Mich. Comp. Laws » Michigan Compiled Laws / Chapter 450 / Act 23 of 1993
Michigan Compiled Laws

Mich. Comp. Laws § 450.4308 (2026)

Distribution; violating operating agreement or MCL 450.4307; liability of members or managers; presumption of assent; knowledge of violation; contribution; commencement of proceeding.

✓ current as of July 2026
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MICHIGAN LIMITED LIABILITY COMPANY ACT


Act 23 of 1993


450.4308 Distribution; violating operating agreement or MCL 450.4307; liability of members or managers; presumption of assent; knowledge of violation; contribution; commencement of proceeding.

Sec. 308.

    (1) A member or manager that votes for or assents to a distribution in violation of an operating agreement or section 307 is personally liable, jointly and severally, to the limited liability company for the amount of the distribution that exceeds what could have been distributed without violating the operating agreement or section 307 if it is established that the member or manager did not comply with section 404.

    (2) For purposes of liability under subsection (1), a member or manager entitled to participate in a decision to make a distribution is presumed to have assented to a distribution unless the member or manager does 1 of the following:

    (a) Votes against the distribution.

    (b) Files a written dissent with the limited liability company within a reasonable time after the member or manager has knowledge of the decision.

    (3) A member that accepts or receives a distribution with knowledge of facts indicating it is in violation of an operating agreement or section 307 is liable to the limited liability company for the amount the member accepts or receives that exceeds the member's share of the amount that could have been distributed without violating section 307 or the operating agreement.

    (4) Each member or manager held liable under subsection (1) for an unlawful distribution is entitled to contribution from each other member or manager who could be held liable under subsection (1) or (3). The contribution of a person held liable under both subsections (1) and (3) shall not exceed the person's liability under either subsection (1) or (3), whichever is greater.

    (5) A proceeding under this section is barred unless it is commenced within 2 years after the date on which the effect of the distribution is measured under section 307.

History: 1993, Act 23, Eff. June 1, 1993 ;-- Am. 1997, Act 52, Imd. Eff. July 1, 1997 ;-- Am. 2010, Act 290, Imd. Eff. Dec. 16, 2010

Notes of Decisions
Cited in 4 cases (2 in the last 5 years), 2011–2024 · leading case: Florence Cement Co. v. Vettraino, 807 N.W.2d 917 (Mich. Ct. App. 2011).
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Florence Cement Co. v. Vettraino, 807 N.W.2d 917 (Mich. Ct. App. 2011). · cites it 8× “14 And under MCL 450.4308, a member of a limited-liability company who assents to or receives such a distribution is “personally liable, jointly and severally, to the limited liability company for the amount of the distribution .”
Alter Domus (US) LLC v. Winget (E.D. Mich. 2024). · cites it 10× “Mich. Comp. Laws § 450.4308 . Alter Domus relies on Simon v.”
MCPHERSON v. Suburban Ann Arbor, LLC (E.D. Mich. 2024). · cites it 2× “” Mich. Comp. Laws § 450.4308 . If the defendant’s principal acted contrary to the law to contrive the defendant’s insolvency and frustrate the satisfaction of any judgment that the plaintiff obtains, then she may pursue appropriate legal remedies to claw back any allegedly…”
Phillips-Johnson Props. LLC v. Tru Fitness Studios LLC (Mich. Ct. App. 2016). “4307, and because Koronich is liable for these distributions under MCL 450.4308(1). Plaintiff supports this claim principally by making reference to balance sheet indicating Tru Fit I’s assets, liabilities, and equity as of December 31, 2013.”
— Mich. Comp. Laws § 450.4308(1) — 2 cases
Florence Cement Co. v. Vettraino, 807 N.W.2d 917 (Mich. Ct. App. 2011). “14 And under MCL 450.4308, a member of a limited-liability company who assents to or receives such a distribution is “personally liable, jointly and severally, to the limited liability company for the amount of the distribution .”
Phillips-Johnson Props. LLC v. Tru Fitness Studios LLC (Mich. Ct. App. 2016). “4307, and because Koronich is liable for these distributions under MCL 450.4308(1). Plaintiff supports this claim principally by making reference to balance sheet indicating Tru Fit I’s assets, liabilities, and equity as of December 31, 2013.”
— Mich. Comp. Laws § 450.4308(5) — 1 case
Florence Cement Co. v. Vettraino, 807 N.W.2d 917 (Mich. Ct. App. 2011). “14 And under MCL 450.4308, a member of a limited-liability company who assents to or receives such a distribution is “personally liable, jointly and severally, to the limited liability company for the amount of the distribution .”
Annotations are extracted automatically from the opinions in the Syfert caselaw corpus and ranked by authority, recency, and treatment. Dots show Syfertize treatment of the citing case itself.