S.B. 170

1

UTAH REVISED LIMITED LIABILITY
2 COMPANY ACT
3 2001 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: John L. Valentine
6 This act modifies the Utah Limited Liability Company Act by repealing the current act and
7 replacing it with the Utah Revised Limited Liability Company Act. The act provides for
8 definitions and authorizes the formation of limited liability companies within the state. The
9 act sets forth the structure, characteristics, and powers of limited liability companies. The
10 act sets forth the filing requirements with the Division of Corporations and Commercial
11 Code. The act provides for the service of process on limited liability companies. The act
12 outlines the process for formation of a limited liability company. The act provides for
13 operating agreements and sets forth the standards for the adoption of operating agreements.
14 The act grants limited liability to members and managers of limited liability companies and
15 defines the exceptions to limited liability. The act sets forth the standards required of
16 members and managers of a limited liability company. The act provides for the management
17 of limited liability companies. The act provides standards for the treatment of contributions,
18 capital accounts, and profits and losses. The act sets standards for distributions. The act
19 provides for the assignment of interests. The act sets forth the procedures and standards for
20 dissolution. The act sets forth the procedures and standards for winding up a limited
21 liability company. The act provides for conversions and mergers. The act allows for the
22 provision of professional services through a limited liability company. The act provides for
23 the treatment and domestication of foreign limited liability companies. The act provides for
24 derivative actions. The act provides for indemnification. The act amends the Utah Revised
25 Uniform Limited Partnership Act to allow for conversions. The act corrects cross references
26 to the Limited Liability Company Act. The act provides an effective date.
27 This act affects sections of Utah Code Annotated 1953 as follows:

28 AMENDS:
29 48-2a-101, as last amended by Chapter 189, Laws of Utah 1991
30 53B-5-114 (Effective 04/30/01), as last amended by Chapter 300, Laws of Utah 2000
31 53C-1-201, as last amended by Chapter 237, Laws of Utah 2000
32 ENACTS:
33 48-2a-108, Utah Code Annotated 1953
34 48-2a-109, Utah Code Annotated 1953
35 48-2a-110, Utah Code Annotated 1953
36 48-2a-111, Utah Code Annotated 1953
37 48-2a-112, Utah Code Annotated 1953
38 48-2a-113, Utah Code Annotated 1953
39 48-2c-101, Utah Code Annotated 1953
40 48-2c-102, Utah Code Annotated 1953
41 48-2c-103, Utah Code Annotated 1953
42 48-2c-104, Utah Code Annotated 1953
43 48-2c-105, Utah Code Annotated 1953
44 48-2c-106, Utah Code Annotated 1953
45 48-2c-107, Utah Code Annotated 1953
46 48-2c-108, Utah Code Annotated 1953
47 48-2c-109, Utah Code Annotated 1953
48 48-2c-110, Utah Code Annotated 1953
49 48-2c-111, Utah Code Annotated 1953
50 48-2c-112, Utah Code Annotated 1953
51 48-2c-113, Utah Code Annotated 1953
52 48-2c-114, Utah Code Annotated 1953
53 48-2c-115, Utah Code Annotated 1953
54 48-2c-116, Utah Code Annotated 1953
55 48-2c-117, Utah Code Annotated 1953
56 48-2c-118, Utah Code Annotated 1953
57 48-2c-119, Utah Code Annotated 1953
58 48-2c-120, Utah Code Annotated 1953

59 48-2c-121, Utah Code Annotated 1953
60 48-2c-122, Utah Code Annotated 1953
61 48-2c-201, Utah Code Annotated 1953
62 48-2c-202, Utah Code Annotated 1953
63 48-2c-203, Utah Code Annotated 1953
64 48-2c-204, Utah Code Annotated 1953
65 48-2c-205, Utah Code Annotated 1953
66 48-2c-206, Utah Code Annotated 1953
67 48-2c-207, Utah Code Annotated 1953
68 48-2c-208, Utah Code Annotated 1953
69 48-2c-209, Utah Code Annotated 1953
70 48-2c-210, Utah Code Annotated 1953
71 48-2c-211, Utah Code Annotated 1953
72 48-2c-212, Utah Code Annotated 1953
73 48-2c-213, Utah Code Annotated 1953
74 48-2c-214, Utah Code Annotated 1953
75 48-2c-301, Utah Code Annotated 1953
76 48-2c-302, Utah Code Annotated 1953
77 48-2c-303, Utah Code Annotated 1953
78 48-2c-304, Utah Code Annotated 1953
79 48-2c-305, Utah Code Annotated 1953
80 48-2c-306, Utah Code Annotated 1953
81 48-2c-307, Utah Code Annotated 1953
82 48-2c-308, Utah Code Annotated 1953
83 48-2c-309, Utah Code Annotated 1953
84 48-2c-310, Utah Code Annotated 1953
85 48-2c-311, Utah Code Annotated 1953
86 48-2c-401, Utah Code Annotated 1953
87 48-2c-402, Utah Code Annotated 1953
88 48-2c-403, Utah Code Annotated 1953
89 48-2c-404, Utah Code Annotated 1953

90 48-2c-405, Utah Code Annotated 1953
91 48-2c-406, Utah Code Annotated 1953
92 48-2c-407, Utah Code Annotated 1953
93 48-2c-408, Utah Code Annotated 1953
94 48-2c-409, Utah Code Annotated 1953
95 48-2c-410, Utah Code Annotated 1953
96 48-2c-411, Utah Code Annotated 1953
97 48-2c-501, Utah Code Annotated 1953
98 48-2c-502, Utah Code Annotated 1953
99 48-2c-503, Utah Code Annotated 1953
100 48-2c-504, Utah Code Annotated 1953
101 48-2c-505, Utah Code Annotated 1953
102 48-2c-506, Utah Code Annotated 1953
103 48-2c-601, Utah Code Annotated 1953
104 48-2c-602, Utah Code Annotated 1953
105 48-2c-603, Utah Code Annotated 1953
106 48-2c-604, Utah Code Annotated 1953
107 48-2c-605, Utah Code Annotated 1953
108 48-2c-701, Utah Code Annotated 1953
109 48-2c-702, Utah Code Annotated 1953
110 48-2c-703, Utah Code Annotated 1953
111 48-2c-704, Utah Code Annotated 1953
112 48-2c-705, Utah Code Annotated 1953
113 48-2c-706, Utah Code Annotated 1953
114 48-2c-707, Utah Code Annotated 1953
115 48-2c-708, Utah Code Annotated 1953
116 48-2c-709, Utah Code Annotated 1953
117 48-2c-710, Utah Code Annotated 1953
118 48-2c-801, Utah Code Annotated 1953
119 48-2c-802, Utah Code Annotated 1953
120 48-2c-803, Utah Code Annotated 1953

121 48-2c-804, Utah Code Annotated 1953
122 48-2c-805, Utah Code Annotated 1953
123 48-2c-806, Utah Code Annotated 1953
124 48-2c-807, Utah Code Annotated 1953
125 48-2c-808, Utah Code Annotated 1953
126 48-2c-809, Utah Code Annotated 1953
127 48-2c-901, Utah Code Annotated 1953
128 48-2c-902, Utah Code Annotated 1953
129 48-2c-903, Utah Code Annotated 1953
130 48-2c-904, Utah Code Annotated 1953
131 48-2c-905, Utah Code Annotated 1953
132 48-2c-906, Utah Code Annotated 1953
133 48-2c-1001, Utah Code Annotated 1953
134 48-2c-1002, Utah Code Annotated 1953
135 48-2c-1003, Utah Code Annotated 1953
136 48-2c-1004, Utah Code Annotated 1953
137 48-2c-1005, Utah Code Annotated 1953
138 48-2c-1006, Utah Code Annotated 1953
139 48-2c-1007, Utah Code Annotated 1953
140 48-2c-1008, Utah Code Annotated 1953
141 48-2c-1101, Utah Code Annotated 1953
142 48-2c-1102, Utah Code Annotated 1953
143 48-2c-1103, Utah Code Annotated 1953
144 48-2c-1104, Utah Code Annotated 1953
145 48-2c-1105, Utah Code Annotated 1953
146 48-2c-1106, Utah Code Annotated 1953
147 48-2c-1201, Utah Code Annotated 1953
148 48-2c-1202, Utah Code Annotated 1953
149 48-2c-1203, Utah Code Annotated 1953
150 48-2c-1204, Utah Code Annotated 1953
151 48-2c-1205, Utah Code Annotated 1953

152 48-2c-1206, Utah Code Annotated 1953
153 48-2c-1207, Utah Code Annotated 1953
154 48-2c-1208, Utah Code Annotated 1953
155 48-2c-1209, Utah Code Annotated 1953
156 48-2c-1210, Utah Code Annotated 1953
157 48-2c-1211, Utah Code Annotated 1953
158 48-2c-1212, Utah Code Annotated 1953
159 48-2c-1213, Utah Code Annotated 1953
160 48-2c-1214, Utah Code Annotated 1953
161 48-2c-1301, Utah Code Annotated 1953
162 48-2c-1302, Utah Code Annotated 1953
163 48-2c-1303, Utah Code Annotated 1953
164 48-2c-1304, Utah Code Annotated 1953
165 48-2c-1305, Utah Code Annotated 1953
166 48-2c-1306, Utah Code Annotated 1953
167 48-2c-1307, Utah Code Annotated 1953
168 48-2c-1308, Utah Code Annotated 1953
169 48-2c-1309, Utah Code Annotated 1953
170 48-2c-1401, Utah Code Annotated 1953
171 48-2c-1402, Utah Code Annotated 1953
172 48-2c-1403, Utah Code Annotated 1953
173 48-2c-1404, Utah Code Annotated 1953
174 48-2c-1405, Utah Code Annotated 1953
175 48-2c-1406, Utah Code Annotated 1953
176 48-2c-1407, Utah Code Annotated 1953
177 48-2c-1408, Utah Code Annotated 1953
178 48-2c-1409, Utah Code Annotated 1953
179 48-2c-1410, Utah Code Annotated 1953
180 48-2c-1501, Utah Code Annotated 1953
181 48-2c-1502, Utah Code Annotated 1953
182 48-2c-1503, Utah Code Annotated 1953

183 48-2c-1504, Utah Code Annotated 1953
184 48-2c-1505, Utah Code Annotated 1953
185 48-2c-1506, Utah Code Annotated 1953
186 48-2c-1507, Utah Code Annotated 1953
187 48-2c-1508, Utah Code Annotated 1953
188 48-2c-1509, Utah Code Annotated 1953
189 48-2c-1510, Utah Code Annotated 1953
190 48-2c-1511, Utah Code Annotated 1953
191 48-2c-1512, Utah Code Annotated 1953
192 48-2c-1513, Utah Code Annotated 1953
193 48-2c-1601, Utah Code Annotated 1953
194 48-2c-1602, Utah Code Annotated 1953
195 48-2c-1603, Utah Code Annotated 1953
196 48-2c-1604, Utah Code Annotated 1953
197 48-2c-1605, Utah Code Annotated 1953
198 48-2c-1606, Utah Code Annotated 1953
199 48-2c-1607, Utah Code Annotated 1953
200 48-2c-1608, Utah Code Annotated 1953
201 48-2c-1609, Utah Code Annotated 1953
202 48-2c-1610, Utah Code Annotated 1953
203 48-2c-1611, Utah Code Annotated 1953
204 48-2c-1612, Utah Code Annotated 1953
205 48-2c-1613, Utah Code Annotated 1953
206 48-2c-1614, Utah Code Annotated 1953
207 48-2c-1615, Utah Code Annotated 1953
208 48-2c-1701, Utah Code Annotated 1953
209 48-2c-1702, Utah Code Annotated 1953
210 48-2c-1703, Utah Code Annotated 1953
211 48-2c-1704, Utah Code Annotated 1953
212 48-2c-1705, Utah Code Annotated 1953
213 48-2c-1706, Utah Code Annotated 1953

214 48-2c-1801, Utah Code Annotated 1953
215 48-2c-1802, Utah Code Annotated 1953
216 48-2c-1803, Utah Code Annotated 1953
217 48-2c-1804, Utah Code Annotated 1953
218 48-2c-1805, Utah Code Annotated 1953
219 48-2c-1806, Utah Code Annotated 1953
220 48-2c-1807, Utah Code Annotated 1953
221 48-2c-1808, Utah Code Annotated 1953
222 48-2c-1809, Utah Code Annotated 1953
223 48-2c-1901, Utah Code Annotated 1953
224 48-2c-1902, Utah Code Annotated 1953
225 REPEALS:
226 48-2b-101, as enacted by Chapter 258, Laws of Utah 1991
227 48-2b-102, as last amended by Chapter 21, Laws of Utah 1999
228 48-2b-103, as last amended by Chapter 56, Laws of Utah 1998
229 48-2b-104, as last amended by Chapter 56, Laws of Utah 1998
230 48-2b-105, as last amended by Chapter 261, Laws of Utah 2000
231 48-2b-106 (Effective 04/30/01), as last amended by Chapters 131 and 300, Laws of Utah
232 2000
233 48-2b-106 (Superseded 04/30/01), as last amended by Chapter 131, Laws of Utah 2000
234 48-2b-107, as enacted by Chapter 258, Laws of Utah 1991
235 48-2b-108, as last amended by Chapter 61, Laws of Utah 1994
236 48-2b-109, as last amended by Chapter 176, Laws of Utah 1996
237 48-2b-110, as enacted by Chapter 258, Laws of Utah 1991
238 48-2b-111, as enacted by Chapter 258, Laws of Utah 1991
239 48-2b-112, as enacted by Chapter 258, Laws of Utah 1991
240 48-2b-113, as last amended by Chapter 176, Laws of Utah 1996
241 48-2b-114, as enacted by Chapter 258, Laws of Utah 1991
242 48-2b-115, as enacted by Chapter 258, Laws of Utah 1991
243 48-2b-116, as last amended by Chapter 56, Laws of Utah 1998
244 48-2b-117, as last amended by Chapter 176, Laws of Utah 1996

245 48-2b-118, as last amended by Chapter 176, Laws of Utah 1996
246 48-2b-119, as last amended by Chapter 168, Laws of Utah 1992
247 48-2b-120, as last amended by Chapter 131, Laws of Utah 2000
248 48-2b-121, as last amended by Chapter 131, Laws of Utah 2000
249 48-2b-122, as last amended by Chapter 159, Laws of Utah 1997
250 48-2b-123, as last amended by Chapter 176, Laws of Utah 1996
251 48-2b-124, as enacted by Chapter 258, Laws of Utah 1991
252 48-2b-125, as last amended by Chapter 176, Laws of Utah 1996
253 48-2b-126, as last amended by Chapter 56, Laws of Utah 1998
254 48-2b-127, as enacted by Chapter 258, Laws of Utah 1991
255 48-2b-128, as enacted by Chapter 258, Laws of Utah 1991
256 48-2b-129, as enacted by Chapter 258, Laws of Utah 1991
257 48-2b-130, as enacted by Chapter 258, Laws of Utah 1991
258 48-2b-131, as last amended by Chapter 159, Laws of Utah 1997
259 48-2b-132, as last amended by Chapter 56, Laws of Utah 1998
260 48-2b-133, as enacted by Chapter 258, Laws of Utah 1991
261 48-2b-134, as last amended by Chapter 176, Laws of Utah 1996
262 48-2b-135, as enacted by Chapter 258, Laws of Utah 1991
263 48-2b-136, as enacted by Chapter 258, Laws of Utah 1991
264 48-2b-137, as last amended by Chapter 159, Laws of Utah 1997
265 48-2b-138, as enacted by Chapter 258, Laws of Utah 1991
266 48-2b-139, as enacted by Chapter 258, Laws of Utah 1991
267 48-2b-140, as enacted by Chapter 258, Laws of Utah 1991
268 48-2b-141, as enacted by Chapter 258, Laws of Utah 1991
269 48-2b-142, as last amended by Chapter 131, Laws of Utah 2000
270 48-2b-143, as enacted by Chapter 258, Laws of Utah 1991
271 48-2b-144, as last amended by Chapter 176, Laws of Utah 1996
272 48-2b-145, as enacted by Chapter 258, Laws of Utah 1991
273 48-2b-146, as last amended by Chapter 30, Laws of Utah 1992
274 48-2b-147, as enacted by Chapter 258, Laws of Utah 1991
275 48-2b-148, as enacted by Chapter 258, Laws of Utah 1991

276 48-2b-149, as last amended by Chapter 168, Laws of Utah 1992
277 48-2b-150, as enacted by Chapter 258, Laws of Utah 1991
278 48-2b-151, as enacted by Chapter 258, Laws of Utah 1991
279 48-2b-152, as enacted by Chapter 258, Laws of Utah 1991
280 48-2b-153, as enacted by Chapter 258, Laws of Utah 1991
281 48-2b-154, as enacted by Chapter 258, Laws of Utah 1991
282 48-2b-155, as enacted by Chapter 258, Laws of Utah 1991
283 48-2b-156, as enacted by Chapter 258, Laws of Utah 1991
284 48-2b-157, as enacted by Chapter 168, Laws of Utah 1992
285 48-2b-158, as enacted by Chapter 83, Laws of Utah 1994
286 Be it enacted by the Legislature of the state of Utah:
287 Section 1. Section 48-2a-101 is amended to read:
288 48-2a-101. Definitions.
289 As used in this chapter, unless the context otherwise requires:
290 (1) "Certificate of limited partnership" means the certificate referred to in Section
291 48-2a-201 , and the certificate as amended or restated.
292 (2) "Contribution" means any cash, property, services rendered, or a promissory note or
293 other binding obligation to contribute cash or property or to perform services, which a partner
294 contributes to a limited partnership in his capacity as a partner.
295 (3) "Division" means the Division of Corporations and Commercial Code of the Utah
296 Department of Commerce.
297 (4) "Event of withdrawal of a general partner" means an event that causes a person to cease
298 to be a general partner as provided in Section 48-2a-402 .
299 (5) "Foreign limited partnership" means a partnership formed under the laws of any state
300 other than this state and having as partners one or more general partners and one or more limited
301 partners.
302 (6) "General partner" means a person who has been admitted to a limited partnership as
303 a general partner in accordance with the partnership agreement and named in the certificate of
304 limited partnership as a general partner.
305 (7) "Limited partner" means a person who has been admitted to a limited partnership as
306 a limited partner in accordance with the partnership agreement.

307 (8) "Limited partnership" and "domestic limited partnership" mean a partnership formed
308 by two or more persons under the laws of this state and having one or more general partners and
309 one or more limited partners.
310 (9) "Partner" means a limited or a general partner.
311 (10) "Partnership agreement" means any valid agreement, written or oral, of the partners
312 as to the affairs of a limited partnership and the conduct of its business.
313 (11) "Partnership interest" means a partner's share of the profits and losses of a limited
314 partnership and the right to receive distributions of partnership assets.
315 (12) "Person" means an individual, general partnership, limited partnership, limited
316 association, domestic or foreign trust, estate, association, or corporation.
317 (13) "State" means a state, territory, or possession of the United States, the District of
318 Columbia, or the Commonwealth of Puerto Rico.
319 (14) "Subject entity" means a corporation, business trust or association, a real estate
320 investment trust, a common-law trust, or any other unincorporated business, including a limited
321 liability company, a general partnership, a registered limited liability partnership, or a foreign
322 limited partnership.
323 Section 2. Section 48-2a-108 is enacted to read:
324 48-2a-108. Conversion of certain entities to a limited partnership.
325 Any subject entity may convert to a limited partnership under this chapter by complying
326 with Section 48-2a-111 and filing with the division:
327 (1) articles of conversion that satisfy the requirements of Section 48-2a-109 ; and
328 (2) a certificate of limited partnership that satisfies the requirements of Section 48-2a-201 .
329 Section 3. Section 48-2a-109 is enacted to read:
330 48-2a-109. Articles of conversion.
331 The articles of conversion shall state:
332 (1) the date on which and jurisdiction where the subject entity was first created, formed,
333 incorporated, or otherwise came into being and, if it has changed, its jurisdiction immediately prior
334 to its conversion to a domestic limited partnership;
335 (2) the name of the subject entity immediately prior to the filing of the articles of
336 conversion;
337 (3) the name of the domestic limited partnership as set forth in its certificate of limited

338 partnership filed in accordance with Section 48-2a-201 ;
339 (4) the future effective date or time, which shall be a date or time certain, of the conversion
340 to a domestic limited partnership if it is not to be effective upon the filing of the articles of
341 conversion and the certificate of limited partnership; and
342 (5) that the conversion has been duly approved by the owners of the subject entity.
343 Section 4. Section 48-2a-110 is enacted to read:
344 48-2a-110. Effect of conversion.
345 (1) Upon the filing with the division of the articles of conversion and the certificate of
346 limited partnership or, if applicable, upon the future effective date or time of the articles of
347 conversion and the certificate of limited partnership, the subject entity shall be converted into a
348 domestic limited partnership and the limited partnership shall thereafter be subject to all of the
349 provisions of this chapter, except that, notwithstanding Section 48-2a-201 , the existence of the
350 limited partnership shall be considered to have commenced on the date the subject entity
351 commenced its existence in the jurisdiction in which the subject entity was first created, formed,
352 incorporated, or otherwise came into being.
353 (2) The conversion of any subject entity into a domestic limited partnership shall not affect
354 any obligations or liabilities of the subject entity incurred prior to its conversion to a domestic
355 limited partnership or the personal liability of any person incurred prior to the conversion.
356 (3) When a conversion becomes effective under this section, for all purposes of the laws
357 of this state, all of the rights, privileges, and powers of the subject entity that has converted, and
358 all property, real, personal, and mixed, and all debts due to the subject entity, as well as all other
359 things and causes of action belonging to the subject entity remain vested in the domestic limited
360 partnership to which the subject entity has converted and shall be the property of the domestic
361 limited partnership and the title to any real property vested by deed or otherwise in the subject
362 entity shall not revert or be in any way impaired by reason of this chapter or of the conversion, but
363 all rights of creditors and all liens upon any property of the subject entity shall be preserved
364 unimpaired, and all debts, liabilities, and duties of the subject entity that has converted shall remain
365 attached to the domestic limited partnership to which the subject entity has converted and may be
366 enforced against it to the same extent as if those debts, liabilities, and duties had been incurred or
367 contracted by it in its capacity as a domestic limited partnership.
368 (4) Unless otherwise agreed, or as required under applicable law of another jurisdiction,

369 the converting subject entity shall not be required to wind up its affairs or pay its liabilities or
370 distribute its assets, and the conversion shall not constitute a dissolution of the subject entity but
371 shall constitute a continuation of the existence of the converting subject entity in the form of a
372 domestic limited partnership. When any subject entity has been converted to a domestic limited
373 partnership pursuant to this part, the domestic limited partnership shall thereafter, for all purposes
374 of the laws of this state, be considered to be the same entity as the converting subject entity.
375 Section 5. Section 48-2a-111 is enacted to read:
376 48-2a-111. Approval of conversion.
377 Prior to filing articles of conversion with the division, the conversion must first be
378 approved in the manner provided for by applicable law or by the document, instrument, agreement,
379 or other writing, as the case may be, that governs the internal affairs of the subject entity, as
380 appropriate, and the new partnership agreement, if any, for the domestic limited partnership must
381 be approved by the same authorization required to approve the conversion. If applicable law, or
382 the document, instrument, agreement, or other writing, as the case may be, that governs the internal
383 affairs of the subject entity, does not provide for the manner of approving such conversion, then
384 unanimous consent of the owners of the subject entity shall be required to approve the conversion
385 and the new partnership agreement.
386 Section 6. Section 48-2a-112 is enacted to read:
387 48-2a-112. No limitation on other changes.
388 The provisions of Sections 48-2a-108 and 48-2a-111 shall not be construed to limit the
389 accomplishment of a change in the law governing, or the domicile of, any other entity in this state
390 by any other means provided for in a partnership agreement or other agreement or as otherwise
391 permitted by law.
392 Section 7. Section 48-2a-113 is enacted to read:
393 48-2a-113. Approval of limited partnership conversion to subject entity.
394 (1) A domestic limited partnership may convert to any subject entity upon the
395 authorization of the conversion in accordance with this section.
396 (a) If the partnership agreement specifies the manner of authorizing a conversion of the
397 limited partnership, the conversion shall be authorized as specified in the partnership agreement.
398 (b) If the partnership agreement does not specify the manner of authorizing a conversion
399 of the limited partnership and does not prohibit a conversion of the limited partnership, the

400 conversion shall be authorized in the same manner as specified in the partnership agreement for
401 authorizing a merger that involves the partnership as a constituent party to the merger.
402 (c) If the partnership agreement does not specify the manner of authorizing a conversion
403 of the limited partnership or a merger that involves the limited partnership as a constituent party
404 and does not prohibit a conversion of the limited partnership, the conversion must be authorized
405 by unanimous consent of all partners.
406 (2) A converted domestic limited partnership shall, upon conversion to a subject entity,
407 be considered the same entity as the subject entity and the rights, privileges, powers, and interests
408 in property of the domestic limited partnership, as well as the debts, liabilities, and duties of the
409 domestic limited partnership, shall not, for any purpose of the laws of this state, be considered, as
410 a consequence of the conversion, to have been transferred to the subject entity to which the
411 domestic limited partnership has converted.
412 (3) Unless otherwise agreed, the conversion of a domestic limited partnership to another
413 entity, pursuant to this section, shall not require the domestic limited partnership to wind up its
414 affairs or to pay its liabilities or distribute its assets under this chapter. In connection with
415 conversion of a domestic limited partnership to a subject entity under this section, all interests in,
416 or securities of or rights in the domestic limited partnership which is to be converted may be
417 exchanged for or converted into cash, property, interests in, or securities of or rights in the entity
418 into which the domestic limited partnership is converted or, in addition to or in lieu thereof, may
419 be exchanged for or converted into cash, property, interests in, or securities of or rights in another
420 entity.
421 Section 8. Section 48-2c-101 is enacted to read:
422 CHAPTER 2c. UTAH REVISED LIMITED LIABILITY COMPANY ACT
423 Part 1. General Provisions
424 48-2c-101. Title.
425 This chapter is known as the "Utah Revised Limited Liability Company Act."
426 Section 9. Section 48-2c-102 is enacted to read:
427 48-2c-102. Definitions.
428 As used in this chapter:
429 (1) "Bankruptcy" includes bankruptcy under federal bankruptcy law or under Utah
430 insolvency law.

431 (2) "Business" includes any lawful trade, occupation, profession, business, investment, or
432 other purpose or activity, whether or not that trade, occupation, profession, business, investment,
433 purpose, or activity is carried on for profit.
434 (3) "Capital account," unless otherwise provided in the operating agreement, means the
435 account, as adjusted from time to time, maintained by the company for each member to reflect the
436 value of all contributions by that member, the amount of all distributions to that member or the
437 member's assignee, the member's share of profits, gains, and losses of the company, and the
438 member's share of the net assets of the company upon dissolution and winding up that are
439 distributable to the member or the member's assignee.
440 (4) "Company," "limited liability company," or "domestic company" means a limited
441 liability company organized under or subject to this chapter.
442 (5) "Designated office" means the street address in this state where the records required
443 to be maintained by Section 48-2c-112 are kept.
444 (6) (a) "Distribution" means a direct or indirect transfer by a company of money or other
445 property, except an interest in the company, or incurrence of indebtedness by a company, to or for
446 the benefit of members in the company in respect of any interest in the company.
447 (b) "Distribution" does not include amounts constituting reasonable compensation for
448 present or past services or reasonable payments made in the ordinary course of business pursuant
449 to a bona fide retirement plan or other benefits program.
450 (7) "Division" means the Division of Corporations and Commercial Code of the Utah
451 Department of Commerce.
452 (8) "Entity" includes:
453 (a) a domestic or foreign corporation;
454 (b) a domestic or foreign nonprofit corporation;
455 (c) a company or foreign company;
456 (d) a profit or nonprofit unincorporated association;
457 (e) a business trust;
458 (f) an estate;
459 (g) a general partnership or a domestic or foreign limited partnership;
460 (h) a trust;
461 (i) a state;

462 (j) the United States; or
463 (k) a foreign government.
464 (9) "Filed with the division" means that a statement, document, or report complies with
465 the requirements of Section 48-2c-207 and has been accepted for filing by the division and
466 includes filing by electronic means approved by the division.
467 (10) "Foreign company" means a limited liability company organized under a law other
468 than the laws of this state.
469 (11) "Interest in the company" means a member's economic rights in the company
470 including the right to receive distributions from the company and the right to receive a portion of
471 the net assets of the company upon dissolution and winding up of the company.
472 (12) "Manager" means a person elected or otherwise designated by the members to manage
473 a manager-managed company pursuant to Part 8.
474 (13) "Manager-managed company" means a company whose management is vested in
475 managers pursuant to Part 8.
476 (14) "Member" means a person with an ownership interest in a company and with the
477 rights and obligations specified under this chapter.
478 (15) "Member-managed company" means a company whose management is vested in its
479 members pursuant to Part 8.
480 (16) "Operating agreement" means any written agreement of the members concerning the
481 business or purpose of the company and the conduct of its affairs, and which complies with Part
482 5. An operating agreement includes any written amendments agreed to by all members or other
483 writing adopted in any other manner as may be provided in the operating agreement.
484 (17) "Person" means an individual or entity.
485 (18) "Proceeding" means any administrative, judicial or other trial, hearing, or other action,
486 whether civil, criminal, or investigative, the result of which may be that a court, arbitrator, or
487 governmental agency may enter a judgment, order, decree, or other determination which, if not
488 appealed or reversed, would be binding upon any person subject to the jurisdiction of that court,
489 arbitrator, or governmental agency.
490 (19) "Professional services" is as defined in Part 15.
491 (20) "Signed," "signs," or "signature" means a manual signature or authorized facsimile
492 thereof and any electronic or digital signature approved by the division.

493 (21) "State" means a state, territory, or possession of the United States, the District of
494 Columbia, or the Commonwealth of Puerto Rico.
495 Section 10. Section 48-2c-103 is enacted to read:
496 48-2c-103. Application of partnership provisions.
497 "Partnership" and "limited partnership," when used in any chapter or title other than this
498 chapter or Title 48, Chapter 1, General and Limited Liability Partnership, and Title 48, Chapter
499 2a, Utah Revised Uniform Limited Partnership Act, are considered to include a company organized
500 under this chapter, unless the context requires otherwise.
501 Section 11. Section 48-2c-104 is enacted to read:
502 48-2c-104. Separate legal entity.
503 A company formed under this chapter is a legal entity distinct from its members.
504 Section 12. Section 48-2c-105 is enacted to read:
505 48-2c-105. Purpose.
506 Except as provided in Subsection 48-2c-102 (2) or in Part 15 of this chapter, each company
507 formed under this chapter has the purpose of engaging in any business unless a more limited
508 purpose is set forth in its articles of organization.
509 Section 13. Section 48-2c-106 is enacted to read:
510 48-2c-106. Name -- Exclusive right.
511 (1) The name of each company as set forth in the articles of organization:
512 (a) shall contain the terms:
513 (i) "limited company";
514 (ii) "limited liability company";
515 (iii) "L.C." or "LC"; or
516 (iv) "L.L.C." or "LLC";
517 (b) may not contain:
518 (i) the terms:
519 (A) "association";
520 (B) "corporation";
521 (C) "incorporated";
522 (D) "limited partnership";
523 (E) "limited";

524 (F) "L.P."; or
525 (G) "Ltd."; or
526 (ii) words or any abbreviation with a similar meaning in any other language;
527 (c) without the written consent of the United States Olympic Committee, may not contain
528 the words:
529 (i) "Olympic";
530 (ii) "Olympiad"; or
531 (iii) "Citius Altius Fortius"; and
532 (d) without the written consent of the State Board of Regents in accordance with Section
533 53B-5-114 , may not contain the words:
534 (i) "university";
535 (ii) "college"; or
536 (iii) "institute."
537 (2) (a) A person, other than a company formed under this chapter or a foreign company
538 authorized to transact business in this state, may not use in its name in this state any of the terms:
539 (i) "limited liability company";
540 (ii) "limited company";
541 (iii) "L.L.C.";
542 (iv) "L.C.";
543 (v) "LLC"; or
544 (vi) "LC".
545 (b) Notwithstanding Subsection (2)(a):
546 (i) a foreign corporation whose actual name includes the word "limited" or "Ltd." may use
547 its actual name in this state if it also uses:
548 (A) "corporation" or "corp."; or
549 (B) "incorporated" or "inc."; and
550 (ii) a limited liability partnership may use in its name the terms:
551 (A) "limited liability partnership";
552 (B) "L.L.P."; or
553 (C) "LLP".
554 (3) Except as authorized by Subsection (4), the name of a company must be

555 distinguishable as defined in Subsection (5) upon the records of the division from:
556 (a) the actual name, reserved name, or fictitious or assumed name of any entity registered
557 with the division; or
558 (b) any tradename, trademark, or service mark registered with the division.
559 (4) (a) A company may apply to the division for approval to file its articles of organization
560 under or to reserve a name that is not distinguishable upon the division's records from one or more
561 of the names described in Subsection (3).
562 (b) The division shall approve the name for which the company applies under Subsection
563 (4)(a) if:
564 (i) the other person whose name is not distinguishable from the name under which the
565 applicant desires to file:
566 (A) consents to the filing in writing; and
567 (B) submits an undertaking in a form satisfactory to the division to change its name to a
568 name that is distinguishable from the name of the applicant; or
569 (ii) the applicant delivers to the division a certified copy of the final judgment of a court
570 of competent jurisdiction establishing the applicant's right to use the name in this state.
571 (5) A name is distinguishable from other names, trademarks, and service marks registered
572 with the division if it contains one or more different words, letters, or numerals from other names
573 upon the division's records.
574 (6) The following differences are not distinguishing:
575 (a) the terms:
576 (i) "corporation";
577 (ii) "incorporated";
578 (iii) "company";
579 (iv) "limited partnership";
580 (v) "limited";
581 (vi) "L.P." or "LP";
582 (vii) "Ltd.";
583 (viii) "limited liability company";
584 (ix) "limited company";
585 (x) "L.C." or "LC"; or

586 (xi) "L.L.C." or "LLC";
587 (b) an abbreviation of a word listed in Subsection (6)(a);
588 (c) the presence or absence of the words or symbols of the words "the," "and," "a," or
589 "plus";
590 (d) differences in punctuation and special characters;
591 (e) differences in capitalization; or
592 (f) for a company that is formed in this state on or after May 4, 1998, or registered as a
593 foreign company in this state on or after May 4, 1998, differences between singular and plural
594 forms of words.
595 (7) A name that implies that a company is an agency of this state or any of its political
596 subdivisions, if it is not actually a legally established agency or political subdivision, may not be
597 approved for filing by the division.
598 Section 14. Section 48-2c-107 is enacted to read:
599 48-2c-107. Limited liability company name -- Limited rights.
600 The authorization to file articles of organization under this chapter or to reserve or register
601 a company name as granted by the division does not:
602 (1) abrogate or limit the law governing unfair competition or unfair trade practices;
603 (2) derogate from the common law, the principles of equity, or the statutes of this state or
604 of the United States with respect to the right to acquire and protect names and trademarks; or
605 (3) create an exclusive right in geographic or generic terms contained within a name.
606 Section 15. Section 48-2c-108 is enacted to read:
607 48-2c-108. Reservation of name.
608 (1) The exclusive right to register a name for use by a company may be reserved by any
609 person.
610 (2) (a) The reservation described in Subsection (1)(a) shall be made by filing with the
611 division an application signed under penalty of perjury.
612 (b) If the division finds that the name is available for use by a company, it shall reserve
613 the name exclusively for the applicant for a period of 120 days. The name reservation may be
614 renewed for any number of subsequent periods of 120 days.
615 (c) The reserved name may be transferred to any other person by filing with the division
616 a notice of the transfer signed under penalty of perjury by the applicant for whom the name was

617 reserved and specifying the name and address of the transferee.
618 Section 16. Section 48-2c-109 is enacted to read:
619 48-2c-109. Transaction of business outside state.
620 It is the intention of the Utah Legislature by the enactment of this chapter that the legal
621 existence of companies formed under this chapter be recognized beyond the boundaries of this
622 state and that, subject to any reasonable registration or filing requirements, any such company
623 transacting business outside this state be recognized as a limited liability company and be granted
624 full faith and credit under Section 1 of Article IV of the Constitution of the United States.
625 Section 17. Section 48-2c-110 is enacted to read:
626 48-2c-110. Powers.
627 Each company organized and existing under this chapter may:
628 (1) sue or be sued, institute or defend any action, or participate in any proceeding in its
629 own name;
630 (2) purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use, or
631 otherwise deal in or with real or personal property or an interest in real or personal property,
632 wherever situated;
633 (3) sell, convey, assign, encumber, mortgage, pledge, create a security interest in, lease,
634 exchange or transfer, or otherwise dispose of all or any part of its property or assets;
635 (4) lend money to and otherwise assist its members, managers, and employees;
636 (5) purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use,
637 employ, sell, mortgage, lend, pledge, or otherwise dispose of, or otherwise use or deal in or with:
638 (a) shares or other interests in any entity or obligations of any person; or
639 (b) direct or indirect obligations of the United States or any other government, state,
640 territory, governmental district, or municipality or of any instrumentality of any of them;
641 (6) make contracts or guarantees or incur liabilities, borrow money at such rates of interest
642 as the company may determine, issue its notes, bonds, or other obligations, or secure any of its
643 obligations by mortgage or pledge of all or any part of its property, franchises, and income;
644 (7) lend money for any lawful purpose, invest or reinvest its funds, or take and hold real
645 or personal property as security for the payment of funds so loaned or invested;
646 (8) conduct its business and maintain offices and exercise the powers granted by this
647 chapter within this state, and in any state, territory, district, or possession of the United States, or

648 in any foreign country;
649 (9) elect or appoint managers and agents of the company, define their duties, and fix their
650 compensation;
651 (10) make and alter an operating agreement as allowed by Part 5 of this chapter;
652 (11) make donations for the public welfare or for charitable, scientific, religious, or
653 educational purposes;
654 (12) indemnify or hold harmless any person;
655 (13) cease its activities and cancel its certificate of organization;
656 (14) transact any lawful business which the members or the managers find to be in aid of
657 governmental policy;
658 (15) pay pensions and establish pension plans, profit-sharing plans, and other incentive
659 plans for any or all of its members, managers, and employees;
660 (16) be a promoter, incorporator, organizer, general partner, limited partner, member,
661 associate, or manager of any corporation, partnership, limited partnership, limited liability
662 company, joint venture, trust, or other enterprise or entity;
663 (17) render professional services, if each member of a company who renders professional
664 services in Utah is licensed or registered to render those professional services pursuant to
665 applicable Utah law; and
666 (18) have and exercise the same powers as an individual, and all powers necessary or
667 convenient to effect or carry out any or all of the purposes for which the company is organized.
668 Section 18. Section 48-2c-111 is enacted to read:
669 48-2c-111. Designated office.
670 Each domestic company shall continuously maintain in this state a designated office where
671 the records required by Section 48-2c-112 shall be maintained. The designated office may, but
672 need not be, a place of business in this state. The designated office shall be at a specific
673 geographical location in this state and be identified by number, if any, and street or building
674 address or rural route or other geographical address. The designated office shall not be identified
675 only by post office box number or other nongeographic address. However, for purposes of
676 communication by mail, the division may permit the use of a post office address in conjunction
677 with the geographic address. In all cases where a domestic company fails to identify or designate
678 its designated office, the designated office for that company shall be its registered office in this

679 state.
680 Section 19. Section 48-2c-112 is enacted to read:
681 48-2c-112. Records.
682 Each company shall keep the following records at its designated office in this state:
683 (1) a current list in alphabetical order of the full name and last-known business, residence,
684 or mailing address of each member and each manager;
685 (2) a copy of the stamped articles of organization and all certificates of amendment thereto,
686 together with a copy of all signed powers of attorney pursuant to which the articles of organization
687 or any amendment has been signed;
688 (3) a copy of the writing required of an organizer under Subsection 48-2c-401 (2);
689 (4) a copy of the company's federal, state, and local income tax returns and reports, if any,
690 for the three most recent years;
691 (5) a copy of any financial statements of the company, if any, for the three most recent
692 years;
693 (6) a copy of the company's operating agreement, if any, and all amendments thereto;
694 (7) a copy of the minutes, if any, of each meeting of members and of any written consents
695 obtained from members; and
696 (8) unless otherwise set forth in the articles of organization or the operating agreement,
697 a written statement setting forth:
698 (a) the amount of cash and a description and statement of the agreed value of the other
699 property or services contributed and agreed to be contributed by each member;
700 (b) the times at which, or events on the happening of which, any additional contributions
701 agreed to be made by each member are to be made;
702 (c) any right of a member to receive distributions;
703 (d) any date or event upon the happening of which a member is entitled to payment in
704 redemption of the member's interest in the company; and
705 (e) any date or event upon the happening of which the company is to be dissolved and its
706 affairs wound up.
707 Section 20. Section 48-2c-113 is enacted to read:
708 48-2c-113. Inspection of records by members and managers.
709 (1) A current or former member or manager of a company is entitled to inspect and copy,

710 during regular business hours at the company's designated office, any of the records described in
711 Section 48-2c-112 after first giving the company written notice of the demand at least five business
712 days before the inspection is to occur.
713 (2) This section does not affect:
714 (a) the right of a member or manager to inspect records if the member or manager is in
715 litigation with the company, to the same extent as any other litigant; or
716 (b) the power of a court, independent of this chapter, to compel the production of records
717 for examination.
718 (3) A current or former member or manager may not use any information obtained through
719 the inspection or copying of records permitted by Subsection (1) for any improper purpose.
720 (4) The division may subpoena any of the records described in Section 48-2c-112 if a
721 company denies any current or former member of manager access to the records.
722 Section 21. Section 48-2c-114 is enacted to read:
723 48-2c-114. Scope of inspection right.
724 (1) An agent or attorney of a current or former member or manager has the same inspection
725 and copying rights as the person represented by the agent or attorney.
726 (2) The right to copy records under Section 48-2c-113 includes, if reasonable, the right to
727 receive copies made by photographic, xerographic, electronic, or other means.
728 (3) The company may impose a reasonable charge, payable in advance, to cover the costs
729 of labor and material, for copies of any documents to be provided. The charge may not exceed the
730 estimated cost of production or reproduction of the records.
731 Section 22. Section 48-2c-115 is enacted to read:
732 48-2c-115. Court-ordered inspection.
733 (1) If a company does not allow a current or former member or manager or their agent or
734 attorney who complies with Subsection 48-2c-113 (1) to inspect or copy any records required by
735 that subsection to be available for inspection, the district court of the county in this state in which
736 the company's designated office is located may summarily order inspection and copying of the
737 records demanded at the company's expense, on application of the person denied access to the
738 records. The court shall dispose of an application under this Subsection (1) on an expedited basis.
739 (2) If a court orders inspection or copying of records demanded, it shall also order the
740 company to pay the costs incurred by the person requesting the order, including reasonable

741 attorney's fees unless the company proves that it refused inspection in good faith because it had
742 a reasonable basis for doubt about the right of the person to inspect the records demanded.
743 (3) If a court orders inspection or copying of records demanded, it may:
744 (a) impose reasonable restrictions on the use or distribution of the records by the person
745 demanding inspection;
746 (b) order the company to pay the member or manager for reasonable attorney's fees and
747 costs incurred and for any damages incurred as a result of the company's denial if the court
748 determines that the company did not act in good faith in refusing to allow the inspection or
749 copying; and
750 (c) grant the person demanding inspection or copying any other available legal remedy.
751 Section 23. Section 48-2c-116 is enacted to read:
752 48-2c-116. Member or manager as a party to proceedings.
753 A member or manager of a company is not a proper party to proceedings by or against a
754 company, except when the object is to enforce a member's or manager's right against, or liability
755 to, the company.
756 Section 24. Section 48-2c-117 is enacted to read:
757 48-2c-117. Taxation of limited liability companies.
758 A company established under this chapter or a foreign company transacting business in this
759 state shall be taxed as provided in Section 59-10-801 .
760 Section 25. Section 48-2c-118 is enacted to read:
761 48-2c-118. Waiver of notice.
762 If, under the provisions of this chapter, the articles of organization, or the operating
763 agreement of a company, notice is required to be given to a member or manager of a company, a
764 waiver in writing signed by the person entitled to the notice, whether made before or after the time
765 for notice to be given, is equivalent to the giving of notice.
766 Section 26. Section 48-2c-119 is enacted to read:
767 48-2c-119. Transaction of members or managers with company.
768 Except as provided in the articles of organization or operating agreement of the company,
769 a member or manager may transact business with the company including, sell or lease property to,
770 buy or lease property from, lend money to, and borrow money from the company, and act as a
771 surety, guarantor or endorser for, or guarantee or assume one or more specific obligations of, or

772 provide collateral for, the company, and transact any other business with the company and, subject
773 to applicable law, shall have the same rights and obligations with respect to any such matter as a
774 person who is not a member or manager, except that this section shall not be construed to relieve
775 a member or manager of the duties specified in Section 48-2c-807 .
776 Section 27. Section 48-2c-120 is enacted to read:
777 48-2c-120. Articles of organization and operating agreement.
778 (1) A company's articles of organization or operating agreement may not:
779 (a) restrict a right to inspect and copy records under Section 48-2c-113 ;
780 (b) reduce the duties of members or managers under Section 48-2c-807 ;
781 (c) eliminate the obligation of good faith and fair dealing, except that the members by
782 written agreement may determine the standards by which the performance of the obligation is to
783 be measured, if the standards are not manifestly unreasonable;
784 (d) vary any filing requirement under this chapter;
785 (e) vary any requirement under this chapter that a particular action or provision be reflected
786 in a writing;
787 (f) vary the right to expel a member based on any event specified in Subsection
788 48-2c-710 (3);
789 (g) vary the remedies under Section 48-2c-1210 for judicial dissolution of a company;
790 (h) except as allowed by Section 48-2c-1103 or any other provision of law, restrict rights
791 of, or impose duties on, persons other than the members, their assignees and transferees, the
792 managers, and the company, without the consent of the persons; or
793 (i) eliminate or limit the personal liability of a manager to the company or its members for
794 damages for any breach of duty in the capacity where a judgment or other final adjudication
795 adverse to the manager establishes that the manager's acts or omissions were in bad faith or
796 involved gross negligence or willful misconduct or that the manager personally gained a financial
797 profit or other advantage to which the manager was not legally entitled.
798 (2) The articles of organization and operating agreement may:
799 (a) vary the requirement under Section 48-2c-1104 that, if all of the other members of the
800 company other than the member proposing to dispose of the member's interest do not approve of
801 the proposed transfer or assignment by unanimous written consent, the transferee of the member's
802 interest shall have no right to participate in the management of the business or affairs of the

803 company or to become a member; and
804 (b) vary the requirement under Section 48-2c-703 that, after the filing of the original
805 articles of organization, a person may be admitted as an additional member only upon the written
806 consent of all members.
807 Section 28. Section 48-2c-121 is enacted to read:
808 48-2c-121. Scope of notice.
809 (1) Articles of organization that have been filed with the division constitute notice to third
810 persons, as well as to members and managers of the company:
811 (a) that the company is a limited liability company formed under the laws of this state; and
812 (b) of all statements set forth in the articles of organization which are:
813 (i) required by Subsection 48-2c-403 (1) to be set forth in articles of organization; and
814 (ii) expressly permitted to be set forth in the articles of organization by Subsection
815 48-2c-403 (4).
816 (2) The filing with the division of any annual report required by Section 48-2c-203
817 constitutes notice to third persons, as well as to members and managers of the company, of the
818 information set forth in the annual report which is required by Section 48-2c-203 to be set forth
819 in an annual report.
820 (3) The filing with the division of any statement allowed by Section 48-2c-122 is notice
821 to third persons, as well as to members and managers of the company, of the information set forth
822 in that statement which is expressly permitted to be set forth in that statement by Section
823 48-2c-122 .
824 Section 29. Section 48-2c-122 is enacted to read:
825 48-2c-122. Statement of person named as manager or member.
826 (1) Any person named as a manager or member of a domestic company or foreign
827 company in an annual report or other document on file with the division may, if that person does
828 not hold the position of manager or member, deliver to the division for filing a written statement
829 setting forth:
830 (a) the person's name;
831 (b) the name of the company;
832 (c) information sufficient to identify the report or other document in which that person is
833 named as a manager or member; and

834 (d) the date on which he ceased to be a manager or member of the company, or a statement
835 that the person did not hold the position for which that person was named in the report or other
836 document.
837 Section 30. Section 48-2c-201 is enacted to read:
838 Part 2. Filing Requirements
839 48-2c-201. Place for filings.
840 Filings required by this chapter to be made with the division shall be made at the division's
841 offices in Salt Lake City, Utah, or at any other place within the state as the division director may
842 designate.
843 Section 31. Section 48-2c-202 is enacted to read:
844 48-2c-202. Record of filings.
845 The division shall maintain a record of all filings required by this chapter to be made with
846 the division and shall make those records available for inspection and copying by any person upon
847 request and payment of a reasonable fee determined by the division.
848 Section 32. Section 48-2c-203 is enacted to read:
849 48-2c-203. Annual report.
850 (1) (a) Each company and each foreign company authorized to transact business in this
851 state shall file an annual report with the division:
852 (i) during the month of its anniversary date of formation, in the case of domestic
853 companies; or
854 (ii) during the month of the anniversary date of being granted authority to transact business
855 in this state, in the case of foreign companies authorized to transact business in this state.
856 (b) The annual report required by Subsection (1)(a) shall set forth the name of the company
857 and the state or country under the laws of which it is formed and shall be set forth any change in:
858 (i) for a domestic company only, the street address of its designated office;
859 (ii) for a foreign company only, the street address of its principal office;
860 (iii) the street address of its registered office in this state;
861 (iv) the name of the agent for service of process at the address listed in Subsection
862 (1)(b)(iii);
863 (v) if the street address or legal name of any manager in a manager-managed company or
864 any member in a member-managed company or any person with management authority of a foreign

865 company, has changed, the new street address or legal name of the manager, member, or other
866 person; and
867 (vi) the identity of the persons constituting the managers in a manager-managed company
868 or members in a member-managed company or other person with management authority of a
869 foreign company.
870 (2) (a) The annual report required by Subsection (1) shall:
871 (i) be made on forms prescribed and furnished by the division; and
872 (ii) contain information that is given as of the date of signing the annual report.
873 (b) The annual report forms shall include a statement notifying the company that failure
874 to file the annual report will result in:
875 (i) the dissolution of the organization, in the case of a domestic company; or
876 (ii) the revocation of authority to transact business in this state in the case of a foreign
877 company.
878 (3) The annual report shall be signed by:
879 (a) any manager in a manager-managed company or members in a member-managed
880 company or other person with management authority; and
881 (b) if the registered agent has changed since the filing of the articles of organization or last
882 annual report, by the new registered agent.
883 (4) (a) If the annual report conforms to the requirements of this chapter, the division shall
884 file the report.
885 (b) If the annual report does not conform to the requirements of this chapter, the division
886 shall mail the report, first class postage prepaid, to the registered agent of the company for any
887 necessary corrections at the street address for the registered agent most recently furnished to the
888 division by notice, annual report, or other document.
889 (c) If the division returns an annual report in accordance with Subsection (4)(b), the
890 penalties for failure to file the report within the time prescribed in this section do not apply, as long
891 as the annual report is corrected and returned to the division within 30 days from the date the
892 nonconforming report was mailed to the registered agent of the company.
893 Section 33. Section 48-2c-204 is enacted to read:
894 48-2c-204. Signing of documents filed with division.
895 (1) Unless otherwise specified in this chapter, each document or report required by this

896 chapter to be filed with the division shall be signed in the following manner:
897 (a) articles of organization for a domestic company shall be signed by at least one
898 organizer or one manager or, if the company is member-managed, by at least one member; and
899 (b) each other document or report shall be signed by at least one manager for a
900 manager-managed company or one member for a member-managed company or a person with
901 management authority for a foreign company, subject in the case of a domestic company, to any
902 restriction or requirement in the articles of organization or operating agreement.
903 (2) Any person may sign any document or report by an attorney-in-fact, but a power of
904 attorney to sign a certificate of amendment relating to the admission of a member shall specify the
905 member to be admitted. Powers of attorney need not be filed with the division but shall be
906 retained with the records of the company required under Section 48-2c-112 .
907 (3) Each document or report required to be filed with the division shall state beneath or
908 opposite the signature of the person signing the document or report, in printed or hand-printed
909 letters, the signer's name and the capacity in which the document or report was signed.
910 (4) The signature of each person signing any document or report required to be filed with
911 the division constitutes an oath or affirmation by the person signing, under penalties of perjury,
912 that the facts stated therein are true and that any power of attorney used in connection with such
913 signing is proper in form and substance.
914 Section 34. Section 48-2c-205 is enacted to read:
915 48-2c-205. Penalty for signing false documents.
916 A person who signs a document or report knowing it to be false in any material respect,
917 with the intent that the document or report be delivered to the division for filing, is guilty of a class
918 A misdemeanor.
919 Section 35. Section 48-2c-206 is enacted to read:
920 48-2c-206. Powers of the division.
921 The division and the division director shall have the powers and authority reasonably
922 necessary to interpret and administer the provisions of this chapter applicable to them and to
923 perform the duties required of the division and the division director under this chapter.
924 Section 36. Section 48-2c-207 is enacted to read:
925 48-2c-207. Filing requirements.
926 (1) A document must satisfy the requirements of this section, and of any other section of

927 this chapter that adds to or varies these requirements, to be entitled to be filed with the division.
928 (2) This chapter must require or permit filing the document with the division.
929 (3) The document must contain the information required by this chapter. It may contain
930 other information as well.
931 (4) The document must be typewritten or machine printed.
932 (5) The document must be in the English language. A company name need not be in
933 English if written in English letters, Arabic or Roman numerals, and the certificate of existence
934 required of foreign companies need not be in English if accompanied by a reasonably authenticated
935 English translation.
936 (6) The document must be signed, or must be a true copy made by a photographic,
937 xerographic, electronic, or other process that provides similar copy accuracy of a document that
938 has been signed:
939 (a) as required by Section 48-2c-204 ;
940 (b) if the company is in the hands of a receiver, trustee, or other court-appointed fiduciary,
941 by that fiduciary; or
942 (c) if the document is that of a registered agent, by the registered agent, if the person is an
943 individual, or by a person authorized by the registered agent to execute the document, if the
944 registered agent is an entity.
945 (7) If the division has prescribed a mandatory form or cover sheet for the document, the
946 document must be in or on the prescribed form or must have the required cover sheet.
947 (8) The document must be delivered to the division for filing and must be accompanied
948 by the correct filing fee and any franchise tax, license fee, or penalty required by this chapter or
949 other law.
950 (9) If the person filing a document with the division desires to receive back a copy of the
951 filed document, that person must submit with the filed document an exact copy of the filed
952 document along with a return-addressed envelope with adequate first-class postage thereon.
953 Section 37. Section 48-2c-208 is enacted to read:
954 48-2c-208. Effective time and date of filed documents.
955 (1) Except as provided in Subsection (2) and in Subsection 48-2c-209 (4), a document
956 submitted to the division for filing under this chapter shall be considered effective at the time of
957 filing on the date it is filed with the division, as evidenced by the division's stamp or endorsement

958 on the document as described in Subsection 48-2c-210 (2).
959 (2) Unless otherwise provided in this chapter, a document, other than an application to
960 reserve the right to register a name, may specify conspicuously on its face a delayed effective time
961 or date, or both an effective time and date, and if it does so, the document becomes effective as
962 specified.
963 (a) If a delayed effective time but no date is specified, the document is effective on the date
964 it is filed with the division, as that date is specified in the division's time and date stamp or
965 endorsement on the document, at the later of the time specified on the document as its effective
966 time or the time specified in the time and date stamp or endorsement.
967 (b) If a delayed effective date but no time is specified, the document is effective at the
968 close of business on that date.
969 (c) A delayed effective date for a document may not be later than the 90th day after the
970 date it is filed with the division. If a document specifies a delayed effective date that is later than
971 the 90th day after the document is filed with the division, the document is effective on the ninetieth
972 day after it is filed with the division.
973 (3) If a document specified a delayed effective date pursuant to Subsection (2), the
974 document may be prevented from becoming effective by delivering to the division, prior to the
975 specified effective date of the document, a certificate of withdrawal, signed in the same manner
976 as the document being withdrawn, stating that the document has been revoked by appropriate
977 action and is void.
978 Section 38. Section 48-2c-209 is enacted to read:
979 48-2c-209. Correcting filed documents.
980 (1) A domestic or foreign company may correct a document filed with the division if the
981 document:
982 (a) contains an incorrect statement, misspelling, or other technical error or defect; or
983 (b) was defectively signed, attested, sealed, verified, or acknowledged.
984 (2) A document is corrected by delivering to the division for filing articles of correction
985 that:
986 (a) describe the document, including its filing date, or have a copy of it attached to the
987 articles of correction;
988 (b) specify the incorrect statement and the reason it is incorrect or the manner in which the

989 signing, attestation, sealing, verification, or acknowledgment was defective; and
990 (c) correct the incorrect statement, misspelling, or other technical error or defect, or
991 defective signing, attestation, sealing, verification, or acknowledgment.
992 (3) Articles of correction may be signed by any person designated in Section 48-2c-204 ,
993 or by any person who signed the document that is corrected.
994 (4) Articles of correction are effective on the effective date of the document they correct
995 except as to persons relying on the uncorrected document and adversely affected by the correction.
996 As to those persons, articles of correction are effective when filed with the division.
997 Section 39. Section 48-2c-210 is enacted to read:
998 48-2c-210. Filing duty of division.
999 (1) If a document delivered to the division for filing satisfies the requirements of Section
1000 48-2c-207 , the division shall file it.
1001 (2) The division files a document by stamping or otherwise endorsing "Filed" together with
1002 the name of the division and the date and time of acceptance for filing on the document. The
1003 division shall evidence on the document any filing fees paid.
1004 (3) If the division refuses to accept a document for filing, it shall return the document to
1005 the person requesting the filing within ten days after the document was delivered to the division,
1006 together with a written notice providing a brief explanation of the reason for the refusal.
1007 (4) The division's duty to file documents under this section is ministerial. Except as
1008 otherwise specifically provided in this chapter, the division's filing or refusal to file a document
1009 does not:
1010 (a) affect the validity or invalidity of the document in whole or part;
1011 (b) relate to the correctness or incorrectness of information contained in the document; or
1012 (c) create a presumption that the document is valid or invalid or that information contained
1013 in the document is correct or incorrect.
1014 Section 40. Section 48-2c-211 is enacted to read:
1015 48-2c-211. Appeal from division's refusal to file document.
1016 (1) If the division refuses to accept a document delivered to it for filing, the domestic or
1017 foreign company for which the filing was requested, or its representative, within 30 days after the
1018 effective date of the notice of refusal given by the division pursuant to Subsection 48-2c-210 (3),
1019 may appeal the refusal to the district court of the county where the company's designated office is

1020 or will be located, or if there is none in this state, the county where its registered office is or will
1021 be located. The appeal is commenced by petitioning the court to compel the filing of the document
1022 and by attaching to the petition a copy of the document and the division's notice of refusal.
1023 (2) The court may summarily order the division to file the document or take other action
1024 the court considers appropriate.
1025 (3) The court's final decision may be appealed as in any other civil proceedings.
1026 Section 41. Section 48-2c-212 is enacted to read:
1027 48-2c-212. Evidentiary effect of copy of filed document.
1028 A certificate attached to a copy of a document filed by the division, or an endorsement,
1029 seal, or stamp placed on the copy, which certificate, endorsement, seal, or stamp bears the
1030 signature of the director of the division, or a facsimile of the director's signature, and the seal of
1031 the division, is conclusive evidence that the original document has been filed with the division.
1032 Section 42. Section 48-2c-213 is enacted to read:
1033 48-2c-213. Certificates issued by the division.
1034 (1) Anyone may apply to the division for a certificate of existence for a domestic company,
1035 a certificate of authorization for a foreign company, or a certificate that sets forth any facts of
1036 record in the office of the division.
1037 (2) A certificate of existence or authorization shall state:
1038 (a) the domestic company's name or the foreign company's name as registered in this state;
1039 (b) (i) that the domestic company is duly formed under the law of this state and the date
1040 of its formation; or
1041 (ii) that the foreign company is authorized to transact business in this state;
1042 (c) that all fees, taxes, and penalties owed to this state have been paid, if:
1043 (i) payment is reflected in the records of the division; and
1044 (ii) nonpayment affects the existence or authorization of the domestic or foreign company;
1045 (d) that its most recent annual report required by Section 48-2c-203 has been filed with
1046 the division;
1047 (e) that articles of dissolution have not been filed with the division; and
1048 (f) other facts of record in the office of the division that may be requested by the applicant.
1049 (3) Subject to any qualification stated in the certificate, a certificate issued by the division
1050 may be relied upon as conclusive evidence of the facts set forth in the certificate.

1051 Section 43. Section 48-2c-214 is enacted to read:
1052 48-2c-214. Fees.
1053 Unless otherwise provided by statute, the division shall collect fees for its services in
1054 amounts determined by the department in accordance with the provisions of Section 63-38-3.2 .
1055 Section 44. Section 48-2c-301 is enacted to read:
1056 Part 3. Service of Process
1057 48-2c-301. Registered office.
1058 (1) Each domestic company and each foreign company authorized to do business in this
1059 state shall continuously maintain a registered office in this state.
1060 (2) Failure to maintain a registered office in this state shall be grounds for administrative
1061 dissolution of a domestic company under Section 48-2c-1206 and for revocation of authority to
1062 transact business in this state in the case of a foreign company.
1063 Section 45. Section 48-2c-302 is enacted to read:
1064 48-2c-302. Registered agent.
1065 (1) (a) Each domestic company and each foreign company authorized to do business in this
1066 state shall continuously maintain an agent in this state for service of process on that company.
1067 (b) The street address of the registered agent shall be the same as the registered office of
1068 the company in this state.
1069 (2) The registered agent must be:
1070 (a) an individual who resides in this state and whose business office is identical with the
1071 registered office;
1072 (b) a domestic company or domestic corporation or domestic nonprofit corporation whose
1073 business office is identical with the registered office; or
1074 (c) a foreign company or foreign corporation or foreign nonprofit corporation authorized
1075 to transact business in this state whose business office is identical with the registered office.
1076 (3) A company or foreign company may not serve as its own registered agent.
1077 (4) Failure to maintain a registered agent in this state shall be grounds for administrative
1078 dissolution of a domestic company under Section 48-2c-1206 and for revocation of authority to
1079 transact business in this state in the case of a foreign company.
1080 (5) The registered agent of a domestic company or foreign company may resign by delivery
1081 to the division for filing an original and one copy of a signed written notice of resignation together

1082 with a declaration that notice of the resignation has been given to the company or foreign company.
1083 The division shall then mail a copy of the notice of resignation:
1084 (a) in the case of a domestic company, to the managers of the company, or if the articles
1085 of organization provide that the company is member-managed, to the members of the company;
1086 or
1087 (b) in the case of a foreign company, to the principal office of the foreign company.
1088 (6) The addresses for the mailing required by Subsection (5) shall be the street addresses
1089 set forth in the notice, annual report, or document most recently filed with the division. The
1090 appointment of the registered agent ends on the 31st day after the division receives notice of the
1091 resignation.
1092 Section 46. Section 48-2c-303 is enacted to read:
1093 48-2c-303. Change of registered office or registered agent.
1094 (1) A domestic company or a foreign company may change its registered office or its
1095 registered agent in this state by delivery to the division for filing a statement of change that sets
1096 forth:
1097 (a) its name;
1098 (b) the street address of its current registered office;
1099 (c) the street address of the new registered office if the registered office is to be changed;
1100 (d) the name of its current registered agent;
1101 (e) the name of the new registered agent if the registered agent is to be changed and the
1102 new registered agent's written consent to the appointment, either on the statement of change or in
1103 an accompanying document; and
1104 (f) a statement that the street addresses of its registered office and the business office of
1105 its registered agent will be identical after the change or changes reflected in the statement are
1106 made.
1107 (2) If the street address of a registered agent's business office is changed, the registered
1108 agent may change the street address of the registered office of any domestic company or foreign
1109 company for which that person is the registered agent by giving written notice to the domestic
1110 company or foreign company of the change and by signing, either manually or in facsimile, and
1111 delivering to the division for filing a statement of change that complies with the requirements of
1112 Subsection (1), and that recites that the domestic company or foreign company has been given

1113 notice of the change.
1114 (3) Within 30 days after any change described in Subsection (1), the domestic company
1115 or the foreign company, or for a change described in Subsection (2), the registered agent shall
1116 cause the statement of change to be delivered to the division for filing.
1117 Section 47. Section 48-2c-304 is enacted to read:
1118 48-2c-304. Change of designated office.
1119 (1) A company may change its designated office by delivery to the division for filing a
1120 statement of change that sets forth:
1121 (a) its name;
1122 (b) the street address of its current designated office; and
1123 (c) the street address of its new designated office.
1124 (2) Within 30 days after a change of its designated office, the company shall cause the
1125 statement of change to be delivered to the division for filing.
1126 Section 48. Section 48-2c-305 is enacted to read:
1127 48-2c-305. Director of division as agent for service of process -- Records of process
1128 served.
1129 The director of the division shall keep a record of each process served upon the director
1130 under this chapter, including the date process was served on the director and the action of the
1131 director with reference thereto.
1132 Section 49. Section 48-2c-306 is enacted to read:
1133 48-2c-306. Service on domestic company.
1134 (1) Service of process on a domestic company may be made:
1135 (a) by delivery to:
1136 (i) the registered agent of the company;
1137 (ii) a manager of the company if the company is manager-managed; or
1138 (iii) any member of the company if the company is member-managed; or
1139 (b) by a writing, which shall be mailed by registered or certified mail to the registered
1140 office of the company in this state or, if the company has no registered office, then to the
1141 designated office listed in the notice, annual report, or document most recently filed with the
1142 division.
1143 (2) Service of process is perfected under Subsection (1)(b) on the earliest of:

1144 (a) the date the company receives the process;
1145 (b) the date shown on the return receipt, if signed on behalf of the company; or
1146 (c) five days after mailing.
1147 (3) This section does not limit or affect the right to serve, in any other manner permitted
1148 by law, any process, notice, or demand required or permitted by law to be served upon a company.
1149 Section 50. Section 48-2c-307 is enacted to read:
1150 48-2c-307. Service on foreign company.
1151 (1) Except as provided in Subsection (3), the division may serve a foreign company that
1152 is authorized to transact business in this state by first-class, postage prepaid, United States mail.
1153 (2) The registered agent of a foreign company authorized to transact business in this state
1154 is the foreign company's agent for service of process, notice, or demand required or permitted by
1155 law to be served on the foreign company.
1156 (3) (a) If a foreign company authorized to transact business in this state has no registered
1157 agent or if the registered agent cannot with reasonable diligence be served, the foreign company
1158 may be served by mail that is:
1159 (i) registered or certified;
1160 (ii) return receipt requested; and
1161 (iii) addressed to the foreign company at its principal office as listed in the notice, annual
1162 report, or document most recently filed with the division.
1163 (b) Service of process is perfected under this Subsection (3) at the earliest of:
1164 (i) the date the foreign company receives the process, notice, or demand;
1165 (ii) the date shown on the return receipt, if signed on behalf of the foreign company; or
1166 (iii) five days after mailing.
1167 (4) This section does not limit or affect the right to serve, in any other manner permitted
1168 by law, any process, notice, or demand required or permitted by law to be served upon a foreign
1169 company.
1170 Section 51. Section 48-2c-308 is enacted to read:
1171 48-2c-308. Service on dissolved company.
1172 (1) A dissolved company shall either:
1173 (a) maintain a registered agent and registered office in this state to accept service of
1174 process on its behalf; or

1175 (b) be considered to have authorized service of process on it by registered or certified mail,
1176 return receipt requested:
1177 (i) to the address of its designated office, if any, as set forth in the notice, annual report,
1178 or document most recently filed with the division;
1179 (ii) to the address for service of process that is listed in its articles of dissolution or as
1180 listed in the notice, annual report, or document most recently filed with the division;
1181 (iii) to the address for any manager of a company that is manager-managed, with such
1182 address being the address listed in the notice, annual report, or document most recently filed with
1183 the division; or
1184 (iv) to the address for any member of a company that is member-managed, with such
1185 address being the address listed in the notice, annual report, or document most recently filed with
1186 the division.
1187 (2) Service of process effected pursuant to Subsection (1)(b) is perfected at the earliest of:
1188 (a) the date the dissolved company receives the process, notice, or demand;
1189 (b) the date shown on the return receipt, if signed on behalf of the dissolved company; or
1190 (c) five days after mailing.
1191 (3) This section does not limit or affect the right to serve, in any other manner permitted
1192 by law, any process, notice, or demand required or permitted by law to be served upon a dissolved
1193 company.
1194 Section 52. Section 48-2c-309 is enacted to read:
1195 48-2c-309. Service on withdrawn foreign company.
1196 (1) A foreign company that has withdrawn from this state pursuant to Section 48-2c-1611
1197 shall either:
1198 (a) maintain a registered agent in this state to accept service of process on its behalf in any
1199 proceeding based on a cause of action arising during the time it was transacting business in this
1200 state, in which case the continued authority of the registered agent shall be specified in the
1201 application for withdrawal and any change shall be governed by the procedure set forth in Section
1202 48-2c-303 which applies to foreign companies authorized to transact business in this state; or
1203 (b) be considered to have authorized service of process on it, in connection with any cause
1204 of action arising during the time it was transacting business in this state, by registered or certified
1205 mail, return receipt requested, to:

1206 (i) the address of its principal office, if any, set forth in its application for withdrawal or
1207 as listed in the notice, annual report, or document most recently filed with the division; or
1208 (ii) the address for service of process that is stated in its application for withdrawal or as
1209 listed in the notice, annual report, or document most recently filed with the division.
1210 (2) Service effected pursuant to Subsection (1)(b) is perfected at the earliest of:
1211 (a) the date the withdrawn foreign company receives the process, notice, or demand;
1212 (b) the date shown on the return receipt, if signed on behalf of the withdrawn foreign
1213 company; or
1214 (c) five days after mailing.
1215 (3) This section does not limit or affect the right to serve, in any other manner permitted
1216 by law, any process, notice, or demand required or permitted by law to be served upon a withdrawn
1217 foreign company.
1218 Section 53. Section 48-2c-310 is enacted to read:
1219 48-2c-310. Service on foreign companies not authorized to do business.
1220 (1) Any foreign company which does business in this state without authority shall be
1221 considered to have thereby appointed and constituted the director of the division its agent for
1222 service of process in any proceeding against it in any state or federal court in this state arising or
1223 growing out of any business transacted by it within this state. Transacting business in this state
1224 by such foreign company shall be a signification of the agreement of that foreign company that any
1225 such process when so served shall be of the same legal force and validity as if served upon an
1226 authorized person or agent personally within this state.
1227 (2) Whenever the words "transacting business", "the doing of business", or "business done
1228 in this state", by any such foreign company are used in this section, they shall mean the course or
1229 practice of carrying on any business activities in this state, including, without limiting the
1230 generality of the foregoing, the solicitation of business or orders in this state.
1231 (3) In the event of service upon the director of the division in accordance with Subsection
1232 (1), the director of the division shall forthwith notify the foreign company thereof by letter,
1233 certified mail, return receipt requested, directed to the foreign company at the address furnished
1234 to the director of the division by the plaintiff in such action, suit, or proceeding. The letter must
1235 enclose a copy of the process and any other papers served upon the director of the division. It shall
1236 be the duty of the plaintiff in the event of such service to serve process and any other papers in

1237 duplicate, to notify the director of the division that service is being made pursuant to this
1238 Subsection (3), and to pay to the director of the division the sum of $100 for the use of this state,
1239 which sum shall be taxed as part of the costs in the proceeding, if the plaintiff shall prevail therein.
1240 The director of the division shall maintain an alphabetical record of any such process setting forth
1241 the name of the plaintiff and defendant, the title, docket number, and nature of the proceeding in
1242 which process has been served upon the director, the return date thereof, and the day and hour
1243 when the service was made. The director of the division shall not be required to retain such
1244 information for a period longer than five years from receipt of the service of process by the director
1245 of the division.
1246 Section 54. Section 48-2c-311 is enacted to read:
1247 48-2c-311. Venue for action against foreign company.
1248 Any person who has a cause of action against any foreign company, whether or not the
1249 company is authorized to transact business in this state, may file suit against the company in the
1250 district court of any county in which there is proper venue if the cause of action arose in Utah out
1251 of the company's transacting business in Utah or while the company was transacting business in
1252 Utah.
1253 Section 55. Section 48-2c-401 is enacted to read:
1254 Part 4. Formation
1255 48-2c-401. Organizer.
1256 (1) One or more individuals 18 years of age or older may form a company under this
1257 chapter by signing and filing with the division articles of organization that meet the requirements
1258 of Section 48-2c-403 . The individuals acting as organizer may, but need not, be members or
1259 managers of the company at the time of formation or after formation has occurred.
1260 (2) The signing of the articles of organization constitutes an affirmation by the organizers,
1261 under penalty of perjury, that the company has one or more members and, if the company is
1262 manager-managed, the person or persons named as managers in the articles of organization have
1263 consented to serve as managers of the company. At or prior to filing articles of organization for
1264 a company, the organizer or organizers shall prepare a writing to be held with the records of the
1265 company which sets forth:
1266 (a) the name and street address of each initial member of the company; and
1267 (b) if the articles of organization provide that the company is manager-managed, the name

1268 and street address of each initial manager.
1269 Section 56. Section 48-2c-402 is enacted to read:
1270 48-2c-402. Formation of company.
1271 (1) A company may be formed by delivering to the division for filing articles of
1272 organization for the company meeting the requirements of Sections 48-2c-207 and 48-2c-403 .
1273 (2) (a) A company shall have at least one member:
1274 (i) at the time of formation; and
1275 (ii) at all times after its formation.
1276 (b) Any person may be a member of a company.
1277 (c) Failure to maintain at least one member shall be an event of dissolution subject to
1278 Section 48-2c-1201 .
1279 (3) The company shall be considered formed as of the time, day, month, and year indicated
1280 by the division's stamp or seal on the articles of organization.
1281 (4) Except as against this state in a proceeding for administrative dissolution or in a
1282 proceeding for judicial dissolution of the company, the filed articles shall be conclusive evidence
1283 that all conditions precedent required to be performed by the members and managers have been
1284 complied with and that the company has been legally formed under this chapter.
1285 Section 57. Section 48-2c-403 is enacted to read:
1286 48-2c-403. Articles of organization.
1287 (1) The articles of organization of a company shall set forth:
1288 (a) the name of the company;
1289 (b) the business purpose for which the company is organized;
1290 (c) the name and street address of its initial registered agent as required by Section
1291 48-2c-302 ;
1292 (d) the signature of its initial registered agent;
1293 (e) a statement that the director of the division is appointed the agent of the company for
1294 service of process if the agent has resigned, the agent's authority has been revoked, or the agent
1295 cannot be found or served with the exercise of reasonable diligence;
1296 (f) the street address of the company's designated office or a statement that the company's
1297 registered office shall be its designated office;
1298 (g) the name and street address of each organizer who is not a member or manager;

1299 (h) if the company is to be manager-managed:
1300 (i) a statement that the company is to be managed by a manager or managers; and
1301 (ii) the names and street addresses of the initial managers; and
1302 (i) if the company is to be member-managed:
1303 (i) a statement that the company is to be managed by its members; and
1304 (ii) the names and street addresses of the initial members.
1305 (2) If the company is to be manager-managed, the articles of organization do not need to
1306 state the name or address of any member, except as required by Part 15.
1307 (3) It is not necessary to include in the articles of organization any of the powers
1308 enumerated in this chapter.
1309 (4) The articles of organization may contain any other provision not inconsistent with law,
1310 including, but not limited to:
1311 (a) a provision limiting or restricting the business in which the company may engage or
1312 the powers that the company may exercise, or both;
1313 (b) a statement of whether there are limitations on the authority of managers or members
1314 to bind the company and, if so, what the limitations are, set out in detail and not with reference to
1315 any other document; or
1316 (c) a statement of the period of duration of the company, which may be as long as 99 years
1317 from the date the articles of organization were filed with the division.
1318 (5) If the articles of organization of a company do not specify a period of duration, the
1319 period of duration for that company is 99 years from the date the articles of organization were filed
1320 with the division.
1321 Section 58. Section 48-2c-404 is enacted to read:
1322 48-2c-404. Prefiling activities.
1323 A company may not transact business or incur indebtedness, except that which is incidental
1324 to its organization or to obtaining subscriptions for or payment of contributions, until its articles
1325 of organization have been filed with the division. Nevertheless, this section may not be interpreted
1326 to invalidate any debts, contracts, or liabilities of the company incurred on behalf of the company
1327 prior to the filing of its articles of organization with the division.
1328 Section 59. Section 48-2c-405 is enacted to read:
1329 48-2c-405. When amendment to articles of organization required.

1330 The articles of organization of a company shall be amended when:
1331 (1) there is a change in the name of the company;
1332 (2) there is a change in the character of the business of the company specified in the
1333 articles of organization;
1334 (3) there is a false or erroneous statement in the articles of organization;
1335 (4) there is a change in the period of duration of the company that is:
1336 (a) stated in the articles of organization; or
1337 (b) provided for in Section 48-2c-403 ;
1338 (5) there is a change in:
1339 (a) the management structure of the company from a manager-managed company to a
1340 member-managed company or from a member-managed company to a manager-managed
1341 company;
1342 (b) if the company is manager-managed, who is a manager of the company; or
1343 (c) if the company is member-managed, who is a member of the company; or
1344 (6) the members desire to make a change in any other statement in the articles of
1345 organization in order for the articles to accurately represent the agreement among the members.
1346 Section 60. Section 48-2c-406 is enacted to read:
1347 48-2c-406. Actions not requiring amendment.
1348 A company is not required to amend its articles of organization to report a change in:
1349 (1) the street or mailing address of a manager in a manager-managed company or member
1350 in a member-managed company;
1351 (2) the legal name of a manager in a manager-managed company or a member in a
1352 member-managed company;
1353 (3) the addresses of its registered office or designated office; or
1354 (4) the name of its registered agent.
1355 Section 61. Section 48-2c-407 is enacted to read:
1356 48-2c-407. Authority to amend articles of organization.
1357 (1) (a) A company may amend its articles of organization at any time to add or change a
1358 provision that is required or permitted in the articles of organization or to delete a provision not
1359 required in the articles of organization.
1360 (b) Whether a provision is required or permitted in the articles of organization is

1361 determined as of the effective date of the amendment.
1362 (2) Except as may otherwise be expressly provided in the articles of organization or
1363 operating agreement, a member has no vested property right resulting from any provision in the
1364 articles of organization, including any provision relating to management, control, capital structure,
1365 purpose, duration of the company, or entitlement to distributions.
1366 Section 62. Section 48-2c-408 is enacted to read:
1367 48-2c-408. Certificate of amendment to articles of organization.
1368 (1) A company amending its articles of organization shall deliver to the division for filing
1369 a certificate of amendment which includes:
1370 (a) the name of the company;
1371 (b) the text of each amendment adopted;
1372 (c) if the amendment provides for restructuring the ownership of the company or an
1373 exchange or reclassification of the members' interests in the company, provisions for implementing
1374 the amendment if not contained in the text of the amendment itself;
1375 (d) the date each amendment was adopted by the members;
1376 (e) a statement that each amendment was adopted by the members as required by Section
1377 48-2c-802 or as otherwise required by the articles of organization or operating agreement; and
1378 (f) the signature required by Section 48-2c-204 .
1379 (2) Unless otherwise provided in the articles of organization or operating agreement, each
1380 amendment to the articles of organization of a company must be approved by all of the members
1381 and, if there are classes of members, by all of the members of each class.
1382 (3) Each company shall deliver a certificate of amendment to the division for filing within
1383 60 days after adoption of the amendment.
1384 (4) Upon filing with the division a certificate of amendment, the articles of organization
1385 shall be amended as set forth in the certificate of amendment.
1386 Section 63. Section 48-2c-409 is enacted to read:
1387 48-2c-409. Restated articles of organization.
1388 (1) A company may integrate into a single document all of the provisions of its articles of
1389 organization and amendments thereto, and it may at the same time also further amend its articles
1390 of organization, by adopting restated or amended and restated articles of organization.
1391 (2) If the restated articles of organization merely restate and integrate but do not further

1392 amend the initial articles of organization, as previously amended or supplemented by any
1393 certificate or document that was signed and filed pursuant to this chapter, they shall be specifically
1394 designated in their heading as "Restated Articles of Organization", together with other words that
1395 the company considers appropriate, and shall be filed with the division.
1396 (3) If the restated articles restate and integrate and also further amend in any respect the
1397 articles of organization, as previously amended or supplemented, they shall be specifically
1398 designated in their heading as "Amended and Restated Articles of Organization", together with
1399 other words that the company considers appropriate, and shall be filed with the division.
1400 (4) (a) Restated articles of organization shall state, either in their heading or in an
1401 introductory paragraph, the company's present name, and, if it has been changed, the name under
1402 which it was originally filed and the date of filing of its original articles of organization with the
1403 division. Restated articles shall also state that they were duly signed and filed in accordance with
1404 this section.
1405 (b) If the restated articles only restate and integrate and do not further amend the
1406 provisions of the articles of organization as previously amended or supplemented and there is no
1407 discrepancy between those provisions and the provisions of the restated articles, they shall so state.
1408 (5) Upon the filing of restated articles of organization with the division, the initial articles,
1409 as previously amended or supplemented, shall be superseded. Thereafter, the restated articles of
1410 organization, including any further amendment or changes made by the restated articles, shall be
1411 the articles of organization, but the original effective date of formation shall remain unchanged.
1412 (6) Any amendment or change made in connection with the restatement and integration
1413 of the articles of organization shall be subject to any other provision of this chapter not inconsistent
1414 with this section, that would apply if a separate certificate of amendment were filed to make the
1415 amendment or change.
1416 Section 64. Section 48-2c-410 is enacted to read:
1417 48-2c-410. Transfer to other jurisdiction.
1418 (1) Any domestic company may transfer to or domesticate in any jurisdiction besides this
1419 state that permits the transfer to or domestication in such jurisdiction of a limited liability company
1420 by delivering to the division for filing articles of transfer meeting the requirements of Subsection
1421 (2) if such transfer is approved by the members as provided in the company's operating agreement
1422 or, if the operating agreement does not so provide, by all of the members.

1423 (2) The articles of transfer shall state:
1424 (a) the name of the company;
1425 (b) the date of filing of the company's original articles of organization with the division;
1426 (c) the jurisdiction to which the company shall be transferred or in which it shall be
1427 domesticated;
1428 (d) the future effective date (which shall be a date certain) of the transfer or domestication
1429 if it is not to be effective upon the filing of the articles of transfer;
1430 (e) that the transfer or domestication has been approved by the members;
1431 (f) that the existence of the company as a domestic company of this state shall cease when
1432 the articles of transfer become effective;
1433 (g) the agreement of the company that it may be served with process in this state in any
1434 proceeding for enforcement of any obligation of the company arising while it was a company under
1435 the laws of this state;
1436 (h) that it irrevocably appoints the director of the division as its agent to accept service for
1437 process in any proceeding; and
1438 (i) if the company does not apply for authority to transact business in this state as a foreign
1439 company pursuant to Section 48-2c-1604 , then the address to which a copy of service of process
1440 referred to in Subsection (2)(h) shall be mailed to it by the division in the event of service upon
1441 the director of the division and the agreement of the company to give the division written notice
1442 of any change in the address.
1443 (3) When the articles of transfer are filed with the division, or upon the future, delayed
1444 effective date of the articles of transfer, and payment to the division of all fees prescribed under
1445 this chapter, the company shall cease to exist as a domestic company of this state. Thereafter, any
1446 certificate of the division as to the transfer shall be prima facia evidence of the transfer or
1447 domestication by the company out of this state.
1448 (4) Transfer or domestication of a company out of this state in accordance with this section
1449 and the resulting cessation of its existence as a domestic company of this state shall not be
1450 considered to affect any obligations or liabilities of the company incurred prior to the transfer or
1451 domestication or the personal liability of any person incurred prior to the transfer or domestication,
1452 including, but not limited to, any taxes owing to this state, nor shall it be considered to affect the
1453 choice of law applicable to the company with respect to matters arising prior to such transfer or

1454 domestication.
1455 Section 65. Section 48-2c-411 is enacted to read:
1456 48-2c-411. Domestication of foreign company.
1457 (1) Where the laws of another state, country, or jurisdiction allows a foreign company
1458 subject to the laws to transfer or domesticate to this state, the foreign company may become a
1459 domestic company by delivering to the division for filing articles of domestication meeting the
1460 requirements of Subsection (2) if its members approve the domestication.
1461 (2) (a) The articles of domestication shall meet the requirements applicable to articles of
1462 organization set forth in Section 48-2c-403 , except that:
1463 (i) the articles of domestication need not name, or be signed by, the organizers of the
1464 foreign company;
1465 (ii) any reference to the company's registered office, registered agent, or managers shall
1466 be to the registered office and agent in this state, and the managers then in office at the time of
1467 filing the articles of domestication; and
1468 (iii) any reference to the company's members shall be to the members at the time of filing
1469 the articles of domestication.
1470 (b) The articles of domestication shall set forth:
1471 (i) the date on which and jurisdiction where the foreign company was first formed,
1472 organized, or otherwise came into being;
1473 (ii) the name of the foreign company immediately prior to the filing of the articles of
1474 domestication;
1475 (iii) any jurisdiction that constituted the seat, location of formation, principal place of
1476 business, or central administration of the foreign company immediately prior to the filing of the
1477 articles of domestication; and
1478 (iv) a statement that the articles of domestication were approved by its members.
1479 (3) Upon the filing of articles of domestication with the division:
1480 (a) the foreign company shall be domesticated in this state, shall thereafter be subject to
1481 all of the provisions of this chapter as a domestic company, and shall continue as if it had been
1482 organized under this chapter; and
1483 (b) notwithstanding any other provisions of this chapter, the existence of the domesticated
1484 company shall be considered to have commenced on the date the foreign company commenced its

1485 existence in the jurisdiction in which the foreign company was first formed, organized, or
1486 otherwise came into being.
1487 (4) The articles of domestication, upon filing with the division, shall become the articles
1488 of organization of the company, and shall be subject to amendments or restatement the same as any
1489 other articles of organization under this chapter.
1490 (5) The domestication of any foreign company in this state shall not be considered to affect
1491 any obligation or liability of the foreign company incurred prior to its domestication.
1492 Section 66. Section 48-2c-501 is enacted to read:
1493 Part 5. Operating Agreements
1494 48-2c-501. Initial agreement.
1495 The initial operating agreement of a company shall be adopted by unanimous consent of
1496 the members.
1497 Section 67. Section 48-2c-502 is enacted to read:
1498 48-2c-502. General.
1499 (1) Except as provided in Subsection 48-2c-120 (1), or in the articles of organization, an
1500 operating agreement may modify the rules of any provision of this chapter that relates to:
1501 (a) the management of the company;
1502 (b) the business or purpose of the company;
1503 (c) the conduct of the company's affairs; or
1504 (d) the rights, duties, powers, and qualifications of, and relations between and among, the
1505 members, the managers, the members' assignees and transferees, and the company.
1506 (2) The provisions of an operating agreement shall control over any provision of this
1507 chapter to the contrary except as set forth in Subsection 48-2c-120 (1) or as set forth in the articles
1508 of organization. To the extent the operating agreement and articles of organization do not
1509 otherwise provide, the provisions of this chapter shall control.
1510 Section 68. Section 48-2c-503 is enacted to read:
1511 48-2c-503. Timing.
1512 An operating agreement may be entered into before, at the time of, or after the filing of the
1513 articles of organization. Regardless of the timing, the agreement may, by its own terms, be
1514 effective upon formation of the company or at a later designated time or date, provided, however,
1515 that the operating agreement may not become effective prior to formation of the company.

1516 Section 69. Section 48-2c-504 is enacted to read:
1517 48-2c-504. Operating agreement for a one-member company.
1518 (1) A written declaration or written guidelines signed by the sole member of a company
1519 constitutes an operating agreement for purposes of this chapter if the member designates in the
1520 declaration or guidelines that the written declaration or guidelines constitutes the operating
1521 agreement.
1522 (2) The operating agreement of a company having only one member shall not be
1523 unenforceable by reason of there being only one person who is a party to the agreement.
1524 Section 70. Section 48-2c-505 is enacted to read:
1525 48-2c-505. Interpretation and enforcement.
1526 Any action to interpret, apply, or enforce the provisions of a company's articles of
1527 organization or operating agreement, or the duties, obligations, or liabilities between and among
1528 a company, its members and managers, or the rights or powers of, or restrictions on, the company,
1529 the members or managers, may be brought in the district court where the designated office of the
1530 company is located or, if the company fails to maintain a designated office, then in the district
1531 court of Salt Lake County.
1532 Section 71. Section 48-2c-506 is enacted to read:
1533 48-2c-506. Amendment.
1534 An operating agreement may be altered, amended, or repealed as provided in the operating
1535 agreement. If an operating agreement does not provide for a procedure for altering, amending, or
1536 repealing the operating agreement, the operating agreement may be altered, amended, or repealed
1537 only by the written consent of all members.
1538 Section 72. Section 48-2c-601 is enacted to read:
1539 Part 6. Limited Liability
1540 48-2c-601. General rule.
1541 Except as provided in Section 48-2c-602 , no organizer, member, manager, or employee of
1542 a company is personally liable under a judgment, decree, or order of a court, or in any other
1543 manner, for a debt, obligation, or liability of the company or for the acts or omissions of the
1544 company or of any other organizer, member, manager, or employee of the company.
1545 Section 73. Section 48-2c-602 is enacted to read:
1546 48-2c-602. Exceptions to limited liability.

1547 The following exceptions to limited liability under Section 48-2c-601 shall apply:
1548 (1) All persons who assume to act as a company without complying with this chapter are
1549 jointly and severally liable for all debts and liabilities so incurred, except for debts incurred in the
1550 course of prefiling activities authorized under Section 48-2c-404 .
1551 (2) A member of a company is liable to the company:
1552 (a) for the difference between the amount of the member's contributions to the company
1553 which have been actually made and the amount which is stated in the operating agreement or other
1554 contract as having been made; and
1555 (b) for any unpaid contribution to the company which the member, in the operating
1556 agreement or other contract, agreed to make in the future at the time and on the conditions stated
1557 in the operating agreement or other contract.
1558 (3) A member holds as trustee for the company:
1559 (a) specific property which is stated in the operating agreement or other contract as having
1560 been contributed by the member, if the property was not contributed or it has been wrongfully or
1561 erroneously returned; and
1562 (b) money or other property wrongfully or erroneously paid or conveyed to the member.
1563 (4) Persons engaged in prefiling activities other than those authorized by Section
1564 48-2c-404 shall be jointly and severally liable for any debts or liabilities incurred in the course of
1565 those activities.
1566 (5) (a) This chapter does not alter any law applicable to the relationship between a person
1567 rendering professional services and a person receiving those services, including liability arising
1568 out of those professional services.
1569 (b) All persons rendering professional services shall remain personally liable for any
1570 results of that person's acts or omissions.
1571 (6) When a member has rightfully received a distribution, in whole or in part, of the
1572 member's capital account, the member remains liable to the company for any sum, not in excess
1573 of the amount of distribution, with interest, necessary to discharge the company's obligations to
1574 all creditors of the company who extended credit in reliance on any representation as to the
1575 financial condition of the company that included the amount so distributed or whose claims arose
1576 prior to the distribution.
1577 Section 74. Section 48-2c-603 is enacted to read:

1578 48-2c-603. Waiver of exceptions to limited liability.
1579 The liabilities of a member described in Subsection 48-2c-602( 2), (3), or (6) may be
1580 waived or compromised upon the consent of all other members. Any such waiver or compromise
1581 does not affect the rights of a creditor of the company:
1582 (1) who extended credit in reliance on any representation as to the financial condition of
1583 the company prior to a distribution described in Subsection 48-2c-602 (6) and without notice of
1584 such waiver or compromise; or
1585 (2) whose claim arose prior to, and without notice of, such waiver or compromise.
1586 Section 75. Section 48-2c-604 is enacted to read:
1587 48-2c-604. Waiver of protection of limited liability.
1588 (1) A member of a company may waive the protection against personal liability of Section
1589 48-2c-601 for any debt, obligation, or liability of a company by signing a waiver in the articles of
1590 organization or certificate of amendment to the articles of organization.
1591 (2) The extent or scope of the waiver is determined by the signed waiver in the articles of
1592 organization or certificate of amendment.
1593 Section 76. Section 48-2c-605 is enacted to read:
1594 48-2c-605. No formalities required to maintain limited liability.
1595 The failure of a company to maintain records, to hold meetings, or to observe any
1596 formalities or requirements imposed by this chapter or by the articles of organization or the
1597 operating agreement is not a ground for imposing personal liability on any member, manager, or
1598 employee for any debt, obligation, or liability of the company.
1599 Section 77. Section 48-2c-701 is enacted to read:
1600 Part 7. Members
1601 48-2c-701. Nature of member interest.
1602 (1) A member's interest in a company is personal property regardless of the nature of the
1603 property owned by the company.
1604 (2) A member has no interest in specific property of a company.
1605 Section 78. Section 48-2c-702 is enacted to read:
1606 48-2c-702. Initial members.
1607 (1) In connection with the formation of a company, a person becomes a member of the
1608 company upon the earliest to occur of the following:

1609 (a) when the person signs the articles of organization;
1610 (b) when the person signs the operating agreement; or
1611 (c) when:
1612 (i) the person evidences the intent to become a member, either orally, in writing, or by
1613 other action such as transferring property or paying money to the company for an interest in the
1614 company; and
1615 (ii) the person's admission as a member is reflected in the records of the company or is
1616 otherwise acknowledged by the company.
1617 (2) Notwithstanding the provisions of Subsection (1), a person shall not become a member
1618 of a company prior to formation of the company.
1619 Section 79. Section 48-2c-703 is enacted to read:
1620 48-2c-703. Additional members.
1621 After the formation of a company, a person is admitted as an additional member of the
1622 company as provided in the operating agreement or, if the operating agreement does not provide
1623 for additional members, then:
1624 (1) in the case of a person who is not an assignee of an interest in the company, including
1625 a person acquiring an interest directly from the company, upon the person's signing the operating
1626 agreement or other writing by which the person agrees to be bound by the operating agreement,
1627 and upon consent of all members;
1628 (2) in the case of a person who is an assignee of an interest in the company, upon the
1629 person's signing the operating agreement or other writing by which the person agrees to be bound
1630 by the operating agreement, and upon consent of all members and upon the effective date of the
1631 person's admission as reflected in the records of the company;
1632 (3) unless otherwise provided in a plan of merger, in the case of a person acquiring an
1633 interest in a surviving company pursuant to a merger approved under Section 48-2c-1407 , at the
1634 time provided in and upon compliance with the operating agreement of the surviving company;
1635 or
1636 (4) unless otherwise provided in articles of conversion, in the case of a person acquiring
1637 an interest in a company pursuant to a conversion approved under Section 48-2c-1404 , at the time
1638 provided in and upon compliance with the operating agreement of the company resulting from the
1639 conversion.

1640 Section 80. Section 48-2c-704 is enacted to read:
1641 48-2c-704. Meetings of members.
1642 Unless otherwise provided in the articles of organization or operating agreement, no
1643 meetings need be held for actions taken by members. If meetings of members are allowed or
1644 required under the articles of organization or operating agreement, then, unless otherwise provided
1645 in the articles of organization or operating agreement:
1646 (1) a meeting of members may be called by any manager in a manager-managed company
1647 or by members in any company holding at least 25% interest in profits of the company;
1648 (2) any business may be transacted at any meeting of members which is properly called;
1649 (3) notice of a meeting of members must be given to each member at least five days prior
1650 to the meeting and shall give the date, place, and time of the meeting;
1651 (4) notice of a meeting of members may be given orally or in writing or by electronic
1652 means;
1653 (5) the person calling the meeting may designate any place within or without the state as
1654 the place for the meeting. If no place is designated, the place of the meeting shall be the
1655 designated office of the company or, if there is no designated office in this state, at the registered
1656 office of the company in this state;
1657 (6) only persons who are members of record at the time notice of a meeting is given shall
1658 be entitled to notice or to vote at the meeting, except that a fiduciary (such as a trustee, personal
1659 representative, or guardian) shall be entitled to act in such capacity on behalf of a member of
1660 record if evidence of such status is presented to the company and except that a surviving joint
1661 tenant shall be entitled to receive notice and act where evidence of the other joint tenant's death
1662 is presented to the company;
1663 (7) a quorum must be present in person or by proxy at a meeting of members for any
1664 business to be transacted and a quorum shall consist of members holding at least 51% interest in
1665 profits of the company;
1666 (8) the members present at any meeting at which a quorum is present may continue to
1667 transact business notwithstanding the withdrawal of members from the meeting in such numbers
1668 that less than a quorum remains;
1669 (9) a member may participate in and be considered present at a meeting by, or the meeting
1670 may be conducted through the use of, any means of communication by which all persons

1671 participating in the meeting may hear each other, or otherwise communicate with each other during
1672 the meeting;
1673 (10) voting at a meeting shall be determined by percentage interests in the profits of the
1674 company; and
1675 (11) a proxy, to be effective, must be in writing and signed by the member and must be
1676 filed with the secretary of the meeting before or at the time of the meeting and shall be valid for
1677 no more than 11 months after it was signed unless otherwise provided in the proxy.
1678 Section 81. Section 48-2c-705 is enacted to read:
1679 48-2c-705. Voting.
1680 (1) Subject to the provisions of Section 48-2c-803 , the articles of organization or operating
1681 agreement may grant to all or a specified class or group of members the right to consent, vote, or
1682 agree, on a percentage interest basis or a per capita basis or other basis, upon any matter.
1683 (2) Any member may vote in person or by proxy.
1684 Section 82. Section 48-2c-706 is enacted to read:
1685 48-2c-706. Action by members without a meeting.
1686 (1) Unless otherwise provided in the articles of organization or operating agreement, and
1687 subject to the limitations of Subsection (5), any action which may be taken by the members may
1688 be taken without any meeting and without prior notice, if one or more consents in writing, setting
1689 forth the action so taken, shall be signed by the members holding interests in the company not less
1690 than the minimum percentage that would be necessary to authorize or take that action.
1691 (2) (a) Unless the written consents of all members entitled to vote have been obtained,
1692 notice of any member approval without a meeting shall be given at least five days before the
1693 consummation of the transaction, action, or event authorized by the member action to those
1694 entitled to vote who have not consented in writing.
1695 (b) The notice must contain or be accompanied by a description of the transaction, action,
1696 or event.
1697 (3) Provided the notice described in Subsection (2) is given, action taken by the members
1698 pursuant to this section is effective as of the date the last written consent necessary to authorize
1699 or take the action is received by the company, unless all of the written consents specify a later date
1700 as the effective date of the action, in which case the later date shall be the effective date of the
1701 action. If the company has received written consents as contemplated by Subsection (1), signed

1702 by all members entitled to vote with respect to the action, the effective date of the action may be
1703 any date that is specified in all of the written consents.
1704 (4) Unless otherwise provided in the operating agreement, any consent or writing may be
1705 received by the company by any electronically transmitted or other form of communication that
1706 provides the company with a complete copy thereof, including the signature thereto.
1707 (5) Any member or an authorized representative of that member may revoke a consent by
1708 a signed writing describing the action and stating that the member's prior consent is revoked, if the
1709 writing is received by the company prior to the effective date and time of the action.
1710 (6) A member action taken pursuant to this section is not effective unless all written
1711 consents on which the company relies for taking an action pursuant to Subsection (1) are received
1712 by the company within a 60-day period and not revoked pursuant to Subsection (5).
1713 (7) Written consent of the members entitled to vote constitutes approval of the members
1714 and may be described as such in any document.
1715 Section 83. Section 48-2c-707 is enacted to read:
1716 48-2c-707. Classes of members.
1717 The articles of organization or operating agreement of a company may provide for classes
1718 or groups of members having such relative rights, powers, and duties as prescribed therein, and
1719 may make provision for the future creation of any such classes or groups. The articles of
1720 organization or operating agreement may provide for the taking of an action, including the
1721 amendment of the operating agreement, without the vote or approval of any member or class or
1722 group of members and may provide that any particular class or group shall have no voting rights.
1723 Section 84. Section 48-2c-708 is enacted to read:
1724 48-2c-708. Cessation of membership.
1725 (1) A person who is a member of a company ceases to be a member of the company and
1726 the person or the person's successor in interest attains the status of an assignee as set forth in
1727 Section 48-2c-1102 , upon the occurrence of one or more of the following events:
1728 (a) the death of the member, except that the member's personal representative, executor,
1729 or administrator may exercise all of the member's rights for the purpose of settling the member's
1730 estate, including any power of an assignee and any power the member had under the articles of
1731 organization or operating agreement;
1732 (b) the incapacity of the member, as defined in Subsection 75-1-201 (22), except that the

1733 member's guardian or conservator or other legal representative may exercise all of the member's
1734 rights for the purpose of administering the member's property, including any power of an assignee
1735 and any power the member had under the articles of organization or operating agreement;
1736 (c) the member withdraws by voluntary act from the company as provided in Section
1737 48-2c-709 ;
1738 (d) upon the assignment of the member's entire interest in the company;
1739 (e) the member is expelled as a member pursuant to Section 48-2c-710 ; or
1740 (f) unless otherwise provided in the operating agreement, or with the written consent of
1741 all other members:
1742 (i) at the time the member:
1743 (A) makes a general assignment for the benefit of creditors;
1744 (B) files a voluntary petition in bankruptcy;
1745 (C) becomes the subject of an order for relief in bankruptcy proceedings;
1746 (D) files a petition or answer seeking for the member any reorganization, arrangement,
1747 composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or
1748 regulation;
1749 (E) files an answer or other pleading admitting or failing to contest the material allegations
1750 of a petition filed against the member in any proceeding of the nature described in Subsections
1751 (1)(f)(i)(A) through (D); or
1752 (F) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator
1753 of the member or of all or any substantial part of the member's properties;
1754 (ii) 120 days after the commencement of any proceeding against the member seeking
1755 reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief
1756 under any statute, law, or regulation, the proceeding has not been dismissed, or if within 90 days
1757 after the appointment without his or her consent or acquiescence of a trustee, receiver, or liquidator
1758 of the member or of all or any substantial part of the member's properties, the appointment is not
1759 vacated or stayed, or within 90 days after the expiration of any stay, the appointment is not
1760 vacated;
1761 (iii) in the case of a member that is another limited liability company, the filing of articles
1762 of dissolution or the equivalent for that company or the judicial dissolution of that company or the
1763 administrative dissolution of that company and the lapse of any period allowed for reinstatement;

1764 (iv) in the case of a member that is a corporation, the filing of articles of dissolution or the
1765 equivalent for the corporation or the administrative dissolution of the corporation and the lapse of
1766 any period allowed for reinstatement; or
1767 (v) in the case of a member that is a limited partnership, the dissolution and
1768 commencement of winding up of the limited partnership.
1769 (2) The articles of organization or operating agreement may provide for other events the
1770 occurrence of which result in a person's ceasing to be a member of the company.
1771 Section 85. Section 48-2c-709 is enacted to read:
1772 48-2c-709. Withdrawal of a member.
1773 A member may withdraw from a company at the time or upon the happening of events
1774 specified in and in accordance with the articles of organization or operating agreement. If the
1775 articles of organization or operating agreement do not specify the time or the events upon the
1776 happening of which a member may withdraw, a member may not withdraw prior to the dissolution
1777 and completion of winding up of the company, without the written consent of all other members
1778 at the time.
1779 Section 86. Section 48-2c-710 is enacted to read:
1780 48-2c-710. Expulsion of a member.
1781 A member of a company may be expelled:
1782 (1) as provided in the company's operating agreement;
1783 (2) by unanimous vote of the other members if it is unlawful to carry on the company's
1784 business with the member; or
1785 (3) on application by the company or another member, by judicial determination that the
1786 member:
1787 (a) has engaged in wrongful conduct that adversely and materially affected the company's
1788 business;
1789 (b) has willfully or persistently committed a material breach of the articles of organization
1790 or operating agreement or of a duty owed to the company or to the other members under Section
1791 48-2c-807 ; or
1792 (c) has engaged in conduct relating to the company's business which makes it not
1793 reasonably practicable to carry on the business with the member.
1794 Section 87. Section 48-2c-801 is enacted to read:

1795 Part 8. Management
1796 48-2c-801. Management structure.
1797 A company may be managed either by one or more managers, in which case it shall be
1798 considered to be a "manager-managed company," or it may be managed by all of its members, in
1799 which case it shall be considered to be a "member-managed company."
1800 (1) The choice of management structure shall be designated in the articles of organization
1801 for the company. If the articles of organization fail to designate the management structure or do
1802 not clearly designate the management structure, management of the company shall be vested in its
1803 members.
1804 (2) Unless the operating agreement provides otherwise, a manager-managed company shall
1805 become a member-managed company upon the death, withdrawal, or removal of the sole
1806 remaining manager, or if one of the events described in Subsection 48-2c-708 (4), (5), or (6) occurs
1807 with regard to the sole remaining manager, unless another manager is appointed by the members
1808 within 90 days after the occurrence of any such event.
1809 (3) The dissolution of a company does not alter the authority of the managers or members,
1810 as the case may be, to wind up the business and affairs of the company.
1811 Section 88. Section 48-2c-802 is enacted to read:
1812 48-2c-802. Agency authority of members and managers.
1813 (1) Except as provided in Subsection (3), in a member-managed company:
1814 (a) each member is an agent of the company for the purpose of its business;
1815 (b) an act of a member, including the signing of a document in the company name, for
1816 apparently carrying on in the ordinary course the company business (or business of the kind carried
1817 on by the company) binds the company, unless the member had no authority to act for the company
1818 in the particular matter and the lack of authority was expressly described in the articles of
1819 organization or the person with whom the member was dealing knew or otherwise had notice that
1820 the member lacked authority; and
1821 (c) an act of a member which is not apparently for carrying on in the ordinary course the
1822 company business (or business of the kind carried on by the company) binds the company only if
1823 the act was authorized by the other members in accordance with Section 48-2c-803 .
1824 (2) Except as provided in Subsection (3), in a manager-managed company:
1825 (a) each manager is an agent of the company for the purpose of its business;

1826 (b) a member is not an agent of the company for the purpose of its business solely by
1827 reason of being a member;
1828 (c) an act of a manager, including the signing of a document in the company name, for
1829 apparently carrying on in the ordinary course the company business (or business of the kind carried
1830 on by the company) binds the company unless the manager had no authority to act for the company
1831 in the particular matter and the lack of authority was expressly described in the articles of
1832 organization or the person with whom the manager was dealing knew or otherwise had notice that
1833 the manager lacked authority; and
1834 (d) an act of a manager which is not apparently for carrying on in the ordinary course the
1835 company business (or business of the kind carried on by the company) binds the company only if
1836 the act was authorized by the members in accordance with Subsection 48-2c-803 (2) or (3).
1837 (3) Notwithstanding the provisions of Subsections (1) and (2), unless the articles of
1838 organization expressly limit their authority, any member in a member-managed company, or any
1839 manager in a manager-managed company, may sign, acknowledge, and deliver any document
1840 transferring or affecting the company's interest in real or personal property, and if the authority is
1841 not so limited, the document shall be conclusive in favor of a person who gives value without
1842 knowledge of the lack of authority of the person who signs and delivers the document.
1843 Section 89. Section 48-2c-803 is enacted to read:
1844 48-2c-803. Management by members.
1845 In a member-managed company, each member shall be subject to the duties described in
1846 Section 48-2c-807 and, unless otherwise provided in this chapter or in the articles of organization
1847 or an operating agreement:
1848 (1) the affirmative vote, approval, or consent of members holding a majority of profits
1849 interests in the company shall be required to decide any matter connected with the business of the
1850 company;
1851 (2) the affirmative vote, approval, or consent of all members shall be required to:
1852 (a) amend the articles of organization, except to make ministerial amendments or to
1853 change an address;
1854 (b) amend the operating agreement, except to make ministerial amendments or to change
1855 an address; or
1856 (c) authorize a member or any other person to do any act on behalf of the company that

1857 contravenes the articles of organization or operating agreement and thereafter to terminate the
1858 authority so granted; and
1859 (3) the affirmative vote, approval, or consent of members holding 2/3 of the profits
1860 interests in the company shall be required to bind the company to any of the following actions:
1861 (a) authorizing a member or any other person to do any act on behalf of the company that
1862 is not in the ordinary course of the company's business (or business of the kind carried on by the
1863 company) and thereafter to terminate the authority so granted;
1864 (b) making a current distribution to members;
1865 (c) resolving any dispute connected with carrying on in the usual way the business of the
1866 company;
1867 (d) making a substantial change in the business purpose of the company;
1868 (e) a conversion of the company to another entity;
1869 (f) a merger in which the company is a party to the merger;
1870 (g) any sale, lease, exchange, or other disposition of all or substantially all of the
1871 company's property other than in the usual and regular course of the company's business;
1872 (h) any mortgage, pledge, dedication to the repayment of indebtedness, whether with or
1873 without recourse, or other encumbering of all or substantially all of the company's property
1874 whether or not in the usual and regular course of the company's business; or
1875 (i) any waiver of a liability of a member under Section 48-2c-603 .
1876 Section 90. Section 48-2c-804 is enacted to read:
1877 48-2c-804. Management by managers.
1878 In a manager-managed company, each manager and each member shall be subject to the
1879 provisions of Section 48-2c-807 and:
1880 (1) the initial managers shall be designated in the articles of organization. Thereafter, the
1881 managers shall be those persons identified in documents filed with the division including
1882 amendments to the articles of organization as well as the annual reports required under Section
1883 48-2c-203 and the statements required or permitted under Section 48-2c-122 ;
1884 (2) when there is a change in the management structure from a member-managed company
1885 to a manager-managed company, the managers shall be those persons identified in the certificate
1886 of amendment to the articles of organization that makes the change;
1887 (3) each manager who is a natural person must have attained the age of majority under the

1888 laws of this state;
1889 (4) no manager shall have authority to do any act in contravention of the articles of
1890 organization or the operating agreement, except as provided in Subsection (6)(g);
1891 (5) a manager who is also a member shall have all of the rights of a member;
1892 (6) unless otherwise provided in the articles of organization or operating agreement of the
1893 company:
1894 (a) except for the initial managers, each manager shall be elected at any time by the
1895 members holding at least a majority of the profits interests in the company, and any vacancy
1896 occurring in the position of manager shall be filled in the same manner;
1897 (b) the number of managers shall be fixed by the members in the operating agreement or
1898 if the operating agreement fails to designate the number of managers, the number of managers shall
1899 be the number designated by members holding at least a majority of the profits interests in the
1900 company;
1901 (c) each manager shall serve until the earliest to occur of the manager's death, withdrawal,
1902 or removal or an event described in Subsection 48-2c-708 (6) or, if membership in the company
1903 is a condition to being a manager, an event described in Subsection 48-2c-708 (4) or (5);
1904 (d) a manager need not be a member of the company or a resident of this state;
1905 (e) any manager may be removed with or without cause by the members, at any time, by
1906 the decision of members owning a majority of the profits interests in the company;
1907 (f) there shall be only one class of managers; and
1908 (g) approval by the requisite number of members, as well as all of the managers, shall be
1909 required as to all matters described in Subsections 48-2c-803 (2) and (3).
1910 Section 91. Section 48-2c-805 is enacted to read:
1911 48-2c-805. Delegation of authority and power to manage.
1912 Unless otherwise provided in the articles of organization or operating agreement, a member
1913 or manager of a company may not delegate to one or more other persons the member's or
1914 manager's, as the case may be, authority and power to manage the business and affairs of the
1915 company, except that an entity may designate an authorized representative to act for it. However,
1916 if a delegation is permitted in the articles of organization or operating agreement, then the
1917 delegation must comply with the following:
1918 (1) any such delegation must be in writing including, but not limited to, a management

1919 agreement or another agreement;
1920 (2) the scope and duration of the authority delegated shall be specified in the writing;
1921 (3) the power to revoke the delegation at any time for any or no reason shall be retained
1922 by the member or manager;
1923 (4) any such delegation shall not include any power of substitution without the written
1924 consent of the member or manager; and
1925 (5) any such delegation by a member or manager shall not cause the member or manager
1926 to cease to be a member or manager, as the case may be.
1927 Section 92. Section 48-2c-806 is enacted to read:
1928 48-2c-806. Reliance by member or manager on reports and information.
1929 Unless a member or manager has knowledge concerning the matter in question that makes
1930 reliance unwarranted, the member or manager shall be fully protected in relying in good faith
1931 upon:
1932 (1) the records of the company; and
1933 (2) the information, opinions, reports, or statements presented to the company by any of
1934 its other managers, members, employees or committees, or by any other person, as to matters the
1935 member or manager reasonably believes are within the other person's professional or expert
1936 competence, including, but not limited to, information, opinions, reports, or statements as to the
1937 value and amount of assets, liabilities, profits or losses of the company, or any other facts pertinent
1938 to the existence and amount of assets from which distributions to members might properly be paid.
1939 Section 93. Section 48-2c-807 is enacted to read:
1940 48-2c-807. Duties of managers and members.
1941 (1) Unless otherwise provided in the articles of organization or an operating agreement,
1942 a member or manager shall not be liable or accountable in damages or otherwise to the company
1943 or the members for any action taken or failure to act on behalf of the company unless the act or
1944 omission constitutes gross negligence or willful misconduct.
1945 (2) Unless otherwise provided in an operating agreement, each member and manager must
1946 account to the company and hold as trustee for it any profit or benefit derived by that person
1947 without the consent of members holding a majority interest in profits in the company, from:
1948 (a) any transaction connected with the conduct of the company's business or winding up
1949 of the company; or

1950 (b) any use by the member or manager of company property, including, but not limited to,
1951 confidential or proprietary information of the company or other matters entrusted to the person in
1952 the capacity of a member or manager.
1953 (3) A member of a manager-managed company who is not also a manager owes no
1954 fiduciary duties to the company or to the other members solely by reason of acting in the capacity
1955 of a member.
1956 Section 94. Section 48-2c-808 is enacted to read:
1957 48-2c-808. Actions by multiple managers.
1958 Unless otherwise provided in the articles of organization or operating agreement, where
1959 there are multiple managers, on any matter that is to be voted on by the managers:
1960 (1) the managers may take action without a meeting, without prior notice, and without a
1961 vote, if a consent in writing, setting forth the action so taken, is signed by all of the managers; and
1962 (2) the managers may not vote by proxy.
1963 Section 95. Section 48-2c-809 is enacted to read:
1964 48-2c-809. Removal by judicial proceeding.
1965 (1) The district court of the county in this state where a company's designated office is
1966 located, or if it has no designated office in this state, its registered office is located, may remove
1967 a manager of a manager-managed company in a proceeding commenced either by the company or
1968 by its members holding at least 25% of the interests in profits of the company if the court finds
1969 that:
1970 (a) the manager engaged in fraudulent or dishonest conduct or gross abuse of authority or
1971 discretion with respect to the company; and
1972 (b) removal is in the best interests of the company.
1973 (2) The court that removes a manager may bar the manager from reelection for a period
1974 prescribed by the court.
1975 (3) If members commence a proceeding under Subsection (1) above, they shall make the
1976 company a party defendant.
1977 (4) Subsections (1), (2), and (3) shall also apply to enable the removal of a member in a
1978 member-managed company from having any management authority or powers on behalf of the
1979 company.
1980 (5) If the court orders removal of a manager or member under this section, the clerk of the

1981 court shall deliver a certified copy of the order to the division for filing.
1982 Section 96. Section 48-2c-901 is enacted to read:
1983 Part 9. Contributions _ Profits and Losses
1984 48-2c-901. Form of contribution.
1985 The contribution of a member to the company may consist of cash, property, services
1986 rendered, or a promissory note or other binding obligation to contribute cash or property or to
1987 perform services, or any combination of the foregoing.
1988 Section 97. Section 48-2c-902 is enacted to read:
1989 48-2c-902. Assessments for additional contributions.
1990 Except as otherwise provided in the articles of organization, operating agreement, or other
1991 writing binding on the members, no additional contributions shall be required of any member and
1992 no member shall be subject to assessment for additional contributions to the company.
1993 Nevertheless, where an assessment obligation is provided for, the obligation shall not be construed
1994 as conferring any rights upon any creditor or upon any person not a party to the operating
1995 agreement.
1996 Section 98. Section 48-2c-903 is enacted to read:
1997 48-2c-903. Capital accounts.
1998 (1) A capital account shall be maintained for each member. The capital account of each
1999 member represents that member's share of the net assets of the company. Except as otherwise
2000 provided in the articles of organization or operating agreement, the capital accounts of all members
2001 shall be adjusted, either increased or decreased, to reflect the revaluation of company assets,
2002 including intangible assets such as goodwill, on the company's books in connection with any of
2003 the following events:
2004 (a) a capital contribution (other than a de minimis contribution) made by or on behalf of
2005 a new member or an additional capital contribution (other than a de minimis contribution) made
2006 by or on behalf of an existing member;
2007 (b) a distribution (other than a de minimis amount) made in partial or complete redemption
2008 of a member's interest in the company; or
2009 (c) the dissolution and winding up of the company.
2010 (2) Upon any such revaluation event, the book value of company assets shall be adjusted
2011 to fair market value and unrealized income, gain, loss, or deduction inherent in such company

2012 assets (that have not been previously reflected in the members' capital accounts) shall be allocated
2013 to the members' capital accounts.
2014 Section 99. Section 48-2c-904 is enacted to read:
2015 48-2c-904. Valuation of member's interest in the company.
2016 Except as otherwise provided in the operating agreement, the fair market value of a
2017 member's interest in the company at any given time shall be the value at which the interest would
2018 change hands in an arms-length transaction between an informed and willing buyer and an
2019 informed and willing seller, neither being under any compulsion to buy or to sell, taking into
2020 consideration all relevant facts and circumstances, including the provisions of the articles of
2021 organization and operating agreement and all relevant discounts or premiums.
2022 Section 100. Section 48-2c-905 is enacted to read:
2023 48-2c-905. Redemption of interest.
2024 (1) Subject to Section 48-2c-1005 , a member may rightfully demand payment from the
2025 company of the fair market value of the member's interest in the company only:
2026 (a) upon the dissolution and completion of winding up of the company; or
2027 (b) upon the date or occurrence of an event specified in the articles of organization or
2028 operating agreement for redemption of the member's interest.
2029 (2) Except as otherwise provided in the articles of organization or operating agreement or
2030 with consent of all members, a member, regardless of the nature of the member's contribution, has
2031 only the right to receive cash in redemption of the member's interest in the company.
2032 Section 101. Section 48-2c-906 is enacted to read:
2033 48-2c-906. Allocation of profits and losses.
2034 The profits and losses of a company shall be allocated among the members in the manner
2035 provided in the operating agreement. If the operating agreement does not otherwise provide,
2036 profits and losses shall be allocated in proportion to the members' capital account balances as of
2037 the beginning of the company's current fiscal year.
2038 Section 102. Section 48-2c-1001 is enacted to read:
2039 Part 10. Distributions
2040 48-2c-1001. Allocation of current distributions.
2041 Except as otherwise provided in the operating agreement, current distributions of profits
2042 and gains of a company shall be in the form of cash. Current distributions shall be allocated

2043 among the members in the manner provided in the operating agreement. If the operating
2044 agreement does not otherwise provide, current distributions shall be allocated among the members
2045 in proportion to the members' capital account balances as of the beginning of the company's current
2046 fiscal year.
2047 Section 103. Section 48-2c-1002 is enacted to read:
2048 48-2c-1002. Timing of distributions.
2049 Distributions to members shall be made at the times or upon the happening of the events
2050 specified in the operating agreement. If the operating agreement does not otherwise provide, each
2051 current distribution shall be made to all members concurrently, or at other times determined by the
2052 members in a member-managed company, or by the managers in a manager-managed company.
2053 Section 104. Section 48-2c-1003 is enacted to read:
2054 48-2c-1003. Liquidating distributions.
2055 Distributions to the members in connection with the dissolution and winding up of a
2056 company shall be made in accordance with Section 48-2c-1308 .
2057 Section 105. Section 48-2c-1004 is enacted to read:
2058 48-2c-1004. Right to distributions.
2059 At the time a member becomes entitled to receive a distribution from the company, the
2060 member has the status of, and is entitled to all remedies available to, a creditor of the company
2061 with respect to the distribution.
2062 Section 106. Section 48-2c-1005 is enacted to read:
2063 48-2c-1005. Limitations on distributions.
2064 (1) No distribution may be made by a company if, after giving effect to the distribution:
2065 (a) the company would not be able to pay its debts as they become due in the usual and
2066 regular course of its business; or
2067 (b) the value of the company's total assets would be less than the sum of its total liabilities
2068 plus, unless the articles of organization or the operating agreement permits otherwise, the amount
2069 that would be needed, if the company were to be dissolved and wound up at the time of the
2070 distribution, to satisfy the preferential rights upon dissolution and winding up of members whose
2071 preferential rights are superior to the rights of members receiving the distribution.
2072 (2) The company may base a determination that a distribution is not prohibited under
2073 Subsection (1) either on:

2074 (a) financial statements prepared on the basis of accounting practices and principles that
2075 are reasonable in the circumstances; or
2076 (b) a fair valuation or other method that is reasonable in the circumstances.
2077 (3) The effect of a distribution under Subsection (1) is measured as of:
2078 (a) the date the distribution is authorized if the payment occurs within 30 days after the
2079 date of authorization; or
2080 (b) the date the payment is made if it occurs more than 30 days after the date of
2081 authorization.
2082 Section 107. Section 48-2c-1006 is enacted to read:
2083 48-2c-1006. Duty to return wrongful distributions.
2084 If a member receives a distribution by mistake or in violation of the articles of organization,
2085 the operating agreement, or Section 48-2c-1005 , that member is obligated to return the wrongful
2086 distribution to the company and shall remain liable to the company for a period of five years
2087 thereafter for the amount of the distribution wrongfully made provided a proceeding to recover the
2088 distribution from the member is commenced prior to the expiration of the five-year period.
2089 Section 108. Section 48-2c-1007 is enacted to read:
2090 48-2c-1007. Distribution in kind.
2091 (1) Except as otherwise provided in the articles of organization or operating agreement,
2092 a member, regardless of the nature of the member's contribution, has no right to demand and
2093 receive any distribution from the company in any form other than cash.
2094 (2) Except for an asset contributed by the member or as otherwise provided in the articles
2095 or organization or operating agreement, a member may not be compelled to accept a distribution
2096 of any asset in kind from a company to the extent that the percentage of the asset distributed to the
2097 member exceeds a percentage of that asset which is equal to the percentage in which the member
2098 shares in distributions from the company.
2099 Section 109. Section 48-2c-1008 is enacted to read:
2100 48-2c-1008. Unclaimed distributions.
2101 If a company has mailed three successive distributions to a member addressed to the
2102 member's address shown on the company's current record of members and the distributions have
2103 been returned as undeliverable, no further attempt to deliver distributions to that member need be
2104 made until another address for the member is made known to the company, at which time all

2105 distributions accumulated by reason of this section shall, except as otherwise provided by law, be
2106 mailed to the member at the other address.
2107 Section 110. Section 48-2c-1101 is enacted to read:
2108 Part 11. Assignment of Interests
2109 48-2c-1101. Assignment of interests.
2110 Unless otherwise provided in the articles of organization or operating agreement, a
2111 member's interest in a company is assignable in whole or in part. An assignment of an interest in
2112 a company does not of itself dissolve the company.
2113 Section 111. Section 48-2c-1102 is enacted to read:
2114 48-2c-1102. Rights of assignee.
2115 An assignment of an interest in a company does not entitle the assignee to participate in
2116 the management and affairs of the company or to vote or to become a member or to exercise any
2117 rights of a member or manager. An assignment only entitles the assignee to receive, to the extent
2118 assigned, any share of profits and losses and distributions to which the assignor would be entitled.
2119 Section 112. Section 48-2c-1103 is enacted to read:
2120 48-2c-1103. Rights of creditor of member.
2121 (1) On application to a court of competent jurisdiction by any judgment creditor of a
2122 member or of a member's assignee, the court may charge the interest in the company of the
2123 member or assignee with payment of the unsatisfied amount of the judgment plus interest. The
2124 court may then or later appoint a receiver of the share of distributions due or to become due to the
2125 judgment debtor in respect of the interest in the company. The receiver shall have only the rights
2126 of an assignee. The court may make all other orders, directions, accounts, and inquiries the
2127 judgment debtor might have made or which the circumstances of the case may require.
2128 (2) A charging order constitutes a lien on the judgment debtor's interest in the company.
2129 The court may order a foreclosure of the interest subject to the charging order at any time. The
2130 purchaser at the foreclosure sale has only the rights of an assignee.
2131 (3) Unless otherwise provided in the articles or organization or operating agreement for
2132 the company, at any time before foreclosure an interest charged may be redeemed:
2133 (a) by the judgment debtor;
2134 (b) with property other than company property, by one or more of the other members; or
2135 (c) by the company with the consent of all of the members whose interests are not so

2136 charged.
2137 (4) This section does not deprive a member of a right under exemption laws with respect
2138 to the member's interest in a company.
2139 (5) This section provides the exclusive remedy by which a judgment creditor of a member
2140 or a member's assignee may satisfy a judgment out of the judgment debtor's interest in a company.
2141 (6) No creditor of a member shall have any right to obtain possession of, or otherwise
2142 exercise legal or equitable remedies with respect to, the property of the company.
2143 Section 113. Section 48-2c-1104 is enacted to read:
2144 48-2c-1104. Right of assignee to become member.
2145 (1) Except as otherwise provided in the articles of organization or operating agreement,
2146 an assignee of an interest in a company may become a member only upon the consent of all
2147 members and upon signing the operating agreement or other writing by which the assignee agrees
2148 to be bound by the operating agreement.
2149 (2) An assignee who has become a member has, with respect to the interest assigned, the
2150 rights and powers, and is subject to the restrictions and liabilities, of a member under the articles
2151 of organization, the operating agreement and this chapter.
2152 (3) An assignee who becomes a member is liable for any obligations of his assignor to
2153 make contributions and to return distributions as provided in this chapter. However, an assignee
2154 who becomes a member is not obligated for liabilities of the assignor unknown to the assignee at
2155 the time the assignee became a member but has constructive notice of any obligations described
2156 in the articles of organization or operating agreement of the company.
2157 Section 114. Section 48-2c-1105 is enacted to read:
2158 48-2c-1105. Liability of assignor continues.
2159 An assignor of an interest in a company is not released from liability to the company by
2160 reason of the assignment or by reason of the assignee's becoming a member.
2161 Section 115. Section 48-2c-1106 is enacted to read:
2162 48-2c-1106. Invalid transfers.
2163 Any transfer or assignment of a member's interest in a company in violation of this part is
2164 void.
2165 Section 116. Section 48-2c-1201 is enacted to read:
2166 Part 12. Dissolution

2167 48-2c-1201. Events of dissolution.
2168 A company organized under this chapter shall be dissolved upon the occurrence of any of
2169 the following events:
2170 (1) when the period fixed for the duration of the company, pursuant to Subsection
2171 48-2c-403 (4)(c), expires;
2172 (2) at such times as the company fails to have at least one member;
2173 (3) by written agreement signed by all members;
2174 (4) upon the occurrence of a dissolution event specified in the articles of organization or
2175 operating agreement;
2176 (5) when the company is not the successor company in the merger or consolidation of two
2177 or more companies;
2178 (6) upon administrative dissolution under Section 48-2c-1207 , subject to right of
2179 reinstatement under Section 48-2c-1208 ; or
2180 (7) upon entry of a decree of judicial dissolution under Section 48-2c-1213 .
2181 Section 117. Section 48-2c-1202 is enacted to read:
2182 48-2c-1202. Voluntary cancellation of certificate.
2183 Articles of organization may be canceled voluntarily at any time by consent of all members
2184 or their successors in interest by submitting to the division for filing a certificate of cancellation
2185 that sets forth:
2186 (1) the name of the company;
2187 (2) the date of filing of its articles of organization;
2188 (3) the effective date of cancellation, which shall be a date certain, if the cancellation is
2189 not to be effective upon the filing of the certificate; and
2190 (4) any other information the person filing the certificate determines to be appropriate.
2191 Section 118. Section 48-2c-1203 is enacted to read:
2192 48-2c-1203. Effect of dissolution.
2193 (1) A dissolved company continues its existence but may not carry on any business or
2194 activities except as appropriate to wind up and liquidate its business and affairs, as provided in Part
2195 13 of this chapter.
2196 (2) Dissolution of a company does not:
2197 (a) transfer title to the company's property;

2198 (b) prevent transfer of an interest in the company;
2199 (c) subject its members or managers to standards of conduct different from those
2200 prescribed in Part 8;
2201 (d) change:
2202 (i) limited liability provided under Part 6 of this chapter;
2203 (ii) voting requirements for its members or managers;
2204 (iii) provisions for selection, resignation, or removal of its managers; or
2205 (iv) provisions for amending its articles of organization or operating agreement;
2206 (e) prevent commencement of a proceeding by or against the company in its company
2207 name;
2208 (f) abate or suspend a proceeding pending by or against the company on the effective date
2209 of dissolution; or
2210 (g) terminate the authority of the registered agent of the company.
2211 Section 119. Section 48-2c-1204 is enacted to read:
2212 48-2c-1204. Articles of dissolution.
2213 (1) After any event of dissolution, other than the events described in Subsection
2214 48-2c-1201 (6) or (7), the company, or a person acting for the company, shall deliver to the division
2215 for filing articles of dissolution setting forth:
2216 (a) the name of the company;
2217 (b) the address of the company's designated office or, if none is to be maintained, a
2218 statement that the company will not maintain a designated office, and, if different from the address
2219 of the designated office or if no designated office is to be maintained, the address to which service
2220 of process may be mailed pursuant to Section 48-2c-308 ;
2221 (c) the effective date of the dissolution;
2222 (d) the event causing the dissolution;
2223 (e) if dissolution occurred by written agreement of the members, a statement to that effect;
2224 and
2225 (f) any additional information the division determines is necessary or appropriate.
2226 (2) A company is dissolved upon the effective date of dissolution set forth in its articles
2227 of dissolution.
2228 Section 120. Section 48-2c-1205 is enacted to read:

2229 48-2c-1205. Revocation of voluntary dissolution.
2230 (1) Where the event of dissolution is the written agreement of the members, a company
2231 may revoke its dissolution within 120 days after the effective date of the dissolution.
2232 (2) Revocation of the voluntary dissolution must be approved by all of the members.
2233 (3) After the revocation of voluntary dissolution is approved by all of the members, the
2234 company may revoke the dissolution by delivering to the division for filing articles of revocation
2235 of dissolution, together with a copy of its articles of dissolution, that set forth:
2236 (a) the name of the company;
2237 (b) the effective date of the dissolution that was revoked; and
2238 (c) the date that the revocation of dissolution was authorized by the members.
2239 (4) Revocation of the voluntary dissolution is effective when the articles of revocation of
2240 dissolution are filed with the division. A provision may not be made for a delayed effective date
2241 for revocation of voluntary dissolution.
2242 (5) When the revocation of voluntary dissolution is effective, it relates back to and takes
2243 effect as of the effective date of the dissolution and the company may carry on its business as if
2244 the dissolution had never occurred.
2245 Section 121. Section 48-2c-1206 is enacted to read:
2246 48-2c-1206. Grounds for administrative dissolution.
2247 The division may dissolve a company under Section 48-2c-1207 if:
2248 (1) the company does not pay when due, any taxes, fees, or penalties imposed by this
2249 chapter or other applicable laws of this state;
2250 (2) the company does not file its annual report with the division when it is due;
2251 (3) the company is without a registered agent or registered office in this state; or
2252 (4) the company fails to give notice to the division that:
2253 (a) its registered agent or registered office has been changed;
2254 (b) its registered agent has resigned;
2255 (c) its registered office has been discontinued; or
2256 (d) the company's period of duration has expired.
2257 Section 122. Section 48-2c-1207 is enacted to read:
2258 48-2c-1207. Procedure for and effect of administrative dissolution.
2259 (1) If the division determines that one or more grounds exist under Section 48-2c-1206 for

2260 dissolving a company, it shall mail to the company written notice of:
2261 (a) the division's determination that one or more grounds exist for dissolving the company;
2262 and
2263 (b) the grounds for dissolving the company.
2264 (2) (a) If the company does not correct each ground for dissolution, or demonstrate to the
2265 reasonable satisfaction of the division that each ground does not exist, within 60 days after mailing
2266 the notice provided in Subsection (1), the division shall administratively dissolve the company.
2267 (b) If a company is dissolved under Subsection (2)(a), the division shall mail written notice
2268 of the administrative dissolution to the dissolved company at its designated office, stating the date
2269 of dissolution specified in Subsection (2)(d).
2270 (c) The division shall mail a copy of the notice of administrative dissolution including a
2271 statement of the grounds therefor, to:
2272 (i) the registered agent of the dissolved company; or
2273 (ii) if there is no registered agent of record, or if the mailing to the registered agent is
2274 returned as undeliverable, at least one member if the company is member-managed or one manager
2275 of the company if the company is manager-managed, at their addresses as reflected on the notice,
2276 annual report, or document most recently filed with the division.
2277 (d) A company's effective date of administrative dissolution is five days after the date the
2278 division mails the written notice of dissolution under Subsection (2)(b).
2279 (e) On the effective date of dissolution, any assumed names filed on behalf of the dissolved
2280 company under Title 42, Chapter 2, Conducting Business Under Assumed Name, are canceled.
2281 (f) Notwithstanding Subsection (2)(e), the name of the company that is dissolved and any
2282 assumed names filed on its behalf are not available for two years from the effective date of
2283 dissolution for use by any other person:
2284 (i) transacting business in this state; or
2285 (ii) doing business under an assumed name under Title 42, Chapter 2, Conducting
2286 Business Under Assumed Name.
2287 (g) Notwithstanding Subsection (2)(e), if the company that is dissolved is reinstated in
2288 accordance with Section 48-2c-1208 , the registration of the name of the company and any assumed
2289 names filed on its behalf are reinstated back to the effective date of dissolution.
2290 (3) (a) Except as provided in Subsection (3)(b), a company administratively dissolved

2291 under this section continues its existence but may not carry on any business except:
2292 (i) the business necessary to wind up and liquidate its business and affairs under Part 13
2293 of this chapter; and
2294 (ii) to give notice to claimants in the manner provided in Sections 48-2c-1305 and
2295 48-2c-1306 .
2296 (b) If the company is reinstated in accordance with Section 48-2c-1208 , business
2297 conducted by the company during a period of administrative dissolution is unaffected by the
2298 dissolution.
2299 (4) The administrative dissolution of a company does not terminate the authority of its
2300 registered agent.
2301 (5) (a) Upon the administrative dissolution of a company, the division shall be an
2302 additional agent of the dissolved company for purposes of service of process.
2303 (b) Service of process on the division under this Subsection (5) is service on the dissolved
2304 company.
2305 (c) Upon receipt of process under this Subsection (5), the division shall send a copy of the
2306 process to the dissolved company at its designated office and a copy of the process to the registered
2307 agent of the dissolved company.
2308 (6) A notice mailed under this section shall be:
2309 (a) mailed first-class, postage prepaid; and
2310 (b) addressed to the most current mailing address appearing on the records of the division
2311 for:
2312 (i) the designated office of the company, if the notice is required to be mailed to the
2313 company;
2314 (ii) the registered agent of the company, if the notice is required to be mailed to the
2315 registered agent; or
2316 (iii) any member if the company is member-managed, or to any manager of the company
2317 if the company is manager-managed, if the notice is required to be mailed to a member or manager
2318 of the company.
2319 Section 123. Section 48-2c-1208 is enacted to read:
2320 48-2c-1208. Reinstatement following administrative dissolution.
2321 (1) A company dissolved under Section 48-2c-1207 may apply to the division for

2322 reinstatement within two years after the effective date of dissolution by delivering to the division
2323 for filing an application for reinstatement that states:
2324 (a) the effective date of the company's dissolution;
2325 (b) the company name as of the effective date of dissolution;
2326 (c) that the ground for dissolution either did not exist or has been eliminated;
2327 (d) the name under which the company is being reinstated, if different than the name stated
2328 in Subsection (1)(b);
2329 (e) that the name stated in Subsection (1)(d) satisfies the requirements of Section
2330 48-2c-106 ;
2331 (f) that all fees or penalties imposed pursuant to this chapter or otherwise owed by the
2332 company to the state have been paid;
2333 (g) the address of the designated office of the company;
2334 (h) the address of its registered office in this state; and
2335 (i) the name of its registered agent at the office stated in Subsection (1)(h) and any
2336 additional information the division determines to be necessary or appropriate.
2337 (2) The company shall include in or with the application for reinstatement the written
2338 consent to appointment by the designated registered agent.
2339 (3) If the division determines that the application for reinstatement contains the
2340 information required by Subsections (1) and (2) and that the information is correct, the division
2341 shall revoke the administrative dissolution. The division shall mail to the company in the manner
2342 provided in Subsection 48-2c-1207 (6) written notice of:
2343 (a) the revocation; and
2344 (b) the effective date of the revocation.
2345 (4) When the reinstatement is effective, it relates back to the effective date of the
2346 administrative dissolution. Upon reinstatement:
2347 (a) an act of the company during the period of dissolution is effective and enforceable as
2348 if the administrative dissolution had never occurred; and
2349 (b) the company may carry on its business, under the name stated pursuant to Subsection
2350 (1)(b) or (1)(d), as if the administrative dissolution had never occurred.
2351 Section 124. Section 48-2c-1209 is enacted to read:
2352 48-2c-1209. Appeal from denial of reinstatement.

2353 If the division denies a company's application for reinstatement under Section 48-2c-1208
2354 following administrative dissolution, the division shall mail to the company in the manner
2355 provided in Subsection 48-2c-1207 (6) written notice:
2356 (1) setting forth the reasons for denying the application; and
2357 (2) stating that the company has the right to appeal the division's determination to the
2358 executive director of the Department of Commerce in accordance with Title 63, Chapter 46b,
2359 Administrative Procedures Act.
2360 Section 125. Section 48-2c-1210 is enacted to read:
2361 48-2c-1210. Grounds for judicial dissolution.
2362 (1) A company may be dissolved in a proceeding filed by the attorney general or the
2363 director of the division if it is established that the company:
2364 (a) obtained the filing of its articles of organization through fraud;
2365 (b) continually exceeded or abused the authority conferred upon it by law;
2366 (c) committed a violation of any provision of law whereby it has forfeited its charter;
2367 (d) carried on, conducted, or transacted its business in a persistently fraudulent or illegal
2368 manner;
2369 (e) abused its powers contrary to the public policy of this state; or
2370 (f) failed to amend its articles of organization as required by Section 48-2c-405 .
2371 (2) A company may be dissolved in a proceeding filed by any member if it is established
2372 that:
2373 (a) the managers are deadlocked in management of company affairs and the members are
2374 unable to break the deadlock, irreparable injury to the company is threatened or being suffered, or
2375 the business and affairs of the company can no longer be conducted to the advantage of the
2376 members generally, because of the deadlock;
2377 (b) the managers or those in control of the company have acted, are acting, or will act in
2378 a manner that is illegal, oppressive, or fraudulent;
2379 (c) the members are deadlocked in voting power and the deadlock has continued for a
2380 period of at least six months;
2381 (d) the company assets are being misapplied or wasted; or
2382 (e) it is not reasonably practical to carry on the business of the company in conformity with
2383 its articles of organization and operating agreement.

2384 (3) A company may be dissolved in a proceeding filed by a creditor of the company if it
2385 is established that:
2386 (a) the creditor's claim has been reduced to judgment, the execution on the judgment has
2387 been returned unsatisfied, and the company is insolvent; or
2388 (b) the company is insolvent and the company has admitted in writing that the creditor's
2389 claim is due and owing.
2390 (4) A company may commence a proceeding under this section when the company seeks
2391 to have its voluntary dissolution continued under court supervision.
2392 Section 126. Section 48-2c-1211 is enacted to read:
2393 48-2c-1211. Procedure for judicial dissolution.
2394 (1) A proceeding by the attorney general or director of the division to dissolve a company
2395 shall be brought in either the district court of the county in this state in which the designated office
2396 or, if it has no designated office in this state, its registered office is or was last located, or the
2397 district court of Salt Lake County. A proceeding brought by any other party named in Section
2398 48-2c-1210 shall be brought in the district court of the county in this state where the company's
2399 designated office or, if it has no designated office in this state, its registered office is or was last
2400 located.
2401 (2) It is not necessary to make any member or manager a party to a proceeding to dissolve
2402 a company unless relief is sought against them individually.
2403 (3) A court in a proceeding brought to dissolve a company may issue injunctions, appoint
2404 a receiver or custodian pendente lite with all powers and duties the court directs, take other action
2405 required to preserve the company's assets wherever located, and carry on the business of the
2406 company until a full hearing can be held.
2407 Section 127. Section 48-2c-1212 is enacted to read:
2408 48-2c-1212. Receivership or custodianship.
2409 (1) A court in a judicial proceeding brought to dissolve a company may, at any time before
2410 entering a decree of dissolution, appoint one or more custodians to manage the business and affairs
2411 of the company until further order of the court and may, upon or after entering a decree dissolving
2412 the company, appoint one or more receivers to wind up and liquidate the business and affairs of
2413 the company. The court shall hold a hearing, after giving notice to all parties to the proceeding and
2414 any interested persons designated by the court, before appointing a receiver or a custodian. The

2415 court appointing a receiver or custodian has exclusive jurisdiction over the company and all of its
2416 property wherever located.
2417 (2) The court may appoint any person or the court may require the receiver or custodian
2418 to post bond, with or without sureties, in an amount the court directs.
2419 (3) The court shall describe the powers and duties of the receiver or custodian in its
2420 appointing order, which may be amended from time to time. Among other powers:
2421 (a) the receiver:
2422 (i) may dispose of all or any part of the assets of the company wherever located, at a public
2423 or private sale, if authorized by the court; and
2424 (ii) may sue and defend in its own name as receiver of the company in all courts of this
2425 state; or
2426 (b) the custodian may exercise all of the powers of the company, through or in place of its
2427 members or managers, to the extent necessary to manage the affairs of the company in the best
2428 interests of its members and creditors.
2429 (4) The court during a receivership may redesignate the receiver a custodian, and during
2430 a custodianship may redesignate the custodian a receiver, if doing so is in the best interests of the
2431 company, its members, and its creditors.
2432 (5) The court from time to time during the receivership or custodianship may order
2433 compensation paid and expense disbursements or reimbursements made to the receiver or
2434 custodian and the custodian's or receiver's counsel from the assets of the company or proceeds
2435 from the sale of the assets.
2436 Section 128. Section 48-2c-1213 is enacted to read:
2437 48-2c-1213. Decree of dissolution.
2438 (1) If after a hearing the court determines that one or more grounds for judicial dissolution
2439 described in Section 48-2c-1210 exist, it may enter a decree dissolving the company and specifying
2440 the effective date of the dissolution. The clerk of the court shall deliver a certified copy of the
2441 decree to the division for filing and shall mail a copy of the decree to the registered agent of the
2442 company or to the division if it has no registered agent of record.
2443 (2) After entering the decree of dissolution, the court shall direct the winding up and
2444 liquidation of the company's business and affairs in accordance with Part 13.
2445 (3) The court's order may be appealed as in other civil proceedings.

2446 Section 129. Section 48-2c-1214 is enacted to read:
2447 48-2c-1214. Election to purchase in lieu of dissolution.
2448 (1) In a proceeding under Subsection 48-2c-1210 (2) to dissolve a company, the company
2449 may elect, or if it fails to elect, one of more members may elect to purchase the interest in the
2450 company owned by the petitioning member at the fair market value of the interest, determined as
2451 provided in this section. An election pursuant to this section is irrevocable unless the court
2452 determines that it is equitable to set aside or modify the election.
2453 (2) (a) An election to purchase pursuant to this section may be filed with the court at any
2454 time within 90 days after the filing of the petition in a proceeding under Subsection 48-2c-1210 (2)
2455 or at any later time as the court in its discretion may allow. If the company files an election with
2456 the court within the 90-day period, or at any later time allowed by the court, to purchase the
2457 interest in the company owned by the petitioning member, the company shall purchase the interest
2458 in the manner provided in this section.
2459 (b) If the company does not file an election with the court within the time period, but an
2460 election to purchase the interest in the company owned by the petitioning member is filed by one
2461 or more members within the time period, the company shall, within ten days after the later of the
2462 end of the time period allowed for the filing of elections to purchase under this section or
2463 notification from the court of an election by members to purchase the interest in the company
2464 owned by the petitioning member as provided in this section, give written notice of the election
2465 to purchase to all members of the company, other than the petitioning member. The notice shall
2466 state the name and the percentage interest in the company owned by the petitioning member and
2467 the name and the percentage interest in the company owned by each electing member. The notice
2468 shall advise any recipients who have not participated in the election of their right to join in the
2469 election to purchase the interest in the company in accordance with this section, and of the date
2470 by which any notice of intent to participate must be filed with the court.
2471 (c) Members who wish to participate in the purchase of the interest in the company of the
2472 petitioning member must file notice of their intention to join in the purchase by electing members,
2473 no later than 30 days after the effective date of the company's notice of their right to join in the
2474 election to purchase.
2475 (d) All members who have filed with the court an election or notice of their intention to
2476 participate in the election to purchase the interest in the company of the petitioning member

2477 thereby become irrevocably obligated to participate in the purchase of the interest from the
2478 petitioning member upon the terms and conditions of this section, unless the court otherwise
2479 directs.
2480 (e) After an election has been filed by the company or one or more members, the
2481 proceedings under Subsection 48-2c-1210 (2) may not be discontinued or settled, nor may the
2482 petitioning member sell or otherwise dispose of his interest in the company, unless the court
2483 determines that it would be equitable to the company and the members, other than the petitioning
2484 member, to permit any discontinuance, settlement, sale, or other disposition.
2485 (3) If, within 60 days after the earlier of the company filing of an election to purchase the
2486 interest in the company of the petitioning member or the company's mailing of a notice to its
2487 members of the filing of an election by the members to purchase the interest in the company of the
2488 petitioning member, the petitioning member and electing company or members reach agreement
2489 as to the fair market value and terms of the purchase of the petitioning member's interest, the court
2490 shall enter an order directing the purchase of the petitioning member's interest, upon the terms and
2491 conditions agreed to by the parties.
2492 (4) If the parties are unable to reach an agreement as provided for in Subsection (3), upon
2493 application of any party, the court shall stay the proceedings under Subsection 48-2c-1210 (2) and
2494 determine the fair market value of the petitioning member's interest in the company as of the day
2495 before the date on which the petition under Subsection 48-2c-1210 (2) was filed or as of any other
2496 date the court determines to be appropriate under the circumstances and based on the factors the
2497 court determines to be appropriate.
2498 (5) (a) Upon determining the fair market value of the interest in the company of the
2499 petitioning member, the court shall enter an order directing the purchase of the interest in the
2500 company upon terms and conditions the court determines to be appropriate. The terms and
2501 conditions may include payment of the purchase price in installments, where necessary in the
2502 interest of equity, provision for security to assure payment of the purchase price and any additional
2503 costs, fees, and expenses awarded by the court, and an allocation of the interest in the company
2504 among members if the interest in the company is to be purchased by members.
2505 (b) In allocating the petitioning member's interest in the company among holders of
2506 different classes of members, the court shall attempt to preserve the existing distribution of voting
2507 rights among member classes to the extent practicable. The court may direct that holders of a

2508 specific class or classes shall not participate in the purchase. The court may not require any
2509 electing member to purchase more of the interest in the company owned by the petitioning member
2510 than the percentage interest that the purchasing member may have set forth in his election or notice
2511 of intent to participate filed with the court.
2512 (c) Interest may be allowed at the rate and from the date determined by the court to be
2513 equitable. However, if the court finds that the refusal of the petitioning member to accept an offer
2514 of payment was arbitrary or otherwise not in good faith, interest may not be allowed.
2515 (d) If the court finds that the petitioning member had probable ground for relief under
2516 Subsection 48-2c-1210 (2)(b) or (2)(d), it may award to the petitioning member reasonable fees and
2517 expenses of counsel and experts employed by the petitioning member.
2518 (6) Upon entry of an order under Subsection (3) or (5), the court shall dismiss the petition
2519 to dissolve the company under Subsection 48-2c-1210 (2) and the petitioning member shall no
2520 longer have any rights or status as a member of the company, except the right to receive the
2521 amounts awarded to him by the court. The award is enforceable in the same manner as any other
2522 judgment.
2523 (7) (a) The purchase ordered pursuant to Subsection (5) shall be made within ten days after
2524 the date the order becomes final, unless before that time the company files with the court a notice
2525 of its intention to adopt articles of dissolution pursuant to Section 48-2c-1204 . The articles of
2526 dissolution must then be adopted and filed within 60 days after notice.
2527 (b) Upon filing of articles of dissolution, the company is dissolved and shall be wound up
2528 pursuant to Part 13 of this chapter, and the order entered pursuant to Subsection (5) is no longer
2529 of any force or effect. However, the court may award the petitioning member reasonable fees and
2530 expenses in accordance with the provisions of Subsection (5)(d). The petitioning member may
2531 continue to pursue any claims previously asserted on behalf of the company.
2532 (8) Any payment by the company pursuant to an order under Subsection (3) or (5), other
2533 than an award of fees and expenses pursuant to Subsection (5)(d), is subject to the provisions of
2534 Sections 48-2c-1005 and 48-2c-1006 .
2535 Section 130. Section 48-2c-1301 is enacted to read:
2536 Part 13. Winding Up
2537 48-2c-1301. Winding up defined.
2538 The winding up of a dissolved company is the process consisting of collecting all amounts

2539 owed to the company, selling or otherwise disposing of the company's assets and property, paying
2540 or discharging the taxes, debts and liabilities of the company or making provision for the payment
2541 or discharge, and distributing all remaining company assets and property among the members of
2542 the company according to their interests. There is no fixed time period for completion of winding
2543 up a dissolved company except that the winding up should be completed within a reasonable time
2544 under the circumstances.
2545 Section 131. Section 48-2c-1302 is enacted to read:
2546 48-2c-1302. Powers of company in winding up.
2547 A dissolved company in winding up has all powers of a company that is not dissolved but
2548 those powers may be used only for the purpose of winding up and not for the carrying on of any
2549 business or activity other than that necessary for winding up. Those powers include, but are not
2550 limited to, the power to:
2551 (1) continue the business of the company for the time reasonably necessary to obtain
2552 appropriate financial results for the members and creditors of the company;
2553 (2) hire and fire employees, agents, and service providers;
2554 (3) settle or compromise claims or debts owed to the company or claims brought against,
2555 or debts owed by, the company;
2556 (4) sell, exchange, or otherwise dispose of property of the company whether for cash or
2557 on terms;
2558 (5) convey and transfer property of the company;
2559 (6) sue to collect amounts owed to the company and to recover property or rights
2560 belonging to the company;
2561 (7) initiate and defend claims in any proceeding;
2562 (8) settle disputes by mediation, arbitration, or court action; and
2563 (9) perform every other act necessary to wind up and liquidate the business and affairs of
2564 the company.
2565 Section 132. Section 48-2c-1303 is enacted to read:
2566 48-2c-1303. Persons to wind up.
2567 (1) Unless otherwise provided in the operating agreement and except for persons appointed
2568 by the court in a judicial dissolution under Sections 48-2c-1211 through 48-2c-1213 , the following
2569 persons, in the order of priority indicated, shall have the right to wind up the business of a

2570 dissolved company:
2571 (a) if the company is manager-managed, first, the existing managers or, second, an agent
2572 designated by the existing managers or, third, the existing members, or fourth, an agent designated
2573 by the existing members;
2574 (b) if the company is member-managed, first, the existing members or, second, an agent
2575 designated by the existing members;
2576 (c) if there are no existing managers or members, first, an agent designated by the last
2577 surviving member or, second, an agent designated by the successors in interest of the last surviving
2578 member; or
2579 (d) in any situation not covered by Subsection (1)(a), (b), or (c), a person appointed by a
2580 court of competent jurisdiction upon application of any interested person.
2581 (2) The person who winds up the business and affairs of a dissolved company in
2582 conformity with this part:
2583 (a) shall, unless otherwise directed by a court of competent jurisdiction, become a trustee
2584 for the members and creditors of the company and, in that capacity, may sell or distribute any
2585 company property discovered after dissolution, convey real estate, and take any other necessary
2586 action on behalf of and in the name of the company; and
2587 (b) shall not be personally liable to anyone by reason of that person's actions in winding
2588 up the company except for damages resulting from the person's gross negligence of willful
2589 misconduct.
2590 Section 133. Section 48-2c-1304 is enacted to read:
2591 48-2c-1304. Payment of claims and obligations.
2592 (1) A dissolved company in winding up shall pay or make reasonable provision to pay all
2593 claims and obligations, including all contingent, conditional, or unmatured claims and obligations,
2594 known to the company and all claims and obligations which are known to the company but for
2595 which the identity of the claimant is unknown. If there are sufficient assets, the claims and
2596 obligations shall be paid in full and any such provision for payment shall be made in full. If there
2597 are insufficient assets, the claims and obligations shall be paid or provided for according to their
2598 priority under law and, among claims and obligations of equal priority, ratably to the extent of
2599 assets available therefor.
2600 (2) Unless otherwise provided in the articles of organization or operating agreement of the

2601 dissolved company, any remaining assets shall be distributed as provided in Section 48-2c-1308 .
2602 Section 134. Section 48-2c-1305 is enacted to read:
2603 48-2c-1305. Disposition of known claims by notification.
2604 (1) A dissolved company in winding up may dispose of the known claims against it by
2605 following the procedures described in this section.
2606 (2) A company in winding up electing to dispose of known claims pursuant to this section
2607 may give written notice of the company's dissolution to known claimants at any time after the
2608 effective date of the dissolution. The written notice must:
2609 (a) describe the information that must be included in a claim;
2610 (b) provide an address to which written notice of any claim must be given to the company;
2611 (c) state the deadline, which may not be fewer than 120 days after the effective date of the
2612 notice, by which the dissolved company must receive the claim; and
2613 (d) state that, unless sooner barred by another state statute limiting actions, the claim will
2614 be barred if not received by the deadline.
2615 (3) Unless sooner barred by another statute limiting actions, a claim against the dissolved
2616 company is barred if:
2617 (a) a claimant was given notice under Subsection (2) and the claim is not received by the
2618 dissolved company by the deadline; or
2619 (b) the dissolved company delivers to the claimant written notice of rejection of the claim
2620 within 90 days after receipt of the claim and the claimant whose claim was rejected by the
2621 dissolved company does not commence a proceeding to enforce the claim within 90 days after the
2622 effective date of the rejection notice.
2623 (4) Claims which are not rejected by the dissolved company in writing within 90 days after
2624 receipt of the claim by the dissolved company shall be considered approved.
2625 (5) The failure of the dissolved company to give notice to any known claimant pursuant
2626 to Subsection (2) does not affect the disposition under this section of any claim held by any other
2627 known claimant.
2628 (6) For purposes of this section, "claim" does not include a contingent liability or a claim
2629 based on an event occurring after the effective date of dissolution.
2630 Section 135. Section 48-2c-1306 is enacted to read:
2631 48-2c-1306. Disposition of claims by publication.

2632 (1) A dissolved company in winding up may publish notice of its dissolution and request
2633 that persons with claims against the company present them in accordance with the notice.
2634 (2) The notice contemplated in Subsection (1) must:
2635 (a) be published once a week for three successive weeks in a newspaper of general
2636 circulation in the county where the dissolved company's designated office or, if it has no
2637 designated office in this state, its registered office, is or was last located;
2638 (b) describe the information that must be included in a claim and provide an address to
2639 which written notice of any claim must be given to the company;
2640 (c) state the deadline, which may not be fewer than 120 days after the first date of
2641 publication of the notice, by which the dissolved company must receive the claim; and
2642 (d) state that, unless sooner barred by another statute limiting actions, the claim will be
2643 barred if not received by the deadline.
2644 (3) If the dissolved company publishes a newspaper notice in accordance with Subsection
2645 (2), then unless sooner barred under Section 48-2c-1305 or under another statute limiting actions,
2646 the claim of any claimant against the dissolved company is barred if:
2647 (a) the claim is not received by the dissolved company by the deadline; or
2648 (b) the dissolved company delivers to the claimant written notice of rejection of the claim
2649 within 90 days after receipt of the claim and the claimant whose claim was rejected by the
2650 dissolved company does not commence a proceeding to enforce the claim within 90 days after the
2651 effective date of the rejection notice.
2652 (4) Claims which are not rejected by the dissolved company in writing within 90 days after
2653 receipt of the claim by the dissolved company shall be considered approved.
2654 (5) (a) For purposes of this section, "claim" means any claim, including claims of this state
2655 whether known or unknown, due or to become due, absolute or contingent, liquidated or
2656 unliquidated, founded on contract, tort, or other legal basis, or otherwise.
2657 (b) For purposes of this section and Section 48-2c-1305 , a proceeding to enforce a claim
2658 means a civil action or an arbitration under an agreement for binding arbitration between the
2659 dissolved company and the claimant.
2660 Section 136. Section 48-2c-1307 is enacted to read:
2661 48-2c-1307. Enforcement of claims against dissolved company in winding up.
2662 (1) A claim may be enforced:

2663 (a) under Section 48-2c-1305 or 48-2c-1306 against a dissolved company in winding up
2664 to the extent of its undistributed assets; or
2665 (b) against one or more members of the dissolved company to the extent the assets have
2666 been distributed to the members in winding up.
2667 (2) The total liability for all claims under this section may not exceed the total value of
2668 assets distributed to the members during winding up as that value is determined at the time of
2669 distribution.
2670 (3) Any member required to return any portion of the value of assets received by that
2671 member during winding up shall be entitled to contribution from all other members. The
2672 contributions shall be in accordance with the respective rights and interests of the members and
2673 may not exceed the value of the assets received in winding up.
2674 Section 137. Section 48-2c-1308 is enacted to read:
2675 48-2c-1308. Distribution of assets on winding up.
2676 (1) After dissolution, and during winding up, the assets of the company shall be applied
2677 to pay or satisfy:
2678 (a) first, the liabilities to creditors other than members, in the order of priority as provided
2679 by law;
2680 (b) second, the liabilities to members in their capacities as creditors, in the order of priority
2681 as provided by law; and
2682 (c) third, the expenses and cost of winding up.
2683 (2) Company assets remaining after application under Subsection (1) shall be allocated and
2684 distributed to the members as provided in the articles of organization or operating agreement, or
2685 if not so provided, in accordance with the members' final capital account balances after allocation
2686 of all profits and losses including profits and losses accrued or incurred during winding up.
2687 Section 138. Section 48-2c-1309 is enacted to read:
2688 48-2c-1309. Deposit with state treasurer.
2689 Assets of a dissolved company that should be transferred to a creditor, claimant, or member
2690 of the company who cannot be found shall be reduced to cash and deposited with the state treasurer
2691 in accordance with Title 67, Chapter 4a, Unclaimed Property Act.
2692 Section 139. Section 48-2c-1401 is enacted to read:
2693 Part 14. Conversions and Mergers

2694 48-2c-1401. Conversion of certain entities to a domestic company.
2695 (1) As used in this part, the term "subject entity" means and includes a corporation,
2696 business trust or association, a real estate investment trust, a common-law trust, or any other
2697 unincorporated business, including a general partnership, a registered limited liability partnership,
2698 a limited partnership, or a foreign company.
2699 (2) Any subject entity may convert to a domestic company by complying with Section
2700 48-2c-1404 and filing with the division:
2701 (a) articles of conversion that satisfy the requirements of Section 48-2c-1402 ; and
2702 (b) articles of organization that satisfy the requirements of Part 4.
2703 Section 140. Section 48-2c-1402 is enacted to read:
2704 48-2c-1402. Articles of conversion.
2705 The articles of conversion shall state:
2706 (1) the date on which and jurisdiction where the subject entity was first created, formed,
2707 incorporated, or otherwise came into being and, if it has changed, its jurisdiction immediately prior
2708 to its conversion to a domestic company;
2709 (2) the name of the subject entity immediately prior to the filing of the articles of
2710 conversion;
2711 (3) the name of the company as set forth in its articles of organization filed in accordance
2712 with Subsection 48-2c-1401 (2)(b);
2713 (4) the future effective date or time (which shall be a date or time certain) of the
2714 conversion to a domestic company if it is not to be effective upon the filing of the articles of
2715 conversion and the articles of organization; and
2716 (5) that the conversion has been duly approved by the owners of the subject entity.
2717 Section 141. Section 48-2c-1403 is enacted to read:
2718 48-2c-1403. Effect of conversion.
2719 (1) Upon filing with the division of the articles of conversion and the articles of
2720 organization or, if applicable, upon the future effective date or time of the articles of conversion
2721 and the articles of organization, the subject entity shall be converted into a domestic company and
2722 the company shall thereafter be subject to all of the provisions of this chapter, except that,
2723 notwithstanding Section 48-2c-402 , the existence of the company shall be considered to have
2724 commenced on the date the subject entity commenced its existence in the jurisdiction in which the

2725 subject entity was first created, formed, incorporated, or otherwise came into being.
2726 (2) The conversion of any subject entity into a domestic company shall not be considered
2727 to affect any obligations or liabilities of the subject entity incurred prior to its conversion to a
2728 domestic company or the personal liability of any person incurred prior to the conversion.
2729 (3) When any conversion shall have become effective under this section, for all purposes
2730 of the laws of this state, all of the rights, privileges, and powers of the subject entity that has
2731 converted, and all property, real, personal, and mixed, and all debts due to the subject entity, as
2732 well as all other things and causes of action belonging to the subject entity, shall remain vested in
2733 the domestic company to which the subject entity has converted and shall be the property of the
2734 domestic company, and the title to any real property vested by deed or otherwise in the subject
2735 entity shall not revert or be in any way impaired by reason of this chapter or of the conversion, but
2736 all rights of creditors and all liens upon any property of the subject entity shall be preserved
2737 unimpaired, and all debts, liabilities, and duties of the subject entity that has converted shall remain
2738 attached to the domestic company to which the subject entity has converted and may be enforced
2739 against it to the same extent as if the debts, liabilities, and duties had been incurred or contracted
2740 by it in its capacity as a domestic company.
2741 (4) A converted subject entity shall, upon conversion to a domestic company pursuant to
2742 this part, be considered the same entity as the domestic company and the rights, privileges, powers,
2743 and interests in property of the subject entity, as well as the debts, liabilities, and duties of the
2744 subject entity, shall not, for any purpose of the laws of this state, be considered, as a consequence
2745 of the conversion, to have been transferred to the domestic company to which the subject entity
2746 has converted.
2747 (5) In connection with conversion of a subject entity to a domestic company under this
2748 part, all interests in, or securities of or rights in the subject entity which is to be converted may be
2749 exchanged for or converted into cash, property, interests in, or securities of or rights in the
2750 domestic company to which it is converted or, in addition to or in lieu thereof, may be exchanged
2751 for or converted into cash, property, interests in, or securities of or rights in another entity.
2752 (6) Unless otherwise agreed, or as required under applicable non-Utah law of another
2753 jurisdiction, the converting subject entity shall not be required to wind up its affairs or pay its
2754 liabilities or distribute its assets, and the conversion shall not be considered to constitute a
2755 dissolution of the other entity but shall constitute a continuation of the existence of the converting

2756 other entity in the form of a domestic company.
2757 Section 142. Section 48-2c-1404 is enacted to read:
2758 48-2c-1404. Approval of conversion.
2759 Prior to filing articles of conversion with the division, the conversion must first be
2760 approved in the manner provided for by applicable law or by the document, instrument, agreement,
2761 or other writing, as the case may be, that governs the internal affairs of the subject entity, as
2762 appropriate, and the new operating agreement, if any, for the domestic company must be approved
2763 by the same authorization required to approve the conversion. If applicable law, or the document,
2764 instrument, agreement, or other writing, as the case may be, that governs the internal affairs of the
2765 subject entity, does not provide for the manner of approving the conversion, then unanimous
2766 consent of the owners of the subject entity shall be required to approve the conversion and the new
2767 operating agreement.
2768 Section 143. Section 48-2c-1405 is enacted to read:
2769 48-2c-1405. No limitation on other changes.
2770 The provisions of Sections 48-2c-1401 and 48-2c-1404 shall not be construed to limit the
2771 accomplishment of a change in the law governing, or the domicile of, any entity to this state by any
2772 other means provided for in an operating agreement or other agreement or as otherwise permitted
2773 by law.
2774 Section 144. Section 48-2c-1406 is enacted to read:
2775 48-2c-1406. Approval of company conversion to other entity.
2776 (1) A domestic company may convert to any subject entity upon the authorization of the
2777 conversion in accordance with this section. If the operating agreement specifies the manner of
2778 authorizing a conversion of the company, the conversion shall be authorized as specified in the
2779 operating agreement. If the operating agreement does not specify the manner of authorizing a
2780 conversion of the company and does not prohibit a conversion of the company, the conversion
2781 shall be authorized in the same manner as specified in the operating agreement for authorizing a
2782 merger that involves the company as a constituent party to the merger. If the operating agreement
2783 does not specify the manner of authorizing a conversion of the company or a merger that involves
2784 the company as a constituent party and does not prohibit a conversion of the company, the
2785 conversion must be authorized by unanimous consent of all members.
2786 (2) A converted domestic company shall, upon conversion to a subject entity, be

2787 considered the same entity as the subject entity and the rights, privileges, powers, and interests in
2788 property of the domestic company, as well as the debts, liabilities, and duties of the domestic
2789 company, shall not, for any purpose of the laws of this state, be considered, as a consequence of
2790 the conversion, to have been transferred to the subject entity to which the domestic company has
2791 converted.
2792 (3) Unless otherwise agreed, the conversion of a domestic company to another entity,
2793 pursuant to this section, shall not require the domestic company to wind up its affairs or to pay its
2794 liabilities or distribute its assets under this chapter. In connection with conversion of a domestic
2795 company to another entity under this section, all interests in, or securities of or rights in the
2796 domestic company which is to be converted may be exchanged for or converted into cash,
2797 property, interests in, or securities of or rights in the entity into which the domestic company is
2798 converted or, in addition to or in lieu thereof, may be exchanged for or converted into cash,
2799 property, interests in, or securities of or rights in another entity.
2800 Section 145. Section 48-2c-1407 is enacted to read:
2801 48-2c-1407. Merger.
2802 (1) One or more limited liability companies may merge with one or more other entities,
2803 pursuant to this section, if each company and entity that is a party to the merger approves a plan
2804 of merger and if the merger is permitted by the statutes governing each entity. The entity that
2805 survives may be a limited liability company or other entity.
2806 (2) The plan of merger shall set forth:
2807 (a) the name and type of each entity planning to merge;
2808 (b) the name and type of the entity that will survive;
2809 (c) the terms and conditions of the merger;
2810 (d) the manner and basis of converting the ownership interests of each owner into
2811 ownership interests or obligations of the surviving entity, or any other entity, or into cash or other
2812 property in whole or in part; and
2813 (e) if any party to the merger is an entity other than a limited liability company, any
2814 additional information required for a merger by the statutes governing that entity.
2815 (3) The plan of merger may set forth:
2816 (a) amendments to the articles of organization of a limited liability company, if that
2817 company is the surviving entity; and

2818 (b) other provisions relating to the merger.
2819 Section 146. Section 48-2c-1408 is enacted to read:
2820 48-2c-1408. Approval of merger.
2821 (1) A plan of merger shall be approved by each entity that is a party to the merger, as
2822 follows:
2823 (a) In the case of a domestic company, by members holding the interest in profits required
2824 by Section 48-2c-803 , or by a greater vote if required by its articles of organization or operating
2825 agreement.
2826 (b) In the case of an entity other than a domestic company, as provided by the statutes
2827 governing that entity.
2828 (2) After a merger is authorized, and at any time before articles of merger are filed, the
2829 planned merger may be abandoned, subject to any contractual rights:
2830 (a) By a domestic company, in accordance with the procedure set forth in the plan of
2831 merger or, if none is set forth, by vote of members holding 2/3 of the profit interests in the
2832 domestic company.
2833 (b) By a party to the merger that is not a domestic company, in accordance with the
2834 procedure set forth in the plan of merger or, if none is set forth, in the manner permitted by the
2835 statutes governing that entity.
2836 Section 147. Section 48-2c-1409 is enacted to read:
2837 48-2c-1409. Articles of merger.
2838 (1) After a plan of merger is approved by each entity that is a party to the merger, the
2839 surviving entity shall deliver to the division, for filing, articles of merger setting forth:
2840 (a) the plan of merger; and
2841 (b) a statement that the plan of merger was duly authorized and approved by each entity
2842 that is a party to the merger in accordance with Section 48-2c-1408 .
2843 (2) The merger takes effect on the date of filing the articles of merger with the division,
2844 unless otherwise set forth in the plan of merger or the articles of merger, provided the effective
2845 date is later than the date of filing the articles of merger.
2846 Section 148. Section 48-2c-1410 is enacted to read:
2847 48-2c-1410. Effect of merger.
2848 (1) When a merger involving a limited liability company takes effect:

2849 (a) every other entity that is a party to the merger merges into the surviving entity, and the
2850 separate existence of every other party ceases;
2851 (b) title to all real estate and other property owned by each of the entities that were parties
2852 to the merger is vested in the surviving entity without reversion or impairment;
2853 (c) all obligations of each of the entities that were parties to the merger, including, without
2854 limitation, contractual, tort, statutory, and administrative obligations, are obligations of the
2855 surviving entity;
2856 (d) an action or proceeding pending against each of the entities or its owners that were
2857 parties to the merger may be continued as if the merger had not occurred, or the surviving entity
2858 may be substituted as a party to the action or proceeding;
2859 (e) if a domestic company is the surviving entity, its articles of organization are amended
2860 to the extent provided in the plan of merger;
2861 (f) the ownership interests of each owner that are to be converted into ownership interests
2862 or obligations of the surviving entity or any other entity, or into cash or other property, are
2863 converted as provided in the plan of merger;
2864 (g) liability of an owner for obligations of an entity that is a party to the merger shall be
2865 determined:
2866 (i) as to liabilities incurred by the entity prior to the merger, according to the laws
2867 applicable prior to the merger; and
2868 (ii) as to liabilities incurred by the entity after the merger, according to the laws applicable
2869 after the merger, except as provided in Subsection (1)(h);
2870 (h) if prior to the merger an owner of an entity was a partner of a partnership or general
2871 partner of a limited partnership and was personally liable for the entity's liabilities, and after the
2872 merger is an owner normally protected from personal liability, then the owner shall continue to be
2873 personally liable for the entity's liabilities incurred during the 12 months following the merger, if
2874 the other party or parties to the transaction reasonably believed that the owner would be personally
2875 liable and had not received notice of the merger; and
2876 (i) the registration of an assumed business name of an entity under Title 42, Chapter 2,
2877 Conducting Business Under Assumed Name, shall not be affected by the merger.
2878 (2) Owners of the entities that are parties to the merger are entitled to:
2879 (a) in the case of members of a domestic company, only the rights described in the articles

2880 of merger; and
2881 (b) in the case of owners of entities other than a domestic company, the rights provided
2882 in the statutes applicable to the entity prior to the merger, including, without limitation, any rights
2883 to dissent, to dissociate, to withdraw, to recover for breach of any duty or obligation owed by the
2884 other owners, and to obtain an appraisal or payment for the value of an owner's interest.
2885 Section 149. Section 48-2c-1501 is enacted to read:
2886 Part 15. Professions
2887 48-2c-1501. Purpose of Part 15.
2888 This part shall be so construed as to effectuate its general purpose of making available to
2889 professional persons the benefits of the limited liability company form for the business aspects of
2890 their practices while preserving the established professional relationships between the professional
2891 person and those receiving the professional services.
2892 Section 150. Section 48-2c-1502 is enacted to read:
2893 48-2c-1502. Definitions.
2894 As used in this part:
2895 (1) "Professional services company" means a limited liability company organized under
2896 this part to render professional services.
2897 (2) "Professional services" means the personal services rendered by:
2898 (a) an architect holding a license under Title 58, Chapter 3a, Architects Licensing Act, and
2899 any subsequent laws regulating the practice of architecture;
2900 (b) an attorney granted the authority to practice law by the:
2901 (i) Supreme Court of Utah as provided in Title 78, Chapter 51, Part 6, Attorneys and
2902 Counselors; or
2903 (ii) the Supreme Court, other court, agency, instrumentality, or regulating board that
2904 licenses or regulates the authority to practice law in any state or territory of the United States other
2905 than Utah;
2906 (c) a chiropractor holding a license under Title 58, Chapter 73, Chiropractic Physician
2907 Practice Act, and any subsequent laws regulating the practice of chiropractic;
2908 (d) a doctor of dentistry holding a license under Title 58, Chapter 69, Dentists and Dental
2909 Hygienists Practice Act, and any subsequent laws, regulating the practice of dentistry;
2910 (e) a professional engineer registered under Title 58, Chapter 22, Professional Engineers

2911 and Professional Land Surveyors Licensing Act;
2912 (f) a naturopath holding a license under Title 58, Chapter 71, Naturopathic Physician
2913 Practice Act, and any subsequent laws regulating the practice of naturopathy;
2914 (g) a nurse licensed under Title 58, Chapter 31b, Nurse Practice Act, or Title 58, Chapter
2915 44a, Nurse Midwife Practice Act;
2916 (h) an optometrist holding a license under Title 58, Chapter 16a, Utah Optometry Practice
2917 Act, and any subsequent laws regulating the practice of optometry;
2918 (i) an osteopathic physician or surgeon holding a license under Title 58, Chapter 68, Utah
2919 Osteopathic Medical Practice Act, and any subsequent laws regulating the practice of osteopathy;
2920 (j) a pharmacist holding a license under Title 58, Chapter 17a, Pharmacy Practice Act, and
2921 any subsequent laws regulating the practice of pharmacy;
2922 (k) a physician, surgeon, or doctor of medicine holding a license under Title 58, Chapter
2923 67, Utah Medical Practice Act, and any subsequent laws regulating the practice of medicine;
2924 (l) a physical therapist holding a license under Title 58, Chapter 24a, Physical Therapist
2925 Practice Act, and any subsequent laws regulating the practice of physical therapy;
2926 (m) a podiatric physician holding a license under Title 58, Chapter 5a, Podiatric Physician
2927 Licensing Act, and any subsequent laws regulating the practice of podiatry;
2928 (n) a psychologist holding a license under Title 58, Chapter 61, Psychologist Licensing
2929 Act, and any subsequent laws regulating the practice of psychology;
2930 (o) a public accountant holding a license under Title 58, Chapter 26a, Certified Public
2931 Accountant Licensing Act, and any subsequent laws regulating the practice of public accounting;
2932 (p) a real estate broker or real estate agent holding a license under Title 61, Chapter 2,
2933 Division of Real Estate, and any subsequent laws regulating the sale, exchange, purchase, rental,
2934 or leasing of real estate;
2935 (q) a clinical or certified social worker holding a license under Title 58, Chapter 60, Part
2936 2, Social Worker Licensing Act, and any subsequent laws regulating the practice of social work;
2937 (r) a mental health therapist holding a license under Title 58, Chapter 60, Mental Health
2938 Professional Practice Act, and any subsequent laws regulating the practice of mental health
2939 therapy; and
2940 (s) a veterinarian holding a license under Title 58, Chapter 28, Veterinary Practice Act, and
2941 any subsequent laws regulating the practice of veterinary medicine.

2942 (3) "Regulating board" means the board or agency organized pursuant to state law that is
2943 charged with the licensing and regulation of the practice of the profession that a company is
2944 organized to render.
2945 Section 151. Section 48-2c-1503 is enacted to read:
2946 48-2c-1503. Rendering professional services.
2947 (1) A professional services company may render professional services in this state only
2948 through individuals licensed or otherwise authorized in this state to render those services.
2949 (2) Subsection (1) does not:
2950 (a) require an individual employed by a professional services company to be licensed to
2951 perform services for the company if a license is not otherwise required;
2952 (b) prohibit a licensed individual from rendering professional services in his capacity
2953 although he is a member, manager, employee, or agent of a professional services company; or
2954 (c) prohibit an individual licensed in another state from rendering professional services
2955 for a professional services company in this state if not prohibited by the regulating board.
2956 (3) A professional services company may not render any professional service other than
2957 the professional service authorized by its articles of organization.
2958 Section 152. Section 48-2c-1504 is enacted to read:
2959 48-2c-1504. No limits on regulating board.
2960 Nothing in this chapter restricts or limits in any manner the authority and duty of the
2961 regulating board to license individuals rendering professional services or the practice of the
2962 profession that is within the jurisdiction of the regulating board, notwithstanding that the
2963 individual is a member, manager, or employee of a company and rendering the professional
2964 services or engaging in the practice of the profession through the company.
2965 Section 153. Section 48-2c-1505 is enacted to read:
2966 48-2c-1505. Name limitations.
2967 (1) The name of a domestic professional services company and of a foreign professional
2968 services company authorized to transact business in this state, in addition to satisfying the
2969 requirements of Sections 48-2c-106 , 48-2c-1602 , and 48-2c-1606 :
2970 (a) may not contain language stating or implying that it is formed for a purpose other than
2971 that authorized by its articles of organization or by Section 48-2c-1503 ;
2972 (b) must conform with any rule promulgated by the regulating board having jurisdiction

2973 over a professional service described in the company's articles of organization; and
2974 (c) must contain, in its articles of organization and in all reports and documents filed with
2975 the division, the words "professional limited liability company" or the abbreviations "P.L.L.C."
2976 or "PLLC" in lieu of the requirements of Subsection 48-2c-106 (1)(a).
2977 (2) Notwithstanding the provisions of Subsection (1)(c), a professional services company
2978 may hold itself out to the public under a name that does not contain the words "professional limited
2979 liability company" or the abbreviations "P.L.L.C." or "PLLC" so long as that name meets the
2980 requirements of Subsection 48-2c-106 (1)(a).
2981 (3) Sections 48-2c-106 , 48-2c-1607 , and 48-2c-1608 do not prevent the use of a name
2982 otherwise prohibited by those sections if it is the personal name of an individual member or
2983 individual former member of the professional services company or the name of an individual who
2984 was associated with a predecessor of the professional services company.
2985 Section 154. Section 48-2c-1506 is enacted to read:
2986 48-2c-1506. Activity limitations.
2987 No professional services company may do anything that is prohibited to be done by
2988 individuals licensed to practice the profession that the company is organized to render.
2989 Section 155. Section 48-2c-1507 is enacted to read:
2990 48-2c-1507. Limit of one profession.
2991 A company organized to render professional services under this chapter may render only
2992 one specific type of professional services, and services ancillary to them, and may not engage in
2993 any business other than rendering the professional services which it was organized to render, and
2994 services ancillary to them; provided, however, that a professional services company may own real
2995 and personal property necessary or appropriate for rendering the type of professional service it was
2996 organized to render and may invest its funds in real estate, mortgages, stocks, bonds, and any other
2997 type of investments.
2998 Section 156. Section 48-2c-1508 is enacted to read:
2999 48-2c-1508. Members and managers restricted to professionals.
3000 A company organized to render professional services:
3001 (1) may include members, managers, and employees authorized under the laws of the
3002 jurisdiction where they reside to provide similar services;
3003 (2) may include members who are not licensed or registered by the state to render those

3004 professional services to the extent allowed by the applicable licensing act relating to those
3005 professional services;
3006 (3) may render professional services in this state only through its members, managers, and
3007 employees who are licensed or registered by this state to render those professional services; and
3008 (4) shall have all of the other powers provided under Section 48-2c-110 .
3009 Section 157. Section 48-2c-1509 is enacted to read:
3010 48-2c-1509. Additional requirements for articles of organization.
3011 The articles of organization of a professional services company shall satisfy the
3012 requirements of Section 48-2c-403 and, in addition thereto, shall contain the following:
3013 (1) a name consistent with Section 48-2c-1505 ;
3014 (2) a description of the profession to be practiced through the company; and
3015 (3) notwithstanding Subsection 48-2c-403 (2), the names and street addresses of all
3016 members and managers of the company.
3017 Section 158. Section 48-2c-1510 is enacted to read:
3018 48-2c-1510. Restrictions on transfers by members.
3019 (1) Except as provided in Subsection (2), a member of a professional services company
3020 may sell or transfer the member's interest in the company only to the company or to an individual
3021 who is licensed or registered by this state to render the same type of professional services as those
3022 for which the company was organized.
3023 (2) Upon the death or incapacity of a member of a professional services company, the
3024 member's interest in the company may be transferred to the personal representative or estate of the
3025 deceased or incapacitated member who may continue to hold that interest for a reasonable period
3026 but shall not be authorized to participate in any decision concerning the rendering of professional
3027 services.
3028 Section 159. Section 48-2c-1511 is enacted to read:
3029 48-2c-1511. Purchase of interest upon death, incapacity, or disqualification of
3030 members.
3031 The articles of organization may provide for the purchase of any member's interest in a
3032 professional services company subject to this part upon the death, incapacity, or disqualification
3033 of that member, or the same may be provided in the operating agreement or by other private
3034 agreement. In the absence of such a provision in the articles of organization, the operating

3035 agreement, or other private agreement, the professional services company shall purchase the
3036 interest of a deceased member or an incapacitated member or a member no longer qualified to own
3037 an interest in that professional services company within 90 days after the company is notified of
3038 the death, incapacity, or disqualification, as the case may be. The price for the interest shall be its
3039 reasonable fair market value as of the date of death, incapacity, or disqualification. If the
3040 professional services company fails to purchase said interest by the end of said 90 days, then the
3041 personal representative of a deceased member or the guardian or conservator of an incapacitated
3042 member or the disqualified member may bring an action in the district court of the county in which
3043 the designated office or place of practice of the professional services company is located for the
3044 enforcement of this provision. The court shall have power to award the plaintiff the reasonable
3045 fair market value of the interest, or within its jurisdiction, may order the liquidation of the
3046 professional services company. Further, if the plaintiff is successful in the action, the plaintiff
3047 shall be entitled to recover a reasonable attorney's fee and costs.
3048 Section 160. Section 48-2c-1512 is enacted to read:
3049 48-2c-1512. Conversion to nonprofessional company.
3050 Whenever all members of a professional services company subject to this part cease at any
3051 one time and for any reason to be licensed for the professional services for which the company was
3052 organized, or by vote of members holding at least 2/3 interest in the profits of the company, the
3053 company shall thereupon be treated as converted into, and shall operate thereafter solely as, a
3054 company subject to this chapter but not subject to this part, but may be reconverted to a
3055 professional services company upon removal of the disability or by the vote of members holding
3056 at least 2/3 interests in the profits of the company. Upon any such conversion or reconversion, a
3057 certificate of amendment to the articles of organization shall be filed with the division within a
3058 reasonable time thereafter to reflect the changes.
3059 Section 161. Section 48-2c-1513 is enacted to read:
3060 48-2c-1513. Application of Part 15.
3061 Where a conflict arises between the provisions of this part and the other provisions of this
3062 chapter, the provisions of this part shall control.
3063 Section 162. Section 48-2c-1601 is enacted to read:
3064 Part 16. Foreign Limited Liability Companies.
3065 48-2c-1601. Law governing foreign companies.

3066 (1) This chapter does not authorize this state to regulate the organization or internal affairs
3067 of a foreign company. The laws of the state or other jurisdiction under which a foreign company
3068 is organized govern its organization and internal affairs and the liability of its managers, members,
3069 and assignees of members.
3070 (2) A foreign company may not be denied authority to transact business in this state by
3071 reason of any difference between the laws of another jurisdiction under which the foreign company
3072 is organized and the laws of this state.
3073 Section 163. Section 48-2c-1602 is enacted to read:
3074 48-2c-1602. Authority to transact business required.
3075 (1) A foreign company may not transact business in this state until its application for
3076 authority to transact business is filed with the division. This applies to foreign companies that
3077 conduct a business governed by other statutes of this state only to the extent this part is not
3078 inconsistent with those other statutes.
3079 (2) The following is a nonexhaustive list of activities that do not constitute "transacting
3080 business" within the meaning of Subsection (1):
3081 (a) maintaining, defending, or settling in its own behalf any proceeding;
3082 (b) holding meetings of the managers or members or otherwise carrying on activities
3083 concerning internal company affairs;
3084 (c) maintaining bank accounts;
3085 (d) selling through independent contractors;
3086 (e) soliciting or obtaining orders, whether by mail or through employees or agents or
3087 otherwise, if the orders require acceptance outside this state before they become contracts;
3088 (f) creating as borrower or lender or acquiring indebtedness, mortgages, or security
3089 interests in real or personal property;
3090 (g) securing or collecting debts in is own behalf or enforcing mortgages or security
3091 interests in property securing those debts;
3092 (h) owning, without more, real or personal property;
3093 (i) conducting an isolated transaction that is completed within 30 days and that is not one
3094 in the course of repeated transactions of a like nature;
3095 (j) transacting business in interstate commerce;
3096 (k) acquiring, in transactions outside this state or in interstate commerce, of conditional

3097 sales contracts or of debts secured by mortgages or liens on real or personal property in this state,
3098 collecting or adjusting of principal or interest payments on the contracts, mortgages, or liens,
3099 enforcing or adjusting any rights provided for in conditional sales contracts or securing the
3100 described debts, taking any actions necessary to preserve and protect the interest of the conditional
3101 vendor in the property covered by a conditional sales contract or the interest of the mortgagee or
3102 holder of the lien in the security, or any combination of such transactions; and
3103 (l) any other activities not considered to constitute transacting business in this state as
3104 determined in the discretion of the director of the division.
3105 (3) Nothing in this section limits or affects the right to subject a foreign company which
3106 does not, or is not required to, have authority to transact business in this state to the jurisdiction
3107 of the courts of this state or to serve upon any foreign company any process, notice, or demand
3108 required or permitted by law to be served upon a company pursuant to any applicable provision
3109 of law or pursuant to any applicable rules of civil procedure.
3110 Section 164. Section 48-2c-1603 is enacted to read:
3111 48-2c-1603. Consequences of transacting business without authority.
3112 (1) A foreign company transacting business in this state without authority, or anyone in
3113 its behalf, may not maintain a proceeding in any court in this state until an application for authority
3114 to transact business is filed with the division.
3115 (2) The successor to a foreign company that transacted business in this state without
3116 authority and the assignee of a cause of action arising out of that business may not maintain a
3117 proceeding based on that cause of action in any court in this state until an application for authority
3118 to transact business is filed on behalf of the foreign company or its successor.
3119 (3) A court may stay a proceeding commenced by a foreign company, its successor, or
3120 assignee until it determines whether the foreign company, its successor, or assignee is required to
3121 file an application for authority to transact business. If it so determines, the court may further stay
3122 the proceeding until the required application for authority to transact business has been filed with
3123 the division.
3124 (4) A foreign company that transacts business in this state without authority is subject to
3125 a civil penalty, payable to this state, of $100 for each day in which it transacts business in this state
3126 without authority. However, the penalty may not exceed a total of $5,000 for each year. Each
3127 manager or member of a foreign company who authorizes, directs, or participates in the transaction

3128 of business in this state without authority and each agent of a foreign company who transacts
3129 business in this state on behalf of a foreign company that is not authorized is subject to a civil
3130 penalty, payable to this state, not exceeding $1,000 for each year.
3131 (5) The civil penalties set forth in Subsection (4) may be recovered in an action brought
3132 in the district court for Salt Lake County or in any other county in this state in which the foreign
3133 company has a registered office or in which it has transacted business. Upon a finding by the court
3134 that a foreign company or any of its managers, members, or agents has transacted business in this
3135 state in violation of this part, the court shall issue, in addition to or instead of a civil penalty, an
3136 injunction restraining the further transaction of the business of the foreign company and the further
3137 exercise of any rights and privileges in this state. Upon issuance of the injunction, the foreign
3138 company shall be enjoined from transacting business in this state until all civil penalties have been
3139 paid, plus any interest and court costs assessed by the court, and until the foreign company has
3140 otherwise complied with the provisions of this part.
3141 (6) Notwithstanding Subsections (1) and (2), the failure of a foreign company to have
3142 authority to transact business in this state does not impair the validity of its acts, nor does the
3143 failure prevent the foreign company from defending any proceeding in this state.
3144 Section 165. Section 48-2c-1604 is enacted to read:
3145 48-2c-1604. Application for authority to transact business.
3146 (1) A foreign company may apply for authority to transact business in this state by
3147 delivering to the division for filing an application for authority to transact business setting forth:
3148 (a) its name and its assumed name, if any;
3149 (b) the name of the state or country under whose law it is formed or organized;
3150 (c) the nature of the business or purposes to be conducted or promoted in this state;
3151 (d) its date of formation or organization and period of its duration;
3152 (e) the street address of its principal office;
3153 (f) the address of its registered office in this state and the name of its registered agent at
3154 that office;
3155 (g) the names and street addresses of its current managers, if it is a manager-managed
3156 company, or of its members, if it is a member-managed company;
3157 (h) the date it commenced or expects to commence transacting business in this state; and
3158 (i) any additional information the division may determine is necessary or appropriate to

3159 determine whether the application for authority to transact business should be filed.
3160 (2) The foreign company shall deliver with the completed application for authority to
3161 transact business a certificate of existence, or a document of similar import, duly authorized by the
3162 secretary of state or other official having custody of records in the state or country under whose
3163 law it is formed or organized. The certificate of existence shall be dated within 90 days prior to
3164 the filing of the application for authority to transact business by the division.
3165 (3) The foreign company shall include in the application for authority to transact business,
3166 or in an accompanying document, the written consent to appointment by the designated registered
3167 agent in this state.
3168 Section 166. Section 48-2c-1605 is enacted to read:
3169 48-2c-1605. Amended application for authority to transact business.
3170 (1) A foreign company authorized to transact business in this state shall deliver an
3171 amended application for authority to transact business to the division for filing if the foreign
3172 company changes:
3173 (a) its name or its assumed name;
3174 (b) the period of its duration; or
3175 (c) the state or country of its formation or organization.
3176 (2) The requirements of Section 48-2c-1604 for obtaining an original application for
3177 authority to transact business apply to filing an amended application for authority to transact
3178 business under this section.
3179 Section 167. Section 48-2c-1606 is enacted to read:
3180 48-2c-1606. Effect of filing an application for authority to transact business.
3181 (1) Filing an application for authority to transact business authorizes the foreign company
3182 to transact business in this state subject, however, to the right of this state to revoke the certificate
3183 as provided in this part.
3184 (2) A foreign company authorized to transact business in this state has the same rights and
3185 privileges as, but no greater rights or privileges than, a domestic company of like character.
3186 Except as otherwise provided by this chapter, a foreign company authorized to transact business
3187 in this state is subject to the same duties, restrictions, penalties, and liabilities now or later imposed
3188 on a domestic company of like character.
3189 Section 168. Section 48-2c-1607 is enacted to read:

3190 48-2c-1607. Company name and assumed company name of foreign company.
3191 (1) Except as provided in Subsection (2), if the name of a foreign company does not satisfy
3192 the requirements of Section 48-2c-106 which applies to domestic companies, the foreign company
3193 in order to obtain authority to transact business in this state, must assume for use in this state a
3194 name that satisfies the requirements of Section 48-2c-106 .
3195 (2) A foreign company may obtain authority to transact business in this state with a name
3196 that does not meet the requirements of Subsection (1) because it is not distinguishable as required
3197 under Subsection 48-2c-106 (2), if the foreign company delivers to the division for filing either:
3198 (a) a written consent to the foreign company's use of the name, given and signed by the
3199 other person entitled to the use of the name together with a written undertaking by the other
3200 person, in a form satisfactory to the division, to change its name to a name that is distinguishable
3201 from the name of the applicant; or
3202 (b) a certified copy of a final judgment of a court of competent jurisdiction establishing
3203 the prior right of the foreign company to use the requested name in this state.
3204 (3) A foreign company may use in this state the name, including the assumed name, of
3205 another domestic or foreign company or other entity that is used or registered in this state if the
3206 other company is formed or organized or authorized to transact business in this state and the
3207 foreign company:
3208 (a) has merged with the other company; or
3209 (b) has been formed by conversion of the other entity.
3210 (4) If a foreign company authorized to transact business in this state, whether under its
3211 name or an assumed name, changes its name to one that does not satisfy the requirements of
3212 Subsections (1) through (3), or the requirements of Section 48-2c-106 , it may not transact business
3213 in this state under the changed name but must use an assumed name that does meet the
3214 requirements of this section and must deliver to the division for filing an amended application for
3215 authority to transact business pursuant to Section 48-2c-1605 .
3216 Section 169. Section 48-2c-1608 is enacted to read:
3217 48-2c-1608. Registered name of foreign company.
3218 (1) A foreign company may register its name as provided in this section if the name would
3219 be available for use as a name for a domestic company under Section 48-2c-106 . If the foreign
3220 company's name would not be available for such use, then the foreign company may register its

3221 name modified by the addition of any of the following words or abbreviations, if the modified
3222 name would be available for use under Section 48-2c-106 : "limited liability company", "limited
3223 company", "L.L.C.", "L.C.", "LLC", or "LC".
3224 (2) A foreign company registers its name, or its name with any addition permitted by
3225 Subsection (1), by delivering to the division for filing an application for registration:
3226 (a) setting forth its name, the name to be registered which must meet the requirements of
3227 Section 48-2c-106 that apply to domestic companies, the state or country and date of formation or
3228 organization, and a brief description of the nature of the business in which it is engaged; and
3229 (b) accompanied by a certificate of existence, or a document of similar import from the
3230 state or country of formation or organization as evidence that the foreign company is in existence
3231 or has authority to transact business under the laws of the state or country in which it is formed or
3232 organized.
3233 (3) The name is registered for the applicant upon the effective date of the application, and
3234 the initial registration is effective until the end of the calendar year in which it became effective.
3235 (4) A foreign company that has in effect a registration of its name as permitted by
3236 Subsection (1) may renew the registration for the following year by delivering to the division for
3237 filing a renewal application for registration, which complies with the requirements of Subsection
3238 (2) between October 1 and December 31 of the preceding year. When filed, the renewal
3239 application for registration renews the registration for the following calendar year.
3240 (5) A foreign company that has in effect registration of its name may apply for authority
3241 to transact business in this state under the registered name in accordance with the procedure set
3242 forth in this part or it may assign the registration to another foreign company by delivering to the
3243 division for filing an assignment of the registration that states the registered name, the name of the
3244 assigning foreign corporation, and the name of the assignee, concurrently with the delivery to the
3245 division for filing of the assignee's application for registration of the name. The assignee's
3246 application must meet the requirements of this part.
3247 (6) (a) A foreign company that has in effect registration of its name may terminate the
3248 registration at any time by delivering to the division for filing a statement of termination setting
3249 forth the name and stating that the registration is terminated.
3250 (b) A registration of name automatically terminates upon the filing of an application for
3251 authority to transact business in this state under the registered name.

3252 (7) The registration of a name under Subsection (1) constitutes authority by the division
3253 to file an application meeting the requirements of this part for authority to transact business in this
3254 state under the registered name, but the authorization is subject to the limitations applicable to
3255 company names as set forth in Section 48-2c-106 .
3256 Section 170. Section 48-2c-1609 is enacted to read:
3257 48-2c-1609. Amendment of articles of organization of foreign company.
3258 Whenever the articles of organization of a foreign company authorized to transact business
3259 in this state are amended, it shall not be necessary for the foreign company to file a copy of the
3260 amendments with the division; but amending the articles of organization shall not of itself enlarge
3261 or alter the purpose or purposes which the foreign company is authorized to pursue in transacting
3262 its business in this state, nor authorize the foreign company to transact business in this state under
3263 any other name than the name set forth in its application for authority filed with the division.
3264 Section 171. Section 48-2c-1610 is enacted to read:
3265 48-2c-1610. Merger of foreign company authorized to transact business in this state.
3266 Whenever a foreign company authorized to transact business in this state shall be a party
3267 to a merger permitted by the laws of the state or jurisdiction under the laws of which it is
3268 organized, and such company shall be the surviving company, it shall, within 30 days after the
3269 merger becomes effective, file with the division a copy of the articles of merger duly authenticated
3270 by the proper officer of the state or country under the laws of which the merger was effected; and
3271 it shall not be necessary for the foreign company to procure either new or amended authority to
3272 transact business in this state unless the name of the company be changed thereby or unless the
3273 foreign company desires to pursue in this state other or additional purposes than those which it is
3274 then authorized to pursue in this state.
3275 Section 172. Section 48-2c-1611 is enacted to read:
3276 48-2c-1611. Withdrawal of foreign company.
3277 (1) A foreign company authorized to transact business in this state may not withdraw from
3278 this state until its application for withdrawal has been filed with the division.
3279 (2) A foreign company authorized to transact business in this state may apply for
3280 withdrawal by delivering to the division for filing an application for withdrawal setting forth:
3281 (a) its company name and its assumed name, if any;
3282 (b) the name of the state or country under whose law it is formed or organized;

3283 (c) the address of its principal office, or if none is to be maintained, a statement that the
3284 foreign company will not maintain a principal office, and if different from the address of the
3285 principal office or if no principal office is to be maintained, the address to which service of process
3286 may be mailed pursuant to Section 48-2c-309 ;
3287 (d) that the foreign company is not transacting business in this state and that it surrenders
3288 its authority to transact business in this state;
3289 (e) whether its registered agent will continue to be authorized to accept service on its
3290 behalf in any proceeding based on a cause of action arising during the time it was authorized to
3291 transact business in this state; and
3292 (f) any additional information that the division determines is necessary or appropriate to
3293 determine whether the foreign company is entitled to withdraw, and to determine and assess any
3294 unpaid taxes, fees, and penalties payable by it as prescribed by this chapter.
3295 (3) A foreign company's application for withdrawal may not be filed by the division until
3296 all outstanding fees and state tax obligations of the foreign company have been paid and the
3297 division has received a tax clearance certificate from the State Tax Commission.
3298 Section 173. Section 48-2c-1612 is enacted to read:
3299 48-2c-1612. Grounds for revocation.
3300 The division may commence a proceeding under Section 48-2c-1613 to revoke the
3301 authority of a foreign company to transact business in this state if:
3302 (1) the foreign company does not deliver its annual report to the division when it is due;
3303 (2) the foreign company does not pay when they are due any taxes, fees, or penalties
3304 imposed by this chapter or other applicable laws of this state;
3305 (3) the foreign company is without a registered agent or registered office in this state;
3306 (4) the foreign company does not inform the division under Section 48-2c-303 that its
3307 registered agent or registered office has changed, that its registered agent has resigned, or that its
3308 registered office has been discontinued;
3309 (5) an organizer, member, manager, or agent of the foreign company signs a document
3310 knowing it is false in any material respect with intent that the document be delivered to the
3311 division for filing; or
3312 (6) the division receives a duly authenticated certificate from the secretary of state or other
3313 official having custody of limited liability company records in the state or country under whose

3314 law the foreign company is formed or organized stating that the foreign company has dissolved or
3315 disappeared as the result of a merger.
3316 Section 174. Section 48-2c-1613 is enacted to read:
3317 48-2c-1613. Procedure for and effect of revocation.
3318 (1) If the division determines that one or more grounds exist under Section 48-2c-1612 for
3319 revoking the authority of a foreign company to transact business in this state, the division shall
3320 mail to the foreign company written notice of:
3321 (a) the division's determination that one or more grounds exist for revocation; and
3322 (b) the grounds for revocation.
3323 (2) (a) If the foreign company does not correct each ground for revocation or demonstrate
3324 to the reasonable satisfaction of the division that each ground determined by the division does not
3325 exist, within 60 days after mailing the notice under Subsection (1), the division shall revoke the
3326 foreign company's authority to transact business in this state.
3327 (b) If a foreign company's authority to transact business in this state is revoked under
3328 Subsection (2)(a), the division shall mail to the foreign company written notice of:
3329 (i) revocation; and
3330 (ii) the effective date of the revocation.
3331 (c) The division shall mail a copy of the notice to:
3332 (i) the last registered agent of the foreign company; or
3333 (ii) if there is no registered agent of record, at least one member or manager of the foreign
3334 company.
3335 (3) The authority of a foreign company to transact business in this state ceases on the date
3336 shown on the division's certificate revoking the company's certificate of authority.
3337 (4) Revocation of a foreign company's authority to transact business in this state does not
3338 terminate the authority of the registered agent of the foreign company.
3339 (5) (a) Upon the revocation of a foreign company's authority to transact business in this
3340 state, the division becomes an agent for the foreign company for service of process in any
3341 proceeding based on a cause of action that arose during the time the foreign company:
3342 (i) transacted business in this state; or
3343 (ii) was authorized to transact business in this state.
3344 (b) Service of process on the division under this Subsection (5) is service on the foreign

3345 company.
3346 (c) Upon receipt of process under this Subsection (5), the division shall mail a copy of the
3347 process to the foreign company at its principal office.
3348 (6) A notice mailed under this section shall be:
3349 (a) mailed first-class, postage prepaid; and
3350 (b) addressed to the most current mailing address appearing on the records of the division
3351 for:
3352 (i) the registered agent of the foreign company, if the notice is required to be mailed to the
3353 registered agent; or
3354 (ii) the member or manager of the foreign company that is mailed the notice, if the notice
3355 is required to be mailed to a member or manager of the foreign company.
3356 Section 175. Section 48-2c-1614 is enacted to read:
3357 48-2c-1614. Appeal from revocation.
3358 (1) A foreign company may appeal the division's revocation of its authority to transact
3359 business in this state to the district court of the county in this state where the last registered office
3360 of the company was located or in Salt Lake County, within 30 days after the notice of revocation
3361 is mailed under Section 48-2c-1613 . The foreign company appeals by petitioning the court to set
3362 aside the revocation and attaching to the petition a copy of the company's application for authority
3363 to transact business, and any amended applications, each as filed with the division, and the
3364 division's notice of revocation.
3365 (2) The court may summarily order the division to reinstate the authority of the foreign
3366 company to transact business in this state or it may take any other action it considers appropriate.
3367 (3) The court's final decision may be appealed as in other civil proceedings.
3368 Section 176. Section 48-2c-1615 is enacted to read:
3369 48-2c-1615. Actions to restrain transaction of business in state.
3370 The division may order any foreign company, or any agent of a foreign company, to cease
3371 doing any business in this state if the foreign company has failed to register under this chapter.
3372 Section 177. Section 48-2c-1701 is enacted to read:
3373 Part 17. Derivative Actions
3374 48-2c-1701. Right of action.
3375 A member may bring an action in the right of a company to recover a judgment in its favor:

3376 (1) if the managers or, if no managers, the members with authority to do so have refused
3377 to bring the action and the decision of the managers or members not to sue constitutes an abuse
3378 of discretion or involves a conflict of interest that prevents an unbiased exercise of judgment; or
3379 (2) if an effort to cause those managers or members to bring the action is not likely to
3380 succeed.
3381 Section 178. Section 48-2c-1702 is enacted to read:
3382 48-2c-1702. Proper plaintiff.
3383 In an action under Section 48-2c-1701 , the plaintiff must be a member at the time of
3384 bringing the action and:
3385 (1) must have been a member at the time of the transaction of which the member
3386 complains; or
3387 (2) the member's status as a member must have devolved upon him by transfer or by
3388 operation of law or pursuant to the terms of the operating agreement from a person who was a
3389 member at the time of the transaction.
3390 Section 179. Section 48-2c-1703 is enacted to read:
3391 48-2c-1703. Pleading.
3392 In a derivative action, the complaint shall set forth with particularity the effort of the
3393 plaintiff to secure the initiation of the action by the managers or members or the reasons for not
3394 making the effort.
3395 Section 180. Section 48-2c-1704 is enacted to read:
3396 48-2c-1704. Stay of proceedings.
3397 Whether or not a demand for action was made, if the company promptly commences an
3398 investigation of the allegations made in the demand or complaint, the court may stay the action for
3399 such reasonable period as the court considers appropriate but, in any event, the stay shall expire
3400 at the earlier of 30 days or when the company's investigation is completed.
3401 Section 181. Section 48-2c-1705 is enacted to read:
3402 48-2c-1705. Expenses.
3403 If an action under Section 48-2c-1701 is successful, in whole or in part, or if anything is
3404 received by the plaintiff as a result of a judgment, compromise, or settlement of any such action
3405 or claim, the court may award the plaintiff reasonable expenses, including reasonable attorney's
3406 fees. The court shall order that any such award be paid out of the proceeds received by the

3407 plaintiff, if any, in which case the plaintiff shall remit to the company the remainder of the
3408 proceeds. If those proceeds are insufficient to reimburse the plaintiff's reasonable expenses, the
3409 court may direct that any such award of the plaintiff's expenses or a portion of the expenses be paid
3410 by the company.
3411 Section 182. Section 48-2c-1706 is enacted to read:
3412 48-2c-1706. Security and costs.
3413 (1) In any action instituted in the right of any company or foreign company, unless the fair
3414 market value of the plaintiff's interest in the company (as a member) exceeds the greater of
3415 $25,000 or 5% of the fair market value of the company, the company in whose right the action is
3416 brought shall be entitled, at any time before final judgment, to require the plaintiff to give security
3417 for the costs and reasonable expenses which may be directly attributable to and incurred by it in
3418 the defense of the action or may be incurred by other parties named as defendant for which the
3419 company may become legally liable, but not including attorney's fees.
3420 (2) Fair market value shall be determined as of the date that the plaintiff institutes the
3421 action, or, in the case of an intervener as of the date that he becomes a party to the action.
3422 (3) The amount and nature of the security shall be determined by the court, and the amount
3423 of the security may from time to time be increased or decreased by the court, upon showing that
3424 the security provided has or may become inadequate or is excessive.
3425 (4) The company shall have recourse to the security in the amount as the court having
3426 jurisdiction shall determine upon the termination of the action if the court finds the action was
3427 brought without reasonable cause.
3428 Section 183. Section 48-2c-1801 is enacted to read:
3429 Part 18. Indemnification
3430 48-2c-1801. Definitions.
3431 As used in this part:
3432 (1) "Company" includes any domestic company and any domestic or foreign entity that is
3433 a predecessor of a company by reason of a merger or other transaction in which the predecessor's
3434 existence ceased upon consummation of the transaction.
3435 (2) "Manager" means an individual who is or was a manager of a company or an individual
3436 who, while a manager of a company, is or was serving at the company's request as a manager,
3437 member, director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or

3438 foreign company or other person or of an employee benefit plan. A manager is considered to be
3439 serving an employee benefit plan at the company's request if his duties to the company also impose
3440 duties on, or otherwise involve services by him to the plan or to participants in or beneficiaries of
3441 the plan. "Manager" includes, unless the context requires otherwise, the estate or personal
3442 representative of a manager.
3443 (3) "Expenses" include attorney's fees.
3444 (4) "Liability" means the obligation incurred with respect to a proceeding to pay a
3445 judgment, settlement, penalty, fine (including an excise tax assessed with respect to an employee
3446 benefit plan), or reasonable expenses.
3447 (5) "Member," "employee," "fiduciary," and "agent" include any person who, while serving
3448 the indicated relationship to the company, is or was serving at the company's request as a manager,
3449 member, director, officer, partner, trustee, employee, fiduciary, or agent of another domestic or
3450 foreign company or other person or of an employee benefit plan. A member, employee, fiduciary,
3451 or agent is considered to be serving an employee benefit plan at the company's request if that
3452 person's duties to the company also impose duties on, or otherwise involve services by, that person
3453 to the plan or participants in, or beneficiaries of the plan. Unless the context requires otherwise,
3454 the terms include the estates or personal representatives of such persons.
3455 (6) (a) "Official capacity" means:
3456 (i) when used with respect to a manager, the office of manager in a manager-managed
3457 company;
3458 (ii) when used with respect to a member, the position of member in a member-managed
3459 company; and
3460 (iii) when used with respect to a person other than a manager under Subsection (6)(a)(i)
3461 or a member under Subsection (6)(a)(ii), as contemplated in Section 48-2c-1807 , the office in a
3462 company held by the person, or the employment, fiduciary, or agency relationship undertaken by
3463 the person on behalf of the company.
3464 (b) "Official capacity" does not include service for any other foreign or domestic limited
3465 liability company, other person, or employee benefit plan.
3466 (7) "Party" includes an individual who was, is, or is threatened to be made a named
3467 defendant or respondent in a proceeding.
3468 (8) "Proceeding" means any threatened, pending, or completed action, suit, or proceeding,

3469 whether civil, criminal, administrative, or investigative and whether formal or informal.
3470 Section 184. Section 48-2c-1802 is enacted to read:
3471 48-2c-1802. Authority to indemnify.
3472 (1) Except as provided in Subsection (4), a company may indemnify an individual made
3473 a party to a proceeding because he is or was a manager, against liability incurred in the proceeding
3474 if:
3475 (a) his conduct was in good faith;
3476 (b) he reasonably believed that his conduct was in, or not opposed to, the company's best
3477 interests; and
3478 (c) in the case of any criminal proceeding, he had no reasonable cause to believe his
3479 conduct was unlawful.
3480 (2) A manager's conduct with respect to any employee benefit plan for a purpose he
3481 reasonably believed to be in, or not opposed to, the interests of the participants in and beneficiaries
3482 of the plan is conduct that satisfies the requirement of Subsection (1)(b).
3483 (3) The termination of a proceeding by judgment, order, settlement, conviction, or upon
3484 a plea of nolo contendere or its equivalent is not, of itself, determinative that the manager did not
3485 meet the standard of conduct described in this section.
3486 (4) A company may not indemnify a manager under this section:
3487 (a) in connection with a proceeding by or in the right of the company in which the manager
3488 was adjudged liable to the company; or
3489 (b) in connection with any other proceeding charging that the manager derived an improper
3490 personal benefit, whether or not involving action in his official capacity, in which proceeding he
3491 was adjudged liable on the basis that he derived an improper personal benefit.
3492 Section 185. Section 48-2c-1803 is enacted to read:
3493 48-2c-1803. Mandatory indemnification of managers.
3494 Unless limited by its articles of organization, a company shall indemnify a manager who
3495 was successful, on the merits or otherwise, in the defense of any proceeding, or in the defense of
3496 any claim, issue, or matter in the proceeding, to which he was a party because he is or was a
3497 manager of the company, against reasonable expenses, including attorney's fees, incurred by him
3498 in connection with the proceeding or claim with respect to which he has been successful.
3499 Section 186. Section 48-2c-1804 is enacted to read:

3500 48-2c-1804. Advancement of expenses.
3501 (1) A company may pay for or reimburse the reasonable expenses incurred by a manager
3502 who is a party to a proceeding in advance of final disposition of the proceeding if:
3503 (a) the manager furnishes the company a written affirmation of his good faith belief that
3504 he has met the applicable standard of conduct described in Section 48-2c-1802 ;
3505 (b) the manager furnishes to the company a written undertaking, executed personally or
3506 on his behalf, to repay the advance if it is ultimately determined that he did not meet the standard
3507 of conduct; and
3508 (c) a determination is made that the facts then known to those making the determination
3509 would not preclude indemnification under this part.
3510 (2) The undertaking required by Subsection (1)(b) must be an unlimited general obligation
3511 of the manager but need not be secured and may be accepted without reference to financial ability
3512 to make repayment.
3513 (3) Determinations and authorizations of payments under this section shall be made in the
3514 manner specified in Section 48-2c-1806 .
3515 Section 187. Section 48-2c-1805 is enacted to read:
3516 48-2c-1805. Court-ordered indemnification.
3517 Unless a company's articles of organization provide otherwise, a manager of the company
3518 who is or was a party to a proceeding may apply for indemnification to the court or other
3519 decision-maker conducting the proceeding or to another court of competent jurisdiction. On
3520 receipt of an application, the court, after giving any notice the court considers necessary, may order
3521 indemnification in the following manner:
3522 (1) if the court determines that the manager is entitled to mandatory indemnification under
3523 Section 48-2c-1803 , the court shall order indemnification, in which case the court shall also order
3524 the company to pay the manager's reasonable expenses, including attorney's fees, incurred to obtain
3525 court-ordered indemnification; and
3526 (2) if the court determines that the manager is fairly and reasonably entitled to
3527 indemnification in view of all the relevant circumstances, whether or not the manager met the
3528 applicable standard of conduct set forth in Section 48-2c-1802 or was adjudged liable as described
3529 in Subsection 48-2c-1802 (4), the court may order indemnification as the court determines to be
3530 proper, except that the indemnification with respect to any proceeding in which liability has been

3531 adjudged in the circumstances described in Subsection 48-2c-1802 (4) is limited to reasonable
3532 expenses incurred.
3533 Section 188. Section 48-2c-1806 is enacted to read:
3534 48-2c-1806. Determination and authorization of indemnification.
3535 (1) A company may not indemnify a manager under Section 48-2c-1802 unless authorized
3536 and a determination has been made in the specific case that indemnification of the manager is
3537 permissible in the circumstances because the manager has met the applicable standard of conduct
3538 set forth in Section 48-2c-1802 . A company may not advance expenses to a manager under
3539 Section 48-2c-1804 unless authorized in the specific case after the written affirmation and
3540 undertaking required by Subsections 48-2c-1804 (1)(a) and (b) are received and the determination
3541 required by Subsection 48-2c-1804 (1)(c) has been made.
3542 (2) The determinations required by Subsection (1) shall be made:
3543 (a) by the managers by a majority vote and only those managers not parties to the
3544 proceeding shall be counted;
3545 (b) by special legal counsel selected by a majority vote of the managers of the company
3546 who are not parties to the proceeding or, if none, by members holding a majority interest in the
3547 profits of the company not counting any interest held by the manager who is a party to the
3548 proceeding; or
3549 (c) by the members holding more than 50% interest in the profits of the company not
3550 counting any interest held by the manager who is a party to the proceeding.
3551 (3) Unless authorization is required by the operating agreement, authorization of
3552 indemnification and advance of expenses shall be made in the same manner as the determination
3553 that indemnification or advance of expenses is permissible. However, if the determination that
3554 indemnification or advance of expenses is permissible is made by special legal counsel,
3555 authorization of indemnification and advance of expenses shall be made by those entitled under
3556 Subsection (2)(b) to select legal counsel.
3557 Section 189. Section 48-2c-1807 is enacted to read:
3558 48-2c-1807. Indemnification of members, employees, fiduciaries, and agents.
3559 Unless a company's articles of organization provide otherwise:
3560 (1) a member of a company is entitled to mandatory indemnification under Section
3561 48-2c-1803 and is entitled to apply for court-ordered indemnification under Section 48-2c-1805

3562 in each case to the same extent as a manager;
3563 (2) the company may indemnify and advance expenses to a member, employee, fiduciary,
3564 or agent of the company to the same extent as to a manager; and
3565 (3) a company may also indemnify and advance expenses to a member, employee,
3566 fiduciary, or agent who is not a manager to a greater extent, if not inconsistent with public policy,
3567 and if provided for by its articles of organization, operating agreement, general or specific action
3568 of its managers or members, or contract.
3569 Section 190. Section 48-2c-1808 is enacted to read:
3570 48-2c-1808. Insurance.
3571 A company may purchase and maintain liability insurance on behalf of a person who is or
3572 was a manager, member, employee, fiduciary, or agent of the company, or who, while serving as
3573 a manager, member, employee, fiduciary, or agent of the company, is or was serving at the request
3574 of the company as a manager, member, director, officer, partner, trustee, employee, fiduciary, or
3575 agent of another foreign or domestic limited liability company or other person, or of an employee
3576 benefit plan, against liability asserted against or incurred by him in that capacity or arising from
3577 his status of a manager, member, employee, fiduciary, or agent, whether or not the company would
3578 have power to indemnify him against the same liability under Sections 48-2c-1802 , 48-2c-1803 ,
3579 and 48-2c-1807 . Insurance may be procured from any insurance company designated by the
3580 company, whether the insurance company is formed under the laws of this state or any other
3581 jurisdiction of the United States or elsewhere, including any insurance company in which the
3582 company has an equity or any other interest through stock ownership or otherwise.
3583 Section 191. Section 48-2c-1809 is enacted to read:
3584 48-2c-1809. Limitations on indemnification.
3585 (1) A provision treating a company's indemnification of, or advance for expenses to,
3586 managers or members that is contained in its articles of organization or operating agreement or in
3587 a resolution of its members or in a contract (except an insurance policy) or otherwise, is valid only
3588 if and to the extent the provision is not inconsistent with this part. If the articles of organization
3589 limit indemnification or advancement of expenses, indemnification and advancement of expenses
3590 are valid only to the extent not inconsistent with the articles of organization.
3591 (2) This part does not limit a company's power to pay or reimburse expenses incurred by
3592 a manager or member in connection with the manager's or member's appearance as a witness in

3593 a proceeding at a time when the manager or member has not been made a named defendant or
3594 respondent in the proceeding.
3595 Section 192. Section 48-2c-1901 is enacted to read:
3596 Part 19. Miscellaneous
3597 48-2c-1901. Legislative intent -- Freedom of contract.
3598 It is the intent of the Legislature that this chapter be interpreted so as to give the maximum
3599 effect to the principle of freedom of contract and to the enforceability of operating agreements of
3600 companies.
3601 Section 193. Section 48-2c-1902 is enacted to read:
3602 48-2c-1902. Transitional provisions.
3603 (1) Each limited liability company formed prior to July 1, 2001, under the laws this state,
3604 and existing on July 1, 2001:
3605 (a) shall continue in existence with all rights and privileges applicable to limited liability
3606 companies formed under this chapter;
3607 (b) need not amend its articles of organization to include the address of its designated
3608 office if it includes the information in its first annual report filed with the division after July 1,
3609 2001, and in all subsequent annual reports; and
3610 (c) that provides professional services as defined in Part 15 of this chapter, need not amend
3611 its articles of organization to comply with Section 48-2c-1509 if it includes the information in its
3612 first annual report filed with the division after July 1, 2001, and in all subsequent annual reports.
3613 (2) All domestic companies formed prior to July 1, 2001, under the laws this state, as well
3614 as their managers, members, and assignees of members, as applicable, shall have all the rights and
3615 privileges and shall be subject to all the requirements, restrictions, duties, liabilities, and remedies
3616 prescribed in this chapter.
3617 (3) Each foreign limited liability company authorized to transact business in this state as
3618 of July 1, 2001, is subject to the provisions of this chapter, but is not required by reason of
3619 enactment of this chapter to obtain a new certificate of authority to transact business in this state.
3620 Section 194. Section 53B-5-114 (Effective 04/30/01) is amended to read:
3621 53B-5-114 (Effective 04/30/01). Consent to use of educational terms in business
3622 names.
3623 (1) For purposes of this section:

3624 (a) "Business name" means a name filed with the Division of Corporations and
3625 Commercial Code under:
3626 (i) Section 16-6a-401 ;
3627 (ii) Section 16-10a-401 ;
3628 (iii) Section 42-2-6.6 ;
3629 (iv) Section 48-2a-102 ; or
3630 (v) Section [ 48-2b-106 ] 48-2c-106 .
3631 (b) "Educational term" means the term:
3632 (i) "university";
3633 (ii) "college"; or
3634 (iii) "institution."
3635 (2) If a statute listed in Subsection (1)(a) requires the written consent of the board to file
3636 a business name with the Division of Corporations and Commercial Code that includes an
3637 educational term, the board may consent to the use of an educational term in accordance with this
3638 statute.
3639 (3) The board shall consent to the use of an educational term in a business name if the
3640 person seeking to file the name:
3641 (a) is registered under this chapter;
3642 (b) is exempt from the chapter under Section 53B-5-105 ; or
3643 (c) (i) is not engaged in educational activities; and
3644 (ii) does not represent that it is engaged in educational activities.
3645 (4) The board may withhold consent to use of an educational term in a business name if
3646 the person seeking to file the name:
3647 (a) offers, sells, or awards a degree or any other type of educational credential; and
3648 (b) fails to provide bona fide instruction through student-faculty interaction according to
3649 the standards and criteria established by the board under Subsection 53B-5-104 (5).
3650 Section 195. Section 53C-1-201 is amended to read:
3651 53C-1-201. Creation of administration -- Purpose -- Director.
3652 (1) (a) There is established within state government the School and Institutional Trust
3653 Lands Administration.
3654 (b) The administration shall manage all school and institutional trust lands and assets

3655 within the state, except as otherwise provided in Chapter 3 of this title and Section 51-7-12 .
3656 (2) The administration is an independent state agency and not a division of any other
3657 department.
3658 (3) (a) It is subject to the usual legislative and executive department controls except as
3659 follows:
3660 (i) (A) the director may make rules as approved by the board that allow the administration
3661 to classify a business proposal submitted to the administration as protected under Section
3662 63-2-304 , for as long as is necessary to evaluate the proposals;
3663 (B) the administration shall return the proposal to the party who submitted the proposal,
3664 and incur no further duties under Title 63, Chapter 2, Government Records Access and
3665 Management Act, if the administration determines not to proceed with the proposal;
3666 (C) the administration shall classify the proposal pursuant to law if it decides to proceed
3667 with the proposal; and
3668 (D) Section 63-2-403 does not apply during the review period;
3669 (ii) the director shall make rules in compliance with Title 63, Chapter 46a, Utah
3670 Administrative Rulemaking Act, except that the director, with the board's approval, may establish
3671 a procedure for the expedited approval of rules, based on written findings by the director showing:
3672 (A) the changes in business opportunities affecting the assets of the trust;
3673 (B) the specific business opportunity arising out of those changes which may be lost
3674 without the rule or changes to the rule;
3675 (C) the reasons the normal procedures under Section 63-46a-4 cannot be met without
3676 causing the loss of the specific opportunity;
3677 (D) approval by at least five board members; and
3678 (E) that the director has filed a copy of the rule and a rule analysis, stating the specific
3679 reasons and justifications for its findings, with the Division of Administrative Rules and notified
3680 interested parties as provided in Subsection 63-46a-4 (7); and
3681 (iii) the administration shall comply with Title 67, Chapter 19, Utah State Personnel
3682 Management Act, except as follows:
3683 (A) the board may approve, upon recommendation of the director, that exemption for
3684 specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
3685 the administration to efficiently fulfill its responsibilities under the law. The director shall consult

3686 with the director of the Department of Human Resource Management prior to making such a
3687 recommendation. The positions of director, deputy director, assistant director, legal counsel
3688 appointed under Subsection 53C-1-305 (2), administrative assistant, and public affairs officer are
3689 exempt under Subsections 67-19-12 (2) and 67-19-15 (1);
3690 (B) salary for exempted positions, except for the director, shall be set by the director, after
3691 consultation with the director of the Department of Human Resource Management, within ranges
3692 approved by the board. The board and director shall consider salaries for similar positions in
3693 private enterprise and other public employment when setting salary ranges; and
3694 (C) the board may create an annual incentive and bonus plan for the director and other
3695 administration employees designated by the board, based upon the attainment of financial
3696 performance goals and other measurable criteria defined and budgeted in advance by the board;
3697 and
3698 (iv) the administration shall comply with Title 63, Chapter 56, Utah Procurement Code,
3699 except where the board approves, upon recommendation of the director, exemption from the Utah
3700 Procurement Code, and simultaneous adoption of policies for procurement, which enable the
3701 administration to efficiently fulfill its responsibilities under the law.
3702 (b) (i) The board and director shall review the exceptions under Subsection (3)(a) and
3703 make recommendations for any modification, if required, which the Legislature would be asked
3704 to consider during its annual General Session.
3705 (ii) The board and director may include in their recommendations any other proposed
3706 exceptions from the usual executive and legislative controls the board and director consider
3707 necessary to accomplish the purpose of this title.
3708 (4) The administration is managed by a director of school and institutional trust lands
3709 appointed by a majority vote of the board of trustees with the consent of the governor.
3710 (5) (a) The board of trustees shall provide policies for the management of the
3711 administration and for the management of trust lands and assets.
3712 (b) The board shall provide policies for the ownership and control of Native American
3713 remains that are discovered or excavated on school and institutional trust lands in consultation with
3714 the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4, Native
3715 American Grave Protection and Repatriation Act.
3716 (6) In connection with joint ventures for the development of trust lands and minerals

3717 approved by the board under Subsection 53C-1-303 (4)(c), the administration may become a
3718 member of a limited liability company under Title 48, Chapter 2b, Utah Limited Liability
3719 Company Act, and is considered a person under [Subsection 48-2b-102 (6)] Section 48-2c-102 for
3720 such purposes.
3721 Section 196. Repealer.
3722 This act repeals:
3723 Section 48-2b-101, Short title.
3724 Section 48-2b-102, Definitions.
3725 Section 48-2b-103, Formation.
3726 Section 48-2b-104, Scope -- Definitions.
3727 Section 48-2b-105, Powers.
3728 Section 48-2b-106 (Effective 04/30/01), Name -- Exclusive right.
3729 Section 48-2b-106 (Superseded 04/30/01), Name -- Exclusive right.
3730 Section 48-2b-107, Limited liability company name - Limited rights.
3731 Section 48-2b-108, Name -- Omission.
3732 Section 48-2b-109, Liability of members, managers, and employees -- Waiver.
3733 Section 48-2b-110, Liability for acting without authority.
3734 Section 48-2b-111, Professional relationship -- Personal liability.
3735 Section 48-2b-112, Member as a party to proceedings.
3736 Section 48-2b-113, Service of process, notice, or demand.
3737 Section 48-2b-114, Waiver of notice.
3738 Section 48-2b-115, Regulating board authority -- Prohibitions on individuals apply.
3739 Section 48-2b-116, Articles of organization.
3740 Section 48-2b-117, Filing of articles.
3741 Section 48-2b-118, Effect of filing -- Prefiling activities.
3742 Section 48-2b-119, Records.
3743 Section 48-2b-120, Annual report.
3744 Section 48-2b-121, When amendments to the articles of organization are required.
3745 Section 48-2b-122, Additional members.
3746 Section 48-2b-123, Registered agent.
3747 Section 48-2b-124, Capital contributions.

3748 Section 48-2b-125, Management.
3749 Section 48-2b-126, Operating agreements.
3750 Section 48-2b-127, Ownership and disposition of property.
3751 Section 48-2b-128, Conditions for property distribution.
3752 Section 48-2b-129, Assets distribution.
3753 Section 48-2b-130, Profits and losses.
3754 Section 48-2b-131, Character, transfer, adjustment, and assignment of member
3755 interests -- Effect -- Charge order.
3756 Section 48-2b-132, Conditions for distribution of property -- Return of contribution.
3757 Section 48-2b-133, Member liabilities.
3758 Section 48-2b-134, Execution of documents.
3759 Section 48-2b-135, Penalty for false execution.
3760 Section 48-2b-136, Restated articles of organization.
3761 Section 48-2b-137, Dissolution.
3762 Section 48-2b-138, Settlement upon dissolution.
3763 Section 48-2b-139, Articles of dissolution.
3764 Section 48-2b-140, Filing of articles of dissolution -- Effect.
3765 Section 48-2b-141, Cancellation of articles of organization.
3766 Section 48-2b-142, Involuntary dissolution.
3767 Section 48-2b-143, Foreign limited liability companies.
3768 Section 48-2b-144, Registration of foreign limited liability companies.
3769 Section 48-2b-145, Cancellation of foreign limited liability companies' registration.
3770 Section 48-2b-146, Effect of registration.
3771 Section 48-2b-147, Effect of failure to register by foreign limited liability companies.
3772 Section 48-2b-148, Foreign limited liability companies -- Service of process -- Cause
3773 of action.
3774 Section 48-2b-149, Merger and consolidation.
3775 Section 48-2b-150, Right of action.
3776 Section 48-2b-151, Proper plaintiff.
3777 Section 48-2b-152, Pleading.
3778 Section 48-2b-153, Expenses.

3779 Section 48-2b-154, Security and costs.
3780 Section 48-2b-155, Indemnification of a manager.
3781 Section 48-2b-156, Correction of technical errors in instruments.
3782 Section 48-2b-157, Application of partnership provisions to limited liability
3783 companies.
3784 Section 48-2b-158, Taxation of limited liability companies.
3785 Section 197. Effective date.
3786 This act takes effect on July 1, 2001.




Legislative Review Note
as of 1-25-01 5:50 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel