HB 221 (BR 436) - S. Brinkman
AN ACT relating to business entities.
Create seven new sections in KRS Chapter 275, the Kentucky Limited Liability Company Act, to authorize the creation of "series" limited liability companies; provide that the word "series" shall appear in the name of the company; provide that the written operating agreement can designate members, managers, or company interests as separate series with regard to specific property, assets, debts, liabilities, or profits or losses associated therewith, of the company; provide other structural arrangements that may be included in the written operating agreement; provide conditions under which debts, liabilities, and obligations of a series can be enforceable only against that specific series and not against other series within the company or the company generally, and conversely as against a specific series; provide creditor's rights of members associated with a series; provide for the dissolution and termination of a series limited liability company; create seven new sections in KRS Chapter 275 to authorize the creation of "special purpose" limited liability companies; provide that the words "special purpose" shall appear in the name of the company; provide that the special purpose limited liability company shall be headed by an independent member or independent manager; provide that the special purpose limited liability company shall not, without the prior written consent of the independent member or manager, institute bankruptcy or other related proceedings, or to otherwise liquidate its assets or arrange for the transfer thereof into another business entity, to provide that fiduciary and other related duties as between the independent member or manager and the members or managers do not exist; provide that restrictions in the written operating agreement on actions of members or managers without the prior written consent of the independent member of manager shall be specifically enforceable; create a new section of KRS Chapter 275 to provide that a series limited liability company may also be a special purpose limited liability company; create five new sections of KRS Chapter 275 to authorize limited liability companies to acquire corporations through a "share exchange," and to provide for a plan of share exchange, its adoption, and rights of members with respect thereto; create five new sections of KRS Chapter 275, modeled in part after KRS 273.237, 273.241, 273.303, 273.333, 273.320, and 273.327, relating to nonprofit corporations, to provide that a nonprofit limited liability company shall not issue interests, make distributions, or make loans to its members or managers; provide for the distribution of assets of a nonprofit limited liability company in the process of dissolution; provide for judicial sale of assets of a nonprofit limited liability company; provide for the involuntary dissolution of a nonprofit limited liability company; amend KRS 275.015 to include new definitions for the chapter; amend KRS 275.020 to require the organizer to name the initial manager or initial member; specify that the limited liability company begins on the date the articles of organization are filed with the Secretary of State; provide that the Secretary of State's filing of the articles of organization is proof that the organizer satisfied all conditions precedent to organization, except in proceedings by the state to cancel or revoke the organization or involuntarily dissolve the limited liability company; amend KRS 275.025 to include articles of organization requirements for nonprofit, series, and special purpose limited liability companies; create a new section of KRS Chapter 275 to place therein substantive language describing a written operating agreement in KRS 275.0125; amend KRS 275.030 to specify that members have no right to dissent from an amendment to the articles of organization unless otherwise provided in the articles or in the written operating agreement; amend KRS 275.045 to allow the Secretary of State to accept electronically transmitted documents for filing and payment of filing fees by credit or debit card; make technical amendments to KRS 275.060, relating to effective date and time of filing; make technical and conforming amendments to KRS 275.065, relating to articles of correction; make technical and conforming amendments to KRS 275.070 and KRS 275.080, relating to filing of documents with the Secretary of State; amend KRS 275.095, relating to joint and several liability for persons purporting to act for a limited liability company that is not organized, to preclude liability to any person with knowledge that the organization had not yet taken place so long as the organization took place shortly thereafter; amend KRS 275.105 to allow holders of reserved names to cancel that reservation; amend KRS 275.170 to provide that voting and quorum requirements for member or manager actions subject to review shall not include the member or manager whose action is being reviewed; amend KRS 275.175 to provide that a member has no right to dissent from an amendment to the operating agreement unless otherwise provided in the articles of organization or the written operating agreement; amend KRS 275.195 to allow persons to be admitted as members of the limited liability company and to receive an interest therein without making a contribution or a promise thereof, and to allow persons to be admitted without acquiring an interest in the LLC; make technical and conforming amendments to KRS 275.200, relating to the obligations of members to make contributions; amend KRS 275.225 to exempt reasonable compensation and payments from a bona fide retirement plan from the definition of "distribution" for the purpose of that section; amend KRS 275.240 to include a "series" limited liability company; amend KRS 275.255 to notwithstand KRS 355.9-406 and 355.9-408, relating to restrictions on assignment; amend KRS 275.285 to provide additional contingencies relating to the last remaining member or successor in interest before a limited liability company shall be dissolved; amend KRS 275.345 and KRS 275.350 to provide that members shall not have the right to dissent from a merger unless otherwise provided in the articles of organization, a written operating agreement, or an agreement and plan of merger, and to prohibit a nonprofit limited liability company from merging with any entity other than a domestic nonprofit limited liability company; amend KRS 313.240 to allow dentists to practice under the organization of a professional limited liability company; and make technical amendments to KRS 11A.010, 11A.201, 304.38-040, 304.38-070, 311A.070, 273.161, and 68.200 to change the phrase "limited liability corporation" to "limited liability company" and to alphabetize definitions.
Jan 7-introduced in House
Jan 8-to Judiciary (H)
Feb 6-posted in committee