Wealth Management Services Ltd.- Antigua & Barbuda Managment

LLC ACT IV

Part I

Part II

Part IV - Contributions and distributions

33.Capital contributions
34. Liability for contributions
35. Interim distributions
36. Distribution in kind
37. Status as a creditor
38. Limitation on distributions
39. Distributions on withdrawal
40. Distribution on winding up
41. Sharing of profits and losses

PART IV – CONTRIBUTIONS AND DISTRIBUTIONS

33. Capital contributions

(1) An interest in a limited liability company may be issued in exchange for a capital contribution, an enforceable promise to make a capital contribution in the future, or a promise to perform services.
(2) Unless otherwise provided in an operating agreement, the agreement or consent of all of the members is necessary to fix or modify the amount and character of the capital contribution that a member makes or promises to make in exchange for an interest in the limited liability company.
(3) The capital contributions of a member are to be credited to his or her capital account.
(4) The operating agreement may provide that a capital account be maintained in accordance with income tax principles.

34. Liability for contributions

(1) A promise by a member to make a capital contribution to the limited liability company is not enforceable unless set out in writing and signed by the member.
(2) Unless otherwise provided in an operating agreement, a member or his or her estate is obligated to the limited liability company to perform any enforceable promise to make a capital contribution, including a promise to perform services, even if the member is unable to perform because of death, disability or any other reason.
(3) If a member does not make a capital contribution when due, the member is obligated at the option of the limited liability company, in addition to and not in lieu of any other rights that the limited liability company has against the member under the articles of organisation or operating agreement, to
- (a) contribute cash equal to the value of that portion of the promised capital contribution that has not been made; or
- (b) forfeit his or her membership interest.
(4) Except as provided in an operating agreement, a member's obligation to make a capital contribution may be compromised or released only with the written consent of all members.
(5) The obligation to make a capital contribution is not assignable to or enforceable by a third party creditor of the limited liability company or any other party unless the member has specifically agreed or consented to the assignment or enforcement in writing.
(6) On the failure of a member to make a capital contribution when due, the limited liability company may enforce the member's obligation by appropriate legal action for damages for breach of contract or for specific performance, and the limited liability company may exercise and enforce additional rights and remedies provided under an operating agreement in the event of any such failure, including the termination of a member’s interest, but subject to the applicable law regarding the enforcement of contracts.

35. Interim distributions

(1) A limited liability company may make distributions of cash or other property to its members before the dissolution and winding up of the limited liability company to the extent, and at the times, or on the occurrence of the events, specified in an operating agreement, or if an operating agreement does not so specify, pursuant to this Act.
(2) Distributions of cash or other property to members from a limited liability company before the dissolution and winding up of a limited liability company shall be shared among the members and among classes of members in the manner provided in an operating agreement and if an operating agreement does not so provide, distributions shall be shared among the members in the following order:
- (a) distributions shall be shared among the members in proportion to their respective capital accounts; and
- (b) other distributions shall be shared by the members in proportion to their respective membership interests.
(3) For the purposes of subsection (2), a capital contribution other than a cash contribution has the value determined in the manner set out in the operating agreement. If an operating agreement does not specify the value of any such capital contribution and does not prescribe a manner for determining its value:
- (a) the value of a capital contribution of a promise to perform services is zero;
- (b) the value of a capital contribution of real or personal property other than cash is the fair market value of the property at the time of its transfer to the limited liability company;
- (c) the value of a capital contribution of the use of property is the fair market value of the use of the property during the period that the limited liability company enjoys possession or use of the property;
- (d) the value of a promise to make a cash contribution at some time in the future is zero until the cash is actually contributed; and
- (e) the value of any other capital contribution is zero.
(4) For the purposes of this section, the term "distribution" does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program.

36. Distribution in kind

(1) Except as otherwise provided in an operating agreement,
- (a) a member, regardless of the nature of the member’s contribution, has no right to demand and receive a distribution from a limited liability company in any form other than cash; and
- (b) a member may not be compelled to accept a distribution of any property other than cash from the limited liability company unless the member receives an undivided ownership interest in the property that is in the same percentage as he or she would have shared in a cash distribution equal to the value of the property at the time of distribution.

37. Status as a creditor
At the time 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.

38. Limitation on distributions

(1) A limited liability company shall not make a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, the liabilities of the limited liability company would exceed the fair value of the assets of the limited liability company, except that
- (a) liabilities to members and former members shall be excluded;
- (b) liabilities for which the recourse of creditors is limited to specified property shall be excluded, provided the fair value of the property is reduced by the recourse liability; and
- (c) contingent liabilities shall be excluded.
(2) The limited liability company may base a determination that a distribution is not prohibited under subsection (1) on
- (a) financial statements prepared on the basis of generally accepted accounting principles (GAAP) and principles that are reasonable in the circumstances;
- (b) a fair valuation or other method that is reasonable in the circumstances; or
- (c) an analysis of contingencies that is reasonable in the circumstances.
(3) The effect of a distribution under subsection (1) is measured
- (a) as of the date the distribution is authorised, if the payment occurs within one hundred and twenty days after the date of authorisation; or
- (b) as of the date the payment is made, if it occurs more than one hundred and twenty days after the date of authorisation.
(4) If a member receives a distribution with respect to his or her interest in a limited liability company in violation of this Act or an operating agreement, he or she is liable to the limited liability company for a period of two years for the amount of the wrongful distribution. An action to recover a wrongful distribution may be brought in any court of competent jurisdiction so long as it is commenced within this period.

39. Distributions on withdrawal

(1) Except as otherwise provided in an operating agreement, a member who withdraws and the withdrawn member's personal representatives, successors and assigns
- (a) have no right to receive any distribution by reason of the withdrawal; and
- (b) have the rights of an assignee of the withdrawn member's interest in the limited liability company to receive distributions with respect to the member's interest
  - (i) during any continuation of the business of the limited liability company, and
  - (ii) during and on completion of winding up.
(2) Any amounts given under paragraph (1)(b) shall be reduced by the amount of any damages recoverable against the withdrawn member if the event of withdrawal violated this Act or the operating agreement.

40. Distribution on winding up

(1) On the winding up of a limited liability company, its assets shall be distributed in the following order:
- (a) to the government of Antigua and Barbuda for any outstanding taxes, fees or charges;
- (b) to a registered agent or other corporate service provider in Antigua and Barbuda for outstanding fees and disbursements;
- (c) to employees, including managers, for outstanding wages;
- (d) to creditors, including members who are creditors, to the extent permitted by law, in satisfaction of liabilities of the limited liability company other than liabilities for distributions to members and former members but if the liabilities of the company exceed its assets, the manager may apply the assets of the company in whatever manner the manager deems most appropriate and the manager may prefer one or more creditors, including creditors who are members or managers, over other creditors;
- (e) except as otherwise provided in an operating agreement, to members and former members in satisfaction of liabilities for distributions; and
- (f) to the members in the manner provided in subsection 35(2).

41. Sharing of profits and losses

(1) The items of profits, losses, deductions and credits of a limited liability company shall be allocated among the members and among classes of members in the manner provided in an operating agreement.
(2) If an operating agreement does not provide otherwise,
- (a) profits and credits shall be allocated among the members according to the manner in which they share in distributions that exceed the repayment of their capital contributions; and
- (b) losses and deductions shall be allocated among the members according to the relative capital contributions that they have made or promised to make in the future.

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