The proposed revisions to the text of the act
set forth in this document have been prepared as part of a project that has two
purposes: (i) to harmonize the language of all of the unincorporated entity
laws, and (ii) to revise the language of each of those acts in a manner that
permits their integration into a single code of entity laws.
The Comments to the act have been omitted from
this document to reduce its length.
Following the approval of the changes in this document by the
Conference, the Commenst will be restored with appropriate changes.
The harmonization process has involved the
revision of the following acts, some of which are referred to in the Reporters’
Notes by the abbreviations listed below:
Business
Organizations Act (“HUB”)
Model
Entity Transactions Act (“META”)
Model
Registered Agents Act
Uniform
Partnership Act (1997)
Uniform
Limited Partnership Act (2001)
Uniform
Limited Liability Company Act (2006)
Uniform
Statutory Trust Entity Act
Uniform
Limited Cooperative Association Act
Uniform
Unincorporated Nonprofit Association Act (2008)
Changes to the currently effective
text of the act are shown by striking through text to be deleted and underlining
text to be added. Regular type is
used to show changes that (i) adopt language from the HUB or META, (ii) are
merely relocations of current language, or (iii) are corrections for the sake
of internal consistency within an act. Changes that adopt language from other
unincorporated entity acts are shown in italics. Changes
that do not have a source in one of the existing unincorporated entity act are
shown in small caps. The changes
shown in small caps in this act
are shown in italics in other acts.
HARMONIZED REVISED
UNIFORM LIMITED LIABILITY COMPANY ACT
SECTION 101. SHORT TITLE. This [act] may be cited as the Revised
Uniform Limited Liability Company Act.
SECTION 102. DEFINITIONS. In this [act]:
(1) “Certificate of
organization” means the certificate required by Section 201. The term includes
the certificate as amended or restated.
(2) “Contribution”, except in the phrase “right of
contribution”, means any
property or a benefit described in Section 402 which is provided
by a person to a limited liability company:
(A) in order to become a member upon formation of the company and in
accordance with an agreement between or among the persons that have agreed to
become the initial members of the company;
(B) in order to become a member after
formation of the company and in accordance with an agreement between the person
and the company; or
(C) in the person’s capacity as a
member and in accordance with the
operating agreement or an agreement between the member and the company.
(3) “Debtor in
bankruptcy” means a person that is the subject of:
(A) an
order for relief under Title 11 of the United States Code or a comparable
order under a successor statute of general application; or
(B) a
comparable order under federal, state, or foreign law governing insolvency.
(4) “Designated office” means:
(A) the office that a limited liability
company is required to designate and maintain under Section 113; or
(B) the principal office of a foreign
limited liability company.
(5) (4)“Distribution”,
except as otherwise provided in Section 405(g), means a transfer of money
or other property from a limited liability company to another a
person on account of a transferable interest or in the person’s capacity as a member. The term:
(A) includes:
(I) a redemption or other purchase by a limited
liability company of a transferable interest; and
(II) a transfer to a member in return for the
member’s relinquishment of any right to participate as a member in the
management or conduct of the company’s activities and affairs or to have access
to records or other information concerning the company’s activities and
affairs; and
(B) does not include amounts constituting
reasonable compensation for present or past service or payments made in the
ordinary course of business under a bona fide retirement plan or other bona
fide benefits program.
(6) “Effective”, with respect to a record required or
permitted to be delivered to the [Secretary of State] for filing under this
[act], means effective under Section 205(c).
(7) (5)
“Foreign limited liability company” means an unincorporated entity formed under
the law of a jurisdiction other than this state and denominated by that law
as which would be a limited liability company if formed under the
law of this state.
(6)
“Jurisdiction”, used to refer to a political entity, means the United States, a
state, a foreign county, or a political subdivision of a foreign country.
(7)
“Jurisdiction of formation” means, with respect to an entity, the jurisdiction:
(A)
under whose law the entity is formed; or
(B)
in the case of a limited liability partnership or foreign limited liability
partnership, in which the partnership’s statement of qualification is filed.
(8) “Limited
liability company”, except in the phrase “foreign limited liability company”
means an entity formed under this [act] or which becomes
subject to this [act] under [Article] 10 or Section 1105.
(9) “Manager” means
a person that under the operating agreement of a manager- managed limited
liability company is responsible, alone or in concert with others, for
performing
the management functions stated in Section 407(c).
(10)
“Manager-managed limited liability company” means a limited liability company
that qualifies under Section 407(a).
(11) “Member” means
a person that:
(A)
has become a member of a limited liability company under Section 401 or was
a member in a company when the company became subject to this [act] under
Section 1106; and
(B)
has not dissociated under Section 602.
(12)
“Member-managed limited liability company” means a limited liability company
that is not a manager-managed limited liability company.
(13) “Operating
agreement” means the agreement, whether or not referred to as an operating
agreement and whether oral, implied, in a record, implied, or in
any combination thereof, of all the members of a limited liability company,
including a sole member, concerning the matters described in Section 110(a)
111(a). The term includes the
agreement as amended or restated.
(14) “Organizer”
means a person that acts under Section 201 to form a limited liability company.
(15) “Person”
means an individual, corporation, business trust, estate, trust, partnership,
limited liability company, association, joint venture, public corporation,
government or governmental subdivision, agency, or instrumentality, or any
other legal or commercial entity. “Person” means an individual, business
corporation, nonprofit corporation, partnership, limited partnership,
limited liability company, [general cooperative association,] limited
cooperative association, unincorporated nonprofit association,
statutory trust, business trust, common-law business trust, estate, trust,
association, joint venture, public corporation, government or governmental
subdivision, agency, or instrumentality, or any other legal or commercial
entity.
(16) “Principal
office” means the principal executive office of a limited liability company or
foreign limited liability company, whether or not the office is located in this
state.
(17) “Property”
means all property, whether real, personal, or mixed or tangible or intangible,
or any right or interest therein.
(17) (18)
“Record”, used as a noun, means information that is inscribed on a
tangible medium or that is stored in an electronic or other medium and is
retrievable in perceivable form.
(19) “Registered
agent” means an agent of a limited liability company or foreign limited
liability company which is authorized to receive service of any process,
notice, or demand required or permitted by law to be served on the company.
(20) “Registered
foreign limited liability company” means a foreign limited liability company
that is registered to do business in this state pursuant to a statement of
registration filed by the [Secretary of State].
(18) (21)
“Sign” means, with the present intent to authenticate or adopt a record:
(A) to
execute or adopt a tangible symbol; or
(B) to
attach to or logically associate with the record an electronic symbol, sound,
or process.
(19) (22)
“State” means a state of the United States, the District of Columbia, Puerto
Rico, the United States Virgin Islands, or any territory or insular possession
subject to the jurisdiction of the United States.
(20) (23)
“Transfer” includes:
(A)
an assignment,;
(B)
a conveyance, deed, bill of;
(C)
a sale,;
(D)
a lease, mortgage, security interest,;
(E)
an encumbrance, including a mortgage or security interest;
(F)
a gift,; and
(G) and a transfer
by operation of law.
(21) (24)
“Transferable interest” means the right, as originally initially
owned by associated with a person in the person’s capacity as
a member, to receive distributions from a limited liability company in
accordance with the operating agreement, whether or not the person remains a
member or continues to own any part of the right. The term applies to any
fraction of the interest, by whomever owned.
(22) (25)
“Transferee” means a person to which all or part of a transferable interest has
been transferred, whether or not the transferor is a member. The
term includes a person that owns a transferable interest under Section
603(a)(3).
Reporters’ Notes
Contribution
– conformed to ULPA.
Distribution –
The new language in subparagraph (A) is to make explicit that redemptions
constitute distributions. The phrase
“participate in the management or conduct of the company’s activities or have
access to records or other information concerning the company’s activities” is
taken from Section 502(a)(3) (describing the realm of governance rights not
available to a transferee).
The new language in
subparagraph (B) formerly appeared in Section 405 (limitations on distributions). Relocating the language here broadens the
effect of the exclusion. For example,
the exclusion now applies to exclude payments that would otherwise be subject
to a charging order.
Limited liability company –The language
conforms to ULPA (2001), taking into account LLCs that come within this statute
through an organic transaction and pre-existing LLCs that are “dragged in”
under this statute.
(a) A person knows
a fact when if the person:
(1) has
actual knowledge of it; or
(2) is
deemed to know it under subsection (d)(1) or law other than this [act].
(b) A person has
notice of a fact when if the person:
(1) has
reason to know the fact from all of the facts known to the person at the
time in question; or
(2) is
deemed to have notice of the fact under subsection (d)(2).
(c) A Subject
to Section 209(f), a person notifies another person of a fact by
taking steps reasonably required to inform the other person in ordinary course,
whether or not those steps cause the other person knows to
know the fact.
(d) A person that
is not a member is deemed:
(1) to
know of a limitation on authority to transfer real property as provided in
Section 302(g); and
(2) to
have notice of a limited liability company’s:
(A)
dissolution, 90 days after a statement of dissolution under Section
702(b)(2)(A) becomes effective;
(B)
termination, 90 days after a statement of termination under Section
702(b)(2)(F) becomes effective; and
(C)
participation in a merger, interest exchange, conversion, or
domestication, 90 days after articles of merger, interest exchange,
conversion, or domestication under [Article] 10 become effective.
(a) A limited
liability company is an entity distinct from its member or members.
(b) A limited
liability company may have any lawful purpose, regardless of whether for
profit.
(c) A limited
liability company has perpetual duration.
Reporters’
Notes
Subsection (a) – “Member or” added to
emphasize that the separate entity concept applies to single member LLCs as
well as to multiple member LLCs
SECTION 105. POWERS. A limited liability
company has the capacity to sue and be sued in its own name and the power to do
all things necessary or convenient to carry on its activities and affairs.
SECTION 106. GOVERNING LAW. The law of this state governs:
(1) the internal
affairs of a limited liability company; and
(2) the liability
of a member as member and a manager as manager for the debts, obligations, or
other liabilities of a limited liability company.
SECTION 107. SUPPLEMENTAL PRINCIPLES OF LAW. Unless displaced by particular provisions of
this [act], the principles of law and equity supplement this [act].
(a) The name of a
limited liability company must contain the words “limited liability company” or
“limited company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
“Limited” may be abbreviated as “Ltd.”, and “company” may be abbreviated as
“Co.”.
(b) Unless
authorized Except as otherwise provided in by subjection (c) subsection
(d), the name of a limited liability company, and the name under which a
foreign limited liability company may register to do business in this state,
must be distinguishable in on the records of the [Secretary of
State] from:
(1) the
name of each an existing person that is not an individual and
that is incorporated, organized, or authorized to transact business in this
state whose formation required the filing of a record by the [Secretary
of State];
(2) the limited liability company name stated
in each certificate of organization that contains the statement as provided in
Section 201(b)(3) and that has not lapsed; and
(2)
the name of a limited liability partnership;
(3)
the name of a person registered to do business in this state by the filing of a
record by the [Secretary of State];
(3)
(4) each name reserved under Section 109 or other law of this state
providing for the reservation of a name by the filing of a record by the
[Secretary of State];
(5) each
name registered under Section 110 or other law of this state providing for the
registration of a name by the filing of a record by the [Secretary of State]; and
(4)
(6) an assumed name registered under [this state’s assumed or fictitious name
statute] [cite other state laws allowing the reservation or
registration of business names, including fictitious or assumed name
statutes].
(c) A limited
liability company may apply to the [Secretary of State] for authorization to
use a name that does not comply with subsection (b). The [Secretary of State] shall authorize use
of the name applied for if, as to each noncomplying name:
(1)
the present user, registrant, or owner of the noncomplying name consents in a
signed record to the use and submits an undertaking in a form satisfactory to
the [Secretary of State] to change the noncomplying name to a name that
complies with subsection (b) and is distinguishable in the records of the
[Secretary of State] from the name applied for; or
(2)
the applicant delivers to the [Secretary of State] a certified copy of the
final judgment of a court establishing the applicant’s right to use in this
state the name applied for.
(d) Subject to
Section 805, this section applies to a foreign limited liability company
transacting business in this state which has a certificate of authority to
transact business in this state or which has applied for a certificate of
authority.
(c) If a person
consents in a record to the use of its name and submits an undertaking in a
form satisfactory to the [Secretary of State] to change its name to a name that
is distinguishable on the records of the [Secretary of State] from any name in
any category of names in subsection (b), the name of the consenting person may
be used by the person to which the consent was given.
(d) Except as
otherwise provided in subsection (e), in determining whether a name is the same
as or not distinguishable on the records of the [Secretary of State] from the
name of another entity, words, phrases, or abbreviations indicating the type of
entity, such as “corporation”, “corp.”, “incorporated”, “Inc.”, “professional
corporation”, “PC”, “professional association”, “PA”, “Limited”, “Ltd.”,
“limited partnership”, “LP”, “limited liability partnership”, “LLP”,
“registered limited liability partnership”, “RLLP”, “limited liability limited
partnership”, “LLLP”, “registered limited liability limited partnership”,
“RLLLP”, “limited liability company”, or “LLC”, may not be taken into account.
(e) A person may
consent in a record to the use of a name that is not distinguishable on the
records of the [Secretary of State] from its name except for the addition of a
word, phrase, or abbreviation indicating the type of person as provided in
subsection (d). In such a case, the person
need not change its name pursuant to subsection (b).
(f) The name of
a limited liability company or foreign limited liability company may not
contain the words [insert prohibited words or words that may be used only with
approval by the appropriate state agency].
(a) A person may
reserve the exclusive use of the a name of a limited liability
company, including a fictitious or assumed name for a foreign limited liability
company whose name is not available, that complies with Section 108 by
delivering an application to the [Secretary of State] for filing. The application must state the name and
address of the applicant and the name proposed to be reserved. If the [Secretary of State] finds that the
name applied for is available, it must be reserved the
[Secretary of State] shall reserve the name for the applicant’s
exclusive use for a 120-day period 120 days.
(b) The owner of a name
reserved for a limited liability company name may transfer the
reservation to another person that is not an individual by delivering to
the [Secretary of State] for filing a signed notice in a record of
the transfer which states the name and address of the transferee.
SECTION 110. REGISTRATION OF NAME.
(a)
A foreign limited liability company not registered to do business in this state
under [Article] 8 may register its name, or an alternate name adopted pursuant
to Section 806, if the name is distinguishable upon on the
records of the [Secretary of State] from the names that are not available under
Section 108.
(b) To register its name or an
alternate name adopted pursuant to Section 806, a foreign limited liability
company must deliver to the [Secretary of State] for filing an application
stating the company’s name, the jurisdiction and date of its formation, and any
alternate name adopted pursuant to Section 806.
If the [Secretary of State] finds that the name applied for is
available, the [Secretary of State] shall register the name for the applicant’s
exclusive use.
(c) The registration of a name
under this section is effective for [one year] after the date of registration.
(d) A foreign limited liability
company whose name registration is effective may renew the registration for
successive one-year periods by delivering, not earlier than [three months]
before the expiration of the registration, to the [Secretary of State] for
filing a renewal application that complies with this section. When filed, the renewal application renews
the registration for a succeeding one-year period.
(e) A foreign limited liability
company whose name registration is effective may register as a foreign limited
liability company under the registered name or consent in a signed record to
the use of that name by another person that is not an individual.
(a)
Except as otherwise provided in subsections (b) and (c) and
(d), the operating agreement governs:
(1)
relations among the members as members and between the members and the
limited liability company;
(2) the
rights and duties under this [act] of a person in the capacity of manager;
(3) the
activities and affairs of
the company and the conduct of those activities and affairs; and
(4) the
means and conditions for amending the operating agreement.
(b) To the extent
the operating agreement does not otherwise
provide for a matter described in subsection (a), this [act] governs the
matter.
(c) An operating
agreement may not:
(1)
vary a limited liability company’s capacity under Section 105 to sue and be
sued in its own name;
(2)
vary the law applicable under Section 106;
(3) vary any requirement, procedure, or other
provision of this [act] pertaining to:
(A) registered agents; or
(B) the
[Secretary of State], including provisions pertaining to records authorized or
required to be delivered to the [Secretary of State] for filing under this
[act];
(3)
(4) vary the power provisions of the court under
Section 204;
(4)
(5) subject to
subsections (d) through (g); eliminate the duty of care or the duty of
loyalty;
(5)
(6) subject to subsections (d) through (g), eliminate the contractual obligation of
good faith and fair dealing under Section 409(d), but the operating agreement may prescribe the standards, if not
manifestly unreasonable, by which the performance of the obligation is to be
measured;
(6) (7) relieve or exonerate a
person from liability for conduct involving bad faith, willful misconduct, or
recklessness;
(6)
(8) unreasonably restrict the duties and rights stated in under
Section 410, but the operating
agreement may impose reasonable restrictions on the availability and use of
information obtained under that section and may define appropriate remedies,
including liquidated damages, for a breach of any reasonable restriction on use;
(7)
(9) vary the power of a court to decree causes of
dissolution in the circumstances specified in Section 701(a)(4)(A)
and (5);
(8)
(10) vary the requirement to wind up a limited liability the
company’s business activities and affairs as specified in Section
702(a), and (b)(1), and (e);
(9)
(11) unreasonably restrict the right of a member to maintain an action
under [Article] 9;
(12) vary the
provisions of Section 905, but the operating agreement may provide that the
company may not have a special litigation committee;
(10)
(13) restrict the right to
approve a merger, conversion, or domestication under Section 1014 to a
member that will have personal liability with respect to a
surviving, converted, or domesticated organization vary the right of a
member to approve a merger, interest exchange, conversion, or domestication
under Section 1023(a)(2), 1033(a)(2), 1043(a)(2), or 1053(a)(2); or
(11) (14) except as otherwise
provided in Section 112(b) Sections 112 and 113(b), restrict the
rights under this [act] of a person other than a member or manager.
(d) If not manifestly unreasonable, the
operating agreement may:
(1) restrict or eliminate the duty:
(A) as required in Section
409(b)(1) and (g), to account to the limited liability company and to hold as
trustee for it any property, profit, or benefit derived by the
member in the conduct or
winding up of the company’s business, from a use by the member of the company’s
property, or from the appropriation of a limited liability company opportunity;
(B) as required in Section
409(b)(2) and (g), to refrain from dealing with the company in the conduct or
winding up of the company’s business as or on behalf of a party having an
interest adverse to the company; and
(C) as required by Section
409(b)(3) and (g), to refrain from competing with the company in the conduct of
the company’s business before the dissolution of the company;
(2) identify specific types or categories
of activities that do not violate the duty of loyalty;
(3) alter the duty of care, except to
authorize intentional misconduct or knowing violation of law;
(4) alter any other fiduciary duty,
including eliminating particular aspects of that duty; and
(5) prescribe the standards by which to
measure the performance of the contractual obligation of good faith and fair
dealing under Section 409(d).
(e) (d)
Subject to subsection (c), without
limiting other terms that may be included in an operating agreement, the
following rules apply:
(1) The
operating agreement may specify the method by which a specific act or
transaction that would otherwise violate the duty of loyalty may be authorized
or ratified by one or more disinterested and independent persons after full
disclosure of all material facts.
(f)
(2) To the extent the operating agreement of a member-managed limited
liability company expressly relieves a member of a responsibility that the
member would otherwise have under this [act] and imposes the responsibility on
one or more other members, the operating agreement may, to the benefit of the
member that the operating agreement relieves of the responsibility, also
eliminate or limit any fiduciary duty that would have pertained to the responsibility.
(g) The
operating agreement may alter or eliminate the indemnification for a member or
manager provided by Section 408(a) and may eliminate or limit a member or
manager’s liability to the limited liability company and members for money
damages, except for:
(1)
breach of the duty of loyalty;
(2)
a financial benefit received by the member or manager to which the member or
manager is not entitled;
(3)
a breach of a duty under Section 406;
(4)
intentional infliction of harm on the company or a member; or
(5)
an intentional violation of criminal law.
(3) If not manifestly unreasonable, the
operating agreement may:
(A) restrict or eliminate the
aspects of the duty of loyalty stated in Section 409(b) and (h)(1);
(B) identify specific types or
categories of activities that do not violate the duty of loyalty;
(C) alter the duty of care, but
may not authorize intentional misconduct or knowing violation of law; and
(D) alter or eliminate any
other fiduciary duty.
(h) (e)
The court shall decide as a matter of law any claim under subsection (c)(6)
or (d)(3) that a term of an operating agreement is manifestly
unreasonable. The court:
(1)
shall make its determination as of the time the challenged term became part of
the operating agreement and by considering only circumstances existing at that
time; and
(2) may
invalidate the term only if, in light of the purposes, and
activities, and affairs of
the limited liability company, it is readily apparent that:
(A)
the objective of the term is unreasonable; or
(B)
the term is an unreasonable means to achieve the provision’s
objective.
Reporters’
Notes
Most changes in this section are intended to
improve readability. Subsection (d)
takes advantage of an approach first approved for USTEA, §
103(e) (“without limiting the terms that may be included in a governing
instrument, the governing instrument may”).
(a) A limited
liability company is bound by and may enforce the operating agreement, whether
or not the company has itself manifested assent to the operating agreement.
(b) A person that
becomes a member of a limited liability company is deemed to assent to the
operating agreement.
(c) Two or more
persons intending to become the initial members of a limited liability company
may make an agreement providing that upon the formation of the company the
agreement will become the operating agreement.
One person intending to become the initial member of a limited liability
company may assent to terms providing that upon the formation of the company
the terms will become the operating agreement.
(a) An operating
agreement may specify that its amendment requires the approval of a person that
is not a party to the operating agreement or the satisfaction of a condition. An amendment is ineffective if its adoption
does not include the required approval or satisfy the specified condition.
(b) The obligations
of a limited liability company and its members to a person in the person’s
capacity as a transferee or a person dissociated as a member are
governed by the operating agreement.
Subject only to any a court order issued under Section
503(b)(2) to effectuate a charging order, an amendment to the operating
agreement made after a person becomes a transferee or is dissociated as
a member is:
(1)
is effective with regard to any debt, obligation, or other liability of the
limited liability company or its members to the person in the person’s capacity
as a transferee or person dissociated as a member; and
(2) is not effective to the extent the
amendment imposes a new debt, obligation, or other liability on the transferee
or person dissociated as a member.
(c) If a record that
has been delivered by a limited liability company to the [Secretary of
State] for filing and has become becomes effective under this
[act] and contains a provision that would be ineffective under
Section 110(c) 111(c) or (d)(3) if contained in the operating
agreement, the provision is likewise ineffective in the record.
(d) Subject to
subsection (c), if a record that has been delivered by a limited
liability company to the [Secretary of State] for filing and has become becomes
effective under this [act] and conflicts with a provision of the
operating agreement:
(1) the
operating agreement prevails as to members, persons dissociated as
members, transferees, and managers; and
(2) the
record prevails as to other persons to the extent they reasonably rely on the
record.
(a) A Each
limited liability company and each registered foreign limited liability
company shall designate and continuously maintain a registered
agent in this state:
(1)
an office, which need not be a place of its activity in this state; and
(2)
an agent for service of process.
(b) A foreign
limited liability company that has a certificate of authority under Section 802
shall designate and continuously maintain in this state an agent for service of
process. The designation of a registered agent is an affirmation of fact
by the limited liability company or registered foreign limited liability
company that the agent has consented to serve.
(c) (b)
An agent for service of process of A registered agent for a
limited liability company or registered foreign limited liability
company must be an individual who is a resident of this state or other
person with authority to transact have a place of business in this
state.
(c) The only duties
under this [act] of a registered agent that has complied with this [act] are:
(1)
to forward to the limited liability company or registered foreign limited
liability company at the address most recently supplied to the agent by the
company any process, notice, or demand pertaining to the company which is
served on or received by the agent; (2) if the registered
agent resigns, to provide the notice required by Section 116(c) to the company
at the address most recently supplied to the agent by the company; and
(3)
to keep current the information with respect to the agent in the certificate of
formation.
(a) A limited
liability company or registered foreign limited liability company may
change its designated office, its registered agent for
service of process, or the address of its registered agent for
service of process by delivering to the [Secretary of State] for filing a
statement of change containing that states:
(1) the
name of the company or foreign company; and
(2) the
street and mailing addresses of its current designated office; the information
that is to be in effect as a result of the filing of the statement of change.
(3)
if the current designated office is to be changed, the street and mailing
addresses of the new designated office;
(4)
the name and street and mailing addresses of its current agent for service of
process; and
(5)
if the current agent for service of process or an address of the agent is to be
changed, the new information.
(b) Subject to
Section 205(c), a statement of change is effective when filed by the [Secretary
of State].
(b)
The members or managers of a limited liability company need not approve the
filing of:
(1)
a statement of change under this section; or
(2)
a similar filing changing the registered agent or registered office, if any, of
the company in any other jurisdiction.
(c)
A statement of change under this section designating a new registered agent is
an affirmation of fact by the limited liability company or registered foreign
limited liability company that the agent has consented to serve.
(d)
As an alternative to using the procedure in this section, a limited liability
company or registered foreign limited liability company may amend its
certificate of organization.
(a)
To resign as an agent for service of process of A registered agent
may resign as agent for a limited liability company or registered
foreign limited liability company, the agent must deliver by
delivering to the [Secretary of State] for filing a statement of
resignation containing the company name and stating that the agent is
resigning. that states:
(1)
the name of the company;
(2)
the name of the agent;
(3)
that the agent resigns from serving as registered agent for the company; and
(4)
the address of the company to which the agent will send the notice required by
subsection (c).
(b) A statement
of resignation takes effect on the earlier of:
(1) the
31st day after the day on which it is filed by the [Secretary of State]; or
(2) the
designation of a new registered agent for the limited liability company or registered
foreign limited liability company.
(c) A registered
agent promptly shall furnish to the limited liability company or registered foreign
limited liability company notice in a record of the date on which a statement
of resignation was filed.
(d) When a
statement of resignation takes effect, the registered agent ceases to have
responsibility under this [act] for any matter thereafter tendered to it as
agent for the limited liability company or registered foreign limited liability
company. The resignation does not affect
any contractual rights the company has against the agent or that the agent has
against the company.
(e) A registered
agent may resign with respect to a limited liability company or registered foreign
limited liability company whether or not the company is in good standing.
(b) The
[Secretary of State] shall file a statement of resignation delivered under
subsection (a) and mail or otherwise provide or deliver a copy to the
designated office of the limited liability company or foreign limited liability
company and another copy to the principal office of the company if the mailing
addresses of the principal office appears in the records of the [Secretary of
State] and is different from the mailing address of the designated office.
(c) An agency
for service of process terminates on the earlier of:
(1)
the 31st day after the [Secretary of State] files the statement of resignation;
(2)
when a record designating a new agent for service of process is delivered to
the [Secretary of State] for filing on behalf of the limited
liability company and becomes
effective.
(a)
If a registered agent changes its name or address, the agent may deliver to the
[Secretary of State] for filing a statement of change that states:
(1)
the name of the limited liability company or registered foreign limited
liability company represented by the registered agent;
(2)
the name of the agent as currently shown in the records of the [Secretary of
State] for the company or foreign company;
(3)
if the name of the agent has changed, its new name; and
(4)
if the address of the agent has changed, its new address.
(b)
A registered agent promptly shall furnish notice to the represented limited
liability company or registered foreign limited liability company of the filing
by the [Secretary of State] of the statement of change and the changes made by
the statement.
(a) An agent for
service of process appointed by a limited liability company or foreign limited
liability company is an agent of the company for service of any process,
notice, or demand required or permitted by law to be served on the company.
(b) If a limited
liability company or foreign limited liability company does not appoint or
maintain an agent for service of process in this state or the agent for service
of process cannot with reasonable diligence be found at the agent’s street
address the [Secretary of State] is an agent of the company upon whom process,
notice, or demand may be served.
(c) Service of
any process, notice, or demand on the [Secretary of State] as agent for a
limited liability company or foreign limited liability company may be made by
delivering to the [Secretary of State] duplicate copies of the process, notice,
or demand. If a process, notice, or demand
is served on the [Secretary of State], the [Secretary of State] shall forward
one of the copies by registered or certified mail, return receipt requested, to
the company at its designated
office.
(d) Service is
effected under subsection (c) at the earliest of:
(1)
the date the limited liability company or foreign limited liability company
receives the process, notice, or demand;
(2)
the date shown on the return receipt, if signed on behalf of the company; or
(3)
five days after the process, notice, or demand is deposited with the United
States Postal Service, if correctly addressed and with sufficient postage.
(e) The
[Secretary of State] shall keep a record of each process, notice, and demand
served pursuant to this section and record the time of, and the action taken
regarding, the service.
(f) This section
does not affect the right to serve process, notice, or demand in any other
manner provided by law.
(a) A limited
liability company or registered foreign limited liability company may be served
with any process, notice, or demand required or permitted by law by serving its
registered agent.
(b) If a limited
liability company or registered foreign limited liability company ceases to
have a registered agent, or if its registered agent cannot with reasonable
diligence be served, the company may be served by registered or certified mail,
return receipt requested, or by similar commercial delivery service, addressed
to the company at its principal office.
The address of the principal office must be as shown on the company’s
most recent [annual] [biennial] report filed by the [Secretary of State]. Service is effected under this subsection on
the earliest of:
(1)
the date the company receives the mail or delivery by the commercial delivery
service;
(2)
the date shown on the return receipt, if signed by the company; or
(3)
five days after its deposit with the United States Postal Service, or with the
commercial delivery service, if correctly addressed and with sufficient postage
or payment.
(c) If process,
notice, or demand cannot be served on a limited liability company or registered
foreign limited liability company pursuant to subsection (a) or (b), service
may be made by handing a copy to the individual in charge of any regular place
of business or activity of the company if the individual served is not a
plaintiff in the action.
(d) Service of
process, notice, or demand on a registered agent must be in a written record.
(e) Service of
process, notice, or demand may be made by other means under law other than this
[act].
(a) Except as otherwise provided in this [act],
permissible means of delivery of a record include delivery by hand, mail by
the United States Postal Service, a commercial delivery service,
and electronic transmission.
(b) Delivery to the [Secretary of State] is
effective only when the a record is received by the [Secretary of
State].
SECTION 120.
RESERVATION OF POWER TO AMEND OR REPEAL. The [legislature of this state] has power to
amend or repeal all or part of this [act] at any time, and all domestic and
foreign limited liability companies subject to this [act] are governed by the
amendment or repeal.
[ARTICLE] 2
(a) One or more
persons may act as organizers to form a limited liability company by signing
and delivering to the [Secretary of State] for filing a certificate of
organization.
(b) A certificate
of organization must state:
(1) the
name of the limited liability company, which must comply with Section 108;
(2) the
street and mailing addresses of the initial designated office and the
street and mailing address of the company’s principal office; and
(3)
the name and street and mailing addresses within this state of the initial
company’s registered agent for service of process of the company; and
(3) if the company will have no members when
the [Secretary of State] files the certificate, a statement to that effect.
(c) Subject to
Section 112 110(c), a A certificate of organization may also contain statements as to
matters other than those required by subsection (b), but may not vary or
otherwise affect the provisions specified in Section 111(c) in a manner
inconsistent with that section.
However, a statement in a certificate of organization is not effective
as a statement of authority.
(d) Unless the filed certificate of organization
contains the statement as provided in subsection (b)(3), the following rules
apply:
(1) A limited liability company is
formed when the [Secretary of State]
has filed the company’s certificate of organization and the company has at least one member,
unless the certificate states a delayed effective date pursuant to Section
205(c) becomes effective
and at least one person becomes a member.
(2) If the certificate states a delayed
effective date, a limited liability company is not formed if, before the
certificate takes effect, a statement of cancellation is signed and delivered
to the [Secretary of State] for filing and the [Secretary of State] files the
certificate.
(3) Subject to any delayed effective date and
except in a proceeding by this state to dissolve a limited liability company,
the filing of the certificate of organization by the [Secretary of State] is
conclusive proof that the organizer satisfied all conditions to the formation
of a limited liability company.
(e) If a filed certificate of organization
contains a statement as provided in subsection (b)(3), the following rules
apply:
(1) The certificate lapses and is void
unless, within [90] days from the date the [Secretary of State] files the
certificate, an organizer signs and delivers to the [Secretary of State] for
filing a notice stating:
(A) that the limited liability
company has at least one member; and
(B) the date on which a person
or persons became the company’s initial member or members.
(2) If an organizer complies with
paragraph (1), a limited liability company is deemed formed as of the date of
initial membership stated in the notice delivered pursuant to paragraph (1).
(3) Except in a proceeding by this state
to dissolve a limited liability company, the filing of the notice described in
paragraph (1) by the [Secretary of State] is conclusive proof that the
organizer satisfied all conditions to the formation of a limited liability
company.
(a) A certificate
of organization may be amended or restated at any time.
(b) To amend its
certificate of organization, a limited liability company must deliver to the
[Secretary of State] for filing an amendment stating:
(1) the
name of the company;
(2) the
date of filing of its initial certificate of organization; and
(3) the
changes the amendment makes to the certificate as most recently amended or
restated.
(c) To restate its
certificate of organization, a limited liability company must deliver to the
[Secretary of State] for filing a restatement, designated as such in its
heading, stating:
(1)
in the heading or an introductory paragraph, the company’s present name and the
date of the filing of the company’s initial certificate of organization;
(2)
if the company’s name has been changed at any time since the company’s
formation, each of the company’s former names; and
(3)
the changes the restatement makes to the certificate as most recently amended
or restated.
(d) Subject to
Sections 112(c) and 205(c), an amendment to or restatement of a certificate of
organization is effective when filed by the [Secretary of State].
(e) (d)
If a member of a member-managed limited liability company, or a manager of a
manager-managed limited liability company, knows that any information in a
filed certificate of organization was inaccurate when the certificate was filed
or has become inaccurate owing due to changed circumstances, the
member or manager shall promptly:
(1)
cause the certificate to be amended; or
(2) if
appropriate, deliver to the [Secretary of State] for filing a statement of
change under Section 114 or a statement of correction under Section 206 208.
(a) A record
delivered to the [Secretary of State] for filing pursuant to this [act] must be
signed as follows:
(1)
Except as otherwise provided in paragraphs (2) through (4) and (3),
a record signed on behalf of a limited liability company must be signed by a
person authorized by the company.
(2) A limited
liability company’s initial certificate of organization must be signed by
at least one person acting as an organizer.
(3) A notice under Section 201(e)(1) must be
signed by an organizer.
(4) A record filed delivered
on behalf of a dissolved limited liability company that has no members
member must be signed by the person winding up the company’s activities and affairs under Section 702(c) or
a person appointed under Section 702(d) to wind up those the activities
and affairs.
(5)
A statement of cancellation under Section 201(d)(2) must be signed by each
organizer that signed the initial certificate of organization, but a personal
representative of a deceased or incompetent organizer may sign in the place of
the decedent or incompetent.
(6) (4) A statement
of denial by a person under Section 303 must be signed by that person.
(7) (5) Any
other record must be signed by the
person on whose behalf the record is delivered on behalf of a person
to the [Secretary of State] for filing
must be signed by that person.
(b)
Any record filed under this [act] may be signed by an agent. Whenever this [act] requires a particular
individual to sign a record and the individual is deceased or incompetent, the
record may be signed by a legal representative of the individual.
(c) A person that signs a record as an
agent or legal representative thereby affirms as a fact that the person is
authorized to sign the record.
(a) If a person
required by this [act] to sign a record or deliver a record to the [Secretary
of State] for filing under this [act] does not do so, any other person that is
aggrieved may petition the [the appropriate court] to order:
(1) the
person to sign the record;
(2) the
person to deliver the record to the [Secretary of State] for filing; or
(3) the
[Secretary of State] to file the record unsigned.
(b) If a petitioner
under subsection (a) is not the limited liability company or foreign limited
liability company to which the record pertains, the petitioner shall make the
company a party to the action.
(c) A record filed under subsection
(a)(3) is effective without being signed.
(a) A record
authorized or required to be delivered to the [Secretary of State] for filing
under this [act] must be captioned to describe the record’s purpose, be in a
medium permitted by the [Secretary of State], and be delivered to the
[Secretary of State]. If the filing fees
have been paid, unless the [Secretary of State] determines that a record does
not comply with the filing requirements of this [act], the [Secretary of State]
shall file the record and:
(1)
for a statement of denial under Section 303, send a copy of the filed statement
and a receipt for the fees to the person on whose behalf the statement was
delivered for filing
and to the limited liability company; and
(2)
for all other records, send a copy of the filed record and a receipt for the
fees to the person on whose behalf the record was filed.
(b) Upon request
and payment of the requisite fee, the [Secretary of State] shall send to the
requester a certified copy of a requested record.
(c) Except as
otherwise provided in Sections 115 and 206 and except for a certificate of
organization that contains a statement as provided in Section 201(b)(3), a
record delivered to the [Secretary of State] for filing under this [act] may
specify an effective time and a delayed effective date. Subject to Sections
115, 201(d)(1), and 206, a record filed by the [Secretary of State] is
effective:
(1)
if the record does not specify either an effective time or a delayed effective
date, on the date and at the time the record is filed as evidenced by the
[Secretary of State’s] endorsement of the date and time on the record;
(2)
if the record specifies an effective time but not a delayed effective date, on
the date the record is filed at the time specified in the record;
(3)
if the record specifies a delayed effective date but not an effective time, at
12:01 a.m. on the earlier of:
s(A) the specified date; or
(B)
the 90th day after the record is filed; or
(4)
if the record specifies an effective time and a delayed effective date, at the
specified time on the earlier of:
(A)
the specified date; or
(B)
the 90th day after the record is filed.
(a) To be filed
by the [Secretary of State] pursuant to this [act], a record must be received
by the [Secretary of State], comply with this [act], and satisfy the following:
(1)
The filing of the record must be required or permitted by this [act].
(2)
The record must be physically delivered in written form unless and to the
extent the [Secretary of State] permits electronic delivery of records.
(3)
The words in the record must be in English, and numbers must be in Arabic or
Roman numerals, but the name of an entity need not be in English if written in
English letters or Arabic or Roman numerals.
(4) The
record must be signed by a person authorized or required under this [act] to
sign the record.
(5) The
record must state the name and capacity, if any, of each individual who signed
it, either on the individual’s behalf or on behalf of a person authorized or
required to sign the record, but need not contain a seal, attestation,
acknowledgment, or verification.
(b) If law other
than this [act] prohibits the disclosure by the [Secretary of State] of
information contained in a record delivered to the [Secretary of State] for
filing, the [Secretary of State] shall accept the record if the record
otherwise complies with this [act] but may redact the information.
(c) When a
record is delivered to the [Secretary of State] for filing, any fee required
under this [act] and any fee, tax, interest, or penalty required to be paid
under this [act] or law other than this [act] must be paid in a manner
permitted by the [Secretary of State] or by that law.
(d) The
[Secretary of State] may require that a record delivered in written form be
accompanied by an identical or conformed copy.
SECTION 206. EFFECTIVE TIME AND DATE. Except as otherwise provided in Section 207
and subject to Section 208(c), a record filed under this [act] is effective:
(1) on the date
and at the time of its filing by the [Secretary of State], as provided in
Section 209;
(2) on the date
of filing and at the time specified in the record as its effective time, if
later than the time under paragraph (1);
(3) at a
specified delayed effective time and date, which may not be more than 90 days
after the date of filing; or
(4) if a delayed
effective date is specified, but no time is specified, at 12:01 a.m. on the
date specified, which may not be more than 90 days after the date of filing.
(a)
Except as otherwise provided in [Article] 10, a record delivered to the
[Secretary of State] for filing may be withdrawn before it takes effect by
delivering to the [Secretary of State] for filing a statement of withdrawal.
(b) A statement
of withdrawal must:
(1)
be signed by each person that signed the record being withdrawn, except as
otherwise agreed by those persons;
(2)
identify the record to be withdrawn; and
(3) if
signed by fewer than all the persons that signed the record being withdrawn,
state that the record is withdrawn in accordance with the agreement of all the
persons that signed the record.
(c)
On filing by the [Secretary of State] of a statement of withdrawal, the action
or transaction evidenced by the original record does not take effect.
(a) A limited
liability company or foreign limited liability company may deliver to the
[Secretary of State] for filing a statement of correction to correct a record
previously delivered by the company to the [Secretary of State] and filed by
the [Secretary of State], if at the time of filing the record contained
inaccurate information or was defectively signed.
(b) A statement
of correction under subsection (a) may not state a delayed effective date and
must:
(1)
describe the record to be corrected, including its filing date, or attach a
copy of the record as filed;
(2)
specify the inaccurate information and the reason it is inaccurate or the
manner in which the signing was defective; and
(3)
correct the defective signature or inaccurate information.
(c) When filed
by the [Secretary of State], a statement of correction under subsection (a) is
effective retroactively as of the effective date of the record the statement
corrects, but the statement is effective when filed:
(1)
for the purposes of Section 103(d); and
(2)
as to persons that previously relied on the uncorrected record and would be
adversely affected by the retroactive effect.
(a) A person on
whose behalf a filed record was delivered to the [Secretary of State] for
filing may correct the record if:
(1)
the record at the time of filing was inaccurate;
(2)
the record was defectively signed; or
(3)
the electronic transmission of the record to the [Secretary of State] was
defective.
(b) To correct a
filed record, a person on whose behalf the record was delivered to the
[Secretary of State] must deliver to the [Secretary of State] for filing a
statement of correction.
(c) A statement
of correction:
(1)
may not state a delayed effective date;
(2)
must be signed by the person correcting the filed record;
(3)
must identify the filed record to be corrected;
(4)
must specify the inaccuracy or defect to be corrected; and
(5)
must correct the inaccuracy or defect.
(d) A statement
of correction is effective as of the effective date of the filed record that it
corrects except for purposes of Section 103(d) and as to persons relying on the
uncorrected filed record and adversely affected by the correction. For those purposes and as to those persons,
the statement of correction is effective when filed.
(a) The
[Secretary of State] shall file a record delivered to the [Secretary of State]
for filing which satisfies this [act].
The duty of the [Secretary of State] under this section is ministerial.
(b) When the
[Secretary of State] files a record, the [Secretary of State] shall record it
as filed on the date and at the time of its delivery. After filing a record, the [Secretary of
State] shall deliver to the person that submitted the record a copy of the
record with an acknowledgment of the date and time of filing and, in the case
of a statement of denial, also to the limited liability company to which the
statement pertains.
(c) If the
[Secretary of State] refuses to file a record, the [Secretary of State] shall,
not later than [15] business days after the record is delivered:
(1) return the record or notify the person that
submitted the record of the refusal; and
(2)
provide a brief explanation in a record of the reason for the refusal.
(d) If the [Secretary
of State] refuses to file a record, the person that submitted the record may
petition [the appropriate court] to compel filing of the record. The record and the explanation of the
[Secretary of State] of the refusal to file must be attached to the petition. The court may decide the matter in a summary
proceeding.
(e) The filing
of or refusal to file a record does not create a presumption that the
information contained in the record is correct or incorrect.
(f) Except as otherwise
provided by Section 118 or by law other than this [act], the [Secretary of
State] may deliver any record to a person by delivering it:
(1)
in person to the person that submitted it;
(2)
to the address of the person’s registered agent;
(3)
to the principal office of the person; or
(4)
to another address the person provides to the [Secretary of State] for
delivery.
(a) If a record
delivered to the [Secretary of State] for filing under this [act] and filed by
the [Secretary of State] contains inaccurate information, a person that suffers
a loss by reliance on the information may recover damages for the loss
from:
(1) a
person that signed the record, or caused another to sign it on the person’s
behalf, and knew the information to be inaccurate at the time the record was
signed; and
(2)
subject to subsection (b), a member of a member-managed limited liability
company or the manager of a manager-managed limited liability company, if:
(A)
the record was delivered for filing on behalf of the company; and
(B)
the member or manager had notice of the inaccuracy for a reasonably sufficient
time before the information was relied upon so that, before the reliance, the
member or manager reasonably could have:
(i)
effected an amendment under Section 202;
(ii)
filed a petition under Section 204; or
(iii)
delivered to the [Secretary of State] for filing a statement of change under
Section 114 115 or a statement of correction under Section 206
208.
(b) To the extent
that the operating agreement of a member-managed limited liability company
expressly relieves a member of responsibility for maintaining the accuracy of
information contained in records delivered on behalf of the company to the
[Secretary of State] for filing under this [act] and imposes that responsibility
on one or more other members, the liability stated in subsection (a)(2) applies
to those other members and not to the member that the operating agreement
relieves of the responsibility.
(c) An individual
who signs a record authorized or required to be filed under this [act] affirms
under penalty of perjury that the information stated in the record is accurate.
(a) The
[Secretary of State], upon request and payment of the requisite fee, shall
furnish to any person a certificate of existence for a limited liability
company if the records filed in the [office of the Secretary of State] show
that the company has been formed under Section 201 and the [Secretary of State]
has not filed a statement of termination pertaining to the company. A certificate of existence must state:
(1)
the company’s name;
(2)
that the company was duly formed under the laws of this state and the date of
formation;
(3)
whether all fees, taxes, and penalties due under this [act] or other law to the
[Secretary of State] have been paid;
(4)
whether the company’s most recent annual report required by Section 209 has
been filed by the [Secretary of State];
(5)
whether the [Secretary of State] has administratively dissolved the company;
(6)
whether the company has delivered to the [Secretary of State] for filing a
statement of dissolution;
(7)
that a statement of termination has not been filed by the [Secretary of State];
and
(8)
other facts of record in the [office of the Secretary of State] which are
specified by the person requesting the certificate.
(b) The
[Secretary of State], upon request and payment of the requisite fee, shall
furnish to any person a certificate of authorization for a foreign limited liability
company if the records filed in the [office of the Secretary of State] show
that the [Secretary of State] has filed a
certificate of authority, has not revoked the certificate of
authority, and has not filed a notice of cancellation. A certificate of authorization must state:
(1)
the company’s name and any alternate name adopted under Section 805(a) for use
in this state;
(2)
that the company is authorized to transact business in this state;
(3)
whether all fees, taxes, and penalties due under this [act] or other law to the
[Secretary of State] have been paid;
(4)
whether the company’s most recent annual report required by Section 209 has
been filed by the [Secretary of State];
(5)
that the [Secretary of State] has not revoked the company’s certificate of
authority and has not filed a notice of cancellation; and
(6)
other facts of record in the [office of the Secretary of State] which are
specified by the person requesting the certificate.
(c) Subject to
any qualification stated in the certificate, a certificate of existence or
certificate of authorization issued by the [Secretary of State] is conclusive
evidence that the limited liability company is in existence or the foreign
limited liability company is authorized to transact business in this state.
(a) On request
of any person, the [Secretary of State] shall issue a certificate of good
standing for a limited liability company or a certificate of registration for a
registered foreign limited liability company.
(b) A
certificate under subsection (a) must state:
(1)
the limited liability company’s name or the registered foreign limited
liability company’s name used in this state;
(2) in the case of a limited liability company:
(A) that a certificate of
formation has been filed and has taken effect;
(B) the date the certificate
became effective;
(C) the period of the
company’s duration if the records of the [Secretary of State] reflect that its
period of duration is less than perpetual; and
(D) that:
(i) a statement of
dissolution, statement of administrative dissolution, or statement of
termination has not been filed;
(ii) the records
of the [Secretary to State] do not otherwise reflect that the company has been
dissolved or terminated; and
(iii) a proceeding
is not pending under Section 707;
(3) in the case of a registered foreign
limited liability company, that it is registered to do business in this state;
(4)
that all fees, taxes, interest, and penalties owed to this state by the company
or the foreign company and collected through the [Secretary of State] have been
paid, if:
(A)
payment is reflected in the records of the [Secretary of State]; and
(B)
nonpayment affects the good standing or registration of the company or foreign company;
(5)
that the most recent [annual] [biennial] report required by Section 212 has
been delivered to the [Secretary of State] for filing; and
(6) other
facts reflected in the records of the [Secretary of State] pertaining to the
company or foreign company which the person requesting the certificate
reasonably requests.
(c) Subject to
any qualification stated in the certificate, a certificate issued by the
[Secretary of State] under subsection (a) may be relied upon as conclusive
evidence of the facts stated in the certificate.
(a) Each year, a
A limited liability company or a registered foreign limited
liability company authorized to transact business in this state shall
deliver to the [Secretary of State] for filing a [an annual] [a biennial]
report that states:
(1) the
name of the company;
(2) the
street and mailing addresses of the company’s designated office and the
name and street and mailing addresses of its registered agent for
service of process in this state;
(3) the
street and mailing addresses of its principal office; and
(4) if the company is member managed, the name
of at least one member;
(5) if the company is manager managed, the
name of at least one manager; and
(4)(6)
in the case of a foreign limited liability company, the state or other
its jurisdiction under whose law the company is formed of
formation and any alternate name adopted under Section 805(a) 806(a).
(b) Information in an
annual report under this section the [annual] [biennial] report must
be current as of the date the report is signed by the limited liability
company or registered foreign limited liability company delivered to the
[Secretary of State] for filing.
(c) The first annual
report under this section [annual] [biennial] report must be
delivered to the [Secretary of State] between after [January 1]
and before [April 1] of the year following the calendar year in which a
the limited liability company
was formed company’s
certificate of organization became effective or a the
registered foreign limited liability company was authorized to transact
business registered to do business in this state. A report Subsequent
[annual][biennial] reports must be delivered to the [Secretary of State] between
after [January 1] and before [April 1] of each subsequent
[second] calendar year thereafter.
(d) If an annual
[an annual] [a biennial] report under this section does not
contain the information required in by subsection (a) this
section, the [Secretary of State] promptly shall promptly
notify the reporting limited liability company or registered foreign
limited liability company in a record and return the report to it
for correction. If the report is
corrected to contain the information required in subsection (a) and delivered
to the [Secretary of State] within 30 days after the effective date of the
notice, it is timely delivered.
(e) If an annual
[an annual] [a biennial] report under this section contains an
address of a designated office or the name or address of an a
registered agent for service of process which differs from the
information shown in the records of the [Secretary of State] immediately before
the annual [annual] [biennial] report becomes effective, the
differing information in the annual [annual] [biennial] report is
considered a statement of change under Section 114 115.
(a) A member is not
an agent of a limited liability company solely by reason of being a member.
(b) A person’s
status as a member does not prevent or restrict law other than this [act] from
imposing liability on a limited liability company because of the person’s
conduct.
(a) A limited
liability company may deliver to the [Secretary of State] for filing a
statement of authority. The statement:
(1)
must include the name of the company and the street and mailing addresses of
its designated office registered agent;
(2)
with respect to any position that exists in or with respect to the company, may
state the authority, or limitations on the authority, of all persons holding
the position to:
(A)
execute an instrument transferring real property held in the name of the
company; or
(B)
enter into other transactions on behalf of, or otherwise act for or bind, the
company; and
(3) may
state the authority, or limitations on the authority, of a specific person to:
(A)
execute an instrument transferring real property held in the name of the
company; or
(B)
enter into other transactions on behalf of, or otherwise act for or bind, the
company.
(b) To amend or
cancel a statement of authority filed by the [Secretary of State] under Section
205(a), a limited liability company must deliver to the [Secretary of State]
for filing an amendment or cancellation stating:
(1) the
name of the company;
(2) the
street and mailing addresses of the company’s designated office registered
agent;
(3) the
caption of the statement being amended or canceled and the date the
statement being affected became effective; and
(4) the
contents of the amendment or a declaration that the statement being affected
is canceled.
(c) A statement of
authority affects only the power of a person to bind a limited liability
company to persons that are not members.
(d) Subject to
subsection (c) and Section 103(d), and except as otherwise provided in
subsections (f), (g), and (h), a limitation on the authority of a person or a
position contained in an effective statement of authority is not by itself
evidence of knowledge or notice of the limitation by any person.
(e) Subject to
subsection (c), a grant of authority not pertaining to transfers of real
property and contained in an effective statement of authority is conclusive in
favor of a person that gives value in reliance on the grant, except to the
extent that when the person gives value:
(1) the
person has knowledge to the contrary;
(2) the
statement has been canceled or restrictively amended under subsection (b); or
(3) a
limitation on the grant is contained in another statement of authority that
became effective after the statement containing the grant became effective.
(f) Subject to
subsection (c), an effective statement of authority that grants authority to
transfer real property held in the name of the limited liability company and that
a certified copy of which is recorded by certified copy in the office
for recording transfers of the real property is conclusive in favor of a person
that gives value in reliance on the grant without knowledge to the contrary,
except to the extent that when the person gives value:
(1) the
statement has been canceled or restrictively amended under subsection (b),
and a certified copy of the cancellation or restrictive amendment has been
recorded in the office for recording transfers of the real property; or
(2) a
limitation on the grant is contained in another statement of authority that
became effective after the statement containing the grant became effective,
and a certified copy of the later-effective statement is recorded in the office
for recording transfers of the real property.
(g) Subject to
subsection (c), if a certified copy of an effective statement containing a
limitation on the authority to transfer real property held in the name of a
limited liability company is recorded in the office for recording transfers of
that real property, all persons are deemed to know of the limitation.
(h) Subject to
subsection (i), an effective statement of dissolution or termination is a
cancellation of any filed statement of authority for the purposes of subsection
(f) and is a limitation on authority for the purposes of subsection (g).
(i) After a
statement of dissolution becomes effective, a limited liability company may
deliver to the [Secretary of State] for filing and, if appropriate, may record
a statement of authority that is designated as a post-dissolution statement of
authority. The statement operates as
provided in subsections (f) and (g).
(j) Unless earlier
canceled, an effective statement of authority is canceled by operation of law
five years after the date on which the statement, or its most recent amendment,
becomes effective. This cancellation
operates without need for any recording under subsection (f) or (g).
(k) An effective
statement of denial operates as a restrictive amendment under this section and
may be recorded by certified copy for the purposes of subsection (f)(1).
SECTION 303. STATEMENT OF DENIAL.
A person named in a filed statement of authority granting that person
authority may deliver to the [Secretary of State] for filing a statement of
denial that:
(1) provides the
name of the limited liability company and the caption of the statement of
authority to which the statement of denial pertains; and
(2) denies the
grant of authority.
(a) The debts, obligations, or other
liabilities of a limited liability company, whether arising in contract, tort,
or otherwise:
(1) are solely the debts, obligations or
other liabilities of the company; and
(2) do not become the debts, obligations,
or other liabilities of a member or manager solely by reason of the member
acting as a member or manager acting as a manager
(a) A debt, obligation, or other liability of a
limited liability company is solely the debt, obligation, or other liability of
the company. A member or manager is not
personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or
other liability of the company solely by reason of being or acting as a member
or manager. This subsection applies
regardless of the dissolution of the company.
(b) The failure of
a limited liability company to observe any
particular formalities
relating to the exercise of its powers or management of its
activities and affairs is
not a ground for imposing liability on the
members or managers for the debts, obligations, or other liabilities of the
company a member or manager of the company for a debt, obligation,
or other liability of the company.
(a) If a limited
liability company is to have only one member upon formation, the person becomes
a member as agreed by that person and the organizer of the company. That person and the organizer may be, but
need not be, different persons. If
different, the organizer acts on behalf of the initial member.
(b) If a limited
liability company is to have more than one member upon formation, those persons
become members as agreed by the persons before the formation of the
company. The organizer acts on behalf of
the persons in forming the company and may be, but need not be, one of the
persons.
(c) If a filed certificate of organization contains the statement
required by Section 201(b)(3), a person becomes an initial member of the
limited liability company with the consent of a majority of the
organizers. The organizers may consent
to more than one person simultaneously becoming the company’s initial members.
(d) (c)
After formation of a limited liability company, a person becomes a member:
(1) as
provided in the operating agreement;
(2) as
the result of a transaction effective under [Article] 10;
(3)
with the consent of all the members; or
(4) if, within 90 consecutive days after
the company ceases to have any members:
(A) the last person to have
been a member, or the legal representative of that person, designates a person
to become a member; and
(B) the designated person
consents to become a member.
(4) as provided in Section 701(a)(3).
(e) (d)
A person may become a member without:
(1)
acquiring a transferable interest; and without or
(2)
making or being obligated to make a contribution to the limited liability
company.
SECTION 402. FORM OF CONTRIBUTION. A contribution may consist of tangible or
intangible property or other benefit to a limited liability company,
including money transferred, services performed, promissory
notes, other agreements or other benefit provided to the limited
liability company or an agreement to contribute money or transfer
property, and contracts for perform services to be performed,
or provide another benefit.
(a)
A person’s obligation to make a contribution to a limited liability company is
not excused by the person’s death, disability, or other inability to perform personally.
(b) If a person does not fulfill an obligation to make a required
contribution, the person or the
person’s estate is obligated at
the option of the limited liability company to contribute money equal
to the value of the part of the contribution which has not been made, at the option of the company.
(b) (c) The obligation of a person to make a contribution may be compromised
only by consent of all members. A
If a creditor of a limited liability company which extends credit
or otherwise acts in reliance on an obligation described in subsection (a) without notice of a compromise under this
subsection, the creditor may enforce the obligation.
(a) Any
distributions made by a limited liability company before its dissolution and
winding up must be in equal shares among members and persons dissociated
as members, except to the extent necessary to comply with any a
transfer effective under Section 502 and any or charging order in
effect under Section 503.
(b) A person has a
right to a distribution before the dissolution and winding up of a limited
liability company only if the company decides to make an interim
distribution. A person’s dissociation
does not entitle the person to a distribution.
(c) A person does
not have a right to demand or receive a distribution from a limited liability
company in any form other than money.
Except as otherwise provided in Section 708(c) 710, a
limited liability company may distribute an asset in kind only if each part of the asset is
fungible with each other part and each person receives a percentage of the
asset equal in value to the person’s share of distributions.
(d) If a member or
transferee becomes entitled to receive a distribution, the member or transferee
has the status of, and is entitled to all remedies available to, a creditor of
the limited liability company with respect to the distribution. However, the company’s obligation to make
a distribution is subject to offset for any amount owed to the company by the
member or a person dissociated as a member on whose account the distribution is
made.
(a)
A limited liability company may not make a distribution, including a distribution under Section 710,
if after the distribution:
(1) the
company would not be able to pay its debts as they become due in the ordinary
course of the company’s activities and
affairs; or
(2) the
company’s total assets would be less than the sum of its total liabilities plus, unless the operating agreement permits
otherwise, the amount that would be needed, if the company were to
be dissolved, and wound up, and terminated at the time of the
distribution, to satisfy the preferential rights upon dissolution,
and winding up, and
termination of members and
transferees whose preferential rights are superior to those of persons
receiving the distribution.
(b) A limited
liability company may base a determination that a distribution is not
prohibited under subsection (a) on:
(1) financial statements
prepared on the basis of accounting practices and principles that are
reasonable in the circumstances;
or on
(2) a fair valuation or other method that is reasonable under
the circumstances.
(c) Except as
otherwise provided in subsection (f) (e), the effect of a
distribution under subsection (a) is measured:
(1)
in the case of a distribution by
purchase, redemption, or other acquisition of a transferable interest in the
company as defined in
Section 102(4)(A), as of the earlier
of:
(A)
the date money or other property is transferred or debt is incurred by
the company; and or
(B) the date the person entitled to the
distribution ceases to own the interest or right being acquired by the company
in return for the distribution;
(2) in the case of any other distribution of
indebtedness, as of the date the indebtedness is distributed; and
(3) in all other cases, as of the date:
(A)
the distribution is authorized, if the payment occurs within not
later than 120 days after that date; or
(B)
the payment is made, if the payment occurs more than 120 days after the
distribution is authorized.
(d)
A limited liability company’s indebtedness to a member or transferee incurred by reason of
a distribution made in accordance with this section is at parity with the
company’s indebtedness to its general, unsecured creditors, except to the extent subordinated by
agreement.
(e)
A limited liability company’s indebtedness, including indebtedness issued in connection with or as part of as a distribution, is not a
liability for purposes of subsection (a) if the terms of the indebtedness
provide that payment of principal and interest are is made only if and to the extent that payment of a distribution could then be made to members under this section. (f)
If the indebtedness is
issued as a distribution, each payment of principal or interest on the indebtedness is treated as a
distribution, the effect of which is measured on the date the payment is made.
(f) In measuring the effect of a distribution
under Section 710, the liabilities of a dissolved limited liability company do
not include any claim that has been disposed of under Section 704, 705, or 706.
(g) In
subsection (a), “distribution” does not include amounts constituting reasonable
compensation for present or past services or reasonable payments made in the
ordinary course of business under a bona fide retirement plan or other benefits
program.
(a) Except as otherwise provided in
subsection (b), if a member of a member-managed limited liability company or
manager of a manager-managed limited liability company consents to a
distribution made in violation of Section 405 and in consenting to the
distribution fails to comply with Section 409, the member or manager is
personally liable to the company for the amount of the distribution that
which exceeds the amount that could have been distributed without the
violation of Section 405.
(b) To the extent
the operating agreement of a member-managed limited liability company expressly
relieves a member of the authority and responsibility to consent to
distributions and imposes that authority and responsibility on one or more
other members, the liability stated in subsection (a) applies to the other
members and not the member that the operating agreement relieves of authority
and responsibility.
(c) A person that
receives a distribution knowing that the distribution to that person was made in violation of
violated Section 405 is
personally liable to the limited liability company but only to the extent that
the distribution received by the person exceeded the amount that could have
been properly paid under Section 405.
(d) A person
against which an action is commenced because the person is liable under subsection
(a) may:
(1) implead
any other person that is subject to liability under subsection (a) and seek to compel enforce a right of contribution from the person; and
(2) implead
any person that received a distribution in violation of subsection (c) and seek
to compel enforce a right of contribution
from the person in the amount the person received in violation of subsection
(c).
(e)
An action under this section is barred if
not unless commenced
within not later than two years after
the distribution.
(a) A limited
liability company is a member-managed limited liability company unless the
operating agreement:
(1)
expressly provides that:
(A)
the company is or will be “manager-managed”;
(B)
the company is or will be “managed by managers”; or
(C)
management of the company is or will be “vested in managers”; or
(2)
includes words of similar import.
(b) In a
member-managed limited liability company, the following rules apply:
(1) The
Except as expressly provided in this [act], the management and conduct
of the company are vested in the members.
(2)
Each member has equal rights in the management and conduct of the company’s
activities and affairs.
(3) A
difference arising among members as to a matter in the ordinary course of the
activities of the company may be decided by a majority of the members.
(4) An
act outside the ordinary course of the activities and affairs of the company may be undertaken only with
the consent of all members.
(5) The
consent of all members is required to approve a transaction under [Article] 10.
(6)
The operating agreement may be amended only with the consent of all members.
(c) In a
manager-managed limited liability company, the following rules apply:
(1)
Except as otherwise expressly provided in this [act], any matter
relating to the activities and
affairs of the company is decided exclusively by the managers
manager, or, if there is more than one manager, by a majority of the
managers.
(2)
Each manager has equal rights in the management and conduct of the company’s
activities and affairs of
the company.
(3)
A difference arising among managers as to a matter in the ordinary course of
the activities of the company may be decided by a majority of the managers.
(4)
(3) The consent of all members is required to:
(A)
sell, lease, exchange, or otherwise dispose of all, or substantially all, of
the company’s property, with or without the good will, outside the ordinary course
of the company’s activities;
(B)
(A) approve a merger, conversion, or domestication transaction
under [Article] 10;
(C)
(B) undertake any other act outside the ordinary course of the
company’s activities and affairs;
and or
(D)
(C) amend the operating agreement.
(5)
(4) A manager may be chosen at any time by the consent of a majority of
the members and remains a manager until a successor has been chosen, unless the
manager at an earlier time resigns, is removed, or dies, or, in the case of a
manager that is not an individual, terminates.
A manager may be removed at any time by the consent of a majority of the
members without notice or cause.
(6)
(5) A person need not be a member to be a manager, but the dissociation
of a member that is also a manager removes the person as a manager. If a person that is both a manager and a
member ceases to be a manager, that cessation does not by itself dissociate the
person as a member.
(7)
(6) A person’s ceasing to be a manager does not discharge any debt,
obligation, or other liability to the limited liability company or members
which the person incurred while a manager.
(d) An action
requiring the consent of members under this [act] may be taken without a
meeting, and a member may appoint a proxy or other agent to consent or
otherwise act for the member by signing an appointing record, personally or by
the member’s agent.
(e) The dissolution
of a limited liability company does not affect the applicability of this
section. However, a person that wrongfully
causes dissolution of the company loses the right to participate in management
as a member and a manager.
(f) A limited liability company shall
reimburse a member for an advance to the company beyond the amount of capital
the member agreed to contribute.
(g) A payment or advance made by a member which gives
rise to an obligation of the limited liability company under subsection (f) or
Section 408(a) constitutes a loan to the company which accrues interest from
the date of the payment or advance.
(f) (h)
This [act] does not entitle a A member is not entitled to
remuneration for services performed for a member-managed limited liability
company, except for reasonable compensation for services rendered in winding up
the activities of the company.
(a)
A limited liability company shall reimburse a member of a member-managed company or the manager of a
manager-managed company for any payment made and indemnify for any debt, obligation, or
other liability incurred by a the member of a member-managed company or the manager of a manager-managed company in the
course of the member’s or manager’s activities on behalf of the company, if, in making the payment or incurring the debt,
obligation, or other liability, the member or manager complied with the duties stated in Sections 405, 407, and 409 in making the payment.
(b) A limited liability company shall
indemnify and hold harmless a person with respect to any claim or demand
against the person and any debt, obligation, or other liability incurred by the
person by reason of the person’s former or present capacity as a member or
manager, if the claim, demand, debt, obligation, or other liability does not
arise from the person’s breach of Section 405, 407, or 409.
(c) In the ordinary course of its activities and
affairs, a limited liability company may advance reasonable expenses, including
attorney’s fees and costs, incurred by a person in connection with a claim or
demand against the person by reason of the person’s former or present capacity
as a member or manager, if the person promises to repay the company if the
person ultimately is determined not to be entitled to be indemnified under
subsection (b).
(b) (d)
A limited liability company may purchase and maintain insurance on behalf of a
member or manager of the company against liability asserted against or incurred
by the member or manager in that capacity or arising from that status even if,
under Section 110(g) Section 111(c)(7), the operating agreement could not eliminate or
limit the person’s liability to the company for the conduct giving rise to the
liability.
(a)
A member of a member-managed limited liability company owes to the company and,
subject to Section 901(b), the other members the fiduciary duties of loyalty and care stated in
subsections (b) and (c).
(b) The fiduciary duty of loyalty of a
member in a member-managed limited liability company includes the duties:
(1) to
account to the company and to hold as trustee for it any property, profit, or
benefit derived by the member:
(A)
in the conduct or winding up of the company’s activities and affairs;
(B)
from a use by the member of the company’s property; or
(C)
from the appropriation of a limited liability company opportunity;
(2) to
refrain from dealing with the company in the conduct or winding up of the
company’s activities and affairs
as or on behalf of a person having an interest adverse to the company; and
(3) to
refrain from competing with the company in the conduct of the company’s
activities and affairs
before the dissolution of the company.
(c) Subject to the business judgment rule,
the The duty of care
of a member of a member-managed limited liability company in the conduct and or winding up of the
company’s activities and affairs
is to act with the care that a person
in a like position would reasonably exercise under similar circumstances and in
a manner the member reasonably believes to be in the best interests of the
company. In discharging this duty, a
member may rely in good faith upon opinions, reports, statements, or other
information provided by another person that the member reasonably believes is a
competent and reliable source for the information refrain from engaging in grossly negligent or reckless conduct,
intentional misconduct, or a knowing violation of law.
(d) A member in a member-managed limited liability company
or a manager-managed limited liability company shall discharge the
duties and obligations under this [act] or under the operating agreement
and exercise any rights consistently with the contractual obligation of good
faith and fair dealing.
(e) It is a
defense to a claim under subsection (b)(2) and any comparable claim in equity
or at common law that the transaction was fair to the limited liability
company. A member does
not violate a duty or obligation under this [act] or under the operating
agreement solely because the member’s conduct furthers the member’s own
interest.
(f) All of
the members of a member-managed limited liability company or a manager-managed
limited liability company may authorize or ratify, after full disclosure of all
material facts, a specific act or transaction that otherwise would violate the
duty of loyalty.
(g) It is a
defense to a claim under subsection (b)(2) and any comparable claim in equity
or at common law that the transaction was fair to the limited liability
company.
(h) If, as permitted by subsection (f) or
(i)(6) or the operating agreement, a member enters into a transaction with the
limited liability company which otherwise would be prohibited by subsection
(b)(2), the member’s rights and obligations arising from the transaction are
the same as those of a person that is not a member.
(g) (i)
In a manager-managed limited liability company, the following rules apply:
(1)
Subsections (a), (b), (c), and (e) (g) apply to the manager or
managers and not the members.
(2) The
duty stated under subsection (b)(3) continues until winding up is completed.
(3)
Subsection (d) applies to the members
and managers and members.
(4) Subsection
(e) applies only to members.
(5) Subsection (f) applies
The power to ratify under subsection
(f) applies only to
the members.
(5)
(6) A Subject
to subsection (d), a member does not have any fiduciary duty to the company or to
any other member solely by reason of being a member.
(a) In a
member-managed limited liability company, the following rules apply:
(1) On
reasonable notice, a member may inspect and copy during regular business hours,
at a reasonable location specified by the company, any record maintained by the
company regarding the company’s activities, affairs, financial
condition, and other circumstances, to the extent the information is material
to the member’s rights and duties under the operating agreement or this [act].
(2) The
company shall furnish to each member:
(A)
without demand, any information concerning the company’s activities, affairs, financial condition, and
other circumstances which the company knows and is material to the proper
exercise of the member’s rights and duties under the operating agreement or
this [act], except to the extent the company can establish that it reasonably
believes the member already knows the information; and
(B)
on demand, any other information concerning the company’s activities, affairs, financial condition, and
other circumstances, except to the extent the demand or information demanded is
unreasonable or otherwise improper under the circumstances.
(3) The
duty to furnish information under paragraph (2) also applies to each member to
the extent the member knows any of the information described in paragraph (2).
(b) In a
manager-managed limited liability company, the following rules apply:
(1) The
informational rights stated in subsection (a) and the duty stated in subsection
(a)(3) apply to the managers and not the members.
(2)
During regular business hours and at a reasonable location specified by the
company, a member may obtain from the company and inspect and copy full
information regarding the activities, affairs, financial condition, and other
circumstances of the company as is just and reasonable if:
(A)
the member seeks the information for a purpose material
reasonably related
to the member’s interest as a member;
(B)
the member makes a demand in a record received by the company, describing with
reasonable particularity the information sought and the purpose for seeking the
information; and
(C)
the information sought is directly connected to the member’s purpose.
(3) Within
Not later than 10 days after receiving a demand pursuant to paragraph
(2)(B), the company shall in a record inform the member that made the demand:
(A)
of the information that the company will provide in response to the demand and
when and where the company will provide the information; and
(B)
if the company declines to provide any demanded information, the company’s
reasons for declining.
(4)
Whenever this [act] or an operating agreement provides for a member to give or
withhold consent to a matter, before the consent is given or withheld, the
company shall, without demand, provide the member with all information that is
known to the company and is material to the member’s decision.
(c) On Subject
to subsection (i), on 10 days’ demand made in a record received by a
limited liability company, a person dissociated as a member may
have access to information to which the person was entitled while a member if:
(i)
the information pertains to the period during which the person was a member,
;
(ii)
the person seeks the information in good faith,; and
(iii)
the person satisfies the requirements imposed on a member by subsection
(b)(2). The
(d) A limited
liability company shall respond to a demand made pursuant to this
subsection (c) in the manner provided in subsection (b)(3).
(d) (e)
A limited liability company may charge a person that makes a demand under this
section the reasonable costs of copying, limited to the costs of labor and
material.
(e) (f)
A member or person dissociated as a member may exercise rights
under this section through an agent or, in the case of an individual under
legal disability, a legal representative.
Any restriction or condition imposed by the operating agreement or under
subsection (g) (i) applies both to the agent or legal
representative and the member or person dissociated as a member.
(f) (g)
The Subject to subsection (i), the rights under this section do
not extend to a person as transferee.
(g) (h)
If a member dies, Section 504 applies.
(i) In
addition to any restriction or condition stated in its the operating
agreement, a limited liability company, as a matter within the ordinary course
of its activities and affairs,
may impose reasonable restrictions and conditions on access to and use of
information to be furnished under this section, including designating
information confidential and imposing nondisclosure and safeguarding
obligations on the recipient. In a
dispute concerning the reasonableness of a restriction under this subsection,
the company has the burden of proving reasonableness.
SECTION 501. NATURE OF TRANSFERABLE INTEREST. A transferable interest is personal property.
(a) A Subject to Section 503(f), a transfer,
in whole or in part, of a transferable interest:
(1) is
permissible;
(2)
does not by itself cause a member’s dissociation or a dissolution and winding
up of the limited liability company’s activities and affairs; and
(3)
subject to Section 504, does not entitle the transferee to:
(A)
participate in the management or conduct of the company’s activities and affairs; or
(B)
except as otherwise provided in subsection (c), have access to records or other
information concerning the company’s activities and affairs.
(b) A transferee
has the right to receive, in accordance with the transfer, distributions to
which the transferor would otherwise be entitled.
(c) In a
dissolution and winding up of a limited liability company, a transferee is
entitled to an account of the company’s transactions only from the date of
dissolution.
(d) A transferable
interest may be evidenced by a certificate of the interest issued by the
limited liability company in a record, and, subject to this section, the
interest represented by the certificate may be transferred by a transfer of the
certificate.
(e) A limited
liability company need not give effect to a transferee’s rights under this
section until the company knows or has notice of the transfer.
(f) A transfer of a
transferable interest in violation of a restriction on transfer contained in
the operating agreement is ineffective as to a person having knowledge or
notice of the restriction at the time of transfer.
(g) Except as
otherwise provided in Section 602(4)(B) 602(5)(B), when if a member transfers a transferable interest, the
transferor retains the rights of a member other than the Transferrable
interest in distributions transferred
and retains all duties and obligations of a member.
(h) When If a member transfers a transferable interest to a
person that becomes a member with respect to the transferred interest, the
transferee is liable for the member’s obligations under Sections 403 and 406(c)
known to the transferee when the transferee becomes a member.
(a) On application
by a judgment creditor of a member or transferee, a court may enter a charging
order against the transferable interest of the judgment debtor for the
unsatisfied amount of the judgment. A Except as otherwise provided in subsection (f), a
charging order constitutes a lien on a judgment debtor’s transferable interest
and requires the limited liability company to pay over to the person to which
the charging order was issued any distribution that would otherwise would
be paid to the judgment debtor.
(b) To the extent
necessary to effectuate the collection of distributions pursuant to a charging
order in effect under subsection (a), the court may:
(1)
appoint a receiver of the distributions subject to the charging order, with the
power to make all inquiries the judgment debtor might have made; and
(2)
make all other orders necessary to give effect to the charging order.
(c) Upon a showing
that distributions under a charging order will not pay the judgment debt within
a reasonable time, the court may foreclose the lien and order the sale of the
transferable interest. The Except as otherwise provided in subsection (f), the
purchaser at the foreclosure sale only obtains the transferable interest, does
not thereby become a member, and is subject to Section 502.
(d) At any time
before foreclosure under subsection (c), the member or transferee whose
transferable interest is subject to a charging order under subsection (a) may
extinguish the charging order by satisfying the judgment and filing a certified
copy of the satisfaction with the court that issued the charging order.
(e) At any time
before foreclosure under subsection (c), a limited liability company or one or
more members whose transferable interests are not subject to the charging order
may pay to the judgment creditor the full amount due under the judgment and
thereby succeed to the rights of the judgment creditor, including the charging
order.
(f) If a court orders foreclosure of a charging
order lien against the sole member of a limited liability company:
(1) the court shall confirm the sale;
(2) the purchaser at the sale
obtains the member’s entire interest, not only the member’s
transferable interest;
(3) the purchaser thereby becomes a
member; and
(4) the person whose interest was subject
to the foreclosed charging order is dissociated as a member.
(g) This [act] does not deprive any
member or transferee of the benefit of any exemption laws applicable to the member’s
or transferee’s transferable interest of the member or transferee.
(g) (h) This section provides the exclusive remedy by
which a person seeking to enforce a judgment against a member or transferee
may, in the capacity of judgment creditor, satisfy the judgment from the
judgment debtor’s transferable interest.
SECTION 504. POWER OF PERSONAL LEGAL REPRESENTATIVE
OF DECEASED MEMBER. If a member dies, the deceased member’s personal representative or other
legal representative may exercise:
(1) the
rights of a transferee provided in Section 502(c); and,
(2) for the
purposes of settling the estate, the rights of a current the
deceased member had
under Section 410.
(a) A person has
the power to dissociate as a member at any time, rightfully or wrongfully, by
withdrawing as a member by express will under Section 602(1).
(b) A person’s
dissociation from a limited liability company as a member is
wrongful only if the dissociation:
(1) is
in breach of an express provision of the operating agreement; or
(2)
occurs before the termination completion of the winding up of
the company and:
(A)
the person withdraws as a member by express will;
(B)
the person is expelled as a member by judicial order under Section 602(5)
602(6);
(C)
the person is dissociated under Section 602(7)(A) by becoming a debtor in bankruptcy 602(8);
or
(D)
in the case of a person that is not a trust other than a business trust, an
estate, or an individual, the person is expelled or otherwise dissociated as a
member because it willfully dissolved or terminated.
(c) A person that
wrongfully dissociates as a member is liable to the limited liability company
and, subject to Section 901, to the other members for damages caused by the
dissociation. The liability is in
addition to any other debt, obligation, or other liability of the member
to the company or the other members.
SECTION 602. EVENTS
CAUSING DISSOCIATION. A person is dissociated as a member from a
limited liability company when:
(1) the company has
notice of the person’s express will to withdraw as a member, but, if the person
specified a withdrawal date later than the date the company had notice, on that
later date;
(2) an event stated
in the operating agreement as causing the person’s dissociation occurs;
(3) the person’s entire interest is transferred in
a foreclosure sale under Section 503(f);
(4) the
person is expelled as a member pursuant to the operating agreement;
(4) (5)
the person is expelled as a member by the unanimous consent of the other
members if:
(A) it
is unlawful to carry on the company’s activities and affairs with the person as a member;
(B)
there has been a transfer of all of the person’s transferable interest in
the company, other than:
(i)
a transfer for security purposes; or
(ii)
a charging order in effect under Section 503 which has not been foreclosed;
(C) the
person is a corporation and, within
90 days after:
(i)
the company notifies the person that it will be expelled as a member because
the person has filed a certificate of dissolution or the equivalent, its
charter has been revoked, or its right to conduct business has been suspended
by the jurisdiction of its incorporation,; and
(ii) not later than 90 days
after the notification the certificate of dissolution or the equivalent has not been
revoked or its charter or right to conduct business has not been reinstated; or
(D) the
person is a limited liability company or partnership an unincorporated
entity that has been dissolved and whose business is being wound up;
(5) (6)
on application by the company, the person is expelled as a member by judicial
order because the person:
(A) has
engaged, or is engaging, in wrongful conduct that has adversely
and materially affected, or will adversely and materially affect, the company’s
activities and affairs;
(B) has
willfully or persistently committed, or is willfully and persistently
committing, a material breach of the operating agreement or the person’s
duties or obligations a duty or obligation under Section 409; or
(C) has
engaged in, or is engaging, in conduct relating to the company’s
activities and affairs which
makes it not reasonably practicable to carry on the activities and affairs with the person as a
member;
(6) (7)
in the case of a person who is an individual:
(A) the
person individual dies; or
(B) in
a member-managed limited liability company:
(i)
a guardian or general conservator for the person individual is
appointed; or
(ii) there is a
judicial order a court orders that the person individual
has otherwise become incapable of performing the person’s individual’s
duties as a member under this [act] or the operating agreement;
(7) (8)
in a member-managed limited liability company, the person:
(A)
becomes a debtor in bankruptcy;
(B)
executes an assignment for the benefit of creditors; or
(C)
seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or
liquidator of the person or of all or substantially all of the person’s
property;
(8) (9)
in the case of a person that is a testamentary
or inter vivos trust or is acting as a member by virtue of being a
trustee of such a trust,
the trust’s entire transferable interest in the company is distributed;
(9) (10)
in the case of a person that is an estate or is acting as a member by virtue of
being a personal representative of an estate, the estate’s entire transferable
interest in the company is distributed;
(10) (11)
in the case of a member person that is not an
individual, partnership, limited
liability company, corporation, unincorporated
entity, trust, or estate, the termination existence of the member person terminates;
(11) (12)
the company participates in a merger under [Article] 10, if and:
(A) the
company is not the surviving entity; or
(B)
otherwise as a result of the merger, the person ceases to be a member;
(12) (13)
the company participates in an interest exchange under [Article] 10 and, as a
result of the interest exchange, the person ceases to be a member;
(14) the
company participates in a conversion under [Article] 10;
(13) (15)
the company participates in a domestication under [Article] 10, if and,
as a result of the domestication, the person ceases to be a member; or
(14) (16)
the company terminates dissolves and completes winding up.
(a) When If a person is dissociated as a member of a limited liability company:
(1) the
person’s right to participate as a member in the management and conduct of the
company’s activities and affairs
terminates;
(2) if
the company is member-managed, the person’s fiduciary
duties and obligations under Section
409 as a member end with regard to matters arising and events occurring
after the person’s dissociation; and
(3)
subject to Section 504 and [Article] 10, any transferable interest owned by the
person in the person’s capacity as a
member immediately before dissociation in the person’s capacity as a member is owned by the person
solely as a transferee.
(b) A person’s
dissociation as a member of a limited
liability company does not of itself discharge the person from any
debt, obligation, or other liability to the company or the other members which
the person incurred while a member.
(a) A limited
liability company is dissolved, and its activities and affairs must be wound up, upon the occurrence of any
of the following:
(1) an
event or circumstance that the operating agreement states causes dissolution;
(2) the
consent of all the members;
(3) the
passage of 90 consecutive days during which the company has no members; unless:
(A) consent to admit at least
one specified person as a member is given by transferees owning the rights to
receive a majority of distributions as transferees at the time the consent is
to be effective; and
(B) at least one person
becomes a member in accordance with the consent;
(4) on
application by a member, the entry by [the appropriate court] of an
order dissolving the company on the grounds that:
(A)
the conduct of all or substantially all of the company’s activities and affairs is unlawful; or
(B)
it is not reasonably practicable to carry on the company’s activities and affairs in conformity with the
certificate of organization and the operating agreement; or
(5) on
application by a member, the entry by [the appropriate court] of an
order dissolving the company on the grounds that the managers or those members
in control of the company:
(A)
have acted, are acting, or will act in a manner that is illegal or fraudulent;
or
(B)
have acted or are acting in a manner that is oppressive and was, is, or will be
directly harmful to the applicant; or
(6) the signing and filing of a statement
of adminstrative dissolution by the [Secretary of State] under Section 707(c).
(b) In a proceeding
brought under subsection (a)(5), the court may order a remedy other than
dissolution.
(a) A dissolved limited
liability company shall wind up its activities and affairs and, except
as otherwise provided in Section 703, the company continues after
dissolution only for the purpose of winding up.
(b) In winding up
its activities and affairs,
a limited liability company:
(1)
shall discharge the company’s debts, obligations, or and other
liabilities, settle and close the company’s activities and affairs, and marshal and
distribute the assets of the company; and
(2)
may:
(A)
deliver to the [Secretary of State] for filing a statement of dissolution
stating the name of the company and that the company is dissolved;
(B)
preserve the company activities,
affairs, and property as a going concern for a reasonable time;
(C)
prosecute and defend actions and proceedings, whether civil, criminal, or
administrative;
(D)
transfer the company’s property;
(E)
settle disputes by mediation or arbitration;
(F)
deliver to the [Secretary of State] for filing a statement of termination
stating the name of the company and that the company is terminated;
and
(G)
perform other acts necessary or appropriate to the winding up.
(c) If a dissolved
limited liability company has no members, the legal representative of the last
person to have been a member may wind up the activities and affairs of the company. If the person does so, the person has the
powers of a sole manager under Section 407(c) and is deemed to be a manager for
the purposes of Section 304(a).
(d) If the legal
representative under subsection (c) declines or fails to wind up the company’s
activities and affairs, a
person may be appointed to do so by the consent of transferees owning a
majority of the rights to receive distributions as transferees at the time the
consent is to be effective. A person appointed
under this subsection:
(1) has
the powers of a sole manager under Section 407(c) and is deemed to be a manager
for the purposes of Section 304(a); and
(2)
shall promptly deliver to the [Secretary of State] for filing an amendment to
the company’s certificate of organization to
stating:
(A)
state that the company has
no members;
(B)
state the name and street and mailing addresses of
the person; and
(C) that the person has been
appointed pursuant to this subsection to wind up the company; and
(C) provide the street and mailing addresses of the
person.
(e) The
[appropriate court] may order judicial supervision of the winding up of a
dissolved limited liability company, including the appointment of a person to
wind up the company’s activities and
affairs:
(1) on
application of a member, if the applicant establishes good cause;
(2) on
the application of a transferee, if:
(A)
the company does not have any members;
(B)
the legal representative of the last person to have been a member declines or
fails to wind up the company’s activities; and
(C)
within a reasonable time following the dissolution a person has not been
appointed pursuant to subsection (c); or
(3) in
connection with a proceeding under Section 701(a)(4) or (5).
(a) A limited liability company may rescind its
dissolution, unless a statement of termination applicable to the company is
effective, [the appropriate court] has entered an order under Section 701(a)(4)
or (5) dissolving the company, or the [secretary of state] has dissolved the company under Section 707.
(b) Rescinding dissolution under this section
requires:
(1) the consent of each member;
(2) if a statement of dissolution applicable
to the limited liability company has been filed by the [Secretary of State] but
has not become effective, the delivery to the [Secretary of State] for filing
of a statement of withdrawal under Section 207 applicable to the statement of
dissolution; and
(3) if a statement of dissolution applicable
to the limited liability company is effective, the delivery to the [Secretary
of State] for filing of a statement of correction under Section 208 stating
that dissolution has been rescinded under this section.
(c) If a limited liability company rescinds its
dissolution:
(1) the company resumes carrying on its
activities and affairs as if dissolution had never occurred;
(2) subject to paragraph (3), any
liability incurred by the company after the dissolution and before the
rescission is effective is determined as if dissolution had never occurred; and
(3) the rights of a third party arising
out of conduct in reliance on the dissolution before the third party knew or
had notice of the rescission may not be adversely affected.
(a) Except as
otherwise provided in subsection (d), a dissolved limited liability company may
give notice of a known claim under subsection (b), which has the effect as
provided in subsection (c).
(b) A dissolved
limited liability company may in a record notify its known claimants of the
dissolution. The notice must:
(1)
specify the information required to be included in a claim;
(2) state that a claim must be in writing and
provide a mailing address to which the claim is to be sent;
(3)
state the deadline for receipt of the a claim, which may not be
less than 120 days after the date the notice is received by the claimant; and
(4)
state that the claim will be barred if not received by the deadline.
(c) A claim against
a dissolved limited liability company is barred if the requirements of
subsection (b) are met and:
(1) the
claim is not received by the specified deadline; or
(2) if
the claim is timely received but rejected by the company:
(A)
the company causes the claimant to receive a notice in a record stating that
the claim is rejected and will be barred unless the claimant commences an
action against the company to enforce the claim within not later than
90 days after the claimant receives the notice; and
(B)
the claimant does not commence the required action within the not
later than 90 days after the complainant receives the notice.
(d) This section
does not apply to a claim based on an event occurring after the effective date
of dissolution or a liability that on that date is contingent.
(a) A dissolved
limited liability company may publish notice of its dissolution and request
persons having claims against the company to present them in accordance with
the notice.
(b) The A
notice authorized by under subsection (a) must:
(1) be
published at least once in a newspaper of general circulation in the [county]
in this state in which the dissolved limited liability company’s principal
office is located or, if it has none the principal office is not
located in this state, in the [county] in which the company’s designated
office of the company’s registered agent is or was last located;
(2)
describe the information required to be contained in a claim, state that the claim must be in writing,
and provide a mailing address to which the claim is to be sent; and
(3)
state that a claim against the company is barred unless an action to enforce
the claim is commenced within five not
later than three years after publication of the notice.
(c) If a dissolved
limited liability company publishes a notice in accordance with subsection (b),
the claim of each of the following
claimants is barred unless the claimant commences an action to enforce
the claim against the company within five not later than three years
after the publication date of the notice,
the claim of each of the following
claimants is barred:
(1) a
claimant that did not receive notice in a record under Section 703 704;
(2) a
claimant whose claim was timely sent to the company but not acted on; and
(3) a
claimant whose claim is contingent at, or based on an event occurring after,
the effective date of dissolution.
(d) A claim not
barred under this section or Section 704 may be enforced:
(1)
against a dissolved limited liability company, to the extent of its
undistributed assets; and
(2) except
as otherwise provided in Section 706, if assets of the company have been
distributed after dissolution, against a member or transferee to the extent of
that person’s proportionate share of the claim or of the company’s assets
distributed to the member or transferee after dissolution, whichever is less,
but a person’s total liability for all claims under this paragraph does may
not exceed the total amount of assets distributed to the person after
dissolution.
(a) A dissolved limited liability company that has
published a notice under section 705 may file an application with [the
appropriate court] in the [county] where the dissolved company’s principal
office is located , or, if the principal office is not located in this state, where
the office of its registered agent is located, for a determination of the
amount and form of security to be provided for payment of claims that are
contingent, have not been made known to the company, or are based on an event
occurring after the effective date of dissolution but which, based on the facts
known to the dissolved company, are reasonably expected to arise after the
effective date of dissolution. Security
is not required for any claim that is or is reasonably anticipated to be barred
under Section 705(c).
(b) Not later than 10 days after the filing of an
application under subsection (a), the dissolved limited liability company shall
give notice of the proceeding to each claimant holding a contingent claim known
to the company.
(c) In any proceeding under this section, the court
may appoint a guardian ad litem to represent all claimants whose identities are
unknown. The reasonable fees and
expenses of the guardian, including all reasonable expert witness fees, must be
paid by the dissolved limited liability company.
(d) A dissolved limited liability company that
provides security in the amount and form ordered by the court under subsection
(a) satisfies the company’s obligations with respect to claims that are
contingent, have not been made known to the company, or are based on an event
occurring after the effective date of dissolution, and such claims may not be
enforced against a member or transferee that received assets in liquidation.
(a)
The [Secretary of State] may commence a proceeding under subsections (b) and
(c) to dissolve a limited liability company administratively if the company
does not:
(1) pay,
within 60 days after the due date, any fee, tax, interest, or
penalty due required to be paid to the [Secretary of State] under
this [act] or law other than this [act] not later than [six months]
after it is due; or
(2)
deliver, within 60 days after the due date, its annual [an annual] [a
biennial] report to the [Secretary of State] not later than [six months]
after it is due; or
(3)
have a registered agent in this state for [60] consecutive days.
(b) If the
[Secretary of State] determines that a ground exists one or more
grounds exist for administratively dissolving a limited liability company,
the [Secretary of State] shall file a record of the determination and serve
the company with a copy of the filed with notice in a record of
the [Secretary of State’s] determination.
(c) If within 60
a limited liability company, not later than [60] days after service of
the copy pursuant to notice under subsection (b), a
limited liability company does not correct cure each ground
for dissolution or demonstrate to the reasonable satisfaction of the
[Secretary of State] that each ground determined by the [Secretary of State]
does not exist, the [Secretary of State] shall administratively dissolve
the company administratively by preparing, signing, and filing
a declaration statement of administrative dissolution that
states recites the grounds for dissolution and the effective
date of dissolution. The [Secretary
of State] shall file the statement and serve a copy on the
company with a copy of the filed declaration pursuant to Section 209.
(d) A limited
liability company that has been is administratively dissolved continues
in existence as an entity but, subject to Section 706, may not
carry on only any activities except as necessary to wind
up its activities and affairs
and liquidate its assets under Sections 702, 704, 705, 706, and 708
710, and to notify claimants under Sections 703 and 704 or to
apply for reinstatement under Section 708.
(e) The
administrative dissolution of a limited liability company does not terminate
the authority of its agent for service of process registered agent.
(a) A limited
liability company that has been is administratively dissolved under
Section 707 may apply to the [Secretary of State] for reinstatement [within
two years] [not later than two years after the effective date
of dissolution dissolution].
The application must be delivered to the [Secretary of State] for
filing and state:
(1)
the name of the company at the time of its administrative dissolution and, if
needed, a different name that satisfies Section 108;
(2)
the address of the principal office of the company and the name and address of
its registered agent;
(3)
and the effective date of its the company’s administrative
dissolution; and
(2)
(4) that the grounds for dissolution did not exist or have been eliminated
cured; and
(3)
that the company’s name satisfies the requirements of Section 108.
(b) To be
reinstated, a limited liability company must pay all fees, taxes, interest, and
penalties that were due to the [Secretary of State] at the time of its
administrative dissolution and all fees, taxes, interest, and penalties that
would have been due to the [Secretary of State] while the company was
administratively dissolved.
(b) (c)
If the [Secretary of State] determines that an application under subsection (a)
contains the required information and required by subsection
(a), is satisfied that the information is correct, and determines that
all payments required to be made to the [Secretary of State] by subsection (b)
have been made, the [Secretary of State] shall:
(1)
cancel the statement of administrative dissolution and prepare a statement the
[Secretary of State] shall prepare a declaration of reinstatement that
states this the [Secretary of State’s] determination and the
effective date of reinstatement, sign and;
(2)
file the original of the declaration of reinstatement, statement;
and
(3)
serve a copy of the statement on the limited liability company with a
copy.
(c) (d)
When a reinstatement becomes under this section is
effective, it:
(1)
The reinstatement relates back to and takes effect as of the effective date
of the administrative dissolution and the.
(2)
The limited liability company may resume its activities and affairs
as if the administrative dissolution had not occurred.
(3) The
rights of a person arising out of an act or omission in reliance on the
dissolution before the person knew or had notice of the reinstatement are not
affected.
(a) If the
[Secretary of State] rejects denies a limited liability company’s
application for reinstatement following administrative dissolution, the
[Secretary of State] shall prepare, sign, and file serve the company
with a notice in a record that explains the reason reasons
for rejection and serve the company with a copy of the notice the
denial.
(b) Within 30
days after service of a notice of rejection of reinstatement under subsection
(a), a limited liability company may appeal from the rejection by petitioning
the [appropriate court] to set aside the dissolution. The petition must be served on the [Secretary
of State] and contain a copy of the [Secretary of State’s] declaration of
dissolution, the company’s application for reinstatement, and the [Secretary of
State’s] notice of rejection.
(c) (b)
The court may order the [Secretary of State] to reinstate a dissolved
limited liability company or take other action the court considers appropriate. A limited liability company may seek
judicial review of denial of reinstatement in the [appropriate court] not later
than [30] days after service of the notice of denial.
(a) In winding up
its activities and affairs,
a limited liability company must shall apply its assets to
discharge its obligations to creditors, including members that are creditors.
(b) After a limited
liability company complies with subsection (a), any surplus must be distributed
in the following order, subject to any charging order in effect under Section
503:
(1) to
each person owning a transferable interest that reflects contributions made by a member and not previously
returned, an amount equal to the value of the unreturned contributions; and
(2) in
equal shares among members and dissociated members, except to the extent
necessary to comply with any transfer effective under Section 502.
(c) If a limited
liability company does not have sufficient surplus to comply with subsection
(b)(1), any surplus must be distributed among the owners of transferable
interests in proportion to the value of their
the respective unreturned
contributions.
(d) All
distributions made under subsections (b) and (c) must be paid in money.
(a) The law of the state
or other jurisdiction under which of formation of a foreign
limited liability company is formed governs:
(1) the
internal affairs of the company; and
(2) the
liability of a member as member and a manager as manager for the debts, obligations or other
liabilities a debt, obligation, or liability of the
company.
(b) A foreign
limited liability company may is not be denied a certificate
of authority by reason precluded from registering to do business in this
state because of any difference between the law of the under which the
company is formed jurisdiction of formation and the law of this
state.
(c) A
certificate of authority Registration of a foreign limited liability
company to do
business in this state does not authorize a the
foreign limited liability company to engage in any business activities
or affairs or exercise any power that a limited liability domestic
company may not engage in or exercise in this state.
(a) A foreign
limited liability company may apply for a certificate of authority to transact
business in this state by delivering an application to the [Secretary of State]
for filing. The application must state:
(1)
the name of the company and, if the name does not comply with Section 108, an
alternate name adopted pursuant to Section 805(a);
(2)
the name of the state or other jurisdiction under whose law the company is
formed;
(3)
the street and mailing addresses of the company’s principal office and, if the
law of the jurisdiction under which the company is formed requires the company
to maintain an office in that jurisdiction, the street and mailing addresses of
the required office; and
(4)
the name and street and mailing addresses of the company’s initial agent for
service of process in this state.
(b) A foreign
limited liability company shall deliver with a completed application under
subsection (a) a certificate of existence or a record of similar import signed
by the [Secretary of State] or other official having custody of the company’s
publicly filed records in the state or other jurisdiction under whose law the
company is formed.
(a) A foreign
limited liability company may not do business in this state until it registers
with the [Secretary of State] under this [article].
(b) A foreign
limited liability company doing business in this state may not maintain an
action or proceeding in this state unless it is registered to do business in
this state.
(c) The failure
of a foreign limited liability company to register to do business in this state
does not impair the validity of a contract or act of the company or preclude it
from defending an action or proceeding in this state.
(d) A limitation
on the liability of a member or manager of a foreign limited liability company
is not waived solely because the company does business in this state without
registering to do business in this state.
(e)
Section 801(a) and (b) applies even if a foreign limited liability company
fails to register under this [article].
SECTION 802 803. APPLICATION FOR CERTIFICATE OF AUTHORITY
FOREIGN REGISTRATION STATEMENT. (a) A foreign
limited liability company may apply for a certificate of authority to transact
To register to do business in this state, a foreign limited liability
company must by delivering an application deliver a foreign
registration statement to the [Secretary of State] for filing. The application statement must
state:
(1) the name of the
company and, if the name does not comply with Section 108, an alternate name
adopted pursuant to Section 805 806(a);
(2) that the company
is a foreign limited liability company;
(2) (3)
the name of the state or other company’s jurisdiction under
whose law the company is formed of formation;
(3) (4)
the street and mailing addresses of the company’s principal office and, if the
law of the jurisdiction under which the company is formed require of
formation requires the company to maintain an office in that jurisdiction,
the street and mailing addresses of the required office; and
(4) (5)
the name and street and mailing addresses of the company’s initial registered
agent for service of process in this state.
(b) A foreign
limited liability company shall deliver with a completed application under
subsection (a) a certificate of existence or a record of similar import signed
by the [Secretary of State] or other official having custody of the company’s
publicly filed records in the state or other jurisdiction under whose law the
company is formed.
SECTION 804. AMENDMENT OF FOREIGN REGISTRATION STATEMENT. A registered foreign limited
liability company shall deliver to the [Secretary of State] for filing an
amendment to its foreign registration statement if there is a change in:
(1) the name of the company;
(2) the company’s jurisdiction of
formation;
(3) an address required by
Section 803(4); or
(4) the information required by
Section 803(5).
(a) Activities of a
foreign limited liability company which do not constitute transacting doing
business in this state within the meaning of under this
[article] include:
(1)
maintaining, defending, mediating, arbitrating, or settling an action or
proceeding;
(2)
carrying on any activity concerning its internal affairs, including holding
meetings of its members or managers;
(3)
maintaining accounts in financial institutions;
(4)
maintaining offices or agencies for the transfer, exchange, and registration of
the company’s own securities of the company or maintaining
trustees or depositories with respect to those securities;
(5)
selling through independent contractors;
(6)
soliciting or obtaining orders, whether by mail or electronic means or
through employees or agents or otherwise by any means, if the orders
require acceptance outside this state before they become contracts;
(7)
creating or acquiring indebtedness, mortgages, or security interests in real
or personal property;
(8)
securing or collecting debts or enforcing mortgages or other security
interests in property securing the debts and holding, protecting, or
maintaining property so acquired;
(9)
conducting an isolated transaction that is completed within 30 days and is not
in the course of similar transactions; and
(10) owning, without more, property; and
(11)
transacting doing business in interstate commerce.
(b)
For purposes of this [article], the ownership in this state of
income-producing real property or tangible personal property, other than
property excluded under subsection (a), constitutes transacting business in
this state. A person does not do
business in this state solely by being a member or manager of a foreign limited
liability company that does business in this state.
(c) This section
does not apply in determining the contacts or activities that may subject a
foreign limited liability company to service of process, taxation, or
regulation under law of this state other than this [act].
SECTION 804. FILING OF CERTIFICATE OF AUTHORITY. Unless the
[Secretary of State] determines that an application for a certificate of
authority does not comply with the filing requirements of this [act], the
[Secretary of State], upon payment of all filing fees, shall file the
application of a foreign limited liability company, prepare, sign, and file a
certificate of authority to transact business in this state, and send a copy of
the filed certificate, together with a receipt for the fees, to the company or
its representative.
(a) A foreign limited liability company whose
name does not comply with Section 108 may not obtain
a certificate of authority register to do business in this state
until it adopts, for the purpose of transacting
doing business in this state, an alternate name that complies with
Section 108. A registered foreign
limited liability company that adopts registers
under an alternate name under this subsection and obtains a certificate of authority with the
alternate name need not comply with [this state’s fictitious
or assumed or fictitious name statute]. After obtaining
a certificate of authority registering to do business in this state
with an alternate name, a registered foreign limited liability
company shall transact do
business in this state under:
(1) the alternate name;
(2) the company’s name, with the addition of
its jurisdiction of formation; or
(3) unless an
assumed or fictitious name the company is authorized to use under [fictitious
or this state’s assumed or fictitious name statute] to transact business in this state under another name.
(b) If a registered foreign limited
liability company authorized to transact business in this state changes
its name to one that does not comply with Section 108, it may not thereafter transact do business in this
state until it complies with subsection (a) and
obtains an amended certificate of authority by amending its
registration to adopt an alternate name that complies with Section 108.
SECTION 807.
WITHDRAWAL DEEMED ON CONVERSION TO DOMESTIC FILING ENTITY OR DOMESTIC
LIMITED LIABILITY PARTNERSHIP. A registered foreign limited liability
company that converts to a domestic limited liability partnership or to a
domestic entity that is organized, incorporated, or otherwise formed through
the delivery of a record to the [Secretary of State] for filing is deemed to
have withdrawn its registration on the effective date of the conversion.
(a) A registered foreign limited liability company that
has dissolved and completed winding up or has converted to a domestic or
foreign entity that is not organized, incorporated, or otherwise formed through
the public filing of a record, other than a limited liability partnership,
shall deliver a statement of withdrawal to the [Secretary of State] for filing. The statement must state:
(1)
in the case of a foreign company that has completed winding up:
(A)
its name and jurisdiction of formation;
(B)
that the company surrenders its registration to do business in this state; and
(2)
in the case of a foreign company that has converted:
(A) the name of the converting
company and its jurisdiction of formation;
(B)
the type of entity to which the company has converted and its jurisdiction of
formation;
(C)
that the converted entity surrenders the converting
company’s registration to do business in this state and revokes the authority of
the converting company’s registered agent to act as registered agent in this
state on the behalf of the company or the converted entity; and
(D) a mailing address
to which service of process may be made under subsection (b).
(b)
After a withdrawal under this section of a foreign entity that has converted to
another type of entity is effective, service of process in any action or
proceeding based on a cause of action arising during the time the foreign
limited liability company was registered to do business in this state may be
made pursuant to Section 117.
(a) When a registered foreign limited
liability company has merged into a foreign entity that is not registered to do
business in this state or has converted to a foreign entity required to
register with the [Secretary of State] to do business in this state, the
foreign entity shall deliver to the [Secretary of State] for filing an
application for transfer of registration.
The application must state:
(1) the name of the registered foreign
limited liability company before the merger or conversion;
(2) that before the merger or conversion the
registration pertained to a foreign limited liability company;
(3) the name of the applicant foreign entity
into which the foreign limited liability company has merged or to which it has
been converted, and, if the name does not comply with Section 108, an alternate
name adopted pursuant to Section 806(a);
(4) the type of entity of the applicant
foreign entity and its jurisdiction of formation;
(5) the street and mailing addresses of the
principal office of the applicant foreign entity and, if the law of the
entity’s jurisdiction of formation requires the entity to maintain an office in
that jurisdiction, the street and mailing addresses of that office; and
(6) the name and street and mailing addresses
of the applicant foreign entity’s registered agent in this state.
(b) When an application for transfer of
registration takes effect, the registration of the foreign limited liability
company to do business in this state is transferred without interruption to the
foreign entity into which the foreign company has merged or to which it has
been converted.
(a) A
certificate of authority The [Secretary of State] may terminate the
registration of a registered foreign limited liability company to
transact business in this state may be revoked by the [Secretary of State] in
the manner provided in subsections (b) and (c) if the company does not:
(1) pay, within 60
not later than [60] days after the due date, any fee, tax, interest,
or penalty due required to be
paid to the [Secretary of State] under this [act] or law other than this
[act];
(2) deliver to the [Secretary of State] for
filing, not later than within 60
[60] days after the due date, its annual [an annual] [a
biennial] report required under Section 209 212;
(3) appoint and maintain an have a registered agent for service of process as required by Section 113(b)
114; or
(4) deliver to the [Secretary of State] for
filing a statement of a change under Section 114 115 within
not later than 30 days after a change has occurred in the name or
address of the registered agent.
(b) To revoke a
certificate of authority of a foreign limited liability company, the The
[Secretary of State] must prepare, sign, and file
a notice of revocation and send may terminate the registration of a
registered foreign limited liability company by:
(1)
filing a notice of termination or noting the termination in the records of the
[Secretary of State]; and
(2)
delivering a copy of the notice or the information in the notation
to the company’s registered agent for
service of process in this state, or if the company does not appoint and maintain a proper have a registered
agent in this state, to the company’s designated
principal office.
(c) The A notice or
information in a notation under subsection (b) must state include:
(1) the revocation’s
effective date of the termination, which must be at least 60 [60 days] after the date the
[Secretary of State] sends delivers the copy; and
(2) the grounds for revocation termination under
subsection (a).
(c) (d) The authority of a registered
foreign limited liability company to transact
do business in this state ceases on the effective date of the notice of revocation termination or notation under
subsection (b), unless before that date the company cures each ground for revocation termination stated in the
notice filed under subsection (b) or
notation. If the company cures each
ground, the [Secretary of State] shall file a record so stating.
SECTION 807 811. CANCELLATION OF CERTIFICATE OF AUTHORITY
WITHDRAWAL OF REGISTRATION OF REGISTERED FOREIGN LIMITED LIABILITY
COMPANY. To cancel its certificate
of authority to transact business in this state, a foreign limited liability
company must deliver to the [Secretary of State] for filing a notice of
cancellation stating the name of the company and that the company desires to
cancel its certificate of authority. The
certificate is canceled when the notice becomes effective.
(a) A registered foreign limited liability
company may withdraw its registration by delivering a statement of withdrawal
to the [Secretary of State] for filing.
The statement of withdrawal must state:
(1) the name of the foreign company and its
jurisdiction of formation;
(2) that the company is not doing business in
this state and that it withdraws its registration to do business in this state;
(3) that the company revokes the authority of
its registered agent to accept service on its behalf in this state; and
(4) an address to which service of process
may be made under subsection (b).
(b) After the withdrawal of the registration
of a foreign limited liability company, service of process in any action or
proceeding based on a cause of action arising during the time the company was
registered to do business in this state may be made pursuant to Section 117.
(a) A foreign
limited liability company transacting business in this state may not maintain
an action or proceeding in this state unless it has a certificate of authority
to transact business in this state.
(b) The failure
of a foreign limited liability company to have a certificate of authority to
transact business in this state does not impair the validity of a contract or
act of the company or prevent the company from defending an action or
proceeding in this state.
(c) A member or
manager of a foreign limited liability company is not liable for the debts,
obligations, or other liabilities of the company solely because the company
transacted business in this state without a certificate of authority.
(d) If a foreign
limited liability company transacts business in this state without a
certificate of authority or cancels its certificate of authority, it appoints
the [Secretary of State] as its agent for service of process for rights of
action arising out of the transaction of business in
this state.
SECTION 809 812. ACTION BY [ATTORNEY GENERAL]. The [Attorney General] may maintain an action
to enjoin a foreign limited liability company from transacting doing business
in this state in violation of this [article].
(a) Subject to subsection (b), a member may maintain a
direct action against another member, a manager, or the limited liability
company to enforce the member’s rights and otherwise protect the member’s
interests, including rights and interests under the operating agreement or this
[act] or arising independently of the membership relationship.
(b) A member maintaining a direct action under this
section must plead and prove an actual or threatened injury that is not solely
the result of an injury suffered or threatened to be suffered by the limited
liability company.
SECTION
902. DERIVATIVE ACTION.
A member may maintain a derivative action to enforce a right of a
limited liability company if:
(1) the member first makes a demand on the other members
in a member-managed limited liability company, or the managers of a
manager-managed limited liability company, requesting that they cause the
company to bring an action to enforce the right, and the managers or other
members do not bring the action within a reasonable time; or
(2) a demand under paragraph (1) would be futile.
(a)
Except as otherwise provided in subsection (b), a derivative action under
Section 902 may be maintained only by a person that is a member at the time the
action is commenced and remains a member while the action continues.
(b) If the sole
plaintiff in a derivative action dies while the action is pending, the court
may permit another member of the limited liability company to be substituted as
plaintiff.
A derivative action to enforce a right of a limited liability
company may be maintained only by a person that is a member at the time the
action is commenced and:
(1) which was a
member when the conduct giving rise to the action occurred; or
(2) whose status as
a member devolved on the person by operation of law or pursuant to the terms of
the operating agreement from a person that was a member at the time of the
conduct.
SECTION
904. PLEADING. In a derivative action under Section 902, the complaint must state with
particularity:
(1) the date and content of plaintiff’s demand and the
response to the demand by the managers or other members to the demand;
or
(2) if a demand
has not been made, the reasons a demand under Section 902(1) would be futile
why the demand should be excused as futile.
(a) If a limited liability company is named as or made a
party in a derivative proceeding, the company may appoint a special litigation
committee to investigate the claims asserted in the proceeding and determine
whether pursuing the action is in the best interests of the company. If the company appoints a special litigation
committee, on motion by the committee made in the name of the company, except
for good cause shown, the court shall stay discovery for the time reasonably
necessary to permit the committee to make its investigation. This subsection does not prevent the court
from enforcing a person’s right to information under Section 410 or, for good
cause shown, granting extraordinary relief in the form of a temporary
restraining order or preliminary injunction.
(b) A special litigation committee may be composed of one
or more disinterested and independent individuals, who may be members.
(c) A special litigation committee may be appointed:
(1) in a member-managed limited liability
company:
(A) by the consent of a majority
of the members not named as defendants or plaintiffs in the proceeding; and
(B) if all members are named as
defendants or plaintiffs in the proceeding, by a majority of the members named
as defendants; or
(2) in a manager-managed limited liability
company:
(A) by a majority of the managers
not named as defendants or plaintiffs in the proceeding; and
(B) if all managers are named as
defendants or plaintiffs in the proceeding, by a majority of the managers named
as defendants.
(d) After appropriate investigation, a special litigation
committee may determine that it is in the best interests of the limited
liability company that the proceeding:
(1) continue under the control of the
plaintiff;
(2) continue under the control of the
committee;
(3) be settled on terms approved by the
committee; or
(4) be dismissed.
(e) After making a determination under subsection (d), a
special litigation committee shall file with the court a statement of its
determination and its report supporting its determination, giving notice to the plaintiff and shall serve each party with a copy of the
determination and report. The
court shall determine whether the members of the committee were disinterested
and independent and whether the committee conducted its investigation and made
its recommendation in good faith, independently, and with reasonable care, with
the committee having the burden of proof.
If the court finds that the members of the committee were disinterested
and independent and that the committee acted in good faith, independently, and
with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay
of discovery entered under subsection (a) and allow the action to proceed under
the direction of the plaintiff.
(a) Except as otherwise provided in subsection (b):
(1) any
proceeds or other benefits of a derivative action under Section 902, whether by judgment, compromise, or
settlement, belong to the limited liability company and not to the plaintiff;
and
(2) if the plaintiff receives any proceeds,
the plaintiff shall remit them immediately to the company.
(b) If a derivative action under Section 902 is successful in whole or in part, the
court may award the plaintiff reasonable expenses, including reasonable
attorney’s fees and costs, from the recovery of the limited liability company.
(c) A derivative action on behalf of a limited
partnership may not be voluntarily dismissed or settled without the court’s
approval.
SECTION 1001.
DEFINITIONS. In this [article]:
(1) “Constituent limited liability company” means a
constituent organization that is a limited liability company.
(2) “Constituent organization” means an organization
that is party to a merger.
(3) “Converted organization” means the organization
into which a converting organization converts pursuant to Sections 1006 through
1009.
(4) “Converting limited liability company” means a
converting organization that is a limited liability company.
(5) “Converting organization” means an organization
that converts into another organization pursuant to Section 1006.
(6) “Domesticated company” means the a company that
exists after a domesticating foreign limited liability company or limited
liability company effects a domestication pursuant to Sections 1010 through
1013.
(7) “Domesticating company” means the company that
effects a domestication pursuant to Sections 1010 through 1013.
(8) “Governing statute” means the statute that governs
an organization’s internal affairs.
(9) “Organization” means a general partnership,
including a limited liability partnership, limited partnership, including a
limited liability limited partnership, limited liability company, businesscompany,
corporation, or any other person having a governing statute. The term includes a domestic or foreign
organization regardless of whether organized for profit.
(10) “Organizational documents” means:
(A) for a domestic or foreign general
partnership, its partnership agreement;
(B) for a limited partnership or foreign limited
partnership, its certificate of limited partnership and partnership agreement;
(C) for a domestic or foreign limited
liability company, its certificate or articles of organization and operating
agreement, or comparable records as provided in its governing statute;
(D) for a businesscompany, its agreement
ofcompany and declaration ofcompany;
(E) for a domestic or foreign corporation
for profit, its articles of incorporation, bylaws, and other agreements among
its shareholders which are authorized by its governing statute, or comparable
records as provided in its governing statute; and
(F) for any other organization, the basic
records that create the organization and determine its internal governance and
the relations among the persons that own it, have an interest in it, or are
members of it.
(11) “Personal liability” means liability for a debt,
obligation, or other liability of an organization which is imposed on a person
that co-owns, has an interest in, or is a member of the organization:
(A)
by the governing statute solely by reason of the person co-owning, having an
interest in, or being a member of the organization; or
(B) by the organization’s organizational
documents under a provision of the governing statute authorizing those documents
to make one or more specified persons liable for all or specified debts,
obligations, or other liabilities of the organization solely by reason of the
person or persons co-owning, having an interest in, or being a member of the
organization.
(12) “Surviving organization” means an organization
into which one or more other organizations are merged whether the organization
preexisted the merger or was created by the merger.
(a) A limited liability company may merge with one or
more other constituent organizations pursuant to this section, Sections 1003
through 1005, and a plan of merger, if:
(1) the governing statute of each of the
other organizations authorizes the merger;
(2) the merger is not prohibited by the
law of a jurisdiction that enacted any of the governing statutes; and
(3) each of the other organizations
complies with its governing statute in effecting the merger.
(b) A plan of merger must be in a record and must
include:
(1) the name and form of each constituent
organization;
(2) the name and form of the surviving
organization and, if the surviving organization is to be created by the merger,
a statement to that effect;
(3) the terms and conditions of the
merger, including the manner and basis for converting the interests in each
constituent organization into any combination of money, interests in the
surviving organization, and other consideration;
(4) if the surviving organization is to be
created by the merger, the surviving organization’s organizational documents
that are proposed to be in a record; and
(5) if the surviving organization is not
to be created by the merger, any amendments to be made by the merger to the
surviving organization’s organizational documents that are, or are proposed to
be, in a record.
(a) Subject to
Section 1014, a plan of merger must be consented to by all the members of a
constituent limited liability company.
(b) Subject to Section 1014 and any contractual
rights, after a merger is approved, and at any time before articles of merger
are delivered to the [Secretary of State] for filing under Section 1004, a
constituent limited liability company may amend the plan or abandon the merger:
(1) as provided in the plan; or
(2) except as otherwise prohibited in the
plan, with the same consent as was required to approve the plan.
(a) After each constituent organization has approved a
merger, articles of merger must be signed on behalf of:
(1) each constituent limited liability
company, as provided in Section 203(a); and
(2) each other constituent organization,
as provided in its governing statute.
(b) Articles of merger under this section must
include:
(1) the name and form of each constituent
organization and the jurisdiction of its governing statute;
(2) the name and form of the surviving
organization, the jurisdiction of its governing statute, and, if the surviving
organization is created by the merger, a statement to that effect;
(3) the date the merger is effective under
the governing statute of the surviving organization;
(4) if the surviving organization is to be
created by the merger:
(A) if it will be a limited liability
company, the company’s certificate of organization; or
(B) if it will be an
organization other than a limited liability company, the organizational
document that creates the organization that is in a public record;
(5) if the surviving organization
preexists the merger, any amendments provided for in the plan of merger for the
organizational document that created the organization that are in a public
record;
(6) a statement as to each constituent
organization that the merger was approved as required by the organization’s
governing statute;
(7) if the surviving organization is a
foreign organization not authorized to transact business in this state, the
street and mailing addresses of an office that the [Secretary of State] may use
for the purposes of Section 1005(b); and
(8) any additional information required by
the governing statute of any constituent organization.
(c) Each constituent limited liability company shall
deliver the articles of merger for filing in the [office of the Secretary of
State].
(d) A merger becomes effective under this [article]:
(1) if the surviving organization is a
limited liability company, upon the later of:
(A) compliance with subsection
(c); or
(B) subject to Section 205(c),
as specified in the articles of merger; or
(2) if the surviving organization is not a
limited liability company, as provided by the governing statute of the
surviving organization.
(a) When a merger becomes effective:
(1) the surviving organization continues
or comes into existence;
(2) each constituent organization that
merges into the surviving organization ceases to exist as a separate entity;
(3) all property owned by each constituent
organization that ceases to exist vests in the surviving organization;
(4) all debts, obligations, or other
liabilities of each constituent organization that ceases to exist continue as
debts, obligations, or other liabilities of the surviving organization;
(5) an action or proceeding pending by or
against any constituent organization that ceases to exist may be continued as
if the merger had not occurred;
(6) except as prohibited by other law, all
of the rights, privileges, immunities, powers, and purposes of each constituent
organization that ceases to exist vest in the surviving organization;
(7) except as otherwise provided in the
plan of merger, the terms and conditions of the plan of merger take effect; and
(8) except as otherwise agreed, if a
constituent limited liability company ceases to exist, the merger does not
dissolve the limited liability company for the purposes of [Article] 7;
(9) if the surviving organization is
created by the merger:
(A) if it is a limited
liability company, the certificate of organization becomes effective; or
(B) if it is an organization
other than a limited liability company, the organizational document that
creates the organization becomes effective; and
(10) if the surviving organization
preexisted the merger, any amendments provided for in the articles of merger
for the organizational document that created the organization become effective.
(b) A surviving organization that is a foreign
organization consents to the jurisdiction of the courts of this state to
enforce any debt, obligation, or other liability owed by a constituent
organization, if before the merger the constituent organization was subject to
suit in this state on the debt, obligation, or other liability. A surviving organization that is a foreign
organization and not authorized to transact business in this state appoints the
[Secretary of State] as its agent for service of process for the purposes of
enforcing a debt, obligation, or other liability under this subsection. Service on the [Secretary of State] under
this subsection must be made in the same manner and has the same consequences
as in Section 116(c) and (d).
(a) An organization other than a limited liability
company or a foreign limited liability company may convert to a limited
liability company, and a limited liability company may convert to an
organization other than a foreign limited liability company pursuant to this
section,
Sections 1007 through 1009,
and a plan of conversion, if:
(1) the other organization’s governing
statute authorizes the conversion;
(2) the conversion is not prohibited by
the law of the jurisdiction that enacted the other organization’s governing
statute; and
(3) the other organization complies with
its governing statute in effecting the conversion.
(b) A plan of conversion must be in a record and must
include:
(1) the name and form of the organization
before conversion;
(2) the name and form of the organization
after conversion;
(3) the terms and conditions of the
conversion, including the manner and basis for converting interests in the
converting organization into any combination of money, interests in the
converted organization, and other consideration; and
(4) the organizational documents of the
converted organization that are, or are proposed to be, in a record.
(a) Subject to Section 1014, a plan of conversion must
be consented to by all the members of a converting limited liability company.
(b) Subject to Section 1014 and any contractual
rights, after a conversion is approved, and at any time before articles of
conversion are delivered to the [Secretary of State] for filing under Section
1008, a converting limited liability company may amend the plan or abandon the conversion:
(1) as provided in the plan; or
(2) except as otherwise prohibited in the
plan, by the same consent as was required to approve the plan.
(a) After a plan of conversion is approved:
(1) a converting limited liability company
shall deliver to the [Secretary of State] for filing articles of conversion,
which must be signed as provided in Section 203(a) and must include;
(A) a statement that the
limited liability company has been converted into another organization;
(B) the name and form of the
organization and the jurisdiction of its governing statute;
(C) the date the conversion is
effective under the governing statute of the converted organization;
(D) a statement that the
conversion was approved as required by this [act];
(E) a statement that the
conversion was approved as required by the governing statute of the converted
organization; and
(F) if the converted
organization is a foreign organization not authorized to transact business in
this state, the street and mailing addresses of an office which the [Secretary
of State] may use for the purposes of Section 1009(c); and
(2) if the converting organization is not
a converting limited liability company, the converting organization shall
deliver to the [Secretary of State] for filing a certificate of organization,
which must include, in addition to the information required by Section 201(b):
(A) a statement that the
converted organization was converted from another organization;
(B) the name and form of that
converting organization and the jurisdiction of its governing statute; and
(C) a statement that the
conversion was approved in a manner that complied with the converting
organization’s governing statute.
(b) A conversion becomes effective:
(1) if the converted organization is a
limited liability company, when the certificate of organization takes effect;
and
(2) if the converted organization is not a
limited liability company, as provided by the governing statute of the
converted organization.
(a) An organization that has been converted pursuant
to this [article] is for all purposes the same entity that existed before the
conversion.
(b) When a conversion takes effect:
(1) all property owned by the converting
organization remains vested in the converted organization;
(2) all debts, obligations, or other
liabilities of the converting organization continue as debts, obligations, or
other liabilities of the converted organization;
(3) an action or proceeding pending by or
against the converting organization may be continued as if the conversion had
not occurred;
(4) except as prohibited by law other than
this [act], all of the rights, privileges, immunities, powers, and purposes of
the converting organization remain vested in the converted organization;
(5) except as otherwise provided in the
plan of conversion, the terms and conditions of the plan of conversion take
effect; and
(6) except as otherwise agreed, the
conversion does not dissolve a converting limited liability company for the
purposes of [Article] 7.
(c) A converted organization that is a foreign
organization consents to the jurisdiction of the courts of this state to
enforce any debt, obligation, or other liability for which the converting
limited liability company is liable if, before the conversion, the converting
limited liability company was subject to suit in this state on the debt,
obligation, or other liability. A
converted organization that is a foreign organization and not authorized to
transact business in this state appoints the [Secretary of State] as its agent
for service of process for purposes of enforcing a debt, obligation, or other
liability under this subsection. Service
on the [Secretary of State] under this subsection must be made in the same
manner and has the same consequences as in Section 116(c) and (d).
(a) A foreign limited liability company may become a
limited liability company pursuant to this section, Sections 1011 through 1013,
and a plan of domestication, if:
(1) the foreign limited liability
company’s governing statute authorizes the domestication;
(2) the domestication is not prohibited by
the law of the jurisdiction that enacted the governing statute; and
(3) the foreign limited liability company
complies with its governing statute in effecting the domestication.
(b) A limited liability company may become a foreign
limited liability company pursuant to this section, Sections 1011 through 1013,
and a plan of domestication, if:
(1) the foreign limited liability
company’s governing statute authorizes the domestication;
(2) the domestication is not prohibited by
the law of the jurisdiction that enacted the governing statute; and
(3) the foreign limited liability company
complies with its governing statute in effecting the domestication.
(c) A plan of domestication must be in a record and
must include:
(1) the name of the domesticating company
before domestication and the jurisdiction of its governing statute;
(2) the name of the domesticated company
after domestication and the jurisdiction of its governing statute;
(3) the terms and conditions of the
domestication, including the manner and basis for converting interests in the
domesticating company into any combination of money, interests in the
domesticated company, and other consideration; and
(4) the organizational documents of the
domesticated company that are, or are proposed to be, in a record.
(a) A plan of domestication must be consented to:
(1) by all the members, subject to Section
1014, if the domesticating company is a limited liability company; and
(2) as provided in the domesticating
company’s governing statute, if the company is a foreign limited liability
company.
(b) Subject to any contractual rights, after a
domestication is approved, and at any time before articles of domestication are
delivered to the [Secretary of State] for filing under Section 1012, a
domesticating limited liability company may amend the plan or abandon the
domestication:
(1) as provided in the plan; or
(2) except as otherwise prohibited in the
plan, by the same consent as was required to approve the plan.
(a) After a plan of domestication is approved, a
domesticating company shall deliver to the [Secretary of State] for filing
articles of domestication, which must include:
(1) a statement, as the case may be, that
the company has been domesticated from or into another jurisdiction;
(2) the name of the domesticating company
and the jurisdiction of its governing statute;
(3) the name of the domesticated company
and the jurisdiction of its governing statute;
(4) the date the domestication is
effective under the governing statute of the
domesticated company;
(5) if the domesticating company was a
limited liability company, a statement that the domestication was approved as
required by this [act];
(6) if the domesticating company was a
foreign limited liability company, a statement that the domestication was
approved as required by the governing statute of the other jurisdiction; and
(7) if the domesticated company was a
foreign limited liability company not authorized to transact business in this
state, the street and mailing addresses of an office that the [Secretary of
State] may use for the purposes of Section 1013(b).
(b) A domestication becomes effective:
(1) when the certificate of organization
takes effect, if the domesticated company is a limited liability company; and
(2) according to the governing statute of
the domesticated company, if the domesticated organization is a foreign limited
liability company.
(a) When a domestication takes effect:
(1) the domesticated company is for all
purposes the company that existed before the domestication;
(2) all property owned by the
domesticating company remains vested in the domesticated company;
(3) all debts, obligations, or other
liabilities of the domesticating company continue as debts, obligations, or
other liabilities of the domesticated company;
(4) an action or proceeding pending by or
against a domesticating company may be continued as if the domestication had
not occurred;
(5) except as prohibited by other law, all
of the rights, privileges, immunities, powers, and purposes of the
domesticating company remain vested in the domesticated company;
(6) except as otherwise provided in the
plan of domestication, the terms and conditions of the plan of domestication
take effect; and
(7) except as otherwise agreed, the
domestication does not dissolve a domesticating limited liability company for
the purposes of [Article] 7.
(b) A domesticated company that is a foreign limited
liability company consents to the jurisdiction of the courts of this state to
enforce any debt, obligation, or other liability owed by the domesticating
company, if, before the domestication, the domesticating company was subject to
suit in this state on the debt, obligation, or other liability. A domesticated company that is a foreign
limited liability company and not authorized to transact business in this state
appoints the [Secretary of State] as its agent for service of process for
purposes of enforcing a debt, obligation, or other liability under this
subsection. Service on the [Secretary of
State] under this subsection must be made in the same manner and has the same
consequences as in Section 116(c) and (d).
(c) If a limited liability company has adopted and
approved a plan of domestication under Section 1010 providing for the company
to be domesticated in a foreign jurisdiction, a statement surrendering the company’s
certificate of organization must be delivered to the [Secretary of State] for
filing setting forth:
(1) the name of the company;
(2) a statement that the certificate of
organization is being surrendered in connection with the domestication of the
company in a foreign jurisdiction;
(3) a statement the domestication was
approved as required by this [act]; and
(4) the jurisdiction of formation of the
domesticated foreign limited liability company.
(a) If a member of a constituent, converting, or
domesticating limited liability company will have personal liability with
respect to a surviving, converted, or domesticated organization, approval or
amendment of a plan of merger, conversion, or domestication are ineffective
without the consent of the member, unless:
(1) the company’s operating agreement
provides for approval of a merger, conversion, or domestication with the
consent of fewer than all the members; and
(2) the member has consented to the
provision of the operating agreement.
(b) A member does not give the consent required by
subsection (a) merely by consenting to a provision of the operating agreement
that permits the operating agreement to be amended with the consent of fewer
than all the members.
SECTION
1015. [ARTICLE] NOT EXCLUSIVE. This [article] does not preclude an entity
from being merged, converted, or domesticated under law other than this [act].
SECTION 1001.
DEFINITIONS. In
this [article]:
(1) “Acquired entity” means the
entity, all of one or more classes or series of interests in which are acquired
in an interest exchange.
(2) “Acquiring entity” means the
entity that acquires all of one or more classes or series of interests of the
acquired entity in an interest exchange.
(3) “Conversion” means a
transaction authorized by [Part] 4.
(4) “Converted entity” means the
converting entity as it continues in existence after a conversion.
(5) “Converting entity” means the
domestic entity that approves a plan of conversion pursuant to Section 1043 or
the foreign entity that approves a conversion pursuant to the law of its
jurisdiction of formation.
(6) “Distributional interest”
means the right under an unincorporated entity’s organic law and organic rules
to receive distributions from the entity.
(7) “Domestic”, with respect to an
entity, means governed as to its internal affairs by the law of this state.
(8) “Domesticated limited
liability company” means the domesticating limited liability company as it
continues in existence after a domestication.
(9) “Domesticating limited
liability company” means the domestic limited liability company that approves a
plan of domestication pursuant to Section 1053 or the foreign limited liability
company that approves a domestication pursuant to the law of its jurisdiction
of formation.
(10) “Domestication” means a
transaction authorized by [Part] 5.
(11) “Entity”:
(A) means:
(i) a
business corporation;
(ii) a
nonprofit corporation;
(iii)
a general partnership, including a limited liability partnership;
(iv)
a limited partnership, including a limited liability limited partnership;
(v)
a limited liability company;
[(vi)
a general cooperative association;]
(vii) a
limited cooperative association;
(viii) an
unincorporated nonprofit association;
(ix) a
statutory trust, business trust, or common-law business trust; or
(x) any
other person that has:
(I)
a legal existence separate from any interest holder of that person; or
(II)
the power to acquire an interest in real property in its own name; and
(B) does not include:
(i) an
individual;
(ii) a
testamentary or inter vivos trust with a predominantly donative purpose or a
charitable trust;
(iii) an
association or relationship that is not a partnership solely by reason of
[Section 202(c) of the Revised Uniform Partnership Act] [Section 7 of the
Uniform Partnership Act] or a similar provision of the law of another
jurisdiction;
(iv) a
decedent’s estate; [or]
(v) a
government or a governmental subdivision, agency, or instrumentality[; or]
[(vi) a
person excluded under Section 1009].
(12) “Filing entity” means an
entity whose formation requires the filing of a public organic record.
(13) “Foreign”, with respect to
an entity, means an entity governed as to its internal affairs by the law of a
jurisdiction other than this state.
(14) “Governance interest” means a
right under the organic law or organic rules of an unincorporated entity, other
than as a governor, agent, assignee, or proxy, to:
(A) receive or demand
access to information concerning, or the books and records of, the entity;
(B) vote for the
election of the governors of the entity; or
(C) receive notice of
or vote on an issue involving the internal affairs of the entity.
(15) “Governor” means:
(A) a director of a
business corporation;
(B) a director or
trustee of a nonprofit corporation;
(C) a general partner
of a general partnership;
(D) a general partner
of a limited partnership;
(E) a manager of a
manager-managed limited liability company;
(F) a member of a
member-managed limited liability company;
[(G) a director of a
general cooperative association;]
(H) a director of a
limited cooperative association;
(I) a manager of an
unincorporated nonprofit association;
(J) a trustee of a
statutory trust, business trust, or common-law business trust; or
(K) any other person by
or under whose authority the powers of an entity are exercised and under whose
direction the activities and affairs of the entity are managed pursuant to the
organic law and organic rules of the entity.
(16) “Interest” means:
(A) a share in a
business corporation;
(B) a membership in a
nonprofit corporation;
(C) a partnership
interest in a general partnership;
(D) a partnership
interest in a limited partnership;
(E) a membership
interest in a limited liability company;
[(F) a share in a
general cooperative association;]
(G) a member’s
interest in a limited cooperative association;
(H) a membership in
an unincorporated nonprofit association;
(I) a beneficial
interest in a statutory trust, business trust, or common-law business trust; or
(J) a governance
interest or distributional interest in any other type of unincorporated entity.
(17) “Interest exchange” means a
transaction authorized by [Part] 3.
(18) “Interest holder” means:
(A) a shareholder of
a business corporation;
(B) a member of a
nonprofit corporation;
(C) a general partner
of a general partnership;
(D) a general partner
of a limited partnership;
(E) a limited partner
of a limited partnership;
(F) a member of a
limited liability company;
[(G) a shareholder of
a general cooperative association;]
(H) a member of a
limited cooperative association;
(I) a member of an
unincorporated nonprofit association;
(J) a beneficiary or
beneficial owner of a statutory trust, business trust, or common-law business
trust; or
(K) any other direct
holder of an interest.
(19) “Interest holder liability”
means:
(A) personal
liability for a liability of an entity that is imposed on a person:
(i)
solely by reason of the status of the person as an interest holder; or
(ii) by
the organic rules of the entity which make one or more specified interest
holders or categories of interest holders liable in their capacity as interest
holders for all or specified liabilities of the entity; or
(B) an obligation of
an interest holder under the organic rules of an entity to contribute to the
entity.
(20) “Merger” means a transaction
authorized by [Part] 2.
(21) “Merging entity” means an
entity that is a party to a merger and exists immediately before the merger
becomes effective.
(22) “Organic law” means the law
of an entity’s jurisdiction of formation governing the internal affairs of the
entity.
(23) “Organic rules” means the
public organic record and private organic rules of an entity.
(24) “Plan” means a plan of
merger, plan of interest exchange, plan of conversion, or plan of domestication.
(25) “Plan of
conversion” means a plan under Section 1042.
(26) “Plan of
domestication” means a plan under Section 1052.
(27) “Plan of
interest exchange” means a plan under Section 1032.
(28) “Plan of
merger” means a plan under Section 1022.
(29) “Private organic rules” means
the rules, whether or not in a record, that govern the internal affairs of an
entity, are binding on all of its interest holders, and are not part of its
public organic record, if any. The term
includes:
(A) the bylaws of a
business corporation;
(B) the bylaws of a
nonprofit corporation;
(C) the partnership
agreement of a general partnership;
(D) the partnership
agreement of a limited partnership;
(E) the operating
agreement of a limited liability company;
[(F) the bylaws of a
general cooperative association;]
(G) the bylaws of a
limited cooperative association;
(H) the governing
principles of an unincorporated nonprofit association; and
(I) the trust
instrument of a statutory trust or similar rules of a business trust or
common-law business trust.
(30) “Protected agreement” means:
(A) a record
evidencing indebtedness and any related agreement in effect on [the effective
date of this [act]];
(B) an agreement that
is binding on an entity on [the effective date of this [act]];
(C) the organic rules
of an entity in effect on [the effective date of this [act]]; or
(D) an agreement that
is binding on any of the governors or interest holders of an entity on [the
effective date of this [act]].
(31) “Public organic record”
means the record the filing of which by the [Secretary of State] is required to
form an entity and any amendment to or restatement of that record. The term includes:
(A) the articles of
incorporation of a business corporation;
(B) the articles of
incorporation of a nonprofit corporation;
(C) the certificate
of limited partnership of a limited partnership;
(D) the certificate
of organization of a limited liability company;
[(E) the articles of
incorporation of a general cooperative association;]
(F) the articles of
organization of a limited cooperative association; and
(G) the certificate
of trust of a statutory trust or similar record of a business trust.
(32) “Registered foreign entity”
means a foreign entity that is registered to do business in this state pursuant
to a record filed by the [Secretary of State].
(33) “Statement of conversion” means a statement
under Section 1045.
(34) “Statement of domestication” means a
statement under Section 1055.
(35) “Statement of interest exchange” means a
statement under Section 1035.
(36) “Statement of merger” means a statement under
Section 1025.
(37) “Surviving entity” means the
entity that continues in existence after or is created by a merger.
(38) “Type of entity” means a
generic form of entity:
(A) recognized at
common law; or
(B) formed under an
organic law, whether or not some entities formed under that organic law are
subject to provisions of that law that create different categories of the form
of entity.
SECTION 1002. RELATIONSHIP
OF [ARTICLE] TO OTHER LAWS.
This [article] does not authorize an act prohibited by, and does not
affect the application or requirements of, law other than this [article].
(a) A domestic or foreign entity
that is required to give notice to, or obtain the approval of, a governmental
agency or officer of this state to be a party to a merger must give the notice
or obtain the approval to be a party to an interest exchange, conversion, or
domestication.
(b) Property held for a
charitable purpose under the law of this state by a domestic or foreign entity
immediately before a transaction under this [article] becomes effective may
not, as a result of the transaction, be diverted from the objects for which it was
donated, granted, devised, or otherwise transferred unless, to the extent
required by or pursuant to the law of this state concerning cy pres or other
law dealing with nondiversion of charitable assets, the entity obtains an
appropriate order of [the appropriate court] [the Attorney General] specifying
the disposition of the property.
SECTION 1004.
STATUS OF FILINGS.
A filing under this [article] signed by a domestic entity becomes part
of the public organic record of the entity if the entity’s organic law provides
that similar filings under that law become part of the public organic record of
the entity.
SECTION 1005.
NONEXCLUSIVITY.
The fact that a transaction under this [article] produces a certain
result does not preclude the same result from being accomplished in any other
manner permitted by law other than this [article].
SECTION 1006.
REFERENCE TO EXTERNAL FACTS. A plan may refer to facts ascertainable
outside the plan if the manner in which the facts will operate upon the plan is
specified in the plan. The facts may
include the occurrence of an event or a determination or action by a person,
whether or not the event, determination, or action is within the control of a
party to the transaction.
SECTION 1007. ALTERNATIVE MEANS OF APPROVAL OF
TRANSACTIONS. Except as otherwise provided in the organic
law or organic rules of a domestic entity, approval of a transaction under this
[article] by the unanimous vote or consent of its interest holders satisfies
the requirements of this [article] for approval of the transaction.
(a) An interest holder of a
domestic merging, acquired, converting, or domesticating entity is entitled to
appraisal rights in connection with the transaction if the interest holder
would have been entitled to appraisal rights under the entity’s organic law in
connection with a merger in which the interest of the interest holder was
changed, converted, or exchanged unless:
(1)
the organic law permits the organic rules to limit the availability of
appraisal rights; and
(2)
the organic rules provide such a limit.
(b) An interest holder of a
domestic merging, acquired, converting, or domesticating entity is entitled to
contractual appraisal rights in connection with a transaction under this
[article] to the extent provided in:
(1)
the entity’s organic rules; or
(2) the plan.
[SECTION 1009.
EXCLUDED ENTITIES AND TRANSACTIONS.
(a) The following entities may
not participate in a transaction under this [article]:
(1)
(2).
(b) This [article] may not be
used to effect a transaction that:
(1)
(2).]
(a)
By complying with this [part]:
(1)
one or more domestic limited liability companies may merge with one or more
domestic or foreign entities into a domestic or foreign surviving entity; and
(2)
two or more foreign entities may merge into a domestic limited liability
company.
(b)
By complying with the provisions of this [part] applicable to foreign entities,
a foreign entity may be a party to a merger under this [part] or may be the
surviving entity in such a merger if the merger is authorized by the law of the
foreign entity’s jurisdiction of formation.
(a)
A domestic limited liability company may become a party to a merger under this
[part] by approving a plan of merger.
The plan must be in a record and contain:
(1)
as to each merging entity, its name, jurisdiction of formation, and type of
entity;
(2)
if the surviving entity is to be created in the merger, a statement to that
effect and the entity’s name, jurisdiction of formation, and type of entity;
(3)
the manner of converting the interests in each party to the merger into
interests, securities, obligations, money, other property, rights to acquire
interests or securities, or any combination of the foregoing;
(4)
if the surviving entity exists before the merger, any proposed amendments to
its public organic record, if any, or to its private organic rules that are, or
are proposed to be, in a record;
(5)
if the surviving entity is to be created in the merger, its proposed public
organic record, if any, and the full text of its private organic rules that are
proposed to be in a record;
(6)
the other terms and conditions of the merger; and
(7)
any other provision required by the law of a merging entity’s jurisdiction of
formation or the organic rules of a merging entity.
(b)
In addition to the requirements of subsection (a), a plan of merger may contain
any other provision not prohibited by law.
(a) A plan of merger is not
effective unless it has been approved:
(1) by a domestic
merging limited liability company, by all the members of the company entitled
to vote on or consent to any matter; and
(2) in a record, by
each member of a domestic merging limited liability company that will have
interest holder liability for debts, obligations and other liabilities that
arise after the merger becomes effective, unless:
(A) the
operating agreement of the company in a record provides for the approval of a
merger in which some or all of its members become subject to interest holder
liability by the vote or consent of fewer than all the members; and
(B) the
member consented in a record to or voted for that provision of the operating
agreement or became a member after the adoption of that provision.
(b)
A merger involving a domestic merging entity that is not a limited liability
company is not effective unless the merger is approved by that entity in accordance
with its organic law.
(c) A merger involving a foreign
merging entity is not effective unless the merger is approved by the foreign
entity in accordance with the law of the foreign entity’s jurisdiction of
formation.
(a) A plan of merger may be
amended only with the consent of each party to the plan, except as otherwise
provided in the plan.
(b) A domestic merging limited
liability company may approve an amendment of a plan of merger:
(1) in the same
manner as the plan was approved, if the plan does not provide for the manner in
which it may be amended; or
(2) by the managers
or members in the manner provided in the plan, but a member that was entitled
to vote on or consent to approval of the merger is entitled to vote on or
consent to any amendment of the plan that will change:
(A) the
amount or kind of interests, securities, obligations, money, other property,
rights to acquire interests or securities, or any combination of the foregoing,
to be received by the interest holders of any party to the plan;
(B) the
public organic record, if any, or private organic rules of the surviving entity
that will be in effect immediately after the merger becomes effective, except
for changes that do not require approval of the interest holders of the
surviving entity under its organic law or organic rules; or
(C) any
other terms or conditions of the plan, if the change would adversely affect the
member in any material respect.
(c) After a plan of merger has
been approved and before a statement of merger becomes effective, the plan may
be abandoned as provided in the plan.
Unless prohibited by the plan, a domestic merging limited liability
company may abandon the plan in the same manner as the plan was approved.
(d) If a plan of merger is
abandoned after a statement of merger has been delivered to the [Secretary of
State] for filing and before the statement becomes effective, a statement of
abandonment, signed by a party to the plan, must be delivered to the [Secretary
of State] for filing before the statement of merger becomes effective. The statement of abandonment takes effect
upon filing, and the merger is abandoned and does not become effective. The statement of abandonment must contain:
(1) the name of each
party to the plan of merger;
(2) the date on which
the statement of merger was delivered to the [Secretary of State] for filing;
and
(3) a statement that
the merger has been abandoned in accordance with this section.
(a) A statement of merger must be
signed by each merging entity and delivered to the [Secretary of State] for
filing.
(b) A statement of merger must
contain:
(1) the name,
jurisdiction of formation, and type of entity of each merging entity that is
not the surviving entity;
(2) the name,
jurisdiction of formation, and type of entity of the surviving entity;
(3) a statement that
the merger was approved by each domestic merging entity, if any, in accordance
with this [part] and by each foreign merging entity, if any, in accordance with
the law of its jurisdiction of formation;
(4) if the surviving
entity exists before the merger and is a domestic filing entity, any amendment
to its public organic record approved as part of the plan of merger;
(5) if the surviving
entity is created by the merger and is a domestic filing entity, its public
organic record, as an attachment;
(6) if the surviving
entity is created by the merger and is a domestic limited liability partnership,
its statement of qualification, as an attachment; and
(7) if the surviving
entity is a foreign entity that is not a registered foreign entity, a mailing
address to which the [Secretary of State] may send any process served on the
[Secretary of State] pursuant to Section 1026(e).
(c) In addition to the
requirements of subsection (b), a statement of merger may contain any other
provision not prohibited by law.
(d) If the surviving entity is a
domestic entity, its public organic record, if any, must satisfy the
requirements of the law of this state, but the public organic record does not
need to be signed.
(e) A plan of merger that is
signed by all the merging entities and meets all the requirements of subsection
(b) may be delivered to the [Secretary of State] for filing instead of a
statement of merger and upon filing has the same effect. If a plan of merger is filed as provided in
this subsection, references in this [article] to a statement of merger refer to
the plan of merger filed under this subsection.
(a) When a merger becomes
effective:
(1) the surviving
entity continues or comes into existence;
(2) each merging
entity that is not the surviving entity ceases to exist;
(3) all property of
each merging entity vests in the surviving entity without transfer, reversion,
or impairment;
(4) all debts,
obligations, and other liabilities of each merging entity are debts,
obligations, and other liabilities of the surviving entity;
(5) except as
otherwise provided by law or the plan of merger, all the rights, privileges,
immunities, powers, and purposes of each merging entity vest in the surviving
entity;
(6) if the surviving
entity exists before the merger:
(A) all
its property continues to be vested in it without transfer, reversion, or
impairment;
(B) it
remains subject to all its debts, obligations, and other liabilities; and
(C) all
its rights, privileges, immunities, powers, and purposes continue to be vested
in it;
(7) the name of the
surviving entity may be substituted for the name of any merging entity that is
a party to any pending action or proceeding;
(8) if the surviving
entity exists before the merger:
(A) its
public organic record, if any, is amended as provided in the statement of
merger; and
(B) its
private organic rules that are to be in a record, if any, are amended to the
extent provided in the plan of merger;
(9) if the surviving
entity is created by the merger:
(A) its
public organic record, if any, is effective; and
(B) its
private organic rules are effective; and
(10) the interests in
each merging entity which are to be converted in the merger are converted, and
the interest holders of those interests are entitled only to the rights
provided to them under the plan of merger and to any appraisal rights they have
under Section 1008 and the merging entity’s organic law.
(b) Except as otherwise provided
in the organic law or organic rules of a merging entity, the merger does not
give rise to any rights that an interest holder, governor, or third party would
otherwise have upon a dissolution, liquidation, or winding up of the merging
entity.
(c) When a merger becomes
effective, a person that did not have interest holder liability with respect to
any of the merging entities and that becomes subject to interest holder
liability with respect to a domestic entity as a result of a merger has
interest holder liability only to the extent provided by the organic law of
that entity and only for those debts, obligations, and other liabilities that
arise after the merger becomes effective.
(d) When a merger becomes
effective, the interest holder liability of a person that ceases to hold an
interest in a domestic merging entity with respect to which the person had
interest holder liability is as follows:
(1) The merger does
not discharge any interest holder liability under the organic law of the
domestic merging entity to the extent the interest holder liability arose
before the merger became effective.
(2) The person does
not have interest holder liability under the organic law of the domestic
merging entity for any liability that arises after the merger becomes
effective.
(3) The organic law
of the domestic merging entity continues to apply to the release, collection,
or discharge of any interest holder liability preserved under paragraph (1) as
if the merger had not occurred and the surviving entity were the domestic
merging entity.
(4) The person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the organic rules of the domestic merging
entity with respect to any interest holder liability preserved under paragraph
(1) as if the merger had not occurred.
(e) When a merger becomes
effective, a foreign entity that is the surviving entity may be served with
process in this state for the collection and enforcement of any debts,
obligations or other liabilities of a domestic merging entity as provided in
Section 118.
(f) When a merger becomes
effective, the registration to do business in this state of any foreign merging
entity that is not the surviving entity is canceled.
(a)
By complying with this [part]:
(1) a domestic
limited liability company may acquire all of one or more classes or series of
interests of another domestic or foreign entity in exchange for interests,
securities, obligations, money, other property, rights to acquire interests or
securities, or any combination of the foregoing; or
(2) all of one or
more classes or series of interests of a domestic limited liability company may
be acquired by another domestic or foreign entity in exchange for interests,
securities, obligations, money, other property, rights to acquire interests or
securities, or any combination of the foregoing.
(b) By complying with the
provisions of this [part] applicable to foreign entities, a foreign entity may
be the acquiring or acquired entity in an interest exchange under this [part]
if the interest exchange is authorized by the law of the foreign entity’s
jurisdiction of formation.
(c) If a protected agreement
contains a provision that applies to a merger of a domestic limited liability
company but does not refer to an interest exchange, the provision applies to an
interest exchange in which the domestic limited liability company is the
acquired entity as if the interest exchange were a merger until the provision
is amended after [the effective date of this [act]].
(a) A domestic limited liability
company may be the acquired entity in an interest exchange under this [part] by
approving a plan of interest exchange.
The plan must be in a record and contain:
(1) the name of the
acquired entity;
(2) the name,
jurisdiction of formation, and type of entity of the acquiring entity;
(3) the manner of
converting the interests in the acquired entity into interests, securities,
obligations, money, other property, rights to acquire interests or securities,
or any combination of the foregoing;
(4) any proposed
amendments to the certificate of organization or operating agreement that are,
or are proposed to be, in a record of the acquired entity;
(5) the other terms
and conditions of the interest exchange; and
(6) any other
provision required by the law of this state or the operating agreement of the
acquired entity.
(b) In addition to the
requirements of subsection (a), a plan of interest exchange may contain any
other provision not prohibited by law.
(a) A plan of interest exchange
is not effective unless it has been approved:
(1) by all the
members of a domestic acquired limited liability company entitled to vote on or
consent to any matter; and
(2) in a record, by
each member of the domestic acquired limited liability company that will have
interest holder liability for debts, obligations, and other liabilities that
arise after the interest exchange becomes effective, unless:
(A) the
operating agreement of the limited liability company in a record provides for
the approval of an interest exchange or a merger in which some or all of its
members become subject to interest holder liability by the vote or consent of
fewer than all the members; and
(B) the
member consented in a record to or voted for that provision of the operating
agreement or became a member after the adoption of that provision.
(b) An interest exchange
involving a domestic acquired entity that is not a limited liability company is
not effective unless it is approved by the domestic entity in accordance with
its organic law.
(c) An interest exchange
involving a foreign acquired entity is not effective unless it is approved by
the foreign entity in accordance with the law of the foreign entity’s
jurisdiction of formation.
(d) Except as otherwise provided
in its organic law or organic rules, the interest holders of the acquiring
entity are not required to approve the interest exchange.
(a) A plan of interest exchange
may be amended only with the consent of each party to the plan, except as
otherwise provided in the plan.
(b) A domestic acquired limited
liability company may approve an amendment of a plan of interest exchange:
(1) in the same
manner as the plan was approved, if the plan does not provide for the manner in
which it may be amended; or
(2) by the managers
or members of the company in the manner provided in the plan, but an interest
holder that was entitled to vote on or consent to approval of the interest
exchange is entitled to vote on or consent to any amendment of the plan that
will change:
(A) the
amount or kind of interests, securities, obligations, money, other property,
rights to acquire interests or securities, or any combination of the foregoing,
to be received by any of the members of the acquired company under the plan;
(B) the
certificate of organization or operating agreement of the acquired company that
will be in effect immediately after the interest exchange becomes effective,
except for changes that do not require approval of the members of the acquired
company under this [act] or the operating agreement; or
(C) any
other terms or conditions of the plan, if the change would adversely affect the
member in any material respect.
(c) After a plan of interest
exchange has been approved and before a statement of interest exchange becomes
effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic
acquired limited liability company may abandon the plan in the same manner as
the plan was approved.
(d) If a plan of interest
exchange is abandoned after a statement of interest exchange has been delivered
to the [Secretary of State] for filing and before the statement becomes
effective, a statement of abandonment, signed by the acquired limited liability
company, must be delivered to the [Secretary of State] for filing before the
statement of interest exchange becomes effective. The statement of abandonment takes effect
upon filing, and the interest exchange is abandoned and does not become
effective. The statement of abandonment
must contain:
(1) the name of the
acquired company;
(2) the date on which
the statement of interest exchange was delivered to the [Secretary of State]
for filing; and
(3) a statement that
the interest exchange has been abandoned in accordance with this section.
(a) A statement of interest
exchange must be signed by a domestic acquired limited liability company and
delivered to the [Secretary of State] for filing.
(b) A statement of interest
exchange must contain:
(1) the name of the
acquired limited liability company;
(2) the name,
jurisdiction of formation, and type of the acquiring entity;
(3) a statement that
the plan of interest exchange was approved by the acquired limited liability
entity in accordance with this [part]; and
(4) any amendments to
the acquired limited liability company’s certificate of organization approved
as part of the plan of interest exchange.
(c) In addition to the
requirements of subsection (b), a statement of interest exchange may contain
any other provision not prohibited by law.
(d) A plan of interest exchange
that is signed by a domestic acquired limited liability company and meets all the
requirements of subsection (b) may be delivered to the [Secretary of State] for
filing instead of a statement of interest exchange and upon filing has the same
effect. If a plan of interest exchange
is filed as provided in this subsection, references in this [article] to a
statement of interest exchange refer to the plan of interest exchange filed
under this subsection.
(a) When an interest exchange in
which the acquired entity is a domestic limited liability company becomes
effective:
(1) the interests in
a domestic company that are the subject of the interest exchange cease to exist
or are converted or exchanged, and the members holding those interests are
entitled only to the rights provided to them under the plan of interest
exchange and to any appraisal rights they have under Section 1008;
(2) the acquiring
entity becomes the interest holder of the interests in the acquired company
stated in the plan of interest exchange to be acquired by the acquiring entity;
(3) the certificate
of organization of the acquired company is amended as provided in the statement
of interest exchange; and
(4) the provisions of
the operating agreement of the acquired company that are to be in a record, if
any, are amended to the extent provided in the plan of interest exchange.
(b) Except as otherwise provided
in the operating agreement of a domestic acquired limited liability company,
the interest exchange does not give rise to any rights that a member, manager,
or third party would otherwise have upon a dissolution, liquidation, or winding
up of the acquired company.
(c) When an interest exchange
becomes effective, a person that did not have interest holder liability with
respect to a domestic acquired limited liability company and that becomes
subject to interest holder liability with respect to a domestic entity as a
result of the interest exchange has interest holder liability only to the
extent provided by the organic law of the entity and only for those debts,
obligations and liabilities that arise after the interest exchange becomes
effective.
(d) When an interest exchange
becomes effective, the interest holder liability of a person that ceases to
hold an interest in a domestic acquired limited liability company with respect
to which the person had interest holder liability is as follows:
(1) The interest
exchange does not discharge any interest holder liability to the extent the
interest holder liability arose before the interest exchange became effective.
(2) The person does
not have interest holder liability for any liability that arises after the
interest exchange becomes effective.
(3) The person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the operating agreement of the acquired company
with respect to any interest holder liability preserved under paragraph (1) as
if the interest exchange had not occurred.
(a)
By complying with this [part], a domestic limited liability company may become:
(1)
a domestic entity of a different type; or
(2)
a foreign entity of a different type, if the conversion is authorized by the
law of the foreign jurisdiction.
(b)
By complying with the provisions of this [part] applicable to foreign entities,
a foreign entity that is not a foreign limited liability company may become a
domestic limited liability company if the conversion is authorized by the law
of the foreign entity’s jurisdiction of formation.
(c)
If a protected agreement contains a provision that applies to a merger of a
domestic limited liability company but does not refer to a conversion, the
provision applies to a conversion of the entity as if the conversion were a
merger until the provision is amended after [the effective date of this [act]].
(a) A domestic limited liability
company may convert to a different type of entity under this [part] by
approving a plan of conversion. The plan
must be in a record and contain:
(1) the name of the
converting limited liability company;
(2) the name,
jurisdiction of formation, and type of entity of the converted entity;
(3) the manner of
converting the interests in the converting limited liability company into
interests, securities, obligations, money, other property, rights to acquire
interests or securities, or any combination of the foregoing;
(4) the proposed
public organic record of the converted entity if it will be a filing entity;
(5) the full text of the private organic rules of
the converted entity that are proposed to be in a record;
(6) the other terms
and conditions of the conversion; and
(7) any other
provision required by the law of this state or the operating agreement of the
converting limited liability company.
(b) In addition to the
requirements of subsection (a) a plan of conversion may contain any other
provision not prohibited by law.
(a) A plan of conversion is not
effective unless it has been approved:
(1) by a domestic
converting limited liability company by all the members of the limited
liability company entitled to vote on or consent to any matter; and
(2) in a record, by member
of a domestic converting limited liability company that will have interest
holder liability for debts, obligations and other liabilities that arise after
the conversion becomes effective:
(A) the
operating agreement of the limited liability company provides in a record for
the approval of a conversion or a merger in which some or all of its interest
holders become subject to interest holder liability by the vote or consent of
fewer than all the interest holders; and
(B) the member
voted for or consented in a record to that provision of the operating agreement
or became a member after the adoption of that provision.
(b) A conversion involving a
domestic converting entity that is not a limited liability company is not
effective unless it is approved by the domestic converting entity in accordance
with its organic law.
(c) A conversion of a foreign
converting entity is not effective unless it is approved by the foreign entity
in accordance with the law of the foreign entity’s jurisdiction of formation.
(a) A plan of conversion of a
domestic converting limited liability company may be amended:
(1) in the same
manner as the plan was approved, if the plan does not provide for the manner in
which it may be amended; or
(2) by the mangers or
members of the entity in the manner provided in the plan, but a member that was
entitled to vote on or consent to approval of the conversion is entitled to
vote on or consent to any amendment of the plan that will change:
(A) the
amount or kind of interests, securities, obligations, money, other property,
rights to acquire interests or securities, or any combination of the foregoing,
to be received by any of the interest holders of the converting entity under
the plan;
(B) the
public organic record or private organic rules of the converted entity that
will be in effect immediately after the conversion becomes effective, except
for changes that do not require approval of the interest holders of the
converted entity under its organic law or organic rules; or
(C) any
other terms or conditions of the plan, if the change would adversely affect the
interest holder in any material respect.
(b) After a plan of conversion
has been approved by a domestic converting limited liability company and before
a statement of conversion becomes effective, the plan may be abandoned as
provided in the plan. Unless prohibited
by the plan, a domestic converting limited liability company may abandon the plan
in the same manner as the plan was approved.
(c) If a plan of conversion is
abandoned after a statement of conversion has been delivered to the [Secretary
of State] for filing and before the filing becomes effective, a statement of
abandonment, signed by the converting entity, must be delivered to the
[Secretary of State] for filing before the time the statement of conversion
becomes effective. The statement of
abandonment takes effect upon filing, and the conversion is abandoned and does
not become effective. The statement of
abandonment must contain:
(1) the name of the
converting limited liability company;
(2) the date on which
the statement of conversion was delivered to the [Secretary of State] for
filing; and
(3) a statement that
the conversion has been abandoned in accordance with this section.
(a) A statement of conversion
must be signed by the converting entity and delivered to the [Secretary of
State] for filing.
(b) A statement of conversion must
contain:
(1) the name,
jurisdiction of formation, and type of the converting entity;
(2) the name,
jurisdiction of formation, and type of the converted entity;
(3) if the converting
entity is a domestic entity, a statement that the plan of conversion was
approved in accordance with this [part] or, if the converting entity is a
foreign entity, a statement that the conversion was approved by the foreign
converting entity in accordance with the law of its jurisdiction of formation;
(4) if the converted
entity is a domestic filing entity, the text of its public organic record, as
an attachment;
(5) if the converted
entity is a domestic limited liability partnership, the text of its statement
of qualification, as an attachment; and
(6) if the converted
entity is a foreign entity that is not a registered foreign entity, a mailing
address to which the [Secretary of State] may send any process served on the
[Secretary of State] pursuant to Section 1046(e).
(c) In addition to the
requirements of subsection (b), a statement of conversion may contain any other
provision not prohibited by law.
(d) If a converted entity is a
domestic entity, its public organic record, if any, must satisfy the
requirements of the law of this state, but the public organic record does not
need to be signed.
(e) A plan of conversion that is
signed by a domestic converting entity and meets all the requirements of
subsection (b) may be delivered to the [Secretary of State] for filing instead
of a statement of conversion and upon filing has the same effect. If a plan of conversion is filed as provided
in this subsection, references in this [article] to a statement of conversion
refer to the plan of conversion filed under this subsection.
(a)
When a conversion in which the converted entity is a domestic limited liability
company becomes effective:
(1) the converted
entity is:
(A) organized
under and subject to this [act]; and
(B) the
same entity without interruption as the converting entity;
(2) all property of
the converting entity continues to be vested in the converted entity without
transfer, reversion, or impairment;
(3) all debts,
obligations, and other liabilities of the converting entity continue as debts,
obligations, and other liabilities of the converted entity;
(4) except as
otherwise provided by law or the plan of conversion, all the rights,
privileges, immunities, powers, and purposes of the converting entity remain in
the converted entity;
(5) the name of the
converted entity may be substituted for the name of the converting entity in
any pending action or proceeding;
(6) the provisions of
the operating agreement of the converted entity that are to be in a record, if
any, approved as part of the plan of conversion are effective; and
(7) the interests in
the converting entity are converted, and the interest holders of the converting
entity are entitled only to the rights provided to them under the plan of
conversion and to any appraisal rights they have under Section 1008 and the
converting entity’s organic law.
(b) Except as otherwise provided
in the operating agreement of a domestic converting limited liability company,
the conversion does not give rise to any rights that a member, manager, or
third party would otherwise have upon a dissolution, liquidation, or winding up
of the converting entity.
(c) When a conversion becomes
effective, a person that did not have interest holder liability with respect to
the converting entity and that becomes subject to interest holder liability
with respect to a domestic entity as a result of a conversion has interest
holder liability only to the extent provided by the organic law of the entity
and only for those debts, obligations, and liabilities that arise after the
conversion becomes effective.
(d) When a conversion becomes
effective, the interest holder liability of a person that ceases to hold an
interest in a domestic limited liability company with respect to which the
person had interest holder liability is as follows:
(1) the conversion
does not discharge any interest holder liability to the extent the interest
holder liability arose before the conversion became effective;
(2) the person does
not have interest holder liability for any liability that arises after the
conversion becomes effective; and
(3) the person has
whatever rights of contribution from any other person as are provided by law
other than this [act], this [act], or the operating agreement of the converting
entity with respect to any interest holder liability preserved under paragraph
(1) as if the conversion had not occurred.
(e) When a conversion becomes
effective, a foreign entity that is the converted entity may be served with
process in this state for the collection and enforcement of any of its debts,
obligations, and liabilities as provided in Section 118.
(f) If the converting entity is a
registered foreign entity, the registration to do business in this state of the
converting entity is canceled when the conversion becomes effective.
(g) A conversion does not require
the entity to wind up its affairs and does not constitute or cause the
dissolution of the entity.
(a) By complying with this
[part], a domestic limited liability company may become a foreign limited
liability company if the domestication is authorized by the law of the foreign
jurisdiction.
(b) By complying with the
provisions of this [part] applicable to foreign limited liability companies, a
foreign limited liability company may become a domestic limited liability
company if the domestication is authorized by the law of the foreign limited
liability company’s jurisdiction of formation.
(c) If a protected agreement
contains a provision that applies to a merger of a domestic limited liability
company but does not refer to a domestication, the provision applies to a
domestication of the limited liability company as if the domestication were a
merger until the provision is amended after [the effective date of this [act]].
(a) A domestic limited liability
company may become a foreign limited liability company in a domestication by
approving a plan of domestication. The
plan must be in a record and contain:
(1) the name of the
domesticating limited liability company;
(2) the name and
jurisdiction of formation of the domesticated limited liability company;
(3) the manner of
converting the interests in the domesticating limited liability company into
interests, securities, obligations, money, other property, rights to acquire
interests or securities, or any combination of the foregoing;
(4) the proposed certificate
of organization of the domesticated limited liability company;
(5) the full text of
the provisions of the operating agreement of the domesticated limited liability
company that are proposed to be in a record;
(6) the other terms
and conditions of the domestication; and
(7) any other
provision required by the law of this state or the operating agreement of the
domesticating limited liability company.
(b) In addition to the
requirements of subsection (a), a plan of domestication may contain any other
provision not prohibited by law.
(a) A plan of domestication of a
domestic domesticating limited liability company is not effective unless it has
been approved:
(1) by all the
members entitled to vote on or consent to any matter; and
(2) in a record, by
each member that will have interest holder liability for debts, obligations,
and liabilities that arise after the domestication becomes effective, unless:
(A) the
operating agreement of the entity in a record provides for the approval of a
domestication or merger in which some or all of its members become subject to
interest holder liability by the vote or consent of fewer than all the members;
and
(B) the member
voted for or consented in a record to that provision of the operating agreement
or became an interest holder after the adoption of that provision.
(b) A domestication of a foreign
domesticating limited liability company is not effective unless it is approved
in accordance with the law of the foreign limited liability company’s
jurisdiction of formation.
(a) A plan of domestication of a
domestic domesticating limited liability company may be amended:
(1) in the same
manner as the plan was approved, if the plan does not provide for the manner in
which it may be amended; or
(2) by the managers
or members of the limited liability company in the manner provided in the plan,
but a member that was entitled to vote on or consent to approval of the
domestication is entitled to vote on or consent to any amendment of the plan
that will change:
(A)
the amount or kind of interests, securities, obligations, money, other
property, rights to acquire interests or securities, or any combination of the
foregoing, to be received by any of the interest holders of the domesticating
limited liability company under the plan;
(B) the
certificate of organization or operating agreement of the domesticated limited
liability company that will be in effect immediately after the domestication
becomes effective, except for changes that do not require approval of the members
of the domesticated limited liability company under its organic law or
operating agreement; or
(C) any
other terms or conditions of the plan, if the change would adversely affect the
interest holder in any material respect.
(b) After a plan of domestication
has been approved by a domestic domesticating limited liability company and
before a statement of domestication becomes effective, the plan may be
abandoned as provided in the plan.
Unless prohibited by the plan, a domestic domesticating limited
liability company may abandon the plan in the same manner as the plan was
approved.
(c) If a plan of domestication is
abandoned after a statement of domestication has been delivered to the
[Secretary of State] for filing and before the filing becomes effective, a
statement of abandonment, signed by the domesticating limited liability
company, must be delivered to the [Secretary of State] for filing before the
time the statement of domestication becomes effective. The statement of abandonment takes effect
upon filing, and the domestication is abandoned and does not become
effective. The statement of abandonment
must contain:
(1) the name of the
domesticating limited liability company;
(2) the date on which
the statement of domestication was delivered to the [Secretary of State] for
filing; and
(3) a statement that
the domestication has been abandoned in accordance with this section.
(a) A statement of
domestication must be signed by the domesticating limited liability company and
delivered to the [Secretary of State] for filing.
(b) A statement of domestication
must contain:
(1) the name and
jurisdiction of formation of the domesticating limited liability company;
(2) the name and
jurisdiction of formation of the domesticated limited liability company;
(3) if the
domesticating limited liability company is a domestic limited liability
company, a statement that the plan of domestication was approved in accordance
with this [part] or, if the domesticating limited liability company is a
foreign limited liability company, a statement that the domestication was
approved in accordance with the law of its jurisdiction of formation;
(4) the certificate
of organization of the domesticated limited liability company, as an
attachment; and
(5) if the
domesticated foreign limited liability company is not a registered foreign
limited liability company, a mailing address to which the [Secretary of State]
may send any process served on the [Secretary of State] pursuant to Section 1056(e).
(c) In addition to the
requirements of subsection (b), a statement of domestication may contain any
other provision not prohibited by law.
(d) The certificate of
organization of a domesticated domestic limited liability company must satisfy the requirements of the law of
this state, but the certificate does not need to be signed.
(e) A plan of domestication that
is signed by a domesticating domestic limited liability company and meets all the
requirements of subsection (b) may be delivered to the [Secretary of State] for
filing instead of a statement of domestication and upon filing has the same
effect. If a plan of domestication is
filed as provided in this subsection, references in this [article] to a
statement of domestication refer to the plan of domestication filed under this
subsection.
(a) When a domestication becomes
effective:
(1) the domesticated
limited liability company is:
(A) organized
under and subject to the organic law of the domesticated company; and
(B) the
same entity without interruption as the domesticating company;
(2) all property of
the domesticating company continues to be vested in the domesticated company
without transfer, reversion, or impairment;
(3) all debts,
obligations, and other liabilities of the domesticating company continue as
debts, obligations, and other liabilities of the domesticated company;
(4) except as
otherwise provided by law or the plan of domestication, all the rights,
privileges, immunities, powers, and purposes of the domesticating company
remain in the domesticated company;
(5) the name of the
domesticated company may be substituted for the name of the domesticating
company in any pending action or proceeding;
(6) the certificate
of organization of the domesticated company is effective;
(7) the provisions of
operating agreement of the domesticated company that are to be in a record, if
any, approved as part of the plan of domestication are effective; and
(8) the interests in
the domesticating company are converted to the extent and as approved in
connection with the domestication, and the members of the domesticating company
are entitled only to the rights provided to them under the plan of
domestication and to any appraisal rights they have under Section 1008.
(b) Except as otherwise provided
in the organic law or operating agreement of the domesticating limited
liability company, the domestication does not give rise to any rights that a
member, manager, or third party would otherwise have upon a dissolution,
liquidation, or winding up of the domesticating company.
(c) When a domestication becomes
effective, a person that did not have interest holder liability with respect to
the domesticating limited liability company and that becomes subject to
interest holder liability with respect to a domestic company as a result of the
domestication has interest holder liability only to the extent provided by the
organic law of the domestic company and only for those debts, obligations, and
other liabilities that arise after the domestication becomes effective.
(d) When a domestication becomes
effective:
(1) The domestication
does not discharge any interest holder liability under this [act] to the extent
the interest holder liability arose before the domestication became effective.
(2) A person does not
have interest holder liability under this [article] for any debts, obligations,
and other liabilities that arise after the domestication becomes effective.
(3) A person has
whatever rights of contribution from any other person as are provided by law other
than this [act], this [act], or the operating agreement of a domestic
domesticating limited liability company with respect to any interest holder
liability preserved under paragraph (1) as if the domestication had not
occurred.
(e) When a domestication becomes
effective, a foreign limited liability company that is the domesticated company
may be served with process in this state for the collection and enforcement of
any of its debts, obligations, and
liabilities as provided in Section 118.
(f) If the domesticating limited
liability company is a registered foreign limited liability company, the
registration of the company is canceled when the domestication becomes effective.
(g) A domestication does not
require the limited liability company to wind up its affairs and does not
constitute or cause the dissolution of the company.
[ARTICLE]
11
SECTION
1101. UNIFORMITY OF APPLICATION AND
CONSTRUCTION. In applying and
construing this uniform act, consideration must be given to the need to promote
uniformity of the law with respect to its subject matter among states that
enact it.
SECTION 1102. SEVERABILITY CLAUSE.
If any provision of this [act] or its application to any person or
circumstance is held invalid, the invalidity does not affect other provisions
or applications of this [act] which can be given effect without the invalid
provision or application, and to this end the provisions of this [act] are
severable.
Legislative Note:
Include this section only if this state lacks a general severability
statute or decision by the highest court of this state stating a general rule
of severability.
SECTION 1102
1103. RELATION TO ELECTRONIC
SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. This [act] modifies, limits, and or
supersedes the federal Electronic Signatures in Global and National
Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or
supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize
electronic delivery of any of the notices described in Section 103(b) of that
act, 15 U.S.C. Section 7003(b).
SECTION 1103
1104. SAVINGS CLAUSE. This [act] does not affect an action
commenced, proceeding brought, or right accrued before [the effective date
of this [act]] takes effect.
(a) Before [all-inclusive date], this [act] governs only:
(1) a limited liability company formed on or
after [the effective date of this act];
and
(2) except as otherwise provided in
subsection (c), a limited liability company formed before [the effective date
of this act] which elects, in the manner provided in its operating agreement or
by law for amending the operating agreement, to be subject to this [act].
(b) Except as otherwise provided in subsection (c), on
and after [all-inclusive date] this [act] governs all limited liability
companies.
(c) For the purposes applying this [act] to a limited
liability company formed before [the effective date of this act]:
(1) the company’s articles of organization
are deemed to be the company’s certificate of organization; and
(2) for the purposes of applying Section
102(10) and subject to Section 112(d), language in the company’s articles of
organization designating the company’s management structure operates as if that
language were in the operating agreement.
Legislative Note: It
is recommended that the “all-inclusive” date should be at least one year after
the date of enactment but no longer than two years.
Each enacting
jurisdiction should consider whether:
(i) this Act makes material changes to the “default” (or “gap filler”)
rules of jurisdiction’s predecessor statute; and (ii) if so, whether subsection
(c) should carry forward any of those rules for pre-existing limited liability
companies. In this assessment, the focus
is on pre-existing limited liability companies that have left default rules in
place, whether advisedly or not. The
central question is whether, for such limited liability companies, expanding
subsection (c) is necessary to prevent material changes to the members’ “deal.”
For an example of this
type of analysis in the context of another business entity act, see the Uniform
Limited Partnership Act (2001), § 1206(c).
Section 301
(de-codifying statutory apparent authority) does not require any special
transition provisions, because: (i)
applying the law of agency, as explained in the Comments to Sections 301 and
407, will produce appropriate results; and (ii) the notion of “lingering
apparent authority” will protect any third party that has previously relied on
the statutory apparent authority of a member of a particular member-managed LLC
or a manager of a particular manager-managed LLC. Restatement
(Third) Of Agency § 3.11, cmt. c (2006).
It is unnecessary
to expand subsection (c) of this Act if the state’s predecessor act is the
original Uniform Limited Liability Company Act, revised to provide for
perpetual duration.
SECTION 1105
1106. REPEALS. Effective [all-inclusive date], the The
following acts and parts of acts are repealed: [the state limited
liability company act, as amended, and in effect immediately before the
effective date of this act].
(1) [the state limited liability company act, as
[amended, and as] in effect immediately before [the effective date of this
[act]];
(2) . . . .
(3) . . . .
SECTION 1106
1107. EFFECTIVE DATE. This [act] takes effect on ….
