Which article in this document outlines the 'Dissolution and Liquidation' process for Marble Slab Creamery?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
7.7 Distributions. The Company may make distributions of Distributable Cash to the Members at such times and amounts as the Manager determines to be appropriate, taking into account the operating cash flow needs of the business. Each distribution shall be made to all Members, and divided among the Members in proportion to their Percentage Interests.
ARTICLE 8.-- DISSOLUTION AND LIQUIDATION
- 8.1 Events of Dissolution. Except as otherwise provided in this Agreement, the Company shall dissolve upon the earlier of:
- (a) the written agreement of all of the Members and the Manager; or
- (b) the sale, transfer or other disposition of all or substantially all of the Company's assets as permitted by this Agreement.
- 8.2 Liquidation Upon Dissolution and Winding Up. Upon the dissolution of the Company, the Manager shall wind up the affairs of the Company. A full account of the assets and liabilities of the Company shall be taken. The assets shall be promptly liquidated and the proceeds thereof applied as required by the Act. Upon discharging all debts and liabilities, all remaining assets shall be distributed to the Members or their representatives by the end of the taxable year in which the liquidation occurs (or, if later, within ninety (90) days after the date of such liquidation) in proportion to the positive balances of their respective Capital Accounts, as determined after taking into account all Capital Account adjustments for the taxable year during which the liquidation occurs (other than those made pursuant to this Section 8.2). With the approval of the Manager, the Company may, in the process of winding up the Company,
distribute property in kind, in which case the Members' Capital Account balances shall be adjusted in accordance with Regulation Section 1.704-1(b)(2)(iv)(e).
8.3 No Obligation to Restore Negative Capital Account Balance. No Member shall have any obligation to make any capital contribution to the Company to eliminate the negative balance, if any, of such Member's Capital Account, and any such negative balance shall not be considered a debt owed by such Member to the Company or to any other person for any purpose whatsoever.
ARTICLE 9.-- TRANSFER OF MEMBER'S INTEREST
Source: Item 23 — RECEIPT (FDD pages 101–346)
What This Means (2025 FDD)
According to the 2025 Marble Slab Creamery FDD, Article 8 outlines the 'Dissolution and Liquidation' process. This section details the events that would lead to the dissolution of the company, such as a written agreement by all members and the manager, or the sale of substantially all of the company's assets.
Upon dissolution, the FDD states that the manager is responsible for winding up the company's affairs, which includes taking a full account of assets and liabilities. The assets will be liquidated promptly, and the proceeds will be applied as required by the relevant Act.
After settling all debts and liabilities, any remaining assets will be distributed to the members or their representatives. This distribution will occur by the end of the taxable year in which the liquidation takes place, or within 90 days after the liquidation date, and will be proportional to the positive balances of their respective Capital Accounts. The document also clarifies that no member is obligated to contribute capital to eliminate any negative balance in their Capital Account.