Distribution in Kind Law and Legal Definition

A distribution in kind is typically a distribution in stock rather than cash. This may occur when cash isn't readily available or stock is the preferred method of payment.

The following is an example of a state statute dealing with distribution in kind:

359.361. Except as provided in writing in the partnership agreement, a partner, regardless of the nature of his contribution, has no right to demand and receive any distribution from a limited partnership in any form other than cash. Except as provided in writing in the partnership agreement, a partner may not be compelled to accept a distribution of any asset in kind from a limited partnership to the extent that the percentage of the asset distributed to him exceeds a percentage of that asset which is equal to the percentage in which he shares in distributions from the limited partnership.