47-34A-210. Failure or refusal to sign record.

If a person required by § 47-34A-205 to sign any record fails or refuses to do so, any other person who is adversely affected by the failure or refusal may petition the state circuit court to direct the signing of the record. If the court finds that it is proper for the record to be signed and that a person so designated has failed or refused to sign the record, it shall order the secretary of state to sign and file an appropriate record.

Source: SL 1998, ch 272, § 210.

47-34A-211. Annual report for secretary of state.

A limited liability company, and a foreign limited liability company authorized to transact business in this state, except a bank organized pursuant to § 51A-3-1.1, shall deliver to the secretary of state for filing an annual report pursuant to §§ 59-11-24 to 59-11-26, inclusive.

Source: SL 1998, ch 272, § 211; SL 2004, ch 289, § 5; SL 2005, ch 241, § 2; SL 2008, ch 275, § 76.

47-34A-212. Fees.

The secretary of state shall charge and collect for:

(a)    Filing the articles of organization in the case of a domestic limited liability company, a filing fee of one hundred fifty dollars. Filing the articles of organization in the case of a foreign limited liability company, a filing fee of seven hundred fifty dollars;

(b)    A reporting fee of fifty dollars, due and payable with the filing of each annual report. Each entity that does not file or refuses to file its annual report within the time prescribed is subject to a penalty of fifty dollars to be assessed by the secretary of state;

(c)    Filing the articles of organization in the case of a domestic limited liability company, where the articles of organization contain a notice that the limited liability company is authorized to establish one or more series, a filing fee of two hundred dollars. Filing an application for a certificate of authority in the case of a foreign limited liability company authorized to establish a series under the laws of another state or jurisdiction, or series of such limited liability company on its own behalf, a filing fee of eight hundred dollars.

Source: SL 1998, ch 272, § 212; SL 1999, ch 221, § 1; SL 2003, ch 8, § 23; SL 2004, ch 279, § 2; SL 2005, ch 241, § 3; SL 2009, ch 4, § 18; SL 2016, ch 2, § 2; SL 2020, ch 200, § 9, eff. Nov. 15, 2020.

47-34A-301. Agency of members and managers.

(a) Subject to subsections (b) and (c):

(1)    Each member is an agent of the limited liability company for the purpose of its business, and an act of a member, including the signing of an instrument in the company's name, for apparently carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company, unless the member had no authority to act for the company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority.

(2)    An act of a member which is not apparently for carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company only if the act was authorized by the other members.

(b) Subject to subsection (c), in a manager-managed company:

(1)    A member is not an agent of the company for the purpose of its business solely by reason of being a member. Each manager is an agent of the company for the purpose of its business, and an act of a manager, including the signing of an instrument in the company's name, for apparently carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company, unless the manager had no authority to act for the company in the particular matter and the person with whom the manager was dealing knew or had notice that the manager lacked authority.

(2)    An act of a manager which is not apparently for carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company only if the act was authorized under § 47-34A-404.1.

(c) Unless the articles of organization limit their authority, any member of a member-managed company or manager of a manager-managed company may sign and deliver any instrument transferring or affecting the company's interest in real property. The instrument is conclusive in favor of a person who gives value without knowledge of the lack of the authority of the person signing and delivering the instrument.

Source: SL 1998, ch 272, § 301.

47-34A-302. Limited liability company liable for member's or manager's actionable conduct.

A limited liability company is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a member or manager acting in the ordinary course of business of the company or with authority of the company.

Source: SL 1998, ch 272, § 302.

47-34A-303. Liability of members and managers.

(a)     A debt, obligation, or other liability of a limited liability company is solely the debt, obligation, or other liability of the company. A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or liability of the company solely by reason of being or acting as a member or manager. This subsection applies regardless of the dissolution of the company.

(b)     The failure of a limited liability company to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a member or manager for a debt, obligation, or other liability of the company.

Source: SL 1998, ch 272, § 303; SL 2020, ch 199, § 1.

47-34A-401. Becoming a member.

(a) If a limited liability company is to have only one member upon formation, the person becomes a member as agreed by that person and the organizer of the company. That person and the organizer may be, but need not be, different persons. If different, the organizer acts on behalf of the initial member.

(b) If a limited liability company is to have more than one member upon formation, those persons become members as agreed by the persons before the formation of the company. The organizer acts on behalf of the persons in forming the company and may be, but need not be, one of the persons.

(c) After formation of a limited liability company, a person becomes a member:

(1)    As provided in the operating agreement;

(2)    As the result of a transaction effective under Article 9;

(3)    With the consent of all the members; or

(4)    If, within 90 consecutive days after the company ceases to have any members:

(A)    The last person to have been a member, or the legal representative of that person, designates a person to become a member; and

(B)    The designated person consents to become a member.

(d) A person may become a member without acquiring a distributional interest and without making or being obligated to make a contribution to the limited liability company.

Source: SL 1998, ch 272, § 401; SL 2013, ch 233, § 6.

47-34A-401.1. Form of contribution.

A contribution of a member of a limited liability company may consist of tangible or intangible property or other benefit to a limited liability company, including money, promissory notes, services performed, other agreements to contribute money or property, or contracts for services to be performed.

Source: SL 2013, ch 233, § 7.

47-34A-402. Liability for contributions.

(a) A person's obligation to make a contribution to a limited liability company is not excused by the person's death, disability, or other inability to perform personally. If a person does not make the required contribution, the person or person's estate is obligated to contribute money equal to the value of that part of the contribution which has not been made at the option of the company.

(b) A creditor of a limited liability company which extends credit or otherwise acts in reliance on an obligation described in subsection (a), and without notice of any compromise under § 47-34A-404.1(c)(5), may enforce the obligation.

Source: SL 1998, ch 272, § 402; SL 2013, ch 233, § 8.

47-34A-403. Member's and manager's rights to payments and reimbursement.

(a) A limited liability company shall reimburse a member or manager for payments made and indemnify a member or manager for liabilities incurred by the member or manager in the ordinary course of the business of the company or for the preservation of its business or property.

(b) A limited liability company shall reimburse a member for an advance to the company beyond the amount of contribution the member agreed to make.

(c) A payment or advance made by a member which gives rise to an obligation of a limited liability company under subsection (a) or (b) constitutes a loan to the company upon which interest accrues from the date of the payment or advance.

(d) A member is not entitled to remuneration for services performed for a limited liability company, except for reasonable compensation for services rendered in winding up the business of the company.

(e) A limited liability company may purchase and maintain insurance on behalf of a member or manager of the limited liability company against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if the operating agreement could not eliminate or limit the person's liability to the company for the conduct giving rise to the liability.

Source: SL 1998, ch 272, § 403; SL 2013, ch 233, § 9.

47-34A-404.1. Management of limited liability company.

(a) In a member-managed company:

(1)    Each member has equal rights in the management and conduct of the company's business; and

(2)    Except as otherwise provided in subsection (c), any matter relating to the business of the company may be decided by a majority of the members.

(b) In a manager-managed company:

(1)    Each manager has equal rights in the management and conduct of the company's business;

(2)    Except as otherwise provided in subsection (c), any matter relating to the business of the company may be exclusively decided by the manager or, if there is more than one manager, by a majority of the managers; and

(3)    A manager:

(i)    Must be designated, appointed, elected, removed, or replaced by a vote, approval, or consent of a majority of the members; and

(ii)    Holds office until a successor has been elected and qualified, unless the manager sooner resigns or is removed.

(c) The only matters of a member-or manager-managed company's business requiring the consent of all of the members are:

(1)    The amendment of the operating agreement under § 47-34A-103;

(2)    The authorization or ratification of acts or transactions under § 47-34A-103(b)(2)(ii) which would otherwise violate the duty of loyalty;

(3)    An amendment to the articles of organization under § 47-34A-204;

(4)    The compromise of an obligation to make a contribution under § 47-34A-402(b);

(5)    The compromise, as among members, of an obligation of a member to make a contribution or return money or other property paid or distributed in violation of this chapter;

(6)    The making of interim distributions under § 47-34A-405(a), including the redemption of an interest;

(7)    The admission of a new member;

(8)    The use of the company's property to redeem an interest subject to a charging order;

(9)    The consent to dissolve the company under § 47-34A-801(a)(2);

(10)    A waiver of the right to have the company's business wound up and the company terminated under § 47-34A-802(b);

(11)    The consent of members to merge with another entity under § 47-34A-904(c)(1); and

(12)    The sale, lease, exchange, or other disposal of all, or substantially all, of the company's property with or without goodwill.

(d) Action requiring the consent of members or managers under this chapter may be taken without a meeting.

(e) A member or manager may appoint a proxy to vote or otherwise act for the member or manager by signing an appointment instrument, either personally or by the member's or manager's attorney-in-fact.

Source: SL 1998, ch 272, § 404.1.

47-34A-404.2. Classes and voting.

Nothing in this chapter prohibits the articles of organization from establishing classes or groups of one or more members having certain expressed relative rights, powers, or duties, including voting rights and the articles of organization may provide for the future creation, in the manner provided in the articles of organization, of additional classes or groups of members having certain relative rights, powers, or duties, including voting rights, expressed either in the regulations or at the time of creation. The rights, powers, or duties of a class or group may be senior to those of one or more existing classes or groups of members.

Source: SL 1998, ch 272, § 404.2.

47-34A-405. Sharing of and right to distributions.

(a) Any distributions made by a limited liability company before its dissolution and winding up must be in equal shares.

(b) A member has no right to receive, and may not be required to accept, a distribution in kind.

(c) If a member becomes entitled to receive a distribution, the member has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution.

Source: SL 1998, ch 272, § 405.

47-34A-406. Limitations on distributions.

(a) A distribution may not be made if, after the distribution is made:

(1)    The limited liability company would not be able to pay its debts as they become due in the ordinary course of business; or

(2)    The company's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the company were to be dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential rights upon dissolution, winding up, and termination of members whose preferential rights are superior to those receiving the distribution.

(b) A limited liability company may base a determination that a distribution is not prohibited under subsection (a) on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

(c) Except as otherwise provided in subsection (e), the effect of a distribution under subsection (a) is measured:

(1)    In the case of distribution by purchase, redemption, or other acquisition of a distributional interest in a limited liability company, as of the date money or other property is transferred or debt incurred by the company; and

(2)    In all other cases, as of the date the:

(i)    Distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization; or

(ii)    Payment is made if it occurs more than one hundred twenty days after the date of authorization.

(d) A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the company's indebtedness to its general, unsecured creditors.

(e) Indebtedness of a limited liability company, including indebtedness issued in connection with or as part of a distribution, is not considered a liability for purposes of determinations under subsection (a) if its terms provide that payment of principal and interest are made only if and to the extent that payment of a distribution to members could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest on the indebtedness is treated as a distribution, the effect of which is measured on the date the payment is made.

(f) In subsection (a), "distribution" does not include amounts (i) constituting reasonable compensation for present or past services or (ii) reasonable payments made in the ordinary course of business under a bona fide retirement plan or other benefits program.

Source: SL 1998, ch 272, § 406; SL 2013, ch 233, § 10.

47-34A-407. Liability for improper distributions.

(a) Any member of a member-managed company, or a manager of a manager-managed company who votes for or assents to a distribution made in violation of § 47-34A-406, the articles of organization, or the operating agreement is personally liable to the company for the amount of the distribution which exceeds the amount that could have been distributed without violating § 47-34A-406, the articles of organization, or the operating agreement if it is established that the member or manager did not perform the member's or manager's duties in compliance with § 47-34A-409.

(b) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in subsection (a) applies to the other members and not the member that the operating agreement relieves of authority and responsibility.

(c) A member of a manager-managed company who knew a distribution was made in violation of § 47-34A-406, the articles of organization, or the operating agreement is personally liable to the company, but only to the extent that the distribution received by the member exceeded the amount that could have been properly paid under § 47-34A-406.

(d) A member or manager against whom an action is brought under this section may implead in the action all:

(1)    Other members or managers who voted for or assented to the distribution in violation of subsection (a) and may compel contribution from them; and

(2)    Members who received a distribution in violation of subsection (b) and may compel contribution from the member in the amount received in violation of subsection (b).

(e) A proceeding under this section is barred unless it is commenced within two years after the distribution.

Source: SL 1998, ch 272, § 407; SL 2013, ch 233, § 11.

47-34A-408. Members' and managers' right to information.

(a) A limited liability company shall provide managers and members and the respective agents and attorneys of members access for proper purposes to its records, if any, at the company's principal office or other reasonable locations specified in the operating agreement. The company shall provide former members and their respective agents and attorneys access for proper purposes to records pertaining to the period during which they were members. The right of access provides the opportunity to inspect and copy records during ordinary business hours. The company may impose a reasonable charge, limited to the costs of labor and material, for copies of records furnished.

(b) A limited liability company shall furnish to a manager:

(1)    Without demand, information concerning the company's business or affairs reasonably required for the proper exercise of the manager's performance of the manager's duties under the operating agreement or this chapter; and

(2)    On demand, other information concerning the company's business or affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

(c) A limited liability company shall furnish to a member, and to the legal representative of a deceased member or member under legal disability:

(1)    Without demand, information concerning the company's business or affairs reasonably required for the proper exercise of the member's rights and performance of the member's duties under the operating agreement or this chapter; and

(2)    On demand, other information concerning the company's business or affairs, except to the extent the demand or the information demanded is unreasonable or otherwise improper under the circumstances.

(d) A member has the right upon written demand given to the limited liability company to obtain at the company's expense a copy of any written operating agreement.

Source: SL 1998, ch 272, § 408; SL 2010, ch 218, § 1.

47-34A-409. General standards of member's and manager's conduct.

(a) The only fiduciary duties a member owes to a member-managed company and, subject to § 47-34A-1101(b), its other members are the duty of loyalty and the duty of care imposed by subsections (b) and (c).

(b) A member's duty of loyalty to a member-managed company and its other members is limited to the following:

(1)    To account to the company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company's business or derived from a use by the member of the company's property, including the appropriation of a company's opportunity;

(2)    To refrain from dealing with the company in the conduct or winding up of the company's business as or on behalf of a party having an interest adverse to the company; and

(3)    To refrain from competing with the company in the conduct of the company's business before the dissolution of the company.

(c) A member's duty of care to a member-managed company and its other members in the conduct of and winding up of the company's business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law.

(d) A member shall discharge the duties to a member-managed company and its other members under this chapter or under the operating agreement and exercise any rights consistently with the obligation of good faith and fair dealing.

(e) A member of a member-managed company does not violate a duty or obligation under this chapter or under the operating agreement merely because the member's conduct furthers the member's own interest.

(f) A member of a member-managed company may lend money to and transact other business with the company. As to each loan or transaction, the rights and obligations of the member are the same as those of a person who is not a member, subject to other applicable law.

(g) This section applies to a person winding up the limited liability company's business as the personal or legal representative of the last surviving member as if the person were a member.

(h) In a manager-managed company:

(1)    A member who is not also a manager owes no duties to the company or to the other members solely by reason of being a member;

(2)    A manager is held to the same standards of conduct prescribed for members in subsections (b) through (f);

(3)    A member who pursuant to the operating agreement exercises some or all of the rights of a manager in the management and conduct of the company's business is held to the standards of conduct in subsections (b) through (f) to the extent that the member exercises the managerial authority vested in a manager by this chapter; and

(4)    A manager is relieved of liability imposed by law for violation of the standards prescribed by subsections (b) through (f) to the extent of the managerial authority delegated to the members by the operating agreement.

Source: SL 1998, ch 272, § 409; SL 2013, ch 233, § 12.

47-34A-410. Actions by members.

(a) A member may maintain an action against a limited liability company or another member for legal or equitable relief, with or without an accounting as to the company's business, to enforce:

(1)    The member's rights under the operating agreement;

(2)    The member's rights under this chapter; and

(3)    The rights and otherwise protect the interests of the member, including rights and interests arising independently of the member's relationship to the company.

(b) The accrual, and any time limited for the assertion, of a right of action for a remedy under this section is governed by other law. A right to an accounting upon a dissolution and winding up does not revive a claim barred by law.

Source: SL 1998, ch 272, § 410.

47-34A-411. Good faith reliance upon information.

A member or manager of a limited liability company shall be fully protected in relying in good faith upon the records of the limited liability company and upon such information, opinions, reports, or statements presented to the limited liability company by any of its other managers, members, officers, employees, or committees of the limited liability company, or any other person, as to matters the member or manager reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the limited liability company, including information, opinions, reports, or statements as to the value and amount of the assets, liabilities, profits, or losses of the limited liability company or any other facts pertinent to the existence and amount of assets from which distributions to members might properly be paid.

Source: SL 2010, ch 218, § 14.

47-34A-501. Member's distributional interest.

(a) A member is not a co-owner of, and has no transferable interest in, property of a limited liability company.

(b) A distributional interest in a limited liability company is personal property and, subject to § 47-34A-502 and § 47-34A-503, may be transferred in whole or in part.

(c) An operating agreement may provide that a distributional interest may be evidenced by a certificate of the interest issued by the limited liability company and, subject to § 47-34A-503, may also provide for the transfer of any interest represented by the certificate.

Source: SL 1998, ch 272, § 501.

47-34A-502. Transfer of distributional interest.

A transfer of a distributional interest does not entitle the transferee to become or to exercise any rights of a member. A transfer entitles the transferee to receive, to the extent transferred, only the distributions to which the transferor would be entitled.

Source: SL 1998, ch 272, § 502.

47-34A-503. Rights of a transferee.

(a) A transferee of a distributional interest may become a member of a limited liability company if and to the extent that the transferor gives the transferee the right in accordance with authority described in the operating agreement or all other members consent.

(b) A transferee who has become a member, to the extent transferred, has the rights and powers, and is subject to the restrictions and liabilities, of a member under the operating agreement of a limited liability company and this chapter. A transferee who becomes a member also is liable for the transferor member's obligations to make contributions under § 47-34A-402 and for obligations under § 47-34A-407 to return unlawful distributions, but the transferee is not obligated for the transferor member's liabilities unknown to the transferee at the time the transferee becomes a member.

(c) Whether or not a transferee of a distributional interest becomes a member under subsection (a), the transferor is not released from liability to the limited liability company under the operating agreement or this chapter.

(d) A transferee who does not become a member is not entitled to participate in the management or conduct of the limited liability company's business, require access to information concerning the company's transactions, or inspect or copy any of the company's records.

(e) A transferee who does not become a member is entitled to:

(1)    Receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled;

(2)    Receive, upon dissolution and winding up of the limited liability company's business:

(i)    In accordance with the transfer, the net amount otherwise distributable to the transferor;

(ii)    A statement of account only from the date of the latest statement of account agreed to by all the members.

(f) A limited liability company need not give effect to a transfer until it has notice of the transfer.

Source: SL 1998, ch 272, § 503; SL 2009, ch 234, § 1.

47-34A-504. Rights of creditor.

(a) On application by a judgment creditor of a member of a limited liability company or of a member's transferee, and following notice to the limited liability company of such application, a court having jurisdiction may charge the distributional interest of the judgment debtor to satisfy the judgment.

(b) A charging order constitutes a lien on the judgment debtor's distributional interest.

(c) A distributional interest in a limited liability company which is charged may be redeemed:

(1)    By the judgment debtor;

(2)    With property other than the company's property, by one or more of the other members; or

(3)    With the company's property, but only if permitted by the operating agreement.

(d) This chapter does not affect a member's right under exemption laws with respect to the member's distributional interest in a limited liability company.

(e) This section provides the exclusive remedy that a judgment creditor of a member's distributional interest or a member's assignee may use to satisfy a judgment out of the judgment debtor's interest in a limited liability company. No other remedy, including foreclosure on the member's distributional interest or a court order for directions, accounts, and inquiries that the debtor, member might have made, is available to the judgment creditor attempting to satisfy the judgment out of the judgment debtor's interest in the limited liability company.

(f) No creditor of a member or a member's assignee has any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the company.

(g) This section applies to single member limited liability companies in addition to limited liability companies with more than one member.

Source: SL 1998, ch 272, § 504; SL 2007, ch 262, § 1; SL 2009, ch 234, § 2; SL 2012, ch 226, § 1; SL 2013, ch 233, § 13.

47-34A-601. Events causing a member's dissociation.

A member is dissociated from a limited liability company upon the occurrence of any of the following events:

(1)    The company's having notice of the member's express will to withdraw upon the date of notice or on a later date specified by the member;

(2)    An event agreed to in the operating agreement as causing the member's dissociation;

(3)    Upon transfer of all of a member's distributional interest, other than a transfer for security purposes or a court order charging the member's distributional interest which has not been foreclosed;

(4)    The member's expulsion pursuant to the operating agreement;

(5)    The member's expulsion by unanimous vote of the other members if:

(i)    It is unlawful to carry on the company's business with the member;

(ii)    There has been a transfer of substantially all of the member's distributional interest, other than a transfer for security purposes or a court order charging the member's distributional interest which has not been foreclosed;

(iii)    Within ninety days after the company notifies a corporate member that it will be expelled because it has filed a certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct business has been suspended by the jurisdiction of its incorporation, the member fails to obtain a revocation of the certificate of dissolution or a reinstatement of its charter or its right to conduct business; or

(iv)    A corporation, partnership, limited liability company, or other entity that is a member has been dissolved and its business is being wound up;

(6)    On application by the company or another member, the member's expulsion by judicial determination because the member:

(i)    Engaged in wrongful conduct that adversely and materially affected the company's business;

(ii)    Willfully or persistently committed a material breach of the operating agreement or of a duty owed to the company or the other members under § 47-34A-409; or

(iii)    Engaged in conduct relating to the company's business which makes it not reasonably practicable to carry on the business with the member;

(7)    The member's:

(i)    Becoming a debtor in bankruptcy;

(ii)    Executing an assignment for the benefit of creditors;

(iii)    Seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or liquidator of the member or of all or substantially all of the member's property; or

(iv)    Failing, within ninety days after the appointment, to have vacated or stayed the appointment of a trustee, receiver, or liquidator of the member or of all or substantially all of the member's property obtained without the member's consent or acquiescence, or failing within ninety days after the expiration of a stay to have the appointment vacated;

(8)    In the case of a member who is an individual:

(i)    The member's death;

(ii)    The appointment of a guardian or general conservator for the member; or

(iii)    A judicial determination that the member has otherwise become incapable of performing the member's duties under the operating agreement;

(9)    In the case of a member that is a trust or is acting as a member by virtue of being a trustee of a trust, distribution of the trust's entire rights to receive distributions from the company, but not merely by reason of the substitution of a successor trustee;

(10)    In the case of a member that is an estate or is acting as a member by virtue of being a personal representative of an estate, distribution of the estate's entire rights to receive distributions from the company, but not merely the substitution of a successor personal representative; or

(11)    Termination of the existence of a member if the member is not an individual, estate, or trust other than a business trust.

Source: SL 1998, ch 272, § 601; SL 2013, ch 233, § 14.

47-34A-602. Member's power to dissociate; wrongful dissociation.

(a) Unless otherwise provided in the operating agreement, a member has the power to dissociate from a limited liability company at any time, rightfully or wrongfully, by express will pursuant to § 47-34A-601(1).

(b) If the operating agreement has not eliminated a member's power to dissociate, the member's dissociation from a limited liability company is wrongful only if:

(1)    It is in breach of an express provision of the agreement; or

(2)    Before the expiration of the term specified in the articles of organization if any:

(i)    The member withdraws by express will;

(ii)    The member is expelled by judicial determination under § 47-34A-601(6);

(iii)    The member is dissociated by becoming a debtor in bankruptcy; or

(iv)    In the case of a member who is not an individual, trust other than a business trust, or estate, the member is expelled or otherwise dissociated because it willfully dissolved or terminated its existence.

(c) A member who wrongfully dissociates from a limited liability company is liable to the company and to the other members for damages caused by the dissociation. The liability is in addition to any other obligation of the member to the company or to the other members.

Source: SL 1998, ch 272, § 602.

47-34A-603. Effect of a member's dissociation.

(a) A limited liability company does not dissolve and wind up its business as result of a member's dissociation.

(b) Upon a member's dissociation from a limited liability company:

(1)    The member's right to participate in the management and conduct of the company's business terminates, except as otherwise provided in § 47-34A-803, and the member ceases to be a member and is treated the same as a transferee of a member;

(2)    The member's duty of loyalty under § 47-34A-409(b)(3) terminates; and

(3)    The member's duty of loyalty under § 47-34A-409(b)(1) and (2) and duty of care under § 47-34A-409(c) continue only with regard to matters arising and events occurring before the member's dissociation.

Source: SL 1998, ch 272, § 603.

47-34A-604. Dissociated member's power to bind limited liability company.

For two years after a member dissociates without the dissociation resulting in a dissolution and winding up of a limited liability company's business, the company, including a surviving company under Article 9, is bound by an act of the dissociated member which would have bound the company under § 47-34A-301 before dissociation only if at the time of entering into the transaction the other party:

(1)    Reasonably believed that the dissociated member was then a member;

(2)    Did not have notice of the member's dissociation; and

(3)    Is not deemed to have had notice under § 47-34A-605.

Source: SL 1998, ch 272, § 604.

47-34A-605. State of dissociation.

(a) A dissociated member or a limited liability company may file in the office of the secretary of state a statement of dissociation stating the name of the company and that the member is dissociated from the company. If the statement is filed by a dissociated member a copy of the statement must also be delivered to the company by the dissociated member.

(b) For the purposes of §§ 47-34A-301 and 47-34A-604, a person not a member is deemed to have notice of the dissociation ninety days after the statement of dissociation is filed.

Source: SL 1998, ch 272, § 605.

47-34A-701 . Series of members, managers, or limited liability company interests permitted.

An operating agreement may establish or provide for the establishment of a series of members, managers, or limited liability company interests having separate rights, powers, or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations. To the extent provided in the operating agreement, any such series may have a separate business purpose or investment objective.

Source: SL 2020, ch 200, § 1, eff. Nov. 15, 2020.

47-34A-702 . Liability of series for debts of limited liability company or other series.

(a) Notwithstanding any other provisions of law to the contrary, the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series shall be enforceable against the assets of such series only, and not against the assets of the limited liability company generally or any other series thereof, if all of the following apply:

(1) The operating agreement creates one or more series;

(2) Separate and distinct records are maintained for or on behalf of any such series;

(3) The assets associated with any such series, whether held directly or indirectly, including through a nominee or otherwise, are accounted for separately from the other assets of the limited liability company or of any other series;

(4) The operating agreement provides for the limitations on liabilities of a series described in this subsection;

(5) Notice of the limitation on liabilities of a series described in this subsection is included in the limited liability company’s articles of organization; and

(6) A certificate of designation has been issued for each series that is to have limited liability under this section.

(b) A particular series shall be deemed to have possession, custody, and control only of the books, records, information, and documentation related to such series and not of the books, records, information, and documentation related to the limited liability company as a whole or any other series thereof.

(c) With respect to a particular series, unless otherwise provided in the operating agreement, none of the debts, liabilities, obligations, and expenses incurred, contracted for or otherwise existing with respect to a limited liability company generally, or any other series thereof, are enforceable against the assets of such series, subject to the provisions of subsection (a).

(d) Compliance with subdivisions (a)(5) and (a)(6) of this section shall constitute notice of such limitation of liability of a series.

(e) A series with limited liability shall be treated as a separate entity to the extent set forth in the articles of organization. Each series with limited liability may, in its own name, contract, hold title to assets, including real and personal property, whether tangible or intangible, grant security interests, sue and be sued, and otherwise conduct business and exercise the powers of a limited liability company under this chapter. The limited liability company and any of its series may elect to consolidate its operations as a single taxpayer to the extent permitted under applicable law, elect to work cooperatively, elect to contract jointly, or elect to be treated as a single business for the purposes of qualification or authorization to do business in this or any other state. Such elections do not affect the limitation of liability set forth in this section except to the extent that the series have specifically accepted joint liability by contract.

Source: SL 2020, ch 200, § 2, eff. Nov. 15, 2020.

47-34A-703 . Name of series.

Except in the case of a foreign limited liability company that has adopted a name that is not the name under which it is registered in its jurisdiction of organization, as permitted under §  47-34A-1005 , the name of the series with limited liability is required to contain the entire name of the limited liability company and be distinguishable from the names of the other series set forth in the articles of organization. In the case of a foreign limited liability company that has adopted a name that is not the name under which it is registered in its jurisdiction of organization, as permitted under §  47-34A-1005 , the name of the series with limited liability must contain the entire name under which the foreign limited liability company has been admitted to transact business in this state.

Source: SL 2020, ch 200, § 3, eff. Nov. 15, 2020.

47-34A-704. Formation of series—Amendment to certificate of designation—Dissolution of series—Registered agent and office.

(a)

(1)    Upon issuance by the secretary of state of a certificate of designation setting forth the name of the series with limited liability, in compliance with § 47-34A-203 or amendments under § 47-34A-204, the series' existence shall begin;

(2)    Each certificate of designation issued by the secretary of state shall be conclusive evidence that all required conditions have been met and that the series has been or shall be legally organized and formed under this section and is notice for all purposes of all other facts required to be set forth therein as of the filing date on the certificate;

(3)    The name of a series with limited liability under this section may be changed by filing an application for a new certificate of designation with the secretary of state pursuant to § 47-34A-204, identifying the series whose name is being changed and the new name of such series. If the managers of a series are not the same as the managers of the limited liability company, the names of the managers of a manager-managed series may be changed by filing an application for a new certificate of designation with the secretary of state;

(4)    A series with limited liability under this section may be dissolved (i) upon the occurrence of any of the events referenced in § 47-34A-801 with respect to the series or (ii) by the dissolution of the limited liability company as provided in § 47-34A-801. Except to the extent otherwise provided in the operating agreement, a series may be dissolved and its affairs wound up without causing the dissolution of the limited liability company or any other series. The dissolution of a series established in accordance with § 47-34A-702 does not affect the limitation on liabilities of such series provided by § 47-34A-702. A series will be terminated (i) upon the dissolution and winding up of the limited liability company and the filing of articles of termination pursuant to § 47-34A-805, or (ii) upon the dissolution and winding up of the series and filing of an application for a certificate of designation identifying the series being terminated;

(5)    Articles of organization, articles of amendment, articles of termination, or applications for certificates of designation described under this subsection may be executed by the limited liability company or any manager, person, or entity designated in the operating agreement for the limited liability company.

(b) If different from the limited liability company, the application for the certificate of designation shall list the names of the managers if the series is manager-managed.

(c) A series of a limited liability company shall be deemed to be in good standing as long as the limited liability company is in good standing. A series of a limited liability company is administratively dissolved when the limited liability company is administratively dissolved, and the series will be reinstated if the limited liability company is reinstated.

(d) The registered agent and registered office for the limited liability company appointed under chapter 59-11 shall serve as the agent and office for service of process for each series in this state.

Source: SL 2020, ch 200, § 4, eff. Nov. 15, 2020.

47-34A-705 . Rights, powers, and duties relating to series governed by operating agreement.

(a) An operating agreement may provide for classes or groups of members or managers associated with a series having such relative rights, powers, and duties as an operating agreement may provide and may make provision for the future creation of additional classes or groups of members or managers associated with the series having such relative rights, powers, and duties as may be established, including rights, powers, and duties senior and subordinate to or different from existing classes and groups of members or managers associated with the series.

(b) A series may be managed either by the member or members associated with the series or by the manager or managers chosen by the members of such series, as provided in the operating agreement. Unless otherwise provided in an operating agreement, the management of a series shall be vested in the members associated with such series.

(c) An operating agreement may grant to all or certain identified members or managers, or to a specified class or group of the members or managers associated with a series, the right to vote separately or with all or any class or group of the members or managers associated with the series, on any matter. An operating agreement may provide that any member or class or group of members associated with a series shall have no voting rights or ability to otherwise participate in the management or governance of such series, but any such member or class or group of members are owners of the series.

(d) Except as modified in this section, the provisions of this chapter that are generally applicable to limited liability companies and their managers, members, and transferees shall be applicable to each particular series with respect to the operation of such series. Except as otherwise provided in an operating agreement, a manager of a manager-managed series owes the duties referenced in §  47-34A-409 only to the series for which the manager serves as a manager. A manager of a manager-managed series does not owe any duty (i) to any series for which the manager does not serve as a manager, (ii) to the members of another series for which the manager does not serve as a manager, in their capacity as members of another series, (iii) to the limited liability company, or (iv) to the members of the limited liability company, in their capacity as members of the limited liability company. Except as otherwise provided in an operating agreement, a member of a member-managed series owes the duties referenced in §  47-34A-409 only to the series of which the member is a member. A member of a member-managed series does not owe any duty (i) to any series of which the member is not a member, (ii) to the members of another series of which the member is not a member, in their capacity as members of another series, (iii) to the limited liability company, or (iv) to the members of the limited liability company, in their capacity as members of the limited liability company.

(e) Except as otherwise provided in an operating agreement, any event specified in this chapter or in an operating agreement that causes a manager to cease to be a manager with respect to a series does not, in itself, cause such manager to cease to be a manager of the limited liability company or with respect to any other series thereof.

(f) Except as otherwise provided in an operating agreement, any event specified in this chapter or in an operating agreement that causes a member to cease to be associated with a series does not, in itself, cause such member to cease to be associated with any other series, terminate the continued membership of a member in the limited liability company, or cause the termination of the series, regardless of whether such member was the last remaining member associated with such series.

(g) An operating agreement may impose restrictions, duties, and obligations on members of the limited liability company or any series thereof as a matter of internal governance, including, without limitation, those with regard to:

(1) Choice of law, forum selection, or consent to personal jurisdiction;

(2) Capital contributions;

(3) Restrictions on, or terms and conditions of, the transfer of membership interests;

(4) Restrictive covenants, including noncompetition, nonsolicitation, and confidentiality provisions;

(5) Fiduciary duties; and

(6) Restrictions, duties, or obligations to or for the benefit of the limited liability company, other series thereof, or their affiliates.

Source: SL 2020, ch 200, § 5, eff. Nov. 15, 2020.

47-34A-706 . Activities of series in foreign jurisdiction--Registration of series authorized in foreign jurisdiction.

(a) If a limited liability company with the ability to establish series does not register to do business in a foreign jurisdiction for itself and its series, a series of a limited liability company may itself register to do business as a limited liability company in the foreign jurisdiction in accordance with the laws of the foreign jurisdiction.

(b) If a foreign limited liability company, as permitted in the jurisdiction of its organization, has established a series having separate rights, powers, or duties and has limited the liabilities of such series so that the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series are enforceable against the assets of such series only, and not against the assets of the limited liability company generally or any other series thereof, or so that the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the limited liability company generally or any other series thereof are not enforceable against the assets of such series, then the limited liability company, on behalf of itself or any of its series, or any of its series on its own behalf may register to do business in this state in accordance with this chapter. The limitation of liability shall also be stated on the application for registration. In addition to the requirements of §  47-34A-1002 , the registration application filed shall identify each series being registered to do business in the state by the limited liability company. Unless otherwise provided in the operating agreement, the debts, liabilities, and obligations incurred, contracted for, or otherwise existing with respect to a particular series of such a foreign limited liability company shall be enforceable against the assets of such series only and not against the assets of the foreign limited liability company generally or any other series thereof, and none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to such a foreign limited liability company generally or any other series thereof shall be enforceable against the assets of such series. Any series registering to do business in this state on its own behalf shall provide the information required in §  47-34A-1002 and pay the fees required by §  47-34A-212 and any other required fees.

Source: SL 2020, ch 200, § 6, eff. Nov. 15, 2020.

47-34A-707 . Requirements for application for certificate of designation.

An application for a certificate of designation shall exist in a medium prescribed by the secretary of state and shall set forth:

(1) The name of the limited liability company;

(2) The name of the series of the limited liability company;

(3) The principal office address for the series; and

(4) Whether the series is to be manager-managed, and, if so, the name and address for each initial manager, if different than the manager of the limited liability company in subsection (1).

Any amendment to the certificate of designation shall require a new application for a certificate of designation and payment of the applicable filing fee.

Source: SL 2020, ch 200, § 7, eff. Nov. 15, 2020.

Source: SL 2020, ch 200, § 7, eff. Nov. 15, 2020.

47-34A-801. Events causing dissolution and winding up of company's business.

(a) A limited liability company is dissolved, and its business must be wound up, upon the occurrence of any of the following events:

(1)    An event specified in the operating agreement;

(2)    Consent of the number or percentage of members specified in the operating agreement;

(3)    An event that makes it unlawful for all or substantially all of the business of the company to be continued, but any cure of illegality within ninety days after notice to the company of the event is effective retroactively to the date of the event for purposes of this section;

(4)    On application by a member or a dissociated member, upon entry of a judicial decree that:

(i)    The economic purpose of the company is likely to be unreasonably frustrated;

(ii)    Another member has engaged in conduct relating to the company's business that makes it not reasonably practicable to carry on the company's business with that member;

(iii)    It is not otherwise reasonably practicable to carry on the company's business in conformity with the articles of organization and the operating agreement; or

(iv)    The managers or members in control of the company have acted, are acting, or will act in a manner that is illegal or fraudulent.

Source: SL 1998, ch 272, § 801; SL 2009, ch 234, § 3.

47-34A-802. Limited liability company continues after dissolution.

(a) Subject to subsection (b), a limited liability company continues after dissolution only for the purpose of winding up its business.

(b) At any time after the dissolution of a limited liability company and before the winding up of its business is completed, the members may unanimously waive the right to have the company's business wound up and the company terminated. In that case:

(1)    The limited liability company resumes carrying on its business as if dissolution had never occurred and any liability incurred by the company or a member after the dissolution and before the waiver is determined as if the dissolution had never occurred; and

(2)    The rights of a third party accruing as a result of the dissolution, under § 47-34A-804(a), or arising out of conduct in reliance on the dissolution before the third party knew or received a notification of the waiver are not adversely affected.

Source: SL 1998, ch 272, § 802.

47-34A-803. Right to wind up the limited liability company's business.

(a) After dissolution, a member who has not wrongfully dissociated may participate in winding up a limited liability company's business, but on application of any member, member's legal representative, or transferee, the circuit court, for good cause shown, may order judicial supervision of the winding up.

(b) A legal representative of the last surviving member may wind up a limited liability company's business.

(c) A person winding up a limited liability company's business may preserve the company's business or property as a going concern for a reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or administrative, settle and close the company's business, dispose of and transfer the company's property, discharge the company's liabilities, distribute the assets of the company pursuant to § 47-34A-806, settle disputes by mediation or arbitration, and perform other necessary acts.

Source: SL 1998, ch 272, § 803.

47-34A-804. Member's or manager's power and liability as agent after dissolution.

(a) A limited liability company is bound by a member's or manager's act after dissolution that:

(1)    Is appropriate for winding up the company's business; or

(2)    Would have bound the company under § 47-34A-301 before dissolution, if the other party to the transaction did not have notice of the dissolution.

(b) A member or manager who, with knowledge of the dissolution, subjects a limited liability company to liability by an act that is not appropriate for winding up the company's business is liable to the company for any damage caused to the company arising from the liability.

Source: SL 1998, ch 272, § 804.

47-34A-805. Articles of termination.

(a) At any time after dissolution and winding up, a limited liability company may terminate its existence by filing with the secretary of state articles of termination stating:

(1)    The name of the company;

(2)    The date of the dissolution; and

(3)    That the company's business has been wound up and the legal existence of the company has been terminated.

(b) The existence of a limited liability company is terminated upon the filing of the articles of termination, or upon a later effective date, if specified in the articles of termination.

(c) Delivery may be made by electronic transmission if and to the extent permitted by the Office of the Secretary of State. If the document is filed in typewritten or printed form and not transmitted electronically, the Office of the Secretary of State may require one exact or conformed copy to be delivered with the document.

Source: SL 1998, ch 272, § 805; SL 2012, ch 222, § 12.

47-34A-806. Distribution of assets in winding up the limited liability company's business.

(a) In winding up a limited liability company's business, the assets of the company must be applied to discharge its obligations to creditors, including members who are creditors. Any surplus must be applied to pay in money the net amount distributable to members in accordance with their right to distributions under subsection (b).

(b) Each member is entitled to a distribution upon the winding up of the limited liability company's business consisting of a return of all contributions which have not previously been returned and a distribution of any remainder in equal shares.

Source: SL 1998, ch 272, § 806.

47-34A-807. Known claims against dissolved limited liability company.

(a) A dissolved limited liability company may dispose of the known claims against it by following the procedure described in this section.

(b) A dissolved limited liability company shall notify its known claimants in writing of the dissolution. The notice must:

(1)    Specify the information required to be included in a claim;

(2)    Provide a mailing address where the claim is to be sent;

(3)    State the deadline for receipt of the claim, which may not be less than one hundred twenty days after the date the written notice is received by the claimant; and

(4)    State that the claim will be barred if not received by the deadline.

(c) A claim against a dissolved limited liability company is barred if the requirements of subsection (b) are met, and:

(1)    The claim is not received by the specified deadline; or

(2)    In the case of a claim that is timely received but rejected by the dissolved company, the claimant does not commence a proceeding to enforce the claim within ninety days after the receipt of the notice of the rejection.

(d) For purposes of this section, claim does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

Source: SL 1998, ch 272, § 807.

47-34A-808. Notice--Other claims against dissolved limited liability company.

(a) A dissolved limited liability company may publish notice of its dissolution and request persons having claims against the company to present them in accordance with the notice.

(b) The notice must:

(1)    Be published at least once in a newspaper of general circulation in the county in which the dissolved limited liability company's principal office is or was located or, if none in this state, in Hughes County;

(2)    Describe the information required to be contained in a claim and provide a mailing address where the claim is to be sent; and

(3)    State that a claim against the limited liability company is barred unless a proceeding to enforce the claim is commenced within five years after publication of the notice.

(c) If a dissolved limited liability company publishes a notice in accordance with subsection (b), the claim of each of the following claimants is barred unless the claimant commences a proceeding to enforce the claim against the dissolved company within five years after the publication date of the notice:

(1)    A claimant who did not receive written notice under § 47-34A-807;

(2)    A claimant whose claim was timely sent to the dissolved company but not acted on; and

(3)    A claimant whose claim is contingent or based on an event occurring after the effective date of dissolution.

(d) A claim not barred under this section may be enforced:

(1)    Against the dissolved limited liability company, to the extent of its undistributed assets; or

(2)    If the assets have been distributed in liquidation, against a member of the dissolved company to the extent of the member's proportionate share of the claim or the company's assets distributed to the member in liquidation, whichever is less, but a member's total liability for all claims under this section may not exceed the total amount of assets distributed to the member.

Source: SL 1998, ch 272, § 808; SL 2008, ch 275, § 77.

47-34A-809. Grounds for administrative dissolution.

The secretary of state may commence a proceeding to dissolve a limited liability company administratively if the company does not:

(1)    Pay any fees, taxes, or penalties imposed by this chapter or other law within sixty days after they are due; or

(2)    Deliver its annual report to the secretary of state within sixty days after it is due.

Source: SL 1998, ch 272, § 809.

47-34A-810. Procedure for and effect of administrative dissolution.

(a) If the secretary of state determines that a ground exists for administratively dissolving a limited liability company, the secretary of state shall enter a record of the determination and serve the company with a copy of the record.

(b) If the company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the secretary of state that each ground determined by the secretary of state does not exist within sixty days after service of the notice, the secretary of state shall administratively dissolve the company by signing a certification of the dissolution that recites the ground for dissolution and its effective date. The secretary of state shall file the original of the certificate and serve the company with a copy of the certificate.

(c) A company administratively dissolved continues its existence but may carry on only business necessary to wind up and liquidate its business and affairs under § 47-34A-802 and to notify claimants under §§ 47-34A-807 and 47-34A-808.

(d) The administrative dissolution of a company does not terminate the authority of its agent for service of process.

Source: SL 1998, ch 272, § 810.

47-34A-811. Reinstatement following administrative dissolution.

(a) A limited liability company administratively dissolved may apply to the secretary of state for reinstatement after the effective date of dissolution. Delivery may be made by electronic transmission if and to the extent permitted by the Office of the Secretary of State. If the document is filed in typewritten or printed form and not transmitted electronically, the Office of the Secretary of State may require one exact or conformed copy to be delivered with the document. The applicant shall submit with the application the appropriate filing fee. The secretary of state shall charge filing fees for any delinquent annual report and a fee for application of reinstatement in the amount of one hundred fifty dollars. The application must:

(1)    Recite the name of the company and the effective date of its administrative dissolution;

(2)    State that the ground for dissolution either did not exist or have been eliminated;

(3)    State that the company's name satisfies the requirements of § 47-34A-105; and

(4)    Contain a certificate from the appropriate state authority reciting that all taxes owed by the company have been paid.

(b) If the secretary of state determines that the application contains the information required by subsection (a) and that the information is correct, the secretary of state shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites this determination and the effective date of reinstatement, file the original of the certificate, and serve the company with a copy of the certificate.

(c) When reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution and the company may resume its business as if the administrative dissolution had never occurred.

Source: SL 1998, ch 272, § 811; SL 2003, ch 8, § 24; SL 2005, ch 241, § 4; SL 2009, ch 4, § 19; SL 2012, ch 222, § 13.

47-34A-812. Appeal from denial of reinstatement.

(a) If the secretary of state denies a limited liability company's application for reinstatement following administrative dissolution, the secretary of state shall serve the company with a record that explains the reason or reasons for denial.

(b) The company may appeal the denial of reinstatement to the state circuit court within thirty days after service of the notice of denial is perfected. The company appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the secretary of state's certificate of dissolution, the company's application for reinstatement, and the secretary of state's notice of denial.

(c) The court may summarily order the secretary of state to reinstate the dissolved company or may take other action the court considers appropriate.

(d) The court's final decision may be appealed as in other civil proceedings.

Source: SL 1998, ch 272, § 812.

47-34A-901. Definitions.

Terms used in this article:

(1)    "Constituent limited liability company" means a constituent organization that is a limited liability company;

(2)    "Constituent organization" means an organization that is party to a merger;

(3)    "Converted organization" means the organization into which a converting organization converts pursuant to §§ 47-34A-906 to 47-34A-909, inclusive;

(4)    "Converting limited liability company" means a converting organization that is a limited liability company;

(5)    "Converting organization" means an organization that converts into another organization pursuant to § 47-34A-906;

(6)    "Domesticated company" means the company that exists after a domesticating foreign limited liability company or limited liability company effects a domestication pursuant to §§ 47-34A-910 to 47-34A-913, inclusive;

(7)    "Domesticating company" means the company that effects a domestication pursuant to §§ 47-34A-910 to 47-34A-913, inclusive;

(8)    "Governing statute" means the statute that governs an organization's internal affairs;

(9)    "Organization" means a general partnership, including a limited liability partnership; limited partnership, including a limited liability limited partnership, limited liability company, business trust, corporation, or any other person having a governing statute. The term includes a domestic or foreign organization regardless of whether organized for profit;

(10)    "Organizational documents" means:

(a)    For a domestic or foreign general partnership, its partnership agreement;

(b)    For a limited partnership or foreign limited partnership, its certificate of limited partnership and partnership agreement;

(c)    For a domestic or foreign limited liability company, its certificate or articles of organization and operating agreement, or comparable records as provided in its governing statute;

(d)    For a business trust, its agreement of trust and declaration of trust;

(e)    For a domestic or foreign corporation for profit, its articles of incorporation, bylaws, and other agreements among its shareholders which are authorized by its governing statute, or comparable records as provided in its governing statute; and

(f)    For any other organization, the basic records that create the organization and determine its internal governance and the relations among the persons that own it, have an interest in it, or are members of it;

(11)    "Personal liability" means liability for a debt, obligation, or other liability of an organization which is imposed on a person that co-owns, has an interest in, or is a member of the organization:

(a)    By the governing statute solely by reason of the person co-owning, having an interest in, or being a member of the organization; or

(b)    By the organization's organizational documents under a provision of the governing statute authorizing those documents to make one or more specified persons liable for all or specified debts, obligations, or other liabilities of the organization solely by reason of the person or persons co-owning, having an interest in, or being a member of the organization;

(12)    "Surviving organization" means an organization into which one or more other organizations are merged whether the organization preexisted the merger or was created by the merger.

Source: SL 1998, ch 272, § 901; SL 2013, ch 233, § 15.

47-34A-902. Merger.

(a) A limited liability company may merge with one or more other constituent organizations pursuant to this section, §§ 47-34A-903 to 47-34A-905, inclusive, and a plan of merger, if:

(1)    The governing statute of each of the other organizations authorizes the merger;

(2)    The merger is not prohibited by the law of a jurisdiction that enacted any of the governing statutes; and

(3)    Each of the other organizations complies with its governing statute in effecting the merger.

(b) A plan of merger must be in a record and must include:

(1)    The name and form of each constituent organization;

(2)    The name and form of the surviving organization and, if the surviving organization is to be created by the merger, a statement to that effect;

(3)    The terms and conditions of the merger, including the manner and basis for converting the interests in each constituent organization into any combination of money, interests in the surviving organization, and other consideration;

(4)    If the surviving organization is to be created by the merger, the surviving organization's organizational documents that are proposed to be in a record; and

(5)    If the surviving organization is not to be created by the merger, any amendments to be made by the merger to the surviving organization's organizational documents that are, or are proposed to be, in a record.

Source: SL 1998, ch 272, § 902; SL 2013, ch 233, § 16.

47-34A-903. Action on plan of merger by constituent limited liability company.

(a) Subject to § 47-34A-914, a plan of merger must be consented to by all the members of a constituent limited liability company.

(b) Subject to § 47-34A-914 and any contractual rights, after a merger is approved, and at any time before articles of merger are delivered to the secretary of state for filing under § 47-34A-904, a constituent limited liability company may amend the plan or abandon the merger:

(1)    As provided in the plan; or

(2)    Except as otherwise prohibited in the plan, with the same consent as was required to approve the plan.

Source: SL 1998, ch 272, § 903; SL 2013, ch 233, § 17.

47-34A-904. Filings required for merger--Effective date.

(a) After each constituent organization has approved a merger, articles of merger must be signed on behalf of:

(1)    Each constituent limited liability company, as provided in § 47-34A-205; and

(2)    Each other constituent organization, as provided in its governing statute.

(b) Articles of merger under this section must include:

(1)    The name and form of each constituent organization and the jurisdiction of its governing statute;

(2)    The name and form of the surviving organization, the jurisdiction of its governing statute, and, if the surviving organization is created by the merger, a statement to that effect;

(3)    The date the merger is effective under the governing statute of the surviving organization;

(4)    If the surviving organization is to be created by the merger:

(A)    If it will be a limited liability company, the company's certificate of organization; or

(B)    If it will be an organization other than a limited liability company, the organizational document that creates the organization that is in a public record;

(5)    If the surviving organization preexists the merger, any amendments provided for in the plan of merger for the organizational document that created the organization that are in a public record;

(6)    A statement as to each constituent organization that the merger was approved as required by the organization's governing statute;

(7)    If the surviving organization is a foreign organization not authorized to transact business in this state, the street and mailing addresses of an office that the secretary of state may use for the purposes of § 47-34A-905(b); and

(8)    Any additional information required by the governing statute of any constituent organization.

(c) Each constituent limited liability company shall deliver the articles of merger for filing in the Office of the Secretary of State.

(d) A merger becomes effective under this article:

(1)    If the surviving organization is a limited liability company, upon the later of:

(A)    Compliance with subsection (c); or

(B)    Subject to § 47-34A-206, as specified in the articles of merger; or

(2)    If the surviving organization is not a limited liability company, as provided by the governing statute of the surviving organization.

Source: SL 1998, ch 272, § 904; SL 2013, ch 233, § 18.

47-34A-905. Effect of merger.

(a) When a merger becomes effective:

(1)    The surviving organization continues or comes into existence;

(2)    Each constituent organization that merges into the surviving organization ceases to exist as a separate entity;

(3)    All property owned by each constituent organization that ceases to exist vests in the surviving organization;

(4)    All debts, obligations, or other liabilities of each constituent organization that ceases to exist continue as debts, obligations, or other liabilities of the surviving organization;

(5)    An action or proceeding pending by or against any constituent organization that ceases to exist may be continued as if the merger had not occurred;

(6)    Except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of each constituent organization that ceases to exist vest in the surviving organization;

(7)    Except as otherwise provided in the plan of merger, the terms and conditions of the plan of merger take effect;

(8)    Except as otherwise agreed, if a constituent limited liability company ceases to exist, the merger does not dissolve the limited liability company for the purposes of §§ 47-34A-801 to 47-34A-812, inclusive;

(9)    If the surviving organization is created by the merger:

(A)    If it is a limited liability company, the certificate of organization becomes effective; or

(B)    If it is an organization other than a limited liability company, the organizational document that creates the organization becomes effective; and

(10)    If the surviving organization preexisted the merger, any amendments provided for in the articles of merger for the organizational document that created the organization become effective.

(b) A surviving organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent organization, if before the merger the constituent organization was subject to suit in this state on the debt, obligation, or other liability. A surviving organization that is a foreign organization and not authorized to transact business in this state appoints the secretary of state as its agent for service of process for the purposes of enforcing a debt, obligation, or other liability under this subsection. Service on the secretary of state under this subsection must be made in the same manner as in § 47-34A-206.

Source: SL 1998, ch 272, § 905; SL 2013, ch 233, § 19.

47-34A-906. Conversion.

(a) An organization other than a limited liability company or a foreign limited liability company may convert to a limited liability company, and a limited liability company may convert to an organization other than a foreign limited liability company pursuant to §§ 47-34A-907 to 47-34A-909, inclusive, and a plan of conversion, if:

(1)    The other organization's governing statute authorizes the conversion;

(2)    The conversion is not prohibited by the law of the jurisdiction that enacted the other organization's governing statute; and

(3)    The other organization complies with its governing statute in effecting the conversion.

(b) A plan of conversion must be in a record and must include:

(1)    The name and form of the organization before conversion;

(2)    The name and form of the organization after conversion;

(3)    The terms and conditions of the conversion, including the manner and basis for converting interests in the converting organization into any combination of money, interests in the converted organization, and other consideration; and

(4)    The organizational documents of the converted organization that are, or are proposed to be, in a record.

Source: SL 1998, ch 272, § 906; SL 2008, ch 275, § 78; SL 2013, ch 233, § 20.

47-34A-907. Action on plan of conversion by converting limited liability company.

(a) Subject to § 47-34A-914, a plan of conversion must be consented to by all the members of a converting limited liability company.

(b) Subject to § 47-34A-914 and any contractual rights, after a conversion is approved, and at any time before articles of conversion are delivered to the secretary of state for filing under § 47-34A-908, a converting limited liability company may amend the plan or abandon the conversion:

(1)    As provided in the plan; or

(2)    Except as otherwise prohibited in the plan, by the same consent as was required to approve the plan.

Source: SL 1998, ch 272, § 907; SL 2013, ch 233, § 21.

47-34A-908. Filings required for conversion--Effective date.

(a) After a plan of conversion is approved:

(1)    A converting limited liability company shall deliver to the secretary of state for filing articles of conversion, which must be signed as provided in § 47-34A-205 and must include:

(A)    A statement that the limited liability company has been converted into another organization;

(B)    The name and form of the organization and the jurisdiction of its governing statute;

(C)    The date the conversion is effective under the governing statute of the converted organization;

(D)    A statement that the conversion was approved as required by this chapter;

(E)    A statement that the conversion was approved as required by the governing statute of the converted organization; and

(F)    If the converted organization is a foreign organization not authorized to transact business in this state, the street and mailing addresses of an office which the secretary of state may use for the purposes of § 47-34A-909(c); and

(2)    If the converting organization is not a converting limited liability company, the converting organization shall deliver to the secretary of state for filing a certificate of organization, which must include, in addition to the information required by § 47-34A-203(a):

(A)    A statement that the converted organization was converted from another organization;

(B)    The name and form of that converting organization and the jurisdiction of its governing statute; and

(C)    A statement that the conversion was approved in a manner that complied with the converting organization's governing statute.

(b) A conversion becomes effective:

(1)    If the converted organization is a limited liability company, when the certificate of organization takes effect; and

(2)    If the converted organization is not a limited liability company, as provided by the governing statute of the converted organization.

Source: SL 2010, ch 218, § 9; SL 2013, ch 233, § 22; SL 2021, ch 198, § 1.

47-34A-909. Effect of conversion.

(a) An organization that has been converted pursuant to this Article is for all purposes the same entity that existed before the conversion.

(b) When a conversion takes effect:

(1)    All property owned by the converting organization remains vested in the converted organization;

(2)    All debts, obligations, or other liabilities of the converting organization continue as debts, obligations, or other liabilities of the converted organization;

(3)    An action or proceeding pending by or against the converting organization may be continued as if the conversion had not occurred;

(4)    Except as prohibited by law other than this chapter, all of the rights, privileges, immunities, powers, and purposes of the converting organization remain vested in the converted organization;

(5)    Except as otherwise provided in the plan of conversion, the terms and conditions of the plan of conversion take effect; and

(6)    Except as otherwise agreed, the conversion does not dissolve a converting limited liability company for the purposes of §§ 47-34A-801 to 47-34A-812, inclusive.

(c) A converted organization that is a foreign organization consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability for which the converting limited liability company is liable if, before the conversion, the converting limited liability company was subject to suit in this state on the debt, obligation, or other liability. A converted organization that is a foreign organization and not authorized to transact business in this state appoints the secretary of state as its agent for service of process for purposes of enforcing a debt, obligation, or other liability under this subsection. Service on the secretary of state under this subsection must be made in the same manner and has the same consequences as set forth in this chapter.

Source: SL 2010, ch 218, § 10; SL 2013, ch 233, § 23.

47-34A-910. Domestication.

(a) A foreign limited liability company may become a limited liability company pursuant to §§ 47-34A-911 to 47-34A-913, inclusive, and a plan of domestication, if:

(1)    The foreign limited liability company's governing statute authorizes the domestication;

(2)    The domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and

(3)    The foreign limited liability company complies with its governing statute in effecting the domestication.

(b) A limited liability company may become a foreign limited liability company pursuant to §§ 47-34A-911 to 47-34A-913, inclusive, and a plan of domestication, if:

(1)    The foreign limited liability company's governing statute authorizes the domestication;

(2)    The domestication is not prohibited by the law of the jurisdiction that enacted the governing statute; and

(3)    The foreign limited liability company complies with its governing statute in effecting the domestication.

(c) A plan of domestication must be in a record and must include:

(1)    The name of the domesticating company before domestication and the jurisdiction of its governing statute;

(2)    The name of the domesticated company after domestication and the jurisdiction of its governing statute;

(3)    The terms and conditions of the domestication, including the manner and basis for converting interests in the domesticating company into any combination of money, interests in the domesticated company, and other consideration; and

(4)    The organizational documents of the domesticated company that are, or are proposed to be, in a record.

Source: SL 2010, ch 218, § 11; SL 2013, ch 233, § 24.

47-34A-911. Action on plan of domestication by domesticating limited liability company.

(a) A plan of domestication must be consented to:

(1)    By all the members, subject to § 47-34A-912, if the domesticating company is a limited liability company; and

(2)    As provided in the domesticating company's governing statute, if the company is a foreign limited liability company.

(b) Subject to any contractual rights, after a domestication is approved, and at any time before articles of domestication are delivered to the secretary of state for filing under § 47-34A-912, a domesticating limited liability company may amend the plan or abandon the domestication:

(1)    As provided in the plan; or

(2)    Except as otherwise prohibited in the plan, by the same consent as was required to approve the plan.

Source: SL 2010, ch 218, § 12; SL 2013, ch 233, § 25.

47-34A-912. Filings required for domestication--Effective date.

(a)    After a plan of domestication is approved, a domesticating company shall deliver to the secretary of state for filing articles of domestication, which must include:

(1)    A statement, as the case may be, that the company has been domesticated from or into another jurisdiction;

(2)    The name of the domesticating company and the jurisdiction of its governing statute;

(3)    The name of the domesticated company and the jurisdiction of its governing statute;

(4)    The date the domestication is effective under the governing statute of the domesticated company;

(5)    If the domesticating company was a limited liability company, a statement that the domestication was approved as required by this chapter;

(6)    If the domesticating company was a foreign limited liability company, a statement that the domestication was approved as required by the governing statute of the other jurisdiction;

(7)    If the domesticated company was a foreign limited liability company not authorized to transact business in this state, the street and mailing addresses of an office that the secretary of state may use for the purposes of § 47-34A-913(b); and

(8)    If the domesticated company was a foreign limited liability company, articles of organization that comply with the requirements of § 47-34A-203.

(b)    A domestication becomes effective:

(1)    When the certificate of organization takes effect, if the domesticated company is a limited liability company; and

(2)    According to the governing statute of the domesticated company, if the domesticated organization is a foreign limited liability company.

Source: SL 2010, ch 218, § 13; SL 2013, ch 233, § 26; SL 2022, ch 168, § 1.

47-34A-913. Effect of domestication.

(a) When a domestication takes effect:

(1)    The domesticated company is for all purposes the company that existed before the domestication;

(2)    All property owned by the domesticating company remains vested in the domesticated company;

(3)    All debts, obligations, or other liabilities of the domesticating company continue as debts, obligations, or other liabilities of the domesticated company;

(4)    An action or proceeding pending by or against a domesticating company may be continued as if the domestication had not occurred;

(5)    Except as prohibited by other law, all of the rights, privileges, immunities, powers, and purposes of the domesticating company remain vested in the domesticated company;

(6)    Except as otherwise provided in the plan of domestication, the terms and conditions of the plan of domestication take effect; and

(7)    Except as otherwise agreed, the domestication does not dissolve a domesticating limited liability company for the purposes of §§ 47-34A-801 to 47-34A-812, inclusive.

(b) A domesticated company that is a foreign limited liability company consents to the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by the domesticating company, if, before the domestication, the domesticating company was subject to suit in this state on the debt, obligation, or other liability. A domesticated company that is a foreign limited liability company and not authorized to transact business in this state appoints the secretary of state as its agent for service of process for purposes of enforcing a debt, obligation, or other liability under this subsection. Service on the secretary of state under this subsection must be made in the same manner and has the same consequences as set forth in this chapter.

(c) If a limited liability company has adopted and approved a plan of domestication under § 47-34A-910 providing for the company to be domesticated in a foreign jurisdiction, a statement surrendering the company's certificate of organization must be delivered to the secretary of state for filing setting forth:

(1)    The name of the company;

(2)    A statement that the certificate of organization is being surrendered in connection with the domestication of the company in a foreign jurisdiction;

(3)    A statement the domestication was approved as required by this chapter; and

(4)    The jurisdiction of formation of the domesticated foreign limited liability company.

Source: SL 2013, ch 233, § 27.

47-34A-914. Restrictions on approval of mergers, conversions, and domestications.

(a) If a member of a constituent, converting, or domesticating limited liability company will have personal liability with respect to a surviving, converted, or domesticated organization, approval or amendment of a plan of merger, conversion, or domestication is ineffective without the consent of the member, unless:

(1)    The company's operating agreement provides for approval of a merger, conversion, or domestication with the consent of fewer than all the members; and

(2)    The member has consented to the provision of the operating agreement.

(b) A member does not give the consent required by subsection (a) merely by consenting to a provision of the operating agreement that permits the operating agreement to be amended with the consent of fewer than all the members.

Source: SL 2013, ch 233, § 28.

47-34A-915. Article not exclusive.

The proceedings authorized under §§ 47-34A-901 to 47-34A-914, inclusive, do not preclude an entity from being merged, converted, or domesticated under law other than these provisions.

Source: SL 2013, ch 233, § 29.

47-34A-1001. Law governing foreign limited liability companies.

(a) The law of the state or other jurisdiction under which a foreign limited liability company is formed governs:

(1)    The internal affairs of the company; and

(2)    The liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of the company.

(b) A foreign limited liability company may not be denied a certificate of authority by reason of any difference between the law of the jurisdiction under which the company is formed and the law of this state.

(c) A certificate of authority does not authorize a foreign limited liability company to engage in any business or exercise any power that a limited liability company may not engage in or exercise in this state.

Source: SL 1998, ch 272, § 1001; SL 2013, ch 233, § 30.

47-34A-1002. Application for certificate of authority.

(a) A foreign limited liability company may not do business in this state until it obtains a certificate of authority from the secretary of state.

(b) A foreign limited liability company may apply for a certificate of authority to transact business in this state by delivering an application to the secretary of state for filing. Delivery may be made by electronic transmission if and to the extent permitted by the Office of the Secretary of State. If the document is filed in typewritten or printed form and not transmitted electronically, the Office of the Secretary of State may require one exact or conformed copy to be delivered with the document. The application must state:

(1)    The name of the company and, if the name does not comply with § 47-34A-105, an alternate name adopted pursuant to § 47-34A-105;

(2)    The name of the state or other jurisdiction under whose law the company is formed;

(3)    The street and mailing addresses of the company's principal office and if the law of the jurisdiction under which the company is formed requires the company to maintain an office in that jurisdiction, the street and mailing address of the required office;

(4)    If the limited liability company is authorized to establish one or more series, the matters required under § 47-34A-702; and

(5)    The name and street and mailing address of the company's initial agent for service of process in this state.

(c) A foreign limited liability company shall deliver with a completed application under subsection (a) a certificate of existence or a record of similar import signed by the secretary of state or other official having custody of the company's publicly filed records in the state or other jurisdiction under whose law the company is formed together with the fees required by § 47-34A-212, and all other fees.

Source: SL 1998, ch 272, § 1002; SL 2008, ch 275, § 79; SL 2012, ch 222, § 15; SL 2013, ch 233, § 31; SL 2020, ch 200, § 10, eff. Nov. 15, 2020.

47-34A-1003. Activities not constituting transacting business.

(a) Activities of a foreign limited liability company which do not constitute transacting business in this state within the meaning of this article include:

(1)    Maintaining, defending, or settling an action or proceeding;

(2)    Carrying on any activity concerning its internal affairs, including holding meetings of its members or managers;

(3)    Maintaining accounts in financial institutions;

(4)    Maintaining offices or agencies for the transfer, exchange, and registration of the company's own securities or maintaining trustees or depositories with respect to those securities;

(5)    Selling through independent contractors;

(6)    Soliciting or obtaining orders, whether by mail or electronic means or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts;

(7)    Creating or acquiring indebtedness, mortgages, or security interests in real or personal property;

(8)    Securing or collecting debts or enforcing mortgages or other security interests in property securing the debts and holding, protecting, or maintaining property so acquired;

(9)    Conducting an isolated transaction that is completed within thirty days and is not in the course of similar transactions; and

(10)    Transacting business in interstate commerce.

(b) For purposes of this article, the ownership in this state of income-producing real property or tangible personal property, other than property excluded under subsection (a), constitutes transacting business in this state.

(c) This section does not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation, or regulation under any law of this state other than this chapter.

Source: SL 1998, ch 272, § 1003; SL 2013, ch 233, § 32.

47-34A-1004. Filing of certificate of authority.

Unless the secretary of state determines that an application for a certificate of authority does not comply with the filing requirements of this chapter, the secretary of state, upon payment of all filing fees, shall file the application of a foreign limited liability company, prepare, sign, and file a certificate of authority to transact business in this state, and send a copy of the filed certificate, together with a receipt for the fees to the company or its representative.

Source: SL 1998, ch 272, § 1004; SL 2013, ch 233, § 33.

47-34A-1005. Noncomplying name of foreign limited liability company.

(a) A foreign limited liability company whose name does not comply with § 47-34A-105 may not obtain a certificate of authority until it adopts, for the purpose of transacting business in this state, an alternate name that complies with § 47-34A-105. A foreign limited liability company that adopts an alternate name under this subsection and obtains a certificate of authority with the alternate name need not comply with chapter 37-11 or § 47-34A-105. After obtaining a certificate of authority with an alternate name, a foreign limited liability company shall transact business in this state under the alternate name unless the company is authorized under chapter 37-11 or § 47-34A-105 to transact business in this state under another name.

(b) If a foreign limited liability company authorized to transact business in this state changes its name to one that does not comply with § 47-34A-105, it may not thereafter transact business in this state until it complies with subsection (a) and obtains an amended certificate of authority.

Source: SL 1998, ch 272, § 1005; SL 2013, ch 233, § 34.

47-34A-1006. Revocation of certificate of authority.

(a) A certificate of authority of a foreign limited liability company to transact business in this state may be revoked by the secretary of state in the manner provided in subsections (b) and (c) if the company does not:

(1)    Pay, within sixty days after the due date, any fee, tax, or penalty due to the secretary of state under this chapter or law other than this chapter;

(2)    Deliver, within sixty days after the due date, its annual report required under § 47-34A-211;

(3)    Appoint and maintain an agent for service of process as required by South Dakota law; or

(4)    Deliver for filing a statement of a change within thirty days after a change has occurred in the name or address of the agent.

(b) To revoke a certificate of authority of a foreign limited liability company, the secretary of state must prepare, sign, and file a notice of revocation and send a copy to the company's agent for service of process in this state, or if the company does not appoint and maintain a proper agent in this state, to the company's designated office. The notice must state:

(1)    The revocation's effective date, which must be at least sixty days after the date the secretary of state sends the copy; and

(2)    The grounds for revocation under subsection (a).

(c) The authority of a foreign limited liability company to transact business in this state ceases on the effective date of the notice of revocation unless before that date the company cures each ground for revocation stated in the notice filed under subsection (b). If the company cures each ground, the secretary of state shall file a record so stating.

Source: SL 1998, ch 272, § 1006; SL 2008, ch 275, § 80; SL 2013, ch 233, § 35.

47-34A-1007. Cancellation of certificate of authority.

To cancel its certificate of authority to transact business in this state, a foreign limited liability company must deliver to the secretary of state for filing a notice of cancellation stating the name of the company and that the company desires to cancel its certificate of authority. The certificate of authority is cancelled when the notice becomes effective.

Source: SL 1998, ch 272, § 1007; SL 2012, ch 222, § 16; SL 2013, ch 233, § 36.

47-34A-1008. Effect of failure to obtain certificate of authority.

(a) A foreign limited liability company transacting business in this state may not maintain an action or proceeding in this state unless it has a certificate of authority to transact business in this state.

(b) The failure of a foreign limited liability company to have a certificate of authority to transact business in this state does not impair the validity of a contract or act of the company or prevent the foreign limited liability company from defending an action or proceeding in this state.

(c) A member or manager of a foreign limited liability company is not liable for the debt, obligations, or other liabilities of the company solely because the company transacted business in that state without a certificate of authority.

(d) If a foreign limited liability company transacts business in this state without a certificate of authority or cancels its certificate of authority, it appoints the secretary of state as its agent for service of process for rights of actions arising out of the transaction of business in this state.

Source: SL 1998, ch 272, § 1008; SL 2013, ch 233, § 37.

47-34A-1009. Action by attorney general.

The attorney general may maintain an action to enjoin a foreign limited liability company from transacting business in this state in violation of this article.

Source: SL 1998, ch 272, § 1009; SL 2013, ch 233, § 38.

47-34A-1010. Repealed.

Source: SL 2010, ch 218, § 2; SL 2022, ch 168, § 2.

47-34A-1011. Repealed.

Source: SL 2010, ch 218, § 3; SL 2022, ch 168, § 3.

47-34A-1012. Repealed.

Source: SL 2010, ch 218, § 4; SL 2022, ch 168, § 4.

47-34A-1013. Repealed.

Source: SL 2010, ch 218, § 5; SL 2022, ch 168, § 5.

47-34A-1014. Repealed.

Source: SL 2010, ch 218, § 6; SL 2022, ch 168, § 6.

47-34A-1015. Repealed.

Source: SL 2010, ch 218, § 7; SL 2022, ch 168, § 7.

47-34A-1016. Repealed.

Source: SL 2010, ch 218, § 8; SL 2022, ch 168, § 8.

47-34A-1101. Direct action by member.

(a) Subject to subsection (b), a member may maintain a direct action against another member, a manager, or the limited liability company to enforce the member's rights and otherwise protect the member's interests, including rights and interests under the operating agreement or this chapter or arising independently of the membership relationship.

(b) A member maintaining a direct action under this section must plead an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.

Source: SL 1998, ch 272, § 1101; SL 2013, ch 233, § 39.

47-34A-1102. Derivative action.

A member may maintain a derivative action to enforce a right of a limited liability company if:

(1)    The member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or

(2)    A demand under paragraph (1) would be futile.

Source: SL 1998, ch 272, § 1102; SL 2013, ch 233, § 40.

47-34A-1103. Proper plaintiff.

(a) Except as otherwise provided in subsection (b), a derivative action under § 47-34A-1102 may be maintained only by a person that is a member at the time the action is commenced and remains a member while the action continues.

(b) If the sole plaintiff in a derivative action dies while the action is pending, the court may permit another member of the limited liability company to be substituted as plaintiff.

Source: SL 1998, ch 272, § 1103; SL 2013, ch 233, § 41.

47-34A-1104. Pleading.

In a derivative action under § 47-34A-1102, the complaint must state with particularity:

(1)    The date and content of the plaintiff's demand and the response to the demand by the managers or other members; or

(2)    If a demand has not been made, the reasons a demand under § 47-34A-1102 would be futile.

Source: SL 1998, ch 272, § 1104; SL 2013, ch 233, § 42.

47-34A-1105. Special litigation committee.

(a) If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee on motion by the committee made in the name of the company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make an investigation. The provisions of this subsection do not prevent the court from enforcing a person's right to information under § 47-34A-408 or, for good cause shown, granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.

(b) A special litigation committee may be composed of one or more disinterested and independent individuals, who may be members.

(c) A special litigation committee may be appointed:

(1)    In a member-managed limited liability company:

(A)    By the consent of a majority of the members not named as defendants or plaintiffs in the proceeding; and

(B)    If all members are named as defendants or plaintiffs in the proceeding, by a majority of the members named as defendants; or

(2)    In a manager-managed limited liability company:

(A)    By a majority of the managers not named as defendants or plaintiffs in the proceeding; and

(B)    If all managers are named as defendants or plaintiffs in the proceeding, by a majority of the managers named as defendants.

(d) After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:

(1)    Continue under the control of the plaintiff;

(2)    Continue under the control of the committee;

(3)    Be settled on terms approved by the committee; or

(4)    Be dismissed.

(e) After making a determination under subsection (d), a special litigation committee shall file with the court a statement of the committees determination and the committee's report supporting the determination, giving notice to the plaintiff. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made the recommendation in good faith, independently, and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently, and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered under subsection (a) and allow the action to proceed under the direction of the plaintiff.

Source: SL 2013, ch 233, § 43.

47-34A-1106. Proceeds and expenses.

(a) Except as otherwise provided in subsection (b):

(1)    Any proceeds or other benefits of a derivative action under § 47-34A-1102, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and

(2)    If the plaintiff receives any proceeds, the plaintiff shall immediately remit the proceeds to the company.

(b) If a derivative action under § 47-34A-1102 is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney's fees and costs, from the recovery of the limited liability company.

Source: SL 2013, ch 233, § 44.

47-34A-1201. Uniformity of application and construction.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

Source: SL 1998, ch 272, § 1201.

47-34A-1202. Short title.

This chapter may be cited as the South Dakota Limited Liability Company Act.

Source: SL 1998, ch 272, § 1202.