Distributions on Expulsion Sample Clauses
The "Distributions on Expulsion" clause defines how a departing member’s share of profits or assets is handled when they are expelled from an organization, such as a partnership or LLC. Typically, this clause outlines the calculation and timing of any distributions owed to the expelled member, specifying whether they receive their share immediately, over time, or subject to certain conditions. Its core function is to ensure a fair and orderly process for compensating an expelled member, thereby reducing disputes and providing clarity for all parties involved.
Distributions on Expulsion. Except as otherwise provided by the Act, or in Article XI of this Agreement, upon expulsion, an expelled member shall be entitled to receive in cash or an undivided interest in the property of the Company the fair market value of the Member’s Membership Interest as of the date of withdrawal. For purposes hereof, the fair market value of a Membership Interest and the nature of the assets to be received will be determined by a Majority in Membership Interests (excluding the interest of the expelled Member).