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S.B. 146 Enrolled
This act modifies the Partnership and Corporations Titles and makes technical changes.
This act addresses issues related to registered agents and business addresses. This act
provides for conversion of corporations to or from domestic limited liability companies. This
act amends provisions of the Utah Revised Limited Liability Company Act.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
48-2a-104, as last amended by Chapter 189, Laws of Utah 1991
48-2a-202, as last amended by Chapter 131, Laws of Utah 2000
48-2c-108, as enacted by Chapter 260, Laws of Utah 2001
48-2c-110, as enacted by Chapter 260, Laws of Utah 2001
48-2c-401, as enacted by Chapter 260, Laws of Utah 2001
48-2c-408, as enacted by Chapter 260, Laws of Utah 2001
48-2c-602, as enacted by Chapter 260, Laws of Utah 2001
48-2c-707, as enacted by Chapter 260, Laws of Utah 2001
48-2c-801, as enacted by Chapter 260, Laws of Utah 2001
48-2c-804, as enacted by Chapter 260, Laws of Utah 2001
48-2c-1103, as enacted by Chapter 260, Laws of Utah 2001
48-2c-1207, as enacted by Chapter 260, Laws of Utah 2001
ENACTS:
16-6a-1008.7, Utah Code Annotated 1953
16-10a-1008.7, Utah Code Annotated 1953
48-2a-202.5, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 16-6a-1008.7 is enacted to read:
16-6a-1008.7. Conversion to or from a domestic limited liability company.
(1) (a) A domestic nonprofit corporation may convert to a domestic limited liability company
subject to Title 48, Chapter 2c, Utah Revised Limited Liability Company Act, by complying with:
(i) this Subsection (1); and
(ii) Section 48-2c-1401 .
(b) If a domestic nonprofit corporation converts to a domestic limited liability company in
accordance with this Subsection (1), the articles of conversion shall:
(i) comply with Section 48-2c-1402 ; and
(ii) if the corporation has any members, provide for:
(A) the cancellation of any membership; or
(B) the conversion of any membership in the domestic nonprofit corporation to a
membership interest in the domestic limited liability company.
(c) In accordance with Section 48-2c-1404 , before articles of conversion may be filed with
the division, the conversion shall be approved:
(i) in the manner provided for the articles of incorporation or bylaws of the domestic
nonprofit corporation; or
(ii) if the articles of incorporation or bylaws of the domestic nonprofit corporation do not
provide the method for approval:
(A) if the domestic nonprofit corporation has voting members, by all of the members of the
domestic nonprofit corporation regardless of limitations or restrictions on the voting rights of the
members; or
(B) if the nonprofit domestic corporation does not have voting members, by a majority of:
(I) the directors in office at the time the conversion is approved by the board of directors;
or
(II) if directors have not been appointed or elected, the incorporators.
(2) A domestic limited liability company may convert to a domestic nonprofit corporation
subject to this chapter by:
(a) filing articles of incorporation in accordance with this chapter; and
(b) complying with Section 48-2c-1406 .
Section 2. Section 16-10a-1008.7 is enacted to read:
16-10a-1008.7. Conversion to or from a domestic limited liability company.
(1) (a) A corporation may convert to a domestic limited liability company subject to Title
48, Chapter 2c, Utah Revised Limited Liability Company Act, by complying with:
(i) this Subsection (1); and
(ii) Section 48-2c-1401 .
(b) If a corporation converts to a domestic limited liability company in accordance with this
Subsection (1), the articles of conversion shall:
(i) comply with Section 48-2c-1402 ; and
(ii) if the corporation has issued shares, provide for:
(A) the cancellation of any issued share; or
(B) the conversion of any issued share to a membership interest in the domestic limited
liability company.
(c) In accordance with Section 48-2c-1404 , before articles of conversion may be filed with
the division, the conversion shall be approved:
(i) in the manner provided for the articles of incorporation or bylaws of the corporation; or
(ii) if the articles of incorporation or bylaws of the corporation do not provide the method
for approval:
(A) if the corporation has issued shares, by all of the outstanding shares of all classes of
shares of the corporation regardless of limitations or restrictions on the voting rights of the shares;
or
(B) if the corporation has not issued shares, by a majority of:
(I) the directors in office at the time that the conversion is approved by the board of
directors; or
(II) if directors have not been appointed or elected, the incorporators.
(2) A domestic limited liability company may convert to a corporation subject to this chapter
by:
(a) filing articles of incorporation in accordance with this chapter; and
(b) complying with Section 48-2c-1406 .
Section 3. Section 48-2a-104 is amended to read:
48-2a-104. Registered agent.
(1) (a) [
service of process on the limited partnership[
(b) The agent [
(i) an individual resident of this state[
(ii) a domestic corporation[
(iii) a foreign corporation authorized to do business in this state.
(2) (a) The registered agent of a limited partnership may resign by filing [
by the resigning agent.
(b) After receipt of the notice of resignation under Subsection (2)(a), the division shall [
limited partnership at the [
general partner.
(c) The appointment of [
notice of [
(3) (a) A limited partnership may change the limited partnership's registered agent in this
state by filing with the division a notice of change of registered agent.
(b) The notice of change of registered agent required by this Subsection (3) shall:
(i) state:
(A) the name of the limited partnership;
(B) the name of the limited partnership's registered agent before the change of registered
agent; and
(C) the name of the limited partnership's registered agent after the change of registered agent;
and
(ii) include the new registered agent's written consent to the appointment:
(A) on the notice of change of registered agent; or
(B) in a document accompanying the notice of change of registered agent.
(c) A registered agent may change the registered agent's street address by:
(i) notifying the limited partnership in writing of the change; and
(ii) filing with the division a notice of change of address that:
(A) is signed by the registered agent;
(B) includes the information required by Subsection (3)(b); and
(C) states that the registered agent notified the limited partnership as required by Subsection
(3)(c)(i).
(d) A notice that is required under this section to be filed with the division shall be filed no
later than 30 days after the change for which notice under this section is required.
Section 4. Section 48-2a-202 is amended to read:
48-2a-202. Amendment to certificate.
(1) (a) A certificate of limited partnership is amended by filing a certificate of amendment
with the division. [
(b) A certificate of amendment filed under this Subsection (1) shall [
[
[
[
(2) [
to a certificate of limited partnership [
under Section 48-2a-801 after an event of withdrawal of a general partner[
[
[
(3) A general partner who knows or reasonably should know that any statement in a
certificate of limited partnership or a certificate of amendment to a certificate of limited partnership
was false at the time the certificate was executed making the certificate inaccurate in any respect,
shall promptly amend the certificate.
(4) A certificate of limited partnership may be amended at any time for any other proper
purpose the general partners determine.
(5) A person may not be held liable because an amendment to a certificate of limited
partnership has not been filed [
(2) if the amendment is filed within the 60 days specified in Subsection (2).
(6) A restated certificate of limited partnership may be executed and filed in the same
manner as a certificate of amendment.
Section 5. Section 48-2a-202.5 is enacted to read:
48-2a-202.5. Actions not requiring amendment.
Notwithstanding Section 48-2a-202 , a limited partnership is not required to amend the
limited partnership's certificate of limited partnership to report a change in:
(1) the name of the limited partnership's registered agent;
(2) the street address of the limited partnership's registered agent; or
(3) the limited partnership's principal place of business where the records required to be
maintained by Section 48-2a-105 are kept.
Section 6. Section 48-2c-108 is amended to read:
48-2c-108. Reservation of name.
(1) The exclusive right to register a name for use by a company may be reserved by any
person.
(2) (a) The reservation described in Subsection (1) shall be made by filing with the division
an application signed [
(b) If the division finds that the name is available for use by a company, [
reserve the name exclusively for the applicant for a period of 120 days. The name reservation may
be renewed for any number of subsequent periods of 120 days.
(c) The reserved name may be transferred to any other person by filing with the division a
notice of the transfer that:
(i) is signed [
and [
(ii) specifies the name and address of the transferee.
Section 7. Section 48-2c-110 is amended to read:
48-2c-110. Powers.
Each company organized and existing under this chapter may:
(1) sue or be sued, institute or defend any action, or participate in any proceeding in its own
name;
(2) purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use, or otherwise
deal in or with real or personal property or an interest in real or personal property, wherever situated;
(3) sell, convey, assign, encumber, mortgage, pledge, create a security interest in, lease,
exchange or transfer, or otherwise dispose of all or any part of its property or assets;
(4) lend money to and otherwise assist its members, managers, and employees;
(5) purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ,
sell, mortgage, lend, pledge, or otherwise dispose of, or otherwise use or deal in or with:
(a) shares or other interests in any entity or obligations of any person; or
(b) direct or indirect obligations of the United States or any other government, state,
territory, governmental district, or municipality or of any instrumentality of any of them;
(6) make contracts or guarantees or incur liabilities, borrow money at such rates of interest
as the company may determine, issue its notes, bonds, or other obligations, or secure any of its
obligations by mortgage or pledge of all or any part of its property, franchises, and income;
(7) lend money for any lawful purpose, invest or reinvest its funds, or take and hold real or
personal property as security for the payment of funds so loaned or invested;
(8) conduct its business and maintain offices and exercise the powers granted by this chapter
within this state, and in any state, territory, district, or possession of the United States, or in any
foreign country;
(9) elect or appoint managers and agents of the company, define their duties, and fix their
compensation;
(10) make and alter an operating agreement as allowed by Part 5 [
Agreements;
(11) make donations for the public welfare or for charitable, scientific, religious, or
educational purposes;
(12) indemnify or hold harmless any person;
(13) cease its activities and cancel its certificate of organization;
(14) transact any lawful business which the members or the managers find to be in aid of
governmental policy;
(15) pay pensions and establish pension plans, profit-sharing plans, and other incentive plans
for any or all of its members, managers, and employees;
(16) be a promoter, incorporator, [
associate, or manager of any corporation, partnership, limited partnership, limited liability company,
joint venture, trust, or other enterprise or entity;
(17) render professional services, if each member of a company who renders professional
services in Utah is licensed or registered to render those professional services pursuant to applicable
Utah law; and
(18) have and exercise the same powers as an individual, and all powers necessary or
convenient to effect or carry out any or all of the purposes for which the company is organized.
Section 8. Section 48-2c-401 is amended to read:
48-2c-401. Organizer.
(1) One or more individuals 18 years of age or older may form a company under this chapter
by signing and filing with the division articles of organization that meet the requirements of Section
48-2c-403 . The individuals acting as organizer may, but need not, be members or managers of the
company at the time of formation or after formation has occurred.
(2) The signing of the articles of organization constitutes an affirmation by the organizers[
manager-managed, the person or persons named as managers in the articles of organization have
consented to serve as managers of the company. At or prior to filing articles of organization for a
company, the organizer or organizers shall prepare a writing to be held with the records of the
company which sets forth:
(a) the name and street address of each initial member of the company; and
(b) if the articles of organization provide that the company is manager-managed, the name
and street address of each initial manager.
Section 9. Section 48-2c-408 is amended to read:
48-2c-408. Certificate of amendment to articles of organization.
(1) A company amending its articles of organization shall deliver to the division for filing
a certificate of amendment which includes:
(a) the name of the company;
(b) the text of each amendment adopted;
(c) if the amendment provides for restructuring the ownership of the company or an
exchange or reclassification of the members' interests in the company, provisions for implementing
the amendment if not contained in the text of the amendment itself;
(d) the date each amendment was adopted by the members;
(e) a statement that each amendment was adopted by the members as required by Section
48-2c-802 or as otherwise required by the articles of organization or operating agreement; and
(f) the signature required by Section 48-2c-204 .
(2) Unless otherwise provided in the articles of organization or operating agreement, each
amendment to the articles of organization of a company must be approved by all of the members and,
if there are classes of members, by all of the members of each class.
(3) [
(1) to the division for filing within 60 days after adoption of the amendment.
(4) Upon the filing with the division of a certificate of amendment, the articles of
organization shall be amended as set forth in the certificate of amendment.
Section 10. Section 48-2c-602 is amended to read:
48-2c-602. Exceptions to limited liability.
The following exceptions to limited liability under Section 48-2c-601 shall apply:
(1) All persons who assume to act as a company without complying with this chapter are
jointly and severally liable for all debts and liabilities so incurred, except for debts incurred in the
course of prefiling activities authorized under Section 48-2c-404 .
(2) A member of a company is liable to the company:
(a) for the difference between the amount of the member's contributions to the company
which have been actually made and the amount which is stated in the operating agreement or other
contract as having been made; and
(b) for any unpaid contribution to the company which the member, in the operating
agreement or other contract, agreed to make in the future at the time and on the conditions stated in
the operating agreement or other contract.
(3) A member holds as trustee for the company:
(a) specific property which is stated in the operating agreement or other contract as having
been contributed by the member, if the property was not contributed or it has been wrongfully or
erroneously returned; and
(b) money or other property wrongfully or erroneously paid or conveyed to the member.
(4) Persons engaged in prefiling activities other than those authorized by Section 48-2c-404
shall be jointly and severally liable for any debts or liabilities incurred in the course of those
activities.
(5) (a) This chapter does not alter any law applicable to the relationship between a person
rendering professional services and a person receiving those services, including liability arising out
of those professional services.
(b) All persons rendering professional services shall remain personally liable for any results
of that person's acts or omissions.
(6) When a member has rightfully received a distribution, in whole or in part, of the
member's capital account, the member remains liable to the company for any sum, not in excess of
the amount of distribution, with interest, necessary to discharge the company's obligations to all
creditors of the company who extended credit in reliance on any representation as to the financial
condition of the company that included the amount so distributed [
to the distribution.
Section 11. Section 48-2c-707 is amended to read:
48-2c-707. Classes of members.
(1) The articles of organization or operating agreement of a company may provide for classes
or groups of members having such relative rights, powers, and duties as prescribed therein, and may
make provision for the future creation of any such classes or groups. [
(2) Except as provided in Subsection 48-2c-803 (2), the articles of organization or operating
agreement may provide for the taking of an action, including the amendment of the operating
agreement, without the vote or approval of any member or class or group of members and may
provide that any particular class or group shall have no voting rights.
Section 12. Section 48-2c-801 is amended to read:
48-2c-801. Management structure.
A company may be managed either by one or more managers, in which case it shall be
considered to be a "manager-managed company," or it may be managed by all of its members, in
which case it shall be considered to be a "member-managed company."
(1) The choice of management structure shall be designated in the articles of organization
for the company. If the articles of organization fail to designate the management structure or do not
clearly designate the management structure, management of the company shall be vested in its
members.
(2) Unless the operating agreement provides otherwise, a manager-managed company shall
become a member-managed company upon the death, withdrawal, or removal of the sole remaining
manager, or if one of the events described in Subsection 48-2c-708 [
occurs with regard to the sole remaining manager, unless another manager is appointed by the
members within 90 days after the occurrence of any such event.
(3) The dissolution of a company does not alter the authority of the managers or members,
as the case may be, to wind up the business and affairs of the company.
Section 13. Section 48-2c-804 is amended to read:
48-2c-804. Management by managers.
In a manager-managed company, each manager and each member shall be subject to the
provisions of Section 48-2c-807 and:
(1) the initial managers shall be designated in the articles of organization; thereafter, the
managers shall be those persons identified in documents filed with the division including
amendments to the articles of organization as well as the annual reports required under Section
48-2c-203 and the statements required or permitted under Section 48-2c-122 ;
(2) when there is a change in the management structure from a member-managed company
to a manager-managed company, the managers shall be those persons identified in the certificate of
amendment to the articles of organization that makes the change;
(3) each manager who is a natural person must have attained the age of majority under the
laws of this state;
(4) no manager shall have authority to do any act in contravention of the articles of
organization or the operating agreement, except as provided in Subsection (6)(g);
(5) a manager who is also a member shall have all of the rights of a member;
(6) unless otherwise provided in the articles of organization or operating agreement of the
company:
(a) except for the initial managers, each manager shall be elected at any time by the members
holding at least a majority of the profits interests in the company, and any vacancy occurring in the
position of manager shall be filled in the same manner;
(b) the number of managers shall be fixed by the members in the operating agreement or if
the operating agreement fails to designate the number of managers, the number of managers shall
be the number designated by members holding at least a majority of the profits interests in the
company;
(c) each manager shall serve until the earliest to occur of the manager's death, withdrawal,
or removal or an event described in Subsection 48-2c-708 [
company is a condition to being a manager, an event described in Subsection 48-2c-708 [
or [
(d) a manager need not be a member of the company or a resident of this state;
(e) any manager may be removed with or without cause by the members, at any time, by the
decision of members owning a majority of the profits interests in the company;
(f) there shall be only one class of managers; and
(g) approval by the requisite number of members, as well as all of the managers, shall be
required as to all matters described in Subsections 48-2c-803 (2) and (3).
Section 14. Section 48-2c-1103 is amended to read:
48-2c-1103. Rights of creditor of member.
(1) On application to a court of competent jurisdiction by any judgment creditor of a member
or of a member's assignee, the court may charge the interest in the company of the member or
assignee with payment of the unsatisfied amount of the judgment plus interest. The court may then
or later appoint a receiver of the share of distributions due or to become due to the judgment debtor
in respect of the interest in the company. The judgment creditor and receiver shall have only the
rights of an assignee. The court may make all other orders, directions, accounts, and inquiries the
judgment debtor might have made or which the circumstances of the case may require.
(2) A charging order constitutes a lien on the judgment debtor's interest in the company. The
court may order a foreclosure of the interest subject to the charging order at any time. The purchaser
at the foreclosure sale has only the rights of an assignee.
(3) Unless otherwise provided in the articles [
the company, at any time before foreclosure an interest charged may be redeemed:
(a) by the judgment debtor;
(b) with property other than company property, by one or more of the other members; or
(c) by the company with the consent of all of the members whose interests are not so
charged.
(4) This section does not deprive a member of a right under exemption laws with respect to
the member's interest in a company.
(5) This section provides the exclusive remedy by which a judgment creditor of a member
or a member's assignee may satisfy a judgment out of the judgment debtor's interest in a company.
(6) No creditor of a member shall have any right to obtain possession of, or otherwise
exercise legal or equitable remedies with respect to, the property of the company.
Section 15. Section 48-2c-1207 is amended to read:
48-2c-1207. Procedure for and effect of administrative dissolution.
(1) If the division determines that one or more grounds exist under Section 48-2c-1206 for
dissolving a company, it shall mail to the company written notice of:
(a) the division's determination that one or more grounds exist for dissolving the company;
and
(b) the grounds for dissolving the company.
(2) (a) If the company does not correct each ground for dissolution, or demonstrate to the
reasonable satisfaction of the division that each ground does not exist, within 60 days after mailing
the notice provided in Subsection (1), the division shall administratively dissolve the company.
(b) If a company is dissolved under Subsection (2)(a), the division shall mail written notice
of the administrative dissolution to the dissolved company at its designated office, stating the date
of dissolution specified in Subsection (2)(d).
(c) The division shall mail a copy of the notice of administrative dissolution including a
statement of the grounds [
(i) the registered agent of the dissolved company; or
(ii) if there is no registered agent of record, or if the mailing to the registered agent is
returned as undeliverable, at least one member if the company is member-managed or one manager
of the company if the company is manager-managed, at their addresses as reflected on the notice,
annual report, or document most recently filed with the division.
(d) A company's effective date of administrative dissolution is five days after the date the
division mails the written notice of dissolution under Subsection (2)(b).
(e) On the effective date of dissolution, any assumed names filed on behalf of the dissolved
company under Title 42, Chapter 2, Conducting Business Under Assumed Name, are canceled.
(f) Notwithstanding Subsection (2)(e), the name of the company that is dissolved and any
assumed names filed on its behalf are not available for two years from the effective date of
dissolution for use by any other person:
(i) transacting business in this state; or
(ii) doing business under an assumed name under Title 42, Chapter 2, Conducting Business
Under Assumed Name.
(g) Notwithstanding Subsection (2)(e), if the company that is dissolved is reinstated in
accordance with Section 48-2c-1208 , the registration of the name of the company and any assumed
names filed on its behalf are reinstated back to the effective date of dissolution.
(3) (a) Except as provided in Subsection (3)(b), a company administratively dissolved under
this section continues its existence but may not carry on any business except:
(i) the business necessary to wind up and liquidate its business and affairs under Part 13 of
this chapter; and
(ii) to give notice to claimants in the manner provided in Sections 48-2c-1305 and
48-2c-1306 .
(b) If the company is reinstated in accordance with Section 48-2c-1208 , business conducted
by the company during a period of administrative dissolution is unaffected by the dissolution.
(4) The administrative dissolution of a company does not terminate the authority of its
registered agent.
(5) (a) Upon the administrative dissolution of a company, the director of the division shall
be an additional agent of the dissolved company for purposes of service of process.
(b) Service of process on the division under this Subsection (5) is service on the dissolved
company.
(c) Upon receipt of process under this Subsection (5), the director of the division shall send
a copy of the process to the dissolved company at its designated office and a copy of the process to
the registered agent of the dissolved company.
(6) A notice mailed under this section shall be:
(a) mailed first-class, postage prepaid; and
(b) addressed to the most current mailing address appearing on the records of the division
for:
(i) the designated office of the company, if the notice is required to be mailed to the
company;
(ii) the registered agent of the company, if the notice is required to be mailed to the
registered agent; or
(iii) any member if the company is member-managed, or to any manager of the company if
the company is manager-managed, if the notice is required to be mailed to a member or manager of
the company.
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