-
Subchapter 001: GENERAL PROVISIONS
§ 4001. Definitions
As used in this chapter:
(1) “Articles of organization” means initial, amended, and restated articles of organization
and articles of merger. In the case of a foreign limited liability company, the term
includes all documents serving a similar function required to be filed in the Office
of the Secretary of State, or comparable office, of the company’s jurisdiction of
organization.
(2) “Business” includes every trade, occupation, profession, and other lawful purpose,
whether or not carried on for profit.
(3) “Debtor in bankruptcy” means a person who is the subject of an order for relief under
Title 11 of the U.S. Code or a comparable order under a successor statute of general
application or a comparable order under federal, state, or foreign law governing insolvency.
(4) “Delivery” means transmission by surface mail or by a method of electronic transmission
the Secretary of State may prescribe.
(5) “Designated office” means the office of a limited liability company designated pursuant
to section 4007 of this title or the principal office of a foreign limited liability company.
(6) “Dissolution” means an event under section 4101 of this title which requires a limited liability company to wind up its affairs and to terminate
its existence as a legal entity.
(7) “Dissociation” means a complete termination of a member’s continued membership in
a limited liability company for any reason.
(8) “Distribution” means a transfer of money or property from a limited liability company
to a member in the member’s capacity as a member or to a transferee of the member’s
distributional interest.
(9) “Distributional interest” means the right of a member or transferee to receive a distribution
from a limited liability company.
(10) “Document” means information that is inscribed on a tangible medium or that is stored
in an electronic or other medium and is retrievable in perceivable form.
(11) “Entity” means a person other than an individual.
(12) “Foreign limited liability company” means an unincorporated entity organized under
laws, other than the laws of this State, which afford limited liability to its owners
comparable to the liability under section 4042 of this title.
(13) “Limited liability company” or “company,” except in the phrase “foreign limited liability
company,” means an organization formed under this chapter or subject to this chapter
following a merger, conversion, or domestication pursuant to subchapter 10 of this
chapter.
(14) “L3C” or “low-profit limited liability company” means a limited liability company
that elects to be a low-profit limited liability company pursuant to section 4161 of this title and meets the requirements of section 4162 of this title.
(15) “Manager” means a person that under the operating agreement of a manager-managed limited
liability company is responsible, alone or in concert with others, for performing
the management functions stated in subsection 4054(c) of this title.
(16) “Manager-managed limited liability company” means a limited liability company that
qualifies under subsection 4054(a) of this title.
(17) “Meeting” means any structured communication conducted by participants in person or
through an electronic or telecommunications medium that permits simultaneous or sequentially
structured communications.
(18) “Member” means a person that has become a member of a limited liability company under
section 4051 of this title and has not dissociated under section 4081 of this title.
(19) “Member-managed limited liability company” means a limited liability company that
is not a manager-managed limited liability company.
(20) “Operating agreement” means any form of description of membership rights and obligations
under section 4003 of this title, stored or depicted in any tangible or electronic medium, which is agreed to by the
members, including amendments to the agreement.
(21) “Record,” used as a noun, means information that is inscribed on a tangible medium
or that is stored in an electronic or other medium and is retrievable in perceivable
form.
(22) “Sign” means, with the present intent to authenticate or adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach or to logically associate with the record an electronic symbol, sound, or
process.
(23) “State” means a state of the United States, the District of Columbia, the Commonwealth
of Puerto Rico, or any territory or insular possession subject to the jurisdiction
of the United States.
(24) “Transfer” includes an assignment, a conveyance, a sale, a lease, an encumbrance,
including a mortgage or security interest, a gift, and a transfer by operation of
law.
(25) “Writing” means a written communication, including a letter, fax, e-mail, or other
electronic format that may be prescribed by the Secretary of State. (Added 2015, No. 17, § 2.)
§ 4002. Knowledge and notice
(a) A person knows a fact if the person has actual knowledge of it.
(b) A person has notice of a fact if the person:
(1) has received a notification of the fact;
(2) has reason to know of the fact from all of the facts known to the person at the time
in question; or
(3) is deemed to have notice of the fact under subsection (d) of this section.
(c) A person notifies or gives a notification of a fact to another by taking steps reasonably
required to inform the other person in the ordinary course, whether or not they cause
the other person to know the fact.
(d) In the case of a limited liability company’s dissolution, termination, or merger or
conversion, a person who is not a member of the company is deemed to have notice as
follows:
(1) for a dissolution, 90 days after a statement of dissolution under section 4103 of this title becomes effective;
(2) for a termination, 90 days after the articles of termination under section 4105 of this title become effective; and
(3) for a merger or conversion, upon the effective date of articles of merger or a statement
of conversion filed with the Secretary of State.
(e) A person receives a notification when the notification:
(1) comes to the person’s attention; or
(2) is delivered at the person’s place of business or at any other place held out by the
person as a place for receiving communications.
(f) A member’s knowledge, notice, or receipt of a notification of a fact in the member’s
capacity as a member does not impute knowledge, notice, or receipt of notification
of the fact to the limited liability company. (Added 2015, No. 17, § 2.)
§ 4003. Effect of operating agreement; nonwaivable provisions
(a) Except as otherwise provided in subsection (b) of this section, an operating agreement
regulates the affairs of the company and the conduct of its business and governs relations
among the members, among the managers, and among the members, managers, and the limited
liability company. To the extent the operating agreement does not otherwise provide,
this chapter regulates the affairs of the company, the conduct of its business, and
governs relations among the members, among the managers, and among members, managers,
and the limited liability company.
(b) An operating agreement may not:
(1) vary a limited liability company’s capacity under subsection 4011(e) of this title to sue and be sued in its own name;
(2) except as provided in subchapter 8 of this chapter, vary the law applicable under
subsection 4011(g) of this title;
(3) vary the power of the court under section 4030 of this title;
(4) subject to subsections (c) through (f) of this section, eliminate or restrict the
duty of loyalty, the duty of care, or any other fiduciary duty;
(5) subject to subsections (c) through (f) of this section, eliminate or restrict the
contractual obligation of good faith and fair dealing under subsection 4059(d) of this title;
(6) unreasonably restrict the duties and rights with respect to books, records, and other
information stated in section 4058 of this title, but the operating agreement may impose reasonable restrictions on the availability
and use of information obtained under that section and may define appropriate remedies,
including liquidated damages, for a breach of any reasonable restriction on use;
(7) vary the power of a court to decree dissolution in the circumstances specified in
subdivision 4101(a)(4) of this title;
(8) vary the requirement to wind up a limited liability company’s business as specified
in section 4101 of this title;
(9) unreasonably restrict the right of a member to maintain an action under subchapter
9 of this chapter;
(10) restrict the right to approve a merger, conversion, or domestication under section 4152 of this title to a member that will have personal liability with respect to a surviving, converted,
or domesticated organization; or
(11) restrict the rights under this title of a person other than a member, manager, or
transferee of any interest in a limited liability company.
(c) Unless unreasonable, the operating agreement may:
(1) restrict the duty:
(A) as required in subdivision 4059(b)(1) and subsection 4059(h) of this title, to account to the limited liability 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, from a use by the member of the company’s property, or from the appropriation
of a limited liability company opportunity;
(B) as required in subdivision 4059(b)(2) and subsection 4059(h) of this title, 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
(C) as required in subdivision 4059(b)(3) and subsection 4059(h) of this title, to refrain from competing with the company in the conduct of the company’s business
before the dissolution of the company;
(2) identify the specific types or categories of activities that do not violate the duty
of loyalty;
(3) alter the duty of care, except to authorize intentional misconduct or knowing violation
of law;
(4) alter any other fiduciary duty, including eliminating particular aspects of that duty;
and
(5) prescribe the standards by which to measure the performance of the contractual obligation
of good faith and fair dealing under subsection 4059(d) of this title.
(d) The operating agreement may specify the method by which a specific act or transaction
that would otherwise violate the duty of loyalty may be authorized or ratified by
one or more disinterested and independent persons after full disclosure of all material
facts.
(e) To the extent the operating agreement of a member-managed limited liability company
expressly relieves a member of a responsibility that the member would otherwise have
under this chapter and imposes the responsibility on one or more other members, the
operating agreement may, to the benefit of the member that the operating agreement
relieves of the responsibility, also eliminate or limit any fiduciary duty that would
have pertained to the responsibility.
(f) The operating agreement may alter or eliminate the indemnification for a member or
manager provided by section 4060 of this title and may eliminate or limit a member or manager’s liability to the limited liability
company and members for money damages, except for:
(1) breach of the duty of loyalty;
(2) a financial benefit received by the member or manager to which the member or manager
is not entitled;
(3) a breach of a duty under subsection 4059(d) of this title;
(4) intentional infliction of harm on the company or a member; or
(5) an intentional violation of criminal law.
(g)(1) The court shall decide any claim under subsection (c) of this section that a term
of an operating agreement is manifestly unreasonable.
(2) The court:
(A) shall make its determination as of the time the challenged term became part of the
operating agreement and by considering only circumstances existing at that time; and
(B) may invalidate the term only if, in light of the purposes and activities of the limited
liability company, it is readily apparent that:
(i) the objective of the term is unreasonable; or
(ii) the term is an unreasonable means to achieve the provision’s objective.
(h) A limited liability company is bound by and may enforce the operating agreement, whether
or not the company has itself manifested assent to the operating agreement.
(i) A person that becomes a member of a limited liability company is deemed to assent
to the operating agreement.
(j)(1) Two or more persons intending to become the initial members of a limited liability
company may make an agreement providing that upon the formation of the company the
agreement will become the operating agreement.
(2) One person intending to become the initial member of a limited liability company may
assent to terms providing that upon the formation of the company the terms will become
the operating agreement.
(k)(1) An operating agreement may specify that its amendment requires the approval of a person
that is not a party to the operating agreement or the satisfaction of a condition.
(2) An amendment is ineffective if its adoption does not include the required approval
or satisfy the specified condition.
(l)(1) The obligations of a limited liability company and its members to a person in the
person’s capacity as a transferee or dissociated member are governed by the operating
agreement.
(2) Subject only to any court order issued under subdivision 4074(b)(2) of this title to effectuate a charging order, an amendment to the operating agreement made after
a person becomes a transferee or dissociated member is effective with regard to any
debt, obligation, or other liability of the limited liability company or its members
to the person in the person’s capacity as a transferee or dissociated member.
(m) If a record that has been delivered by a limited liability company to the Secretary
of State for filing and has become effective under this chapter contains a provision
that would be ineffective under subsection (b) of this section if contained in the
operating agreement, the provision is likewise ineffective in the record.
(n) Subject to subsection (c) of this section, if a record that has been delivered by
a limited liability company to the Secretary of State for filing and has become effective
under this title conflicts with a provision of the operating agreement:
(1) the operating agreement prevails as to members, dissociated members, transferees,
and managers; and
(2) the record prevails as to other persons to the extent they reasonably rely on the
record. (Added 2015, No. 17, § 2; amended 2015, No. 97 (Adj. Sess.), § 42; 2015, No. 157 (Adj. Sess.), § E.3.)
§ 4004. Supplemental principles of law
(a) Unless displaced by particular provisions of this chapter, the principles of law and
equity supplement this chapter.
(b) If an obligation to pay interest arises under this chapter and the rate is not specified,
the rate shall be 12 percent per annum computed by the actuarial method. (Added 2015, No. 17, § 2.)
§ 4005. Name
(a)(1) Except for a low-profit limited liability company, the name of a limited liability
company as set forth in its articles of organization shall contain the words “limited
liability company” or “limited company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,”
or “LC.” The word “limited” may be abbreviated as “Ltd.” and “company” may be abbreviated
as “Co.” in a limited liability company name.
(2) The name of a low-profit limited liability company shall contain the abbreviation
L3C.
(b) Unless authorized under subsection (c) of this section, the name of a limited liability
company shall be distinguishable in the records of the Secretary of State from:
(1) the name of each person that is not an individual and that is incorporated, organized,
or authorized to transact business in this State; and
(2) each name reserved under:
(A) sections 1621a, 4006, and 3403 of this title;
(B) 11A V.S.A. § 4.02;
(C) 11B V.S.A. § 4.02; and
(D) 11C V.S.A. § 112.
(c) A person may apply to the Secretary of State for authorization to use a name that
does not comply with subsection (b) of this section. The Secretary of State shall
authorize use of the name applied for if, as to each noncomplying name:
(1) the present user, registrant, or owner of the name consents to the applicant’s use
of the name in a signed record and submits an undertaking in a form satisfactory to
the Secretary of State to change its name to a new name that complies with subsection
(b) of this section; or
(2) the applicant delivers to the Secretary of State a certified copy of the final judgment
of a court of competent jurisdiction establishing the applicant’s right to use in
this State the name applied for.
(d) Subject to section 4116 of this title, this section applies to a foreign limited liability company transacting business
in this State that has a certificate of authority to transact business in this State
or which has applied for a certificate of authority.
(e) A person intending to operate a postsecondary school, as defined in 16 V.S.A. §§ 176 and 176a, shall apply for a certificate of approval from the State Board of Education prior
to registering a name under this section. (Added 2015, No. 17, § 2.)
§ 4006. Reserved name
A person may reserve the exclusive use of a business name by delivering an application
to the Secretary of State for filing pursuant to section 1652 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4007. Designated office and agent
A limited liability company and a foreign limited liability company authorized to
do business in this State shall designate and continuously maintain:
(1) a designated office for notification purposes, which may but need not be a place of
its business, and may but need not be located in this State; and
(2) an agent for service of process pursuant to section 1655 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4008. Change of designated office or agent for service of process
(a) A limited liability company or foreign limited liability company may change its designated
office by delivering to the Secretary of State for filing a statement of change that
sets forth its current designated office information and any change to the information.
(b) A limited liability company or foreign limited liability company shall change its
agent for service of process, or the agent’s email or address information, by delivering
to the Secretary for filing a statement of change pursuant to section 1655 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4009. Resignation of agent for service of process
To resign as an agent for service of process of a limited liability company or foreign
limited liability company, the agent shall deliver to the Secretary of State for filing
a statement of resignation pursuant to section 1655 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4010. Service of process
A limited liability company or foreign limited liability company is subject to the
service of process provisions in section 1656 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4011. Nature of business and powers; governing law
(a) A limited liability company is an entity distinct from its members.
(b) A limited liability company may have any lawful purpose, regardless of whether for
profit.
(c) A limited liability company has perpetual duration.
(d)(1) A limited liability company or a foreign limited liability company engaging in a business
subject to any other provisions of law of this State governing or regulating business
may be formed or authorized to transact business under this chapter only if permitted
by, and subject to all limitations of, the other statute.
(2) The following shall not be formed or authorized to transact business under this chapter:
(A) a credit union regulated under Title 8;
(B) an insurance company regulated under Title 8, except that a captive insurance company
regulated under 8 V.S.A. chapter 141 may be formed as a limited liability company;
(C) a railroad company regulated under Title 19.
(e) A limited liability company shall possess and may exercise all the powers and privileges
granted by this chapter, any other law, its articles of organization, or its operating
agreement, together with any powers incidental thereto, so far as the powers and privileges
are necessary or convenient to the conduct, promotion, or attainment of the business
purposes or activities of the limited liability company, including power to sue and
to be sued, complain and defend in its company name, and the power to do all things
necessary or convenient to carry on its activities.
(f) The law of this State governs:
(1) the internal affairs of a limited liability company; and
(2) the liability of a member as member and a manager as manager for the debts, obligations,
or other liabilities of a limited liability company.
(g)(1) Notwithstanding the provisions of subsections (a) and (b) of this section, a limited
liability company or foreign limited liability company shall engage in rendering professional
services only to the extent that, and subject to the conditions and limitations under
which, a professional corporation may engage in rendering professional services under
chapter 4 of this title.
(2) For purposes of applying the provisions, conditions, and limitations of chapter 4
of this title, unless the licensing laws of this State expressly prohibit the provision
of professional services by domestic and foreign limited liability companies:
(A) unless the context clearly requires otherwise, references to 11A V.S.A. chapters 1-20, relating to business corporations shall be treated as references to this chapter,
and references to a “corporation” shall be treated as references to a limited liability
company or foreign limited liability company;
(B) the members shall be treated in the same manner as shareholders of a professional
corporation;
(C) managers shall be treated in the same manner as directors of a professional corporation;
(D) the persons signing the articles of organization of the company shall be treated in
the same manner as the incorporators of a professional corporation; and
(E) the name shall comply with sections 4005 and 4116 of this title and, in addition, shall contain the word “Professional” or the abbreviation “P.L.C.,”
“PLC,” “P.L.L.C.,” or “PLLC.” (Added 2015, No. 17, § 2.)
§ 4012. Fees
(a) The Secretary of State shall collect the following fees when a document described
in this section is delivered to the Office of the Secretary of State for filing:
| |
(1) Articles of organization |
$155.00 |
| |
(2) Application for certificate of authority |
$155.00 |
| |
(3) Amendment of articles or certificate of authority |
$35.00 |
| |
(4) Cancellation of certificate of authority |
$25.00 |
| |
(5) Application for reserved name |
$25.00 |
| |
(6) Notice of transfer of reserved name |
$20.00 |
| |
(7) Application for registered name |
$25.00 |
| |
(8) Application for renewal of registered name |
$25.00 |
| |
(9) Statement of change of designated agent or designated office, or both |
$35.00 and not to
exceed $1,000.00
per filer per
calendar year
|
| |
(10) Agent’s statement of resignation |
no fee |
| |
(11) Restatement of articles of organization |
$25.00 |
| |
(12) Articles of correction |
$35.00 |
| |
(13) Application for certificate of existence or authorization |
$35.00 |
| |
(14) Articles of merger |
$55.00 |
| |
(15) Annual report of a domestic limited liability company |
$45.00 |
| |
(16) Annual report of a foreign limited liability company |
$170.00 |
| |
(17) Reinstatement |
$35.00 |
| |
(18) Any other document required or permitted to be filed by this chapter |
$20.00 |
| |
(19) Articles of domestication |
$20.00 |
| |
(20) Articles of termination |
$20.00 |
| |
(21) Notice of withdrawal of reserved name |
$20.00 |
| |
(22) Statement of conversion |
$20.00 |
(b) The Secretary of State shall collect the following fees:
(1) $35.00 each time process is served on the Secretary under this chapter. The party
to a proceeding causing service of process is entitled to recover this fee as costs
if the party prevails in the proceeding.
(2) $25.00 for the certificate certifying the copy of any filed document relating to a
limited liability company or a foreign limited liability company. (Added 2015, No. 17, § 2; amended 2023, No. 77, § 37, eff. June 20, 2023.)
-
Subchapter 002: ORGANIZATION
§ 4021. Limited liability company as legal entity
A limited liability company is a legal entity distinct from its members. (Added 2015, No. 17, § 2.)
§ 4022. Organization
(a) One or more persons may organize a limited liability company, consisting of one or
more members, by delivering articles of organization to the Office of the Secretary
of State for filing. The organizers need not be members of the limited liability company
at the time of formation or after formation has occurred.
(b) Unless a delayed effective date is specified, the existence of a limited liability
company begins when the articles of organization are filed.
(c) The filing of the articles of organization by the Secretary of State is conclusive
proof that the organizers satisfied all conditions precedent to the creation of the
organization.
(d) The Secretary of State shall maintain a separate record of the number of limited liability
companies that deliver articles of organization to the Secretary for filing by electronic
transmission. (Added 2015, No. 17, § 2.)
§ 4023. Articles of organization
(a) Articles of organization of a limited liability company shall set forth:
(1) the name of the company;
(2) the address of the initial designated office;
(3) the name and street address of the initial agent for service of process;
(4) the name and address of each organizer;
(5) if the company has no members at the time of filing, a statement to that effect; and
(6) whether the company is an L3C.
(b) Articles of organization of a limited liability company may set forth:
(1) provisions permitted to be set forth in an operating agreement;
(2) name, email, and address information for one or more owners, officers, or other principals
of the company; and
(3) other matters not inconsistent with law.
(c) Articles of organization of a limited liability company may not vary the nonwaivable
provisions of subsection 4003(b) of this title. As to all other matters, if any provision of an operating agreement is inconsistent
with the articles of organization:
(1) the operating agreement controls as to managers, members, and members’ transferees;
and
(2) the articles of organization control as to persons other than managers, members, and
their transferees who relied on the articles to their detriment. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4024. Amendment or restatement of articles of organization
(a) Articles of organization of a limited liability company may be amended at any time
by delivering articles of amendment to the Secretary of State for filing. The articles
of amendment shall set forth the:
(1) name of the limited liability company;
(2) date of filing of the articles of organization; and
(3) amendment to the articles.
(b) The articles of organization of a limited liability company may be amended at any
time but shall be amended if:
(1) there is a change in the name of the company;
(2) there is a change in any other matter set forth in the articles of organization under
subsection 4023(b) of this title; or
(3) the articles of organization contain a false or erroneous statement.
(c) A limited liability company may restate its articles of organization at any time.
Restated articles of organization shall be signed and filed in the same manner as
articles of amendment. Restated articles of organization shall be designated as such
in the heading and state in the heading or in an introductory paragraph the limited
liability company’s present name and, if it has been changed, all of its former names
and the date of the filing of its initial articles of organization. (Added 2015, No. 17, § 2.)
§ 4025. Signing of documents
(a) Except as otherwise provided in this chapter, a document to be filed by or on behalf
of a limited liability company in the Office of the Secretary of State must be signed
in the name of the company by:
(1) a person authorized by the company;
(2) a person organizing the company, if it is the company’s initial articles of organization;
or
(3) a fiduciary, if the company is in the hands of a receiver, trustee, or other court-appointed
fiduciary.
(b) A document signed under subsection (a) of this section shall state adjacent to the
signature the name and capacity of the signer.
(c) Any record filed under this chapter may be signed by an agent.
(d) An individual who signs a record authorized or required to be filed under this chapter
affirms under penalty of perjury that the information stated in the record is accurate. (Added 2015, No. 17, § 2.)
§ 4026. Filing in Office of Secretary of State
(a) The original signed copy, together with a duplicate copy that may be either a signed,
photocopied, or conformed copy, of the articles of organization or any other document
required to be filed pursuant to this chapter shall be delivered to the Secretary
of State. If the Secretary of State determines that a document conforms to the filing
provisions of this chapter, the Secretary of State shall, when all required filing
fees have been paid:
(1) endorse each signed original and duplicate copy with the word “filed” and the date
and time of the acceptance for filing;
(2) retain the signed original in the Office of the Secretary of State; and
(3) return the duplicate copy to the limited liability company or to its representative.
(b) If the Secretary of State is unable to make the determination required under subsection
(a) of this section for filing the articles of organization at the time a document
is delivered for filing, the document is deemed to have been filed at the time of
delivery if the Secretary of State subsequently determines that:
(1) the document as delivered conforms to the filing provisions of this chapter; or
(2) within 20 days after notification of nonconformance is given by the Secretary to the
limited liability company or its representative, the document is brought into conformance.
(c) If the filing and determination requirements of this chapter are not satisfied within
the time prescribed in subdivision (b)(2) of this section, the document shall not
be filed.
(d) A document accepted for filing by the Secretary of State is effective:
(1) on the date it is filed, as evidenced by the Secretary of State maintaining a record
of the date and time of the filing;
(2) at the time specified in the document as its effective time; or
(3) on the date and at the time specified in the document if the document specifies a
delayed effective date and time.
(e) If a delayed effective date for a document is specified but no time is specified,
the document is effective at 12:01 a.m. on that date. A delayed effective date that
is later than the 90th day after the document is filed makes the document effective
as of the 90th day.
(f) An original copy may consist of an electronic communication received by the Secretary
of State’s office, endorsement may consist of an attached electronic record, and the
delivery of a duplicate may be done electronically. (Added 2015, No. 17, § 2.)
§ 4027. Correcting filed document
(a) A limited liability company or foreign limited liability company may correct a document
filed by the Secretary of State if the document contains a false or erroneous statement
or was defectively signed.
(b) A document is corrected:
(1) by preparing articles of correction that:
(A) describe the document, including its filing date, or attach a copy of it to the articles
of correction;
(B) specify the incorrect statement and the reason it is incorrect or the manner in which
the signing was defective;
(C) correct the incorrect statement or defective signing; and
(2) by delivering the corrected document to the Secretary of State for filing.
(c) When filed by the Secretary of State, articles of correction filed under subsection
(a) of this section are effective retroactively as of the effective date of the record
the articles correct, but the articles are effective when filed as to persons that
previously relied on the uncorrected record and would be adversely affected by the
retroactive effect. (Added 2015, No. 17, § 2.)
§ 4028. Certificate of good standing
A person may request the Secretary of State to issue a certificate of good standing
for a domestic or foreign limited liability company pursuant to section 1657 of this title. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7a, eff. July 1, 2025.)
§ 4029. Liability for false statement in filed document
If a document filed with the Secretary of State contains a false statement, one who
suffers loss by reliance on the statement may recover damages for the loss from a
person who signed the document or caused another to sign it on the person’s behalf
and knew the statement to be false at the time the document was signed. (Added 2015, No. 17, § 2.)
§ 4030. Filing by judicial act
If a person required by section 4025 of this title to sign any document fails or refuses to do so, any other person who is adversely
affected by the failure or refusal may petition the Superior Court to direct the signing
of the document. If the Court finds that it is proper for the document to be signed
and that a person so designated has failed or refused to sign the document, it shall
order the Secretary of State to sign and file an appropriate document. (Added 2015, No. 17, § 2.)
§ 4031. Limited liability company property
Property transferred to or otherwise acquired by a limited liability company is property
of the limited liability company and not of the members individually. (Added 2015, No. 17, § 2.)
§ 4032. When property is limited liability company property
(a) Property is limited liability company property if acquired in the name of:
(1) the limited liability company; or
(2) one or more members with an indication in the instrument transferring title to the
property of the person’s capacity as a member or of the existence of a limited liability
company, but without an indication of the name of the limited liability company.
(b) Property is presumed to be limited liability company property if purchased with limited
liability company assets, even if not acquired in the name of the limited liability
company or of one or more members with an indication in the instrument transferring
title to the property of the person’s capacity as a member or of the existence of
a limited liability company.
(c) Property acquired in the name of one or more of the members, without an indication
in the instrument transferring title to the property of the person’s capacity as a
member or of the existence of a limited liability company and without use of limited
liability company assets, is presumed to be separate property, even if used for limited
liability company purposes. (Added 2015, No. 17, § 2.)
§ 4033. Annual report for Secretary of State
(a) Each domestic limited liability company and each foreign limited liability company
authorized to transact business in this State shall file an annual report with the
Secretary of State. The annual report shall set forth the following information:
(1) the name of the company and the state or country under whose law it is organized;
(2) the address of its designated office; and
(3) the name, email, and address of its agent for service of process.
(b) Information in the annual report shall be current as of the date the annual report
is signed on behalf of the company.
(c) The annual report shall be delivered to the Secretary of State within three months
after the expiration of the company’s fiscal year.
(d) The Secretary of State shall amend its records to reflect a change, if specified in
the report, to the business’s purpose, email, address, or principal information. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4034. Involuntary termination
(a)(1) The articles of organization of a limited liability company that fails to file an
annual report required by section 4033 of this title shall terminate and the provisions of this section shall apply to the limited liability
company.
(2) The certificate of authority of a foreign limited liability company that fails to
file an annual report required by section 4033 of this title shall terminate and the Secretary of State shall notify the company of the termination.
(3) If a company that has had its articles of organization terminated or had its certificate
of authority terminated files its annual report together with the annual report filing
fee and the reinstatement fee for each year the company failed to file its annual
report, its articles of organization or certificate of authority, as the case may
be, shall be reinstated by the Secretary of State.
(b) When the reinstatement becomes effective, it relates back to and takes effect as of
the effective date of termination of the company’s articles of organization or the
date the company’s certificate of authority was terminated under subsection (a) of
this section as if the termination never occurred.
(c) A limited liability company or a foreign limited liability company shall lose the
right to retain its name if the annual report required under subsection (a) of this
section is not filed on or before five years after the date when the report is due.
(d) Involuntary termination under this section does not:
(1) prevent commencement of a proceeding against the limited liability company or the
foreign limited liability company in its company name; provided that a proceeding
is subject to dismissal unless the company is reinstated in accordance with subsections
(a) and (b) of this section;
(2) abate or suspend a proceeding pending by or against the limited liability company
or foreign limited liability company on the effective date of involuntary termination;
or
(3) terminate the authority of the designated agent of the limited liability company or
foreign limited liability company;
(4) alter the limited liability status of members or managers of the limited liability
company or foreign limited liability company; or
(5) impair the validity of acts of the limited liability company during the period between
involuntary termination and reinstatement. (Added 2015, No. 17, § 2.)
-
Subchapter 004: RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED LIABILITY COMPANY
§ 4051. 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) If articles of organization filed with the Secretary of State contain the statement
required by subdivision 4023(a)(5) of this title, a person becomes an initial member of the limited liability company with the consent
of a majority of the organizers. The organizers may consent to more than one person
simultaneously becoming the company’s initial members.
(d) 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 subchapter 10 of this chapter;
(3) with the affirmative vote or 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.
(e) 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. (Added 2015, No. 17, § 2.)
§ 4052. Form of contribution
A contribution may consist of tangible or intangible property or other benefit to
the company, including money, promissory notes, services performed, agreements to
contribute money or property, or contracts for services to be performed. (Added 2015, No. 17, § 2.)
§ 4053. Member’s liability for contributions
(a) A person’s obligation to make a contribution to a limited liability company is not
excused by the member’s death, disability, or other inability to perform personally.
If a person does not make the required contribution, the person’s estate is obligated
at the option of the company to contribute money equal to that portion of the value
of the part of the contribution which has not been made.
(b) A creditor of a limited liability company who extends credit or otherwise acts in
reliance on an obligation described in subsection (a) of this section, and without
notice of any compromise under subdivision 4054(d)(4) of this title, may enforce the original obligation. (Added 2015, No. 17, § 2.)
§ 4054. Management of limited liability company
(a) A limited liability company is a member-managed limited liability company unless the
operating agreement:
(1) expressly provides that:
(A) the company is or will be “manager-managed”;
(B) the company is or will be “managed by managers”; or
(C) management of the company is or will be “vested in managers”; or
(2) includes words of similar import.
(b) In a member-managed limited liability company:
(1) the management and conduct of the company are vested in the members;
(2) each member has equal rights in the management and conduct of the company’s activities;
and
(3) except as otherwise provided in subsection (d) of this section, any matter relating
to the activities of the company may be decided by a majority of the members.
(c) In a manager-managed limited liability company:
(1) Except as otherwise provided in subsection (d) of this section, the managers have
the exclusive authority to manage and conduct the company’s activities.
(2) Each manager has equal rights in the management and conduct of the company’s activities.
(3) Except as specified in subsection (d) of this section, any matter relating to the
activities of the company may be exclusively decided by the manager or, if there is
more than one manager, by a majority of the managers.
(4)(A) A manager may be chosen at any time by the affirmative vote or consent of a majority
of the members and remains a manager until a successor has been chosen, unless the
manager at an earlier time resigns, is removed, or dies, or, in the case of a manager
that is not an individual, terminates.
(B) A manager may be removed at any time by the affirmative vote or consent of a majority
of the members without notice or cause.
(5)(A) A person need not be a member to be a manager, but the dissociation of a member that
is also a manager removes the person as a manager.
(B) If a person that is both a manager and a member ceases to be a manager, that cessation
does not by itself dissociate the person as a member.
(6) A person’s ceasing to be a manager does not discharge any debt, obligation, or other
liability to the limited liability company or members which the person incurred while
a manager.
(d) Except as provided in the operating agreement, the affirmative vote or consent of
all the members is required to:
(1) amend the operating agreement of a limited liability company;
(2) amend the articles of organization under section 4024 of this title;
(3) compromise an obligation to make a contribution under section 4053 of this title;
(4) compromise, as among members, an obligation of a member to make a contribution or
return money or other property paid or distributed in violation of this chapter;
(5) make interim distributions under subsection 4055(a) of this title;
(6) admit a new member;
(7) use the company’s property to redeem an interest subject to a charging order;
(8) waive the right to have the company’s business wound up and the company terminated
under subsection 4102(b) of this title; and
(9) sell, lease, exchange or otherwise dispose of all, or substantially all, of the company’s
property with or without goodwill.
(e)(1) 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.
(2) An appointment of a proxy is valid for 11 months unless a different time is specified
in the appointment instrument.
(3) An appointment is revocable by the member or manager unless the appointment form conspicuously
states that it is irrevocable and the appointment is coupled with an interest, in
which case the appointment is revoked when the coupled interest is extinguished.
(f)(1) An action requiring the affirmative vote or consent of members under this title may
be taken without a meeting if the action is approved in a consent by members having
not less than the minimum number of votes that would be necessary to authorize or
take the action at a meeting at which all members entitled to vote thereon were present
and voted.
(2) A member may appoint a proxy or other agent to consent or otherwise act for the member
by signing an appointing record, personally or by the member’s agent.
(g)(1) An action that may be taken at a meeting of the managers may be taken without a meeting
if the action is approved by consent of all managers entitled to vote on the action.
(2) The action must be evidenced by one or more consents reflected in a record describing
the action taken and signed by all managers entitled to vote on the action.
(h) The dissolution of a limited liability company does not affect the applicability of
this section. However, a person that wrongfully causes dissolution of the company
loses the right to participate in management as a member and a manager.
(i) This chapter does not entitle a member to remuneration for services performed for
a member-managed limited liability company, except for reasonable compensation for
services rendered in winding up the activities of the company. (Added 2015, No. 17, § 2.)
§ 4055. Sharing of profits and losses and right to distributions
(a) The profits and losses of a limited liability company shall be allocated among the
members or the holders of distributional interests, as the case may be, in proportion
to the agreed value, as stated in the limited liability company records required to
be kept under this chapter, of the contributions made by each member, taking into
account variations in the capital contributions of each member during the period for
which such allocations are made.
(b) Any distributions made by a limited liability company before its dissolution and winding
up shall be made among the members or the holders of distributional interests, as
the case may be, in proportion to the agreed value of the contributions made by each
member as of the date of such distribution.
(c)(1) A member has a right to a distribution before the dissolution and winding up of a
limited liability company only if the company decides to make an interim distribution.
(2) A person’s dissociation does not entitle the person to a distribution.
(d) A member has no right to receive, and may not be required to accept, a distribution
in kind.
(e) If a member or transferee becomes entitled to receive a distribution, the member or
transferee has the status of, and is entitled to all remedies available to, a creditor
of the limited liability company with respect to the distribution. (Added 2015, No. 17, § 2.)
§ 4056. Limitations on distributions
(a) A distribution shall not be made if:
(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) of this section on financial statements prepared on the basis
of:
(1) generally accepted accounting practices and principles;
(2) a fair valuation; or
(3) another method that is reasonable under the circumstances.
(c) Except as otherwise provided in subsection (e) of this section, the effect of a distribution
under subsection (a) of this section 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:
(A) distribution is authorized if the payment occurs within 120 days after the date of
authorization; or
(B) payment is made if it occurs more than 120 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) of this section 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 and not the
issuance of the indebtedness is treated as a distribution, the effect of which is
measured on the date the payment is made. (Added 2015, No. 17, § 2.)
§ 4057. Liability for unlawful distributions
(a) A member of a member-managed limited liability company or a member or manager of a
manager-managed company who votes for or assents to a distribution made in violation
of section 4056 of this title, the articles of organization, or a written 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 section 4056 of this title, the articles of organization, or a written operating agreement if it is established
that the member or manager did not perform the member’s or manager’s duties in compliance
with section 4059 of this title.
(b) A member of a manager-managed limited liability company who knew a distribution was
made to such member in violation of section 4056 of this title is personally liable to the limited liability company, but only to the extent that
the distribution received by such member exceeded the amount that could properly have
been paid under section 4056 of this title.
(c) 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) of this section and may compel contribution from them; and
(2) members who received a distribution in violation of subsection (b) of this section
and may compel contribution from the member in the amount received in violation of
subsection (b) of this section.
(d) A proceeding under this section is barred unless it is commenced within two years
after the distribution. (Added 2015, No. 17, § 2.)
§ 4058. Information rights
(a) In a member-managed limited liability company, each member has the right, subject
to such reasonable standards, including standards governing what information and documents
are to be furnished and at what time and location, as may be set forth in the articles
of organization, an operating agreement, or otherwise established by the members to
obtain from the company from time to time and upon reasonable demand for any purpose
reasonably related to the member’s interest as a member of the limited liability company
during the period in which he or she was a member:
(1) information concerning the company’s business or affairs reasonably required for the
proper exercise of the member’s rights and duties under the operating agreement or
this chapter; and
(2) 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.
(b) In a manager-managed limited liability company:
(1) the right to receive information as stated in subdivision (a)(1) of this section shall
apply to the managers and not the members;
(2) during regular business hours and at a reasonable location specified by the company,
a member may inspect and copy information regarding the activities, affairs, financial
condition, and other circumstances of the company as is just and reasonable if:
(A) the member seeks the information for a purpose reasonably related to the member’s
interest as a member;
(B) the member makes a demand in a record received by the company, describing with reasonable
particularity the information sought and the purpose for seeking the information;
and
(C) the information sought is directly connected to the member’s purpose; and
(3) the managers shall have the right to keep confidential from members who are not managers,
for such period of time as the managers deem reasonable, any information which the
managers reasonably believe to be in the nature of trade secrets or other information
the disclosure of which the managers in good faith believe is not in the best interest
of the company.
(c) A company may impose a reasonable charge, limited to the costs of labor and material,
for copies of records or other information furnished under this section.
(d) A company may maintain its records in other than written form if such form is capable
of conversion into written form within a reasonable time or into an electronic form
that may be prescribed by the Secretary of State.
(e) Any demand under this section shall:
(1) be in writing;
(2) be made in good faith and for a proper purpose; and
(3) describe with reasonable particularity the purpose and the records or information
desired.
(f)(1) A member or person dissociated as a member may exercise the rights under this section
through an agent or, in the case of an individual under legal disability, a legal
representative.
(2) Any restriction or condition imposed by the operating agreement or under subsection
(h) of this section applies both to the agent or legal representative of such a member
and to a person dissociated as a member.
(g) Subject to section 4075 of this title, the rights under this section do not extend to a person who is a transferee of an
interest in a limited liability company, except that a transferee is entitled to an
account of the company’s transactions only from the date of dissolution.
(h)(1) In addition to any restriction or condition stated in this section or the company’s
operating agreement, a limited liability company may impose reasonable restrictions
and conditions on access to and use of information to be furnished under this section,
including designating information confidential and imposing nondisclosure and safeguarding
obligations on the recipient.
(2) In a dispute concerning the reasonableness of a restriction under this subsection,
the company has the burden of proving reasonableness.
(i) Failure of the company to keep or maintain any of the records or information required
pursuant to this section shall not be grounds for imposing liability on any person
for the debts and obligations of the company. (Added 2015, No. 17, § 2.)
§ 4059. General standards of member’s and manager’s conduct
(a) The only fiduciary duties a member owes to a member-managed limited liability company
and its other members are the duty of loyalty and the duty of care imposed by subsections
(b) and (c) of this section.
(b) A member’s duty of loyalty to a member-managed limited liability 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
the 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 limited liability company and its other
members in the conduct of and winding up of the company’s business is limited to refrain
from engaging in grossly negligent or reckless conduct, or a knowing violation of
the law.
(d) A member shall discharge the duties to a member-managed limited liability 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 limited liability 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) All the members of a member-managed limited liability company or a manager-managed
limited liability company may authorize or ratify, after full disclosure of all material
facts, a specific act or transaction that otherwise would violate the duty of loyalty.
(g) It is a defense to a claim under subdivision (b)(2) of this section and any comparable
claim in equity or at common law that the transaction was fair to the limited liability
company.
(h) 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 of the company
as if the person were a member.
(i) In a manager-managed limited liability company:
(1) subsections (a), (b), (c), and (g) of this section apply to the manager or managers
and not the members, and the duty stated in subdivision (b)(3) of this section continues
until winding up is completed;
(2) subsection (d) of this section applies to managers and members;
(3) subsection (e) of this section applies only to members;
(4) the power to ratify under subsection (f) of this section applies only to members;
(5) subject to subsection (d) of this section, a member does not have any duty to the
company or to the other members solely by reason of being a member;
(6) 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 (a), (b), (c), and (g) of this section to the
extent that the member exercises the managerial authority vested in a manager by this
chapter; and
(7) a manager is relieved of liability imposed by law for violation of the standards prescribed
by subsections (a), (b), (c), and (g) of this section to the extent of the managerial
authority delegated to the members by the operating agreement.
(j) In discharging his or her duties, a member or a manager is entitled to rely on information,
opinions, reports, or statements, including financial statements and other financial
data, if prepared or presented by:
(1) one or more members, managers, officers, or employees of the company whom the member
or manager reasonably believes to be reliable and competent in the matter presented;
(2) legal counsel, public accountants, or other persons as to matters the member or manager
reasonably believes are within the person’s professional or expert competence; or
(3) a committee of the members or managers of which the member or manager is not a member
if the member or manager reasonably believes the committee merits confidence.
(k) A member or manager is not acting in good faith if he or she has knowledge concerning
the matter in question that makes reliance permitted by subsection (j) of this section
unwarranted.
(l)(1) A member of a member-managed limited liability company or a manager of a manager-managed
limited liability company may lend money to and transact other business with the company.
(2) As to each loan or transaction, the rights and obligations of the member or manager,
as applicable, are the same as those of a person who is not a member or manager, subject
to other applicable law.
(m) A member or manager is not liable for any action taken as a member or manager or any
failure to take any action, if the member or manager performed the duties of his or
her office in compliance with this section. (Added 2015, No. 17, § 2.)
§ 4060. Reimbursement, indemnification, and insurance
(a) A member-managed limited liability company shall reimburse a member, and a manager-managed
limited liability company shall reimburse a manager, for payments made and indemnify
the member or manager for liabilities reasonably incurred by the member or manager
in the ordinary and proper conduct of the activities of the limited liability company
or for the preservation of its activities or property.
(b) A limited liability company may purchase and maintain insurance on behalf of a member
or manager against liability asserted against or incurred by the member or manager
in that capacity or arising from that status whether or not the operating agreement
is permitted to provide for the member or manager to be indemnified against the liability.
(c) A limited liability company shall reimburse a member for an advance to the company
beyond the amount of contribution the member agreed to make.
(d) A payment or advance that gives rise to an obligation of a limited liability company
under subsections (a) through (c) of this section constitutes a loan to the company,
which accrues interest from the date of the payment or advance.
(e) A member is not entitled to remuneration for services performed for a limited liability
company even in the capacity as a manager of a manager-managed company, except for
reasonable compensation for services rendered in winding up the activities of the
company. (Added 2015, No. 17, § 2.)
-
Subchapter 007: WINDING UP OF COMPANY BUSINESS
§ 4101. Events causing dissolution and winding up of company business
(a) A limited liability company is dissolved, and its business shall be wound up, upon
the occurrence of any of the following events:
(1) an event or circumstance that the operating agreement states causes dissolution;
(2) consent of the number or percentage of members specified in the operating agreement,
or in the absence of a provision governing approval of a dissolution or winding up
of the company contained in an operating agreement, the consent of all the members;
(3) the passage of 90 consecutive days during which the company has no members;
(4) on application by a member, the entry by the Superior Court of an order dissolving
the company on the grounds that:
(A) the conduct of all or substantially all of the company’s activities is unlawful; or
(B) it is not reasonably practicable to carry on the company’s activities in conformance
with the certificate of organization and the operating agreement; or
(5) on application by a member, the entry by the Superior Court of an order dissolving
the company on the grounds that the managers or those members in control of the company:
(A) have acted, are acting, or will act in a manner that is illegal or fraudulent; or
(B) have acted or are acting in a manner that is oppressive and was, is, or will be directly
harmful to the applicant.
(b) In an action brought under subdivision (a)(5) of this section, the Court may order
a remedy other than dissolution. (Added 2015, No. 17, § 2.)
§ 4102. Limited liability company continues after dissolution
(a) Subject to subsection (b) of this section, 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, all of the members, or, if different, the number
or percentage of members specified in the operating agreement to dissolve or liquidate
the company may waive the right to have the company’s business wound up and the company
terminated, in which 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 shall be subject to the same limitations on liability
as if the dissolution had never occurred; and
(2) the rights of a third party accruing under section 4104 of this title 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. (Added 2015, No. 17, § 2.)
§ 4103. Right to wind up limited liability company’s business
(a) After dissolution, a member may participate in winding up a limited liability company’s
business, but on application of any member, member’s legal representative, or transferee,
the Superior Court, for good cause shown, may order judicial supervision of the winding
up.
(b) In winding up its activities, a limited liability company:
(1) shall discharge the company’s debts, obligations, or other liabilities, settle and
close the company’s activities, and marshal and distribute the assets of the company;
and
(2) may:
(A) deliver to the Secretary of State for filing a statement of dissolution stating the
name of the company and that the company is dissolved;
(B) preserve the company activities and property as a going concern for a reasonable time;
(C) prosecute and defend actions and proceedings, whether civil, criminal, or administrative;
(D) transfer the company’s property;
(E) settle disputes by mediation or arbitration; and
(F) perform other acts necessary or appropriate to the winding up.
(c) If a dissolved limited liability company has no members, the legal representative
of the last person to have been a member may wind up the activities of the company.
If the person does so, the person has the powers of a sole manager under subsection 4054(c) of this title and is deemed to be a manager for the purposes of subdivision 4042(a)(2) of this title.
(d)(1) If the legal representative under subsection (c) of this section declines or fails
to wind up the company’s activities, a person may be appointed to do so by the consent
of transferees who own a majority of the rights to receive distributions as transferees
at the time the consent is to be effective.
(2) A person appointed under this subsection:
(A) has the powers of a sole manager under subsection 4054(c) of this title and is deemed to be a manager for purposes of subdivision 4042(a)(2) of this title; and
(B) shall promptly deliver to the Secretary of State for filing an amendment to the company’s
certificate of organization to:
(i) state that the company has no members;
(ii) state that the person has been appointed pursuant to this subsection (d) to wind up
the company; and
(iii) provide the street and mailing addresses of the person.
(e) The Superior Court may order judicial supervision of the winding up of a dissolved
limited liability company, including the appointment of a person to wind up the company’s
activities:
(1) on application of a member, if the applicant establishes good cause;
(2) on the application of a transferee, if:
(A) the company does not have any members;
(B) the legal representative of the last person to have been a member declines or fails
to wind up the company’s activities; and
(C) within a reasonable time following the dissolution, a person has not been appointed
pursuant to subsection (c) of this section; or
(3) in connection with a proceeding under subdivision 4101(a)(4) or (5) of this title. (Added 2015, No. 17, § 2.)
§ 4104. Member’s or manager’s power and liability as agent after dissolution
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 section 4041 of this title before dissolution, if the other party to the transaction did not have notice of
the dissolution. (Added 2015, No. 17, § 2.)
§ 4105. 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. (Added 2015, No. 17, § 2.)
§ 4106. Distribution of assets in winding up limited liability company’s business
(a) In winding up a limited liability company’s business, the assets of the company shall
be applied to discharge its obligations to creditors, including members who are creditors.
Any surplus shall be applied to pay in money the net amount distributable to members
in accordance with their right to distributions under subsection (b) of this section.
(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 proportion to each member’s capital
contributions. (Added 2015, No. 17, § 2.)
§ 4107. 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 shall:
(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 120 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) of this section 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 company:
(A) the company causes the claimant to receive notice in a record stating that the claim
is rejected and will be barred unless the claimant commences an action against the
company to enforce the claim within 90 days after the claimant receives the notice;
and
(B) the claimant does not commence the required action within the 90 days.
(d) This section does not apply to a claim based on an event occurring after the effective
date of dissolution or a liability that on that date is contingent. (Added 2015, No. 17, § 2.)
§ 4108. 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 shall:
(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 located or, if
it has none in this State, in the county in which its designated office is or was
last located, and sent to the Office of the Attorney General;
(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)(1) If the dissolved limited liability company sends notice to the Attorney General and
publishes a newspaper notice in accordance with subsection (b) of this section, a
cause of action against a dissolved limited liability company, whether arising before
or after the dissolution of the limited liability company, may be enforced only as
follows:
(A) against the dissolved limited liability company; and
(B) if any of the assets of the dissolved limited liability company have been distributed
to its members, against members of the dissolved limited liability company.
(2) A cause of action against a dissolved limited liability company arising under subdivision
(1)(A) of this subsection is extinguished unless the claimant commences a proceeding
to enforce the cause of action against the dissolved limited liability company prior
to the expiration of the statute of limitations applicable to the cause of action.
(3) A cause of action against a dissolved limited liability company arising under subdivision
(1)(B) of this subsection is extinguished unless the claimant commences a proceeding
to enforce the cause of action against a member of a dissolved limited liability company
prior to the earlier of the following:
(A) the expiration of the statute of limitations applicable to the cause of action; or
(B) five years after the effective date of the dissolution of the limited liability company. (Added 2015, No. 17, § 2.)
§ 4109. Enforcement of claims against dissolved limited liability company
A claim not barred under section 4108 of this title may be enforced against the dissolved limited liability company:
(1) to the extent of its undistributed assets, including any insurance assets held by
the limited liability company that may be available to satisfy claims; 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. (Added 2015, No. 17, § 2.)
-
Subchapter 008: FOREIGN LIMITED LIABILITY COMPANIES
§ 4111. Law governing foreign limited liability companies
(a) The laws of the state or other jurisdiction under which a foreign limited liability
company is organized govern its organization and internal affairs and the liability
of a member as a member, and a manager as a manager, for the debts, obligations, or
other liabilities of the foreign limited liability company or series thereof.
(b) A foreign limited liability company may not be denied a certificate of authority by
reason of any difference between the laws of another jurisdiction under which the
foreign company is formed and the laws 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. (Added 2015, No. 17, § 2.)
§ 4112. Application for certificate of authority
(a) 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. The application shall set forth:
(1) the name of the foreign company and, if its name is unavailable for use in this State,
an alternate name that satisfies the requirements of section 4116 of this title;
(2) the name of the state or country under whose law it is organized;
(3) the address of its initial designated office; and
(4) the name, email, and address information of its agent for service of process in this
State pursuant to section 1655 of this title.
(b) An application may set forth:
(1) provisions permitted to be included in an operating agreement;
(2) the name, email, and address information for one or more owners, officers, or other
principals of the company; and
(3) other matters not inconsistent with law.
(c) A foreign limited liability company shall deliver with the completed application a
certificate of existence or a document of similar import, authenticated by the Secretary
of State or other official having custody of company records in the state or country
under whose law it is organized, dated not earlier than 90 days prior to filing of
the application. (Added 2015, No. 17, § 2; amended 2025, No. 10, § 7, eff. July 1, 2025.)
§ 4113. Activities not constituting transacting business
(a) A foreign limited liability company may not transact business in this State until
it obtains a certificate of authority from the Secretary of State.
(b) Except as provided in subsection (c) of this section, “doing business” or “transacting
business” shall mean and include each act, power, or privilege exercised or enjoyed
in this State by a foreign limited liability company.
(c) Among others, the following activities without more do not constitute transacting
business for the purpose of determining whether a foreign limited liability company
is required to obtain a certificate of authority under subsection (a) of this section:
(1) maintaining, defending, or settling any proceeding;
(2) holding meetings of its members or managers or carrying on any other activity concerning
its internal affairs;
(3) maintaining bank accounts;
(4) maintaining offices or agencies for the transfer, exchange, and registration of the
foreign 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, and maintaining property so
acquired;
(9) owning real or personal property;
(10) conducting an isolated transaction that is not one in the course of repeated transactions
of a like nature; or
(11) transacting business in interstate commerce. (Added 2015, No. 17, § 2.)
§ 4114. Issuance of certificate of authority
If the Secretary of State determines that an application for a certificate of authority
complies as to form with the filing requirements of this chapter, and if all filing
fees have been paid, the Secretary of State shall file the application and issue a
certificate of authority to the foreign limited liability company or its representative. (Added 2015, No. 17, § 2.)
§ 4115. Amended certificate of authority
(a) A foreign limited liability company authorized to transact business in this State
shall obtain an amended certificate of authority from the Secretary of State if it:
(1) changes its name; and
(2) changes the state or country under whose law it is organized.
(b) The requirements of section 4114 of this title for obtaining an original certificate of authority apply to obtaining an amended
certificate under this section. (Added 2015, No. 17, § 2.)
§ 4116. Name of foreign limited liability company
(a)(1) A foreign limited liability company whose name does not comply with section 4005 of this title 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 section 4005 of this title.
(2) 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 15 of this title.
(3) 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 15 of this title 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 satisfy the requirements of section 4005 of this title, it may not transact business in this State until it complies with subsection (a)
of this section and obtains an amended certificate of authority. (Added 2015, No. 17, § 2.)
§ 4117. Revocation of certificate of authority
(a) The Secretary of State may revoke a certificate of authority of a foreign limited
liability company to transact business in this State in the manner provided in subsections
(b) and (c) of this section if:
(1) the company does not:
(A) pay, within 60 days after the due date, any fee, tax, or penalty due to the Secretary
of State under this chapter;
(B) appoint and maintain an agent for service of process as required by section 4007 of this title; or
(C) deliver for filing a statement of change under section 4008 of this title within 30 days after a change has occurred in the name or address of the agent; or
(2) the Commissioner of Taxes notifies the Secretary of State that a foreign limited liability
company has failed to make a return, to pay a tax, to file a bond, or to do any other
act required under 32 V.S.A. chapter 211.
(b)(1) To revoke a certificate of authority of a foreign limited liability company, the Secretary
of State shall 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.
(2) A notice of revocation shall state:
(A) the effective date of the revocation, which shall be at least 60 days after the date
the Secretary of State sends the copy; and
(B) the grounds for revocation under subsection (a) of this section.
(c) The authority of a foreign limited liability company to transact business in this
State shall cease 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) of this section. If the company cures each ground, the Secretary
of State shall file a record so stating. (Added 2015, No. 17, § 2.)
§ 4118. Cancellation of authority
A foreign limited liability company may cancel its authority to transact business
in this State by filing a certificate of cancellation with the Secretary of State.
Cancellation does not terminate the authority of the Secretary of State to accept
service of process on the company for claims arising out of the transactions of business
in this State. (Added 2015, No. 17, § 2.)
§ 4119. Effect of failure to obtain certificate of authority
(a)(1) A foreign limited liability company transacting business in this State may not maintain
a proceeding or raise a counterclaim, crossclaim, or affirmative defense in any court
in this State until it obtains a certificate of authority to transact business in
this State.
(2) The successor to a foreign limited liability company that transacted business in this
State without a certificate of authority and the assignee of a cause of action arising
out of that business may not maintain a proceeding or raise a counterclaim, crossclaim,
or affirmative defense based on that cause of action in any court in this State until
the foreign limited liability company or its successor or assignee obtains a certificate
of authority.
(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 debts,
obligations, or other liabilities of the company solely because the company transacted
business in this State without a certificate of authority.
(d) If a foreign limited liability company transacts business in this State without a
certificate of authority, it appoints the Secretary of State as its agent for service
of process for claims arising out of the transaction of business in this State.
(e) A foreign limited liability company that transacts business in this State without
a certificate of authority shall be liable to the State for:
(1) a civil penalty of $50.00 for each day, not to exceed a total of $10,000.00 for each
year, it transacts business in this State without a certificate of authority;
(2) an amount equal to the fees due under this chapter during the period it transacted
business in this State without a certificate of authority; and
(3) other penalties imposed by law. (Added 2015, No. 17, § 2; amended 2015, No. 128 (Adj. Sess.), § C.8.)
§ 4120. Action by Attorney General
The Attorney General may maintain an action in the Civil Division of the Superior
Court to collect the penalties imposed under section 4119 of this title and to restrain a foreign limited liability company from transacting business in
this State in violation of this chapter. (Added 2015, No. 17, § 2; amended 2015, No. 128 (Adj. Sess.), § C.9.)
§ 4121. Election
A limited liability company formed under this chapter may elect to be a foreign law
limited liability company by complying with all the following:
(1) designating itself as a foreign law limited liability company in its articles of organization
filed pursuant to section 4023 of this title;
(2) including in its name either the term “foreign law limited liability company,” the
term “Foreign Law Company,” or the abbreviation “F.L.L.L.C.” or “F.L.C.” in lieu of
the words or abbreviations required under subsection 4005(a) of this title; and
(3) complying with the requirements of this subchapter and paying the filing fees pursuant
to section 4012 of this title. (Added 2015, No. 17, § 2.)
§ 4122. Designation of controlling foreign law
(a) A foreign law limited liability company shall designate in its articles of organization
all the following:
(1) a specific law or body of law of a foreign jurisdiction, either within or outside
the United States of America, that will control the internal governance affairs of
the company;
(2) the type of organization that will control how the foreign law limited liability company
is treated under the foreign law and all matters that are required to be included
in the constituent filing for that type of organization under that foreign law;
(3) any variations or limitations on the applicability of the foreign law and any mechanisms
for amending, rescinding, or limiting the designation in the future;
(4) the courts, if any, that, in addition to the courts of the State of Vermont and the
United States, will have jurisdiction over disputes relating to the internal governance
affairs of the foreign law limited liability company; and
(5) a designation of those classes of individuals or officers within the chosen legal
structure who shall have authority to act on behalf of the foreign law limited liability
company equivalent to the authority of managers under subsections 4054(b) and (c)
of this title, and any limitations on or clarification of that authority.
(b) Any bylaws, agreements, or other statements of principles governing the internal governance
affairs of the foreign law limited liability company addressed in the applicable foreign
law but not required to be in the constituent filing shall be set forth as part of,
or in lieu of, the operating agreement required by section 4003 of this title. The prohibitions on a waiver under subsection 4003(b) shall not apply to foreign
law limited liability companies. (Added 2015, No. 17, § 2.)
§ 4123. Scope of designated foreign law
(a) In any disputes over the internal governance affairs of a foreign law limited liability
company, the designated foreign law or body of law shall be applied by any court having
jurisdiction over the parties as the binding authority governing these matters, provided
that no designated law shall be enforced that:
(1) is contrary to provisions of Vermont or U.S. law or public policy;
(2) cause fraud or manifest injustice under Vermont or U.S. law;
(3) purports to limit the civil or criminal liability of an individual, partnership, or
entity under Vermont or U.S. law; or
(4) varies or limits the filing procedures for creating a limited liability company required
by this title.
(b) As used in this subchapter, “internal governance affairs” means the relations among
the limited liability company, its members, and managers. Whether an issue is a matter
of internal governance affairs of the company shall be determined under Vermont law.
(c) If a court determines that the designated law does not address an internal governance
matter or addresses it in a manner that is unenforceable pursuant to subsection (a)
of this section, or a limitation or variation relating to the issue is specified in
the articles of organization, Vermont law shall apply to the matter at issue.
(d) All the external affairs of the foreign law limited liability company shall be governed
by the general provisions of this chapter, the articles of organization other than
choice of foreign law, the operating agreement, and applicable Vermont and federal
laws. (Added 2015, No. 17, § 2.)
§ 4124. Jurisdiction
(a) Vermont and other courts designated pursuant to section 4122 of this title shall have jurisdiction over all disputes relating to the internal governance affairs
of a foreign law limited liability company.
(b) In adjudicating any dispute relating to the internal governance affairs of a foreign
law limited liability company, the court may rely on its own English translation of
the designated law and on testimony of experts, opinions of counsel, advisory opinions,
or declaratory or binding judgments, and other appropriate evidence. (Added 2015, No. 17, § 2.)
-
Subchapter 010: CONVERSION, MERGER, AND DOMESTICATION
§ 4141. Definitions
As used in this subchapter:
(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) “Conversion” means a transaction authorized by sections 4142 through 4147 of this title.
(4) “Converted organization” means the converting organization as it continues in existence
after a conversion.
(5) “Converting organization” means the domestic organization that approves a plan of
conversion pursuant to section 4144 of this title or the foreign organization that approves a conversion pursuant to the law of its
jurisdiction of formation.
(6) “Domestic,” with respect to an organization, means an organization governed as to
its internal affairs by the law of this State.
(7) “Domesticated company” means the company that exists after a domesticating foreign
limited liability company or limited liability company effects a domestication pursuant
to sections 4152 through 4155 of this title.
(8) “Domesticating company” means the company that effects a domestication pursuant to
sections 4152 through 4155 of this title.
(9) “General partner” means a partner in a partnership and a general partner in a limited
partnership.
(10) “Governing statute” means the statute that governs an organization’s internal affairs.
(11) “Interest holder” means:
(A) a shareholder of a business corporation;
(B) a member of a nonprofit corporation;
(C) a general partner of a general partnership;
(D) a general partner of a limited partnership;
(E) a limited partner of a limited partnership;
(F) a member of a limited liability company;
(G) a shareholder of a general cooperative association;
(H) a member of a limited cooperative association or mutual benefit enterprise;
(I) a member of an unincorporated nonprofit association;
(J) a beneficiary or beneficial owner of a statutory trust, business trust, or common-law
business trust; or
(K) any other direct holder of an interest.
(12) “Limited partner” means a limited partner in a limited partnership.
(13) “Limited partnership” means a limited partnership created under chapter 23 of this
title, a predecessor law, or comparable law of another jurisdiction.
(14) “Organization”:
(A) means any of the following, whether a domestic or foreign organization, and regardless
of whether organized for profit:
(i) a business corporation;
(ii) a nonprofit corporation;
(iii) a general partnership, including a limited liability partnership;
(iv) a limited partnership, including a limited liability limited partnership;
(v) a limited liability company;
(vi) a general cooperative association;
(vii) a limited cooperative association or mutual benefit enterprise;
(viii) an unincorporated nonprofit association;
(ix) a statutory trust, business trust, or common-law business trust; or
(x) any other person that has:
(I) a legal existence separate from any interest holder of that person; or
(II) the power to acquire an interest in real property in its own name; and
(B) does not include:
(i) an individual;
(ii) a trust with a predominantly donative purpose or a charitable trust;
(iii) an association or relationship that is not an organization listed in subdivision (A)
of this subdivision (14) and is not a partnership under chapter 22 or 23 of this title,
or a similar provision of the law of another jurisdiction;
(iv) a decedent’s estate; or
(v) a government or a governmental subdivision, agency, or instrumentality.
(15) “Organizational documents” means, whether or not in a record, documents governing
the internal affairs of an organization that are binding on all its interest holders,
including:
(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 certificate or 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.
(16) “Partner” includes a general partner and a limited partner.
(17) “Partnership” means a general partnership under chapter 22 of this title, a predecessor
law, or comparable law of another jurisdiction.
(18) “Partnership agreement” means an agreement among the partners concerning the partnership
or limited partnership.
(19) “Personal liability” means:
(A) any 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:
(i) by the governing statute solely by reason of the person co-owning, having an interest
in, or being a member of the organization; or
(ii) 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; or
(B) an obligation of an interest holder under the organizational documents of an organization
to contribute to the organization.
(20) “Private organizational documents” means organizational documents or portions thereof
that are not part of the organization’s public record, if any, and includes:
(A) the bylaws of a business corporation;
(B) the bylaws of a nonprofit corporation;
(C) the partnership agreement of a general partnership;
(D) the partnership agreement of a limited partnership;
(E) the operating agreement of a limited liability company;
(F) the bylaws of a general cooperative association;
(G) the bylaws of a limited cooperative association or mutual benefit enterprise;
(H) the governing principles of an unincorporated nonprofit association; and
(I) the trust instrument of a statutory trust or similar rules of a business trust or
common-law business trust.
(21) “Protected agreement” means:
(A) an instrument or agreement evidencing indebtedness of an organization in effect on
July 1, 2016 or on the date the organization elects to become subject to this chapter,
whichever is earlier;
(B) an agreement that is binding on an organization on July 1, 2016 or on the date the
organization elects to become subject to this chapter, whichever is earlier;
(C) the organizational documents of an organization in effect on July 1, 2016 or on the
date the organization elects to become subject to this chapter, whichever is earlier;
or
(D) an agreement that is binding on any of the directors, officers, general partners,
managers, or interest holders of an organization on July 1, 2016 or on the date the
organization elects to become subject to this chapter, whichever is earlier.
(22) “Public organizational documents” means the record of organizational documents required
to be filed with the Secretary of State to form an organization, and any amendment
to or restatement of that record, and includes:
(A) the articles of incorporation of a business corporation;
(B) the articles of incorporation of a nonprofit corporation;
(C) the certificate of limited partnership of a limited partnership;
(D) the certificate of organization of a limited liability company;
(E) the articles of incorporation of a general cooperative association;
(F) the articles of organization of a limited cooperative association or mutual benefit
enterprise; and
(G) the certificate of trust of a statutory trust or similar record of a business trust.
(23) “Registered foreign organization” means a foreign organization that is registered
to do business in this State pursuant to a record filed by the Secretary of State.
(24) “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. (Added 2015, No. 17, § 2; amended 2015, No. 97 (Adj. Sess.), § 43; 2015, No. 157 (Adj. Sess.), § E.3.)
§ 4142. Conversion authorized
(a) By complying with sections 4143 through 4146 of this title, a domestic limited liability company may become a domestic organization that is
a different type of organization.
(b) By complying with sections 4143 through 4146 of this title, a domestic limited liability company may convert into a different type of foreign
organization if the conversion is authorized by the foreign statute that governs the
organization after conversion and the converting organization complies with the statute.
(c) By complying with sections 4143 through 4146 of this title, a domestic organization may become a domestic limited liability company.
(d) By complying with sections 4143 through 4146 of this title applicable to foreign organizations, a foreign organization that is not a foreign
limited liability company may become a domestic limited liability company if the conversion
is authorized by the law of the foreign organization’s jurisdiction of formation.
(e) If a protected agreement contains a provision that applies to a merger of a domestic
limited liability company but does not refer to a conversion, the provision applies
to a conversion of the company as if the conversion were a merger until the provision
is amended after July 1, 2016 or after the date the organization elects to become
subject to this chapter, whichever is earlier. (Added 2015, No. 17, § 2; amended 2015, No. 97 (Adj. Sess.), § 44; 2015, No. 157 (Adj. Sess.), § E.3.)
§ 4143. Plan of conversion
(a) A domestic limited liability company may convert to a different type of organization
under section 4142 of this title, by approving a plan of conversion. The plan shall be in a record and contain:
(1) the name of the converting limited liability company;
(2) the name, jurisdiction of formation, and type of organization of the converted organization;
(3) the manner of converting the interests in the converting limited liability company
into interests, securities, obligations, money, other property, rights to acquire
interests or securities, or any combination of the foregoing;
(4) the proposed public organizational documents of the converted organization if it will
be an organization with public organizational documents filed with the Secretary of
State;
(5) the full text of the private organizational documents of the converted organization
which are proposed to be in a record;
(6) the other terms and conditions of the conversion; and
(7) any other provision required by the law of this State or the operating agreement of
the converting limited liability company.
(b) A domestic general partnership or a domestic limited partnership may convert into
a domestic limited liability company by approving a plan of conversion setting forth
the terms and conditions of the conversion of the interests of partners of a partnership
or of a limited partnership, as the case may be, into interests in the converted limited
liability company or the cash or other consideration to be paid or delivered as a
result of the conversion of the interests of the partners, or a combination thereof.
(c) In addition to the requirements of subsection (a) of this section, a plan of conversion
may contain any other provision not prohibited by law. (Added 2015, No. 17, § 2.)
§ 4144. Approval of conversion
(a) For any conversion of a limited liability company into another type of organization,
a plan of conversion is not effective unless it has been approved:
(1) by a domestic converting limited liability company, in accordance with the organizational
documents of the limited liability company, or, in the absence of a provision governing
approval of conversions, by all the members of the limited liability company entitled
to vote on or consent to any matter; and
(2) in a record, by each member of a domestic converting limited liability company who
will have personal liability for debts, obligations, and other liabilities that are
incurred after the conversion becomes effective, unless:
(A) the operating agreement of the company provides in a record for the approval of a
conversion or a merger in which some or all of its members become subject to personal
liability by the affirmative vote or consent of fewer than all the members; and
(B) the member voted for or consented in a record to that provision of the operating agreement
or became a member after the adoption of that provision.
(b) For a conversion of a domestic general partnership or domestic limited partnership
into a domestic limited liability company, the plan of conversion shall be approved
by all of the partners or by a number or percentage of the partners required for the
conversion in the partnership agreement.
(c) A conversion involving a domestic converting organization is not effective unless
it is approved by the domestic converting organization in accordance with its governing
law and organizational documents.
(d) A conversion of a foreign converting organization is not effective unless it is approved
by the foreign organization in accordance with the law of the foreign organization’s
jurisdiction of formation and its organizational documents. (Added 2015, No. 17, § 2.)
§ 4145. Amendment or abandonment of plan of conversion
(a) A plan of conversion of a domestic converting limited liability company may be amended:
(1) in the same manner as the plan was approved, if the plan does not provide for the
manner in which it may be amended; or
(2) by its managers or members in the manner provided in the plan of conversion, but a
member that was entitled to vote on or consent to approval of the conversion is entitled
to vote on or consent to any amendment of the plan that will change:
(A) the amount or kind of interests, securities, obligations, money, other property, rights
to acquire interests or securities, or any combination of the foregoing, to be received
by any of the members of the converting company under the plan;
(B) the public organizational documents, if any, or private organizational documents of
the converted organization which will be in effect immediately after the conversion
becomes effective, except for changes that do not require approval of the interest
holders of the converted organization under its governing law or organizational documents;
or
(C) any other terms or conditions of the plan, if the change would adversely affect the
member in any material respect.
(b) A plan of conversion of a general or limited partnership may be amended:
(1) in the same manner as the plan was approved, if the plan does not provide for the
manner in which it may be amended; or
(2) by its general partner or general partners in the manner provided in the plan, but
a partner that was entitled to vote on or consent to approval of the conversion is
entitled to vote on or consent to any amendment of the plan that will change:
(A) the amount or kind of interests, securities, obligations, money, other property, rights
to acquire interests or securities, or any combination of the foregoing, to be received
by any of the partners of the converting company under the plan;
(B) the public organizational documents, if any, or private organizational documents of
the converted organization which will be in effect immediately after the conversion
becomes effective, except for changes that do not require approval of the interest
holders of the converted organization under its governing statute or governing documents;
or
(C) any other terms or conditions of the plan, if the change would adversely affect the
partner in any material respect.
(c)(1) After a plan of conversion has been approved by a domestic converting limited liability
company and before a statement of conversion becomes effective, the plan may be abandoned
as provided in the plan.
(2) Unless prohibited by the plan, a domestic converting limited liability company may
abandon the plan in the same manner as the plan was approved.
(d)(1) If a plan of conversion is abandoned after a statement of conversion has been delivered
to the Secretary of State for filing and before the statement becomes effective, a
statement of abandonment, signed by the converting organization, shall be delivered
to the Secretary of State for filing before the statement of conversion becomes effective.
(2) The statement of abandonment takes effect on filing, and the conversion is abandoned
and does not become effective.
(3) The statement of abandonment shall contain:
(A) the name of the converting limited liability company;
(B) the date on which the statement of conversion was filed by the Secretary of State;
and
(C) a statement that the conversion has been abandoned in accordance with this section. (Added 2015, No. 17, § 2.)
§ 4146. Statement of conversion; effective date of conversion
(a) A statement of conversion shall be signed by the converting organization and delivered
to the Secretary of State for filing.
(b) A statement of conversion shall contain:
(1) the name, jurisdiction of formation, and type of organization of the converting organization;
(2) the name, jurisdiction of formation, and type of organization of the converted organization;
(3) if the converting organization is a domestic limited liability company, a statement
that the plan of conversion was approved in accordance with this subchapter, or, if
the converting organization is a foreign organization, a statement that the conversion
was approved by the foreign organization in accordance with the law of its jurisdiction
of formation;
(4) if the converted organization is a domestic organization, its public organizational
documents, as an attachment; and
(5) if the converted organization is a foreign limited liability partnership, its certificate
of authority to do business in the State, as an attachment.
(c) In addition to the requirements of subsection (b) of this section, a statement of
conversion may contain any other provision not prohibited by law.
(d) If the converted organization is a domestic organization, its public organizational
documents, if any, shall satisfy the requirements of the law of this State, except
that the public organizational documents do not need to be signed.
(e)(1) A plan of conversion that is signed by a domestic converting limited liability company
and meets all the requirements of subsection (b) of this section may be delivered
to the Secretary of State for filing instead of a statement of conversion and on filing
has the same effect.
(2) If a plan of conversion is filed as provided in this subsection, references in this
subchapter to a statement of conversion refer to the plan of conversion filed under
this subsection.
(f)(1) If the converted organization is a domestic limited liability company, the conversion
becomes effective when the statement of conversion is effective.
(2) In all other cases, the conversion becomes effective on the later of:
(A) the date and time provided by the governing statute of the converted organization;
or
(B) when the statement is effective. (Added 2015, No. 17, § 2.)
§ 4147. Effect of conversion
(a) When a conversion becomes effective:
(1) the converted organization is:
(A) organized under and subject to the governing statute of the converted organization;
and
(B) the same organization without interruption as the converting organization;
(2) all property of the converting organization continues to be vested in the converted
organization without transfer, reversion, or impairment;
(3) all debts, obligations, and other liabilities of the converting organization continue
as debts, obligations, and other liabilities of the converted organization;
(4) except as otherwise provided by law or the plan of conversion, all the rights, privileges,
immunities, powers, and purposes of the converting organization remain in the converted
organization;
(5) the name of the converted organization may be substituted for the name of the converting
organization in any pending action or proceeding;
(6) the certificate of organization of the converted organization becomes effective;
(7) the provisions of the operating agreement of the converted organization which are
to be in a record, if any, approved as part of the plan of conversion become effective;
and
(8) the interests in the converting organization are converted, and the interest holders
of the converting organization are entitled only to the rights provided to them under
the plan of conversion.
(b) Except as otherwise provided in the operating agreement of a domestic converting limited
liability company, the conversion does not give rise to any rights that a member,
manager, or third party would have upon a dissolution, liquidation, or winding up
of the converting organization.
(c) When a conversion becomes effective, a person that did not have personal liability
with respect to the converting organization and becomes subject to personal liability
with respect to a domestic organization as a result of the conversion has personal
liability only to the extent provided by the governing statute of the organization
and only for those debts, obligations, and other liabilities that are incurred after
the conversion becomes effective.
(d) When a conversion becomes effective, the personal liability of a person that ceases
to hold an interest in a domestic converting limited liability company with respect
to which the person had personal liability is subject to the following rules:
(1) the conversion does not discharge any personal liability under this title to the extent
the personal liability was incurred before the conversion became effective;
(2) the person does not have personal liability under this title for any debt, obligation,
or other liability that arises after the conversion becomes effective;
(3) this title continues to apply to the release, collection, or discharge of any personal
liability preserved under subdivision (1) of this subsection as if the conversion
had not occurred; and
(4) the person has whatever rights of contribution from any other person as are provided
by this title, law other than this title, or the organizational documents of the converting
organization with respect to any personal liability preserved under subdivision (1)
of this subsection as if the conversion had not occurred.
(e) When a conversion becomes effective, a foreign organization that is the converted
organization may be served with process in this State for the collection and enforcement
of any of its debts, obligations, and other liabilities as provided in section 4010 of this title.
(f) If the converting organization is a registered foreign organization, its registration
to do business in this State is canceled when the conversion becomes effective.
(g) A conversion does not require the organization to wind up its affairs and does not
constitute or cause the dissolution of the organization. (Added 2015, No. 17, § 2.)
§ 4148. Merger of entities
(a) A limited liability company may merge with one or more other constituent organizations
pursuant to this section, sections 4149 through 4151 of this title, 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 shall be in a record and shall 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. (Added 2015, No. 17, § 2.)
§ 4149. Action on plan of merger by constituent limited liability company
(a) Subject to section 4156 of this title, a plan of merger shall be approved in accordance with the organizational documents
of the constituent limited liability company, or, in the absence of a provision governing
approval of a merger, by all the members of the limited liability company entitled
to vote on or consent to any matter.
(b) Subject to section 4156 of this title and any contractual rights, after a merger is approved, and at any time before the
articles of merger are delivered to the Secretary of State for filing under section 4150 of this title, 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. (Added 2015, No. 17, § 2; amended 2015, No. 97 (Adj. Sess.), § 45; 2015, No. 157 (Adj. Sess.), § E.3.)
§ 4150. Filings required for merger; effective date
(a) After each constituent organization has approved a merger, articles of merger shall
be signed on behalf of:
(1) each constituent limited liability company, as provided in subsection 4025(a) of this title; and
(2) each other constituent organization, as provided in its governing statute.
(b) Articles of merger under this section shall 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 subsection 4151(b) of this title; 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 subchapter:
(1) if the surviving organization is a limited liability company, upon the later of:
(A) compliance with subsection (c) of this section; or
(B) subject to section 4026 of this title, 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. (Added 2015, No. 17, § 2.)
§ 4151. 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 subchapter
7 of this chapter;
(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)(1) 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.
(2) 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.
(3) Service on the Secretary of State under this subsection shall be made in the same
manner and has the same consequences as in subsections 4010(c) and (d) of this title. (Added 2015, No. 17, § 2.)
§ 4152. Domestication
(a) A foreign limited liability company may become a limited liability company pursuant
to this section, sections 4153 through 4155 of this title, 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 this section, sections 4153 through 4155 of this title, 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 shall be in a record and shall 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. (Added 2015, No. 17, § 2.)
§ 4153. Action on plan of domestication by domesticating limited liability company
(a) A plan of domestication shall be consented to:
(1) by all the members, subject to section 4156 of this title, 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 section 4154 of this title, 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. (Added 2015, No. 17, § 2.)
§ 4154. 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 shall 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 title;
(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; and
(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 subsection 4155(b) of this title.
(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. (Added 2015, No. 17, § 2.)
§ 4155. 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 subchapter 7 of this chapter.
(b)(1) 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.
(2) 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.
(3) Service on the Secretary of State under this subsection must be made in the same manner
and has the same consequences as in section 4010 of this title.
(c) If a limited liability company has adopted and approved a plan of domestication under
section 4152 of this title 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 title; and
(4) the jurisdiction of formation of the domesticated foreign limited liability company. (Added 2015, No. 17, § 2.)
§ 4156. 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) of this section 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. (Added 2015, No. 17, § 2.)
§ 4157. Subchapter not exclusive
This subchapter does not preclude an organization from being converted, merged, or
domesticated under law other than this title. (Added 2015, No. 17, § 2.)