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6 AN ACT RELATING TO LIMITED LIABILITY COMPANIES; DEFINING TERMS;
7 AMENDING REQUIREMENTS FOR ARTICLES OF ORGANIZATION; AMENDING
8 PROVISIONS FOR AMENDING ARTICLES OF ORGANIZATION; ADDRESSING
9 MEMBERS' CONTRIBUTION AT TIME THE MEMBER'S INTEREST IS TERMINATED;
10 AND MAKING TECHNICAL CORRECTIONS.
11 This act affects sections of Utah Code Annotated 1953 as follows:
13 48-2b-103, as last amended by Chapter 159, Laws of Utah 1997
14 48-2b-104, as enacted by Chapter 258, Laws of Utah 1991
15 48-2b-116, as last amended by Chapter 159, Laws of Utah 1997
16 48-2b-121, as last amended by Chapter 176, Laws of Utah 1996
17 48-2b-126, as last amended by Chapter 159, Laws of Utah 1997
18 48-2b-132, as enacted by Chapter 258, Laws of Utah 1991
19 Be it enacted by the Legislature of the state of Utah:
20 Section 1. Section 48-2b-103 is amended to read:
21 48-2b-103. Formation.
22 (1) A limited liability company may be formed by delivering to the division articles of
23 organization for the limited liability company:
24 (a) meeting the requirements of Section 48-2b-116; and
25 (b) executed as required by Section 48-2b-134.
26 (2) (a) A limited liability company shall [
1 (i) at the time of formation; and
2 (ii) at all times after its formation.
3 (b) Any person may be a member of a limited liability company.
4 (c) Failure to maintain at least one member shall be an event of dissolution, subject to
5 Section 48-2b-137.
6 Section 2. Section 48-2b-104 is amended to read:
7 48-2b-104. Scope -- Definitions.
8 (1) Except as otherwise provided by the laws of this state, a limited liability company may
9 conduct or promote any lawful business [
11 (2) For purposes of this chapter, "business" includes any lawful purpose, activity, or
13 Section 3. Section 48-2b-116 is amended to read:
14 48-2b-116. Articles of organization.
15 (1) The articles of organization of a limited liability company shall set forth:
16 (a) the name of the limited liability company;
17 (b) the period of its duration, which shall not exceed 99 years from the date of filing with
18 the division;
19 (c) the business purpose or purposes for which the limited liability company is organized;
20 (d) the street address of its registered office in the state;
21 (e) the name and signature of its initial registered agent at that address, as required by
22 Section 48-2b-123;
23 (f) if the limited liability company is to be managed by a manager or managers:
24 (i) a statement that the company is to be managed [
25 managers; and
26 (ii) the names and street addresses of the managers who are to serve until the first meeting
27 of members or until their successors are elected;
28 (g) if the management of a limited liability company is reserved to the members, the names
29 and street addresses of the members; and
30 (h) any other provision, not inconsistent with law, that the members choose to include in
31 the articles of organization for the regulation of the internal affairs of the limited liability company,
1 including any provision that is required or permitted to be included in the operating agreement of
2 the limited liability company under this chapter.
3 (2) It is not necessary to include in the articles of organization any of the powers
4 enumerated in this chapter.
5 (3) If a limited liability company is to be managed by one or more managers, the articles
6 of organization do not need to state the name or address of any member.
7 (4) If the articles of organization of a limited liability company do not specify a period of
8 duration as required by Subsection (1)(b), the period of duration for that limited liability company
9 is 99 years from the date of filing the articles of organization with the division.
10 Section 4. Section 48-2b-121 is amended to read:
11 48-2b-121. When amendments required.
12 (1) The articles of organization of a limited liability company shall be amended when:
13 (a) there is a change in the name of the limited liability company;
14 (b) there is a change in the character of the business of the limited liability company
15 specified in the articles of organization;
16 (c) there is a false or erroneous statement in the articles of organization;
17 (d) there is a change in the time[
18 dissolution of the limited liability company that is:
19 (i) stated in the articles of organization; or
20 (ii) provided for in Subsection 48-2b-116(4);
21 (e) there is a change in:
22 (i) who is a manager of the limited liability company; or[
23 (ii) if the limited liability company is managed by its members, [
24 member of the limited liability company; or
28 organization in order for the articles to accurately represent the agreement among [
30 (2) Each limited liability company shall file with the division a copy of any amendment
31 to the articles within 60 days after the adoption of the amendment.
1 Section 5. Section 48-2b-126 is amended to read:
2 48-2b-126. Operating agreements.
3 (1) An operating agreement may be adopted with the unanimous consent of the members.
4 (2) An operating agreement may be altered, amended, or repealed as provided in the
5 operating agreement of the limited liability company.
6 (3) The operating agreements may provide for:
7 (a) the regulation and management of the affairs of the limited liability company in any
8 manner not inconsistent with law or the articles of organization;
9 (b) the removal of a manager or managers; and
10 (c) the termination of a member's interest in the limited liability company.
15 limited liability company constitutes an operating agreement for purposes of this chapter if:
16 (a) the limited liability company has only one member; and
17 (b) the member designates in the written declaration or guidelines that the written
18 declaration or guidelines is the operating agreement.
19 Section 6. Section 48-2b-132 is amended to read:
20 48-2b-132. Conditions for distribution of property -- Return of contribution.
21 (1) A member [
22 property on account of any member's contribution to capital until:
23 (a) all liabilities of the limited liability company, except liabilities to members on account
24 of their contributions to capital, have been paid or sufficient property of the company remains to
25 pay them; and
26 (b) the consent of all members is obtained, unless the return of the contribution to capital
27 may be rightfully demanded as provided in:
28 (i) this chapter[
29 (ii) the articles of organization[
30 (iii) the operating agreement.
31 (2) Subject to Subsection (1), a member may rightfully demand the return of the member's
2 (a) upon the dissolution of the limited liability company;
3 (b) when the date an event specified in the articles of organization for the return of the
4 contribution has arrived; or
5 (c) [
8 agreement, if the member's interest in the limited liability company is terminated under the
9 operating agreement.
10 (3) In the absence of a statement in the articles of organization to the contrary or the
11 consent of all members of the limited liability company, a member, irrespective of the nature of
12 the member's contribution, has only the right to demand and receive cash in return for the
13 member's contribution to capital.
Legislative Review Note
as of 1-23-98 10:57 AM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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