Texas Business Organizations Code
§ 101.206 — PROHIBITED DISTRIBUTION; DUTY TO RETURN
BO § 101.206Title 3. LIMITED LIABILITY COMPANIES · Ch. 101. LIMITED LIABILITY COMPANIES · Art. E. ALLOCATIONS AND DISTRIBUTIONS
Statute text
View on source(a)Unless the distribution is made in compliance with Chapter 11, a limited liability company may not make a distribution to a member of the company if, immediately after making the distribution, the company's total liabilities, other than liabilities described by Subsection (b), exceed the fair value of the company's total assets.
(b)For purposes of Subsection (a), the liabilities of a limited liability company do not include:
(1)a liability related to the member's membership interest; or
(2)except as provided by Subsection (c), a liability for which the recourse of creditors is limited to specified property of the company.
(c)For purposes of Subsection (a), the assets of a limited liability company include the fair value of property subject to a liability for which recourse of creditors is limited to specified property of the company only if the fair value of that property exceeds the liability. (c-1) For purposes of this section, the determination of the amount of a limited liability company's liabilities or the value of a company's assets may be based on:
(1)financial statements of the company, which may include the financial statements of subsidiary entities or other entities accounted for on a consolidated basis or on the equity method of accounting, that:
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Legislative history
Acts 2009, 81st Leg., R.S., Ch. 84 (S.B. 1442), Sec. 41, eff. September 1, 2009. Acts 2021, 87th Leg., R.S., Ch. 39 (S.B. 1203), Sec. 27, eff. September 1, 2021. Acts 2023, 88th Leg., R.S., Ch. 27 (S.B. 1514), Sec. 37, eff. September 1, 2023.