumes that: profits will be shared equally; some
distributions will constitute a return of contributions that should be shared equally
rather than a distribution of profits; and property contributors should have the right
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to veto any distribution that threatens their return of contributions on liquidation.
.