Liquidation of Member’s Interest Clause Samples
The Liquidation of Member’s Interest clause outlines the process and terms under which a member’s ownership stake in a company is converted to cash or other assets upon certain triggering events, such as dissolution or withdrawal. Typically, this clause details how the value of the member’s interest will be determined, the timing and method of payment, and any conditions or restrictions that may apply to the liquidation process. Its core practical function is to provide a clear and fair mechanism for distributing a departing member’s share, thereby preventing disputes and ensuring an orderly transition of ownership.
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Liquidation of Member’s Interest. If there is a Liquidation of a Member’s interest in the Company, any liquidating Distribution pursuant to such Liquidation shall be made only to the extent of the positive Capital Account balance, if any, of such Member for the taxable year during which such Liquidation occurs after proper adjustments for allocations and Distributions for such taxable year up to the time of Liquidation. Such Distributions shall be made by the end of the taxable year of the Company during which such Liquidation occurs, or if later, within 90 days after such Liquidation.
Liquidation of Member’s Interest. Upon liquidation of any Member's interest in the Company, the liquidating distributions shall be made in accordance with the positive Capital Account balances of the Members adjusted as otherwise required by the provisions of this Agreement. A liquidation of a Member's interest shall occur as required pursuant to Regulations Section 1.704-1(b)(2)(ii)(g).
Liquidation of Member’s Interest. Upon a liquidation of a Member's Units as defined in Treas. Reg. §1.761-1(d) that is not in connection with liquidation of the Company under Article 9, the liquidation distributions to such Member shall be made in accordance with, and to the extent of, the positive balance in that Member's Capital Account, as determined after taking into account all Capital Account adjustments (other than those pursuant to this Section 5.02) for the Fiscal Year during which such liquidation occurs; provided, however, that this Section 5.02 shall not apply to a purchase or redemption of any Units which is pursuant to Article 3 or any other agreement negotiated at arm's length by persons who at the time such agreement is entered into have materially adverse interests and which does not have as a principal purpose avoidance of the principles of Treas. Reg. §1.704-1(b)(2)(ii)(a).
Liquidation of Member’s Interest. In no event may a Member liquidate its interest in the Company without the prior Approval of the Board of Directors, which approval may be given or withheld, conditioned or delayed (as allowed by this Agreement or the Act), as the Board of Directors may determine in its sole discretion.
Liquidation of Member’s Interest. Except as may otherwise be required in this Agreement, if a Member’s Membership Interest is to be liquidated, liquidating distributions shall be made in accordance with the positive Capital Account balance of such Member, as determined after taking into account all Capital Account adjustments for the Fund’s taxable year during which such liquidation occurs, by the end of the taxable year, or if later, within ninety (90) days after the date of such liquidation. Where a Member’s Membership Interest is to be liquidated by a series of distributions, such Member’s Membership Interest shall not be considered liquidated until the final distribution has been made. For purposes of this Section 5.04, a liquidation of a Member’s Membership Interest means the termination of the Member’s entire interest in the Fund by means of a distribution or series of distributions to the Member by the Fund. Where a Member’s Membership Interest is to be liquidated by a series of distributions, the interest shall not be considered as liquidated until the final distribution has been made.