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Partnership | |
Utah Revised Limited Liability Company Act | |
Section 412 | Low-profit limited liability company. |
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48-2c-412 (Repealed 07/01/12). Low-profit limited liability company. (1) (a) To be a low-profit limited liability company, a company shall: (i) state in its articles of organization that it is a low-profit limited liability company; (ii) organize under this chapter; and (iii) be organized for a business purpose that satisfies, and at all times operates to satisfy each of the requirements under Subsection (1)(b). (b) A low-profit limited liability company: (i) shall significantly further the accomplishment of one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B), Internal Revenue Code; (ii) shall demonstrate that it would not be formed but for the company's relationship to the accomplishment of a charitable or educational purpose; (iii) subject to Subsection (3), may not have as a significant purpose the production of income or the appreciation of property; and (iv) may not have as a purpose to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D), Internal Revenue Code. (2) (a) If a company that is a low-profit limited liability company at its formation at any time ceases to meet a requirement to be a low-profit limited liability company under Subsection (1), the company: (i) ceases to be a low-profit limited liability company on the day on which the company no longer meets the requirement; and (ii) if it continues to meet the requirements of this chapter to be a limited liability company, continues to exist as a limited liability company that is not a low-profit limited liability company. (b) A low-profit limited liability company's failure to meet a requirement of Subsection (1) may be: (i) voluntary, in order to convert to a limited liability company that is not a low-profit limited liability company; or (ii) involuntary. (c) If a low-profit limited liability company ceases to be a low-profit limited liability company in accordance with Subsection (2)(a), the company shall: (i) change its name to conform with Section 48-2c-106; and (ii) amend its articles of organization in accordance with Section 48-2c-405. (3) Notwithstanding Subsection (1), if a low-profit limited liability company produces significant income or capital appreciation, in the absence of other factors, the fact that the low-profit limited liability company produces significant income or capital appreciation is not conclusive evidence of a significant purpose involving the production of income or the appreciation of property.
Enacted by Chapter 141, 2009 General Session |
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