A. A promise by a member to make a capital contribution to the limited liability company is not enforceable unless set out in writing and signed by the member.
B. Except as provided in an operating agreement, a member is obligated to the limited liability company to perform any enforceable promise to make a capital contribution, including a promise to perform services, even if he is unable to perform because of death, disability or any other reason. If a member does not make a required capital contribution when due, he is obligated at the option of the limited liability company to contribute cash equal to the value of that portion of the promised capital contribution that has not been made. This option is in addition to and not in lieu of any other rights, including the right to specific performance, that the limited liability company may have against the member under the articles of organization, an operating agreement or applicable law.
C. Except as provided in an operating agreement, a member’s obligation to make a required capital contribution may be compromised or released only with the written consent of all members. The obligation is not enforceable by a third party creditor of the limited liability company unless the member has specifically agreed or consented to the enforcement or the limited liability company has assigned the member’s obligation to the creditor or creditors seeking to enforce the obligation.
D. On the failure of a member to make a promised capital contribution when due, the limited liability company may enforce the member’s obligation by appropriate legal action for damages for breach of contract or for specific performance, and the limited liability company may exercise and enforce additional rights and remedies as may be provided under an operating agreement in the event of any such failure, subject to the applicable law regarding the enforcement of contracts. Except as provided in an operating agreement, a member may enforce another member’s promise to make a capital contribution as provided in article 10 of this chapter.
Caution: The above language was taken from Arizona’s statutes on November 13, 2016. Check the Arizona legislature’s website to determine if this statute changed after November 13, 2016.
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