Connecticut House Bill HB07127

Connecticut 2019 Regular Session

• Introduced: 2/14/19
• Refer: 2/14/19
• Report Pass: 4/8/19
• Refer: 4/22/19
• Report Pass: 4/29/19
• Refer: 5/10/19
• Report Pass: 5/13/19

Caption

An Act Concerning The Uniform Protected Series Act.

Impact

The implementation of HB 07127 will significantly alter how LLCs operate within Connecticut's business landscape. By creating a legal status for protected series, the bill aims to shield individual assets against liabilities arising from other series within the same LLC. This can lead to more efficient risk management for business owners, allowing them to segregate assets and liabilities effectively. The success of this legislation could serve as a model for other states looking to modernize their business laws regarding LLC structures and liabilities.

Summary

House Bill 07127, known as the Uniform Protected Series Act, aims to establish a legal framework for the creation of protected series within limited liability companies (LLCs). This bill allows LLCs to create separate protected series that can have their own assets and liabilities, effectively treating them as distinct entities under the law. The primary goal of the bill is to enhance the flexibility and protection for businesses, particularly in the context of liability and asset management, thus promoting economic growth and protection of business interests in Connecticut.

Sentiment

Overall, the sentiment towards the bill appears to be favorable, particularly among business owners and advocates for corporate flexibility. Supporters argue that the creation of protected series will reduce the risk for entrepreneurs and small businesses, enabling them to operate more effectively and with greater confidence. However, there are concerns among some regulatory bodies about the implications of such separations and the potential for misuse in evading liability. Nonetheless, the bill has garnered substantial support in legislative discussions, indicating a strong legislative intent to facilitate business growth in Connecticut.

Contention

Notable points of contention surrounding HB 07127 revolve around the potential complexities it introduces into the business landscape. Critics argue that while the intention to provide asset protection is valid, it could complicate regulatory oversight and lead to challenges in accountability. There are also fears that businesses might exploit this new structure to shield assets inappropriately. Legislative debates highlighted the need for balancing enhanced business flexibility with the enforcement of regulatory compliance to prevent misuse of the protections offered under the bill.