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Regular Session, 2014
HOUSE BILL NO. 841
BY REPRESENTATIVE LEGER
CORPORATIONS: Provides for voting trusts as holders of limited liability company
certificates
AN ACT1
To amend and reenact R.S. 12:1301(A)(18) and 1316 and to enact R.S. 12:1318(E) and2
1370, relative to limited liability companies; to provide for the definition of person3
as it relates to limited liability companies; to provide relative to voting of managers;4
to provide relative to voting by proxy; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 12:1301(A)(18) and 1316 are hereby amended and reenacted and7
R.S. 12:1318(E) and 1370 are hereby enacted to read as follows: 8
§1301. Definitions9
A. As used in this Chapter, unless the context otherwise requires:10
* * *11
(18) "Person" means a natural person, corporation, partnership, limited12
partnership, domestic or foreign limited liability company, joint venture, trust13
including a common law trust, business trust, statutory trust, voting trust, or any14
other form of trust, estate, or association.15
* * *16
§1316. Voting by managers 17
Except as otherwise provided in the articles of organization or an operating18
agreement, if the limited liability company has more than one manager, each19
manager shall be entitled to a single vote on all matters properly brought before the20 HLS 14RS-1155 REENGROSSED
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managers, and all decisions of the managers shall be made by majority vote of the1
managers. In the absence of such a provision in the articles or operating agreement,2
no manager shall have the right to vote by proxy.3
* * *4
§1318. Voting rights of members 5
* * *6
E.(1) A member shall have the right to cast his vote either in person or,7
subject to the following provisions, by proxy duly authorized in writing, signed by8
the member and filed in the registered office of the limited liability company at or9
before the meeting.10
(2) The authority of the holder of a proxy to act shall not be revoked by the11
death of the member who executed the proxy unless, before the authority is12
exercised, written notice of such death is received by the registered office of the13
limited liability company.14
(3)(a) A proxy shall be revocable at will, unless otherwise validly provided15
by agreement or by any provision of the proxy. The validity of every unrevoked16
proxy shall cease eleven months after the date of its execution, unless some other17
definite period of validity is expressly provided. In no case shall an outstanding18
proxy be valid for longer than three years.19
(b) The revocation of a proxy, if revocable, shall not be effective until20
written notice has been given to the office of the limited liability company, or unless21
a proxy of later date is filed with the office at or before the meeting.22
(4) A proxy regular on its face and signed in the name of a member entitled23
to vote at the meeting shall be deemed valid unless challenged before it is voted, and24
the burden of proving invalidity shall be on the challenger.25
(5) When shares are registered in the names of two or more persons, other26
than trustees, a proxy signed by any one or more of them shall be deemed valid27
unless the limited liability company receives written notice to the contrary from a28
nonsigning member before the proxy is voted.29 HLS 14RS-1155 REENGROSSED
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(6) Except as otherwise provided in the articles or bylaws, without limiting1
the manner in which a member may authorize another person or persons to act for2
him as proxy, pursuant to this Subsection, the following shall constitute a valid3
means by which a member may grant such authority:4
(a) A member may execute a writing authorizing another person or persons5
to act for him as proxy. Execution may be accomplished by the member or his6
authorized officer, director, employee, or agent signing such writing or causing his7
signature to be affixed to such writing by any reasonable means, including but not8
limited to facsimile signature.9
(b)(i) A member may authorize another person or persons to act for him as10
proxy by transmitting or authorizing the transmission of a telegram, cablegram, or11
other means of electronic transmission to the person who will be the holder of the12
proxy, or to a proxy solicitation firm, proxy support service organization, or like13
agent duly authorized by the person who will be the holder of the proxy to receive14
such transmission.15
(ii) Any such telegram, cablegram, or other means of electronic transmission16
shall be submitted with information from which it can be determined that the17
telegram, cablegram, or other electronic transmission was authorized by the member.18
If it is determined that such telegrams, cablegrams, or other electronic transmissions19
are valid, the inspectors or other such persons making that determination shall20
specify the information upon which they relied.21
(c) Any copy, facsimile telecommunication, or other reliable reproduction22
of the writing or transmission, created pursuant to this Subsection may be substituted23
or used in lieu of the original writing or transmission for all purposes for which the24
original writing or transmission could be used. Such copy, facsimile25
telecommunication, or other reliable reproduction shall be a complete reproduction26
of the entire original writing or transmission.27
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§1370. Voting trusts1
A. One or more members of a limited liability company may, pursuant to an2
agreement in writing, transfer voting shares to any one or more persons or company3
having authority to act as trustees, for the purpose of vesting in the transferees, as4
trustees, for a period not exceeding fifteen years and upon the terms and conditions5
stated in the agreement, all voting or other rights pertaining to such shares. The6
voting trust agreement may stipulate that the time of the agreement may be extended7
under the same terms and conditions for an additional period, not to exceed ten years8
from the date of expiration of the original agreement. When the original agreement9
contains such a stipulation, it shall provide for the manner, method, time, and place10
for a meeting of all of the depositing members to vote on the extension. At least a11
majority in interest of all depositing members, and a larger percentage if stipulated,12
must vote for extension if the original agreement is to remain effective beyond its13
original expiration date.14
B. Unless the agreement provides otherwise, any other member may at any15
time transfer his voting shares to the same trustee or trustees upon the terms and16
conditions stated in the agreement, and thereupon shall be bound by, and shall have17
the benefits of, all of the provisions of the voting trust agreement.18
C. The certificates of voting shares transferred to a trustee or trustees shall19
be surrendered and cancelled, and new certificates therefor issued in the name of the20
trustee or trustees. In the new certificates it shall appear that they are issued pursuant21
to the voting trust agreement. In the entry of transfer on the records of the limited22
liability company, it shall be noted that the transfer is made pursuant to the23
agreement.24
D. The trustee or trustees shall execute and deliver voting trust certificates25
to the transferors. Such voting trust certificates shall be transferable in the same26
manner and with the same effect as a membership interest under the provisions of27
R.S. 12:1330.28 HLS 14RS-1155 REENGROSSED
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E. The trustee or trustees shall possess all voting and other rights pertaining1
to the shares transferred and registered in his or their names, subject to the terms and2
conditions of, and for the period specified in, the agreement.3
F. Unless otherwise provided in the agreement, the following shall apply:4
(1) The trustee or trustees may vote in person or by proxy.5
(2) If there are two or more trustees, the manner of voting shall be6
determined by the will of the majority of the trustees, unless the voting trust7
agreement appointing the trustees directs that the shares shall be voted in some other8
way. When, in any case, the trustees are equally divided as to the manner of voting9
shares transferred jointly in their names, any court of competent jurisdiction may,10
upon petition filed by any of the trustees or by any member, appoint an additional11
person to act with the trustees in determining the manner in which the shares shall12
be voted on the particular questions as to which the trustees are divided.13
(3) Vacancies among the trustees shall be filled by the remaining trustee or14
trustees.15
(4) A trustee shall incur no responsibility as trustee except for his individual16
neglect or malfeasance.17
G. The trustee or trustees shall keep at a place available to holders of voting18
trust certificates, correct and complete books and records of account relating to the19
trust, and a record containing the names and addresses of all persons who are holders20
of voting trust certificates, the number of shares represented by each certificate held21
by them, and the dates when they became the owners of the shares. The record may22
be in written form or in any other form capable of being converted into written form23
within a reasonable time.24
H. A duplicate of every voting trust agreement shall be filed in the registered25
office of the limited liability company. The duplicate and the record of voting trust26
certificate holders shall be subject to the same right of inspection by a member or a27
holder of a voting trust certificate, in person or by agent or attorney, as are the28
records of the limited liability company under R.S. 12:1319.29 HLS 14RS-1155 REENGROSSED
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Leger HB No. 841
Abstract: Provides relative to limited liability companies.
Present law defines person as a natural person, corporation, partnership, limited partnership,
domestic or foreign limited liability company, joint venture, trust, estate, or association for
purposes of the Limited Liability Company Law.
Proposed law provides that a trust for purposes of the definition of "person" in present law
shall include a common law trust, business trust, statutory trust, voting trust, or any other
form of trust.
Present law provides that except as otherwise provided in the articles of organization or an
operating agreement, if the limited liability company has more than one manager, each
manager shall be entitled to a single vote on all matters properly brought before the
managers, and all decisions of the managers shall be made by majority vote of the managers.
Proposed law adds that in the absence of such a provision in the articles or operating
agreement, no manager of a limited liability company has the right to vote by proxy.
Present law provides for the voting rights of members of a limited liability company.
Proposed law adds that a member shall have the right to cast his vote either in person or,
subject to the certain provisions of proposed law, by proxy duly authorized in writing, signed
by the member and filed in the registered office of the limited liability company at or before
the meeting.
Proposed law includes provisions relative to member voting by proxy, such as revocable and
irrevocable proxy voting, challenging a proxy regular, proxy voting when voting shares are
registered in the names of two or more persons, other than trustees, and transmission
methods to authorize another to act as a proxy.
Proposed law permits and provides for voting trusts, including provisions relative to trust
agreements, the transfer of certificates of voting shares to trustees, the execution and
deliverance of voting trust certificates to transferors, trustee voting rights, and trustee
requirements to maintain and keep available for holders of voting trust certificates correct
and complete books and records of accounts relative to the trusts.
(Amends R.S. 12:1301(A)(18) and 1316; Adds R.S. 12:1318(E) and 1370)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made technical changes.
House Floor Amendments to the engrossed bill.
1. Made technical changes.