SESSION OF 2025
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2371
As Amended by Senate Committee on Judiciary
Brief*
HB 2371, as amended, would make amendments to the
Revised Limited Liability Company Act (LLC Act) to specify
document forms and signature and delivery options, and
clarify filing fee limits; amend the Business Entity
Transactions Act to modify requirements related to various
certificates; and amend the Business Entity Standard
Treatment Act to modify registration requirements with the
Secretary of State and clarify certain provisions related to
resident agent change.
The bill would make technical amendments to
implement the provisions of the bill, remove definitions that
are relocated in the bill, remove a prior effective date, and
ensure consistency in statutory language.
Revised Limited Liability Company Act (New Sections 1,
2; Sections 3-23)
Definitions (Section 3)
The bill would define “document” and “electronic
transmission” and would amend definitions for “manager,”
“member,” and “operating agreement.”
Document. The bill would define “document” to mean:
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
https://klrd.gov/ ●Any tangible medium on which information is
inscribed. “Document” would include handwritten,
typed, printed, or similar instruments and copies of
such instruments; and
●An electronic transmission.
Electronic Transmission. The bill would define
“electronic transmission” to mean any form of communication
not directly involving the physical transmission of paper,
including the use of, or participation in, one or more electronic
networks or databases, including one or more distributed
electronic networks or databases, that creates a record that
may be retained, retrieved, and reviewed by a recipient
thereof, and directly reproduced in paper form by such
recipient through an automated process.
Manager. The bill would amend the existing definition of
“manager” to specify that it includes a manager of the limited
liability company (LLC) generally and a manager associated
with a series of the LLC. Unless the context otherwise
requires, references in the LLC Act to a manager would be
deemed to include both a general and series manager.
Member. The bill would amend the existing definition of
“member” to specify that it includes a member of the LLC
generally and those associated with a series of the LLC.
Unless the context otherwise requires, references in the LLC
Act to a member would be deemed to include both a general
and series member.
Operating Agreement. Current law provides that an
LLC is bound by its operating agreement, whether or not it
has executed such agreement. The bill would amend the
existing definition of “operating agreement” to:
●Specify that these operating agreement provisions
would include any series of the LLC; and
2- 2371 ●Specify that the term may consist of one or more
agreements, instruments, or other writings, and
include or incorporate one or more schedules,
supplements, or other writings containing
provisions as to the conduct of the business and
affairs of the LLC or any related series.
Documentation, Signature, Delivery, and Receipt (New
Section 1)
The bill would provide that any act or transactions
governed by the LLC Act or an operating agreement of an
LLC may be provided for in a document. An electronic
transmission would be considered the equivalent of a written
document.
The below provisions would apply solely for purposes of
determining whether an act or transaction has been
documented, and whether the document has been signed
and delivered in accordance with the LLC Act and the
operating agreement.
Signature. The bill would provide that if the LLC Act or
an operating agreement require or permit a signature, such
signature could be manual, facsimile, conformed, or an
electronic signature. For this purpose, an electronic signature
would include an electronic symbol or process that is
attached to, or logistically associated with, a document, and
executed or adopted by a person who has intent to execute,
authenticate, or adopt the document. The bill would further
specify that a person could execute a document with their
signature.
Delivery. Unless otherwise provided in the operating
agreement, or agreed between the sender and recipient, an
electronic transmission would be considered as delivered
when it enters an information processing system that was
designated by the recipient for the purpose of receiving such
transmissions. Such transmission would be required to be in
3- 2371 a form capable of being processed by such system and
retrievable from the system.
Recipient designation of an information processing
system would be determined by the operating agreement or
from the context and surrounding circumstances, including
the parties’ conduct.
Receipt. Additionally, the bill would consider an
electronic transmission delivered even if no person is aware
of its receipt. Receipt of an electronic acknowledgment from
an information processing system would be proof that such
transmission was received, but would not be proof that the
content of the transmission corresponds with what was
received.
Uniform Electronic Transactions Act (UETA). The bill
would clarify that its provisions regarding documentation,
signature, delivery, and receipt would not preclude persons
from conducting a transaction in accordance with the UETA, if
the part or parts of the transaction governed by the LLC Act
are documented, signed, and delivered in accordance with
either the bill’s electronic transmission provisions, or those in
the LLC Act.
Exceptions. The bill would clarify that its
documentation, signature, delivery, and receipt provisions
would not apply to:
●A document filed with or submitted to the Secretary
of State, a court, or other judicial or governmental
body of the State;
●A certificate of LLC interest, except that a signature
on such certificate could be manual, facsimile, or
electronic; and
●An act or transaction governed by the Business
Entity Standard Treatment Act.
4- 2371 The bill would specify that these exceptions would not
create any presumption about the lawful means to
document any act or transaction or the lawful means to
sign or deliver such document.
Operating Agreement Restrictions. An operating
agreement would only be allowed to limit the application of
the signature, delivery, and receipt provisions, unless it
expressly restricts one or more means of documenting an act
or transaction, or of signing or delivering a document that
would otherwise be permitted by the bill.
Federal Law. The bill would provide that if any provision
of the LLC Act is later deemed to modify, limit, or supersede
the federal Electronic Signatures in Global and National
Commerce Act, the provisions of the LLC Act would control to
the fullest extent permitted by such federal law.
Subscription (New Section 2)
The bill would specify that a subscription for an LLC
interest, whether submitted in writing, electronically, or
another legal method, is irrevocable to the extent contained in
the subscription terms.
Void or Voidable Acts or Transactions (Section 5)
Ratification or Waiver. Under the bill, any act or
transaction that could be taken by or in respect of an LLC
under the LLC Act that is void or voidable when taken may be
ratified.
If the act or transaction conflicts with the terms of an
operating agreement, such conflict could be waived by the
members, manager, or other persons who are required to
give approval:
●For such act or transaction to be validly taken; or
5- 2371 ●To amend the operating agreement in a manner
that would permit the act or transaction to be
validly taken, in each case at the time of such
ratification or waiver.
Additionally, if the void or voidable act or transaction was
the issuance or assignment of any LLC interests, such
interests purportedly issued or assigned would be deemed
not to have been issued or assigned for purposes of
determining whether such act was ratified or waived.
Date of Act or Transaction. Any act or transaction that
is ratified, or waived, would be deemed validly taken at the
time of the act or transaction.
Operating Agreement Amendment Notice. The bill
would require notice be given pursuant to the terms of an
operating agreement. If notice is required after a ratification or
waiver is effectuated, the bill would require notice be given to
members, managers, or other persons who would have been
entitled to notice, but who had not otherwise received notice
or participated in the ratification or waiver.
Validity of a Ratification or Waiver. The bill would
further specify that its ratification or waiver procedures may
not be construed to limit the accomplishment of a ratification
or waiver of a void or voidable act by any other means
permitted by law.
Judicial Review. Under the bill, an LLC or any member,
manager, or person claiming to be harmed by a ratification or
waiver could file an action in district court. Upon receiving the
application, the court could review an act or transaction and
make a determination of its validity and the effectiveness of
such ratification or waiver.
Applications for judicial review would be required to
name the LLC as a party and service of process be made to
the resident agent of the LLC, which would be deemed to be
service to the company itself. No other party would be
6- 2371 required to be joined in order for the court to adjudicate the
validity and effectiveness of the ratification or waiver.
The court would be allowed to order further or other
notice of the application be made by the LLC. The bill would
provide that these notice provisions would not limit or affect
the right to serve process in any other manner and that these
provisions are an extension of, rather than a limit on, existing
service rights of legal process upon non-residents.
Act or Omission by an Officer (Section 6)
Except as provided in the operating agreement, for any
act or omission occurring after June 30, 2025, the bill would
state that for indemnification purposes, the term “officer”
includes an officer of the LLC who:
●Is or was the president, chief executive officer,
chief operating officer, chief financial officer, chief
legal officer, controller, treasurer, or chief
accounting officer of the LLC; or
●Is or was identified in the LLC’s public filings with
the U.S. Securities and Exchange Commission,
because such person is or was one of the most
highly compensated executive officers of the LLC.
Merger or Consolidation (Section 7)
Under current law, a domestic LLC may merge or
consolidate with one or more LLCs to become a surviving or
resulting LLC, per the merger or consolidation agreement.
The surviving or resulting LLC is required to file a certificate
or merger or consolidation with the Secretary of State. If a
domestic LLC is the surviving entity, it is required to state
within its certificate any amendments it desires to be made to
its articles of organization.
7- 2371 The bill would allow the surviving domestic LLC to also
amend and restate the articles of organization of the surviving
entity in its entirety in the certificate. Additionally, the bill
would allow such entity to make amendments to its operating
agreement. Continuing law also allows a surviving entity to
adopt a new operating agreement instead.
Appraisal Rights (Section 8)
Under current law, appraisal rights may be provided in
an operating agreement or an agreement of merger or
consolidation. The bill would provide that there are no
statutory appraisal rights, unless provided in either such
agreement or under a plan of division. The bill also would
make amendments to include a series or division of an LLC
when such entity is party to the merger or consolidation.
Division of an LLC (Section 9)
Under continuing law, an LLC may divide itself into two
or more domestic LLCs. The dividing company is required to
file a certificate of division with the Office of the Secretary of
State.
The bill would amend provisions of the LLC Act
concerning the content of such certificates to allow the
dividing company to include any other information it desires.
Furthermore, the bill would allow a certificate of division to be
amended to change the name or business address of a
division contact, or to add additional information, if desired.
Such amendments would be effective upon filing with the
Office of the Secretary of State. The agency would be
required to accept the filing of a certificate of amendment for
all division companies, provided at least one such company is
in good standing at the time of filing.
Elective Amendments. Amendments to a certificate of
division could be made by filing a certificate of amendment for
each division company that exists as an LLC in the Office of
8- 2371 the Secretary of State. Such certificate of amendment would
be required to include:
●The name of the dividing company, and if changed,
the name of the original dividing company;
●The name of the division of the company to which
the amendment relates; and
●The amendment to the certificate of division.
Required Amendment. Upon becoming aware that the
name or business address of the division contact, or other
information required to be in the certificate, was false when
made, or that such information has changed, either the
manager or member (if no manager exists) of the dividing
company would be required to amend the certificate. These
provisions would apply for six years following the date of
division, regardless if the dividing company is a survivor or no
longer exists.
Execution of Amended Certificates. Unless otherwise
provided in a plan of division, or in the certificate, each
certificate of amendment would be required to be executed:
●If the dividing company is a surviving company, by
one or more authorized persons on behalf of the
dividing company acting on behalf of the division
company to which the certificate of amendment
relates; and
●If the dividing company is not a surviving company
or no longer exists as an LLC, by one or more
authorized persons on behalf of a resulting
company acting on behalf of the division company
who is the subject of the certificate of amendment.
Each division company would be deemed to have
consented to the execution of the certificate of amendment.
9- 2371 Membership in a Division Company (Section 10)
The bill would amend existing law to allow an operating
agreement to name existing or new members of the LLC.
Additionally, the bill would create new provisions to specify
the procedure of admitting a new member of a division
company. Such members could be named in an operating
agreement of a division company, or in the plan of division. If
an inconsistency exists, or the person is being admitted as a
member of an LLC pursuant to a division in which the LLC is
not a division company, the terms of the plan of division
would control.
Examination of LLC Information by Members (Section 12)
Under current law, LLC members may examine certain
information kept by the LLC, subject to reasonable standards.
The bill would specify that such information includes books,
records, and other documents. Conforming amendments
would be made to reference books and other documents
within the records provisions. References to written records
would be replaced with paper records, which would allow the
printing of an electronic record.
Additionally, the bill would state that a member’s right to
obtain information under the LLC Act or an operating
agreement for a purpose reasonably related to their interest
as a member or other stated purpose is necessary and
essential to achieving that purpose.
Continuing law allows members to obtain information
and allows rights to be restricted by an operating agreement.
The bill would clarify that such right may include examination
of a record and that such right may be expanded in an
operating agreement. The bill would also state that these
information provisions could not be construed to limit the
ability of an LLC to expand or restrict the rights of a member
or manager to obtain or examine information by any other
means permitted by law.
10- 2371 Delegation of Rights, Powers, and Duties (Section 14)
Continuing law allows a member or manager of an LLC
to delegate their rights, powers, and duties to manage and
control the business and affairs of the LLC to one or more
persons.
The bill would allow delegation to a committee of one or
more persons and would provide that any such delegation
could be made irrespective of whether the delegating person
has a conflict of interest with respect to the underlying matter
and reason for delegation. Persons to whom the rights,
powers, and duties are being delegated would not be deemed
to have the same conflict of interest as the delegating person,
unless the conflict exists with that person independently.
LLC Filing Fee (Section 15)
Current law requires an application and recording fee of
$150 be paid to the Office of the Secretary of State when a
LLC files its articles or organization or, if a foreign LLC, its
application to do business. The bill would allow the Secretary
of State to set such filing fee through rules and regulations,
with a limit of $150.
Series LLCs (Sections 16–17)
Continuing law allows an operating agreement to
establish or designate a series of members, managers, LLC
company interests, or assets. A series is formed by filing a
certificate of designation with the Secretary of State. A series
has the power and capacity to contract, hold title to assets,
sue, and be sued in its own name.
Consolidation. The bill would further clarify that a
series could conduct business and exercise the power of an
LLC. Additionally, an LLC or any of its series could elect to
consolidate its operations as a single taxpayer to the extent
required to file consolidated tax returns and elect to be
11- 2371 treated as a single business for the purposes of qualification
or authorization to do business in Kansas or another state.
Such election would not affect liability limitations under the
Act except to the extent the series has specifically accepted
joint liability by contract.
Merger or Consolidation. Under continuing law, a
series could merge or consolidate with one or more other
series of the same LLC by filing a certificate of merger or
consolidation of series with the Office of the Secretary of
State. The bill would allow the certificate to be amended at a
later date. Such amendments could amend and restate the
certificate of designation of the surviving series in its entirety.
Voting Rights. Continuing law allows an operating
agreement to deny voting rights to a member, class, or group
of members of a series. The bill would allow the operating
agreement to also prohibit participation in the management or
governance of such series, but still confer ownership of the
series to such member, class, or group of members.
Series Operating Agreement. The bill would specify
that an operating agreement may impose restrictions, duties,
and obligations on members of the LLC or any series of the
LLC as a matter of internal governance, including, without
limitation, those with regard to:
●Choice of law, forum selection, or consent to
personal jurisdiction;
●Capital contributions;
●Restrictions on, or terms and conditions of, the
transfer of membership interests;
●Restrictive covenants, including non-competition,
non-solicitation, and confidentiality provisions;
●Fiduciary duties; and
12- 2371 ●Restrictions, duties, or obligations to or for the
benefit of the LLC, other series, or their affiliates.
Wrongful Transfer of Property. If a series wrongfully
transfers property to another series or the LLC as a whole
with an intent to hinder, delay, or defraud creditors of its just
and lawful debts or damages, or to defraud, such transfers
would be deemed void pursuant to continuing law.
Dissolution of a Series or LLC (Sections 16 and 18)
Dissolution of a Series. Under the bill, if an operating
agreement provides the manner in which a dissolution of a
series is to be revoked, such manner could be followed.
A series dissolution may be revoked if provided for in the
LLC’s operating agreement, unless:
●The LLC has dissolved and the dissolution was not
revoked; or
●The LCC operating agreement prohibits revocation
of a series dissolution.
If the series dissolution is revoked, the LLC would not be
dissolved and its affairs not wound up, if prior to filing a
certificate of cancellation, the series is continued through one
of the following events:
●If the dissolution is effected by the vote or consent
of the members associated with the series, or other
persons whose approval is required under an
operating agreement; or
●In the case of a dissolution not effectuated by a
vote or consent, and which occurs either at a time
specified in the operating agreement or after the
occurrence of certain specified events, is stopped
due to an agreement to amend the operating
13- 2371 agreement, or approval of members to revoke such
dissolution.
If a series is dissolved by dissolution of the LLC, unless
a certificate of cancellation of the series’ certificate of
designation has been filed in the office of the Secretary of
State, or the operating agreement prohibits revocation of the
dissolution of a series, the dissolution of the series would be
automatically revoked upon any revocation of the dissolution
of the underlying LLC.
The bill would further specify that continuing law and its
amendments could not be construed to limit the revocation of
dissolution of a series by other means allowed by law.
Dissolution of an LLC. Continuing law allows for
dissolution of an LLC, which may be revoked in certain
circumstances. The bill would add provisions to allow an
operating agreement to specify persons whose vote, consent,
or approval is required for a dissolution of an LLC. Such
persons could vote to revoke a dissolution that would have
otherwise occurred.
LLC Forfeiture or Cancellation (Section 19)
Under continuing law, a domestic LLC or a foreign LLC
may forfeit their articles of incorporation or authority to do
business if they fail to update records with the Secretary of
State regarding their registered agent or registered office
when a change occurs. An LLC could be reinstated by filing a
certificate of reinstatement with the Secretary of State and
paying certain fees. The bill would update references to the
certificate of reinstatement to specify that it applies to an LLC.
The bill would specify that upon filing of the certificate of
reinstatement, that reinstatement would also apply to each
series that has not been terminated and wound up and that
other privileges of being reinstated would apply to the LLC
and any such series.
14- 2371 Statutory Public Benefit Companies (Sections 20–23)
The bill would amend and repeal law related to the
formation and operation of a statutory public benefit limited
liability company (SPBLLC).
Under current law, an LLC may elect to become an
SPBLLC. The bill would allow an LLC to be formed as an
SPBLLC. If an LLC is not formed as an SPBLLC, the bill
would allow the LLC to become designated as such by the
terms of its operating agreement, or by amending its
operating agreement and articles of organization to comply
with the bill. Under current law, certain provisions are required
to be contained with an SPBLLC’s articles of incorporation.
The bill would make conforming amendments to require the
same information be contained in its operating agreement.
In the event of an inconsistency between the operating
agreement and articles of incorporation, the bill would specify
that the operating agreement would control among those
bound by such agreement. If a manager of the SPBLLC, or if
there is no manager, any other member of such, becomes
aware that the specified public benefits are inaccurately set
forth in the articles of incorporation, such person shall
promptly amend such articles. Any provisions of the operating
agreement or articles of incorporation that are inconsistent
with the provisions of the bill would not be effective to the
extent of such inconsistency.
Business Entity Transactions Act (Sections 24–29)
The bill would make amendments to current law
provisions related to certain certificates, including certificates
of merger, certificates of interest exchange, certificates of
conversion, and certificates of domestication.
Certificate of Merger. Current law requirements for
certificates of merger would be amended to require a
statement that the merger will be approved by each merging
15- 2371 entity prior to the time the merger becomes effective. Under
continuing law, when a merger is effective, the surviving
entity’s public organic document is amended as provided in
the certificate of merger. The bill would allow such certificate
to amend and restate the public organic document entirely.
Certificate of Interest Exchange. Current law
requirements for certificates of interest exchange would be
amended to require a statement that the interest exchange
will be approved by the acquired entity prior to the time the
exchange becomes effective. Under continuing law, when an
interest exchange is effective, the acquired entity’s public
organic document is amended as provided in the certificate of
merger. The bill would allow such certificate to amend and
restate the public organic document entirely.
Certificate of Conversion. Current law requirements
for certificates of conversion would be amended to require a
statement that the conversion will be approved by each
converting entity prior to the time the conversion becomes
effective.
Certificate of Domestication. Current law requirements
for certificates of domestication would be amended to require
a statement that the conversion will be approved by each
converting entity prior to the time the domestication becomes
effective.
Business Entity Standard Treatment Act (Sections 30–33)
Filings of Certificate. The bill would make conforming
amendments to require the filing of certain documents
addressed by the bill with the Office of the Secretary of State,
including certificates of amendment to certificate of
designation, and certificates of merger or consolidation of
series.
Resident Agent—Good Standing. The bill would
require any domestic entity that serves as a resident agent for
a covered entity be in good standing with the State.
16- 2371 Resident Agent—Name Change. Continuing law
provides that a merger or consolidation of the resident agent,
with or into another entity who succeeds to its assets by
operation of law, constitutes a change of name, which
requires a records update with the Office of the Secretary of
State.
Under the bill, any of the following events would also be
deemed a change of name:
●The conversion of the resident agent into another
person; or
●A division of the resident agent in which an
identified resulting person succeeds to all of the
assets and liabilities of the resident agent related to
its resident agent business pursuant to a plan of
division, as set forth in a certificate of division.
Resident Agent—Certificate of Resignation. Under
continuing law, a resident agent for a business may resign
without appointing a successor if they pay a fee, if authorized
by law, and by filing a certificate of resignation with the Office
of the Secretary of State. The bill would amend current law to
require the resigning resident agent to provide notice of
resignation to the covered entity, rather than each affected
entity, at least 30 days prior to filing the certificate.
The bill would be in effect upon publication in the
Kansas Register.
Background
The bill was introduced by the House Committee on
Judiciary at the request of a representative of the Kansas Bar
Association (KBA).
17- 2371 House Committee on Judiciary
In the House Committee hearing, proponent testimony
was provided by representatives of the KBA and the Office of
the Secretary of State. The KBA representative stated the bill
was the product of a KBA study committee’s proposal to
integrate various changes that had been made in the
Delaware Limited Liability Company Act, which is the model
for Kansas law, allowing Kansas courts to also refer to
Delaware corporation and LLC jurisprudence. The
representative of the Office of the Secretary of State stated
the agency specifically requested changes to corporate filing
fees that are static under current law, but could be adjusted to
a lower amount under the bill.
Neutral testimony was provided by representatives of
the Kansas Bankers Association and the Kansas Chamber.
The Kansas Chamber conferee indicated a desire by
members of the Kansas Chamber to make revisions to
provisions concerning series limited LLCs within the Act. The
Bankers Association conferee indicated support for the
Chamber proposal, if series LLC amendments are made,
because the proposal has integrated language to address
concerns about series limited LLC independence and shared
tax status.
No other testimony was provided.
The House Committee amended the bill to incorporate
the amendments suggested by the representatives of the
Kansas Chamber and the Kansas Bankers Association
regarding series LLCS.
Senate Committee on Judiciary
In the Senate Committee hearing, proponent testimony
was provided by representatives of the Office of the Kansas
Secretary of State; Kansas Chamber; and the Kansas Bar
Association. The proponents stated the bill, as amended,
18- 2371 would be helpful to Kansas courts, agencies, practitioners,
and businesses by making the process for LLC filings clearer
and more efficient.
Written-only neutral testimony was provided by a
representative of the Kansas Bankers Association.
No other testimony was provided.
The Senate Committee amended the bill to make the
effective date to be upon publication in the Kansas Register.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Office of Secretary
of State indicates enactment of the bill would not have a fiscal
effect on agency operations.
Revised Limited Liability Company Act; documents; electronic transmission;
subscription; filing fee; Secretary of State
19- 2371