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Connecticut House Bill HB07127

Connecticut 2019 Regular Session

Connecticut House Bill HB07127 Compare Versions

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77 General Assembly Substitute Bill No. 7127
88 January Session, 2019
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1212 AN ACT CONCERNING TH E UNIFORM PROTECTED SERIES ACT.
1313 Be it enacted by the Senate and House of Representatives in General
1414 Assembly convened:
1515
1616 Section 1. (NEW) (Effective October 1, 2019) Sections 1 to 42, 1
1717 inclusive, of this act may be cited as the Uniform Protected Series Act. 2
1818 Sec. 2. (NEW) (Effective October 1, 2019) As used in sections 1 to 42, 3
1919 inclusive, of this act: 4
2020 (1) "Asset" means property: (A) In which a series limited liability 5
2121 company or protected series has rights; or (B) as to which the company 6
2222 or protected series has the power to transfer rights. 7
2323 (2) "Associated asset" means an asset that meets the requirements of 8
2424 section 15 of this act. 9
2525 (3) "Associated member" means a member that meets the 10
2626 requirements of section 16 of this act. 11
2727 (4) "Foreign protected series" means an arrangement, configuration 12
2828 or other structure established by a foreign limited liability company 13
2929 which has attributes comparable to a protected series established 14
3030 under sections 1 to 42, inclusive, of this act. "Foreign protected series" 15
3131 applies whether or not the law under which the foreign company is 16
3232 organized refers to "protected series". 17
3333 (5) "Foreign series limited liability company" means a foreign 18 Substitute Bill No. 7127
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4040 limited liability company that has at least one foreign protected series. 19
4141 (6) "Non-associated asset" means: 20
4242 (A) An asset of a series limited liability company which is not an 21
4343 associated asset of the company; or 22
4444 (B) An asset of a protected series of the company which is not an 23
4545 associated asset of the protected series. 24
4646 (7) "Person" includes a protected series. 25
4747 (8) "Protected series", except in the phrase "foreign protected series", 26
4848 means a protected series established under section 9 of this act. 27
4949 (9) "Protected-series manager" means a person under whose 28
5050 authority the powers of a protected series are exercised and under 29
5151 whose direction the activities and affairs of the protected series are 30
5252 managed under the operating agreement, sections 1 to 42, inclusive, of 31
5353 this act and chapter 613a of the general statutes. 32
5454 (10) "Protected-series transferable interest" means a right to receive a 33
5555 distribution from a protected series. 34
5656 (11) "Protected-series transferee" means a person to which all or part 35
5757 of a protected-series transferable interest of a protected series of a 36
5858 series limited liability company has been transferred, other than the 37
5959 company. "Protected-series transferee" includes a person that owns a 38
6060 protected-series transferable interest as a result of ceasing to be an 39
6161 associated member of a protected series. 40
6262 (12) "Series limited liability company", except in the phrase "foreign 41
6363 series limited liability company", means a limited liability company 42
6464 that has at least one protected series. 43
6565 Sec. 3. (NEW) (Effective October 1, 2019) A protected series of a series 44
6666 limited liability company is a person distinct from: 45 Substitute Bill No. 7127
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7373 (1) The company, subject to subsection (c) of section 4 of this act, 46
7474 subdivision (1) of section 24 of this act and subsection (d) of section 25 47
7575 of this act; 48
7676 (2) Another protected series of the company; 49
7777 (3) A member of the company, whether or not the member is an 50
7878 associated member of the protected series; 51
7979 (4) A protected-series transferee of a protected series of the 52
8080 company; and 53
8181 (5) A transferee of a transferable interest of the company. 54
8282 Sec. 4. (NEW) (Effective October 1, 2019) (a) A protected series of a 55
8383 series limited liability company has the capacity to sue and be sued in 56
8484 its own name. 57
8585 (b) Except as otherwise provided in subsections (c) and (d) of this 58
8686 section, a protected series of a series limited liability company has the 59
8787 same powers and purposes as the company. 60
8888 (c) A protected series of a series limited liability company ceases to 61
8989 exist not later than when the company completes its winding up. 62
9090 (d) A protected series of a series limited liability company may not: 63
9191 (1) Be a member of the company; 64
9292 (2) Establish a protected series; or 65
9393 (3) Except as permitted by law of this state other than sections 1 to 66
9494 42, inclusive, of this act, have a purpose or power that the law of this 67
9595 state other than sections 1 to 42, inclusive, of this act prohibits a limited 68
9696 liability company from doing or having. 69
9797 Sec. 5. (NEW) (Effective October 1, 2019) The law of this state governs: 70
9898 (1) The internal affairs of a protected series of a series limited 71 Substitute Bill No. 7127
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105105 liability company, including: 72
106106 (A) Relations among any associated members of the protected 73
107107 series; 74
108108 (B) Relations between the protected series and: (i) Any associated 75
109109 member; (ii) the protected-series manager; or (iii) any protected-series 76
110110 transferee; 77
111111 (C) Relations between any associated member and: (i) The 78
112112 protected-series manager; or (ii) any protected-series transferee; 79
113113 (D) The rights and duties of a protected-series manager; 80
114114 (E) Governance decisions affecting the activities and affairs of the 81
115115 protected series and the conduct of those activities and affairs; and 82
116116 (F) Procedures and conditions for becoming an associated member 83
117117 or a protected-series transferee; 84
118118 (2) The relations between a protected series of a series limited 85
119119 liability company and each of the following: 86
120120 (A) The company; 87
121121 (B) Another protected series of the company; 88
122122 (C) A member of the company which is not an associated member of 89
123123 the protected series; 90
124124 (D) A protected-series manager that is not a protected-series 91
125125 manager of the protected series; and 92
126126 (E) A protected-series transferee that is not a protected-series 93
127127 transferee of the protected series; 94
128128 (3) The liability of a person for a debt, obligation or other liability of 95
129129 a protected series of a series limited liability company if the debt, 96
130130 obligation or liability is asserted solely by reason of the person being or 97 Substitute Bill No. 7127
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137137 acting as: 98
138138 (A) An associated member, a protected-series transferee or a 99
139139 protected-series manager of the protected series; 100
140140 (B) A member of the company which is not an associated member of 101
141141 the protected series; 102
142142 (C) A protected-series manager that is not a protected-series 103
143143 manager of the protected series; 104
144144 (D) A protected-series transferee that is not a protected-series 105
145145 transferee of the protected series; 106
146146 (E) A manager of the company; or 107
147147 (F) A transferee of a transferable interest of the company; 108
148148 (4) The liability of a series limited liability company for a debt, 109
149149 obligation or other liability of a protected series of the company if the 110
150150 debt, obligation or liability is asserted solely by reason of the company: 111
151151 (A) Having delivered to the Secretary of the State for filing (i) under 112
152152 subsection (b) of section 9 of this act, a protected series designation 113
153153 pertaining to the protected series, or (ii) under subsection (d) of section 114
154154 9 of this act or subsection (c) of section 10 of this act, a certificate of 115
155155 designation change pertaining to the protected series; 116
156156 (B) Being or acting as a protected-series manager of the protected 117
157157 series; 118
158158 (C) Having the protected series be or act as a manager of the 119
159159 company; or 120
160160 (D) Owning a protected-series transferable interest of the protected 121
161161 series; and 122
162162 (5) The liability of a protected series of a series limited liability 123 Substitute Bill No. 7127
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169169 company for a debt, obligation or other liability of the company or of 124
170170 another protected series of the company if the debt, obligation or 125
171171 liability is asserted solely by reason of: 126
172172 (A) The protected series: (i) Being a protected series of the company 127
173173 or having as a protected-series manager the company or another 128
174174 protected series of the company; or (ii) being or acting as a protected-129
175175 series manager of another protected series of the company or a 130
176176 manager of the company; or 131
177177 (B) The company owning a protected-series transferable interest of 132
178178 the protected series. 133
179179 Sec. 6. (NEW) (Effective October 1, 2019) (a) Except as otherwise 134
180180 provided in this section and subject to sections 7 and 8 of this act, the 135
181181 operating agreement of a series limited liability company governs: 136
182182 (1) The internal affairs of a protected series, including: 137
183183 (A) Relations among any associated members of the protected 138
184184 series; 139
185185 (B) Relations between the protected series and: (i) Any associated 140
186186 member; (ii) the protected-series manager; or (iii) any protected-series 141
187187 transferee; 142
188188 (C) Relations between any associated member and: (i) The 143
189189 protected-series manager; or (ii) any protected-series transferee; 144
190190 (D) The rights and duties of a protected-series manager; 145
191191 (E) Governance decisions affecting the activities and affairs of the 146
192192 protected series and the conduct of those activities and affairs; and 147
193193 (F) Procedures and conditions for becoming an associated member 148
194194 or protected-series transferee; 149
195195 (2) Relations among the protected series, the company and any 150 Substitute Bill No. 7127
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202202 other protected series of the company; 151
203203 (3) Relations between: 152
204204 (A) The protected series, its protected-series manager, any 153
205205 associated member of the protected series or any protected-series 154
206206 transferee of the protected series; and 155
207207 (B) A person in the person's capacity as: (i) A member of the 156
208208 company which is not an associated member of the protected series; 157
209209 (ii) a protected-series transferee or protected-series manager of another 158
210210 protected series; or (iii) a transferee of the company. 159
211211 (b) If any provision of chapter 613a of the general statutes restricts 160
212212 the power of an operating agreement to affect a matter, the restriction 161
213213 applies to a matter under sections 1 to 42, inclusive, of this act in 162
214214 accordance with section 8 of this act. 163
215215 (c) If law of this state other than sections 1 to 42, inclusive, of this act 164
216216 imposes a prohibition, limitation, requirement, condition, obligation, 165
217217 liability or other restriction on a limited liability company, a member, 166
218218 manager or other agent of the company, or a transferee of the 167
219219 company, except as otherwise provided in law of this state other than 168
220220 sections 1 to 42, inclusive, of this act, the restriction applies in 169
221221 accordance with section 8 of this act. 170
222222 (d) Except as otherwise provided in section 7 of this act, if the 171
223223 operating agreement of a series limited liability company does not 172
224224 provide for a matter described in subsection (a) of this section in a 173
225225 manner permitted by sections 1 to 42, inclusive, of this act, the matter 174
226226 is determined in accordance with the following rules: 175
227227 (1) To the extent sections 1 to 42, inclusive, of this act address the 176
228228 matter, sections 1 to 42, inclusive, of this act govern. 177
229229 (2) To the extent sections 1 to 42, inclusive, of this act do not address 178
230230 the matter, chapter 613a of the general statutes governs the matter in 179 Substitute Bill No. 7127
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237237 accordance with section 8 of this act. 180
238238 Sec. 7. (NEW) (Effective October 1, 2019) (a) An operating agreement 181
239239 may not vary the effect of: 182
240240 (1) This section; 183
241241 (2) Section 3 of this act; 184
242242 (3) Subsection (a) of section 4 of this act; 185
243243 (4) Subsection (b) of section 4 of this act to provide a protected series 186
244244 a power beyond the powers chapter 613a of the general statutes 187
245245 provides a limited liability company; 188
246246 (5) Subsection (c) or (d) of section 4 of this act; 189
247247 (6) Section 5 of this act; 190
248248 (7) Section 6 of this act; 191
249249 (8) Section 8 of this act; 192
250250 (9) Section 9 of this act, except to vary the manner in which a limited 193
251251 liability company approves establishing a protected series; 194
252252 (10) Section 10 of this act; 195
253253 (11) Section 15 of this act; 196
254254 (12) Section 16 of this act; 197
255255 (13) Subsection (a) or (b) of section 17 of this act; 198
256256 (14) Subsection (c) or (f) of section 18 of this act; 199
257257 (15) Section 20 of this act, except to decrease or eliminate a limitation 200
258258 of liability stated in section 20 of this act; 201
259259 (16) Section 21 of this act; 202 Substitute Bill No. 7127
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266266 (17) Section 22 of this act; 203
267267 (18) Section 23 of this act; 204
268268 (19) Subdivisions (1), (4) and (5) of section 24 of this act; 205
269269 (20) Section 25 of this act, except to designate a different person to 206
270270 manage winding up; 207
271271 (21) Section 26 of this act; 208
272272 (22) Sections 27 to 34, inclusive, of this act; 209
273273 (23) Sections 35 to 38, inclusive, of this act; 210
274274 (24) Sections 39 to 42, inclusive, of this act; or 211
275275 (25) A provision of sections 1 to 42, inclusive, of this act pertaining 212
276276 to: 213
277277 (A) Registered agents; or 214
278278 (B) The Secretary of the State, including provisions pertaining to 215
279279 records authorized or required to be delivered to the Secretary of the 216
280280 State for filing under sections 1 to 42, inclusive, of this act. 217
281281 (b) An operating agreement may not unreasonably restrict the 218
282282 duties and rights under section 19 of this act but may impose 219
283283 reasonable restrictions on the availability and use of information 220
284284 obtained under section 19 of this act and may provide appropriate 221
285285 remedies, including liquidated damages, for a breach of any 222
286286 reasonable restriction on use. 223
287287 Sec. 8. (NEW) (Effective October 1, 2019) (a) Except as otherwise 224
288288 provided in subsection (b) of this section and section 7 of this act, the 225
289289 following rules apply in applying section 6 of this act, subsections (c) 226
290290 and (f) of section 18 of this act, subparagraph (A) of subdivision (4) of 227
291291 section 24 of this act, subsection (a) of section 25 of this act, and 228 Substitute Bill No. 7127
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298298 subdivision (2) of section 26 of this act: 229
299299 (1) A protected series of a series limited liability company is deemed 230
300300 to be a limited liability company that is formed separately from the 231
301301 series limited liability company and is distinct from the series limited 232
302302 liability company and any other protected series of the series limited 233
303303 liability company. 234
304304 (2) An associated member of the protected series is deemed to be a 235
305305 member of the company deemed to exist under subdivision (1) of this 236
306306 subsection. 237
307307 (3) A protected-series transferee of the protected series is deemed to 238
308308 be a transferee of the company deemed to exist under subdivision (1) 239
309309 of this subsection. 240
310310 (4) A protected-series transferable interest of the protected series is 241
311311 deemed to be a transferable interest of the company deemed to exist 242
312312 under subdivision (1) of this subsection. 243
313313 (5) A protected-series manager is deemed to be a manager of the 244
314314 company deemed to exist under subdivision (1) of this subsection. 245
315315 (6) An asset of the protected series is deemed to be an asset of the 246
316316 company deemed to exist under subdivision (1) of this subsection, 247
317317 whether or not the asset is an associated asset of the protected series. 248
318318 (7) Any creditor or other obligee of the protected series is deemed to 249
319319 be a creditor or obligee of the company deemed to exist under 250
320320 subdivision (1) of this subsection. 251
321321 (b) Subsection (a) of this section does not apply if its application 252
322322 would: 253
323323 (1) Contravene the provisions of section 34-243d of the general 254
324324 statutes; or 255
325325 (2) Authorize or require the Secretary of the State to: 256 Substitute Bill No. 7127
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332332 (A) Accept for filing a type of record that neither sections 1 to 42, 257
333333 inclusive, of this act nor chapter 613a of the general statutes authorizes 258
334334 or requires a person to deliver to the Secretary of the State for filing; or 259
335335 (B) Make or deliver a record that neither sections 1 to 42, inclusive, 260
336336 of this act nor chapter 613a of the general statutes authorizes or 261
337337 requires the Secretary of the State to make or deliver. 262
338338 Sec. 9. (NEW) (Effective October 1, 2019) (a) With the affirmative vote 263
339339 or consent of all members of a limited liability company, the company 264
340340 may establish a protected series. 265
341341 (b) To establish a protected series, a limited liability company shall 266
342342 deliver to the Secretary of the State for filing a protected series 267
343343 designation, signed by the company, stating the name of the company 268
344344 and the name of the protected series to be established. 269
345345 (c) A protected series is established when the protected series 270
346346 designation takes effect under section 34-247f of the general statutes, as 271
347347 amended by this act. 272
348348 (d) To amend a protected series designation, a series limited liability 273
349349 company shall deliver to the Secretary of the State for filing a 274
350350 certificate of designation change, signed by the company, that changes 275
351351 the name of the company, the name of the protected series to which the 276
352352 designation applies, or both. The change takes effect when the 277
353353 certificate of designation change takes effect under section 34-247f of 278
354354 the general statutes, as amended by this act. 279
355355 Sec. 10. (NEW) (Effective October 1, 2019) (a) Except as otherwise 280
356356 provided in subsection (b) of this section, the name of a protected 281
357357 series shall comply with section 34-243k of the general statutes. 282
358358 (b) The name of a protected series of a series limited liability 283
359359 company shall: 284
360360 (1) Begin with the name of the company, including any word or 285 Substitute Bill No. 7127
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367367 abbreviation required by subsection (a) of section 34-243k of the 286
368368 general statutes; and 287
369369 (2) Contain the phrase "Protected Series" or "protected series" or the 288
370370 abbreviation "P.S." or "PS". 289
371371 (c) If a series limited liability company changes its name, the 290
372372 company shall deliver to the Secretary of the State for filing a 291
373373 certificate of designation change for each of the company's protected 292
374374 series, changing the name of each protected series to comply with this 293
375375 section. 294
376376 Sec. 11. (NEW) (Effective October 1, 2019) (a) The registered agent in 295
377377 this state for a series limited liability company is the registered agent in 296
378378 this state for each protected series of the company. 297
379379 (b) Before delivering a protected series designation to the Secretary 298
380380 of the State for filing, a limited liability company shall agree with a 299
381381 registered agent that the agent will serve as the registered agent in this 300
382382 state for both the company and the protected series. 301
383383 (c) A person that signs a protected series designation delivered to 302
384384 the Secretary of the State for filing affirms as a fact that the limited 303
385385 liability company on whose behalf the designation is delivered has 304
386386 complied with subsection (b) of this section. 305
387387 (d) A person that ceases to be the registered agent for a series 306
388388 limited liability company ceases to be the registered agent for each 307
389389 protected series of the company. 308
390390 (e) A person that ceases to be the registered agent for a protected 309
391391 series of a series limited liability company, other than as a result of the 310
392392 termination of the protected series, ceases to be the registered agent of 311
393393 the company and any other protected series of the company. 312
394394 (f) Except as otherwise agreed by a series limited liability company 313
395395 and its registered agent, the agent is not obligated to distinguish 314 Substitute Bill No. 7127
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402402 between a process, notice, demand or other record concerning the 315
403403 company and a process, notice, demand or other record concerning a 316
404404 protected series of the company. 317
405405 Sec. 12. (NEW) (Effective October 1, 2019) (a) A protected series of a 318
406406 series limited liability company may be served with a process, notice, 319
407407 demand or other record required or permitted by law by: 320
408408 (1) Serving the company; 321
409409 (2) Serving the registered agent of the protected series; or 322
410410 (3) Other means authorized by law of this state other than chapter 323
411411 613a of the general statutes. 324
412412 (b) Service of a summons and complaint on a series limited liability 325
413413 company is notice to each protected series of the company of service of 326
414414 the summons and complaint and the contents of the complaint. 327
415415 (c) Service of a summons and complaint on a protected series of a 328
416416 series limited liability company is notice to the company and any other 329
417417 protected series of the company of service of the summons and 330
418418 complaint and the contents of the complaint. 331
419419 (d) Service of a summons and complaint on a foreign series limited 332
420420 liability company is notice to each foreign protected series of the 333
421421 foreign company of service of the summons and complaint and the 334
422422 contents of the complaint. 335
423423 (e) Service of a summons and complaint on a foreign protected 336
424424 series of a foreign series limited liability company is notice to the 337
425425 foreign company and any other foreign protected series of the 338
426426 company of service of the summons and complaint and the contents of 339
427427 the complaint. 340
428428 (f) Notice to a person under subsection (b), (c), (d) or (e) of this 341
429429 section is effective whether or not the summons and complaint identify 342 Substitute Bill No. 7127
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436436 the person if the summons and complaint name as a party and 343
437437 identify: 344
438438 (1) The series limited liability company or a protected series of the 345
439439 company; or 346
440440 (2) The foreign series limited liability company or a foreign 347
441441 protected series of the foreign company. 348
442442 Sec. 13. (NEW) (Effective October 1, 2019) (a) On request of any 349
443443 person, the Secretary of the State shall issue a certificate of legal 350
444444 existence for a protected series of a series limited liability company or a 351
445445 certificate of registration for a foreign protected series if: 352
446446 (1) In the case of a protected series: 353
447447 (A) No certificate of dissolution, termination or relocation 354
448448 pertaining to the protected series has been filed; and 355
449449 (B) The company has delivered to the Secretary of the State for filing 356
450450 the most recent annual report required by section 34-247k of the 357
451451 general statutes and the report includes the name of the protected 358
452452 series, unless: (i) When the company delivered the report for filing, the 359
453453 protected series designation pertaining to the protected series had not 360
454454 yet taken effect; or (ii) after the company delivered the report for filing, 361
455455 the company delivered to the Secretary of the State for filing a 362
456456 certificate of designation change changing the name of the protected 363
457457 series; or 364
458458 (2) In the case of a foreign protected series, it is registered to do 365
459459 business in this state. 366
460460 (b) A certificate issued under subsection (a) of this section shall 367
461461 state: 368
462462 (1) In the case of a protected series: 369
463463 (A) The name of the protected series of the series limited liability 370 Substitute Bill No. 7127
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470470 company and the name of the company; 371
471471 (B) That the requirements of subsection (a) of this section are met; 372
472472 (C) The date the protected series designation pertaining to the 373
473473 protected series took effect; and 374
474474 (D) If a certificate of designation change pertaining to the protected 375
475475 series has been filed, the effective date and contents of the certificate; 376
476476 (2) In the case of a foreign protected series, that it is registered to do 377
477477 business in this state; 378
478478 (3) That the fees, taxes, interest and penalties owed to this state by 379
479479 the protected series or foreign protected series and collected through 380
480480 the Secretary of the State have been paid, if: 381
481481 (A) Payment is reflected in the records of the Secretary of the State; 382
482482 and 383
483483 (B) Nonpayment affects the good standing of the protected series; 384
484484 and 385
485485 (4) Other facts reflected in the records of the Secretary of the State 386
486486 pertaining to the protected series or foreign protected series which the 387
487487 person requesting the certificate reasonably requests. 388
488488 (c) Subject to any qualification stated by the Secretary of the State in 389
489489 a certificate issued under subsection (a) of this section, the certificate 390
490490 may be relied on as conclusive evidence of the facts stated in the 391
491491 certificate. 392
492492 Sec. 14. (NEW) (Effective October 1, 2019) (a) In the annual report 393
493493 required by section 34-247k of the general statutes, a series limited 394
494494 liability company shall include the name of each protected series of the 395
495495 company: 396
496496 (1) For which the company has previously delivered to the Secretary 397 Substitute Bill No. 7127
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502502
503503 of the State for filing a protected series designation; and 398
504504 (2) Which has not dissolved and completed winding up. 399
505505 (b) A failure by a series limited liability company to comply with 400
506506 subsection (a) of this section with regard to a protected series prevents 401
507507 issuance of a certificate of legal existence pertaining to the protected 402
508508 series but does not otherwise affect the protected series. 403
509509 Sec. 15. (NEW) (Effective October 1, 2019) (a) Only an asset of a 404
510510 protected series may be an associated asset of the protected series. 405
511511 Only an asset of a series limited liability company may be an 406
512512 associated asset of the company. 407
513513 (b) An asset of a protected series of a series limited liability 408
514514 company is an associated asset of the protected series only if the 409
515515 protected series creates and maintains records that state the name of 410
516516 the protected series and describe the asset with sufficient specificity to 411
517517 permit a disinterested, reasonable individual to: 412
518518 (1) Identify the asset and distinguish it from any other asset of the 413
519519 protected series, any asset of the company and any asset of any other 414
520520 protected series of the company; 415
521521 (2) Determine when and from what person the protected series 416
522522 acquired the asset or how the asset otherwise became an asset of the 417
523523 protected series; and 418
524524 (3) If the protected series acquired the asset from the company or 419
525525 another protected series of the company, determine any consideration 420
526526 paid, the payor and the payee. 421
527527 (c) An asset of a series limited liability company is an associated 422
528528 asset of the company only if the company creates and maintains 423
529529 records that state the name of the company and describe the asset with 424
530530 sufficient specificity to permit a disinterested, reasonable individual to: 425 Substitute Bill No. 7127
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536536
537537 (1) Identify the asset and distinguish it from any other asset of the 426
538538 company and any asset of any protected series of the company; 427
539539 (2) Determine when and from what person the company acquired 428
540540 the asset or how the asset otherwise became an asset of the company; 429
541541 and 430
542542 (3) If the company acquired the asset from a protected series of the 431
543543 company, determine any consideration paid, the payor and the payee. 432
544544 (d) The records and recordkeeping required by subsections (b) and 433
545545 (c) of this section may be organized by specific listing, category, type, 434
546546 quantity or computational or allocational formula or procedure, 435
547547 including a percentage or share of any asset, or in any other reasonable 436
548548 manner. 437
549549 (e) To the extent permitted by this section and law of this state other 438
550550 than sections 1 to 42, inclusive, of this act, a series limited liability 439
551551 company or protected series of the company may hold an associated 440
552552 asset directly or indirectly, through a representative, nominee or 441
553553 similar arrangement, except that: 442
554554 (1) A protected series may not hold an associated asset in the name 443
555555 of the company or another protected series of the company; and 444
556556 (2) The company may not hold an associated asset in the name of a 445
557557 protected series of the company. 446
558558 Sec. 16. (NEW) (Effective October 1, 2019) (a) Only a member of a 447
559559 series limited liability company may be an associated member of a 448
560560 protected series of the company. 449
561561 (b) A member of a series limited liability company becomes an 450
562562 associated member of a protected series of the company if the 451
563563 operating agreement or a procedure established by the agreement 452
564564 states: 453 Substitute Bill No. 7127
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570570
571571 (1) That the member is an associated member of the protected series; 454
572572 (2) The date on which the member became an associated member; 455
573573 and 456
574574 (3) Any protected-series transferable interest the associated member 457
575575 has in connection with becoming or being an associated member. 458
576576 (c) If a person that is an associated member of a protected series of a 459
577577 series limited liability company is dissociated from the company, the 460
578578 person ceases to be an associated member of the protected series. 461
579579 Sec. 17. (NEW) (Effective October 1, 2019) (a) A protected-series 462
580580 transferable interest of a protected series of a series limited liability 463
581581 company shall be owned initially by an associated member of the 464
582582 protected series or the company. 465
583583 (b) If a protected series of a series limited liability company has no 466
584584 associated members when established, the company owns the 467
585585 protected-series transferable interests of the protected series. 468
586586 (c) In addition to acquiring a protected-series transferable interest of 469
587587 the protected series under subsection (b) of this section, a series limited 470
588588 liability company may acquire a protected-series transferable interest 471
589589 through a transfer from another person or as provided in the operating 472
590590 agreement. 473
591591 (d) Except for subdivision (3) of subsection (a) of section 8 of this 474
592592 act, a provision of sections 1 to 42, inclusive, of this act that applies to a 475
593593 protected-series transferee of a protected series of a series limited 476
594594 liability company applies to the company in its capacity as an owner of 477
595595 a protected-series transferable interest of the protected series. A 478
596596 provision of the operating agreement of a series limited liability 479
597597 company that applies to a protected-series transferee of a protected 480
598598 series of the company applies to the company in its capacity as an 481
599599 owner of a protected-series transferable interest of the protected series. 482 Substitute Bill No. 7127
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606606 Sec. 18. (NEW) (Effective October 1, 2019) (a) A protected series may 483
607607 have more than one protected-series manager. 484
608608 (b) If a protected series has no associated members, the series 485
609609 limited liability company is the protected-series manager. 486
610610 (c) Section 8 of this act applies to determine any duties of a 487
611611 protected-series manager of a protected series of a series limited 488
612612 liability company to: 489
613613 (1) The protected series; 490
614614 (2) Any associated member of the protected series; and 491
615615 (3) Any protected-series transferee of the protected series. 492
616616 (d) Solely by reason of being or acting as a protected-series manager 493
617617 of a protected series of a series limited liability company, a person 494
618618 owes no duty to: 495
619619 (1) The company; 496
620620 (2) Another protected series of the company; or 497
621621 (3) Another person in that person's capacity as: 498
622622 (A) A member of the company which is not an associated member 499
623623 of the protected series; 500
624624 (B) A protected-series transferee or protected-series manager of 501
625625 another protected series; or 502
626626 (C) A transferee of the company. 503
627627 (e) An associated member of a protected series of a series limited 504
628628 liability company has the same rights as any other member of the 505
629629 company to vote on or consent to an amendment to the company's 506
630630 operating agreement or any other matter being decided by the 507
631631 members, whether or not the amendment or matter affects the interests 508 Substitute Bill No. 7127
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637637
638638 of the protected series or the associated member. 509
639639 (f) Part VIII of chapter 613a of the general statutes applies to a 510
640640 protected series in accordance with section 8 of this act. 511
641641 Sec. 19. (NEW) (Effective October 1, 2019) (a) A member of a series 512
642642 limited liability company which is not an associated member of a 513
643643 protected series of the company has a right to information concerning 514
644644 the protected series to the same extent, in the same manner and under 515
645645 the same conditions that a member that is not a manager of a manager-516
646646 managed limited liability company has a right to information 517
647647 concerning the company under section 34-255i of the general statutes. 518
648648 (b) A person that was formerly an associated member of a protected 519
649649 series has a right to information concerning the protected series to the 520
650650 same extent, in the same manner and under the same conditions that a 521
651651 person dissociated as a member of a manager-managed limited 522
652652 liability company has a right to information concerning the company 523
653653 under section 34-255i of the general statutes. 524
654654 (c) If an associated member of a protected series dies, the legal 525
655655 representative of the deceased associated member has a right to 526
656656 information concerning the protected series to the same extent, in the 527
657657 same manner and under the same conditions that the legal 528
658658 representative of a deceased member of a limited liability company has 529
659659 a right to information concerning the company under section 34-255i of 530
660660 the general statutes. 531
661661 (d) A protected-series manager of a protected series has a right to 532
662662 information concerning the protected series to the same extent, in the 533
663663 same manner and under the same conditions that a manager of a 534
664664 manager-managed limited liability company has a right to information 535
665665 concerning the company under section 34-255i of the general statutes. 536
666666 Sec. 20. (NEW) (Effective October 1, 2019) (a) A person is not liable, 537
667667 directly or indirectly, by way of contribution or otherwise, for a debt, 538
668668 obligation or other liability of: 539 Substitute Bill No. 7127
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674674
675675 (1) A protected series of a series limited liability company solely by 540
676676 reason of being or acting as: (A) An associated member, a series 541
677677 manager or a protected-series transferee of the protected series; or (B) a 542
678678 member, manager or transferee of the company; or 543
679679 (2) A series limited liability company solely by reason of being or 544
680680 acting as an associated member, a protected-series manager or a 545
681681 protected-series transferee of a protected series of the company. 546
682682 (b) Subject to section 23 of this act, the following rules apply: 547
683683 (1) A debt, obligation or other liability of a series limited liability 548
684684 company is solely the debt, obligation or liability of the company. 549
685685 (2) A debt, obligation or other liability of a protected series is solely 550
686686 the debt, obligation or liability of the protected series. 551
687687 (3) A series limited liability company is not liable, directly or 552
688688 indirectly, by way of contribution or otherwise, for a debt, obligation 553
689689 or other liability of a protected series of the company solely by reason 554
690690 of the protected series being a protected series of the company or the 555
691691 company: 556
692692 (A) Being or acting as a protected-series manager of the protected 557
693693 series; 558
694694 (B) Having the protected series manage the company; or 559
695695 (C) Owning a protected-series transferable interest of the protected 560
696696 series. 561
697697 (4) A protected series of a series limited liability company is not 562
698698 liable, directly or indirectly, by way of contribution or otherwise, for a 563
699699 debt, obligation or other liability of the company or another protected 564
700700 series of the company solely by reason of: 565
701701 (A) Being a protected series of the company; 566 Substitute Bill No. 7127
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707707
708708 (B) Being or acting as a manager of the company or a protected-567
709709 series manager of another protected series of the company; or 568
710710 (C) Having the company or another protected series of the company 569
711711 be or act as a protected-series manager of the protected series. 570
712712 Sec. 21. (NEW) (Effective October 1, 2019) (a) Except as otherwise 571
713713 provided in subsection (b) of this section, a claim seeking to disregard 572
714714 a limitation in section 20 of this act is governed by the principles of law 573
715715 and equity, including a principle providing a right to a creditor or 574
716716 holding a person liable for a debt, obligation or other liability of 575
717717 another person, which would apply if each protected series of a series 576
718718 limited liability company were a limited liability company formed 577
719719 separately from the series limited liability company and distinct from 578
720720 the series limited liability company and any other protected series of 579
721721 the series limited liability company. 580
722722 (b) The failure of a limited liability company or a protected series to 581
723723 observe a formality relating to the exercise of its powers or 582
724724 management of its activities and affairs is not a ground to disregard a 583
725725 limitation in subsection (a) of section 20 of this act, but may be a 584
726726 ground to disregard a limitation in subsection (b) of section 20 of this 585
727727 act. 586
728728 (c) This section applies to a claim seeking to disregard a limitation of 587
729729 liability applicable to a foreign series limited liability company or 588
730730 foreign protected series and comparable to a limitation stated in 589
731731 section 20 of this act, if: 590
732732 (1) The claimant is a resident of this state or doing business or 591
733733 registered to do business in this state; or 592
734734 (2) The claim is to establish or enforce a liability arising under law of 593
735735 this state other than sections 1 to 42, inclusive, of this act or from an act 594
736736 or omission in this state. 595
737737 Sec. 22. (NEW) (Effective October 1, 2019) Section 34-259b of the 596 Substitute Bill No. 7127
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743743
744744 general statutes applies to a judgment creditor of: 597
745745 (1) An associated member or a protected-series transferee of a 598
746746 protected series; or 599
747747 (2) A series limited liability company, to the extent the company 600
748748 owns a protected-series transferable interest of a protected series. 601
749749 Sec. 23. (NEW) (Effective October 1, 2019) (a) As used in this section: 602
750750 (1) "Enforcement date" means 12:01 a.m. on the date on which a 603
751751 claimant first serves process on a series limited liability company or 604
752752 protected series in an action seeking to enforce under this section a 605
753753 claim against an asset of the company or protected series by 606
754754 attachment, levy or the like. 607
755755 (2) Subject to subsection (b) of section 34 of this act, "incurrence 608
756756 date" means the date on which a series limited liability company or 609
757757 protected series incurred the liability giving rise to a claim that a 610
758758 claimant seeks to enforce under this section. 611
759759 (b) If a claim against a series limited liability company or a protected 612
760760 series of the company has been reduced to judgment, in addition to 613
761761 any other remedy provided by law or equity, the judgment may be 614
762762 enforced in accordance with the following rules: 615
763763 (1) A judgment against the company may be enforced against an 616
764764 asset of a protected series of the company if the asset: (A) Was a non-617
765765 associated asset of the protected series on the incurrence date; or (B) is 618
766766 a non-associated asset of the protected series on the enforcement date. 619
767767 (2) A judgment against a protected series may be enforced against 620
768768 an asset of the company if the asset: (A) Was a non-associated asset of 621
769769 the company on the incurrence date; or (B) is a non-associated asset of 622
770770 the company on the enforcement date. 623
771771 (3) A judgment against a protected series may be enforced against 624 Substitute Bill No. 7127
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777777
778778 an asset of another protected series of the company if the asset: (A) 625
779779 Was a non-associated asset of the other protected series on the 626
780780 incurrence date; or (B) is a non-associated asset of the other protected 627
781781 series on the enforcement date. 628
782782 (c) In addition to any other remedy provided by law or equity, if a 629
783783 claim against a series limited liability company or a protected series 630
784784 has not been reduced to a judgment and law other than sections 1 to 631
785785 42, inclusive, of this act permits a prejudgment remedy by attachment, 632
786786 levy or the like, the court may apply subsection (b) of this section as a 633
787787 prejudgment remedy. 634
788788 (d) In a proceeding under this section, the party asserting that an 635
789789 asset is or was an associated asset of a series limited liability company 636
790790 or a protected series of the company has the burden of proof on the 637
791791 issue. 638
792792 (e) This section applies to an asset of a foreign series limited liability 639
793793 company or foreign protected series if: 640
794794 (1) The asset is real or tangible property located in this state; 641
795795 (2) The claimant is a resident of this state or doing business or 642
796796 registered to do business in this state, or the claim under this section is 643
797797 to enforce a judgment, or to seek a prejudgment remedy, pertaining to 644
798798 a liability arising under law of this state other than sections 1 to 42, 645
799799 inclusive, of this act or an act or omission in this state; and 646
800800 (3) The asset is not identified in the records of the foreign series 647
801801 limited liability company or foreign protected series in a manner 648
802802 comparable to the manner required by section 15 of this act. 649
803803 Sec. 24. (NEW) (Effective October 1, 2019) A protected series of a 650
804804 series limited liability company is dissolved, and its activities and 651
805805 affairs wound up, only on the: 652
806806 (1) Dissolution of the company; 653 Substitute Bill No. 7127
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812812
813813 (2) Occurrence of an event or circumstance the operating agreement 654
814814 states causes dissolution of the protected series; 655
815815 (3) Affirmative vote or consent of all members; 656
816816 (4) Entry by the court of an order dissolving the protected series on 657
817817 application by an associated member or a protected-series manager of 658
818818 the protected series: 659
819819 (A) In accordance with section 8 of this act; and 660
820820 (B) To the same extent, in the same manner and on the same 661
821821 grounds the court would enter an order dissolving a limited liability 662
822822 company on application by a member or manager of the company; or 663
823823 (5) Entry by the court of an order dissolving the protected series on 664
824824 application by the company or a member of the company on the 665
825825 ground that the conduct of all or substantially all the activities and 666
826826 affairs of the protected series is illegal. 667
827827 Sec. 25. (NEW) (Effective October 1, 2019) (a) Subject to subsections 668
828828 (b) and (c) of this section and in accordance with section 8 of this act: 669
829829 (1) A dissolved protected series shall wind up its activities and 670
830830 affairs in the same manner that a limited liability company winds up 671
831831 its activities and affairs under section 34-267a of the general statutes, 672
832832 subject to the same requirements and conditions and with the same 673
833833 effects; and 674
834834 (2) Judicial supervision or another judicial remedy is available in the 675
835835 winding up of the protected series to the same extent, in the same 676
836836 manner, under the same conditions and with the same effects that 677
837837 apply under section 34-267a of the general statutes. 678
838838 (b) When a protected series of a series limited liability company 679
839839 dissolves, the company may deliver to the Secretary of the State for 680
840840 filing a certificate of protected series dissolution stating the name of 681 Substitute Bill No. 7127
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846846
847847 the company and the protected series and that the protected series is 682
848848 dissolved. The filing of the certificate by the Secretary of the State has 683
849849 the same effect as the filing by the Secretary of the State of a certificate 684
850850 of dissolution under section 34-267a of the general statutes. 685
851851 (c) When a protected series of a series limited liability company has 686
852852 completed winding up, the company may deliver to the Secretary of 687
853853 the State for filing a certificate of designation cancellation stating the 688
854854 name of the company and the protected series and that the protected 689
855855 series is terminated. The filing of the certificate by the Secretary of the 690
856856 State has the same effect as the filing by the Secretary of the State of a 691
857857 certificate of dissolution under subsection (b) of section 34-267a of the 692
858858 general statutes. 693
859859 (d) A series limited liability company has not completed its winding 694
860860 up until each of the protected series of the company has completed its 695
861861 winding up. 696
862862 Sec. 26. (NEW) (Effective October 1, 2019) If a series limited liability 697
863863 company that has been administratively dissolved is reinstated, or a 698
864864 series limited liability company that voluntarily dissolved rescinds its 699
865865 dissolution: 700
866866 (1) Each protected series of the company ceases winding up; and 701
867867 (2) Section 34-267b of the general statutes applies to each protected 702
868868 series of the company in accordance with section 8 of this act. 703
869869 Sec. 27. (NEW) (Effective October 1, 2019) As used in this section and 704
870870 sections 28 to 34, inclusive, of this act: 705
871871 (1) "After a merger" or "after the merger" means when a merger 706
872872 under section 30 of this act becomes effective and afterwards. 707
873873 (2) "Before a merger" or "before the merger" means before a merger 708
874874 under section 30 of this act becomes effective. 709 Substitute Bill No. 7127
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880880
881881 (3) "Continuing protected series" means a protected series of a 710
882882 surviving company which continues in uninterrupted existence after a 711
883883 merger under section 30 of this act. 712
884884 (4) "Merging company" means a limited liability company that is 713
885885 party to a merger under section 30 of this act. 714
886886 (5) "Non-surviving company" means a merging company that does 715
887887 not continue in existence after a merger under section 30 of this act. 716
888888 (6) "Relocated protected series" means a protected series of a non-717
889889 surviving company which, after a merger under section 30 of this act, 718
890890 continues in uninterrupted existence as a protected series of the 719
891891 surviving company. 720
892892 (7) "Surviving company" means a merging company that continues 721
893893 in existence after a merger under section 30 of this act. 722
894894 Sec. 28. (NEW) (Effective October 1, 2019) A protected series may not: 723
895895 (1) Be an acquiring, acquired, converting, converted, merging or 724
896896 surviving entity; 725
897897 (2) Participate in a domestication; or 726
898898 (3) Be a party to or be formed, organized, established or created in a 727
899899 transaction substantially like a merger, interest exchange, conversion 728
900900 or domestication. 729
901901 Sec. 29. (NEW) (Effective October 1, 2019) A series limited liability 730
902902 company may not be: 731
903903 (1) An acquiring, acquired, converting, converted, domesticating or 732
904904 domesticated entity; or 733
905905 (2) Except as otherwise provided in section 30 of this act, a party to 734
906906 or the surviving company of a merger. 735 Substitute Bill No. 7127
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912912
913913 Sec. 30. (NEW) (Effective October 1, 2019) A series limited liability 736
914914 company may be party to a merger in accordance with sections 34-737
915915 279h to 34-279k, inclusive, of the general statutes, this section and 738
916916 sections 31 to 34, inclusive, of this act only if: 739
917917 (1) Each other party to the merger is a limited liability company; and 740
918918 (2) The surviving company is not created in the merger. 741
919919 Sec. 31. (NEW) (Effective October 1, 2019) In a merger under section 742
920920 30 of this act, the plan of merger shall: 743
921921 (1) Comply with section 34-279h of the general statutes; and 744
922922 (2) State in a record: 745
923923 (A) For any protected series of a non-surviving company, whether 746
924924 after the merger the protected series will be a relocated protected series 747
925925 or be dissolved, wound up and terminated; 748
926926 (B) For any protected series of the surviving company which exists 749
927927 before the merger, whether after the merger the protected series will be 750
928928 a continuing protected series or be dissolved, wound up and 751
929929 terminated; 752
930930 (C) For each relocated protected series or continuing protected 753
931931 series: 754
932932 (i) The name of any person that becomes an associated member or 755
933933 protected-series transferee of the protected series after the merger, any 756
934934 consideration to be paid by, on behalf of, or in respect of the person, 757
935935 the name of the payor and the name of the payee; 758
936936 (ii) The name of any person whose rights or obligations in the 759
937937 person's capacity as an associated member or protected-series 760
938938 transferee will change after the merger; 761
939939 (iii) Any consideration to be paid to a person who before the merger 762 Substitute Bill No. 7127
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945945
946946 was an associated member or a protected-series transferee of the 763
947947 protected series and the name of the payor; and 764
948948 (iv) If after the merger the protected series will be a relocated 765
949949 protected series, its new name; 766
950950 (D) For any protected series to be established by the surviving 767
951951 company as a result of the merger: 768
952952 (i) The name of the protected series; 769
953953 (ii) Any protected-series transferable interest to be owned by the 770
954954 surviving company when the protected series is established; and 771
955955 (iii) The name of and any protected-series transferable interest 772
956956 owned by any person that will be an associated member of the 773
957957 protected series when the protected series is established; and 774
958958 (E) For any person that is an associated member of a relocated 775
959959 protected series and will remain a member after the merger, any 776
960960 amendment to the operating agreement of the surviving company 777
961961 which: 778
962962 (i) Is or is proposed to be in a record; and 779
963963 (ii) Is necessary or appropriate to state the rights and obligations of 780
964964 the person as a member of the surviving company. 781
965965 Sec. 32. (NEW) (Effective October 1, 2019) In a merger under section 782
966966 30 of this act, the certificate of merger shall: 783
967967 (1) Comply with the requirements for a certificate of merger under 784
968968 section 34-279j of the general statutes; and 785
969969 (2) Include as an attachment the following records, each to become 786
970970 effective when the merger becomes effective: 787
971971 (A) For a protected series of a merging company being terminated 788 Substitute Bill No. 7127
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977977
978978 as a result of the merger, a certificate of termination signed by the 789
979979 company; 790
980980 (B) For a protected series of a non-surviving company which after 791
981981 the merger will be a relocated protected series: 792
982982 (i) A certificate of relocation signed by the non-surviving company 793
983983 which contains the name of the company and the name of the 794
984984 protected series before and after the merger; and 795
985985 (ii) A certificate of protected series designation signed by the 796
986986 surviving company; and 797
987987 (C) For a protected series being established by the surviving 798
988988 company as a result of the merger, a certificate of designation signed 799
989989 by the company. 800
990990 Sec. 33. (NEW) (Effective October 1, 2019) When a merger under 801
991991 section 30 of this act becomes effective, in addition to the effects stated 802
992992 in section 34-279k of the general statutes: 803
993993 (1) As provided in the plan of merger, each protected series of each 804
994994 merging company which was established before the merger: 805
995995 (A) Is a relocated protected series or continuing protected series; or 806
996996 (B) Is dissolved, wound up, and terminated; 807
997997 (2) Any protected series to be established as a result of the merger is 808
998998 established; 809
999999 (3) Any relocated protected series or continuing protected series is 810
10001000 the same person without interruption as it was before the merger; 811
10011001 (4) All property of a relocated protected series or continuing 812
10021002 protected series continues to be vested in the protected series without 813
10031003 transfer, reversion or impairment; 814 Substitute Bill No. 7127
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10091009
10101010 (5) All debts, obligations and other liabilities of a relocated protected 815
10111011 series or continuing protected series continue as debts, obligations and 816
10121012 other liabilities of the protected series; 817
10131013 (6) Except as otherwise provided by law or the plan of merger, all 818
10141014 the rights, privileges, immunities, powers and purposes of a relocated 819
10151015 protected series or continuing protected series remain in the protected 820
10161016 series; 821
10171017 (7) The new name of a relocated protected series may be substituted 822
10181018 for the former name of the protected series in any pending action or 823
10191019 proceeding; 824
10201020 (8) If provided in the plan of merger: 825
10211021 (A) A person becomes an associated member or a protected-series 826
10221022 transferee of a relocated protected series or continuing protected series; 827
10231023 (B) A person becomes an associated member of a protected series 828
10241024 established by the surviving company as a result of the merger; 829
10251025 (C) Any change in the rights or obligations of a person in the 830
10261026 person's capacity as an associated member or a protected-series 831
10271027 transferee of a relocated protected series or continuing protected series 832
10281028 take effect; and 833
10291029 (D) Any consideration to be paid to a person that before the merger 834
10301030 was an associated member or a protected-series transferee of a 835
10311031 relocated protected series or continuing protected series is due; and 836
10321032 (9) Any person that is a member of a relocated protected series 837
10331033 becomes a member of the surviving company, if not already a member. 838
10341034 Sec. 34. (NEW) (Effective October 1, 2019) (a) A creditor's right that 839
10351035 existed under section 23 of this act immediately before a merger under 840
10361036 section 30 of this act may be enforced after the merger in accordance 841
10371037 with the following rules: 842 Substitute Bill No. 7127
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10431043
10441044 (1) A creditor's right that existed immediately before the merger 843
10451045 against the surviving company, a continuing protected series or a 844
10461046 relocated protected series continues without change after the merger. 845
10471047 (2) A creditor's right that existed immediately before the merger 846
10481048 against a non-surviving company: 847
10491049 (A) May be asserted against an asset of the non-surviving company 848
10501050 which vested in the surviving company as a result of the merger; and 849
10511051 (B) Does not otherwise change. 850
10521052 (3) Subject to subsection (b) of this section, the following rules 851
10531053 apply: 852
10541054 (A) In addition to the remedy stated in subdivision (1) of this 853
10551055 subsection, a creditor with a right under section 23 of this act which 854
10561056 existed immediately before the merger against a non-surviving 855
10571057 company or a relocated protected series may assert the right against: (i) 856
10581058 An asset of the surviving company, other than an asset of the non-857
10591059 surviving company which vested in the surviving company as a result 858
10601060 of the merger; (ii) an asset of a continuing protected series; (iii) an asset 859
10611061 of a protected series established by the surviving company as a result 860
10621062 of the merger; (iv) if the creditor's right was against an asset of the non-861
10631063 surviving company, an asset of a relocated series; or (v) if the creditor's 862
10641064 right was against an asset of a relocated protected series, an asset of 863
10651065 another relocated protected series. 864
10661066 (B) In addition to the remedy stated in subdivision (2) of this 865
10671067 subsection, a creditor with a right that existed immediately before the 866
10681068 merger against the surviving company or a continuing protected series 867
10691069 may assert the right against: 868
10701070 (i) An asset of a relocated protected series; or 869
10711071 (ii) An asset of a non-surviving company which vested in the 870
10721072 surviving company as a result of the merger. 871 Substitute Bill No. 7127
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10781078
10791079 (b) For the purposes of subdivision (3) of subsection (a) of this 872
10801080 section and subparagraph (A) of subdivision (1) of subsection (b) of 873
10811081 section 23 of this act, subparagraph (A) of subdivision (2) of subsection 874
10821082 (b) of section 23 of this act and subparagraph (A) of subdivision (3) of 875
10831083 subsection (b) of section 23 of this act, the incurrence date is deemed be 876
10841084 the date on which the merger becomes effective. 877
10851085 (c) A merger under section 30 of this act does not affect the manner 878
10861086 in which section 23 of this act applies to a liability incurred after the 879
10871087 merger. 880
10881088 Sec. 35. (NEW) (Effective October 1, 2019) The law of the jurisdiction 881
10891089 of formation of a foreign series limited liability company governs: 882
10901090 (1) The internal affairs of a foreign protected series of the company, 883
10911091 including: 884
10921092 (A) Relations among any associated members of the foreign 885
10931093 protected series; 886
10941094 (B) Relations between the foreign protected series and: (i) Any 887
10951095 associated member; (ii) the protected-series manager; or (iii) any 888
10961096 protected-series transferee; 889
10971097 (C) Relations between any associated member and: (i) The 890
10981098 protected-series manager; or (ii) any protected-series transferee; 891
10991099 (D) The rights and duties of a protected-series manager; 892
11001100 (E) Governance decisions affecting the activities and affairs of the 893
11011101 foreign protected series and the conduct of those activities and affairs; 894
11021102 and 895
11031103 (F) Procedures and conditions for becoming an associated member 896
11041104 or a protected-series transferee; 897
11051105 (2) Relations between the foreign protected series and: 898 Substitute Bill No. 7127
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11121112 (A) The company; 899
11131113 (B) Another foreign protected series of the company; 900
11141114 (C) A member of the company which is not an associated member of 901
11151115 the foreign protected series; 902
11161116 (D) A foreign protected-series manager that is not a protected-series 903
11171117 manager of the protected series; 904
11181118 (E) A foreign protected-series transferee that is not a foreign 905
11191119 protected-series transferee of the protected series; and 906
11201120 (F) A transferee of a transferable interest of the company; 907
11211121 (3) Except as otherwise provided in sections 21 and 23 of this act, the 908
11221122 liability of a person for a debt, obligation or other liability of a foreign 909
11231123 protected series of a foreign series limited liability company if the debt, 910
11241124 obligation or liability is asserted solely by reason of the person being or 911
11251125 acting as: 912
11261126 (A) An associated member, a protected-series transferee or a 913
11271127 protected-series manager of the foreign protected series; 914
11281128 (B) A member of the company which is not an associated member of 915
11291129 the foreign protected series; 916
11301130 (C) A protected-series manager of another foreign protected series 917
11311131 of the company; 918
11321132 (D) A protected-series transferee of another foreign protected series 919
11331133 of the company; 920
11341134 (E) A manager of the company; or 921
11351135 (F) A transferee of a transferable interest of the company; and 922
11361136 (4) Except as otherwise provided in sections 21 and 23 of this act: 923 Substitute Bill No. 7127
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11421142
11431143 (A) The liability of the foreign series limited liability company for a 924
11441144 debt, obligation or other liability of a foreign protected series of the 925
11451145 company if the debt, obligation or liability is asserted solely by reason 926
11461146 of the foreign protected series being a foreign protected series of the 927
11471147 company or the company: (i) Being or acting as a foreign protected-928
11481148 series manager of the foreign protected series; (ii) having the foreign 929
11491149 protected series manage the company; or (iii) owning a protected-930
11501150 series transferable interest of the foreign protected series; and 931
11511151 (B) The liability of a foreign protected series for a debt, obligation or 932
11521152 other liability of the company or another foreign protected series of the 933
11531153 company if the debt, obligation or liability is asserted solely by reason 934
11541154 of the foreign protected series: (i) Being a foreign protected series of 935
11551155 the company or having the company or another foreign protected 936
11561156 series of the company be or act as a foreign protected-series manager 937
11571157 of the foreign protected series; or (ii) managing the company or being 938
11581158 or acting as a foreign protected-series manager of another foreign 939
11591159 protected series of the company. 940
11601160 Sec. 36. (NEW) (Effective October 1, 2019) In determining whether a 941
11611161 foreign series limited liability company or foreign protected series of 942
11621162 the company does business in this state or is subject to the personal 943
11631163 jurisdiction of the courts of this state: 944
11641164 (1) The activities and affairs of the company are not attributable to a 945
11651165 foreign protected series of the company solely by reason of the foreign 946
11661166 protected series being a foreign protected series of the company; and 947
11671167 (2) The activities and affairs of a foreign protected series are not 948
11681168 attributable to the company or another foreign protected series of the 949
11691169 company solely by reason of the foreign protected series being a 950
11701170 foreign protected series of the company. 951
11711171 Sec. 37. (NEW) (Effective October 1, 2019) (a) Except as otherwise 952
11721172 provided in this section and subject to sections 21 and 23 of this act, the 953
11731173 law of this state governing the registration of a foreign limited liability 954 Substitute Bill No. 7127
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11791179
11801180 company to do business in this state, including the consequences of not 955
11811181 complying with that law, applies to a foreign protected series of a 956
11821182 foreign series limited liability company as if the foreign protected 957
11831183 series were a foreign limited liability company formed separately from 958
11841184 the foreign series limited liability company and distinct from the 959
11851185 foreign series limited liability company and any other foreign 960
11861186 protected series of the foreign series limited liability company. 961
11871187 (b) An application by a foreign protected series of a foreign series 962
11881188 limited liability company for registration to do business in this state 963
11891189 shall include: 964
11901190 (1) The name and jurisdiction of formation of the foreign series 965
11911191 limited liability company; and 966
11921192 (2) If the company has other foreign protected series, the name and 967
11931193 street and mailing address of an individual who knows the name and 968
11941194 street and mailing address of: 969
11951195 (A) Each other foreign protected series of the foreign series limited 970
11961196 liability company; and 971
11971197 (B) The foreign protected-series manager of and agent for service of 972
11981198 process for each other foreign protected series of the foreign series 973
11991199 limited liability company. 974
12001200 (c) The name of a foreign protected series applying for registration 975
12011201 or registered to do business in this state shall comply with section 10 of 976
12021202 this act and may do so using an alternate name adopted pursuant to 977
12031203 section 34-275e of the general statutes, if the name complies with 978
12041204 section 10 of this act. 979
12051205 (d) The requirement in section 34-275c of the general statutes to 980
12061206 amend a foreign registration certificate to update information applies 981
12071207 to the information required by subsection (b) of this section. 982
12081208 Sec. 38. (NEW) (Effective October 1, 2019) (a) Not later than thirty 983 Substitute Bill No. 7127
12091209
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12141214
12151215 days after becoming a party to a proceeding b efore a civil, 984
12161216 administrative or other adjudicative tribunal of or located in this state 985
12171217 or a tribunal of the United States located in this state: 986
12181218 (1) A foreign series limited liability company shall disclose to each 987
12191219 other party the name and street and mailing address of: 988
12201220 (A) Each foreign protected series of the company; and 989
12211221 (B) Each foreign protected-series manager of and a registered agent 990
12221222 for service of process for each foreign protected series of the company; 991
12231223 and 992
12241224 (2) A foreign protected series of a foreign series limited liability 993
12251225 company shall disclose to each other party the name and street and 994
12261226 mailing address of: 995
12271227 (A) The company and each manager of the company and an agent 996
12281228 for service of process for the company; and 997
12291229 (B) Any other foreign protected series of the company and each 998
12301230 foreign protected-series manager of and an agent for service of process 999
12311231 for the other foreign protected series. 1000
12321232 (b) If a foreign series limited liability company or foreign protected 1001
12331233 series challenges the personal jurisdiction of the tribunal, the 1002
12341234 requirement that the foreign company or foreign protected series make 1003
12351235 a disclosure under subsection (a) of this section is tolled until the 1004
12361236 tribunal determines whether it has personal jurisdiction. 1005
12371237 (c) If a foreign series limited liability company or foreign protected 1006
12381238 series does not comply with subsection (a) of this section, a party to the 1007
12391239 proceeding may: 1008
12401240 (1) Request the tribunal to treat the noncompliance as a failure to 1009
12411241 comply with the tribunal's discovery rules; or 1010
12421242 (2) Bring a separate proceeding in the court to enforce subsection (a) 1011 Substitute Bill No. 7127
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12481248
12491249 of this section. 1012
12501250 Sec. 39. (NEW) (Effective October 1, 2019) In applying and construing 1013
12511251 sections 1 to 42, inclusive, of this uniform act, consideration shall be 1014
12521252 given to the need to promote uniformity of the law with respect to its 1015
12531253 subject matter among states that enact it. 1016
12541254 Sec. 40. (NEW) (Effective October 1, 2019) The provisions of sections 1 1017
12551255 to 42, inclusive, of this act modify, limit and supersede the Electronic 1018
12561256 Signatures in Global and National Commerce Act, 15 USC 7001 et seq., 1019
12571257 but do not modify, limit or supersede Section 101(c) of said act, 15 USC 1020
12581258 7001(c), or authorize electronic delivery of any of the notices described 1021
12591259 in Section 103(b) of said act, 15 USC 7003(b). 1022
12601260 Sec. 41. (NEW) (Effective October 1, 2019) (a) On and after October 1, 1023
12611261 2019, sections 1 to 42, inclusive, of this act govern all series limited 1024
12621262 liability companies and protected series. 1025
12631263 (b) Prior to October 1, 2020, sections 21 and 23 of this act do not 1026
12641264 apply to a foreign protected series that was established before October 1027
12651265 1, 2019, or a foreign limited liability company that became a foreign 1028
12661266 series limited liability company before October 1, 2019. 1029
12671267 Sec. 42. (NEW) (Effective October 1, 2019) The provisions of sections 1 1030
12681268 to 42, inclusive, of this act do not affect an action commenced, 1031
12691269 proceeding brought or right accrued before October 1, 2019. 1032
12701270 Sec. 43. Section 34-243a of the general statutes is repealed and the 1033
12711271 following is substituted in lieu thereof (Effective October 1, 2019): 1034
12721272 As used in sections 34-243 to 34-283d, inclusive, and sections 1 to 42, 1035
12731273 inclusive, of this act: 1036
12741274 (1) "Certificate of organization" means the certificate required by 1037
12751275 section 34-247, and includes the certificate as amended or restated. 1038
12761276 (2) "Connecticut Entity Transactions Act" means chapter 616. 1039 Substitute Bill No. 7127
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12821282
12831283 (3) "Contribution", except in the phrase "right of contribution", 1040
12841284 means property or a benefit described in section 34-255a which is 1041
12851285 provided by a person to a limited liability company to become a 1042
12861286 member or in the person's capacity as a member. 1043
12871287 (4) "Debtor in bankruptcy" means a person that is the subject of: (A) 1044
12881288 An order for relief under Title 11 of the United States Code or a 1045
12891289 comparable order under a successor statute of general application; or 1046
12901290 (B) a comparable order under federal, state or foreign law governing 1047
12911291 insolvency. 1048
12921292 (5) "Disinterested individual" means an individual, including a 1049
12931293 disinterested member, who, at the time action is to be taken under 1050
12941294 section 34-271d, does not have (A) a material interest in the outcome of 1051
12951295 the proceeding, or (B) a material relationship with a person who has 1052
12961296 such an interest. 1053
12971297 (6) "Disinterested member" means a member who, at the time action 1054
12981298 is to be taken under: 1055
12991299 (A) Subsection (b) or (d) of section 34-255g, (i) is not a party to the 1056
13001300 proceeding, (ii) is not a member who sought approval for a member's 1057
13011301 conflicting interest transaction under subsection (f) of section 34-255h 1058
13021302 or a disclaimer of the limited liability company's interest in a business 1059
13031303 opportunity under subsection (b) of section 34-255h, which approval or 1060
13041304 disclaimer is challenged in the proceeding, and (iii) does not have a 1061
13051305 material relationship with a party or member described in clause (i) or 1062
13061306 (ii) of this subparagraph; 1063
13071307 (B) Subsection (f) of section 34-255h, is not a member (i) as to whom 1064
13081308 the transaction is a member's conflicting interest transaction, or (ii) 1065
13091309 who has a material relationship with another member as to whom the 1066
13101310 transaction is a member's conflicting interest transaction; or 1067
13111311 (C) Subsection (b) of section 34-255h, would be a disinterested 1068
13121312 member under subparagraph (B) of this subdivision if the business 1069
13131313 opportunity were a member's conflicting interest transaction. 1070 Substitute Bill No. 7127
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13191319
13201320 (7) "Disinterested person" means a person, including a disinterested 1071
13211321 member, who, at the time action is to be taken under subparagraph (A) 1072
13221322 of subdivision (1) of subsection (d) of section 34-243d, does not have 1073
13231323 (A) a material interest in the outcome of the action, or (B) a material 1074
13241324 relationship with a person who has such an interest. 1075
13251325 (8) "Distribution" means a transfer of money or other property from 1076
13261326 a limited liability company to a person on account of a transferable 1077
13271327 interest or in the person's capacity as a member. "Distribution": (A) 1078
13281328 Includes (i) a redemption or other purchase by a limited liability 1079
13291329 company of a transferable interest; and (ii) a transfer to a member in 1080
13301330 return for the member's relinquishment of any right to participate as a 1081
13311331 member in the management or conduct of the company's activities and 1082
13321332 affairs or to have access to records or other information concerning the 1083
13331333 company's activities and affairs; and (B) does not include amounts 1084
13341334 constituting reasonable compensation for present or past service or 1085
13351335 payments made in the ordinary course of business under a bona fide 1086
13361336 retirement plan or other bona fide benefits program. 1087
13371337 (9) "Foreign limited liability company" means an unincorporated 1088
13381338 entity formed under the law of a jurisdiction other than this state 1089
13391339 which would be a limited liability company if formed under the law of 1090
13401340 this state. 1091
13411341 (10) "Governing jurisdiction" means the jurisdiction whose law 1092
13421342 governs the internal affairs of an entity. 1093
13431343 (11) "Jurisdiction", when used to refer to a political entity, means the 1094
13441344 United States, a state, a foreign county or a political subdivision of a 1095
13451345 foreign country. 1096
13461346 (12) "Limited liability company", except in the phrase "foreign 1097
13471347 limited liability company" and when used in sections 34-279 to 34-279i, 1098
13481348 inclusive, means an entity formed under sections 34-243 to 34-283d, 1099
13491349 inclusive, or which becomes subject to said sections under the 1100
13501350 Connecticut Entity Transactions Act, or section 34-243i or 34-279h. 1101 Substitute Bill No. 7127
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13571357 (13) "Majority in interest of the members" means the members 1102
13581358 owning more than fifty per cent of the transferable interests of the 1103
13591359 limited liability company, excluding any transferable interests not 1104
13601360 owned by the members; except that if it is not possible to determine 1105
13611361 which members own more than fifty per cent of the transferable 1106
13621362 interests based on the operating agreement of the limited liability 1107
13631363 company, then majority in interest of the members means the members 1108
13641364 who would receive more than fifty per cent of the distributions with 1109
13651365 respect to the dissolution of the limited liability company at the time of 1110
13661366 the vote if there would be such distributions, or if there would not be 1111
13671367 such distributions, the "majority in interest of the members" means the 1112
13681368 members who at the time of the vote contributed more than fifty per 1113
13691369 cent of the unreturned capital contributions made to the limited 1114
13701370 liability company since the date of formation of the limited liability 1115
13711371 company. 1116
13721372 (14) "Manager" means a person that, under the operating agreement 1117
13731373 of a manager-managed limited liability company, is responsible, alone 1118
13741374 or in concert with others, for performing the management functions set 1119
13751375 forth in subsection (c) of section 34-255f, regardless of the title used to 1120
13761376 describe such person. 1121
13771377 (15) "Manager-managed limited liability company" means a limited 1122
13781378 liability company that qualifies under subsection (a) of section 34-255f. 1123
13791379 (16) "Material relationship" means a familial, financial, professional 1124
13801380 or employment relationship that would reasonably be expected to 1125
13811381 impair the objectivity of the person's judgment when participating in 1126
13821382 the action to be taken. 1127
13831383 (17) "Material interest" means an actual or potential benefit or 1128
13841384 detriment, other than one which would devolve on the limited liability 1129
13851385 company or the members generally, that would reasonably be 1130
13861386 expected to impair the objectivity of the person's judgment when 1131
13871387 participating in the action to be taken. 1132 Substitute Bill No. 7127
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13931393
13941394 (18) "Member" means a person that: (A) Has become a member of a 1133
13951395 limited liability company under section 34-255 or was a member in a 1134
13961396 company when the company became subject to sections 34-243 to 34-1135
13971397 283d, inclusive, under section 34-243i; and (B) has not dissociated 1136
13981398 under section 34-263a. 1137
13991399 (19) "Member-managed limited liability company" means a limited 1138
14001400 liability company that is not a manager-managed limited liability 1139
14011401 company. 1140
14021402 (20) "Operating agreement" means the agreement, whether or not 1141
14031403 referred to as an operating agreement and whether oral, implied, in a 1142
14041404 record or in any combination thereof, of all the members of a limited 1143
14051405 liability company, including a sole member, concerning the matters 1144
14061406 described in subsection (a) of section 34-243d. "Operating agreement" 1145
14071407 includes the agreement as amended or restated. 1146
14081408 (21) "Organizer" means a person that acts under section 34-247 to 1147
14091409 form a limited liability company. 1148
14101410 (22) "Person" means an individual, business corporation, nonprofit 1149
14111411 corporation, partnership, limited partnership, limited liability 1150
14121412 company, foreign limited liability company, cooperative association, 1151
14131413 limited cooperative association, unincorporated nonprofit association, 1152
14141414 statutory trust, business trust, common law business trust, estate, trust, 1153
14151415 association, joint venture, public corporation, government or 1154
14161416 governmental subdivision, agency or instrumentality, or any other 1155
14171417 domestic or foreign legal or commercial entity. 1156
14181418 (23) "Principal office" means the principal executive office of a 1157
14191419 limited liability company or foreign limited liability company, whether 1158
14201420 or not the office is located in this state. 1159
14211421 (24) "Professional service" means any type of service to the public 1160
14221422 that requires members of a profession rendering such service to obtain 1161
14231423 a license or other legal authorization as a condition precedent to the 1162
14241424 rendition thereof, limited to the professional services rendered by 1163 Substitute Bill No. 7127
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14301430
14311431 dentists, naturopaths, chiropractors, physicians and surgeons, 1164
14321432 physician assistants, doctors of dentistry, physical therapists, 1165
14331433 occupational therapists, podiatrists, optometrists, nurses, nurse-1166
14341434 midwives, veterinarians, pharmacists, architects, professional 1167
14351435 engineers, or jointly by architects and professional engineers, 1168
14361436 landscape architects, real estate brokers, insurance producers, certified 1169
14371437 public accountants and public accountants, land s urveyors, 1170
14381438 psychologists, attorneys-at-law, licensed marital and family therapists, 1171
14391439 licensed professional counselors, licensed or certified alcohol and drug 1172
14401440 counselors and licensed clinical social workers. 1173
14411441 (25) "Property" means all property, whether real, personal, or mixed 1174
14421442 or tangible or intangible, or any right or interest therein. 1175
14431443 (26) "Record", when used as a noun, means information that is 1176
14441444 inscribed on a tangible medium or that is stored in an electronic or 1177
14451445 other medium and is retrievable in perceivable form. 1178
14461446 (27) "Registered agent" means an agent of a limited liability 1179
14471447 company or foreign limited liability company which is authorized to 1180
14481448 receive service of any process, notice, or demand required or permitted 1181
14491449 by law to be served on the company. 1182
14501450 (28) "Registered foreign limited liability company" means a foreign 1183
14511451 limited liability company that is registered to do business in this state 1184
14521452 pursuant to a certificate of registration filed by the Secretary of the 1185
14531453 State. 1186
14541454 (29) "Sign" means, with the present intent to authenticate or adopt a 1187
14551455 record: (A) To execute or adopt a tangible symbol; or (B) to attach to or 1188
14561456 logically associate with the record an electronic symbol, sound or 1189
14571457 process. 1190
14581458 (30) "State", when used as a noun, means a state of the United States, 1191
14591459 the District of Columbia, Puerto Rico, the United States Virgin Islands, 1192
14601460 or any territory or insular possession subject to the jurisdiction of the 1193
14611461 United States. 1194 Substitute Bill No. 7127
14621462
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14671467
14681468 (31) "Transfer" includes: (A) An assignment; (B) a conveyance; (C) a 1195
14691469 sale; (D) a lease; (E) an encumbrance, including a mortgage or security 1196
14701470 interest; (F) a gift; and (G) a transfer by operation of law. 1197
14711471 (32) "Transferable interest" means the right, as initially owned by a 1198
14721472 person in the person's capacity as a member, to receive distributions 1199
14731473 from a limited liability company, whether or not the person remains a 1200
14741474 member or continues to own any part of the right. "Transferable 1201
14751475 interest" applies to any fraction of the interest, by whomever owned. 1202
14761476 (33) "Transferee" means a person to which all or part of a 1203
14771477 transferable interest has been transferred, whether or not the transferor 1204
14781478 is a member. "Transferee" includes a person that owns a transferable 1205
14791479 interest under subdivision (3) of subsection (a) of section 34-263b. 1206
14801480 (34) "Two-thirds in interest of the members" means the members 1207
14811481 owning at least two-thirds of the transferable interests of the limited 1208
14821482 liability company, excluding any transferable interests not owned by 1209
14831483 the members; except that if it is not possible to determine which 1210
14841484 members own at least two-thirds of the transferable interests based on 1211
14851485 the operating agreement of the limited liability company, two-thirds in 1212
14861486 interest of the members means the members who would receive at 1213
14871487 least two-thirds of the distributions with respect to the dissolution of 1214
14881488 the limited liability company at the time of the vote if there would be 1215
14891489 such distributions, or if there would not be such distributions, two-1216
14901490 thirds in interest of the members means the members who at the time 1217
14911491 of the vote contributed at least two-thirds of the unreturned capital 1218
14921492 contributions made to the limited liability company since the date of 1219
14931493 formation of the limited liability company. 1220
14941494 Sec. 44. Section 34-247f of the general statutes is repealed and the 1221
14951495 following is substituted in lieu thereof (Effective October 1, 2019): 1222
14961496 Except as provided in section 34-247g and subject to the provisions 1223
14971497 of subsection (c) of section 34-247h, a certificate of organization is 1224
14981498 effective and a foreign registration certificate is effective on the date 1225 Substitute Bill No. 7127
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15041504
15051505 and at the time of its filing by the Secretary of the State, as provided in 1226
15061506 section 34-247e. Each other record filed under sections 34-243 to 34-1227
15071507 283d, inclusive, or under sections 1 to 42, inclusive, of this act, is 1228
15081508 effective on the later of: 1229
15091509 (1) On the date and at the time of its filing by the Secretary of the 1230
15101510 State, as provided in section 34-247e; 1231
15111511 (2) On the date of filing and at the time specified in the record as its 1232
15121512 effective time, if later than the time under subdivision (1) of this 1233
15131513 section; 1234
15141514 (3) At a specified delayed effective date and time, which may not be 1235
15151515 more than ninety days after the date of filing; or 1236
15161516 (4) If a delayed effective date is specified, but no time is specified, at 1237
15171517 12:01 a.m. on the date specified, which may not be more than ninety 1238
15181518 days after the date of filing. 1239
15191519 Sec. 45. Section 34-275 of the general statutes is repealed and the 1240
15201520 following is substituted in lieu thereof (Effective October 1, 2019): 1241
15211521 (a) The law of the governing jurisdiction of a foreign limited liability 1242
15221522 company governs: (1) The internal affairs of the company; (2) subject to 1243
15231523 sections 21 and 23 of this act, the liability of a member as member and 1244
15241524 a manager as manager for a debt, obligation or other liability of the 1245
15251525 company; and (3) subject to sections 21 and 23 of this act, the liability 1246
15261526 of a series of the company. 1247
15271527 (b) A foreign limited liability company is not precluded from 1248
15281528 registering to transact business in this state because of any difference 1249
15291529 between the law of the governing jurisdiction and the law of this state. 1250
15301530 (c) Registration of a foreign limited liability company to transact 1251
15311531 business in this state does not authorize the foreign company to 1252
15321532 engage in any activities or affairs or exercise any power in this state 1253
15331533 that a limited liability company may not engage in or exercise in this 1254 Substitute Bill No. 7127
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15391539
15401540 state. 1255
15411541 Sec. 46. Section 34-600 of the general statutes is repealed and the 1256
15421542 following is substituted in lieu thereof (Effective October 1, 2019): 1257
15431543 As used in this chapter and sections 1 to 42, inclusive, of this act: 1258
15441544 (1) "Acquired entity" means the entity, all of one or more classes or 1259
15451545 series of interests of which are acquired in an interest exchange. 1260
15461546 (2) "Acquiring entity" means the entity that acquires all of one or 1261
15471547 more classes or series of interests of the acquired entity in an interest 1262
15481548 exchange. 1263
15491549 (3) "Approve" means, in the case of an entity, for its governors and 1264
15501550 interest holders to take whatever steps are necessary under its organic 1265
15511551 rules, organic law and other law to (A) propose a transaction subject to 1266
15521552 this chapter; (B) adopt and approve the terms and conditions of the 1267
15531553 transaction; and (C) conduct any required proceedings or otherwise 1268
15541554 obtain any required votes or consents of the governors or interest 1269
15551555 holders. 1270
15561556 (4) "Business corporation" means a corporation whose internal 1271
15571557 affairs are governed by chapter 601 or a professional service 1272
15581558 corporation governed by chapter 594a. 1273
15591559 (5) "Conversion" means a transaction authorized by part IV of this 1274
15601560 chapter. 1275
15611561 (6) "Converted entity" means the converting entity as it continues in 1276
15621562 existence after a conversion. 1277
15631563 (7) "Converting entity" means the domestic entity that approves a 1278
15641564 plan of conversion pursuant to section 34-633 or the foreign entity that 1279
15651565 approves a conversion pursuant to the law of its jurisdiction of 1280
15661566 organization. 1281
15671567 (8) "Domestic entity", unless the context otherwise requires, means 1282 Substitute Bill No. 7127
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15731573
15741574 an entity whose internal affairs are governed by the law of this state. 1283
15751575 (9) "Domesticated entity" means the domesticating entity as it 1284
15761576 continues in existence after a domestication. 1285
15771577 (10) "Domesticating entity" means the domestic entity that approves 1286
15781578 a plan of domestication pursuant to section 34-643 or the foreign entity 1287
15791579 that approves a domestication pursuant to the law of its jurisdiction of 1288
15801580 organization. 1289
15811581 (11) "Domestication" means a transaction authorized by part V of 1290
15821582 this chapter. 1291
15831583 (12) "Entity", unless the context otherwise requires, means (A) a 1292
15841584 business corporation; (B) a nonprofit corporation; (C) a general 1293
15851585 partnership, including a limited liability partnership; (D) a limited 1294
15861586 partnership, including a limited liability limited partnership; (E) a 1295
15871587 limited liability company; (F) a business trust or statutory trust entity; 1296
15881588 (G) an unincorporated nonprofit association; (H) a cooperative; or (I) 1297
15891589 any other person who has a separate legal existence or the power to 1298
15901590 acquire an interest in real property in his or her own name other than 1299
15911591 (i) an individual; (ii) a testamentary, inter vivos or charitable trust, 1300
15921592 with the exception of a business trust, statutory trust entity or similar 1301
15931593 trust; (iii) an association or relationship that is not a partnership solely 1302
15941594 by reason of the law of any other jurisdiction; (iv) a decedent's estate; 1303
15951595 or (v) a government, a governmental subdivision, agency or 1304
15961596 instrumentality, or a quasi-governmental instrumentality. 1305
15971597 (13) "Filing entity" means an entity that is created by the filing of a 1306
15981598 public organic document. 1307
15991599 (14) "Foreign entity" means an entity other than a domestic entity. 1308
16001600 (15) "Governance interest" means the right under the organic law or 1309
16011601 organic rules of an entity, other than as a governor, agent, assignee or 1310
16021602 proxy, to (A) receive or demand access to information concerning, or 1311
16031603 the books and records of, the entity; (B) vote for the election of the 1312 Substitute Bill No. 7127
16041604
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16091609
16101610 governors of the entity; or (C) receive notice of or vote on any or all 1313
16111611 issues involving the internal affairs of the entity. 1314
16121612 (16) "Governor" means a person by or under whose authority the 1315
16131613 powers of an entity are exercised and under whose direction the 1316
16141614 business and affairs of the entity are managed pursuant to the organic 1317
16151615 law and organic rules of the entity. 1318
16161616 (17) "Interest", unless the context otherwise requires, means (A) a 1319
16171617 governance interest in an unincorporated entity; (B) a transferable 1320
16181618 interest in an unincorporated entity; or (C) a share or membership in a 1321
16191619 corporation. 1322
16201620 (18) "Interest exchange" means a transaction authorized by part III 1323
16211621 of this chapter. 1324
16221622 (19) "Interest holder" means a direct holder of an interest. 1325
16231623 (20) "Interest holder liability" means (A) personal liability for a 1326
16241624 liability of an entity that is imposed on a person (i) solely by reason of 1327
16251625 the status of the person as an interest holder, or (ii) by the organic rules 1328
16261626 of the entity pursuant to a provision of the organic law authorizing the 1329
16271627 organic rules to make one or more specified interest holders or 1330
16281628 categories of interest holders liable in their capacity as interest holders 1331
16291629 for all or specified liabilities of the entity; or (B) an obligation of an 1332
16301630 interest holder under the organic rules of an entity to contribute to the 1333
16311631 entity. 1334
16321632 (21) "Jurisdiction of organization" of an entity means the jurisdiction 1335
16331633 under which the law includes the organic law of the entity. 1336
16341634 (22) "Liability" means a debt, obligation or any other liability arising 1337
16351635 in any manner, regardless of whether it is secured or contingent. 1338
16361636 (23) "Merger" means a transaction in which two or more merging 1339
16371637 entities are combined into a surviving entity pursuant to a filing with 1340
16381638 the Secretary of the State. 1341 Substitute Bill No. 7127
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16441644
16451645 (24) "Merging entity" means an entity that is a party to a merger and 1342
16461646 exists immediately before the merger becomes effective. 1343
16471647 (25) "Nonprofit corporation" means a corporation whose internal 1344
16481648 affairs are governed by chapter 602. 1345
16491649 (26) "Organic law" means the section of the general statutes, if any, 1346
16501650 other than this section and sections 34-601 to 34-646, inclusive, 1347
16511651 governing the internal affairs of an entity. 1348
16521652 (27) "Organic rules" means the public organic document and private 1349
16531653 organic rules of an entity. 1350
16541654 (28) "Person" means an individual, corporation, estate, trust, 1351
16551655 partnership, limited liability company, business or similar trust, 1352
16561656 association, joint venture, public corporation, government or 1353
16571657 governmental subdivision, agency or instrumentality, or any other 1354
16581658 legal or commercial entity. 1355
16591659 (29) "Plan" means a plan of merger, interest exchange, conversion or 1356
16601660 domestication. 1357
16611661 (30) "Private organic rules" means the rules, whether or not in a 1358
16621662 record, that govern the internal affairs of an entity, are binding on all 1359
16631663 of its interest holders and are not part of its public organic document, 1360
16641664 if any. 1361
16651665 (31) "Protected agreement" means (A) a record evidencing 1362
16661666 indebtedness and any related agreement in effect on or after January 1, 1363
16671667 2014; (B) an agreement that is binding on an entity on or after January 1364
16681668 1, 2014; (C) the organic rules of an entity in effect on or after January 1, 1365
16691669 2014; or (D) an agreement that is binding on any of the governors or 1366
16701670 interest holders of an entity on or after January 1, 2014. 1367
16711671 (32) "Public organic document" means the public record, the filing of 1368
16721672 which creates an entity and any amendment to or restatement of such 1369
16731673 record. 1370 Substitute Bill No. 7127
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16791679
16801680 (33) "Qualified foreign entity" means a foreign entity that is 1371
16811681 authorized to transact business in this state pursuant to a filing with 1372
16821682 the Secretary of the State. 1373
16831683 (34) "Record" means information that is inscribed on a tangible 1374
16841684 medium or that is stored in an electronic or other medium and is 1375
16851685 retrievable in perceivable form. 1376
16861686 (35) "Sign" or "signature" includes any manual, facsimile, conformed 1377
16871687 or electronic signature. 1378
16881688 (36) "Surviving entity" means the entity that continues in existence 1379
16891689 after a merger or that is created by a merger. 1380
16901690 (37) "Transferable interest" means the right under an entity's organic 1381
16911691 law to receive distributions from the entity. 1382
16921692 (38) "Type", with regard to an entity, means a generic form of entity 1383
16931693 (A) recognized at common law, or (B) organized under an organic law, 1384
16941694 whether or not an entity organized under such organic law is subject to 1385
16951695 the provisions of such organic law creating different categories of the 1386
16961696 form of entity. 1387
16971697 This act shall take effect as follows and shall amend the following
16981698 sections:
16991699
17001700 Section 1 October 1, 2019 New section
17011701 Sec. 2 October 1, 2019 New section
17021702 Sec. 3 October 1, 2019 New section
17031703 Sec. 4 October 1, 2019 New section
17041704 Sec. 5 October 1, 2019 New section
17051705 Sec. 6 October 1, 2019 New section
17061706 Sec. 7 October 1, 2019 New section
17071707 Sec. 8 October 1, 2019 New section
17081708 Sec. 9 October 1, 2019 New section
17091709 Sec. 10 October 1, 2019 New section
17101710 Sec. 11 October 1, 2019 New section
17111711 Sec. 12 October 1, 2019 New section
17121712 Sec. 13 October 1, 2019 New section Substitute Bill No. 7127
17131713
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17181718
17191719 Sec. 14 October 1, 2019 New section
17201720 Sec. 15 October 1, 2019 New section
17211721 Sec. 16 October 1, 2019 New section
17221722 Sec. 17 October 1, 2019 New section
17231723 Sec. 18 October 1, 2019 New section
17241724 Sec. 19 October 1, 2019 New section
17251725 Sec. 20 October 1, 2019 New section
17261726 Sec. 21 October 1, 2019 New section
17271727 Sec. 22 October 1, 2019 New section
17281728 Sec. 23 October 1, 2019 New section
17291729 Sec. 24 October 1, 2019 New section
17301730 Sec. 25 October 1, 2019 New section
17311731 Sec. 26 October 1, 2019 New section
17321732 Sec. 27 October 1, 2019 New section
17331733 Sec. 28 October 1, 2019 New section
17341734 Sec. 29 October 1, 2019 New section
17351735 Sec. 30 October 1, 2019 New section
17361736 Sec. 31 October 1, 2019 New section
17371737 Sec. 32 October 1, 2019 New section
17381738 Sec. 33 October 1, 2019 New section
17391739 Sec. 34 October 1, 2019 New section
17401740 Sec. 35 October 1, 2019 New section
17411741 Sec. 36 October 1, 2019 New section
17421742 Sec. 37 October 1, 2019 New section
17431743 Sec. 38 October 1, 2019 New section
17441744 Sec. 39 October 1, 2019 New section
17451745 Sec. 40 October 1, 2019 New section
17461746 Sec. 41 October 1, 2019 New section
17471747 Sec. 42 October 1, 2019 New section
17481748 Sec. 43 October 1, 2019 34-243a
17491749 Sec. 44 October 1, 2019 34-247f
17501750 Sec. 45 October 1, 2019 34-275
17511751 Sec. 46 October 1, 2019 34-600
17521752
1753+Statement of Legislative Commissioners:
1754+In Section 17(c), "protected-" was inserted before "series transferable
1755+interest" for consistency with the defined term.
17531756
17541757 JUD Joint Favorable Subst. -LCO
1755-APP Joint Favorable
17561758