Ariz. Rev. Stat. » Title 29
Arizona Revised Statutes

Ariz. Rev. Stat. § 29-3404 (2026)

Sharing of and right to distributions before dissolution

✓ current as of May 2026
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29-3404. Sharing of and right to distributions before dissolution

A. Any distribution made by a limited liability company before its dissolution and winding up must be in equal shares among members and persons dissociated as members, except to the extent necessary to comply with a transfer effective under section 29-3502 or charging order in effect under section 29-3503. 

B. A person has a right to a distribution before the dissolution and winding up of a limited liability company only if the company decides to make an interim distribution.  A person's dissociation does not entitle the person to a distribution. 

C. A person does not have a right to demand or receive a distribution from a limited liability company in any form other than money.  Except as otherwise provided in section 29-3707, subsection D, a company may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.

D. If a member or transferee becomes entitled to receive a distribution, the member or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.  However, the company's obligation to make a distribution is subject to offset for any amount owed to the company by the member or a person dissociated as a member on whose account the distribution is made.

Notes of Decisions
Cited in 2 cases (2 in the last 5 years), 2022–2024 · leading case: Zambezi v. Proforma (Ariz. Ct. App. 2022).
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Zambezi v. Proforma (Ariz. Ct. App. 2022). · cites it 4× “11 Sections 29-703 and -709 have since been repealed as part of the recodification of the Arizona Limited Liability Company Act.”
Constantine v. constantine/bafaloukos (Ariz. Ct. App. 2024). · cites it 2× “§ 29-703 (now A.R.S. § 29-3404) prevents LLC members from agreeing to take out distributions according to each party’s ownership interest.”
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