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S.C. Code Ann. § 33-44-407

Liability for unlawful distributions

Known as the South Carolina Uniform Limited Liability Company Act

The act spans §§ 33–33 (94 sections).

Applied in 3 court decisions — leading case Mazloom v. Mazloom (2009)

Most recently applied in Vieira v. Harris (In re JK Harris & Co.) (August 2012)

1996 Act No. 343, SECTION 2.

How often courts cite this section

20062010201210
citing decisions per year

Court decisions citing this, by year. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.

(a) A member of a member-managed company or a member or manager of a manager-managed company who votes for or assents to a distribution made in violation of Section 33-44-406, the articles of organization, or the operating agreement is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without violating Section 33-44-406, the articles of organization, or the operating agreement if it is established that the member or manager did not perform the member's or manager's duties in compliance with Section 33-44-409.

(b) A member of a manager-managed company who knew a distribution was made in violation of Section 33-44-406, the articles of organization, or the operating agreement is personally liable to the company, but only to the extent that the distribution received by the member exceeded the amount that could have been properly paid under Section 33-44-406.

(c) A member or manager against whom an action is brought under this section may implead in the action all:

(1) other members or managers who voted for or assented to the distribution in violation of subsection (a) and may compel contribution from them; and

(2) members who received a distribution in violation of subsection (b) and may compel contribution from the member in the amount received in violation of subsection (b).

(d) A proceeding under this section is barred unless it is commenced within two years after the distribution.

Official source: South Carolina Legislature. Reproduced from public-domain South Carolina statutes; confirm against the official source for the current text. Not legal advice.