Kansas 2025-2026 Regular Session

Kansas House Bill HB2355 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Session of 2025
2	2	HOUSE BILL No. 2355
3	3	By Committee on Judiciary
4	4	Requested by Representative L. Williams on behalf of the Kansas Chamber
5	5	2-7
6	6	AN ACT concerning limited liability companies; relating to series limited
7	7	liability companies; authorizing a limited liability company and any of
8	8	its series to elect to consolidate its operations as a single taxpayer and
9	9	elect to be treated as a single business for certain purposes; permitting
10	10	operating agreements to impose restrictions, duties and obligations on
11	11	members; specifying that wrongful transfer of property with intent to
12	12	hinder, delay or defraud creditors or to defraud shall be deemed void;
13	13	amending K.S.A. 17-76,143 and repealing the existing section.
14	14	Be it enacted by the Legislature of the State of Kansas:
15	15	Section 1. K.S.A. 17-76,143 is hereby amended to read as follows:
16	16	17-76,143. (a) An operating agreement may establish or provide for the
17	17	establishment of one or more designated series of members, managers,
18	18	limited liability company interests or assets. If an operating agreement so
19	19	provides for the establishment or formation of one or more series, then a
20	20	series may be formed by complying with this section. Any such series may
21	21	have separate rights, powers or duties with respect to specified property or
22	22	obligations of the limited liability company or profits and losses associated
23	23	with specified property or obligations, and to the extent provided in the
24	24	operating agreement, any such series may have a separate business
25	25	purpose or investment objective. A series is formed by the filing of a
26	26	certificate of designation in the office of the secretary of state. Other than
27	27	pursuant to K.S.A. 17-76,143a, and amendments thereto, a series may not
28	28	merge, convert, or consolidate pursuant to any section of the Kansas
29	29	revised limited liability company act, the business entity transactions act,
30	30	K.S.A. 17-78-101 et seq., and amendments thereto, or any other statute of
31	31	this state.
32	32	(b) Notice of the limitation on liabilities of a series as referenced in
33	33	subsection (c) shall be set forth in the articles of organization of the limited
34	34	liability company. Notice in articles of organization of the limitation on
35	35	liabilities of a series as referenced in subsection (c) shall be sufficient for
36	36	all purposes of this subsection whether or not the limited liability company
37	37	has formed any series when such notice is included in the articles of
38	38	organization, and there shall be no requirement that any specific series of
39	39	the limited liability company be referenced in such notice. The fact that
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75	75	articles of organization that contain the foregoing notice of the limitation
76	76	on liabilities of a series is on file in the office of the secretary of state shall
77	77	constitute notice of such limitation on liabilities of a series.
78	78	(c) Notwithstanding anything to the contrary set forth in the Kansas
79	79	revised limited liability company act or under other applicable law, in the
80	80	event that an operating agreement establishes or provides for the
81	81	establishment of one or more series, and if to the extent the records
82	82	maintained for any series account for the assets associated with such series
83	83	separately from the other assets of the limited liability company, or any
84	84	other series thereof, and if the operating agreement so provides, and if
85	85	notice of the limitation on liabilities of a series as referenced in this
86	86	subsection is set forth in the articles of organization of the limited liability
87	87	company and if the limited liability company has filed a certificate of
88	88	designation for each series which is to have limited liability under this
89	89	section, then the debts, liabilities, obligations and expenses incurred,
90	90	contracted for or otherwise existing with respect to such series shall be
91	91	enforceable against the assets of such series only, and not against the assets
92	92	of the limited liability company generally or any other series thereof, and,
93	93	unless otherwise provided in the operating agreement, none of the debts,
94	94	liabilities, obligations and expenses incurred, contracted for or otherwise
95	95	existing with respect to the limited liability company generally or any
96	96	other series thereof shall be enforceable against the assets of such series.
97	97	Neither the preceding sentences nor any provision pursuant thereto in an
98	98	operating agreement, articles of organization or certificate of designation
99	99	shall: Restrict a series or limited liability company on behalf of a series
100	100	from agreeing in the operating agreement or otherwise that any or all of
101	101	the debts, liabilities, obligations, and expenses incurred, contracted for, or
102	102	otherwise existing with respect to the limited liability company generally
103	103	or any other series thereof shall be enforceable against the assets of such
104	104	series; or restrict a limited liability company from agreeing in the
105	105	operating agreement or otherwise that any or all of the debts, liabilities,
106	106	obligations, and expenses incurred, contracted for, or otherwise existing
107	107	with respect to a series shall be enforceable against the assets of the
108	108	limited liability company generally. Assets associated with a series may be
109	109	held directly or indirectly, including in the name of such series, in the
110	110	name of the limited liability company, through a nominee or otherwise.
111	111	Records maintained for a series that reasonably identify its assets,
112	112	including by specific listing, category, type, quantity, computational, or
113	113	allocational formula or procedure, including a percentage or share of any
114	114	asset or assets, or by any other method where the identity of such assets is
115	115	objectively determinable, will be deemed to account for the assets
116	116	associated with such series separately from the other assets of the limited
117	117	liability company, or any other series thereof. As used in the Kansas
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161	161	revised limited liability company act, a reference to assets of a series
162	162	includes assets associated with such series, a reference to assets associated
163	163	with a series includes assets of such series, a reference to members or
164	164	managers of a series includes members or managers associated with such
165	165	series, and a reference to members or managers associated with a series
166	166	includes members or managers of such series. The following shall apply to
167	167	a series:
168	168	(1) A series may carry on any lawful business, purpose or activity,
169	169	whether or not for profit, with the exception of the business of granting
170	170	policies of insurance, assuming insurance risks, or banking as defined in
171	171	K.S.A. 9-702, and amendments thereto. Unless otherwise provided in an
172	172	operating agreement, a series shall have the power and capacity to, in its
173	173	own name, contract, hold title to assets, including real, personal, and
174	174	intangible property, grant liens and security interests, and sue and be sued
175	175	and otherwise conduct business and exercise the power of a limited
176	176	liability company under this article. The limited liability company and any
177	177	of its series may elect to consolidate its operations as a single taxpayer to
178	178	the extent required to file consolidated tax returns as permitted under
179	179	applicable law and elect to be treated as a single business for the purposes
180	180	of qualification or authorization to do business in this or any other state.
181	181	Such elections shall not affect the limitation of liability set forth in this
182	182	section except to the extent that the series have specifically accepted joint
183	183	liability by contract.
184	184	(2) Except as otherwise provided by the Kansas revised limited
185	185	liability company act, no member or manager of a series shall be obligated
186	186	personally for any debt, obligation or liability of such series, whether
187	187	arising in contract, tort or otherwise, solely by reason of being a member
188	188	or acting as manager of such series. Notwithstanding the preceding
189	189	sentence, under an operating agreement or under another agreement, a
190	190	member or manager may agree to be obligated personally for any or all of
191	191	the debts, obligations and liabilities of one or more series.
192	192	(3) An operating agreement may provide for classes or groups of
193	193	members or managers associated with a series having such relative rights,
194	194	powers and duties as the operating agreement may provide, and may make
195	195	provision for the future creation in the manner provided in the operating
196	196	agreement of additional classes or groups of members or managers
197	197	associated with such series having such relative rights, powers and duties
198	198	as may from time to time be established, including rights, powers and
199	199	duties senior to existing classes and groups of members or managers
200	200	associated with such series. An operating agreement may provide for the
201	201	taking of an action, including the amendment of the operating agreement,
202	202	without the vote, consent or approval of any member or manager or class
203	203	or group of members or managers, including an action to create under the
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247	247	provisions of the operating agreement a class or group of a series of
248	248	limited liability company interests that was not previously outstanding. An
249	249	operating agreement may provide that any member or class or group of
250	250	members associated with a series shall have no voting rights or ability to
251	251	otherwise participate in the management or governance of such series, but
252	252	any such member or class or group of members are owners of the series.
253	253	(4) An operating agreement may grant to all or certain identified
254	254	members or managers or a specified class or group of the members or
255	255	managers associated with a series the right to vote separately or with all or
256	256	any class or group of the members or managers associated with such
257	257	series, on any matter. Voting by members or managers associated with a
258	258	series may be on a per capita, number, financial interest, class, group or
259	259	any other basis.
260	260	(5) Unless otherwise provided in an operating agreement, the
261	261	management of a series shall be vested in the members associated with
262	262	such series in proportion to the then-current percentage or other interest of
263	263	members in the profits of such series owned by all of the members
264	264	associated with such series, the decision of members owning more than
265	265	50% of such percentage or other interest in the profits controlling, except
266	266	that if an operating agreement provides for the management of a series, in
267	267	whole or in part, by a manager or managers, the management of such
268	268	series, to the extent so provided, shall be vested in the manager or
269	269	managers who shall be chosen in the manner provided in the operating
270	270	agreement. The manager of a series shall also hold the offices and have the
271	271	responsibilities accorded to the manager as set forth in an operating
272	272	agreement. A series may have more than one manager. Subject to K.S.A.
273	273	17-76,105, and amendments thereto, a manager shall cease to be a
274	274	manager with respect to a series as provided in an operating agreement.
275	275	Except as otherwise provided in an operating agreement, any event under
276	276	the Kansas revised limited liability company act or in an operating
277	277	agreement that causes a manager to cease to be a manager with respect to a
278	278	series shall not, in itself, cause such manager to cease to be a manager of
279	279	the limited liability company or with respect to any other series thereof.
280	280	(6) Notwithstanding K.S.A. 17-76,109, and amendments thereto, but
281	281	subject to subsections (c)(7) and (c)(10), and unless otherwise provided in
282	282	an operating agreement, at the time a member of a series becomes entitled
283	283	to receive a distribution with respect to such series, the member has the
284	284	status of, and is entitled to all remedies available to, a creditor of such
285	285	series, with respect to the distribution. An operating agreement may
286	286	provide for the establishment of a record date with respect to allocations
287	287	and distributions with respect to a series.
288	288	(7) Notwithstanding K.S.A. 17-76,110(a), and amendments thereto, a
289	289	limited liability company may make a distribution with respect to a series.
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333	333	A limited liability company shall not make a distribution with respect to a
334	334	series to a member to the extent that at the time of the distribution, after
335	335	giving effect to the distribution, all liabilities of such series, other than
336	336	liabilities to members on account of their limited liability company
337	337	interests with respect to such series and liabilities for which the recourse of
338	338	creditors is limited to specified property of such series, exceed the fair
339	339	value of the assets associated with such series, except that the fair value of
340	340	property of such series that is subject to a liability for which the recourse
341	341	of creditors is limited shall be included in the assets associated with such
342	342	series only to the extent that the fair value of that property exceeds that
343	343	liability. For purposes of the immediately preceding sentence, the term
344	344	"distribution" shall not include amounts constituting reasonable
345	345	compensation for present or past services or reasonable payments made in
346	346	the ordinary course of business pursuant to a bona fide retirement plan or
347	347	other benefits program. A member who receives a distribution in violation
348	348	of this subsection, and who knew at the time of the distribution that the
349	349	distribution violated this subsection, shall be liable to the series for the
350	350	amount of the distribution. A member who receives a distribution in
351	351	violation of this subsection, and who did not know at the time of the
352	352	distribution that the distribution violated this subsection, shall not be liable
353	353	for the amount of the distribution. Subject to K.S.A. 17-76,110(c), and
354	354	amendments thereto, which shall apply to any distribution made with
355	355	respect to a series under this subsection, this subsection shall not affect any
356	356	obligation or liability of a member under an agreement or other applicable
357	357	law for the amount of a distribution.
358	358	(8) Unless otherwise provided in the operating agreement, a member
359	359	shall cease to be associated with a series and to have the power to exercise
360	360	any rights or powers of a member with respect to such series upon the
361	361	assignment of all of the member's limited liability company interest with
362	362	respect to such series. Except as otherwise provided in an operating
363	363	agreement, any event under the Kansas revised limited liability company
364	364	act or an operating agreement that causes a member to cease to be
365	365	associated with a series shall not, in itself, cause such member to cease to
366	366	be associated with any other series or terminate the continued membership
367	367	of a member in the limited liability company or cause the dissolution of
368	368	the series, regardless of whether such member was the last remaining
369	369	member associated with such series.
370	370	(9) Subject to K.S.A. 17-76,116, and amendments thereto, except to
371	371	the extent otherwise provided in the operating agreement, a series may be
372	372	dissolved and its affairs wound up without causing the dissolution of the
373	373	limited liability company. The dissolution of a series shall not affect the
374	374	limitation on liabilities of such series provided by this subsection (c). A
375	375	series is dissolved and its affairs shall be wound up upon the dissolution of
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419	419	the limited liability company under K.S.A. 17-76,116, and amendments
420	420	thereto, or otherwise upon the first to occur of the following:
421	421	(A) At the time specified in the operating agreement;
422	422	(B) upon the happening of events specified in the operating
423	423	agreement;
424	424	(C) unless otherwise provided in the operating agreement, upon the
425	425	vote, consent or approval of members associated with such series who own
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427	427	/3 or more of the then-current percentage or other interest in the profits of
428	428	such series of the limited liability company owned by all of the members
429	429	associated with such series; or
430	430	(D) the dissolution of such series under subsection (c)(11).
431	431	(10) Notwithstanding K.S.A. 17-76,118(a), and amendments thereto,
432	432	unless otherwise provided in the operating agreement, a manager
433	433	associated with a series who has not wrongfully dissolved such series or, if
434	434	none, the members associated with such series or a person consented to or
435	435	approved by the members associated with such series, in either case, by
436	436	members who own more than 50% of the then-current percentage or other
437	437	interest in the profits of such series owned by all of the members
438	438	associated with such series, may wind up the affairs of such series, but the
439	439	district court, upon cause shown, may wind up the affairs of a series upon
440	440	application of any member or manager associated with such series, or the
441	441	member's personal representative or assignee, and in connection therewith,
442	442	may appoint a liquidating trustee. The persons winding up the affairs of a
443	443	series may, in the name of the limited liability company and for and on
444	444	behalf of the limited liability company and such series, take all actions
445	445	with respect to such series as are permitted under K.S.A. 17-76,118(b), and
446	446	amendments thereto. The persons winding up the affairs of a series shall
447	447	provide for the claims and obligations of such series and distribute the
448	448	assets of such series as provided in K.S.A. 17-76,119, and amendments
449	449	thereto, which section shall apply to the winding up and distribution of
450	450	assets of a series. Actions taken in accordance with this subsection shall
451	451	not affect the liability of members and shall not impose liability on a
452	452	liquidating trustee.
453	453	(11) On application by or for a member or manager associated with a
454	454	series, the district court may decree dissolution of such series whenever it
455	455	is not reasonably practicable to carry on the business of such series in
456	456	conformity with an operating agreement.
457	457	(12) For all purposes of the laws of the state of Kansas, a series is an
458	458	association, regardless of the number of members or managers, if any, of
459	459	such series.
460	460	(d) In order to form a series of a limited liability company, a
461	461	certificate of designation must be filed in accordance with this subsection.
462	462	(1) (A) A certificate of designation shall set forth:
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506	506	(i) The name of the limited liability company; and
507	507	(ii) the name of the series.
508	508	(B) A certificate of designation may include any other matter that the
509	509	members of such series determine to include therein.
510	510	(C) A certificate of designation properly filed with the secretary of
511	511	state prior to July 1, 2020, shall be deemed to comply with the
512	512	requirements of this paragraph.
513	513	(2) A certificate of designation shall be executed in accordance with
514	514	K.S.A. 17-7908(b), and amendments thereto, and shall be filed in the
515	515	office of the secretary of state in accordance with K.S.A. 17-7910, and
516	516	amendments thereto. A certificate of designation is not an amendment to
517	517	the articles of organization of the limited liability company.
518	518	(3) A certificate of designation may be amended by filing a certificate
519	519	of amendment thereto in the office of the secretary of state.
520	520	(A) The certificate of amendment shall set forth:
521	521	(i) The name of the limited liability company;
522	522	(ii) the name of the series; and
523	523	(iii) the amendment to the certificate of designation.
524	524	(B) A certificate of designation properly filed with the secretary of
525	525	state prior to July 1, 2020, that changed a previously filed certificate of
526	526	designation shall be deemed to be a certificate of amendment thereto for
527	527	purposes of this paragraph.
528	528	(4) A manager of a series or, if there is no manager, then any member
529	529	of a series who becomes aware that any statement in a certificate of
530	530	designation filed with respect to such series was false when made, or that
531	531	any matter described therein has changed making the certificate of
532	532	designation false in any material respect, shall promptly amend the
533	533	certificate of designation.
534	534	(5) A certificate of designation may be amended at any time for any
535	535	other proper purpose.
536	536	(6) Unless otherwise provided in the Kansas revised limited liability
537	537	company act or unless a later effective date or time, which shall be a date
538	538	or time certain, is provided for in the certificate of amendment, a
539	539	certificate of amendment shall be effective at the time of its filing with the
540	540	secretary of state.
541	541	(7) A certificate of designation shall be canceled upon the
542	542	cancellation of the articles of organization of the limited liability company
543	543	named in the certificate of designation, or upon the filing of a certificate of
544	544	cancellation of the certificate of designation, or upon the future effective
545	545	date or time of a certificate of cancellation of the certificate of designation,
546	546	or as provided in K.S.A. 17-76,139(d), and amendments thereto, or upon
547	547	the filing of a certificate of merger or consolidation if the series is not the
548	548	surviving or resulting series in a merger or consolidation or upon the future
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592	592	effective date or time of a certificate of merger or consolidation if the
593	593	series is not the surviving or resulting series in a merger or consolidation.
594	594	A certificate of cancellation of the certificate of designation may be filed at
595	595	any time, and shall be filed, in the office of the secretary of state to
596	596	accomplish the cancellation of a certificate of designation upon the
597	597	dissolution of a series for which a certificate of designation was filed and
598	598	completion of the winding up of such series.
599	599	(A) A certificate of cancellation of the certificate of designation shall
600	600	set forth:
601	601	(i) The name of the limited liability company;
602	602	(ii) the name of the series;
603	603	(iii) the future effective date or time, which shall be a date or time
604	604	certain, of cancellation if it is not to be effective upon the filing of the
605	605	certificate of cancellation; and
606	606	(iv) any other information the person filing the certificate of
607	607	cancellation of the certificate of designation determines.
608	608	(B) A certificate of designation properly filed with the secretary of
609	609	state prior to July 1, 2020, that dissolved a series shall be deemed to be a
610	610	certificate of cancellation thereto for purposes of this paragraph.
611	611	(8) A certificate of cancellation of the certificate of designation that is
612	612	filed in the office of the secretary of state prior to the dissolution or the
613	613	completion of winding up of a series may be corrected as an erroneously
614	614	executed certificate of cancellation of the certificate of designation by
615	615	filing with the office of the secretary of state a certificate of correction of
616	616	such certificate of cancellation of the certificate of designation in
617	617	accordance with K.S.A. 17-7912, and amendments thereto.
618	618	(9) The secretary of state shall not issue a certificate of good standing
619	619	with respect to a series if the certificate of designation is canceled or the
620	620	limited liability company has ceased to be in good standing.
621	621	(e) The name of each series as set forth in its certificate of
622	622	designation:
623	623	(1) Shall include the name of the limited liability company, including
624	624	any word, abbreviation or designation required by K.S.A. 17-7920, and
625	625	amendments thereto;
626	626	(2) may contain the name of a member or manager;
627	627	(3) must comply with the requirements of K.S.A. 17-7918, and
628	628	amendments thereto, to the same extent as a covered entity; and
629	629	(4) may contain any word permitted by K.S.A. 17-7920, and
630	630	amendments thereto, and may not contain any word prohibited to be
631	631	included in the name of a limited liability company under Kansas law.
632	632	(f) If a foreign limited liability company that is registered to do
633	633	business in this state in accordance with K.S.A. 17-7931, and amendments
634	634	thereto, is governed by an operating agreement that establishes or provides
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678	678	for the establishment of a series of members, managers, limited liability
679	679	company interests or assets having separate rights, powers or duties with
680	680	respect to specified property or obligations of the foreign limited liability
681	681	company or profits and losses associated with specified property or
682	682	obligations, that fact shall be so stated on the application for registration as
683	683	a foreign limited liability company. In addition, the foreign limited liability
684	684	company shall state on such application whether the debts, liabilities and
685	685	obligations incurred, contracted for or otherwise existing with respect to a
686	686	particular series, if any, are enforceable against the assets of such series
687	687	only, and not against the assets of the foreign limited liability company
688	688	generally or any other series thereof, and whether any of the debts,
689	689	liabilities, obligations and expenses incurred, contracted for or otherwise
690	690	existing with respect to the foreign limited liability company generally or
691	691	any other series thereof shall be enforceable against the assets of such
692	692	series.
693	693	(g) An operating agreement may impose restrictions, duties and
694	694	obligations on members of the limited liability company or any series
695	695	thereof as a manner of internal governance, including, without limitation,
696	696	those with regard to:
697	697	(1) Choice of law, forum selection or consent to personal
698	698	jurisdiction;
699	699	(2) capital contributions;
700	700	(3) restrictions on, or terms and conditions of, the transfer of
701	701	membership interests;
702	702	(4) restrictive covenants, including noncompetition, nonsolicitation
703	703	and confidentiality provisions;
704	704	(5) fiduciary duties; and
705	705	(6) restrictions, duties or obligations to or for the benefit of the
706	706	limited liability company, other series thereof or their affiliates.
707	707	(h) The wrongful transfer of property from a series to another series
708	708	or the limited liability company as a whole with intent to hinder, delay or
709	709	defraud creditors of their just and lawful debts or damages, or to defraud
710	710	shall be subject to K.S.A. 33-102, and amendments thereto.
711	711	Sec. 2. K.S.A. 17-76,143 is hereby repealed.
712	712	Sec. 3. This act shall take effect and be in force from and after its
713	713	publication in the statute book.
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