13.1-1027 - Contributions. - Virginia Statutes

§ 13.1-1027. Contributions.

A. The contributions of a member to a limited liability company may be incash, property, or services rendered or a promissory note or other bindingobligation to contribute cash or property or to perform services.

B. Except as provided in the articles of organization or an operatingagreement, a member is obligated to the limited liability company to performany enforceable promise to contribute cash or property or to performservices, even if he is unable to perform because of death, disability or anyother reason. If a member does not make the required contribution of propertyor services, he is obligated at the option of the limited liability companyto contribute cash equal to that portion of the value, as stated in thelimited liability company records required to be kept by § 13.1-1028, of suchcontribution that has not been made.

C. Unless otherwise provided in the articles of organization or an operatingagreement, the obligation of a member to make a contribution or return moneyor other property paid or distributed in violation of this chapter may becompromised only by consent of all the members. Notwithstanding thecompromise, a creditor of a limited liability company who extends credit orotherwise acts in reliance on the original obligation may enforce theoriginal obligation to the extent that, in extending credit, the creditorreasonably relied on the obligation of a member to make a contribution orreturn. A conditional obligation of a member to make a contribution or returnmoney or other property to a limited liability company may not be enforcedunless the conditions of the obligation have been satisfied or waived as toor by such member. Conditional obligations include contributions payable upona discretionary call of a limited liability company prior to the time thecall occurs.

D. The articles of organization or an operating agreement may provide inwriting that the interest of any member who fails to make any contributionthat he is obligated to make shall be subject to specified penalties for, orspecified consequences of, such failure. Such penalty or consequence may takethe form of reducing or eliminating the defaulting member's proportionateinterest in a limited liability company, subordinating his interest in thelimited liability company to that of nondefaulting members, a forced sale ofhis interest in the limited liability company, forfeiture of his interest inthe limited liability company, the lending by other members of the amountnecessary to meet his commitment, a fixing of the value of his interest inthe limited liability company by appraisal or by formula and redemption orsale of his interest in the limited liability company at such value, or otherpenalty or consequence.

E. No promise by a member to contribute to a limited liability company isenforceable unless set out in a writing signed by the member.

F. The contributions of a corporation to a limited liability company of whichsuch corporation is a member may be in the form of an asset for which anapplication for a project requiring a certificate has been approved by theCommissioner pursuant to the provisions of Title 32.1. No further approval bysuch Commissioner shall be required as a condition to the validity of themember's contribution of such an asset to the limited liability company if(i) both the member and the limited liability company have their principaloffices within the same city or county of the Commonwealth, (ii) suchcontributing member owns at least one-third of the membership interests ofthe limited liability company, and (iii) the assets contributed by suchmember to the limited liability company comprise not more than ten percent ofsuch assets of the member.

(1991, c. 168; 1995, c. 168; 1999, c. 966.)