{"data":{"id":"us-ok/okla.-stat.-tit.-18-18-2030","jurisdiction":"us-ok","citation":"Okla. Stat. tit. 18, § 18-2030","heading":"Restrictions on distributions - Determination of","body":"prohibited distributions - Effect of distribution – Indebtedness.\n\nRESTRICTIONS ON DISTRIBUTIONS; DETERMINATION OF PROHIBITED\n\nDISTRIBUTIONS; EFFECT OF DISTRIBUTION; INDEBTEDNESS\n\nA. A distribution may not be made if, after giving effect to\n\nthe distribution:\n\n1. The limited liability company would not be able to pay its\n\ndebts as they become due in the usual course of business; or\n\n2. The limited liability company's total assets would be less\n\nthan the sum of its total liabilities plus, unless the operating\n\nagreement permits otherwise, the amount that would be needed, if the\n\nlimited liability company were to be dissolved at the time of the\n\ndistribution, to satisfy the preferential rights upon dissolution of\n\nmembers whose preferential rights are superior to the rights of\n\nmembers receiving the distribution.\n\nB. The limited liability company may base a determination that\n\na distribution is not prohibited under subsection A of this section\n\non:\n\n1. Financial statements prepared on the basis of accounting\n\npractices and principles that are reasonable in the circumstances;\n\nor\n\n2. A fair valuation or other method that is reasonable in the\n\ncircumstances.\n\nC. Except as provided in subsection E of this section, the\n\neffect of a distribution under subsection A of this section is\n\nmeasured as of:\n\n1. In the case of a distribution by purchase, redemption or\n\nother acquisition of a capital interest in the limited liability\n\ncompany, the date money or other property is transferred or debt\n\nincurred by the limited liability company; and\n\n2. In all other cases, the date:\n\na. the distribution is authorized, if the payment occurs\n\nwithin one hundred twenty (120) days after the date of\n\nauthorization, or\n\nb. the payment is made if it occurs more than one hundred\n\ntwenty (120) days after the date of authorization.\n\nD. A limited liability company's indebtedness to a member,\n\nincurred by reason of a distribution made in accordance with this\n\nsection, is at parity with the limited liability company's\n\nindebtedness to its general, unsecured creditors, except to the\n\nextent subordinated by agreement.\n\nE. 1. If the terms of the indebtedness provide that payment of\n\nprincipal and interest is to be made only if, and to the extent\n\nthat, payment of a distribution to members could then be made under\n\nthis section, indebtedness of a limited liability company, including\n\nindebtedness issued as a distribution, is not a liability for\n\npurposes of determinations made under subsection B of this section.\n\n2. If the indebtedness is issued as a distribution, each\n\npayment of principal or interest on the indebtedness is treated as a\n\ndistribution, the effect of which is measured on the date the\n\npayment is actually made.","path":["OK Code","Title 18"],"source_url":"https://www.oklegislature.gov/OK_Statutes/CompleteTitles/os18.pdf","current_through":"2026-08-14","vintage":"open-us-law v2026.08, retrieved 2026-09-14","retrieved_at":"2026-09-14T18:32:36Z","sha256":"bdd7b525c6977499a43b877ca17fa4dec7f2e9ffa6e688a88803100b37f263c9","source_id":"us-ok","stale":false,"prev":"us-ok/okla.-stat.-tit.-18-18-2029","next":"us-ok/okla.-stat.-tit.-18-18-2031"},"notice":"GroundRules: Original legal text. Not legal advice."}