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First Substitute S.B. 131
This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Feb 28, 2011 at 11:39 AM by kcallred. -->
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7 LONG TITLE
8 General Description:
9 This bill repeals the existing Partnership Act, Utah Revised Uniform Limited
10 Partnership Act, and Utah Revised Limited Liability Company Act, and enacts with
11 modifications the Utah Uniform Partnership Act, Utah Uniform Limited Partnership
12 Act, and Utah Revised Uniform Limited Liability Company Act.
13 Highlighted Provisions:
14 This bill:
15 . enacts provisions related to partnerships, including:
16 . enacting general provisions related to partnerships such as defining terms,
17 addressing what constitutes knowledge and notice, addressing the effect of a
18 partnership agreement, designating supplemental principles of law, providing
19 for execution, filing, and recording of statements, addressing what is the
20 governing law, and the affects of amendments or repeals to the chapter;
21 . addressing the nature of a partnership;
22 . addressing the relations of partners to persons dealing with a partnership;
23 . addressing relations of partners to each other and to the partnership;
24 . addressing transferees and creditors of partners;
25 . providing for a partner's dissociation including when business is not wound up;
26
27 . providing for conversion and merger; and
28 . providing for a limited liability partnership, a limited liability partnership that
29 provides a professional service, and foreign limited liability partnership;
30 . enacts provisions related to limited partnerships, including:
31 . providing for general provisions related to limited partnerships;
32 . addressing formation of limited partnerships and various filing requirements;
33 . addressing limited partners;
34 . addressing general partners;
35 . providing for contributions and distributions;
36 . providing for dissociation;
37 . addressing transferable interests and rights of transferees and creditors;
38 . providing for dissolution;
39 . addressing foreign limited partnerships;
40 . providing for actions by partners; and
41 . providing for conversions and mergers;
42 . enacts provisions related to limited liability companies, including:
43 . addressing various general provisions related to limited liability companies;
44 . providing for the formation and filings of limited liability companies;
45 . addressing relations of members and managers to a person dealing with a
46 limited liability company;
47 . addressing relations of members to each other and to the limited liability
48 company;
49 . addressing transferable interests and rights of transferees and creditors;
50 . providing for dissociation;
51 . providing for dissolution and winding up;
52 . addressing foreign limited liability companies;
53 . providing for actions by members;
54 . providing for merger, conversion, and domestication;
55 . providing for professional services companies;
56 . providing for series; and
57
58 . includes miscellaneous provisions such as providing for uniformity of application,
59 severability, and savings; and
60 . makes technical and conforming amendments.
61 Money Appropriated in this Bill:
62 None
63 Other Special Clauses:
64 This bill takes effect on July 1, 2012.
65 Utah Code Sections Affected:
66 AMENDS:
67 7-1-810, as last amended by Laws of Utah 2008, Chapter 382
68 7-3-10, as last amended by Laws of Utah 2007, Chapter 277
69 7-8-3, as last amended by Laws of Utah 2004, Chapter 92
70 13-34-114, as last amended by Laws of Utah 2010, Chapter 218
71 16-6a-1008.7, as last amended by Laws of Utah 2006, Chapter 228
72 16-10a-401, as last amended by Laws of Utah 2010, Chapters 218 and 378
73 16-10a-1008.7, as enacted by Laws of Utah 2002, Chapter 193
74 16-11-16, as last amended by Laws of Utah 2010, Chapters 218 and 378
75 16-16-111, as last amended by Laws of Utah 2010, Chapter 378
76 16-17-102, as enacted by Laws of Utah 2008, Chapter 364
77 31A-37a-102, as enacted by Laws of Utah 2008, Chapter 302
78 46-4-503, as last amended by Laws of Utah 2008, Chapter 382
79 53C-1-201, as last amended by Laws of Utah 2010, Chapter 218
80 61-2b-25, as last amended by Laws of Utah 2010, Chapter 379
81 61-2f-401, as last amended by Laws of Utah 2010, Chapter 184 and renumbered and
82 amended by Laws of Utah 2010, Chapter 379
83 75-7-1011, as enacted by Laws of Utah 2004, Chapter 89
84 ENACTS:
85 48-1a-101, Utah Code Annotated 1953
86 48-1a-102, Utah Code Annotated 1953
87 48-1b-101, Utah Code Annotated 1953
88
89 48-1b-103, Utah Code Annotated 1953
90 48-1b-104, Utah Code Annotated 1953
91 48-1b-105, Utah Code Annotated 1953
92 48-1b-106, Utah Code Annotated 1953
93 48-1b-107, Utah Code Annotated 1953
94 48-1b-201, Utah Code Annotated 1953
95 48-1b-202, Utah Code Annotated 1953
96 48-1b-203, Utah Code Annotated 1953
97 48-1b-204, Utah Code Annotated 1953
98 48-1b-301, Utah Code Annotated 1953
99 48-1b-302, Utah Code Annotated 1953
100 48-1b-303, Utah Code Annotated 1953
101 48-1b-304, Utah Code Annotated 1953
102 48-1b-305, Utah Code Annotated 1953
103 48-1b-306, Utah Code Annotated 1953
104 48-1b-307, Utah Code Annotated 1953
105 48-1b-308, Utah Code Annotated 1953
106 48-1b-401, Utah Code Annotated 1953
107 48-1b-402, Utah Code Annotated 1953
108 48-1b-403, Utah Code Annotated 1953
109 48-1b-404, Utah Code Annotated 1953
110 48-1b-405, Utah Code Annotated 1953
111 48-1b-406, Utah Code Annotated 1953
112 48-1b-501, Utah Code Annotated 1953
113 48-1b-502, Utah Code Annotated 1953
114 48-1b-503, Utah Code Annotated 1953
115 48-1b-504, Utah Code Annotated 1953
116 48-1b-601, Utah Code Annotated 1953
117 48-1b-602, Utah Code Annotated 1953
118 48-1b-603, Utah Code Annotated 1953
119
120 48-1b-702, Utah Code Annotated 1953
121 48-1b-703, Utah Code Annotated 1953
122 48-1b-704, Utah Code Annotated 1953
123 48-1b-705, Utah Code Annotated 1953
124 48-1b-801, Utah Code Annotated 1953
125 48-1b-802, Utah Code Annotated 1953
126 48-1b-803, Utah Code Annotated 1953
127 48-1b-804, Utah Code Annotated 1953
128 48-1b-805, Utah Code Annotated 1953
129 48-1b-806, Utah Code Annotated 1953
130 48-1b-807, Utah Code Annotated 1953
131 48-1b-901, Utah Code Annotated 1953
132 48-1b-902, Utah Code Annotated 1953
133 48-1b-903, Utah Code Annotated 1953
134 48-1b-904, Utah Code Annotated 1953
135 48-1b-905, Utah Code Annotated 1953
136 48-1b-906, Utah Code Annotated 1953
137 48-1b-907, Utah Code Annotated 1953
138 48-1b-908, Utah Code Annotated 1953
139 48-1b-909, Utah Code Annotated 1953
140 48-1b-910, Utah Code Annotated 1953
141 48-1b-911, Utah Code Annotated 1953
142 48-1b-912, Utah Code Annotated 1953
143 48-1b-913, Utah Code Annotated 1953
144 48-1b-914, Utah Code Annotated 1953
145 48-1b-915, Utah Code Annotated 1953
146 48-1b-1001, Utah Code Annotated 1953
147 48-1b-1002, Utah Code Annotated 1953
148 48-1b-1003, Utah Code Annotated 1953
149 48-1b-1004, Utah Code Annotated 1953
150
151 48-1b-1102, Utah Code Annotated 1953
152 48-1b-1102.1, Utah Code Annotated 1953
153 48-1b-1103, Utah Code Annotated 1953
154 48-1b-1104, Utah Code Annotated 1953
155 48-1b-1105, Utah Code Annotated 1953
156 48-1b-1201, Utah Code Annotated 1953
157 48-1b-1202, Utah Code Annotated 1953
158 48-1b-1203, Utah Code Annotated 1953
159 48-1b-1204, Utah Code Annotated 1953
160 48-1b-1205, Utah Code Annotated 1953
161 48-2d-101, Utah Code Annotated 1953
162 48-2d-102, Utah Code Annotated 1953
163 48-2d-103, Utah Code Annotated 1953
164 48-2d-104, Utah Code Annotated 1953
165 48-2d-105, Utah Code Annotated 1953
166 48-2d-106, Utah Code Annotated 1953
167 48-2d-107, Utah Code Annotated 1953
168 48-2d-108, Utah Code Annotated 1953
169 48-2d-109, Utah Code Annotated 1953
170 48-2d-110, Utah Code Annotated 1953
171 48-2d-111, Utah Code Annotated 1953
172 48-2d-112, Utah Code Annotated 1953
173 48-2d-113, Utah Code Annotated 1953
174 48-2d-114, Utah Code Annotated 1953
175 48-2d-201, Utah Code Annotated 1953
176 48-2d-202, Utah Code Annotated 1953
177 48-2d-203, Utah Code Annotated 1953
178 48-2d-204, Utah Code Annotated 1953
179 48-2d-205, Utah Code Annotated 1953
180 48-2d-206, Utah Code Annotated 1953
181
182 48-2d-208, Utah Code Annotated 1953
183 48-2d-209, Utah Code Annotated 1953
184 48-2d-210, Utah Code Annotated 1953
185 48-2d-301, Utah Code Annotated 1953
186 48-2d-302, Utah Code Annotated 1953
187 48-2d-303, Utah Code Annotated 1953
188 48-2d-304, Utah Code Annotated 1953
189 48-2d-305, Utah Code Annotated 1953
190 48-2d-306, Utah Code Annotated 1953
191 48-2d-401, Utah Code Annotated 1953
192 48-2d-402, Utah Code Annotated 1953
193 48-2d-403, Utah Code Annotated 1953
194 48-2d-404, Utah Code Annotated 1953
195 48-2d-405, Utah Code Annotated 1953
196 48-2d-406, Utah Code Annotated 1953
197 48-2d-407, Utah Code Annotated 1953
198 48-2d-408, Utah Code Annotated 1953
199 48-2d-501, Utah Code Annotated 1953
200 48-2d-502, Utah Code Annotated 1953
201 48-2d-503, Utah Code Annotated 1953
202 48-2d-504, Utah Code Annotated 1953
203 48-2d-505, Utah Code Annotated 1953
204 48-2d-506, Utah Code Annotated 1953
205 48-2d-507, Utah Code Annotated 1953
206 48-2d-508, Utah Code Annotated 1953
207 48-2d-509, Utah Code Annotated 1953
208 48-2d-601, Utah Code Annotated 1953
209 48-2d-602, Utah Code Annotated 1953
210 48-2d-603, Utah Code Annotated 1953
211 48-2d-604, Utah Code Annotated 1953
212
213 48-2d-606, Utah Code Annotated 1953
214 48-2d-607, Utah Code Annotated 1953
215 48-2d-701, Utah Code Annotated 1953
216 48-2d-702, Utah Code Annotated 1953
217 48-2d-703, Utah Code Annotated 1953
218 48-2d-704, Utah Code Annotated 1953
219 48-2d-801, Utah Code Annotated 1953
220 48-2d-802, Utah Code Annotated 1953
221 48-2d-803, Utah Code Annotated 1953
222 48-2d-804, Utah Code Annotated 1953
223 48-2d-805, Utah Code Annotated 1953
224 48-2d-806, Utah Code Annotated 1953
225 48-2d-807, Utah Code Annotated 1953
226 48-2d-808, Utah Code Annotated 1953
227 48-2d-809, Utah Code Annotated 1953
228 48-2d-810, Utah Code Annotated 1953
229 48-2d-811, Utah Code Annotated 1953
230 48-2d-812, Utah Code Annotated 1953
231 48-2d-901, Utah Code Annotated 1953
232 48-2d-902, Utah Code Annotated 1953
233 48-2d-903, Utah Code Annotated 1953
234 48-2d-904, Utah Code Annotated 1953
235 48-2d-905, Utah Code Annotated 1953
236 48-2d-906, Utah Code Annotated 1953
237 48-2d-907, Utah Code Annotated 1953
238 48-2d-908, Utah Code Annotated 1953
239 48-2d-1001, Utah Code Annotated 1953
240 48-2d-1002, Utah Code Annotated 1953
241 48-2d-1003, Utah Code Annotated 1953
242 48-2d-1004, Utah Code Annotated 1953
243
244 48-2d-1101, Utah Code Annotated 1953
245 48-2d-1102, Utah Code Annotated 1953
246 48-2d-1103, Utah Code Annotated 1953
247 48-2d-1104, Utah Code Annotated 1953
248 48-2d-1105, Utah Code Annotated 1953
249 48-2d-1106, Utah Code Annotated 1953
250 48-2d-1107, Utah Code Annotated 1953
251 48-2d-1108, Utah Code Annotated 1953
252 48-2d-1109, Utah Code Annotated 1953
253 48-2d-1110, Utah Code Annotated 1953
254 48-2d-1111, Utah Code Annotated 1953
255 48-2d-1112, Utah Code Annotated 1953
256 48-2d-1113, Utah Code Annotated 1953
257 48-2d-1114, Utah Code Annotated 1953
258 48-2d-1115, Utah Code Annotated 1953
259 48-2d-1116, Utah Code Annotated 1953
260 48-2d-1117, Utah Code Annotated 1953
261 48-2d-1201, Utah Code Annotated 1953
262 48-2d-1202, Utah Code Annotated 1953
263 48-2d-1203, Utah Code Annotated 1953
264 48-2d-1204, Utah Code Annotated 1953
265 48-2d-1205, Utah Code Annotated 1953
266 48-3-101, Utah Code Annotated 1953
267 48-3-102, Utah Code Annotated 1953
268 48-3-103, Utah Code Annotated 1953
269 48-3-104, Utah Code Annotated 1953
270 48-3-105, Utah Code Annotated 1953
271 48-3-106, Utah Code Annotated 1953
272 48-3-107, Utah Code Annotated 1953
273 48-3-108, Utah Code Annotated 1953
274
275 48-3-110, Utah Code Annotated 1953
276 48-3-111, Utah Code Annotated 1953
277 48-3-112, Utah Code Annotated 1953
278 48-3-201, Utah Code Annotated 1953
279 48-3-202, Utah Code Annotated 1953
280 48-3-203, Utah Code Annotated 1953
281 48-3-204, Utah Code Annotated 1953
282 48-3-205, Utah Code Annotated 1953
283 48-3-206, Utah Code Annotated 1953
284 48-3-207, Utah Code Annotated 1953
285 48-3-208, Utah Code Annotated 1953
286 48-3-209, Utah Code Annotated 1953
287 48-3-301, Utah Code Annotated 1953
288 48-3-302, Utah Code Annotated 1953
289 48-3-303, Utah Code Annotated 1953
290 48-3-304, Utah Code Annotated 1953
291 48-3-401, Utah Code Annotated 1953
292 48-3-402, Utah Code Annotated 1953
293 48-3-403, Utah Code Annotated 1953
294 48-3-404, Utah Code Annotated 1953
295 48-3-405, Utah Code Annotated 1953
296 48-3-406, Utah Code Annotated 1953
297 48-3-407, Utah Code Annotated 1953
298 48-3-408, Utah Code Annotated 1953
299 48-3-409, Utah Code Annotated 1953
300 48-3-410, Utah Code Annotated 1953
301 48-3-501, Utah Code Annotated 1953
302 48-3-502, Utah Code Annotated 1953
303 48-3-503, Utah Code Annotated 1953
304 48-3-504, Utah Code Annotated 1953
305
306 48-3-602, Utah Code Annotated 1953
307 48-3-603, Utah Code Annotated 1953
308 48-3-701, Utah Code Annotated 1953
309 48-3-702, Utah Code Annotated 1953
310 48-3-703, Utah Code Annotated 1953
311 48-3-704, Utah Code Annotated 1953
312 48-3-705, Utah Code Annotated 1953
313 48-3-706, Utah Code Annotated 1953
314 48-3-707, Utah Code Annotated 1953
315 48-3-708, Utah Code Annotated 1953
316 48-3-709, Utah Code Annotated 1953
317 48-3-801, Utah Code Annotated 1953
318 48-3-802, Utah Code Annotated 1953
319 48-3-803, Utah Code Annotated 1953
320 48-3-804, Utah Code Annotated 1953
321 48-3-805, Utah Code Annotated 1953
322 48-3-806, Utah Code Annotated 1953
323 48-3-807, Utah Code Annotated 1953
324 48-3-808, Utah Code Annotated 1953
325 48-3-809, Utah Code Annotated 1953
326 48-3-901, Utah Code Annotated 1953
327 48-3-902, Utah Code Annotated 1953
328 48-3-903, Utah Code Annotated 1953
329 48-3-904, Utah Code Annotated 1953
330 48-3-905, Utah Code Annotated 1953
331 48-3-906, Utah Code Annotated 1953
332 48-3-1001, Utah Code Annotated 1953
333 48-3-1002, Utah Code Annotated 1953
334 48-3-1003, Utah Code Annotated 1953
335 48-3-1004, Utah Code Annotated 1953
336
337 48-3-1006, Utah Code Annotated 1953
338 48-3-1007, Utah Code Annotated 1953
339 48-3-1008, Utah Code Annotated 1953
340 48-3-1009, Utah Code Annotated 1953
341 48-3-1010, Utah Code Annotated 1953
342 48-3-1011, Utah Code Annotated 1953
343 48-3-1012, Utah Code Annotated 1953
344 48-3-1013, Utah Code Annotated 1953
345 48-3-1014, Utah Code Annotated 1953
346 48-3-1015, Utah Code Annotated 1953
347 48-3-1101, Utah Code Annotated 1953
348 48-3-1102, Utah Code Annotated 1953
349 48-3-1103, Utah Code Annotated 1953
350 48-3-1104, Utah Code Annotated 1953
351 48-3-1105, Utah Code Annotated 1953
352 48-3-1106, Utah Code Annotated 1953
353 48-3-1107, Utah Code Annotated 1953
354 48-3-1108, Utah Code Annotated 1953
355 48-3-1109, Utah Code Annotated 1953
356 48-3-1110, Utah Code Annotated 1953
357 48-3-1111, Utah Code Annotated 1953
358 48-3-1112, Utah Code Annotated 1953
359 48-3-1201, Utah Code Annotated 1953
360 48-3-1202, Utah Code Annotated 1953
361 48-3-1203, Utah Code Annotated 1953
362 48-3-1204, Utah Code Annotated 1953
363 48-3-1205, Utah Code Annotated 1953
364 48-3-1206, Utah Code Annotated 1953
365 48-3-1207, Utah Code Annotated 1953
366 48-3-1208, Utah Code Annotated 1953
367
368 48-3-1210, Utah Code Annotated 1953
369 48-3-1301, Utah Code Annotated 1953
370 48-3-1302, Utah Code Annotated 1953
371 48-3-1303, Utah Code Annotated 1953
372 48-3-1304, Utah Code Annotated 1953
373 48-3-1401, Utah Code Annotated 1953
374 48-3-1402, Utah Code Annotated 1953
375 48-3-1403, Utah Code Annotated 1953
376 48-3-1404, Utah Code Annotated 1953
377 48-3-1405, Utah Code Annotated 1953
378 REPEALS:
379 48-1-1, as last amended by Laws of Utah 2008, Chapter 249
380 48-1-2, Utah Code Annotated 1953
381 48-1-3, as last amended by Laws of Utah 1994, Chapter 61
382 48-1-3.1, as enacted by Laws of Utah 1985, Chapter 14
383 48-1-4, Utah Code Annotated 1953
384 48-1-5, Utah Code Annotated 1953
385 48-1-6, Utah Code Annotated 1953
386 48-1-7, Utah Code Annotated 1953
387 48-1-8, Utah Code Annotated 1953
388 48-1-9, Utah Code Annotated 1953
389 48-1-10, Utah Code Annotated 1953
390 48-1-11, Utah Code Annotated 1953
391 48-1-12, as last amended by Laws of Utah 1994, Chapter 61
392 48-1-13, Utah Code Annotated 1953
393 48-1-14, Utah Code Annotated 1953
394 48-1-15, as last amended by Laws of Utah 1994, Chapter 61
395 48-1-16, Utah Code Annotated 1953
396 48-1-17, Utah Code Annotated 1953
397 48-1-18, Utah Code Annotated 1953
398
399 48-1-20, Utah Code Annotated 1953
400 48-1-21, Utah Code Annotated 1953
401 48-1-22, Utah Code Annotated 1953
402 48-1-23, Utah Code Annotated 1953
403 48-1-24, Utah Code Annotated 1953
404 48-1-25, Utah Code Annotated 1953
405 48-1-26, Utah Code Annotated 1953
406 48-1-27, Utah Code Annotated 1953
407 48-1-28, Utah Code Annotated 1953
408 48-1-29, Utah Code Annotated 1953
409 48-1-30, Utah Code Annotated 1953
410 48-1-31, as last amended by Laws of Utah 1994, Chapter 61
411 48-1-32, Utah Code Annotated 1953
412 48-1-33, as last amended by Laws of Utah 1994, Chapter 61
413 48-1-34, Utah Code Annotated 1953
414 48-1-35, Utah Code Annotated 1953
415 48-1-36, Utah Code Annotated 1953
416 48-1-37, as last amended by Laws of Utah 1994, Chapter 61
417 48-1-38, Utah Code Annotated 1953
418 48-1-39, Utah Code Annotated 1953
419 48-1-40, Utah Code Annotated 1953
420 48-1-41, as enacted by Laws of Utah 1994, Chapter 61
421 48-1-42, as last amended by Laws of Utah 2009, Chapter 183
422 48-1-43, as enacted by Laws of Utah 1994, Chapter 61
423 48-1-44, as last amended by Laws of Utah 2008, Chapter 249
424 48-1-45, as enacted by Laws of Utah 1994, Chapter 61
425 48-1-46, as enacted by Laws of Utah 1994, Chapter 61
426 48-1-47, as enacted by Laws of Utah 1994, Chapter 61
427 48-1-48, as last amended by Laws of Utah 2000, Chapter 261
428 48-2a-101, as last amended by Laws of Utah 2008, Chapter 249
429
430 48-2a-103, as last amended by Laws of Utah 1991, Chapter 189
431 48-2a-103.5, as enacted by Laws of Utah 1991, Chapter 189
432 48-2a-105, as last amended by Laws of Utah 1991, Chapter 189
433 48-2a-106, as enacted by Laws of Utah 1990, Chapter 233
434 48-2a-107, as enacted by Laws of Utah 1990, Chapter 233
435 48-2a-108, as enacted by Laws of Utah 2001, Chapter 260
436 48-2a-109, as enacted by Laws of Utah 2001, Chapter 260
437 48-2a-110, as enacted by Laws of Utah 2001, Chapter 260
438 48-2a-111, as enacted by Laws of Utah 2001, Chapter 260
439 48-2a-112, as enacted by Laws of Utah 2001, Chapter 260
440 48-2a-113, as enacted by Laws of Utah 2001, Chapter 260
441 48-2a-201, as last amended by Laws of Utah 2008, Chapter 364
442 48-2a-202, as last amended by Laws of Utah 2002, Chapter 193
443 48-2a-202.5, as last amended by Laws of Utah 2008, Chapter 364
444 48-2a-203, as last amended by Laws of Utah 1991, Chapter 189
445 48-2a-203.5, as last amended by Laws of Utah 2008, Chapter 382
446 48-2a-204, as enacted by Laws of Utah 1990, Chapter 233
447 48-2a-205, as enacted by Laws of Utah 1990, Chapter 233
448 48-2a-206, as last amended by Laws of Utah 2009, Chapter 183
449 48-2a-207, as last amended by Laws of Utah 1992, Chapter 30
450 48-2a-208, as last amended by Laws of Utah 1991, Chapter 189
451 48-2a-209, as enacted by Laws of Utah 1990, Chapter 233
452 48-2a-210, as last amended by Laws of Utah 2008, Chapter 364
453 48-2a-301, as last amended by Laws of Utah 1991, Chapter 189
454 48-2a-302, as enacted by Laws of Utah 1990, Chapter 233
455 48-2a-303, as last amended by Laws of Utah 1991, Chapter 189
456 48-2a-304, as last amended by Laws of Utah 1991, Chapter 189
457 48-2a-305, as enacted by Laws of Utah 1990, Chapter 233
458 48-2a-401, as enacted by Laws of Utah 1990, Chapter 233
459 48-2a-402, as last amended by Laws of Utah 2010, Chapter 324
460
461 48-2a-404, as last amended by Laws of Utah 1991, Chapter 189
462 48-2a-405, as enacted by Laws of Utah 1990, Chapter 233
463 48-2a-501, as enacted by Laws of Utah 1990, Chapter 233
464 48-2a-502, as enacted by Laws of Utah 1990, Chapter 233
465 48-2a-503, as enacted by Laws of Utah 1990, Chapter 233
466 48-2a-504, as last amended by Laws of Utah 1991, Chapter 189
467 48-2a-601, as last amended by Laws of Utah 1991, Chapter 189
468 48-2a-602, as enacted by Laws of Utah 1990, Chapter 233
469 48-2a-603, as enacted by Laws of Utah 1990, Chapter 233
470 48-2a-604, as last amended by Laws of Utah 1991, Chapter 189
471 48-2a-605, as enacted by Laws of Utah 1990, Chapter 233
472 48-2a-606, as enacted by Laws of Utah 1990, Chapter 233
473 48-2a-607, as enacted by Laws of Utah 1990, Chapter 233
474 48-2a-608, as last amended by Laws of Utah 1991, Chapter 189
475 48-2a-701, as enacted by Laws of Utah 1990, Chapter 233
476 48-2a-702, as last amended by Laws of Utah 1991, Chapter 189
477 48-2a-703, as last amended by Laws of Utah 1991, Chapter 189
478 48-2a-704, as last amended by Laws of Utah 1991, Chapter 189
479 48-2a-705, as last amended by Laws of Utah 1991, Chapter 189
480 48-2a-801, as last amended by Laws of Utah 1991, Chapter 189
481 48-2a-802, as enacted by Laws of Utah 1990, Chapter 233
482 48-2a-803, as enacted by Laws of Utah 1990, Chapter 233
483 48-2a-804, as last amended by Laws of Utah 1991, Chapter 189
484 48-2a-901, as enacted by Laws of Utah 1990, Chapter 233
485 48-2a-902, as last amended by Laws of Utah 2008, Chapters 249 and 364
486 48-2a-903, as enacted by Laws of Utah 1990, Chapter 233
487 48-2a-904, as enacted by Laws of Utah 1990, Chapter 233
488 48-2a-905, as last amended by Laws of Utah 1991, Chapter 189
489 48-2a-906, as last amended by Laws of Utah 1991, Chapter 189
490 48-2a-907, as last amended by Laws of Utah 1991, Chapter 189
491
492 48-2a-1001, as enacted by Laws of Utah 1990, Chapter 233
493 48-2a-1002, as last amended by Laws of Utah 1991, Chapter 189
494 48-2a-1003, as enacted by Laws of Utah 1990, Chapter 233
495 48-2a-1004, as enacted by Laws of Utah 1990, Chapter 233
496 48-2a-1005, as last amended by Laws of Utah 1991, Chapter 189
497 48-2a-1006, as enacted by Laws of Utah 1990, Chapter 233
498 48-2a-1101, as enacted by Laws of Utah 1990, Chapter 233
499 48-2a-1102, as enacted by Laws of Utah 1990, Chapter 233
500 48-2a-1103, as enacted by Laws of Utah 1990, Chapter 233
501 48-2a-1104, as last amended by Laws of Utah 1991, Chapters 5 and 189
502 48-2a-1105, as enacted by Laws of Utah 1990, Chapter 233
503 48-2a-1106, as enacted by Laws of Utah 1990, Chapter 233
504 48-2a-1107, as last amended by Laws of Utah 2009, Chapter 183
505 48-2c-101, as enacted by Laws of Utah 2001, Chapter 260
506 48-2c-102, as last amended by Laws of Utah 2009, Chapter 141
507 48-2c-103, as enacted by Laws of Utah 2001, Chapter 260
508 48-2c-104, as enacted by Laws of Utah 2001, Chapter 260
509 48-2c-105, as enacted by Laws of Utah 2001, Chapter 260
510 48-2c-106, as last amended by Laws of Utah 2010, Chapter 218
511 48-2c-107, as enacted by Laws of Utah 2001, Chapter 260
512 48-2c-108, as last amended by Laws of Utah 2002, Chapter 193
513 48-2c-109, as enacted by Laws of Utah 2001, Chapter 260
514 48-2c-110, as last amended by Laws of Utah 2005, Chapter 141
515 48-2c-113, as last amended by Laws of Utah 2010, Chapter 43
516 48-2c-114, as enacted by Laws of Utah 2001, Chapter 260
517 48-2c-115, as last amended by Laws of Utah 2008, Chapter 364
518 48-2c-116, as enacted by Laws of Utah 2001, Chapter 260
519 48-2c-118, as enacted by Laws of Utah 2001, Chapter 260
520 48-2c-119, as enacted by Laws of Utah 2001, Chapter 260
521 48-2c-120, as last amended by Laws of Utah 2006, Chapter 92
522
523 48-2c-122, as enacted by Laws of Utah 2001, Chapter 260
524 48-2c-201, as enacted by Laws of Utah 2001, Chapter 260
525 48-2c-202, as enacted by Laws of Utah 2001, Chapter 260
526 48-2c-203, as last amended by Laws of Utah 2009, Chapter 141
527 48-2c-204, as last amended by Laws of Utah 2008, Chapter 364
528 48-2c-205, as enacted by Laws of Utah 2001, Chapter 260
529 48-2c-206, as enacted by Laws of Utah 2001, Chapter 260
530 48-2c-207, as enacted by Laws of Utah 2001, Chapter 260
531 48-2c-208, as enacted by Laws of Utah 2001, Chapter 260
532 48-2c-209, as enacted by Laws of Utah 2001, Chapter 260
533 48-2c-210, as enacted by Laws of Utah 2001, Chapter 260
534 48-2c-211, as last amended by Laws of Utah 2008, Chapter 364
535 48-2c-212, as enacted by Laws of Utah 2001, Chapter 260
536 48-2c-213, as enacted by Laws of Utah 2001, Chapter 260
537 48-2c-214, as last amended by Laws of Utah 2009, Chapter 141
538 48-2c-305, as enacted by Laws of Utah 2001, Chapter 260
539 48-2c-309, as last amended by Laws of Utah 2008, Chapter 364
540 48-2c-311, as enacted by Laws of Utah 2001, Chapter 260
541 48-2c-401, as last amended by Laws of Utah 2005, Chapter 141
542 48-2c-402, as enacted by Laws of Utah 2001, Chapter 260
543 48-2c-403, as last amended by Laws of Utah 2009, Chapter 141
544 48-2c-404, as enacted by Laws of Utah 2001, Chapter 260
545 48-2c-405, as last amended by Laws of Utah 2009, Chapter 141
546 48-2c-406, as last amended by Laws of Utah 2008, Chapter 364
547 48-2c-407, as enacted by Laws of Utah 2001, Chapter 260
548 48-2c-408, as last amended by Laws of Utah 2005, Chapter 141
549 48-2c-409, as enacted by Laws of Utah 2001, Chapter 260
550 48-2c-410, as last amended by Laws of Utah 2010, Chapter 43
551 48-2c-411, as last amended by Laws of Utah 2008, Chapter 364
552 48-2c-412, as enacted by Laws of Utah 2009, Chapter 141
553
554 48-2c-502, as enacted by Laws of Utah 2001, Chapter 260
555 48-2c-503, as enacted by Laws of Utah 2001, Chapter 260
556 48-2c-504, as enacted by Laws of Utah 2001, Chapter 260
557 48-2c-505, as enacted by Laws of Utah 2001, Chapter 260
558 48-2c-506, as enacted by Laws of Utah 2001, Chapter 260
559 48-2c-601, as enacted by Laws of Utah 2001, Chapter 260
560 48-2c-602, as last amended by Laws of Utah 2002, Chapter 193
561 48-2c-603, as enacted by Laws of Utah 2001, Chapter 260
562 48-2c-604, as enacted by Laws of Utah 2001, Chapter 260
563 48-2c-605, as enacted by Laws of Utah 2001, Chapter 260
564 48-2c-606, as last amended by Laws of Utah 2010, Chapter 43
565 48-2c-607, as last amended by Laws of Utah 2010, Chapter 43
566 48-2c-608, as enacted by Laws of Utah 2006, Chapter 92
567 48-2c-609, as enacted by Laws of Utah 2006, Chapter 92
568 48-2c-610, as enacted by Laws of Utah 2006, Chapter 92
569 48-2c-611, as enacted by Laws of Utah 2006, Chapter 92
570 48-2c-612, as enacted by Laws of Utah 2006, Chapter 92
571 48-2c-613, as enacted by Laws of Utah 2006, Chapter 92
572 48-2c-614, as enacted by Laws of Utah 2006, Chapter 92
573 48-2c-615, as enacted by Laws of Utah 2006, Chapter 92
574 48-2c-616, as enacted by Laws of Utah 2006, Chapter 92
575 48-2c-701, as enacted by Laws of Utah 2001, Chapter 260
576 48-2c-702, as last amended by Laws of Utah 2005, Chapter 141
577 48-2c-703, as enacted by Laws of Utah 2001, Chapter 260
578 48-2c-704, as last amended by Laws of Utah 2008, Chapter 364
579 48-2c-705, as enacted by Laws of Utah 2001, Chapter 260
580 48-2c-706, as enacted by Laws of Utah 2001, Chapter 260
581 48-2c-707, as last amended by Laws of Utah 2002, Chapter 193
582 48-2c-708, as enacted by Laws of Utah 2001, Chapter 260
583 48-2c-709, as enacted by Laws of Utah 2001, Chapter 260
584
585 48-2c-801, as last amended by Laws of Utah 2002, Chapter 193
586 48-2c-802, as enacted by Laws of Utah 2001, Chapter 260
587 48-2c-803, as last amended by Laws of Utah 2005, Chapter 141
588 48-2c-803.1, as enacted by Laws of Utah 2005, Chapter 141
589 48-2c-804, as last amended by Laws of Utah 2005, Chapter 141
590 48-2c-805, as enacted by Laws of Utah 2001, Chapter 260
591 48-2c-806, as enacted by Laws of Utah 2001, Chapter 260
592 48-2c-807, as last amended by Laws of Utah 2005, Chapter 141
593 48-2c-808, as enacted by Laws of Utah 2001, Chapter 260
594 48-2c-809, as last amended by Laws of Utah 2008, Chapter 364
595 48-2c-901, as enacted by Laws of Utah 2001, Chapter 260
596 48-2c-902, as enacted by Laws of Utah 2001, Chapter 260
597 48-2c-903, as last amended by Laws of Utah 2005, Chapter 141
598 48-2c-904, as enacted by Laws of Utah 2001, Chapter 260
599 48-2c-905, as enacted by Laws of Utah 2001, Chapter 260
600 48-2c-906, as enacted by Laws of Utah 2001, Chapter 260
601 48-2c-1001, as enacted by Laws of Utah 2001, Chapter 260
602 48-2c-1002, as enacted by Laws of Utah 2001, Chapter 260
603 48-2c-1003, as enacted by Laws of Utah 2001, Chapter 260
604 48-2c-1004, as enacted by Laws of Utah 2001, Chapter 260
605 48-2c-1005, as enacted by Laws of Utah 2001, Chapter 260
606 48-2c-1006, as enacted by Laws of Utah 2001, Chapter 260
607 48-2c-1007, as enacted by Laws of Utah 2001, Chapter 260
608 48-2c-1008, as enacted by Laws of Utah 2001, Chapter 260
609 48-2c-1101, as enacted by Laws of Utah 2001, Chapter 260
610 48-2c-1102, as enacted by Laws of Utah 2001, Chapter 260
611 48-2c-1103, as last amended by Laws of Utah 2005, Chapter 141
612 48-2c-1104, as enacted by Laws of Utah 2001, Chapter 260
613 48-2c-1105, as enacted by Laws of Utah 2001, Chapter 260
614 48-2c-1106, as enacted by Laws of Utah 2001, Chapter 260
615
616 48-2c-1202, as enacted by Laws of Utah 2001, Chapter 260
617 48-2c-1203, as enacted by Laws of Utah 2001, Chapter 260
618 48-2c-1204, as last amended by Laws of Utah 2008, Chapter 364
619 48-2c-1205, as enacted by Laws of Utah 2001, Chapter 260
620 48-2c-1206, as last amended by Laws of Utah 2008, Chapter 364
621 48-2c-1207, as last amended by Laws of Utah 2009, Chapter 141
622 48-2c-1208, as last amended by Laws of Utah 2009, Chapter 141
623 48-2c-1209, as last amended by Laws of Utah 2009, Chapter 141
624 48-2c-1210, as enacted by Laws of Utah 2001, Chapter 260
625 48-2c-1211, as last amended by Laws of Utah 2008, Chapter 364
626 48-2c-1212, as enacted by Laws of Utah 2001, Chapter 260
627 48-2c-1213, as enacted by Laws of Utah 2001, Chapter 260
628 48-2c-1214, as enacted by Laws of Utah 2001, Chapter 260
629 48-2c-1301, as enacted by Laws of Utah 2001, Chapter 260
630 48-2c-1302, as enacted by Laws of Utah 2001, Chapter 260
631 48-2c-1303, as enacted by Laws of Utah 2001, Chapter 260
632 48-2c-1304, as enacted by Laws of Utah 2001, Chapter 260
633 48-2c-1305, as enacted by Laws of Utah 2001, Chapter 260
634 48-2c-1306, as last amended by Laws of Utah 2009, Chapter 141
635 48-2c-1307, as enacted by Laws of Utah 2001, Chapter 260
636 48-2c-1308, as enacted by Laws of Utah 2001, Chapter 260
637 48-2c-1309, as enacted by Laws of Utah 2001, Chapter 260
638 48-2c-1401, as last amended by Laws of Utah 2009, Chapter 141
639 48-2c-1402, as enacted by Laws of Utah 2001, Chapter 260
640 48-2c-1403, as enacted by Laws of Utah 2001, Chapter 260
641 48-2c-1404, as last amended by Laws of Utah 2005, Chapter 141
642 48-2c-1405, as enacted by Laws of Utah 2001, Chapter 260
643 48-2c-1406, as last amended by Laws of Utah 2005, Chapter 141
644 48-2c-1407, as enacted by Laws of Utah 2001, Chapter 260
645 48-2c-1408, as enacted by Laws of Utah 2001, Chapter 260
646
647 48-2c-1410, as enacted by Laws of Utah 2001, Chapter 260
648 48-2c-1411, as enacted by Laws of Utah 2009, Chapter 141
649 48-2c-1501, as enacted by Laws of Utah 2001, Chapter 260
650 48-2c-1502, as last amended by Laws of Utah 2010, Chapter 379
651 48-2c-1503, as enacted by Laws of Utah 2001, Chapter 260
652 48-2c-1504, as enacted by Laws of Utah 2001, Chapter 260
653 48-2c-1505, as enacted by Laws of Utah 2001, Chapter 260
654 48-2c-1506, as enacted by Laws of Utah 2001, Chapter 260
655 48-2c-1507, as enacted by Laws of Utah 2001, Chapter 260
656 48-2c-1508, as enacted by Laws of Utah 2001, Chapter 260
657 48-2c-1509, as enacted by Laws of Utah 2001, Chapter 260
658 48-2c-1510, as enacted by Laws of Utah 2001, Chapter 260
659 48-2c-1511, as last amended by Laws of Utah 2008, Chapter 364
660 48-2c-1512, as enacted by Laws of Utah 2001, Chapter 260
661 48-2c-1513, as enacted by Laws of Utah 2001, Chapter 260
662 48-2c-1601, as enacted by Laws of Utah 2001, Chapter 260
663 48-2c-1602, as enacted by Laws of Utah 2001, Chapter 260
664 48-2c-1603, as last amended by Laws of Utah 2008, Chapter 364
665 48-2c-1604, as last amended by Laws of Utah 2008, Chapters 249 and 364
666 48-2c-1605, as enacted by Laws of Utah 2001, Chapter 260
667 48-2c-1606, as enacted by Laws of Utah 2001, Chapter 260
668 48-2c-1607, as enacted by Laws of Utah 2001, Chapter 260
669 48-2c-1608, as enacted by Laws of Utah 2001, Chapter 260
670 48-2c-1609, as enacted by Laws of Utah 2001, Chapter 260
671 48-2c-1610, as enacted by Laws of Utah 2001, Chapter 260
672 48-2c-1611, as last amended by Laws of Utah 2008, Chapter 364
673 48-2c-1612, as last amended by Laws of Utah 2008, Chapter 364
674 48-2c-1613, as last amended by Laws of Utah 2009, Chapter 141
675 48-2c-1614, as last amended by Laws of Utah 2008, Chapter 364
676 48-2c-1615, as enacted by Laws of Utah 2001, Chapter 260
677
678 48-2c-1702, as enacted by Laws of Utah 2001, Chapter 260
679 48-2c-1703, as enacted by Laws of Utah 2001, Chapter 260
680 48-2c-1704, as enacted by Laws of Utah 2001, Chapter 260
681 48-2c-1705, as enacted by Laws of Utah 2001, Chapter 260
682 48-2c-1706, as enacted by Laws of Utah 2001, Chapter 260
683 48-2c-1801, as enacted by Laws of Utah 2001, Chapter 260
684 48-2c-1802, as enacted by Laws of Utah 2001, Chapter 260
685 48-2c-1803, as enacted by Laws of Utah 2001, Chapter 260
686 48-2c-1804, as enacted by Laws of Utah 2001, Chapter 260
687 48-2c-1805, as enacted by Laws of Utah 2001, Chapter 260
688 48-2c-1806, as enacted by Laws of Utah 2001, Chapter 260
689 48-2c-1807, as enacted by Laws of Utah 2001, Chapter 260
690 48-2c-1808, as enacted by Laws of Utah 2001, Chapter 260
691 48-2c-1809, as enacted by Laws of Utah 2001, Chapter 260
692 48-2c-1901, as enacted by Laws of Utah 2001, Chapter 260
693 48-2c-1902, as enacted by Laws of Utah 2001, Chapter 260
694
695 Be it enacted by the Legislature of the state of Utah:
696 Section 1. Section 7-1-810 is amended to read:
697 7-1-810. Limited liability companies.
698 (1) Notwithstanding any other provision of this title and subject to Subsection (8), if
699 the conditions of this section are met, the following may be organized as or convert to a limited
700 liability company under Title 48, Chapter [
701 Company Act:
702 (a) an industrial bank chartered under Chapter 8, Industrial Banks;
703 (b) an industrial loan company as defined in Section 7-8-21 ; or
704 (c) any of the following if the institution is an S Corporation, as defined in Section
705 1361, Internal Revenue Code, immediately before becoming a limited liability company:
706 (i) a bank chartered under Chapter 3, Banks;
707 (ii) a savings and loan association chartered under Chapter 7, Savings and Loan
708
709 (iii) a depository institution holding company.
710 (2) (a) Before an institution described in Subsection (1) may organize as or convert to a
711 limited liability company, the institution shall obtain approval of the commissioner.
712 (b) (i) To obtain the approval under this section from the commissioner, the institution
713 shall file a request for approval with the commissioner at least 30 days before the day on which
714 the institution becomes a limited liability company.
715 (ii) If the commissioner does not disapprove the request for approval within 30 days
716 from the day on which the commissioner receives the request, the request is considered
717 approved.
718 (iii) When taking action on a request for approval filed under this section, the
719 commissioner may:
720 (A) approve the request;
721 (B) approve the request subject to terms and conditions the commissioner considers
722 necessary; or
723 (C) disapprove the request.
724 (3) To approve a request for approval, the commissioner shall find:
725 (a) for an institution described in Subsection (1) that is required to be insured by a
726 federal deposit insurance agency, that the institution:
727 (i) will operate in a safe and sound manner;
728 (ii) has the following characteristics:
729 (A) the institution is not subject to automatic termination, dissolution, or suspension
730 upon the happening of some event other than the passage of time;
731 (B) the exclusive authority to manage the institution is vested in a board of managers
732 or directors that:
733 (I) is elected or appointed by the owners;
734 (II) is not required to have owners of the institution included on the board;
735 (III) possesses adequate independence and authority to supervise the operation of the
736 institution; and
737 (IV) operates with substantially the same rights, powers, privileges, duties, and
738 responsibilities as the board of directors of a corporation;
739
740 organizational documents provide that an owner of the institution is liable for the debts,
741 liabilities, and obligations of the institution in excess of the amount of the owner's investment;
742 and
743 (D) (I) neither state law, nor the institution's operating agreement, bylaws, or other
744 organizational documents require the consent of any other owner of the institution in order for
745 any owner to transfer an ownership interest in the institution, including voting rights; and
746 (II) the institution is able to obtain new investment funding if needed to maintain
747 adequate capital; and
748 (iii) is able to comply with all legal and regulatory requirements for an insured
749 depository institution under applicable federal and state law; and
750 (b) for an institution described in Subsection (1) that is not required to be insured by a
751 federal deposit insurance agency, that the institution will operate in a safe and sound manner.
752 (4) An institution described in Subsection (3)(a) that is organized as a limited liability
753 company shall maintain the characteristics listed in Subsection (3)(a)(ii) during such time as it
754 is authorized to conduct business under this title as a limited liability company.
755 (5) (a) All rights, privileges, powers, duties, and obligations of an institution described
756 in Subsection (1) that is organized as a limited liability company and its members and
757 managers shall be governed by Title 48, Chapter [
758 Liability Company Act, except:
759 (i) the following [
760 (3)(a):
761 [
762 [
763 [
764 [
765 [
766 [
767 [
768 [
769 (A) Section 48-3-110 ;
770
771 (C) Section 48-3-201 ;
772 (D) Section 48-3-401 ;
773 (E) Subsections 48-3-407 (1) and (3)(d);
774 (F) Section 48-3-410 ;
775 (G) Subsection 48-3-502 (1)(c);
776 (H) Title 48, Chapter 3, Part 6, Member's Dissociation;
777 (I) Section 48-3-701 ; and
778 (J) Title 48, Chapter 3, Part 8, Foreign Limited Liability Companies; and
779 (ii) as otherwise provided in this title.
780 (b) Notwithstanding Subsection (5)(a), for an institution that is described in Subsection
781 (3)(a):
782 (i) for purposes of transferring a member's interests in the institution, a member's
783 interest in the institution shall be treated like a share of stock in a corporation; and
784 (ii) if a member's interest in the institution is transferred voluntarily or involuntarily to
785 another person, the person who receives the member's interest shall obtain the member's entire
786 rights associated with the member's interest in the institution including:
787 (A) all economic rights; and
788 (B) all voting rights.
789 (c) An institution described in Subsection (3)(a) may not by agreement or otherwise
790 change the application of Subsection (5)(a) to the institution.
791 (6) Unless the context requires otherwise, for the purpose of applying this title to an
792 institution described in Subsection (1) that is organized as a limited liability company:
793 (a) a citation to Title 16, Chapter 10a, Utah Revised Business Corporation Act,
794 includes the equivalent citation to Title 48, Chapter [
795 Liability Company Act;
796 (b) "articles of incorporation" includes a limited liability company's [
797 certificate of organization as that term is used in Section [
798 (c) "board of directors" includes one or more persons who have, with respect to an
799 institution described in Subsection (1), authority substantially similar to that of a board of
800 directors of a corporation;
801
802 defined in Section [
803 (e) "corporation" includes a limited liability company organized under Title 48,
804 Chapter [
805 (f) "director" includes any of the following of a limited liability company:
806 (i) a manager;
807 (ii) a director; or
808 (iii) other person who has with respect to the institution described in Subsection (1),
809 authority substantially similar to that of a director of a corporation;
810 (g) "dividend" includes distributions made by a limited liability company under Title
811 48, Chapter [
812 Limited Liability Company;
813 (h) "incorporator" includes [
814 as provided in Title 48, Chapter [
815 Organization and Other Filings;
816 (i) "officer" includes any of the following of an institution described in Subsection (1):
817 (i) an officer; or
818 (ii) other person who has with respect to the institution described in Subsection (1)
819 authority substantially similar to that of an officer of a corporation;
820 (j) "security," "shares," or "stock" of a corporation includes:
821 (i) a membership interest in a limited liability company as provided in Title 48,
822 Chapter [
823 Liability Company; and
824 (ii) [
825 company; and
826 (k) "stockholder" or "shareholder" includes an owner of an interest in an institution
827 described in Subsection (1) including a member as provided in Title 48, Chapter [
828
829 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
830 commissioner shall make rules governing the form of a request for approval filed under this
831 section.
832
833 as or converted to a series of [
834 liability company as provided in [
835 Limited Liability Companies.
836 Section 2. Section 7-3-10 is amended to read:
837 7-3-10. Organization -- Powers, rights, and privileges of banking corporation --
838 Other business activities.
839 (1) A bank chartered under this chapter shall be:
840 (a) a domestic corporation under Title 16, Chapter 10a, Utah Revised Business
841 Corporation Act; or
842 (b) subject to Section 7-1-810 , including the requirement that the bank be an S
843 Corporation immediately before becoming a limited liability company, a limited liability
844 company created under Title 48, Chapter [
845 Company Act.
846 (2) A bank has all the rights, privileges, and powers necessary or incidental to carrying
847 on the business of banking in addition to the powers granted:
848 (a) if the bank is a corporation, under Title 16, Chapter 10a, Utah Revised Business
849 Corporation Act; or
850 (b) subject to Section 7-1-810 , if the bank is a limited liability company, under Title
851 48, Chapter [
852 (3) The commissioner may, by rule or order, determine that necessary or incidental
853 rights, privileges, and powers include:
854 (a) the rights, privileges, and powers held by national banks; or
855 (b) other business activities so long as the commissioner's determination is not
856 inconsistent with the rules, regulations, or other actions of the board of governors of the
857 Federal Reserve System under Section 4(c)(8) of the Bank Holding Company Act of 1956, 12
858 U.S.C. Sec. 1843(c)(8).
859 (4) The commissioner shall implement this section in a manner consistent with the
860 purposes set forth in Section 7-1-102 .
861 Section 3. Section 7-8-3 is amended to read:
862 7-8-3. Organization -- Authorization to conduct business -- Deposit insurance.
863
864 Subsection (2) to conduct business as an industrial bank.
865 (2) (a) Each person organized to conduct the business of an industrial bank in this state
866 shall be organized under:
867 (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act; or
868 (ii) in accordance with Section 7-1-810 , Title 48, Chapter [
869 Uniform Limited Liability Company Act.
870 (b) A person may not conduct business as an industrial bank authorized under this
871 chapter to conduct business as an industrial bank in any form of entity other than those
872 provided in Subsection (2)(a).
873 (3) (a) All rights, privileges, powers, duties, and obligations of a corporation
874 authorized to conduct business as an industrial bank and its officers, directors, and stockholders
875 shall be governed by Title 16, Chapter 10a, Utah Revised Business Corporation Act, except as
876 otherwise provided in this title.
877 (b) All rights, privileges, powers, duties, and obligations of a limited liability company
878 authorized to conduct business as an industrial bank and its members and managers shall be
879 governed by Title 48, Chapter [
880 except as otherwise provided in this title.
881 (4) (a) An industrial bank is authorized to receive and hold deposits.
882 (b) An industrial bank may not conduct business under this chapter as an industrial
883 bank unless the industrial bank obtains insurance from the Federal Deposit Insurance
884 Corporation or a successor federal deposit insurance entity for any deposits received or held by
885 the industrial bank.
886 Section 4. Section 13-34-114 is amended to read:
887 13-34-114. Consent to use of educational terms in business names.
888 (1) For purposes of this section:
889 (a) "Business name" means a name filed with the Division of Corporations and
890 Commercial Code under:
891 (i) Section 16-6a-401 ;
892 (ii) Section 16-10a-401 ;
893 (iii) Section 16-11-16 ;
894
895 (v) Section [
896 (vi) Section [
897 (b) "Educational term" means the term:
898 (i) "university";
899 (ii) "college"; or
900 (iii) "institute" or "institution."
901 (2) If a statute listed in Subsection (1)(a) requires the written consent of the division to
902 file a business name with the Division of Corporations and Commercial Code that includes an
903 educational term, the division may consent to the use of an educational term in accordance with
904 this statute.
905 (3) The division shall consent to the use of an educational term in a business name if
906 the person seeking to file the name:
907 (a) is registered under this chapter;
908 (b) is exempt from the chapter under Section 13-34-105 ; or
909 (c) (i) is not engaged in educational activities; and
910 (ii) does not represent that it is engaged in educational activities.
911 (4) The division may withhold consent to use of an educational term in a business
912 name if the person seeking to file the name:
913 (a) offers, sells, or awards a degree or any other type of educational credential; and
914 (b) fails to provide bona fide instruction through student-faculty interaction according
915 to the standards and criteria established by the division under Subsection 13-34-104 (5).
916 Section 5. Section 16-6a-1008.7 is amended to read:
917 16-6a-1008.7. Conversion to or from a domestic limited liability company.
918 (1) (a) A domestic nonprofit corporation may convert to a domestic limited liability
919 company subject to Title 48, Chapter [
920 Act, by complying with:
921 (i) this Subsection (1); and
922 (ii) Section [
923 (b) If a domestic nonprofit corporation converts to a domestic limited liability company
924 in accordance with this Subsection (1), the articles of conversion shall:
925
926 (ii) if the corporation has any members, provide for:
927 (A) the cancellation of any membership; or
928 (B) the conversion of any membership in the domestic nonprofit corporation to a
929 membership interest in the domestic limited liability company.
930 (c) [
931 be filed with the division, the conversion shall be approved:
932 (i) in the manner provided for the articles of incorporation or bylaws of the domestic
933 nonprofit corporation; or
934 (ii) if the articles of incorporation or bylaws of the domestic nonprofit corporation do
935 not provide the method for approval:
936 (A) if the domestic nonprofit corporation has voting members, by all of the members of
937 the domestic nonprofit corporation regardless of limitations or restrictions on the voting rights
938 of the members; or
939 (B) if the nonprofit domestic corporation does not have voting members, by a majority
940 of:
941 (I) the directors in office at the time the conversion is approved by the board of
942 directors; or
943 (II) if directors have not been appointed or elected, the incorporators.
944 (2) A domestic limited liability company may convert to a domestic nonprofit
945 corporation subject to this chapter by:
946 (a) filing articles of incorporation in accordance with this chapter; and
947 (b) complying with Section [
948 (3) Any conversion under this section may not result in a violation, directly or
949 indirectly, of:
950 (a) Section 16-6a-1301 ; or
951 (b) any other provision of this chapter.
952 Section 6. Section 16-10a-401 is amended to read:
953 16-10a-401. Corporate name.
954 (1) The name of a corporation:
955 (a) except for the name of a depository institution as defined in Section 7-1-103 , shall
956
957 (i) the word:
958 (A) "corporation";
959 (B) "incorporated"; or
960 (C) "company";
961 (ii) the abbreviation:
962 (A) "corp.";
963 (B) "inc."; or
964 (C) "co."; or
965 (iii) words or abbreviations of like import to the words or abbreviations listed in
966 Subsections (1)(a)(i) and (ii) in another language;
967 (b) may not contain language stating or implying that the corporation is organized for a
968 purpose other than that permitted by:
969 (i) Section 16-10a-301 ; and
970 (ii) the corporation's articles of incorporation;
971 (c) without the written consent of the United States Olympic Committee, may not
972 contain the words:
973 (i) "Olympic";
974 (ii) "Olympiad"; or
975 (iii) "Citius Altius Fortius"; and
976 (d) without the written consent of the Division of Consumer Protection issued in
977 accordance with Section 13-34-114 , may not contain the words:
978 (i) "university";
979 (ii) "college"; or
980 (iii) "institute" or "institution."
981 (2) Except as authorized by Subsections (3) and (4), the name of a corporation shall be
982 distinguishable, as defined in Subsection (5), upon the records of the division from:
983 (a) the name of any domestic corporation incorporated in or foreign corporation
984 authorized to transact business in this state;
985 (b) the name of any domestic or foreign nonprofit corporation incorporated or
986 authorized to transact business in this state;
987
988 to transact business in this state;
989 (d) the name of any limited partnership formed or authorized to transact business in
990 this state;
991 (e) any name reserved or registered with the division for a corporation, limited liability
992 company, or general or limited partnership, under the laws of this state; and
993 (f) any business name, fictitious name, assumed name, trademark, or service mark
994 registered by the division.
995 (3) (a) A corporation may apply to the division for authorization to file its articles of
996 incorporation under, or to register or reserve, a name that is not distinguishable upon its records
997 from one or more of the names described in Subsection (2).
998 (b) The division shall approve the application filed under Subsection (3)(a) if:
999 (i) the other person whose name is not distinguishable from the name under which the
1000 applicant desires to file, or which the applicant desires to register or reserve:
1001 (A) consents to the filing, registration, or reservation in writing; and
1002 (B) submits an undertaking in a form satisfactory to the division to change its name to
1003 a name that is distinguishable from the name of the applicant; or
1004 (ii) the applicant delivers to the division a certified copy of the final judgment of a
1005 court of competent jurisdiction establishing the applicant's right to make the requested filing in
1006 this state under the name applied for.
1007 (4) A corporation may make a filing under the name, including the fictitious name, of
1008 another domestic or foreign corporation that is used or registered in this state if:
1009 (a) the other corporation is incorporated or authorized to transact business in this state;
1010 and
1011 (b) the filing corporation:
1012 (i) has merged with the other corporation; or
1013 (ii) has been formed by reorganization of the other corporation.
1014 (5) (a) A name is distinguishable from other names, trademarks, and service marks on
1015 the records of the division if it:
1016 (i) contains one or more different letters or numerals; or
1017 (ii) has a different sequence of letters or numerals from the other names on the
1018
1019 (b) Differences which are not distinguishing are:
1020 (i) the words or abbreviations of the words:
1021 (A) "corporation";
1022 (B) "company";
1023 (C) "incorporated";
1024 (D) "limited partnership";
1025 (E) "L.P.";
1026 (F) "limited";
1027 [
1028 [
1029 [
1030 [
1031 [
1032 (ii) the presence or absence of the words or symbols of the words "the," "and," or "a";
1033 (iii) differences in punctuation and special characters;
1034 (iv) differences in capitalization;
1035 (v) differences between singular and plural forms of words for a corporation:
1036 (A) incorporated in or authorized to do business in this state on or after May 4, 1998;
1037 or
1038 (B) that changes its name on or after May 4, 1998;
1039 (vi) differences in whether the letters or numbers immediately follow each other or are
1040 separated by one or more spaces if:
1041 (A) the sequence of letters or numbers is identical; and
1042 (B) the corporation:
1043 (I) is incorporated in or authorized to do business in this state on or after May 3, 1999;
1044 or
1045 (II) changes its name on or after May 3, 1999; or
1046 (vii) differences in abbreviations, for a corporation:
1047 (A) incorporated in or authorized to do business in this state on or after May 1, 2000;
1048 or
1049
1050 (c) The director of the division has the power and authority reasonably necessary to
1051 interpret and efficiently administer this section and to perform the duties imposed on the
1052 division by this section.
1053 (6) A name that implies that the corporation is an agency of this state or of any of its
1054 political subdivisions, if it is not actually such a legally established agency or subdivision, may
1055 not be approved for filing by the division.
1056 (7) (a) The requirements of Subsection (1)(d) do not apply to a corporation
1057 incorporated in or authorized to do business in this state on or before May 4, 1998, until
1058 December 31, 1998.
1059 (b) On or after January 1, 1999, any corporation incorporated in or authorized to do
1060 business in this state shall comply with the requirements of Subsection (1)(d).
1061 Section 7. Section 16-10a-1008.7 is amended to read:
1062 16-10a-1008.7. Conversion to or from a domestic limited liability company.
1063 (1) (a) A corporation may convert to a domestic limited liability company subject to
1064 Title 48, Chapter [
1065 with:
1066 (i) this Subsection (1); and
1067 (ii) Section [
1068 (b) If a corporation converts to a domestic limited liability company in accordance with
1069 this Subsection (1), the articles of conversion shall:
1070 (i) comply with Section [
1071 (ii) if the corporation has issued shares, provide for:
1072 (A) the cancellation of any issued share; or
1073 (B) the conversion of any issued share to a membership interest in the domestic limited
1074 liability company.
1075 (c) [
1076 be filed with the division, the conversion shall be approved:
1077 (i) in the manner provided for the articles of incorporation or bylaws of the
1078 corporation; or
1079 (ii) if the articles of incorporation or bylaws of the corporation do not provide the
1080
1081 (A) if the corporation has issued shares, by all of the outstanding shares of all classes
1082 of shares of the corporation regardless of limitations or restrictions on the voting rights of the
1083 shares; or
1084 (B) if the corporation has not issued shares, by a majority of:
1085 (I) the directors in office at the time that the conversion is approved by the board of
1086 directors; or
1087 (II) if directors have not been appointed or elected, the incorporators.
1088 (2) A domestic limited liability company may convert to a corporation subject to this
1089 chapter by:
1090 (a) filing articles of incorporation in accordance with this chapter; and
1091 (b) complying with Section [
1092 Section 8. Section 16-11-16 is amended to read:
1093 16-11-16. Corporate name.
1094 (1) The name of each professional corporation as set forth in its articles of
1095 incorporation:
1096 (a) shall contain the terms:
1097 (i) "professional corporation"; or
1098 (ii) "P.C.";
1099 (b) may not contain the words:
1100 (i) "incorporated"; or
1101 (ii) "inc.";
1102 (c) may not contain language stating or implying that the professional corporation is
1103 organized for a purpose other than that permitted by:
1104 (i) Section 16-11-6 ; and
1105 (ii) the professional corporation's articles of incorporation;
1106 (d) without the written consent of the United States Olympic Committee, may not
1107 contain the words:
1108 (i) "Olympic";
1109 (ii) "Olympiad"; or
1110 (iii) "Citius Altius Fortius"; and
1111
1112 with Section 13-34-114 , may not contain the words:
1113 (i) "university";
1114 (ii) "college"; or
1115 (iii) "institute" or "institution."
1116 (2) The professional corporation may not imply by any word in the name that it is an
1117 agency of the state or of any of its political subdivisions.
1118 (3) A person, other than a professional corporation formed or registered under this
1119 chapter, may not use in its name in this state any of the terms:
1120 (a) "professional corporation"; or
1121 (b) "P.C."
1122 (4) Except as authorized by Subsection (5), the name of the professional corporation
1123 shall be distinguishable, as defined in Subsection (6), upon the records of the division from:
1124 (a) the name of any domestic corporation incorporated in or foreign corporation
1125 authorized to transact business in this state;
1126 (b) the name of any domestic or foreign nonprofit corporation incorporated or
1127 authorized to transact business in this state;
1128 (c) the name of any domestic or foreign limited liability company formed or authorized
1129 to transact business in this state;
1130 (d) the name of any limited partnership formed or authorized to transact business in
1131 this state;
1132 (e) any name reserved or registered with the division for a corporation, limited liability
1133 company, or general or limited partnership, under the laws of this state; and
1134 (f) any business name, fictitious name, assumed name, trademark, or service mark
1135 registered by the division.
1136 (5) (a) A professional corporation may apply to the division for authorization to file its
1137 articles of incorporation under, or to register or reserve, a name that is not distinguishable upon
1138 its records from one or more of the names described in Subsection (4).
1139 (b) The division shall approve the application filed under Subsection (5)(a) if:
1140 (i) the other person whose name is not distinguishable from the name under which the
1141 applicant desires to file, or which the applicant desires to register or reserve:
1142
1143 (B) submits an undertaking in a form satisfactory to the division to change its name to
1144 a name that is distinguishable from the name of the applicant; or
1145 (ii) the applicant delivers to the division a certified copy of the final judgment of a
1146 court of competent jurisdiction establishing the applicant's right to make the requested filing in
1147 this state under the name applied for.
1148 (6) (a) A name is distinguishable from other names, trademarks, and service marks
1149 registered with the division if it:
1150 (i) contains one or more different letters or numerals from other names upon the
1151 division's records; or
1152 (ii) has a different sequence of letter or numerals from the other names on the division's
1153 records.
1154 (b) The following differences are not distinguishable:
1155 (i) the words or abbreviations of the words:
1156 (A) "corporation";
1157 (B) "incorporated";
1158 (C) "company";
1159 (D) "limited partnership";
1160 (E) "limited";
1161 (F) "L.P.";
1162 [
1163 [
1164 [
1165 [
1166 [
1167 (ii) the presence or absence of the words or symbols of the words "the," "and," "a," or
1168 "plus";
1169 (iii) differences in punctuation and special characters;
1170 (iv) differences in capitalization; or
1171 (v) differences in abbreviations.
1172 (7) The director of the division shall have the power and authority reasonably necessary
1173
1174 division by this section.
1175 Section 9. Section 16-16-111 is amended to read:
1176 16-16-111. Name.
1177 (1) Use of the term "cooperative" or its abbreviation under this chapter is not a
1178 violation of the provisions restricting the use of the term under any other law of this state.
1179 (2) (a) Notwithstanding Section [
1180 cooperative association shall contain:
1181 (i) the words "limited cooperative association" or "limited cooperative"; or
1182 (ii) the abbreviation "L.C.A." or "LCA". [
1183 (b) "Cooperative" may be abbreviated as "Co-op" or "Coop".
1184 (c) "Association" may be abbreviated as "Assoc." or "Assn.".
1185 (d) (i) Use of the term "cooperative" or its abbreviation as permitted by this chapter is
1186 not a violation of the provisions restricting the use of the term under any other law of this state.
1187 (ii) A limited cooperative association or a member may enforce the restrictions on the
1188 use of the term "cooperative" under this chapter and any other law of this state.
1189 (iii) A limited cooperative association or a member may enforce the restrictions on the
1190 use of the term "cooperative" under any other law of this state.
1191 (3) Except as otherwise provided in Subsection (4), a limited cooperative association
1192 may use only a name that is available. A name is available if it is distinguishable in the records
1193 of the division from:
1194 (a) the name of any entity organized or authorized to transact business in this state;
1195 (b) a name reserved under Section 16-16-112 ; and
1196 (c) an alternative name approved for a foreign cooperative authorized to transact
1197 business in this state.
1198 (4) A limited cooperative association may apply to the division for authorization to use
1199 a name that is not available. The division shall authorize use of the name if:
1200 (a) the person with ownership rights to use the name consents in a record to the use and
1201 applies in a form satisfactory to the division to change the name used or reserved to a name that
1202 is distinguishable upon the records of the division from the name applied for; or
1203 (b) the applicant delivers to the division a certified copy of the final judgment of a
1204
1205 Section 10. Section 16-17-102 is amended to read:
1206 16-17-102. Definitions.
1207 In this chapter:
1208 (1) "Appointment of agent" means a statement appointing an agent for service of
1209 process filed by:
1210 (a) a domestic or foreign unincorporated nonprofit association under Section
1211 16-17-204 ; or
1212 (b) a domestic entity that is not a filing entity or a nonqualified foreign entity under
1213 Section 16-17-210 .
1214 (2) "Commercial registered agent" means an individual or a domestic or foreign entity
1215 listed under Section 16-17-204 .
1216 (3) "Division" means the Division of Corporations and Commercial Code.
1217 (4) "Domestic entity" means an entity whose internal affairs are governed by the law of
1218 this state.
1219 (5) "Entity" means a person that has a separate legal existence or has the power to
1220 acquire an interest in real property in its own name other than:
1221 (a) an individual;
1222 (b) a testamentary, inter vivos, or charitable trust, with the exception of a business
1223 trust, statutory trust, or similar trust;
1224 (c) an association or relationship that is not a partnership by reason of [
1225
1226 law of any other jurisdiction;
1227 (d) a decedent's estate; or
1228 (e) a public corporation, government or governmental subdivision, agency, or
1229 instrumentality, or quasi-governmental instrumentality.
1230 (6) "Filing entity" means an entity that is created by the filing of a public organic
1231 document.
1232 (7) "Foreign entity" means an entity other than a domestic entity.
1233 (8) "Foreign qualification document" means an application for a certificate of authority
1234 or other foreign qualification filing with the division by a foreign entity.
1235
1236 entity, other than as a governor, agent, assignee, or proxy, to:
1237 (a) receive or demand access to information concerning, or the books and records of,
1238 the entity;
1239 (b) vote for the election of the governors of the entity; or
1240 (c) receive notice of or vote on any or all issues involving the internal affairs of the
1241 entity.
1242 (10) "Governor" means a person by or under whose authority the powers of an entity
1243 are exercised and under whose direction the business and affairs of the entity are managed
1244 pursuant to the organic law and organic rules of the entity.
1245 (11) "Interest" means:
1246 (a) a governance interest in an unincorporated entity;
1247 (b) a transferable interest in an unincorporated entity; or
1248 (c) a share or membership in a corporation.
1249 (12) "Interest holder" means a direct holder of an interest.
1250 (13) "Jurisdiction of organization," with respect to an entity, means the jurisdiction
1251 whose law includes the organic law of the entity.
1252 (14) "Noncommercial registered agent" means a person that is not listed as a
1253 commercial registered agent under Section 16-17-204 and that is:
1254 (a) an individual or a domestic or foreign entity that serves in this state as the agent for
1255 service of process of an entity; or
1256 (b) the individual who holds the office or other position in an entity that is designated
1257 as the agent for service of process pursuant to Subsection 16-17-203 (1)(b)(ii).
1258 (15) "Nonqualified foreign entity" means a foreign entity that is not authorized to
1259 transact business in this state pursuant to a filing with the division.
1260 (16) "Nonresident LLP statement" means:
1261 (a) a statement of qualification of a domestic limited liability partnership that does not
1262 have an office in this state; or
1263 (b) a statement of foreign qualification of a foreign limited liability partnership that
1264 does not have an office in this state.
1265 (17) "Organic law" means the statutes, if any, other than this chapter, governing the
1266
1267 (18) "Organic rules" means the public organic document and private organic rules of an
1268 entity.
1269 (19) "Person" means an individual, corporation, estate, trust, partnership, limited
1270 liability company, business or similar trust, association, joint venture, public corporation,
1271 government or governmental subdivision, agency, or instrumentality, or any other legal or
1272 commercial entity.
1273 (20) "Private organic rules" mean the rules, whether or not in a record, that govern the
1274 internal affairs of an entity, are binding on all of its interest holders, and are not part of its
1275 public organic document, if any.
1276 (21) "Public organic document" means the public record the filing of which creates an
1277 entity, and any amendment to or restatement of that record.
1278 (22) "Qualified foreign entity" means a foreign entity that is authorized to transact
1279 business in this state pursuant to a filing with the division.
1280 (23) "Record" means information that is inscribed on a tangible medium or that is
1281 stored in an electronic or other medium and is retrievable in perceivable form.
1282 (24) "Registered agent" means a commercial registered agent or a noncommercial
1283 registered agent.
1284 (25) "Registered agent filing" means:
1285 (a) the public organic document of a domestic filing entity;
1286 (b) a nonresident LLP statement;
1287 (c) a foreign qualification document; or
1288 (d) an appointment of agent.
1289 (26) "Represented entity" means:
1290 (a) a domestic filing entity;
1291 (b) a domestic or qualified foreign limited liability partnership that does not have an
1292 office in this state;
1293 (c) a qualified foreign entity;
1294 (d) a domestic or foreign unincorporated nonprofit association for which an
1295 appointment of agent has been filed;
1296 (e) a domestic entity that is not a filing entity for which an appointment of agent has
1297
1298 (f) a nonqualified foreign entity for which an appointment of agent has been filed.
1299 (27) "Sign" means, with present intent to authenticate or adopt a record:
1300 (a) to execute or adopt a tangible symbol; or
1301 (b) to attach to or logically associate with the record an electronic sound, symbol, or
1302 process.
1303 (28) "Transferable interest" means the right under an entity's organic law to receive
1304 distributions from the entity.
1305 (29) "Type," with respect to an entity, means a generic form of entity:
1306 (a) recognized at common law; or
1307 (b) organized under an organic law, whether or not some entities organized under that
1308 organic law are subject to provisions of that law that create different categories of the form of
1309 entity.
1310 Section 11. Section 31A-37a-102 is amended to read:
1311 31A-37a-102. Definitions.
1312 (1) For purposes of this chapter:
1313 (a) "Ceding insurer" means an insurer that:
1314 (i) is approved by the commissioner;
1315 (ii) is licensed or otherwise authorized to transact the business of insurance or
1316 reinsurance in the insurer's state or country of domicile; and
1317 (iii) cedes risk to a special purpose financial captive insurance company pursuant to a
1318 reinsurance contract.
1319 (b) Notwithstanding Section 31A-27a-102 , "insolvency" or "insolvent" for purposes of
1320 applying Chapter 27a, Insurer Receivership Act, to a special purpose financial captive
1321 insurance company, means that a special purpose financial captive insurance company:
1322 (i) is unable to pay an obligation when the obligation is due, unless the obligation is the
1323 subject of a bona fide dispute; or
1324 (ii) fails to meet the criteria and conditions for solvency of the special purpose financial
1325 captive insurance company established by the commissioner by rule or order.
1326 (c) (i) "Insurance securitization" means a transaction or a group of related transactions:
1327 (A) that may include a capital market offering;
1328
1329 facilitating administrative agreements;
1330 (C) where all or part of the result of the transaction or group of related transactions is
1331 used to fund the special purpose financial captive insurance company's obligations under a
1332 reinsurance contract with a ceding insurer;
1333 (D) by which:
1334 (I) proceeds are obtained by a special purpose financial captive insurance company,
1335 directly or indirectly, through the issuance of one or more securities by the special purpose
1336 financial captive insurance company or another person; or
1337 (II) a person provides one or more letters of credit or other assets for the benefit of the
1338 special purpose financial captive insurance company if the commissioner authorizes the special
1339 purpose financial captive insurance company to treat the letter of credit or asset as an admitted
1340 asset for purposes of the special purpose financial captive insurance company's annual report;
1341 and
1342 (E) if all or a part of the proceeds, a letter of credit, or asset described in this
1343 Subsection (1)(c) is used to fund the special purpose financial captive insurance company's
1344 obligations under a reinsurance contract with a ceding insurer.
1345 (ii) "Insurance securitization" does not include the issuance of a letter of credit for the
1346 benefit of the commissioner to satisfy all or part of the special purpose financial captive
1347 insurance company's capital and surplus requirements under Section 31A-37a-302 .
1348 (d) "Management" means:
1349 (i) a board of directors of a special purpose financial captive insurance company;
1350 (ii) a managing board of a special purpose financial captive insurance company; or
1351 (iii) one or more individuals with the overall responsibility for the management of the
1352 affairs of the special purpose financial captive insurance company, including:
1353 (A) an officer elected or appointed to act on behalf of the special purpose financial
1354 captive insurance company; or
1355 (B) an agent elected or appointed to act on behalf of the special purpose financial
1356 captive insurance company.
1357 (e) "Organizational document" means:
1358 (i) in the case of a special purpose financial captive insurance company formed as a
1359
1360 (A) articles of incorporation; and
1361 (B) bylaws; and
1362 (ii) in the case of a special purpose financial captive insurance company formed as a
1363 limited liability company, the special purpose financial captive insurance company's:
1364 (A) [
1365 (B) operating agreement.
1366 (f) "Reinsurance contract" means a contract between a special purpose financial captive
1367 insurance company and a ceding insurer pursuant to which the special purpose financial captive
1368 insurance company agrees to provide reinsurance to the ceding insurer for risks associated with
1369 the ceding insurer's insurance or reinsurance business.
1370 (g) "Security" means:
1371 (i) a security as defined in Section 31A-1-301 ; or
1372 (ii) one or more of the following that the commissioner designates, by rule or order, as
1373 a "security" for purposes of this chapter:
1374 (A) a debt obligation;
1375 (B) equity;
1376 (C) a surplus certificate;
1377 (D) a surplus note;
1378 (E) a funding agreement;
1379 (F) a derivative; or
1380 (G) another financial instrument.
1381 (h) "Special purpose financial captive insurance company" means a captive insurance
1382 company has a certificate of authority under this chapter from the commissioner to operate as a
1383 special purpose financial captive insurance company pursuant to this chapter.
1384 (i) "Special purpose financial captive insurance company security" means:
1385 (i) a security issued by a special purpose financial captive insurance company; or
1386 (ii) a security issued by a third party, the proceeds of which are obtained directly or
1387 indirectly by a special purpose financial captive insurance company.
1388 (j) "Surplus note" means an unsecured subordinated debt obligation that has one or
1389 more characteristics that are consistent with paragraph 3 of the National Association of
1390
1391 from time to time and as modified or supplemented by rule or order of the commissioner.
1392 (2) The terms defined in Section 31A-37-102 shall have the same meaning for
1393 purposes of this chapter.
1394 Section 12. Section 46-4-503 is amended to read:
1395 46-4-503. Government products and services provided electronically.
1396 (1) Notwithstanding Section 46-4-501 , a state governmental agency that administers
1397 one or more of the following transactions shall allow those transactions to be conducted
1398 electronically:
1399 (a) an application for or renewal of a professional or occupational license issued under
1400 Title 58, Occupations and Professions;
1401 (b) the renewal of a drivers license;
1402 (c) an application for a hunting or fishing license;
1403 (d) the filing of:
1404 (i) a return under Title 59, Chapter 10, Individual Income Tax Act or 12, Sales and Use
1405 Tax Act;
1406 (ii) a court document, as defined by the Judicial Council; or
1407 (iii) a document under Title 70A, Uniform Commercial Code;
1408 (e) a registration for:
1409 (i) a product; or
1410 (ii) a brand;
1411 (f) a renewal of a registration of a motor vehicle;
1412 (g) a registration under:
1413 (i) Title 16, Corporations;
1414 (ii) Title 42, Names; or
1415 (iii) Title 48, [
1416 (h) submission of an application for benefits:
1417 (i) under Title 35A, Chapter 3, Employment Support Act;
1418 (ii) under Title 35A, Chapter 4, Employment Security Act; or
1419 (iii) related to accident and health insurance.
1420 (2) The state system of public education, in coordination with the Utah Education
1421
1422 electronically:
1423 (a) secure access by parents and students to student grades and progress reports;
1424 (b) email communications with:
1425 (i) teachers;
1426 (ii) parent-teacher associations; and
1427 (iii) school administrators;
1428 (c) access to school calendars and schedules; and
1429 (d) teaching resources that may include:
1430 (i) teaching plans;
1431 (ii) curriculum guides; and
1432 (iii) media resources.
1433 (3) A state governmental agency shall:
1434 (a) in carrying out the requirements of this section, take reasonable steps to ensure the
1435 security and privacy of records that are private or controlled as defined by Title 63G, Chapter 2,
1436 Government Records Access and Management Act;
1437 (b) in addition to those transactions listed in Subsections (1) and (2), determine any
1438 additional services that may be made available to the public through electronic means; and
1439 (c) as part of the agency's information technology plan required by Section 63F-1-204 ,
1440 report on the progress of compliance with Subsections (1) through (3).
1441 (4) Notwithstanding the other provisions of this part, a state governmental agency is
1442 not required by this part to conduct a transaction electronically if:
1443 (a) conducting the transaction electronically is not required by federal law; and
1444 (b) conducting the transaction electronically is:
1445 (i) impractical;
1446 (ii) unreasonable; or
1447 (iii) not permitted by laws pertaining to privacy or security.
1448 (5) (a) For purposes of this Subsection (5), "one-stop shop" means the consolidation of
1449 access to diverse services and agencies at one location including virtual colocation.
1450 (b) State agencies that provide services or offer direct assistance to the business
1451 community shall participate in the establishment, maintenance, and enhancement of an
1452
1453 web portal is to provide "one-stop shop" assistance to businesses.
1454 (c) State agencies shall partner with other governmental and nonprofit agencies whose
1455 primary mission is to provide services or offer direct assistance to the business community in
1456 Utah in fulfilling the requirements of this section.
1457 (d) The following state entities shall comply with the provisions of this Subsection (5):
1458 (i) Governor's Office of Economic Development, which shall serve as the managing
1459 partner for the website;
1460 (ii) Department of Workforce Services;
1461 (iii) Department of Commerce;
1462 (iv) Tax Commission;
1463 (v) Department of Administrative Services - Division of Purchasing and General
1464 Services, including other state agencies operating under a grant of authority from the division
1465 to procure goods and services in excess of $5,000;
1466 (vi) Department of Agriculture;
1467 (vii) Department of Natural Resources; and
1468 (viii) other state agencies that provide services or offer direct assistance to the business
1469 sector.
1470 (e) The business services available on the business web portal may include:
1471 (i) business life cycle information;
1472 (ii) business searches;
1473 (iii) employment needs and opportunities;
1474 (iv) motor vehicle registration;
1475 (v) permit applications and renewal;
1476 (vi) tax information;
1477 (vii) government procurement bid notifications;
1478 (viii) general business information;
1479 (ix) business directories; and
1480 (x) business news.
1481 Section 13. Section 48-1a-101 is enacted to read:
1482
1483
1484
1485 48-1a-101. Title.
1486 (1) This title is known as the "Unincorporated Business Entities Act."
1487 (2) This chapter is known as "General Provisions."
1488 Section 14. Section 48-1a-102 is enacted to read:
1489 48-1a-102. Definitions.
1490 As used in this title, "division" means the Division of Corporations and Commercial
1491 Code within the Department of Commerce.
1492 Section 15. Section 48-1b-101 is enacted to read:
1493
1494
1495 48-1b-101. Title -- Definitions.
1496 (1) This chapter may be cited as the "Utah Uniform Partnership Act."
1497 (2) As used in this chapter:
1498 (a) "Business" includes every trade, occupation, and profession.
1499 (b) "Debtor in bankruptcy" means a person who is the subject of:
1500 (i) an order for relief under United States Code, Title 11, or a comparable order under a
1501 successor statute of general application; or
1502 (ii) a comparable order under federal, state, or foreign law governing insolvency.
1503 (c) "Distribution" means a transfer of money or other property from a partnership to a
1504 partner in the partner's capacity as a partner or to the partner's transferee.
1505 (d) "Foreign limited liability partnership" means a partnership that:
1506 (i) is formed under laws other than the laws of this state; and
1507 (ii) has the status of a limited liability partnership under those laws.
1508 (e) "Limited liability partnership" means a partnership that has filed with the division a
1509 statement of qualification under Section 48-1b-1001 and does not have a similar statement in
1510 effect in any other jurisdiction.
1511 (f) "Partnership" means an association of two or more persons to carry on as co-owners
1512 a business for profit formed under Section 48-1b-202 , predecessor law, or comparable law of
1513 another jurisdiction.
1514
1515 among the partners concerning the partnership, including amendments to the partnership
1516 agreement.
1517 (h) "Partnership at will" means a partnership in which the partners have not agreed to
1518 remain partners until the expiration of a definite term or the completion of a particular
1519 undertaking.
1520 (i) "Partnership interest" or "partner's interest in the partnership" means all of a
1521 partner's interests in the partnership, including the partner's transferable interest and all
1522 management and other rights.
1523 (j) "Person" means:
1524 (i) an individual;
1525 (ii) a corporation;
1526 (iii) a business trust;
1527 (iv) an estate;
1528 (v) a trust;
1529 (vi) a partnership;
1530 (vii) an association;
1531 (viii) a joint venture;
1532 (ix) government;
1533 (x) a governmental subdivision, agency, or instrumentality; or
1534 (xi) any other legal or commercial entity.
1535 (k) "Property" means all property, real, personal, or mixed, tangible or intangible, or
1536 any interest therein.
1537 (l) "State" means a state of the United States, the District of Columbia, the
1538 Commonwealth of Puerto Rico, or any territory or insular possession subject to the jurisdiction
1539 of the United States.
1540 (m) "Statement" means:
1541 (i) a statement of partnership authority under Section 48-1b-303 ;
1542 (ii) a statement of denial under Section 48-1b-304 ;
1543 (iii) a statement of dissociation under Section 48-1b-704 ;
1544 (iv) a statement of dissolution under Section 48-1b-805 ;
1545
1546 (vi) a statement of qualification under Section 48-1b-1001 ;
1547 (vii) a statement of foreign qualification under Section 48-1b-1102 ; or
1548 (viii) an amendment or cancellation of any of the foregoing.
1549 (n) "Transfer" includes an assignment, conveyance, lease, mortgage, deed, and
1550 encumbrance.
1551 (o) "Tribe" means a tribe, band, nation, pueblo, or other organized group or community
1552 of Indians, including an Alaska Native village, that is legally recognized as eligible for and is
1553 consistent with a special program, service, or entitlement provided by the United States to
1554 Indians because of their status as Indians.
1555 (p) "Tribal limited liability partnership" means a limited liability partnership:
1556 (i) formed under the law of a tribe; and
1557 (ii) that is at least 51% owned or controlled by the tribe.
1558 Section 16. Section 48-1b-102 is enacted to read:
1559 48-1b-102. Knowledge and notice.
1560 (1) A person knows a fact if the person has actual knowledge of it.
1561 (2) A person has notice of a fact if the person:
1562 (a) knows of it;
1563 (b) has received a notification of it; or
1564 (c) has reason to know it exists from all of the facts known to the person at the time in
1565 question.
1566 (3) A person notifies or gives a notification to another by taking steps reasonably
1567 required to inform the other person in ordinary course, whether or not the other person learns of
1568 it.
1569 (4) A person receives a notification when the notification:
1570 (a) comes to the person's attention; or
1571 (b) is duly delivered at the person's place of business or at any other place held out by
1572 the person as a place for receiving communications.
1573 (5) Except as otherwise provided in Subsection (6), a person other than an individual
1574 knows, has notice, or receives a notification of a fact for purposes of a particular transaction
1575 when the individual conducting the transaction knows, has notice, or receives a notification of
1576
1577 the person had exercised reasonable diligence. The person exercises reasonable diligence if it
1578 maintains reasonable routines for communicating significant information to the individual
1579 conducting the transaction and there is reasonable compliance with the routines. Reasonable
1580 diligence does not require an individual acting for the person to communicate information
1581 unless the communication is part of the individual's regular duties or the individual has reason
1582 to know of the transaction and that the transaction would be materially affected by the
1583 information.
1584 (6) A partner's knowledge, notice, or receipt of a notification of a fact relating to the
1585 partnership is effective immediately as knowledge by, notice to, or receipt of a notification by
1586 the partnership, except in the case of a fraud on the partnership committed by or with the
1587 consent of that partner.
1588 Section 17. Section 48-1b-103 is enacted to read:
1589 48-1b-103. Effect of partnership agreement -- Nonwaivable provisions.
1590 (1) Except as otherwise provided in Subsection (2), relations among the partners and
1591 between the partners and the partnership are governed by the partnership agreement. To the
1592 extent the partnership agreement does not otherwise provide, this chapter governs relations
1593 among the partners and between the partners and the partnership.
1594 (2) The partnership agreement may not:
1595 (a) vary the rights and duties under Section 48-1b-105 except to eliminate the duty to
1596 provide copies of statements to all of the partners;
1597 (b) unreasonably restrict the right of access to books and records under Subsection
1598 48-1b-403 (2);
1599 (c) eliminate the duty of loyalty under Subsection 48-1b-404 (2) or 48-1b-603 (2)(c),
1600 but:
1601 (i) the partnership agreement may identify specific types or categories of activities that
1602 do not violate the duty of loyalty, if not unconscionable or against public policy; or
1603 (ii) all of the partners or a number or percentage specified in the partnership agreement
1604 may authorize or ratify, after full disclosure of all material facts, a specific act or transaction
1605 that otherwise would violate the duty of loyalty;
1606 (d) unreasonably reduce the duty of care under Subsection 48-1b-404 (3) or
1607
1608 (e) eliminate the obligation of good faith and fair dealing under Subsection
1609 48-1b-404 (4), but the partnership agreement may prescribe the standards by which the
1610 performance of the obligation is to be measured, if the standards are not manifestly
1611 unreasonable;
1612 (f) vary the power to dissociate as a partner under Subsection 48-1b-602 (1), except to
1613 require the notice under Subsection 48-1b-601 (1) to be in writing;
1614 (g) vary the right of a court to expel a partner in the events specified in Subsection
1615 48-1b-601 (5);
1616 (h) vary the requirement to wind up the partnership business in cases specified in
1617 Subsection 48-1b-801 (4), (5), or (6);
1618 (i) vary the law applicable to a limited liability partnership under Subsection
1619 48-1b-106 (2); or
1620 (j) restrict rights of third parties under this chapter.
1621 Section 18. Section 48-1b-104 is enacted to read:
1622 48-1b-104. Supplemental principles of law.
1623 (1) Unless displaced by particular provisions of this chapter, the principles of law and
1624 equity supplement this chapter.
1625 (2) If an obligation to pay interest arises under this chapter and the rate is not specified,
1626 the rate is that specified in Section 15-1-1 .
1627 Section 19. Section 48-1b-105 is enacted to read:
1628 48-1b-105. Execution, filing, and recording of statements.
1629 (1) A statement may be filed with the division. A certified copy of a statement that is
1630 filed in an office in another state may be filed with the division. Either filing has the effect
1631 provided in this chapter with respect to partnership property located in or transactions that
1632 occur in this state.
1633 (2) A certified copy of a statement that is filed with the division and recorded in the
1634 office for recording transfers of real property has the effect provided for recorded statements in
1635 this chapter. A recorded statement that is not a certified copy of a statement filed with the
1636 division does not have the effect provided for recorded statements in this chapter.
1637 (3) A statement filed with the division by a partnership must be executed by at least
1638
1639 this chapter. An individual who executes a statement as, or on behalf of, a partner or other
1640 person named as a partner in a statement shall personally declare under penalty of perjury that
1641 the contents of the statement are accurate.
1642 (4) A person authorized by this chapter to file a statement with the division may amend
1643 or cancel the statement by filing an amendment or cancellation that names the partnership,
1644 identifies the statement, and states the substance of the amendment or cancellation.
1645 (5) A person who files a statement with the division pursuant to this section shall
1646 promptly send a copy of the statement to every nonfiling partner and to any other person named
1647 as a partner in the statement. Failure to send a copy of a statement to a partner or other person
1648 does not limit the effectiveness of the statement as to a person not a partner.
1649 (6) The division may collect a fee, established in accordance with Section 63J-1-504 ,
1650 for filing or providing a certified copy of a statement. The county recorder may in accordance
1651 with Section 17-21-18.5 collect a fee for recording a statement.
1652 (7) A statement filed with the division pursuant to this section and in accordance with
1653 Section 48-1b-303 , is effective for a period of five years from the date of filing. At the
1654 expiration of that period, if no new filing is made by or on behalf of the person who made the
1655 original filing, the division shall send a notice by regular mail, postage prepaid, to the address
1656 shown in the filing indicating that it has expired. If no new filing is made within 30 days after
1657 the date of mailing the notice, the division shall remove the filing from the division's active
1658 file.
1659 Section 20. Section 48-1b-106 is enacted to read:
1660 48-1b-106. Governing law.
1661 (1) Except as otherwise provided in Subsection (2), the law of the jurisdiction in which
1662 a partnership has its chief executive office governs relations among the partners and between
1663 the partners and the partnership.
1664 (2) The law of this state governs relations among the partners and between the partners
1665 and the partnership and the liability of partners for an obligation of a limited liability
1666 partnership.
1667 Section 21. Section 48-1b-107 is enacted to read:
1668 48-1b-107. Partnership subject to amendment or repeal of chapter.
1669
1670 chapter.
1671 Section 22. Section 48-1b-201 is enacted to read:
1672
1673 48-1b-201. Partnership as entity.
1674 (1) A partnership is an entity distinct from its partners.
1675 (2) A limited liability partnership continues to be the same entity that existed before the
1676 filing of a statement of qualification with the division under Section 48-1b-1001 .
1677 Section 23. Section 48-1b-202 is enacted to read:
1678 48-1b-202. Formation of partnership.
1679 (1) Except as otherwise provided in Subsection (2), the association of two or more
1680 persons to carry on as co-owners a business for profit forms a partnership, whether or not the
1681 persons intend to form a partnership.
1682 (2) An association formed under a statute other than this chapter, a predecessor statute,
1683 or a comparable statute of another jurisdiction is not a partnership under this chapter.
1684 (3) In determining whether a partnership is formed, the following rules apply:
1685 (a) Joint tenancy, tenancy in common, tenancy by the entireties, joint property,
1686 common property, or part ownership does not by itself establish a partnership, even if the
1687 co-owners share profits made by the use of the property.
1688 (b) The sharing of gross returns does not by itself establish a partnership, even if the
1689 persons sharing them have a joint or common right or interest in property from which the
1690 returns are derived.
1691 (c) A person who receives a share of the profits of a business is presumed to be a
1692 partner in the business, unless the profits were received in payment:
1693 (i) of a debt by installments or otherwise;
1694 (ii) for services as an independent contractor or of wages or other compensation to an
1695 employee;
1696 (iii) of rent;
1697 (iv) of an annuity or other retirement or health benefit to a beneficiary, representative,
1698 or designee of a deceased or retired partner;
1699 (v) of interest or other charge on a loan, even if the amount of payment varies with the
1700
1701 collateral, or rights to income, proceeds, or increase in value derived from the collateral; or
1702 (vi) for the sale of the goodwill of a business or other property by installments or
1703 otherwise.
1704 Section 24. Section 48-1b-203 is enacted to read:
1705 48-1b-203. Partnership property.
1706 Property acquired by a partnership is property of the partnership and not of the partners
1707 individually.
1708 Section 25. Section 48-1b-204 is enacted to read:
1709 48-1b-204. When property is partnership property.
1710 (1) Property is partnership property if acquired in the name of:
1711 (a) the partnership; or
1712 (b) one or more partners with an indication in the instrument transferring title to the
1713 property of the person's capacity as a partner or of the existence of a partnership but without an
1714 indication of the name of the partnership.
1715 (2) Property is acquired in the name of the partnership by a transfer to:
1716 (a) the partnership in its name; or
1717 (b) one or more partners in their capacity as partners in the partnership, if the name of
1718 the partnership is indicated in the instrument transferring title to the property.
1719 (3) Property is presumed to be partnership property if purchased with partnership
1720 assets, even if not acquired in the name of the partnership or of one or more partners with an
1721 indication in the instrument transferring title to the property of the person's capacity as a
1722 partner or of the existence of a partnership.
1723 (4) Property acquired in the name of one or more of the partners, without an indication
1724 in the instrument transferring title to the property of the person's capacity as a partner or of the
1725 existence of a partnership and without use of partnership assets, is presumed to be separate
1726 property, even if used for partnership purposes.
1727 Section 26. Section 48-1b-301 is enacted to read:
1728
1729 48-1b-301. Partner agent of partnership.
1730 Subject to the effect of a statement of partnership authority under Section 48-1b-303 :
1731
1732 a partner, including the execution of an instrument in the partnership name, for apparently
1733 carrying on in the ordinary course the partnership business or business of the kind carried on by
1734 the partnership binds the partnership, unless the partner had no authority to act for the
1735 partnership in the particular matter and the person with whom the partner was dealing knew or
1736 had received a notification that the partner lacked authority.
1737 (2) An act of a partner which is not apparently for carrying on in the ordinary course
1738 the partnership business or business of the kind carried on by the partnership binds the
1739 partnership only if the act was authorized by the other partners.
1740 Section 27. Section 48-1b-302 is enacted to read:
1741 48-1b-302. Transfer of partnership property.
1742 (1) Partnership property may be transferred as follows:
1743 (a) Subject to the effect of a statement of partnership authority under Section
1744 48-1b-303 , partnership property held in the name of the partnership may be transferred by an
1745 instrument of transfer executed by a partner in the partnership name.
1746 (b) Partnership property held in the name of one or more partners with an indication in
1747 the instrument transferring the property to them of their capacity as partners or of the existence
1748 of a partnership, but without an indication of the name of the partnership, may be transferred by
1749 an instrument of transfer executed by the persons in whose name the property is held.
1750 (c) Partnership property held in the name of one or more persons other than the
1751 partnership, without an indication in the instrument transferring the property to them of their
1752 capacity as partners or of the existence of a partnership, may be transferred by an instrument of
1753 transfer executed by the persons in whose name the property is held.
1754 (2) A partnership may recover partnership property from a transferee only if it proves
1755 that execution of the instrument of initial transfer did not bind the partnership under Section
1756 48-1b-301 and:
1757 (a) as to a subsequent transferee who gave value for property transferred under
1758 Subsection (1)(a) and (b), proves that the subsequent transferee knew or had received a
1759 notification that the person who executed the instrument of initial transfer lacked authority to
1760 bind the partnership; or
1761 (b) as to a transferee who gave value for property transferred under Subsection (1)(c),
1762
1763 property and that the person who executed the instrument of initial transfer lacked authority to
1764 bind the partnership.
1765 (3) A partnership may not recover partnership property from a subsequent transferee if
1766 the partnership would not have been entitled to recover the property, under Subsection (2),
1767 from any earlier transferee of the property.
1768 (4) If a person holds all of the partners' interests in the partnership, all of the
1769 partnership property vests in that person. The person may execute a document in the name of
1770 the partnership to evidence vesting of the property in that person and may file or record the
1771 document.
1772 Section 28. Section 48-1b-303 is enacted to read:
1773 48-1b-303. Statement of partnership authority.
1774 (1) A partnership may file with the division a statement of partnership authority,
1775 which:
1776 (a) must include:
1777 (i) the name of the partnership;
1778 (ii) the street address of its chief executive office and of one office in this state, if there
1779 is one;
1780 (iii) the names and mailing addresses of all of the partners or of an agent appointed and
1781 maintained by the partnership for the purpose of Subsection (2); and
1782 (iv) the names of the partners authorized to execute an instrument transferring real
1783 property held in the name of the partnership; and
1784 (b) may state the authority, or limitations on the authority, of some or all of the partners
1785 to enter into other transactions on behalf of the partnership and any other matter.
1786 (2) If a statement of partnership authority names an agent, the agent shall maintain a
1787 list of the names and mailing addresses of all of the partners and make it available to any
1788 person on request for good cause shown.
1789 (3) If a filed statement of partnership authority is executed pursuant to Subsection
1790 48-1b-105 (3) and states the name of the partnership but does not contain all of the other
1791 information required by Subsection (1), the statement nevertheless operates with respect to a
1792 person not a partner as provided in Subsections (4) and (5).
1793
1794 authority supplements the authority of a partner to enter into transactions on behalf of the
1795 partnership as follows:
1796 (a) Except for transfers of real property, a grant of authority contained in a filed
1797 statement of partnership authority is conclusive in favor of a person who gives value without
1798 knowledge to the contrary, so long as and to the extent that a limitation on that authority is not
1799 then contained in another filed statement. A filed cancellation of a limitation on authority
1800 revives the previous grant of authority.
1801 (b) A grant of authority to transfer real property held in the name of the partnership
1802 contained in a certified copy of a filed statement of partnership authority recorded in the office
1803 for recording transfers of that real property is conclusive in favor of a person who gives value
1804 without knowledge to the contrary, so long as and to the extent that a certified copy of a filed
1805 statement containing a limitation on that authority is not then of record in the office for
1806 recording transfers of that real property. The recording in the office for recording transfers of
1807 that real property of a certified copy of a filed cancellation of a limitation on authority revives
1808 the previous grant of authority.
1809 (5) A person not a partner is deemed to know of a limitation on the authority of a
1810 partner to transfer real property held in the name of the partnership if a certified copy of the
1811 filed statement containing the limitation on authority is of record in the office for recording
1812 transfers of that real property.
1813 (6) Except as otherwise provided in Subsections (4) and (5) and Sections 48-1b-704
1814 and 48-1b-805 , a person not a partner is not deemed to know of a limitation on the authority of
1815 a partner merely because the limitation is contained in a filed statement.
1816 (7) Unless earlier canceled and if not renewed, a filed statement of partnership
1817 authority is canceled by operation of law five years after the date on which the statement, or the
1818 most recent amendment, was filed with the division.
1819 (8) (a) If a partnership files a statement of partnership authority with the division under
1820 this section, the partnership is not required to file a certificate with the division under Title 42,
1821 Chapter 2, Conducting Business Under Assumed Name.
1822 (b) A filing with the division under Title 42, Chapter 2, Conducting Business Under
1823 Assumed Name:
1824
1825 (ii) is subject to Section 42-2-8 .
1826 Section 29. Section 48-1b-304 is enacted to read:
1827 48-1b-304. Statement of denial.
1828 A partner or other person named as a partner in a filed statement of partnership
1829 authority or in a list maintained by an agent pursuant to Subsection 48-1b-303 (2) may file a
1830 statement of denial with the division stating the name of the partnership and the fact that is
1831 being denied, which may include denial of a person's authority or status as a partner. A
1832 statement of denial is a limitation on authority as provided in Subsections 48-1b-303 (4) and
1833 (5).
1834 Section 30. Section 48-1b-305 is enacted to read:
1835 48-1b-305. Partnership liable for partner's actionable conduct.
1836 (1) A partnership is liable for loss or injury caused to a person, or for a penalty
1837 incurred, as a result of a wrongful act or omission, or other actionable conduct, of a partner
1838 acting in the ordinary course of business of the partnership or with authority of the partnership.
1839 (2) If, in the course of the partnership's business or while acting with authority of the
1840 partnership, a partner receives or causes the partnership to receive money or property of a
1841 person not a partner, and the money or property is misapplied by a partner, the partnership is
1842 liable for the loss.
1843 Section 31. Section 48-1b-306 is enacted to read:
1844 48-1b-306. Partner's liability.
1845 (1) Except as otherwise provided in Subsections (2) and (3), all partners are liable
1846 jointly and severally for all obligations of the partnership unless otherwise agreed by the
1847 claimant or provided by law.
1848 (2) A person admitted as a partner into an existing partnership is not personally liable
1849 for any partnership obligation incurred before the person's admission as a partner.
1850 (3) (a) An obligation of a partnership incurred while the partnership is a limited
1851 liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of
1852 the partnership. A partner is not personally liable, directly or indirectly, by way of contribution
1853 or otherwise, for such an obligation solely by reason of being or so acting as a partner.
1854 (b) This Subsection (3) applies notwithstanding anything inconsistent in the
1855
1856 liability partnership under Subsection 48-1b-1001 (2).
1857 (c) This Subsection (3) and Part 10, Limited Liability Partnerships, do not alter any law
1858 applicable to the relationship between a person providing a professional service and a person
1859 receiving the professional service, including liability arising out of those professional services.
1860 A person providing a professional service remains personally liable for a result of that person's
1861 act or omission.
1862 Section 32. Section 48-1b-307 is enacted to read:
1863 48-1b-307. Actions by and against partnership and partners.
1864 (1) A partnership may sue and be sued in the name of the partnership.
1865 (2) An action may be brought against the partnership and, to the extent not inconsistent
1866 with Section 48-1b-306 , any or all of the partners in the same action or in separate actions.
1867 (3) A judgment against a partnership is not by itself a judgment against a partner. A
1868 judgment against a partnership may not be satisfied from a partner's assets unless there is also a
1869 judgment against the partner.
1870 (4) A judgment creditor of a partner may not levy execution against the assets of the
1871 partner to satisfy a judgment based on a claim against the partnership unless the partner is
1872 personally liable for the claim under Section 48-1b-306 and:
1873 (a) a judgment based on the same claim has been obtained against the partnership and a
1874 writ of execution on the judgment has been returned unsatisfied in whole or in part;
1875 (b) the partnership is a debtor in bankruptcy;
1876 (c) the partner has agreed that the creditor need not exhaust partnership assets;
1877 (d) a court grants permission to the judgment creditor to levy execution against the
1878 assets of a partner based on a finding that partnership assets subject to execution are clearly
1879 insufficient to satisfy the judgment, that exhaustion of partnership assets is excessively
1880 burdensome, or that the grant of permission is an appropriate exercise of the court's equitable
1881 powers; or
1882 (e) liability is imposed on the partner by law or contract independent of the existence of
1883 the partnership.
1884 (5) This section applies to any partnership liability or obligation resulting from a
1885 representation by a partner or purported partner under Section 48-1b-308 .
1886
1887 48-1b-308. Liability of purported partner.
1888 (1) If a person, by words or conduct, purports to be a partner, or consents to being
1889 represented by another as a partner, in a partnership or with one or more persons not partners,
1890 the purported partner is liable to a person to whom the representation is made, if that person,
1891 relying on the representation, enters into a transaction with the actual or purported partnership.
1892 If the representation, either by the purported partner or by a person with the purported partner's
1893 consent, is made in a public manner, the purported partner is liable to a person who relies upon
1894 the purported partnership even if the purported partner is not aware of being held out as a
1895 partner to the claimant. If partnership liability results, the purported partner is liable with
1896 respect to that liability as if the purported partner were a partner. If no partnership liability
1897 results, the purported partner is liable with respect to that liability jointly and severally with any
1898 other person consenting to the representation.
1899 (2) If a person is thus represented to be a partner in an existing partnership, or with one
1900 or more persons not partners, the purported partner is an agent of persons consenting to the
1901 representation to bind them to the same extent and in the same manner as if the purported
1902 partner were a partner, with respect to persons who enter into transactions in reliance upon the
1903 representation. If all of the partners of the existing partnership consent to the representation, a
1904 partnership act or obligation results. If fewer than all of the partners of the existing partnership
1905 consent to the representation, the person acting and the partners consenting to the
1906 representation are jointly and severally liable.
1907 (3) A person is not liable as a partner merely because the person is named by another in
1908 a statement of partnership authority.
1909 (4) A person does not continue to be liable as a partner merely because of a failure to
1910 file a statement of dissociation or to amend a statement of partnership authority with the
1911 division to indicate the partner's dissociation from the partnership.
1912 (5) Except as otherwise provided in Subsections (1) and (2), persons who are not
1913 partners as to each other are not liable as partners to other persons.
1914 Section 34. Section 48-1b-401 is enacted to read:
1915
1916 48-1b-401. Partner's rights and duties.
1917
1918 (a) credited with an amount equal to the money plus the value of any other property,
1919 net of the amount of any liabilities, the partner contributes to the partnership and the partner's
1920 share of the partnership profits; and
1921 (b) charged with an amount equal to the money plus the value of any other property,
1922 net of the amount of any liabilities, distributed by the partnership to the partner and the
1923 partner's share of the partnership losses.
1924 (2) Each partner is entitled to an equal share of the partnership profits and is chargeable
1925 with a share of the partnership losses in proportion to the partner's share of the profits.
1926 (3) A partnership shall reimburse a partner for payments made and indemnify a partner
1927 for liabilities incurred by the partner in the ordinary course of the business of the partnership or
1928 for the preservation of its business or property.
1929 (4) A partnership shall reimburse a partner for an advance to the partnership beyond
1930 the amount of capital the partner agreed to contribute.
1931 (5) A payment or advance made by a partner which gives rise to a partnership
1932 obligation under Subsection (3) or (4) constitutes a loan to the partnership which accrues
1933 interest from the date of the payment or advance.
1934 (6) Each partner has equal rights in the management and conduct of the partnership
1935 business.
1936 (7) A partner may use or possess partnership property only on behalf of the partnership.
1937 (8) A partner is not entitled to remuneration for services performed for the partnership,
1938 except for reasonable compensation for services rendered in winding up the business of the
1939 partnership.
1940 (9) A person may become a partner only with the consent of all of the partners.
1941 (10) A difference arising as to a matter in the ordinary course of business of a
1942 partnership may be decided by a majority of the partners. An act outside the ordinary course of
1943 business of a partnership and an amendment to the partnership agreement may be undertaken
1944 only with the consent of all of the partners.
1945 (11) This section does not affect the obligations of a partnership to other persons under
1946 Section 48-1b-301 .
1947 Section 35. Section 48-1b-402 is enacted to read:
1948
1949 A partner has no right to receive, and may not be required to accept, a distribution in
1950 kind.
1951 Section 36. Section 48-1b-403 is enacted to read:
1952 48-1b-403. Partner's rights and duties with respect to information.
1953 (1) A partnership shall keep its books and records, if any, at its chief executive office.
1954 (2) A partnership shall provide partners and their agents and attorneys access to its
1955 books and records. It shall provide former partners and their agents and attorneys access to
1956 books and records pertaining to the period during which they were partners. The right of
1957 access provides the opportunity to inspect and copy books and records during ordinary business
1958 hours. A partnership may impose a reasonable charge, covering the costs of labor and material,
1959 for copies of documents furnished.
1960 (3) Each partner and the partnership shall furnish to a partner, and to the legal
1961 representative of a deceased partner or partner under legal disability:
1962 (a) without demand, any information concerning the partnership's business and affairs
1963 reasonably required for the proper exercise of the partner's rights and duties under the
1964 partnership agreement or this chapter; and
1965 (b) on demand, any other information concerning the partnership's business and affairs,
1966 except to the extent the demand or the information demanded is unreasonable or otherwise
1967 improper under the circumstances.
1968 Section 37. Section 48-1b-404 is enacted to read:
1969 48-1b-404. General standards of partner's conduct.
1970 (1) The only fiduciary duties a partner owes to the partnership and the other partners
1971 are the duty of loyalty and the duty of care set forth in Subsections (2) and (3).
1972 (2) A partner's duty of loyalty to the partnership and the other partners is limited to the
1973 following:
1974 (a) to account to the partnership and hold as trustee for it any property, profit, or
1975 benefit derived by the partner in the conduct and winding up of the partnership business or
1976 derived from a use by the partner of partnership property, including the appropriation of a
1977 partnership opportunity;
1978 (b) to refrain from dealing with the partnership in the conduct or winding up of the
1979
1980 (c) to refrain from competing with the partnership in the conduct of the partnership
1981 business before the dissolution of the partnership.
1982 (3) A partner's duty of care to the partnership and the other partners in the conduct and
1983 winding up of the partnership business is limited to refraining from engaging in grossly
1984 negligent or reckless conduct, intentional misconduct, or a knowing violation of law.
1985 (4) A partner shall discharge the duties to the partnership and the other partners under
1986 this chapter or under the partnership agreement and exercise any rights consistently with the
1987 obligation of good faith and fair dealing.
1988 (5) A partner does not violate a duty or obligation under this chapter or under the
1989 partnership agreement merely because the partner's conduct furthers the partner's own interest.
1990 (6) A partner may lend money to and transact other business with the partnership, and
1991 as to each loan or transaction the rights and obligations of the partner are the same as those of a
1992 person who is not a partner, subject to other applicable law.
1993 (7) This section applies to a person winding up the partnership business as the personal
1994 or legal representative of the last surviving partner as if the person were a partner.
1995 Section 38. Section 48-1b-405 is enacted to read:
1996 48-1b-405. Actions by partnership and partners.
1997 (1) A partnership may maintain an action against a partner for a breach of the
1998 partnership agreement, or for the violation of a duty to the partnership, causing harm to the
1999 partnership.
2000 (2) A partner may maintain an action against the partnership or another partner for
2001 legal or equitable relief, with or without an accounting as to partnership business, to:
2002 (a) enforce the partner's rights under the partnership agreement;
2003 (b) enforce the partner's rights under this chapter, including:
2004 (i) the partner's rights under Section 48-1b-401 , 48-1b-403 , or 48-1b-404 ;
2005 (ii) the partner's right on dissociation to have the partner's interest in the partnership
2006 purchased pursuant to Section 48-1b-701 or enforce any other right under Part 6, Partner's
2007 Dissociation, or Part 7, Partner's Dissociation When Business Not Wound Up; or
2008 (iii) the partner's right to compel a dissolution and winding up of the partnership
2009 business under Section 48-1b-801 or enforce any other right under Part 8, Winding Up
2010
2011 (c) enforce the rights and otherwise protect the interests of the partner, including rights
2012 and interests arising independently of the partnership relationship.
2013 (3) The accrual of, and any time limitation on, a right of action for a remedy under this
2014 section is governed by other law. A right to an accounting upon a dissolution and winding up
2015 does not revive a claim barred by law.
2016 Section 39. Section 48-1b-406 is enacted to read:
2017 48-1b-406. Continuation of partnership beyond definite term or particular
2018 undertaking.
2019 (1) If a partnership for a definite term or particular undertaking is continued, without
2020 an express agreement, after the expiration of the term or completion of the undertaking, the
2021 rights and duties of the partners remain the same as they were at the expiration or completion,
2022 so far as is consistent with a partnership at will.
2023 (2) If the partners, or those of them who habitually acted in the business during the
2024 term or undertaking, continue the business without any settlement or liquidation of the
2025 partnership, they are presumed to have agreed that the partnership will continue.
2026 Section 40. Section 48-1b-501 is enacted to read:
2027
2028 48-1b-501. Partner not co-owner of partnership property.
2029 A partner is not a co-owner of partnership property and has no interest in partnership
2030 property which can be transferred, either voluntarily or involuntarily.
2031 Section 41. Section 48-1b-502 is enacted to read:
2032 48-1b-502. Partner's transferable interest in partnership.
2033 The only transferable interest of a partner in the partnership is the partner's share of the
2034 profits and losses of the partnership and the partner's right to receive distributions. The interest
2035 is personal property.
2036 Section 42. Section 48-1b-503 is enacted to read:
2037 48-1b-503. Transfer of partner's transferable interest.
2038 (1) A transfer, in whole or in part, of a partner's transferable interest in the partnership:
2039 (a) is permissible;
2040 (b) does not by itself cause the partner's dissociation or a dissolution and winding up of
2041
2042 (c) does not, as against the other partners or the partnership, entitle the transferee,
2043 during the continuance of the partnership, to participate in the management or conduct of the
2044 partnership business, to require access to information concerning partnership transactions, or to
2045 inspect or copy the partnership books or records.
2046 (2) A transferee of a partner's transferable interest in the partnership has a right:
2047 (a) to receive, in accordance with the transfer, distributions to which the transferor
2048 would otherwise be entitled; and
2049 (b) to receive upon the dissolution and winding up of the partnership business, in
2050 accordance with the transfer, the net amount otherwise distributable to the transferor.
2051 (3) In a dissolution and winding up, a transferee is entitled to an account of partnership
2052 transactions only from the date of the latest account agreed to by all of the partners.
2053 (4) Upon transfer, the transferor retains the rights and duties of a partner other than the
2054 interest in distributions transferred.
2055 (5) A partnership need not give effect to a transferee's rights under this section until it
2056 has notice of the transfer.
2057 (6) A transfer of a partner's transferable interest in the partnership in violation of a
2058 restriction on transfer contained in the partnership agreement is ineffective as to a person
2059 having notice of the restriction at the time of transfer.
2060 Section 43. Section 48-1b-504 is enacted to read:
2061 48-1b-504. Partner's transferable interest subject to charging order.
2062 (1) On application by a judgment creditor of a partner or of a partner's transferee, a
2063 court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy
2064 the judgment. The court may appoint a receiver of the share of the distributions due or to
2065 become due to the judgment debtor in respect of the partnership and make all other orders,
2066 directions, accounts, and inquiries the judgment debtor might have made or which the
2067 circumstances of the case may require.
2068 (2) A charging order constitutes a lien on the judgment debtor's transferable interest in
2069 the partnership. The court may order a foreclosure of the interest subject to the charging order
2070 at any time. The purchaser at the foreclosure sale has the rights of a transferee.
2071 (3) At any time before foreclosure, an interest charged may be redeemed:
2072
2073 (b) with property other than partnership property, by one or more of the other partners;
2074 or
2075 (c) with partnership property, by one or more of the other partners with the consent of
2076 all of the partners whose interests are not so charged.
2077 (4) This chapter does not deprive a partner of a right under exemption laws with
2078 respect to the partner's interest in the partnership.
2079 (5) This section provides the exclusive remedy by which a judgment creditor of a
2080 partner or partner's transferee may satisfy a judgment out of the judgment debtor's transferable
2081 interest in the partnership.
2082 Section 44. Section 48-1b-601 is enacted to read:
2083
2084 48-1b-601. Events causing partner's dissociation.
2085 A partner is dissociated from a partnership upon the occurrence of any of the following
2086 events:
2087 (1) the partnership's having notice of the partner's express will to withdraw as a partner
2088 or on a later date specified by the partner;
2089 (2) an event agreed to in the partnership agreement as causing the partner's
2090 dissociation;
2091 (3) the partner's expulsion pursuant to the partnership agreement;
2092 (4) the partner's expulsion by the unanimous vote of the other partners if:
2093 (a) it is unlawful to carry on the partnership business with that partner;
2094 (b) there has been a transfer of all or substantially all of that partner's transferable
2095 interest in the partnership, other than a transfer for security purposes, or a court order charging
2096 the partner's interest, which has not been foreclosed;
2097 (c) within 90 days after the partnership notifies a corporate partner that it will be
2098 expelled because it has filed a certificate of dissolution or the equivalent, its charter has been
2099 revoked, or its right to conduct business has been suspended by the jurisdiction of its
2100 incorporation, there is no revocation of the certificate of dissolution or no reinstatement of its
2101 charter or its right to conduct business; or
2102 (d) a partnership that is a partner has been dissolved and its business is being wound
2103
2104 (5) on application by the partnership or another partner, the partner's expulsion by
2105 judicial determination because:
2106 (a) the partner engaged in wrongful conduct that adversely and materially affected the
2107 partnership business;
2108 (b) the partner willfully or persistently committed a material breach of the partnership
2109 agreement or of a duty owed to the partnership or the other partners under Section 48-1b-404 ;
2110 or
2111 (c) the partner engaged in conduct relating to the partnership business which makes it
2112 not reasonably practicable to carry on the business in partnership with the partner;
2113 (6) the partner's:
2114 (a) becoming a debtor in bankruptcy;
2115 (b) executing an assignment for the benefit of creditors;
2116 (c) seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or
2117 liquidator of that partner or of all or substantially all of that partner's property; or
2118 (d) failing, within 90 days after the appointment, to have vacated or stayed the
2119 appointment of a trustee, receiver, or liquidator of the partner or of all or substantially all of the
2120 partner's property obtained without the partner's consent or acquiescence, or failing within 90
2121 days after the expiration of a stay to have the appointment vacated;
2122 (7) in the case of a partner who is an individual:
2123 (a) the partner's death;
2124 (b) the appointment of a guardian or general conservator for the partner; or
2125 (c) a judicial determination that the partner has otherwise become incapable of
2126 performing the partner's duties under the partnership agreement;
2127 (8) in the case of a partner that is a trust or is acting as a partner by virtue of being a
2128 trustee of a trust, distribution of the trust's entire transferable interest in the partnership, but not
2129 merely by reason of the substitution of a successor trustee;
2130 (9) in the case of a partner that is an estate or is acting as a partner by virtue of being a
2131 personal representative of an estate, distribution of the estate's entire transferable interest in the
2132 partnership, but not merely by reason of the substitution of a successor personal representative;
2133 or
2134
2135 or estate.
2136 Section 45. Section 48-1b-602 is enacted to read:
2137 48-1b-602. Partner's power to dissociate -- Wrongful dissociation.
2138 (1) A partner has the power to dissociate at any time, rightfully or wrongfully, by
2139 express will pursuant to Subsection 48-1b-601 (1).
2140 (2) A partner's dissociation is wrongful only if:
2141 (a) it is in breach of an express provision of the partnership agreement; or
2142 (b) in the case of a partnership for a definite term or particular undertaking, before the
2143 expiration of the term or the completion of the undertaking:
2144 (i) the partner withdraws by express will, unless the withdrawal follows within 90 days
2145 after another partner's dissociation by death or otherwise under Subsection 48-1b-601 (6)
2146 through (10) or wrongful dissociation under this Subsection (2);
2147 (ii) the partner is expelled by judicial determination under Subsection 48-1b-601 (5);
2148 (iii) the partner is dissociated by becoming a debtor in bankruptcy; or
2149 (iv) in the case of a partner who is not an individual, trust other than a business trust, or
2150 estate, the partner is expelled or otherwise dissociated because it willfully dissolved or
2151 terminated.
2152 (3) A partner who wrongfully dissociates is liable to the partnership and to the other
2153 partners for damages caused by the dissociation. The liability is in addition to any other
2154 obligation of the partner to the partnership or to the other partners.
2155 Section 46. Section 48-1b-603 is enacted to read:
2156 48-1b-603. Effect of partner's dissociation.
2157 (1) (a) If a partner's dissociation results in a dissolution and winding up of the
2158 partnership business, Part 8, Winding Up Partnership Business, applies.
2159 (b) Except as provided in Subsection (1)(a), Part 7, Partner's Dissociation When
2160 Business Not Wound Up, applies.
2161 (2) Upon a partner's dissociation:
2162 (a) the partner's right to participate in the management and conduct of the partnership
2163 business terminates, except as otherwise provided in Section 48-1b-803 ;
2164 (b) the partner's duty of loyalty under Subsection 48-1b-404 (2)(c) terminates; and
2165
2166 care under Subsection 48-1b-404 (3) continue only with regard to matters arising and events
2167 occurring before the partner's dissociation, unless the partner participates in winding up the
2168 partnership's business pursuant to Section 48-1b-803 .
2169 Section 47. Section 48-1b-701 is enacted to read:
2170
2171 48-1b-701. Purchase of dissociated partner's interest.
2172 (1) If a partner is dissociated from a partnership without resulting in a dissolution and
2173 winding up of the partnership business under Section 48-1b-801 , the partnership shall cause the
2174 dissociated partner's interest in the partnership to be purchased for a buyout price determined
2175 pursuant to Subsection (2).
2176 (2) The buyout price of a dissociated partner's interest is the amount that would have
2177 been distributable to the dissociating partner under Subsection 48-1b-807 (2) if, on the date of
2178 dissociation, the assets of the partnership were sold at a price equal to the greater of the
2179 liquidation value or the value based on a sale of the entire business as a going concern without
2180 the dissociated partner and the partnership were wound up as of that date. Interest must be paid
2181 from the date of dissociation to the date of payment.
2182 (3) Damages for wrongful dissociation under Subsection 48-1b-602 (2), and all other
2183 amounts owing, whether or not presently due, from the dissociated partner to the partnership,
2184 must be offset against the buyout price. Interest must be paid from the date the amount owed
2185 becomes due to the date of payment.
2186 (4) A partnership shall indemnify a dissociated partner whose interest is being
2187 purchased against all partnership liabilities, whether incurred before or after the dissociation,
2188 except liabilities incurred by an act of the dissociated partner under Section 48-1b-702 .
2189 (5) If no agreement for the purchase of a dissociated partner's interest is reached within
2190 120 days after a written demand for payment, the partnership shall pay, or cause to be paid, in
2191 cash to the dissociated partner the amount the partnership estimates to be the buyout price and
2192 accrued interest, reduced by any offsets and accrued interest under Subsection (3).
2193 (6) If a deferred payment is authorized under Subsection (8), the partnership may
2194 tender a written offer to pay the amount it estimates to be the buyout price and accrued interest,
2195 reduced by any offsets under Subsection (3), stating the time of payment, the amount and type
2196
2197 (7) The payment or tender required by Subsection (5) or (6) must be accompanied by
2198 the following:
2199 (a) a statement of partnership assets and liabilities as of the date of dissociation;
2200 (b) the latest available partnership balance sheet and income statement, if any;
2201 (c) an explanation of how the estimated amount of the payment was calculated; and
2202 (d) written notice that the payment is in full satisfaction of the obligation to purchase
2203 unless, within 120 days after the written notice, the dissociated partner commences an action to
2204 determine the buyout price, any offsets under Subsection (3), or other terms of the obligation to
2205 purchase.
2206 (8) A partner who wrongfully dissociates before the expiration of a definite term or the
2207 completion of a particular undertaking is not entitled to payment of any portion of the buyout
2208 price until the expiration of the term or completion of the undertaking, unless the partner
2209 establishes to the satisfaction of the court that earlier payment will not cause undue hardship to
2210 the business of the partnership. A deferred payment must be adequately secured and bear
2211 interest.
2212 (9) A dissociated partner may maintain an action against the partnership, pursuant to
2213 Subsection 48-1b-405 (2)(b)(ii), to determine the buyout price of that partner's interest, any
2214 offsets under Subsection (3), or other terms of the obligation to purchase. The action must be
2215 commenced within 120 days after the partnership has tendered payment or an offer to pay or
2216 within one year after written demand for payment if no payment or offer to pay is tendered.
2217 The court shall determine the buyout price of the dissociated partner's interest, any offset due
2218 under Subsection (3), and accrued interest, and enter judgment for any additional payment or
2219 refund. If deferred payment is authorized under Subsection (8), the court shall also determine
2220 the security for payment and other terms of the obligation to purchase. The court may assess
2221 reasonable attorney fees and the fees and expenses of appraisers or other experts for a party to
2222 the action, in amounts the court finds equitable, against a party that the court finds acted
2223 arbitrarily, vexatiously, or not in good faith. The finding may be based on the partnership's
2224 failure to tender payment or an offer to pay or to comply with Subsection (7).
2225 Section 48. Section 48-1b-702 is enacted to read:
2226 48-1b-702. Dissociated partner's power to bind and liability to partnership.
2227
2228 winding up of the partnership business, the partnership, including a surviving partnership under
2229 Part 9, Merger, Conversion, and Domestication, is bound by an act of the dissociated partner
2230 which would have bound the partnership under Section 48-1b-301 before dissociation only if at
2231 the time of entering into the transaction the other party:
2232 (a) reasonably believed that the dissociated partner was then a partner;
2233 (b) did not have notice of the partner's dissociation; and
2234 (c) is not deemed to have had knowledge under Subsection 48-1b-303 (5) or notice
2235 under Subsection 48-1b-704 (3).
2236 (2) A dissociated partner is liable to the partnership for any damage caused to the
2237 partnership arising from an obligation incurred by the dissociated partner after dissociation for
2238 which the partnership is liable under Subsection (1).
2239 Section 49. Section 48-1b-703 is enacted to read:
2240 48-1b-703. Dissociated partner's liability to other persons.
2241 (1) A partner's dissociation does not of itself discharge the partner's liability for a
2242 partnership obligation incurred before dissociation. A dissociated partner is not liable for a
2243 partnership obligation incurred after dissociation, except as otherwise provided in Subsection
2244 (2).
2245 (2) A partner who dissociates without resulting in a dissolution and winding up of the
2246 partnership business is liable as a partner to the other party in a transaction entered into by the
2247 partnership, or a surviving partnership under Part 9, Merger, Conversion, and Domestication,
2248 within two years after the partner's dissociation, only if the partner is liable for the obligation
2249 under Section 48-1b-306 and at the time of entering into the transaction the other party:
2250 (a) reasonably believed that the dissociated partner was then a partner;
2251 (b) did not have notice of the partner's dissociation; and
2252 (c) is not deemed to have had knowledge under Subsection 48-1b-303 (5) or notice
2253 under Subsection 48-1b-704 (3).
2254 (3) By agreement with the partnership creditor and the partners continuing the
2255 business, a dissociated partner may be released from liability for a partnership obligation.
2256 (4) A dissociated partner is released from liability for a partnership obligation if a
2257 partnership creditor, with notice of the partner's dissociation but without the partner's consent,
2258
2259 Section 50. Section 48-1b-704 is enacted to read:
2260 48-1b-704. Statement of dissociation.
2261 (1) A dissociated partner or the partnership may file a statement of dissociation with
2262 the division stating the name of the partnership and that the partner is dissociated from the
2263 partnership.
2264 (2) A statement of dissociation is a limitation on the authority of a dissociated partner
2265 for the purposes of Subsections 48-1b-303 (4) and (5).
2266 (3) For the purposes of Subsections 48-1b-702 (1)(c) and 48-1b-703 (2)(c), a person not
2267 a partner is deemed to have notice of the dissociation 90 days after the statement of
2268 dissociation is filed.
2269 Section 51. Section 48-1b-705 is enacted to read:
2270 48-1b-705. Continued use of partnership name.
2271 Continued use of a partnership name, or a dissociated partner's name as part thereof, by
2272 partners continuing the business does not of itself make the dissociated partner liable for an
2273 obligation of the partners or the partnership continuing the business.
2274 Section 52. Section 48-1b-801 is enacted to read:
2275
2276 48-1b-801. Events causing dissolution and winding up of partnership business.
2277 A partnership is dissolved, and its business must be wound up, only upon the
2278 occurrence of any of the following events:
2279 (1) in a partnership at will, the partnership's having notice from a partner, other than a
2280 partner who is dissociated under Subsections 48-1b-601 (2) through (10), of that partner's
2281 express will to withdraw as a partner, or on a later date specified by the partner;
2282 (2) in a partnership for a definite term or particular undertaking:
2283 (a) within 90 days after a partner's dissociation by death or otherwise under
2284 Subsections 48-1b-601 (6) through (10) or wrongful dissociation under Subsection
2285 48-1b-602 (2), the express will of at least half of the remaining partners to wind up the
2286 partnership business, for which purpose a partner's rightful dissociation pursuant to Subsection
2287 48-1b-602 (2)(b)(i) constitutes the expression of that partner's will to wind up the partnership
2288 business;
2289
2290 (c) the expiration of the term or the completion of the undertaking;
2291 (3) an event agreed to in the partnership agreement resulting in the winding up of the
2292 partnership business;
2293 (4) an event that makes it unlawful for all or substantially all of the business of the
2294 partnership to be continued, but a cure of illegality within 90 days after notice to the
2295 partnership of the event is effective retroactively to the date of the event for purposes of this
2296 section;
2297 (5) on application by a partner, a judicial determination that:
2298 (a) the economic purpose of the partnership is likely to be unreasonably frustrated;
2299 (b) another partner has engaged in conduct relating to the partnership business which
2300 makes it not reasonably practicable to carry on the business in partnership with that partner; or
2301 (c) it is not otherwise reasonably practicable to carry on the partnership business in
2302 conformity with the partnership agreement; or
2303 (6) on application by a transferee of a partner's transferable interest, a judicial
2304 determination that it is equitable to wind up the partnership business:
2305 (a) after the expiration of the term or completion of the undertaking, if the partnership
2306 was for a definite term or particular undertaking at the time of the transfer or entry of the
2307 charging order that gave rise to the transfer; or
2308 (b) at any time, if the partnership was a partnership at will at the time of the transfer or
2309 entry of the charging order that gave rise to the transfer.
2310 Section 53. Section 48-1b-802 is enacted to read:
2311 48-1b-802. Partnership continues after dissolution.
2312 (1) Subject to Subsection (2), a partnership continues after dissolution only for the
2313 purpose of winding up its business. The partnership is terminated when the winding up of its
2314 business is completed.
2315 (2) At any time after the dissolution of a partnership and before the winding up of its
2316 business is completed, all of the partners, including any dissociating partner other than a
2317 wrongfully dissociating partner, may waive the right to have the partnership's business wound
2318 up and the partnership terminated. In that event:
2319 (a) the partnership resumes carrying on its business as if dissolution had never
2320
2321 before the waiver is determined as if dissolution had never occurred; and
2322 (b) the rights of a third party accruing under Subsection 48-1b-804 (1) or arising out of
2323 conduct in reliance on the dissolution before the third party knew or received a notification of
2324 the waiver may not be adversely affected.
2325 Section 54. Section 48-1b-803 is enacted to read:
2326 48-1b-803. Right to wind up partnership business.
2327 (1) After dissolution, a partner who has not wrongfully dissociated may participate in
2328 winding up the partnership's business, but on application of any partner, partner's legal
2329 representative, or transferee, the district court, for good cause shown, may order judicial
2330 supervision of the winding up.
2331 (2) The legal representative of the last surviving partner may wind up a partnership's
2332 business.
2333 (3) A person winding up a partnership's business may preserve the partnership business
2334 or property as a going concern for a reasonable time, prosecute and defend actions and
2335 proceedings, whether civil, criminal, or administrative, settle and close the partnership's
2336 business, dispose of and transfer the partnership's property, discharge the partnership's
2337 liabilities, distribute the assets of the partnership pursuant to Section 48-1b-807 , settle disputes
2338 by mediation or arbitration, and perform other necessary acts.
2339 Section 55. Section 48-1b-804 is enacted to read:
2340 48-1b-804. Partner's power to bind partnership after dissolution.
2341 Subject to Section 48-1b-805 , a partnership is bound by a partner's act after dissolution
2342 that:
2343 (1) is appropriate for winding up the partnership business; or
2344 (2) would have bound the partnership under Section 48-1b-301 before dissolution, if
2345 the other party to the transaction did not have notice of the dissolution.
2346 Section 56. Section 48-1b-805 is enacted to read:
2347 48-1b-805. Statement of dissolution.
2348 (1) After dissolution, a partner who has not wrongfully dissociated may file a statement
2349 of dissolution with the division stating the name of the partnership and that the partnership has
2350 dissolved and is winding up its business.
2351
2352 purposes of Subsection 48-1b-303 (4) and is a limitation on authority for the purposes of
2353 Subsection 48-1b-303 (5).
2354 (3) For the purposes of Sections 48-1b-301 and 48-1b-804 , a person not a partner is
2355 deemed to have notice of the dissolution and the limitation on the partner's authority as a result
2356 of the statement of dissolution 90 days after it is filed.
2357 (4) After filing and, if appropriate, recording a statement of dissolution, a dissolved
2358 partnership may file and, if appropriate, record a statement of partnership authority which will
2359 operate with respect to a person not a partner as provided in Subsections 48-1b-303 (4) and (5)
2360 in any transaction, whether or not the transaction is appropriate for winding up the partnership
2361 business.
2362 Section 57. Section 48-1b-806 is enacted to read:
2363 48-1b-806. Partner's liability to other partners after dissolution.
2364 (1) Except as otherwise provided in Subsection (2) and Section 48-1b-306 , after
2365 dissolution a partner is liable to the other partners for the partner's share of any partnership
2366 liability incurred under Section 48-1b-804 .
2367 (2) A partner who, with knowledge of the dissolution, incurs a partnership liability
2368 under Subsection 48-1b-804 (2) by an act that is not appropriate for winding up the partnership
2369 business is liable to the partnership for any damage caused to the partnership arising from the
2370 liability.
2371 Section 58. Section 48-1b-807 is enacted to read:
2372 48-1b-807. Settlement of accounts and contributions among partners.
2373 (1) In winding up a partnership's business, the assets of the partnership, including the
2374 contributions of the partners required by this section, must be applied to discharge its
2375 obligations to creditors, including, to the extent permitted by law, partners who are creditors.
2376 Any surplus must be applied to pay in cash the net amount distributable to partners in
2377 accordance with their right to distributions under Subsection (2).
2378 (2) Each partner is entitled to a settlement of all partnership accounts upon winding up
2379 the partnership business. In settling accounts among the partners, profits and losses that result
2380 from the liquidation of the partnership assets must be credited and charged to the partners'
2381 accounts. The partnership shall make a distribution to a partner in an amount equal to any
2382
2383 partnership an amount equal to any excess of the charges over the credits in the partner's
2384 account but excluding from the calculation charges attributable to an obligation for which the
2385 partner is not personally liable under Section 48-1b-306 .
2386 (3) If a partner fails to contribute the full amount required under Subsection (2), all of
2387 the other partners shall contribute, in the proportions in which those partners share partnership
2388 losses, the additional amount necessary to satisfy the partnership obligations for which they are
2389 personally liable under Section 48-1b-306 . A partner or partner's legal representative may
2390 recover from the other partners any contributions the partner makes to the extent the amount
2391 contributed exceeds that partner's share of the partnership obligations for which the partner is
2392 personally liable under Section 48-1b-306 .
2393 (4) After the settlement of accounts, each partner shall contribute, in the proportion in
2394 which the partner shares partnership losses, the amount necessary to satisfy partnership
2395 obligations that were not known at the time of the settlement and for which the partner is
2396 personally liable under Section 48-1b-306 .
2397 (5) The estate of a deceased partner is liable for the partner's obligation to contribute to
2398 the partnership.
2399 (6) An assignee for the benefit of creditors of a partnership or a partner, or a person
2400 appointed by a court to represent creditors of a partnership or a partner, may enforce a partner's
2401 obligation to contribute to the partnership.
2402 Section 59. Section 48-1b-901 is enacted to read:
2403
2404 48-1b-901. Definitions.
2405 In this part:
2406 (1) "Constituent organization" means an organization that is party to a merger.
2407 (2) "Constituent partnership" means a constituent organization that is a partnership.
2408 (3) "Converted organization" means the organization into which a converting
2409 organization converts pursuant to Sections 48-1b-906 through 48-1b-909 .
2410 (4) "Converting organization" means an organization that converts into another
2411 organization pursuant to Section 48-1b-906 .
2412 (5) "Converting partnership" means a converting organization that is a partnership.
2413
2414 that exists after a domesticating foreign limited liability partnership or limited liability
2415 partnership effects a domestication pursuant to Sections 48-1b-910 through 48-1b-913 .
2416 (7) "Domesticating limited liability partnership" means a limited liability partnership
2417 that effects a domestication pursuant to Sections 48-1b-910 through 48-1b-913 .
2418 (8) "Foreign partnership" means a partnership that has:
2419 (a) its chief executive office in a jurisdiction other than this state; or
2420 (b) specified in its partnership agreement that relations among the partners and between
2421 the partners and the partnership will be governed by the law of a jurisdiction other than this
2422 state.
2423 (9) "Governing statute" means the statute that governs an organization's internal affairs.
2424 (10) (a) "Organization" means:
2425 (i) a general partnership, including a limited liability partnership;
2426 (ii) a limited partnership, including a limited liability limited partnership;
2427 (iii) a limited liability company;
2428 (iv) a business trust;
2429 (v) a corporation; or
2430 (vi) any other person having a governing statute.
2431 (b) "Organization" includes a domestic or foreign organization regardless of whether
2432 organized for profit.
2433 (11) "Organizational documents" means:
2434 (a) for a domestic or foreign general partnership, its partnership agreement;
2435 (b) for a limited partnership or foreign limited partnership, its certificate of limited
2436 partnership and partnership agreement;
2437 (c) for a domestic or foreign limited liability company, its certificate or articles of
2438 organization and operating agreement, or comparable records as provided in its governing
2439 statute;
2440 (d) for a business trust, its agreement of trust and declaration of trust;
2441 (e) for a domestic or foreign corporation for profit, its articles of incorporation, bylaws,
2442 and other agreements among its shareholders which are authorized by its governing statute, or
2443 comparable records as provided in its governing statute; and
2444
2445 determine its internal governance and the relations among the persons that own it, have an
2446 interest in it, or are members of it.
2447 (12) "Personal liability" means liability for a debt, obligation, or other liability of an
2448 organization which is imposed on a person that co-owns, has an interest in, or is a member of
2449 the organization:
2450 (a) by the governing statute solely by reason of the person co-owning, having an
2451 interest in, or being a member of the organization; or
2452 (b) by the organization's organizational documents under a provision of the governing
2453 statute authorizing those documents to make one or more specified persons liable for all or
2454 specified debts, obligations, or other liabilities of the organization solely by reason of the
2455 person or persons co-owning, having an interest in, or being a member of the organization.
2456 (13) "Surviving organization" means an organization into which one or more other
2457 organizations are merged whether the organization preexisted the merger or was created by the
2458 merger.
2459 Section 60. Section 48-1b-902 is enacted to read:
2460 48-1b-902. Merger.
2461 (1) A partnership may merge with one or more other constituent organizations pursuant
2462 to this section, Sections 48-1b-903 through 48-1b-905 , and a plan of merger, if:
2463 (a) the governing statute of each of the other organizations authorizes the merger;
2464 (b) the merger is not prohibited by the law of a jurisdiction that enacted any of the
2465 governing statutes; and
2466 (c) each of the other organizations complies with its governing statute in effecting the
2467 merger.
2468 (2) Unless each constituent organization and the surviving organization are
2469 partnerships other than limited liability partnerships, a plan of merger must be in a record and
2470 must include:
2471 (a) the name and form of each constituent organization;
2472 (b) the name and form of the surviving organization and, if the surviving organization
2473 is to be created by the merger, a statement to that effect;
2474 (c) the terms and conditions of the merger, including the manner and basis for
2475
2476 interests in the surviving organization, and other consideration;
2477 (d) if the surviving organization is to be created by the merger, the surviving
2478 organization's organizational documents that are proposed to be in a record; and
2479 (e) if the surviving organization is not to be created by the merger, any amendments to
2480 be made by the merger to the surviving organization's organizational documents that are, or are
2481 proposed to be, in a record.
2482 Section 61. Section 48-1b-903 is enacted to read:
2483 48-1b-903. Action on plan of merger by constituent partnership.
2484 (1) Subject to Section 48-1b-914 , a plan of merger must be consented to by all the
2485 partners of a constituent partnership.
2486 (2) Subject to Section 48-1b-914 and any contractual rights, after a merger is approved,
2487 and at any time before articles of merger are delivered to the division for filing under Section
2488 48-1b-904 , a constituent partnership may amend the plan or abandon the merger:
2489 (a) as provided in the plan; or
2490 (b) except as otherwise prohibited in the plan, with the same consent as was required to
2491 approve the plan.
2492 Section 62. Section 48-1b-904 is enacted to read:
2493 48-1b-904. Filings required and permitted for merger -- Effective date.
2494 (1) After each constituent organization has approved a merger, articles of merger must
2495 be signed on behalf of:
2496 (a) each constituent partnership, as provided in Section 48-1b-105 , unless the merger is
2497 only between or among general partnerships, none of which is a limited liability partnership,
2498 and the surviving organization will be a general partnership other than a limited liability
2499 partnership; and
2500 (b) each other constituent organization, as provided in its governing statute.
2501 (2) Articles of merger under this section must include:
2502 (a) the name and form of each constituent organization and the jurisdiction of its
2503 governing statute;
2504 (b) the name and form of the surviving organization, the jurisdiction of its governing
2505 statute, and, if the surviving organization is created by the merger, a statement to that effect;
2506
2507 organization;
2508 (d) if the surviving organization is to be created by the merger:
2509 (i) if it will be a limited liability partnership, the limited liability partnership's
2510 statement of qualification; or
2511 (ii) if it will be an organization other than a limited liability partnership, the
2512 organizational document that creates the organization that is in a public record;
2513 (e) if the surviving organization preexists the merger, any amendments provided for in
2514 the plan of merger for the organizational document that created the organization that are in a
2515 public record;
2516 (f) a statement as to each constituent organization that the merger was approved as
2517 required by the organization's governing statute;
2518 (g) if the surviving organization is a foreign organization not authorized to transact
2519 business in this state, the street and mailing addresses of an office that may be used for service
2520 of process under Section 48-1b-905 (2); and
2521 (h) any additional information required by the governing statute of any constituent
2522 organization.
2523 (3) Each constituent partnership that is a limited liability partnership shall, and each
2524 constituent partnership that is not a limited liability partnership may, deliver the articles of
2525 merger for filing in the division.
2526 (4) A merger becomes effective under this part:
2527 (a) if the surviving organization is a partnership, upon the later of:
2528 (i) compliance with Subsection (3); or
2529 (ii) as specified in the articles of merger; or
2530 (b) if the surviving organization is not a partnership, as provided by the governing
2531 statute of the surviving organization.
2532 Section 63. Section 48-1b-905 is enacted to read:
2533 48-1b-905. Effect of merger.
2534 (1) When a merger becomes effective:
2535 (a) the surviving organization continues or comes into existence;
2536 (b) each constituent organization that merges into the surviving organization ceases to
2537
2538 (c) all property owned by each constituent organization that ceases to exist vests in the
2539 surviving organization;
2540 (d) all debts, obligations, or other liabilities of each constituent organization that ceases
2541 to exist continue as debts, obligations, or other liabilities of the surviving organization;
2542 (e) an action or proceeding pending by or against any constituent organization that
2543 ceases to exist may be continued as if the merger had not occurred;
2544 (f) except as prohibited by other law, all of the rights, privileges, immunities, powers,
2545 and purposes of each constituent organization that ceases to exist vest in the surviving
2546 organization;
2547 (g) except as otherwise provided in the plan of merger, the terms and conditions of the
2548 plan of merger take effect; and
2549 (h) except as otherwise agreed, if a constituent partnership ceases to exist, the merger
2550 does not dissolve the partnership for the purposes of Part 8, Winding Up Partnership Business;
2551 (i) if the surviving organization is created by the merger:
2552 (i) if it is a partnership, the partnership is formed upon approval of and on the date
2553 specified in the plan of merger;
2554 (ii) if it is a limited liability partnership, the limited liability partnership is formed and
2555 the statement of qualification takes effect on the later of:
2556 (A) the day after the day on which the division has received for filing both the articles
2557 of merger and the statement of qualification pursuant to Section 48-1b-1001 ; or
2558 (B) the date provided in the statement of qualification; or
2559 (iii) if it is an organization other than a partnership, the organizational document that
2560 creates the organization becomes effective; and
2561 (j) if the surviving organization preexisted the merger, any amendments provided for in
2562 the articles of merger for the organizational document that created the organization become
2563 effective.
2564 (2) A surviving organization that is a foreign organization consents to the jurisdiction
2565 of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent
2566 organization, if before the merger the constituent organization was subject to suit in this state
2567 on the debt, obligation, or other liability. A surviving organization that is a foreign
2568
2569 the address required in the articles of merger under 48-1b-904 (2)(g).
2570 Section 64. Section 48-1b-906 is enacted to read:
2571 48-1b-906. Conversion.
2572 (1) An organization other than a partnership or a foreign partnership may convert to a
2573 partnership, and a partnership may convert to an organization other than a foreign partnership
2574 pursuant to this section, Sections 48-1b-907 through 48-1b-909 , and a plan of conversion, if:
2575 (a) the other organization's governing statute authorizes the conversion;
2576 (b) the conversion is not prohibited by the law of the jurisdiction that enacted the other
2577 organization's governing statute; and
2578 (c) the other organization complies with its governing statute in effecting the
2579 conversion.
2580 (2) A plan of conversion must be in a record and must include:
2581 (a) the name and form of the organization before conversion;
2582 (b) the name and form of the organization after conversion;
2583 (c) the terms and conditions of the conversion, including the manner and basis for
2584 converting interests in the converting organization into any combination of money, interests in
2585 the converted organization, and other consideration; and
2586 (d) the organizational documents of the converted organization that are, or are
2587 proposed to be, in a record.
2588 Section 65. Section 48-1b-907 is enacted to read:
2589 48-1b-907. Action on plan of conversion by converting partnership.
2590 (1) Subject to Section 48-1b-914 , a plan of conversion must be consented to by all the
2591 partners of a converting partnership.
2592 (2) Subject to Section 48-1b-914 and any contractual rights, after a conversion is
2593 approved, and at any time before articles of conversion are delivered to the division for filing
2594 under Section 48-1b-908 , a converting partnership may amend the plan or abandon the
2595 conversion:
2596 (a) as provided in the plan; or
2597 (b) except as otherwise prohibited in the plan, by the same consent as was required to
2598 approve the plan.
2599
2600 48-1b-908. Filings required for conversion -- Effective date.
2601 (1) After a plan of conversion is approved:
2602 (a) a converting limited liability partnership shall deliver to the division for filing
2603 articles of conversion, which must be signed as provided in Section 48-1b-105 and must
2604 include:
2605 (i) a statement that the limited liability partnership has been converted into another
2606 organization;
2607 (ii) the name and form of the converted organization and the jurisdiction of its
2608 governing statute;
2609 (iii) the date the conversion is effective under the governing statute of the converted
2610 organization;
2611 (iv) a statement that the conversion was approved as required by this chapter;
2612 (v) a statement that the conversion is authorized by the governing statute of the
2613 converted organization; and
2614 (vi) if the converted organization is a foreign organization not authorized to transact
2615 business in this state, the street and mailing addresses of an office that may be used for
2616 purposes of Subsection 48-1b-909 (3); and
2617 (b) if the converting organization is not a converting partnership or limited liability
2618 partnership, the converting organization shall deliver to the division for filing articles of
2619 conversion, which must include:
2620 (i) a statement that the converted organization was converted from another
2621 organization, and whether the converted organization is a partnership or a limited liability
2622 partnership;
2623 (ii) the name and form of that converting organization and the jurisdiction of its
2624 governing statute; and
2625 (iii) a statement that the conversion was approved in a manner that complied with the
2626 converting organization's governing statute.
2627 (2) A conversion becomes effective:
2628 (a) if the converted organization is a partnership, as provided in the plan or articles of
2629 conversion;
2630
2631 (i) the day after the day on which the division has received for filing both the articles of
2632 conversion and the statement of qualification pursuant to Section 48-1b-1001 ; or
2633 (ii) the date provided in the statement of qualification; or
2634 (c) if the converted organization is not a partnership or limited liability partnership, as
2635 provided by the governing statute of the converted organization.
2636 Section 67. Section 48-1b-909 is enacted to read:
2637 48-1b-909. Effect of conversion.
2638 (1) An organization that has been converted pursuant to this part is for all purposes the
2639 same entity that existed before the conversion.
2640 (2) When a conversion takes effect:
2641 (a) all property owned by the converting organization remains vested in the converted
2642 organization;
2643 (b) all debts, obligations, or other liabilities of the converting organization continue as
2644 debts, obligations, or other liabilities of the converted organization;
2645 (c) an action or proceeding pending by or against the converting organization may be
2646 continued as if the conversion had not occurred;
2647 (d) except as prohibited by law other than this chapter, all of the rights, privileges,
2648 immunities, powers, and purposes of the converting organization remain vested in the
2649 converted organization;
2650 (e) except as otherwise provided in the plan of conversion, the terms and conditions of
2651 the plan of conversion take effect; and
2652 (f) except as otherwise agreed, the conversion does not dissolve a converting
2653 partnership for the purposes of Part 8, Winding Up Partnership Business.
2654 (3) A converted organization that is a foreign organization consents to the jurisdiction
2655 of the courts of this state to enforce any debt, obligation, or other liability for which the
2656 converting partnership or limited liability partnership is liable if, before the conversion, the
2657 converting partnership or limited liability partnership was subject to suit in this state on the
2658 debt, obligation, or other liability. A converted organization that is a foreign organization and
2659 not authorized to transact business in this state may be served with process at the address
2660 required in the articles of conversion under Subsection 48-1b-908 (1)(a)(vi).
2661
2662 48-1b-910. Domestication.
2663 (1) A foreign limited liability partnership may become a limited liability partnership
2664 pursuant to this section, Sections 48-1b-911 through 48-1b-913 , and a plan of domestication,
2665 if:
2666 (a) the foreign limited liability partnership's governing statute authorizes the
2667 domestication;
2668 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
2669 governing statute; and
2670 (c) the foreign limited liability partnership complies with its governing statute in
2671 effecting the domestication.
2672 (2) A limited liability partnership may become a foreign limited liability partnership
2673 pursuant to this section, Sections 48-1b-911 through 48-1b-913 , and a plan of domestication,
2674 if:
2675 (a) the foreign limited liability partnership's governing statute authorizes the
2676 domestication;
2677 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
2678 governing statute; and
2679 (c) the foreign limited liability partnership complies with its governing statute in
2680 effecting the domestication.
2681 (3) A plan of domestication must be in a record and must include:
2682 (a) the name of the domesticating limited liability partnership before domestication and
2683 the jurisdiction of its governing statute;
2684 (b) the name of the domesticated limited liability partnership after domestication and
2685 the jurisdiction of its governing statute;
2686 (c) the terms and conditions of the domestication, including the manner and basis for
2687 converting interests in the domesticating limited liability partnership into any combination of
2688 money, interests in the domesticated limited liability partnership, and other consideration; and
2689 (d) the organizational documents of the domesticated limited liability partnership that
2690 are, or are proposed to be, in a record.
2691 Section 69. Section 48-1b-911 is enacted to read:
2692
2693 (1) A plan of domestication must be consented to:
2694 (a) by all the partners, subject to Section 48-1b-914 , if the domesticating limited
2695 liability partnership is a limited liability partnership; and
2696 (b) as provided in the domesticating limited liability partnership's governing statute, if
2697 the limited liability partnership is a foreign limited liability partnership.
2698 (2) Subject to any contractual rights, after a domestication is approved, and at any time
2699 before articles of domestication are delivered to the division for filing under Section
2700 48-1b-912 , a domesticating limited liability partnership may amend the plan or abandon the
2701 domestication:
2702 (a) as provided in the plan; or
2703 (b) except as otherwise prohibited in the plan, by the same consent as was required to
2704 approve the plan.
2705 Section 70. Section 48-1b-912 is enacted to read:
2706 48-1b-912. Filings required for domestication -- Effective date.
2707 (1) After a plan of domestication is approved, a domesticating limited liability
2708 partnership shall deliver to the division for filing articles of domestication, which must include:
2709 (a) a statement, as the case may be, that the limited liability partnership has been
2710 domesticated from or into another jurisdiction;
2711 (b) the name of the domesticating limited liability partnership and the jurisdiction of its
2712 governing statute;
2713 (c) the name of the domesticated limited liability partnership and the jurisdiction of its
2714 governing statute;
2715 (d) the date the domestication is effective under the governing statute of the
2716 domesticated limited liability partnership;
2717 (e) if the domesticating limited liability partnership was a limited liability partnership,
2718 a statement that the domestication was approved as required by this chapter;
2719 (f) if the domesticating limited liability partnership was a foreign limited liability
2720 partnership, a statement that the domestication was approved as required by the governing
2721 statute of the other jurisdiction; and
2722 (g) if the domesticated limited liability partnership is a foreign limited liability
2723
2724 an office that the division may use for the purposes of Subsection 48-1b-913 (2).
2725 (2) A domestication becomes effective:
2726 (a) if the domesticated limited liability partnership is a limited liability partnership, the
2727 later of:
2728 (i) the day after the day on which the division has received for filing both the articles of
2729 domestication and the statement of qualification pursuant to Section 48-1b-1001 ; and
2730 (ii) the date provided in the statement of qualification; or
2731 (b) if it is a foreign limited liability partnership, according to the governing statute of
2732 the domesticated limited liability partnership.
2733 Section 71. Section 48-1b-913 is enacted to read:
2734 48-1b-913. Effect of domestication.
2735 (1) When a domestication takes effect:
2736 (a) the domesticated limited liability partnership is for all purposes the limited liability
2737 partnership that existed before the domestication;
2738 (b) all property owned by the domesticating limited liability partnership remains vested
2739 in the domesticated limited liability partnership;
2740 (c) all debts, obligations, or other liabilities of the domesticating limited liability
2741 partnership continue as debts, obligations, or other liabilities of the domesticated limited
2742 liability partnership;
2743 (d) an action or proceeding pending by or against a domesticating limited liability
2744 partnership may be continued as if the domestication had not occurred;
2745 (e) except as prohibited by other law, all of the rights, privileges, immunities, powers,
2746 and purposes of the domesticating limited liability partnership remain vested in the
2747 domesticated limited liability partnership;
2748 (f) except as otherwise provided in the plan of domestication, the terms and conditions
2749 of the plan of domestication take effect; and
2750 (g) except as otherwise agreed, the domestication does not dissolve a domesticating
2751 limited liability partnership for the purposes of Part 8, Winding Up Partnership Business.
2752 (2) A domesticated limited liability partnership that is a foreign limited liability
2753 partnership consents to the jurisdiction of the courts of this state to enforce any debt,
2754
2755 the domestication, the domesticating limited liability partnership was subject to suit in this
2756 state on the debt, obligation, or other liability. A domesticated limited liability partnership that
2757 is a foreign limited liability partnership and not authorized to transact business in this state may
2758 be served with process at the address required in the articles of domestication under Subsection
2759 48-1b-912 (1)(g).
2760 (3) If a limited liability partnership has adopted and approved a plan of domestication
2761 under Section 48-1b-910 providing for the limited liability partnership to be domesticated in a
2762 foreign jurisdiction, a statement pursuant to Subsection 48-1b-1001 (4) cancelling the limited
2763 liability partnership's statement of qualification must be delivered to the division for filing
2764 setting forth:
2765 (a) the name of the limited liability partnership;
2766 (b) a statement that the limited liability partnership's statement of qualification is being
2767 cancelled in connection with the domestication of the limited liability partnership in a foreign
2768 jurisdiction;
2769 (c) a statement the domestication was approved as required by this chapter; and
2770 (d) the jurisdiction of formation of the domesticated foreign limited liability
2771 partnership.
2772 Section 72. Section 48-1b-914 is enacted to read:
2773 48-1b-914. Restrictions on approval of mergers, conversions, and domestications.
2774 (1) If a partner of a constituent or converting partnership, or a partner of a
2775 domesticating limited liability partnership will have personal liability with respect to a
2776 surviving, converted, or domesticated organization, approval or amendment of a plan of
2777 merger, conversion, or domestication are ineffective without the consent of the partner, unless:
2778 (a) the partnership's partnership agreement provides for approval of a merger,
2779 conversion, or domestication with the consent of fewer than all the partners; and
2780 (b) the partner has consented to the provision of the partnership agreement.
2781 (2) A partner does not give the consent required by Subsection (1) merely by
2782 consenting to a provision of the partnership agreement that permits the partnership agreement
2783 to be amended with the consent of fewer than all the partners.
2784 Section 73. Section 48-1b-915 is enacted to read:
2785
2786 This part does not preclude an entity from being merged, converted, or domesticated
2787 under law other than this chapter.
2788 Section 74. Section 48-1b-1001 is enacted to read:
2789
2790 48-1b-1001. Statement of qualification.
2791 (1) A partnership may become a limited liability partnership pursuant to this section.
2792 (2) The terms and conditions on which a partnership becomes a limited liability
2793 partnership must be approved by the vote necessary to amend the partnership agreement
2794 except, in the case of a partnership agreement that expressly considers obligations to contribute
2795 to the partnership, the vote necessary to amend those provisions.
2796 (3) After the approval required by Subsection (2), a partnership may become a limited
2797 liability partnership by filing a statement of qualification with the division. The statement must
2798 contain:
2799 (a) the name of the partnership;
2800 (b) the street address of the partnership's chief executive office and, if different, the
2801 street address of an office in this state, if any;
2802 (c) if the partnership does not have an office in this state, the information required by
2803 Subsection 16-17-203 (1);
2804 (d) a statement that the partnership elects to be a limited liability partnership; and
2805 (e) a deferred effective date, if any.
2806 (4) The status of a partnership as a limited liability partnership is effective on the later
2807 of the filing of the statement or a date specified in the statement. The status remains effective,
2808 regardless of changes in the partnership, until it is canceled pursuant to Subsection
2809 48-1b-105 (4) or revoked pursuant to Section 48-1b-1003 .
2810 (5) The status of a partnership as a limited liability partnership and the liability of its
2811 partners is not affected by errors or later changes in the information required to be contained in
2812 the statement of qualification under Subsection (3).
2813 (6) The filing of a statement of qualification establishes that a partnership has satisfied
2814 all conditions precedent to the qualification of the partnership as a limited liability partnership.
2815 (7) An amendment or cancellation of a statement of qualification is effective when it is
2816
2817 Section 75. Section 48-1b-1002 is enacted to read:
2818 48-1b-1002. Name.
2819 (1) The name of a limited liability partnership must end with "Registered Limited
2820 Liability Partnership," "Limited Liability Partnership," "R.L.L.P.," "L.L.P.," "RLLP," or "LLP".
2821 (2) The name of a limited liability partnership may not contain:
2822 (a) without the written consent of the United States Olympic Committee, the words:
2823 (i) "Olympic";
2824 (ii) "Olympiad"; or
2825 (iii) "Citius Altius Fortius"; and
2826 (b) without the written consent of the Division of Consumer Protection issued in
2827 accordance with Section 13-34-114 , the words:
2828 (i) "university";
2829 (ii) "college"; or
2830 (iii) "institute" or "institution".
2831 (3) Unless authorized by Subsection (4), the name of a limited liability partnership
2832 must be distinguishable in the records of the division from:
2833 (a) the name of each person other than an individual incorporated, organized, or
2834 authorized to transact business in this state; and
2835 (b) each name reserved under:
2836 (i) Section 16-6a-401 or 16-6a-402 ;
2837 (ii) Section 16-10a-401 or 16-10a-402 ;
2838 (iii) Section 16-11-16 ;
2839 (iv) Section 42-2-6.6 ;
2840 (v) Section 48-2d-108 or 48-2d-109 ; or
2841 (vi) Section 48-3-108 or 48-3-109 .
2842 (4) A limited liability partnership may apply to the division for authorization to use a
2843 name that does not comply with Subsection (3). The division shall authorize use of the name
2844 applied for if, as to each conflicting name:
2845 (a) the present user, registrant, or owner of the conflicting name consents in a signed
2846 record to the use and submits an undertaking in a form satisfactory to the division to change the
2847
2848 records of the division from the name applied for;
2849 (b) the applicant delivers to the division a certified copy of the final judgment of a
2850 district court establishing the applicant's right to use in this state the name applied for; or
2851 (c) the applicant delivers to the division proof satisfactory to the division that the
2852 present user, registrant, or owner of the conflicting name:
2853 (i) has merged into the applicant;
2854 (ii) has been converted into the applicant; or
2855 (iii) has transferred substantially all of its assets, including the conflicting name, to the
2856 applicant.
2857 (5) Subject to Section 48-1b-1102.1 , this section applies to any foreign limited
2858 partnership transacting business in this state, having a certificate of authority to transact
2859 business in this state, or applying for a certificate of authority.
2860 (6) The division may not approve for filing a name that implies that a limited liability
2861 partnership is an agency of this state or any of its political subdivisions, if it is not actually such
2862 a legally established agency or subdivision.
2863 (7) The authorization to file a certificate under or to reserve or register a limited
2864 liability partnership name as granted by the division does not:
2865 (a) abrogate or limit the law governing unfair competition or unfair trade practices;
2866 (b) derogate from the common law, the principles of equity, or the statutes of this state
2867 or of the United States with respect to the right to acquire and protect names and trademarks; or
2868 (c) create an exclusive right in geographic or generic terms contained within a name.
2869 Section 76. Section 48-1b-1003 is enacted to read:
2870 48-1b-1003. Annual report.
2871 (1) A limited liability partnership, and a foreign limited liability partnership authorized
2872 to transact business in this state, shall file an annual report with the division which contains:
2873 (a) the name of the limited liability partnership and the state or other jurisdiction under
2874 whose laws the foreign limited liability partnership is formed;
2875 (b) the street address of the partnership's chief executive office and, if different, the
2876 street address of an office of the partnership in this state, if any; and
2877 (c) if the partnership does not have an office in this state, the information required by
2878
2879 (2) Following the calendar year in which a partnership files a statement of qualification
2880 or a foreign partnership becomes authorized to transact business in this state, the partnership
2881 shall file an annual report:
2882 (a) during the month of its anniversary date of formation, in the case of a domestic
2883 partnership; or
2884 (b) during the month of the anniversary date of being granted authority to transact
2885 business in this state, in the case of a foreign partnership authorized to transact business in this
2886 state.
2887 (3) (a) The division may revoke the statement of qualification of a partnership that fails
2888 to:
2889 (i) file an annual report when due; or
2890 (ii) pay the required filing fee, established in accordance with Section 63J-1-504 .
2891 (b) To take an action under this Subsection (3), the division shall provide the
2892 partnership at least 60 days' written notice of intent to revoke the statement. The notice must
2893 be mailed to the partnership at its chief executive office set forth in the last filed statement of
2894 qualification or annual report. The notice must specify the annual report that has not been
2895 filed, the fee that has not been paid, and the effective date of the revocation. The revocation is
2896 not effective if the annual report is filed and the fee is paid before the effective date of the
2897 revocation.
2898 (4) A revocation under Subsection (3) only affects a partnership's status as a limited
2899 liability partnership and is not an event of dissolution of the partnership.
2900 (5) A partnership whose statement of qualification has been revoked may apply to the
2901 division for reinstatement within two years after the effective date of the revocation. The
2902 application must state:
2903 (a) the name of the partnership and the effective date of the revocation; and
2904 (b) that the ground for revocation either did not exist or has been corrected.
2905 (6) A reinstatement under Subsection (5) relates back to and takes effect as of the
2906 effective date of the revocation, and the partnership's status as a limited liability partnership
2907 continues as if the revocation had never occurred.
2908 Section 77. Section 48-1b-1004 is enacted to read:
2909
2910 (1) A limited liability partnership organized under this part to provide a professional
2911 service:
2912 (a) may provide:
2913 (i) only one specific type of professional service; and
2914 (ii) services ancillary to the professional service described in Subsection (1)(a)(i); and
2915 (b) may not engage in a business other than providing the professional service that it is
2916 organized to provide and services ancillary to the professional service.
2917 (2) A limited liability partnership organized to provide a professional service:
2918 (a) may include a partner or employee authorized under the laws of the jurisdiction
2919 where the partner or employee reside to provide similar professional service;
2920 (b) may include a partner who is not licensed or registered by the state to provide the
2921 professional service to the extent allowed by the applicable licensing act relating to the
2922 professional service; and
2923 (c) may render a professional service in Utah only through a partner or employee who
2924 is licensed or registered by the state to render the professional service.
2925 (3) A limited liability partnership organized to provide a professional service has the
2926 powers provided a limited liability partnership under this chapter.
2927 (4) (a) This part does not restrict or limit the authority or duty of a regulatory entity to
2928 license an individual who provides a professional service or practices the profession that is
2929 within the jurisdiction of the regulatory entity, notwithstanding that the individual:
2930 (i) is a partner or employee of a limited liability partnership; or
2931 (ii) provides a professional service or engaging in the practice of the profession through
2932 a limited liability partnership.
2933 (b) A limited liability partnership may not do anything an individual licensed to
2934 practice the profession that the limited liability partnership is organized to provide may not do.
2935 Section 78. Section 48-1b-1101 is enacted to read:
2936
2937 48-1b-1101. Law governing foreign limited liability partnership.
2938 (1) The law under which a foreign limited liability partnership is formed governs
2939 relations among the partners and between the partners and the partnership and the liability of
2940
2941 (2) A foreign limited liability partnership may not be denied a statement of foreign
2942 qualification by reason of any difference between the law under which the partnership was
2943 formed and the law of this state.
2944 (3) A statement of foreign qualification does not authorize a foreign limited liability
2945 partnership to engage in any business or exercise any power that a partnership may not engage
2946 in or exercise in this state as a limited liability partnership.
2947 (4) (a) The division may permit a tribal limited liability partnership to register with the
2948 division in the same manner as a foreign limited liability partnership formed in another state.
2949 (b) If a tribal limited liability partnership elects to register with the division, for
2950 purposes of this chapter, the tribal limited liability partnership shall be treated in the same
2951 manner as a foreign limited liability partnership formed under the laws of another state.
2952 Section 79. Section 48-1b-1102 is enacted to read:
2953 48-1b-1102. Statement of foreign qualification.
2954 (1) Before transacting business in this state, a foreign limited liability partnership must
2955 file a statement of foreign qualification with the division. The statement must contain:
2956 (a) the name of the foreign limited liability partnership which satisfies the requirements
2957 of the state or other jurisdiction under whose law it is formed;
2958 (b) the street address of the partnership's chief executive office;
2959 (c) the information required by Subsection 16-17-203 (1); and
2960 (d) a deferred effective date, if any.
2961 (2) The status of a partnership as a foreign limited liability partnership is effective on
2962 the later of the filing of the statement of foreign qualification or a date specified in the
2963 statement. The status remains effective, regardless of changes in the partnership, until it is
2964 canceled pursuant to Subsection 48-1b-105 (4) or revoked pursuant to Section 48-1b-1003 .
2965 (3) An amendment or cancellation of a statement of foreign qualification is effective
2966 when it is filed or on a deferred effective date specified in the amendment or cancellation.
2967 Section 80. Section 48-1b-1102.1 is enacted to read:
2968 48-1b-1102.1. Noncomplying name of foreign limited liability partnership.
2969 (1) A foreign limited liability partnership whose name does not comply with Section
2970 48-1b-1002 may not obtain a certificate of authority until it adopts, for the purpose of
2971
2972 foreign limited liability partnership that adopts an alternate name under this Subsection (1) and
2973 then obtains a certificate of authority with the name need not comply with Title 42, Chapter 2,
2974 Conducting Business Under Assumed Name. After obtaining a certificate of authority with an
2975 alternate name, a foreign limited liability partnership shall transact business in this state under
2976 the name unless the foreign limited liability partnership is authorized under Title 42, Chapter 2,
2977 Conducting Business Under Assumed Name, to transact business in this state under another
2978 name.
2979 (2) If a foreign limited liability partnership authorized to transact business in this state
2980 changes its name to one that does not comply with Section 48-1b-1002 , it may not thereafter
2981 transact business in this state until it complies with Subsection (1) and obtains an amended
2982 certificate of authority.
2983 Section 81. Section 48-1b-1103 is enacted to read:
2984 48-1b-1103. Effect of failure to qualify.
2985 (1) A foreign limited liability partnership transacting business in this state may not
2986 maintain an action or proceeding in this state unless it has in effect a statement of foreign
2987 qualification.
2988 (2) The failure of a foreign limited liability partnership to have in effect a statement of
2989 foreign qualification does not impair the validity of a contract or act of the foreign limited
2990 liability partnership or preclude it from defending an action or proceeding in this state.
2991 (3) A limitation on personal liability of a partner is not waived solely by transacting
2992 business in this state without a statement of foreign qualification.
2993 (4) If a foreign limited liability partnership transacts business in this state without a
2994 statement of foreign qualification, service of process with respect to a right of action arising out
2995 of the transaction of business in this state shall be served in accordance with Section
2996 16-17-301 .
2997 Section 82. Section 48-1b-1104 is enacted to read:
2998 48-1b-1104. Activities not constituting transacting business.
2999 (1) Activities of a foreign limited liability partnership which do not constitute
3000 transacting business for the purpose of this part include:
3001 (a) maintaining, defending, or settling an action or proceeding;
3002
3003 internal affairs;
3004 (c) maintaining bank accounts;
3005 (d) maintaining offices or agencies for the transfer, exchange, and registration of the
3006 partnership's own securities or maintaining trustees or depositories with respect to those
3007 securities;
3008 (e) selling through independent contractors;
3009 (f) soliciting or obtaining orders, whether by mail or through employees or agents or
3010 otherwise, if the orders require acceptance outside this state before they become contracts;
3011 (g) creating or acquiring indebtedness, with or without a mortgage, or other security
3012 interest in property;
3013 (h) collecting debts or foreclosing mortgages or other security interests in property
3014 securing the debts, and holding, protecting, and maintaining property so acquired;
3015 (i) conducting an isolated transaction that is completed within 30 days and is not one in
3016 the course of similar transactions; and
3017 (j) transacting business in interstate commerce.
3018 (2) For purposes of this part, the ownership in this state of income-producing real
3019 property or tangible personal property, other than property excluded under Subsection (1),
3020 constitutes transacting business in this state.
3021 (3) This section does not apply in determining the contacts or activities that may
3022 subject a foreign limited liability partnership to service of process, taxation, or regulation under
3023 any other law of this state.
3024 Section 83. Section 48-1b-1105 is enacted to read:
3025 48-1b-1105. Action by attorney general.
3026 The attorney general may maintain an action to restrain a foreign limited liability
3027 partnership from transacting business in this state in violation of this part.
3028 Section 84. Section 48-1b-1201 is enacted to read:
3029
3030 48-1b-1201. Uniformity of application and construction.
3031 This chapter shall be applied and construed to effectuate its general purpose to make
3032 uniform the law with respect to the subject of this chapter among states enacting it.
3033
3034 48-1b-1202. Relation to electronic signatures in global and national commerce act.
3035 This chapter modifies, limits, and supersedes the federal Electronic Signatures in
3036 Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or
3037 supersede Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of
3038 any of the notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
3039 Section 86. Section 48-1b-1203 is enacted to read:
3040 48-1b-1203. Severability clause.
3041 If any provision of this chapter or its application to any person or circumstance is held
3042 invalid, the invalidity does not affect other provisions or applications of this chapter which can
3043 be given effect without the invalid provision or application, and to this end the provisions of
3044 this chapter are severable.
3045 Section 87. Section 48-1b-1204 is enacted to read:
3046 48-1b-1204. Savings clause.
3047 This chapter does not affect an action or proceeding commenced or right accrued before
3048 July 1, 2012.
3049 Section 88. Section 48-1b-1205 is enacted to read:
3050 48-1b-1205. Applicability.
3051 (1) Before January 1, 2014, this chapter governs only a partnership formed:
3052 (a) after July 1, 2012, except a partnership that is continuing the business of a dissolved
3053 partnership; and
3054 (b) before July 1, 2012, that elects, as provided by Subsection (3), to be governed by
3055 this chapter.
3056 (2) On and after January 1, 2014, this chapter governs all partnerships.
3057 (3) Before January 1, 2014, a partnership voluntarily may elect, in the manner provided
3058 in its partnership agreement or by law for amending the partnership agreement, to be governed
3059 by this chapter. The provisions of this chapter relating to the liability of the partnership's
3060 partners to third parties apply to limit those partners' liability to a third party who had done
3061 business with the partnership within one year before the partnership's election to be governed
3062 by this chapter only if the third party knows or has received a notification of the partnership's
3063 election to be governed by this chapter.
3064
3065
3066
3067 48-2d-101. Title.
3068 This chapter is known as the "Utah Uniform Limited Partnership Act."
3069 Section 90. Section 48-2d-102 is enacted to read:
3070 48-2d-102. Definitions.
3071 As used in this chapter:
3072 (1) (a) "Certificate of limited partnership" means the certificate required by Section
3073 48-2d-201 .
3074 (b) "Certificate of limited partnership" includes the certificate as amended or restated.
3075 (2) "Contribution," except in the phrase "right of contribution," means any benefit
3076 provided by a person to a limited partnership in order to become a partner or in the person's
3077 capacity as a partner.
3078 (3) "Debtor in bankruptcy" means a person that is the subject of:
3079 (a) an order for relief under United States Code, Title 11, or a comparable order under
3080 a successor statute of general application; or
3081 (b) a comparable order under federal, state, or foreign law governing insolvency.
3082 (4) "Distribution" means a transfer of money or other property from a limited
3083 partnership to a partner in the partner's capacity as a partner or to a transferee on account of a
3084 transferable interest owned by the transferee.
3085 (5) "Foreign limited liability limited partnership" means a foreign limited partnership
3086 whose general partners have limited liability for the obligations of the foreign limited
3087 partnership under a provision similar to Subsection 48-2d-404 (3).
3088 (6) (a) "Foreign limited partnership" means a partnership formed under the laws of a
3089 jurisdiction other than this state and required by those laws to have one or more general
3090 partners and one or more limited partners.
3091 (b) "Foreign limited partnership" includes a foreign limited liability limited
3092 partnership.
3093 (7) "General partner" means:
3094 (a) with respect to a limited partnership, a person that:
3095
3096 (ii) was a general partner in a limited partnership when the limited partnership became
3097 subject to this chapter under Subsection 48-2d-1205 (1) or (2); and
3098 (b) with respect to a foreign limited partnership, a person that has rights, powers, and
3099 obligations similar to those of a general partner in a limited partnership.
3100 (8) "Limited liability limited partnership," except in the phrase "foreign limited liability
3101 limited partnership," means a limited partnership whose certificate of limited partnership states
3102 that the limited partnership is a limited liability limited partnership.
3103 (9) "Limited partner" means:
3104 (a) with respect to a limited partnership, a person that:
3105 (i) becomes a limited partner under Section 48-2d-301 ; or
3106 (ii) was a limited partner in a limited partnership when the limited partnership became
3107 subject to this chapter under Subsection 48-2d-1205 (1) or (2); and
3108 (b) with respect to a foreign limited partnership, a person that has rights, powers, and
3109 obligations similar to those of a limited partner in a limited partnership.
3110 (10) (a) "Limited partnership," except in the phrases "foreign limited partnership" and
3111 "foreign limited liability limited partnership," means an entity, having one or more general
3112 partners and one or more limited partners, which is formed under this chapter by two or more
3113 persons or becomes subject to this chapter under Part 11, Merger, Conversion, and
3114 Domestication, or Subsection 48-2d-1205 (1) or (2).
3115 (b) "Limited partnership" includes a limited liability limited partnership.
3116 (11) "Partner" means a limited partner or general partner.
3117 (12) (a) "Partnership agreement" means the partners' agreement, whether oral, implied,
3118 in a record, or in any combination, concerning the limited partnership.
3119 (b) "Partnership agreement" includes the agreement as amended.
3120 (13) "Person" means:
3121 (a) an individual;
3122 (b) a corporation;
3123 (c) a business trust;
3124 (d) an estate;
3125 (e) a trust;
3126
3127 (g) a limited liability company;
3128 (h) an association;
3129 (i) a joint venture;
3130 (j) government;
3131 (k) a governmental subdivision, agency, or instrumentality;
3132 (l) a public corporation; or
3133 (m) any other legal or commercial entity.
3134 (14) "Person dissociated as a general partner" means a person dissociated as a general
3135 partner of a limited partnership.
3136 (15) "Principal office" means the office where the principal executive office of a
3137 limited partnership or foreign limited partnership is located, whether or not the office is located
3138 in this state.
3139 (16) "Record" means information that is inscribed on a tangible medium or that is
3140 stored in an electronic or other medium and is retrievable in perceivable form.
3141 (17) "Required information" means the information that a limited partnership is
3142 required to maintain under Section 48-2d-111 .
3143 (18) "Sign" means:
3144 (a) to execute or adopt a tangible symbol with the present intent to authenticate a
3145 record; or
3146 (b) to attach or logically associate an electronic symbol, sound, or process to or with a
3147 record with the present intent to authenticate the record.
3148 (19) "State" means a state of the United States, the District of Columbia, Puerto Rico,
3149 the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction
3150 of the United States.
3151 (20) "Transfer" includes an assignment, conveyance, deed, bill of sale, lease, mortgage,
3152 security interest, encumbrance, gift, and transfer by operation of law.
3153 (21) "Transferable interest" means a partner's right to receive distributions.
3154 (22) "Transferee" means a person to which all or part of a transferable interest has been
3155 transferred, whether or not the transferor is a partner.
3156 (23) "Tribal limited partnership" means a limited partnership:
3157
3158 (b) that is at least 51% owned or controlled by the tribe.
3159 (24) "Tribe" means a tribe, band, nation, pueblo, or other organized group or
3160 community of Indians, including an Alaska Native village, that is legally recognized as eligible
3161 for and is consistent with a special program, service, or entitlement provided by the United
3162 States to Indians because of their status as Indians.
3163 Section 91. Section 48-2d-103 is enacted to read:
3164 48-2d-103. Knowledge and notice.
3165 (1) A person knows a fact if the person has actual knowledge of it.
3166 (2) A person has notice of a fact if the person:
3167 (a) knows of it;
3168 (b) has received a notification of it;
3169 (c) has reason to know it exists from all of the facts known to the person at the time in
3170 question; or
3171 (d) has notice of it under Subsection (3) or (4).
3172 (3) A certificate of limited partnership on file in the division is notice that the
3173 partnership is a limited partnership and the persons designated in the certificate as general
3174 partners are general partners. Except as otherwise provided in Subsection (4), the certificate is
3175 not notice of any other fact.
3176 (4) A person has notice of:
3177 (a) another person's dissociation as a general partner, 90 days after the effective date of
3178 an amendment to the certificate of limited partnership which states that the other person has
3179 dissociated or 90 days after the effective date of a statement of dissociation pertaining to the
3180 other person, whichever occurs first;
3181 (b) a limited partnership's dissolution, 90 days after the effective date of an amendment
3182 to the certificate of limited partnership stating that the limited partnership is dissolved;
3183 (c) a limited partnership's termination, 90 days after the effective date of a statement of
3184 termination;
3185 (d) a limited partnership's conversion under Part 11, Merger, Conversion, and
3186 Domestication, 90 days after the effective date of the articles of conversion; or
3187 (e) a merger under Part 11, Merger, Conversion, and Domestication, 90 days after the
3188
3189 (5) A person notifies or gives a notification to another person by taking steps
3190 reasonably required to inform the other person in ordinary course, whether or not the other
3191 person learns of it.
3192 (6) A person receives a notification when the notification:
3193 (a) comes to the person's attention; or
3194 (b) is delivered at the person's place of business or at any other place held out by the
3195 person as a place for receiving communications.
3196 (7) (a) Except as otherwise provided in Subsection (8), a person other than an
3197 individual knows, has notice, or receives a notification of a fact for purposes of a particular
3198 transaction when the individual conducting the transaction for the person knows, has notice, or
3199 receives a notification of the fact, or in any event when the fact would have been brought to the
3200 individual's attention if the person had exercised reasonable diligence.
3201 (b) A person other than an individual exercises reasonable diligence if it maintains
3202 reasonable routines for communicating significant information to the individual conducting the
3203 transaction for the person and there is reasonable compliance with the routines. Reasonable
3204 diligence does not require an individual acting for the person to communicate information
3205 unless the communication is part of the individual's regular duties or the individual has reason
3206 to know of the transaction and that the transaction would be materially affected by the
3207 information.
3208 (8) A general partner's knowledge, notice, or receipt of a notification of a fact relating
3209 to the limited partnership is effective immediately as knowledge of, notice to, or receipt of a
3210 notification by the limited partnership, except in the case of a fraud on the limited partnership
3211 committed by or with the consent of the general partner. A limited partner's knowledge, notice,
3212 or receipt of a notification of a fact relating to the limited partnership is not effective as
3213 knowledge of, notice to, or receipt of a notification by the limited partnership.
3214 Section 92. Section 48-2d-104 is enacted to read:
3215 48-2d-104. Nature, purpose, and duration of entity.
3216 (1) (a) A limited partnership is an entity distinct from its partners.
3217 (b) A limited partnership is the same entity regardless of whether its certificate states
3218 that the limited partnership is a limited liability limited partnership.
3219
3220 (3) A limited partnership has a perpetual duration.
3221 Section 93. Section 48-2d-105 is enacted to read:
3222 48-2d-105. Powers.
3223 A limited partnership has the powers to do all things necessary or convenient to carry
3224 on its activities, including the power to sue, be sued, and defend in its own name and to
3225 maintain an action against a partner for harm caused to the limited partnership by a breach of
3226 the partnership agreement or violation of a duty to the partnership.
3227 Section 94. Section 48-2d-106 is enacted to read:
3228 48-2d-106. Governing law.
3229 The law of this state governs relations among the partners of a limited partnership and
3230 between the partners and the limited partnership and the liability of partners as partners for an
3231 obligation of the limited partnership.
3232 Section 95. Section 48-2d-107 is enacted to read:
3233 48-2d-107. Supplemental principles of law-- Rate of interest.
3234 (1) Unless displaced by particular provisions of this chapter, the principles of law and
3235 equity supplement this chapter.
3236 (2) If an obligation to pay interest arises under this chapter and the rate is not specified,
3237 the rate is that specified in Section 15-1-1 .
3238 Section 96. Section 48-2d-108 is enacted to read:
3239 48-2d-108. Name.
3240 (1) The name of a limited partnership may contain the name of any partner.
3241 (2) (a) The name of a limited partnership that is not a limited liability limited
3242 partnership must contain the phrase "limited partnership" or the abbreviation "L.P." or "LP".
3243 (b) The name of a limited partnership that is not a limited liability partnership may not
3244 contain the phrase "limited liability limited partnership" or the abbreviation "LLLP" or
3245 "L.L.L.P.".
3246 (c) The name of a limited partnership may not contain:
3247 (i) without the written consent of the United States Olympic Committee, the words:
3248 (A) "Olympic";
3249 (B) "Olympiad"; or
3250
3251 (ii) without the written consent of the Division of Consumer Protection issued in
3252 accordance with Section 13-34-114 , the words:
3253 (A) "university";
3254 (B) "college"; or
3255 (C) "institute" or "institution".
3256 (3) (a) The name of a limited liability limited partnership must contain the phrase
3257 "limited liability limited partnership" or the abbreviation "LLLP" or "L.L.L.P."
3258 (b) The name of a limited liability limited partnership may not contain the abbreviation
3259 "L.P." or "LP".
3260 (4) Unless authorized by Subsection (5), the name of a limited partnership must be
3261 distinguishable in the records of the division from:
3262 (a) the name of each person other than an individual incorporated, organized, or
3263 authorized to transact business in this state; and
3264 (b) each name reserved under:
3265 (i) Section 16-6a-401 or 16-6a-402 ;
3266 (ii) Section 16-10a-401 or 16-10a-402 ;
3267 (iii) Section 16-11-16 ;
3268 (iv) Section 42-2-6.6 ;
3269 (v) Section 48-1b-1002 ; or
3270 (vi) Section 48-3-108 or 48-3-109 .
3271 (5) A limited partnership may apply to the division for authorization to use a name that
3272 does not comply with Subsection (4). The division shall authorize use of the name applied for
3273 if, as to each conflicting name:
3274 (a) the present user, registrant, or owner of the conflicting name consents in a signed
3275 record to the use and submits an undertaking in a form satisfactory to the division to change the
3276 conflicting name to a name that complies with Subsection (4) and is distinguishable in the
3277 records of the division from the name applied for;
3278 (b) the applicant delivers to the division a certified copy of the final judgment of a
3279 district court establishing the applicant's right to use in this state the name applied for; or
3280 (c) the applicant delivers to the division proof satisfactory to the division that the
3281
3282 (i) has merged into the applicant;
3283 (ii) has been converted into the applicant; or
3284 (iii) has transferred substantially all of its assets, including the conflicting name, to the
3285 applicant.
3286 (6) Subject to Section 48-2d-905 , this section applies to any foreign limited partnership
3287 transacting business in this state, having a certificate of authority to transact business in this
3288 state, or applying for a certificate of authority.
3289 (7) The division may not approve for filing a name that implies that a limited
3290 partnership is an agency of this state or any of its political subdivisions, if it is not actually such
3291 a legally established agency or subdivision.
3292 (8) The authorization to file a certificate under or to reserve or register a limited
3293 partnership name as granted by the division does not:
3294 (a) abrogate or limit the law governing unfair competition or unfair trade practices;
3295 (b) derogate from the common law, the principles of equity, or the statutes of this state
3296 or of the United States with respect to the right to acquire and protect names and trademarks; or
3297 (c) create an exclusive right in geographic or generic terms contained within a name.
3298 Section 97. Section 48-2d-109 is enacted to read:
3299 48-2d-109. Reservation of name.
3300 (1) The exclusive right to the use of a name that complies with Section 48-2d-108 may
3301 be reserved by:
3302 (a) a person intending to organize a limited partnership under this chapter and to adopt
3303 the name;
3304 (b) a limited partnership or a foreign limited partnership authorized to transact business
3305 in this state intending to adopt the name;
3306 (c) a foreign limited partnership intending to obtain a certificate of authority to transact
3307 business in this state and adopt the name;
3308 (d) a person intending to organize a foreign limited partnership and intending to have it
3309 obtain a certificate of authority to transact business in this state and adopt the name;
3310 (e) a foreign limited partnership formed under the name; or
3311 (f) a foreign limited partnership formed under a name that does not comply with
3312
3313 from the foreign limited partnership's name only to the extent necessary to comply with
3314 Subsections 48-2d-108 (2) and (3).
3315 (2) (a) A person may apply to reserve a name under Subsection (1) by delivering to the
3316 division for filing an application that states the name to be reserved and the provision of
3317 Subsection (1) which applies.
3318 (b) If the division finds that the name is available for use by the applicant, the division
3319 shall file a statement of name reservation and thereby reserve the name for the exclusive use of
3320 the applicant for 120 days.
3321 (3) An applicant that has reserved a name pursuant to Subsection (2) may reserve the
3322 same name for additional 120-day periods. A person having a current reservation for a name
3323 may not apply for another 120-day period for the same name until 90 days have elapsed in the
3324 current reservation.
3325 (4) A person that has reserved a name under this section may deliver to the division for
3326 filing a notice of transfer that states the reserved name, the name, and street and mailing
3327 address of some other person to which the reservation is to be transferred, and the provision of
3328 Subsection (1) which applies to the other person. Subject to Subsection 48-2d-206 (3), the
3329 transfer is effective when the division files the notice of transfer.
3330 Section 98. Section 48-2d-110 is enacted to read:
3331 48-2d-110. Effect of partnership agreement -- Nonwaivable provisions.
3332 (1) Except as otherwise provided in Subsection (2), the partnership agreement governs
3333 relations among the partners and between the partners and the partnership. To the extent the
3334 partnership agreement does not otherwise provide, this chapter governs relations among the
3335 partners and between the partners and the partnership.
3336 (2) A partnership agreement may not:
3337 (a) vary a limited partnership's power under Section 48-2d-105 to sue, be sued, and
3338 defend in its own name;
3339 (b) vary the law applicable to a limited partnership under Section 48-2d-106 ;
3340 (c) vary the requirements of Section 48-2d-204 ;
3341 (d) vary the information required under Section 48-2d-111 or unreasonably restrict the
3342 right to information under Section 48-2d-304 or 48-2d-407 , but the partnership agreement may
3343
3344 sections and may define appropriate remedies, including liquidated damages, for a breach of
3345 any reasonable restriction on use;
3346 (e) eliminate the duty of loyalty under Section 48-2d-408 , but the partnership
3347 agreement may:
3348 (i) identify specific types or categories of activities that do not violate the duty of
3349 loyalty, if not unconscionable or against public policy; and
3350 (ii) specify the number or percentage of partners which may authorize or ratify, after
3351 full disclosure to all partners of all material facts, a specific act or transaction that otherwise
3352 would violate the duty of loyalty;
3353 (f) unreasonably reduce the duty of care under Subsection 48-2d-408 (3);
3354 (g) eliminate the obligation of good faith and fair dealing under Subsections
3355 48-2d-305 (2) and 48-2d-408 (4), but the partnership agreement may prescribe the standards by
3356 which the performance of the obligation is to be measured, if the standards are not manifestly
3357 unreasonable;
3358 (h) vary the power of a person to dissociate as a general partner under Subsection
3359 48-2d-604 (1) except to require that the notice under Subsection 48-2d-603 (1) be in a record;
3360 (i) vary the power of a court to decree dissolution in the circumstances specified in
3361 Section 48-2d-802 ;
3362 (j) vary the requirement to wind up the partnership's business as specified in Section
3363 48-2d-803 ;
3364 (k) unreasonably restrict the right to maintain an action under Part 10, Actions by
3365 Partners;
3366 (l) restrict the right of a partner under Subsection 48-2d-1114 (1) to approve a
3367 conversion or merger or the right of a general partner under Subsection 48-2d-1114 (2) to
3368 consent to an amendment to the certificate of limited partnership which deletes a statement that
3369 the limited partnership is a limited liability limited partnership; or
3370 (m) restrict rights under this chapter of a person other than a partner or a transferee.
3371 Section 99. Section 48-2d-111 is enacted to read:
3372 48-2d-111. Required information.
3373 A limited partnership shall maintain at its designated office the following information:
3374
3375 each partner, separately identifying the general partners, in alphabetical order, and the limited
3376 partners, in alphabetical order;
3377 (2) a copy of the initial certificate of limited partnership and all amendments to and
3378 restatements of the certificate, together with signed copies of any powers of attorney under
3379 which any certificate, amendment, or restatement has been signed;
3380 (3) a copy of any filed articles of conversion or merger;
3381 (4) a copy of the limited partnership's federal, state, and local income tax returns and
3382 reports, if any, for the three most recent years;
3383 (5) a copy of any partnership agreement made in a record and any amendment made in
3384 a record to any partnership agreement;
3385 (6) a copy of any financial statement of the limited partnership for the three most recent
3386 years;
3387 (7) a copy of the three most recent annual reports delivered by the limited partnership
3388 to the division pursuant to Section 48-2d-210 ;
3389 (8) a copy of any record made by the limited partnership during the past three years of
3390 any consent given by or vote taken of any partner pursuant to this chapter or the partnership
3391 agreement; and
3392 (9) unless contained in a partnership agreement made in a record, a record stating:
3393 (a) the amount of cash, and a description and statement of the agreed value of the other
3394 benefits, contributed and agreed to be contributed by each partner;
3395 (b) the times at which, or events on the happening of which, any additional
3396 contributions agreed to be made by each partner are to be made;
3397 (c) for any person that is both a general partner and a limited partner, a specification of
3398 what transferable interest the person owns in each capacity; and
3399 (d) any events upon the happening of which the limited partnership is to be dissolved
3400 and its activities wound up.
3401 Section 100. Section 48-2d-112 is enacted to read:
3402 48-2d-112. Business transactions of partner with partnership.
3403 A partner may lend money to and transact other business with the limited partnership
3404 and has the same rights and obligations with respect to the loan or other transaction as a person
3405
3406 Section 101. Section 48-2d-113 is enacted to read:
3407 48-2d-113. Dual capacity.
3408 (1) A person may be both a general partner and a limited partner.
3409 (2) A person that is both a general and limited partner has the rights, powers, duties,
3410 and obligations provided by this chapter and the partnership agreement in each of those
3411 capacities. When the person acts as a general partner, the person is subject to the obligations,
3412 duties, and restrictions under this chapter and the partnership agreement for general partners.
3413 When the person acts as a limited partner, the person is subject to the obligations, duties, and
3414 restrictions under this chapter and the partnership agreement for limited partners.
3415 Section 102. Section 48-2d-114 is enacted to read:
3416 48-2d-114. Consent and proxies of partners.
3417 Action requiring the consent of partners under this chapter may be taken without a
3418 meeting, and a partner may appoint a proxy to consent or otherwise act for the partner by
3419 signing an appointment record, either personally or by the partner's attorney-in-fact.
3420 Section 103. Section 48-2d-201 is enacted to read:
3421
3422 48-2d-201. Formation of limited partnership -- Certificate of limited partnership.
3423 (1) In order for a limited partnership to be formed, a certificate of limited partnership
3424 must be delivered to the division for filing. The certificate must state:
3425 (a) the name of the limited partnership, which must comply with Section 48-2d-108 ;
3426 (b) the information required by Subsection 16-17-203 (1);
3427 (c) the name and the street and mailing address of each general partner;
3428 (d) whether the limited partnership is a limited liability limited partnership; and
3429 (e) any additional information required by Part 11, Merger, Conversion, and
3430 Domestication.
3431 (2) A certificate of limited partnership may also contain any other matters but may not
3432 vary or otherwise affect the provisions specified in Subsection 48-2d-110 (2) in a manner
3433 inconsistent with that section.
3434 (3) If there has been substantial compliance with Subsection (1), subject to Subsection
3435 48-2d-206 (3) a limited partnership is formed when the division files the certificate of limited
3436
3437 (4) Subject to Subsection (2), if any provision of a partnership agreement is
3438 inconsistent with the filed certificate of limited partnership or with a filed statement of
3439 dissociation, termination, or change or filed articles of conversion or merger:
3440 (a) the partnership agreement prevails as to partners and transferees; and
3441 (b) the filed certificate of limited partnership, statement of dissociation, termination, or
3442 change, or articles of conversion or merger prevail as to persons, other than partners and
3443 transferees, that reasonably rely on the filed record to their detriment.
3444 Section 104. Section 48-2d-202 is enacted to read:
3445 48-2d-202. Amendment or restatement of certificate.
3446 (1) To amend its certificate of limited partnership, a limited partnership must deliver to
3447 the division for filing an amendment or, pursuant to Part 11, Merger, Conversion, and
3448 Domestication, articles of merger stating:
3449 (a) the name of the limited partnership;
3450 (b) the date of filing of its initial certificate; and
3451 (c) the changes the amendment makes to the certificate as most recently amended or
3452 restated.
3453 (2) By no later than 60 days from the day on which one of the following occurs, a
3454 limited partnership shall deliver to the division for filing an amendment to a certificate of
3455 limited partnership to reflect:
3456 (a) the admission of a new general partner;
3457 (b) the dissociation of a person as a general partner; or
3458 (c) the appointment of a person to wind up the limited partnership's activities under
3459 Subsection 48-2d-803 (3) or (4).
3460 (3) A general partner that knows that any information in a filed certificate of limited
3461 partnership was false when the certificate was filed or has become false due to changed
3462 circumstances shall promptly:
3463 (a) cause the certificate to be amended; or
3464 (b) if appropriate, deliver to the division for filing a statement of change pursuant to
3465 Section 16-17-206 or a statement of correction pursuant to Section 16-17-206 or 48-2d-207 .
3466 (4) A certificate of limited partnership may be amended at any time for any other
3467
3468 (5) A restated certificate of limited partnership may be delivered to the division for
3469 filing in the same manner as an amendment.
3470 (6) Subject to Subsection 48-2d-206 (3), an amendment or restated certificate is
3471 effective when filed by the division.
3472 Section 105. Section 48-2d-203 is enacted to read:
3473 48-2d-203. Statement of termination.
3474 A dissolved limited partnership that has completed winding up may deliver to the
3475 division for filing a statement of termination that states:
3476 (1) the name of the limited partnership;
3477 (2) the date of filing of its initial certificate of limited partnership; and
3478 (3) any other information as determined by the general partners filing the statement or
3479 by a person appointed pursuant to Subsection 48-2d-803 (3) or (4).
3480 Section 106. Section 48-2d-204 is enacted to read:
3481 48-2d-204. Signing of records.
3482 (1) Each record delivered to the division for filing pursuant to this chapter must be
3483 signed in the following manner:
3484 (a) An initial certificate of limited partnership must be signed by all general partners
3485 listed in the certificate.
3486 (b) An amendment adding or deleting a statement that the limited partnership is a
3487 limited liability limited partnership must be signed by all general partners listed in the
3488 certificate.
3489 (c) An amendment designating as general partner a person admitted under Subsection
3490 48-2d-801 (3)(b) following the dissociation of a limited partnership's last general partner must
3491 be signed by that person.
3492 (d) An amendment required by Subsection 48-2d-803 (3) following the appointment of
3493 a person to wind up the dissolved limited partnership's activities must be signed by that person.
3494 (e) Any other amendment must be signed by:
3495 (i) at least one general partner listed in the certificate;
3496 (ii) each other person designated in the amendment as a new general partner; and
3497 (iii) each person that the amendment indicates has dissociated as a general partner,
3498
3499 (A) the person is deceased or a guardian or a general conservator has been appointed
3500 for the person and the amendment so states; or
3501 (B) the person has previously delivered to the division for filing a statement of
3502 dissociation.
3503 (f) A restated certificate of limited partnership must be signed by at least one general
3504 partner listed in the certificate, and, to the extent the restated certificate effects a change under
3505 any other subsection of this Subsection (1), the certificate must be signed in a manner that
3506 satisfies that subsection.
3507 (g) A statement of termination must be signed by all general partners listed in the
3508 certificate or, if the certificate of a dissolved limited partnership lists no general partners, by the
3509 person appointed pursuant to Subsection 48-2d-803 (3) or (4) to wind up the dissolved limited
3510 partnership's activities.
3511 (h) Articles of conversion must be signed by each general partner listed in the
3512 certificate of limited partnership.
3513 (i) Articles of merger must be signed as provided in Subsection 48-2d-1108 (1).
3514 (j) Any other record delivered on behalf of a limited partnership to the division for
3515 filing must be signed by at least one general partner listed in the certificate.
3516 (k) A statement by a person pursuant to Subsection 48-2d-605 (1)(d) stating that the
3517 person has dissociated as a general partner must be signed by that person.
3518 (l) A statement of withdrawal by a person pursuant to Section 48-2d-306 must be
3519 signed by that person.
3520 (m) A record delivered on behalf of a foreign limited partnership to the division for
3521 filing must be signed by at least one general partner of the foreign limited partnership.
3522 (n) Any other record delivered on behalf of any person to the division for filing must
3523 be signed by that person.
3524 (2) Any person may sign by an attorney-in-fact any record to be filed pursuant to this
3525 chapter.
3526 Section 107. Section 48-2d-205 is enacted to read:
3527 48-2d-205. Signing and filing pursuant to judicial order.
3528 (1) If a person required by this chapter to sign a record or deliver a record to the
3529
3530 court to order:
3531 (a) the person to sign the record;
3532 (b) the person to deliver the record to the division for filing; or
3533 (c) the division to file the record unsigned, which will have the same effect as if signed
3534 by the person required by this chapter to sign the record.
3535 (2) If the person aggrieved under Subsection (1) is not the limited partnership or
3536 foreign limited partnership to which the record pertains, the aggrieved person shall make the
3537 limited partnership or foreign limited partnership a party to the action. A person aggrieved
3538 under Subsection (1) may seek the remedies provided in Subsection (1) in the same action in
3539 combination or in the alternative.
3540 (3) A record filed unsigned pursuant to this section is effective without being signed.
3541 Section 108. Section 48-2d-206 is enacted to read:
3542 48-2d-206. Delivery to and filing of records by division -- Effective time and date.
3543 (1) A record authorized or required to be delivered to the division for filing under this
3544 chapter must be captioned to describe the record's purpose, be in a medium permitted by the
3545 division, and be delivered to the division. Unless the division determines that a record does not
3546 comply with the filing requirements of this chapter, and if all filing fees have been paid, the
3547 division shall file the record and:
3548 (a) for a statement of dissociation, send:
3549 (i) a copy of the filed statement and a receipt for the fees to the person which the
3550 statement indicates has dissociated as a general partner; and
3551 (ii) a copy of the filed statement and receipt to the limited partnership;
3552 (b) for a statement of withdrawal, send:
3553 (i) a copy of the filed statement and a receipt for the fees to the person on whose behalf
3554 the record was filed; and
3555 (ii) if the statement refers to an existing limited partnership, a copy of the filed
3556 statement and receipt to the limited partnership; and
3557 (c) for all other records, send a copy of the filed record and a receipt for the fees to the
3558 person on whose behalf the record was filed.
3559 (2) Upon request and payment of a fee, established in accordance with Section
3560
3561 (3) Except as otherwise provided in Section 48-2d-207 , a record delivered to the
3562 division for filing under this chapter may specify an effective time and a delayed effective date.
3563 Except as otherwise provided in this chapter, a record filed by the division is effective:
3564 (a) if the record does not specify an effective time and does not specify a delayed
3565 effective date, on the date and at the time the record is filed as evidenced by the division's
3566 endorsement of the date and time on the record;
3567 (b) if the record specifies an effective time but not a delayed effective date, on the date
3568 the record is filed at the time specified in the record;
3569 (c) if the record specifies a delayed effective date but not an effective time, at 12:01
3570 a.m. on the earlier of:
3571 (i) the specified date; or
3572 (ii) the 90th day after the record is filed; or
3573 (d) if the record specifies an effective time and a delayed effective date, at the specified
3574 time on the earlier of:
3575 (i) the specified date; or
3576 (ii) the 90th day after the record is filed.
3577 Section 109. Section 48-2d-207 is enacted to read:
3578 48-2d-207. Correcting filed record.
3579 (1) A limited partnership or foreign limited partnership may deliver to the division for
3580 filing a statement of correction to correct a record previously delivered by the limited
3581 partnership or foreign limited partnership to the division and filed by the division, if at the time
3582 of filing the record contained false or erroneous information or was defectively signed.
3583 (2) A statement of correction may not state a delayed effective date and must:
3584 (a) describe the record to be corrected, including its filing date, or attach a copy of the
3585 record as filed;
3586 (b) specify the incorrect information and the reason it is incorrect or the manner in
3587 which the signing was defective; and
3588 (c) correct the incorrect information or defective signature.
3589 (3) When filed by the division, a statement of correction is effective retroactively as of
3590 the effective date of the record the statement corrects, but the statement is effective when filed:
3591
3592 (b) as to persons relying on the uncorrected record and adversely affected by the
3593 correction.
3594 Section 110. Section 48-2d-208 is enacted to read:
3595 48-2d-208. Liability for false information in filed record.
3596 (1) If a record delivered to the division for filing under this chapter and filed by the
3597 division contains false information, a person that suffers loss by reliance on the information
3598 may recover damages for the loss from:
3599 (a) a person that signed the record, or caused another to sign it on the person's behalf,
3600 and knew the information to be false at the time the record was signed; and
3601 (b) a general partner that has notice that the information was false when the record was
3602 filed or has become false because of changed circumstances, if the general partner has notice
3603 for a reasonably sufficient time before the information is relied upon to enable the general
3604 partner to effect an amendment under Section 48-2d-202 , file a petition pursuant to Section
3605 48-2d-205 , or deliver to the division for filing a statement of change pursuant to Section
3606 16-17-206 or a statement of correction pursuant to Section 48-2d-207 .
3607 (2) Signing a record authorized or required to be filed under this chapter constitutes an
3608 affirmation under the penalties of perjury that the facts stated in the record are true.
3609 Section 111. Section 48-2d-209 is enacted to read:
3610 48-2d-209. Certificate of existence or authorization.
3611 (1) The division, upon request and payment of the requisite fee, shall furnish a
3612 certificate of existence for a limited partnership if the records filed in the division show that the
3613 division has filed a certificate of limited partnership and has not filed a statement of
3614 termination. A certificate of existence must state:
3615 (a) the limited partnership's name;
3616 (b) that it was duly formed under the laws of this state and the date of formation;
3617 (c) whether all fees, taxes, and penalties due to the division under this chapter or other
3618 law have been paid;
3619 (d) whether the limited partnership's most recent annual report required by Section
3620 48-2d-210 has been filed by the division;
3621 (e) whether the division has administratively dissolved the limited partnership;
3622
3623 amended to state that the limited partnership is dissolved;
3624 (g) that a statement of termination has not been filed by the division; and
3625 (h) other facts of record in the division which may be requested by the applicant.
3626 (2) The division, upon request and payment of the requisite fee, shall furnish a
3627 certificate of authorization for a foreign limited partnership if the records filed in the division
3628 show that the division has filed a certificate of authority, has not revoked the certificate of
3629 authority, and has not filed a notice of cancellation. A certificate of authorization must state:
3630 (a) the foreign limited partnership's name and any alternate name adopted under
3631 Subsection 48-2d-905 (1) for use in this state;
3632 (b) that it is authorized to transact business in this state;
3633 (c) whether all fees, taxes, and penalties due to the division under this chapter or other
3634 law have been paid;
3635 (d) whether the foreign limited partnership's most recent annual report required by
3636 Section 48-2d-210 has been filed by the division;
3637 (e) that the division has not revoked its certificate of authority and has not filed a notice
3638 of cancellation; and
3639 (f) other facts of record in the division which may be requested by the applicant.
3640 (3) Subject to any qualification stated in the certificate, a certificate of existence or
3641 authorization issued by the division may be relied upon as conclusive evidence that the limited
3642 partnership or foreign limited partnership is in existence or is authorized to transact business in
3643 this state.
3644 Section 112. Section 48-2d-210 is enacted to read:
3645 48-2d-210. Annual report for division.
3646 (1) A limited partnership or a foreign limited partnership authorized to transact
3647 business in this state shall deliver to the division for filing an annual report that states:
3648 (a) the name of the limited partnership or foreign limited partnership;
3649 (b) the information required by Section 16-17-203 (1);
3650 (c) in the case of a limited partnership, the street and mailing address of its principal
3651 office; and
3652 (d) in the case of a foreign limited partnership, the state or other jurisdiction under
3653
3654 Subsection 48-2d-905 (1).
3655 (2) Information in an annual report must be current as of the date the annual report is
3656 delivered to the division for filing.
3657 (3) An annual report must be delivered to the division:
3658 (a) during the month of its anniversary date of formation, in the case of domestic
3659 limited partnerships; or
3660 (b) during the month of the anniversary date of being granted authority to transact
3661 business in this state, in the case of foreign limited partnerships authorized to transact business
3662 in this state.
3663 (4) If an annual report does not contain the information required in Subsection (1), the
3664 division shall promptly notify the reporting limited partnership or foreign limited partnership
3665 and return the report to it for correction. If the report is corrected to contain the information
3666 required in Subsection (1) and delivered to the division within 30 days after the effective date
3667 of the notice, it is timely delivered.
3668 (5) If a filed annual report contains information provided under Subsection (1)(b)
3669 which differs from the information shown in the records of the division immediately before the
3670 filing, the differing information in the annual report is considered a statement of change under
3671 Section 16-17-206 .
3672 Section 113. Section 48-2d-301 is enacted to read:
3673
3674 48-2d-301. Becoming limited partner.
3675 A person becomes a limited partner:
3676 (1) as provided in the partnership agreement;
3677 (2) as the result of a conversion or merger under Part 11, Merger, Conversion, and
3678 Domestication; or
3679 (3) with the consent of all the partners.
3680 Section 114. Section 48-2d-302 is enacted to read:
3681 48-2d-302. No right or power as limited partner to bind limited partnership.
3682 A limited partner does not have the right or the power as a limited partner to act for or
3683 bind the limited partnership.
3684
3685 48-2d-303. No liability as limited partner for limited partnership obligations.
3686 (1) An obligation of a limited partnership, whether arising in contract, tort, or
3687 otherwise, is not the obligation of a limited partner.
3688 (2) A limited partner is not personally liable, directly or indirectly, by way of
3689 contribution or otherwise, for an obligation of the limited partnership solely by reason of being
3690 a limited partner, even if the limited partner participates in the management and control of the
3691 limited partnership.
3692 Section 116. Section 48-2d-304 is enacted to read:
3693 48-2d-304. Right of limited partner and former limited partner to information.
3694 (1) On 10 days' demand, made in a record received by the limited partnership, a limited
3695 partner may inspect and copy required information during regular business hours in the limited
3696 partnership's principal office. The limited partner need not have any particular purpose for
3697 seeking the information.
3698 (2) During regular business hours and at a reasonable location specified by the limited
3699 partnership, a limited partner may obtain from the limited partnership and inspect and copy true
3700 and full information regarding the state of the activities and financial condition of the limited
3701 partnership and other information regarding the activities of the limited partnership as is just
3702 and reasonable if:
3703 (a) the limited partner seeks the information for a purpose reasonably related to the
3704 partner's interest as a limited partner;
3705 (b) the limited partner makes a demand in a record received by the limited partnership,
3706 describing with reasonable particularity the information sought and the purpose for seeking the
3707 information; and
3708 (c) the information sought is directly connected to the limited partner's purpose.
3709 (3) Within 10 days after receiving a demand pursuant to Subsection (2), the limited
3710 partnership in a record shall inform the limited partner that made the demand:
3711 (a) what information the limited partnership will provide in response to the demand;
3712 (b) when and where the limited partnership will provide the information; and
3713 (c) if the limited partnership declines to provide any demanded information, the limited
3714 partnership's reasons for declining.
3715
3716 copy required information during regular business hours in the limited partnership's principle
3717 office if:
3718 (a) the information pertains to the period during which the person was a limited
3719 partner;
3720 (b) the person seeks the information in good faith; and
3721 (c) the person meets the requirements of Subsection (2).
3722 (5) The limited partnership shall respond to a demand made pursuant to Subsection (4)
3723 in the same manner as provided in Subsection (3).
3724 (6) If a limited partner dies, Section 48-2d-704 applies.
3725 (7) The limited partnership may impose reasonable restrictions on the use of
3726 information obtained under this section. In a dispute concerning the reasonableness of a
3727 restriction under this Subsection (7), the limited partnership has the burden of proving
3728 reasonableness.
3729 (8) A limited partnership may charge a person that makes a demand under this section
3730 reasonable costs of copying, limited to the costs of labor and material.
3731 (9) Whenever this chapter or a partnership agreement provides for a limited partner to
3732 give or withhold consent to a matter, before the consent is given or withheld, the limited
3733 partnership shall, without demand, provide the limited partner with all information material to
3734 the limited partner's decision that the limited partnership knows.
3735 (10) A limited partner or person dissociated as a limited partner may exercise the rights
3736 under this section through an attorney or other agent. Any restriction imposed under
3737 Subsection (7) or by the partnership agreement applies both to the attorney or other agent and
3738 to the limited partner or person dissociated as a limited partner.
3739 (11) The rights stated in this section do not extend to a person as transferee, but may be
3740 exercised by the legal representative of an individual under legal disability who is a limited
3741 partner or person dissociated as a limited partner.
3742 Section 117. Section 48-2d-305 is enacted to read:
3743 48-2d-305. Limited duties of limited partners.
3744 (1) (a) A limited partner does not have any fiduciary duty to the limited partnership or
3745 to any other partner solely by reason of being a limited partner.
3746
3747 limited partnership and the other partners to refrain from competing with the limited
3748 partnership in the conduct or winding up of the limited partnership's activities.
3749 (2) A limited partner shall discharge the duties to the partnership and the other partners
3750 under this chapter or under the partnership agreement and exercise any rights consistently with
3751 the obligation of good faith and fair dealing.
3752 (3) A limited partner does not violate a duty or obligation under this chapter or under
3753 the partnership agreement merely because the limited partner's conduct furthers the limited
3754 partner's own interest.
3755 Section 118. Section 48-2d-306 is enacted to read:
3756 48-2d-306. Person erroneously believing self to be limited partner.
3757 (1) Except as otherwise provided in Subsection (2), a person that makes an investment
3758 in a business enterprise and erroneously but in good faith believes that the person has become a
3759 limited partner in the enterprise is not liable for the enterprise's obligations by reason of making
3760 the investment, receiving distributions from the enterprise, or exercising any rights of or
3761 appropriate to a limited partner, if, on ascertaining the mistake, the person:
3762 (a) causes an appropriate certificate of limited partnership, amendment, or statement of
3763 correction to be signed and delivered to the division for filing; or
3764 (b) withdraws from future participation as an owner in the enterprise by signing and
3765 delivering to the division for filing a statement of withdrawal under this section.
3766 (2) A person that makes an investment described in Subsection (1) is liable to the same
3767 extent as a general partner to any third party that enters into a transaction with the enterprise,
3768 believing in good faith that the person is a general partner, before the division files a statement
3769 of withdrawal, certificate of limited partnership, amendment, or statement of correction to
3770 show that the person is not a general partner.
3771 (3) If a person makes a diligent effort in good faith to comply with Subsection (1)(a)
3772 and is unable to cause the appropriate certificate of limited partnership, amendment, or
3773 statement of correction to be signed and delivered to the division for filing, the person has the
3774 right to withdraw from the enterprise pursuant to Subsection (1)(b) even if the withdrawal
3775 would otherwise breach an agreement with others that are or have agreed to become co-owners
3776 of the enterprise.
3777
3778
3779 48-2d-401. Becoming general partner.
3780 A person becomes a general partner:
3781 (1) as provided in the partnership agreement;
3782 (2) under Subsection 48-2d-801 (3)(b) following the dissociation of a limited
3783 partnership's last general partner;
3784 (3) as the result of a conversion or merger under Part 11, Merger, Conversion, and
3785 Domestication; or
3786 (4) with the consent of all the partners.
3787 Section 120. Section 48-2d-402 is enacted to read:
3788 48-2d-402. General partner agent of limited partnership.
3789 (1) (a) Each general partner is an agent of the limited partnership for the purposes of its
3790 activities.
3791 (b) An act of a general partner, including the signing of a record in the partnership's
3792 name, for apparently carrying on in the ordinary course the limited partnership's activities or
3793 activities of the kind carried on by the limited partnership binds the limited partnership, unless
3794 the general partner did not have authority to act for the limited partnership in the particular
3795 matter and the person with which the general partner was dealing knew, had received a
3796 notification, or had notice under Subsection 48-2d-103 (4) that the general partner lacked
3797 authority.
3798 (2) An act of a general partner which is not apparently for carrying on in the ordinary
3799 course the limited partnership's activities or activities of the kind carried on by the limited
3800 partnership binds the limited partnership only if the act was actually authorized by all the other
3801 partners.
3802 Section 121. Section 48-2d-403 is enacted to read:
3803 48-2d-403. Limited partnership liable for general partner's actionable conduct.
3804 (1) A limited partnership is liable for loss or injury caused to a person, or for a penalty
3805 incurred, as a result of a wrongful act or omission, or other actionable conduct, of a general
3806 partner acting in the ordinary course of activities of the limited partnership or with authority of
3807 the limited partnership.
3808
3809 of the limited partnership, a general partner receives or causes the limited partnership to receive
3810 money or property of a person not a partner, and the money or property is misapplied by a
3811 general partner, the limited partnership is liable for the loss.
3812 Section 122. Section 48-2d-404 is enacted to read:
3813 48-2d-404. General partner's liability.
3814 (1) Except as otherwise provided in Subsections (2) and (3), all general partners are
3815 liable jointly and severally for all obligations of the limited partnership unless otherwise agreed
3816 by the claimant or provided by law.
3817 (2) A person that becomes a general partner of an existing limited partnership is not
3818 personally liable for an obligation of a limited partnership incurred before the person became a
3819 general partner.
3820 (3) (a) An obligation of a limited partnership incurred while the limited partnership is a
3821 limited liability limited partnership, whether arising in contract, tort, or otherwise, is solely the
3822 obligation of the limited partnership.
3823 (b) A general partner is not personally liable, directly or indirectly, by way of
3824 contribution or otherwise, for such an obligation solely by reason of being or acting as a
3825 general partner.
3826 (c) This Subsection (3) applies despite anything inconsistent in the partnership
3827 agreement that existed immediately before the consent required to become a limited liability
3828 limited partnership under Subsection 48-2d-406 (2)(b).
3829 Section 123. Section 48-2d-405 is enacted to read:
3830 48-2d-405. Actions by and against partnership and partners.
3831 (1) To the extent not inconsistent with Section 48-2d-404 , a general partner may be
3832 joined in an action against the limited partnership or named in a separate action.
3833 (2) A judgment against a limited partnership is not by itself a judgment against a
3834 general partner. A judgment against a limited partnership may not be satisfied from a general
3835 partner's assets unless there is also a judgment against the general partner.
3836 (3) A judgment creditor of a general partner may not levy execution against the assets
3837 of the general partner to satisfy a judgment based on a claim against the limited partnership,
3838 unless the partner is personally liable for the claim under Section 48-2d-404 and:
3839
3840 partnership and a writ of execution on the judgment has been returned unsatisfied in whole or
3841 in part;
3842 (b) the limited partnership is a debtor in bankruptcy;
3843 (c) the general partner has agreed that the creditor need not exhaust limited partnership
3844 assets;
3845 (d) a court grants permission to the judgment creditor to levy execution against the
3846 assets of a general partner based on a finding that limited partnership assets subject to
3847 execution are clearly insufficient to satisfy the judgment, that exhaustion of limited partnership
3848 assets is excessively burdensome, or that the grant of permission is an appropriate exercise of
3849 the court's equitable powers; or
3850 (e) liability is imposed on the general partner by law or contract independent of the
3851 existence of the limited partnership.
3852 Section 124. Section 48-2d-406 is enacted to read:
3853 48-2d-406. Management rights of general partner.
3854 (1) Each general partner has equal rights in the management and conduct of the limited
3855 partnership's activities. Except as expressly provided in this chapter, any matter relating to the
3856 activities of the limited partnership may be exclusively decided by the general partner or, if
3857 there is more than one general partner, by a majority of the general partners.
3858 (2) The consent of each partner is necessary to:
3859 (a) amend the partnership agreement;
3860 (b) amend the certificate of limited partnership to add or, subject to Section
3861 48-2d-1114 , delete a statement that the limited partnership is a limited liability limited
3862 partnership; and
3863 (c) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited
3864 partnership's property, with or without the good will, other than in the usual and regular course
3865 of the limited partnership's activities.
3866 (3) A limited partnership shall reimburse a general partner for payments made and
3867 indemnify a general partner for liabilities incurred by the general partner in the ordinary course
3868 of the activities of the partnership or for the preservation of its activities or property.
3869 (4) A limited partnership shall reimburse a general partner for an advance to the limited
3870
3871 (5) A payment or advance made by a general partner which gives rise to an obligation
3872 of the limited partnership under Subsection (3) or (4) constitutes a loan to the limited
3873 partnership which accrues interest from the date of the payment or advance.
3874 (6) A general partner is not entitled to remuneration for services performed for the
3875 partnership.
3876 Section 125. Section 48-2d-407 is enacted to read:
3877 48-2d-407. Right of general partner and former general partner to information.
3878 (1) A general partner, without having any particular purpose for seeking the
3879 information, may inspect and copy during regular business hours:
3880 (a) in the limited partnership's principal office, required information; and
3881 (b) at a reasonable location specified by the limited partnership, any other records
3882 maintained by the limited partnership regarding the limited partnership's activities and financial
3883 condition.
3884 (2) Each general partner and the limited partnership shall furnish to a general partner:
3885 (a) without demand, any information concerning the limited partnership's activities and
3886 activities reasonably required for the proper exercise of the general partner's rights and duties
3887 under the partnership agreement or this chapter; and
3888 (b) on demand, any other information concerning the limited partnership's activities,
3889 except to the extent the demand or the information demanded is unreasonable or otherwise
3890 improper under the circumstances.
3891 (3) Subject to Subsection (5), on 10 days' demand made in a record received by the
3892 limited partnership, a person dissociated as a general partner may have access to the
3893 information and records described in Subsection (1) at the location specified in Subsection (1)
3894 if:
3895 (a) the information or record pertains to the period during which the person was a
3896 general partner;
3897 (b) the person seeks the information or record in good faith; and
3898 (c) the person satisfies the requirements imposed on a limited partner by Subsection
3899 48-2d-304 (2).
3900 (4) The limited partnership shall respond to a demand made pursuant to Subsection (3)
3901
3902 (5) If a general partner dies, Section 48-2d-704 applies.
3903 (6) The limited partnership may impose reasonable restrictions on the use of
3904 information under this section. In any dispute concerning the reasonableness of a restriction
3905 under this Subsection (6), the limited partnership has the burden of proving reasonableness.
3906 (7) A limited partnership may charge a person dissociated as a general partner that
3907 makes a demand under this section reasonable costs of copying, limited to the costs of labor
3908 and material.
3909 (8) A general partner or person dissociated as a general partner may exercise the rights
3910 under this section through an attorney or other agent. Any restriction imposed under
3911 Subsection (6) or by the partnership agreement applies both to the attorney or other agent and
3912 to the general partner or person dissociated as a general partner.
3913 (9) The rights under this section do not extend to a person as transferee, but the rights
3914 under Subsection (3) of a person dissociated as a general may be exercised by the legal
3915 representative of an individual who dissociated as a general partner under Subsection
3916 48-2d-603 (7)(b) or (c).
3917 Section 126. Section 48-2d-408 is enacted to read:
3918 48-2d-408. General standards of general partner's conduct.
3919 (1) The only fiduciary duties that a general partner has to the limited partnership and
3920 the other partners are the duties of loyalty and care under Subsections (2) and (3).
3921 (2) A general partner's duty of loyalty to the limited partnership and the other partners
3922 is limited to the following:
3923 (a) to account to the limited partnership and hold as trustee for it any property, profit,
3924 or benefit derived by the general partner in the conduct and winding up of the limited
3925 partnership's activities or derived from a use by the general partner of limited partnership
3926 property, including the appropriation of a limited partnership opportunity;
3927 (b) to refrain from dealing with the limited partnership in the conduct or winding up of
3928 the limited partnership's activities as or on behalf of a party having an interest adverse to the
3929 limited partnership; and
3930 (c) to refrain from competing with the limited partnership in the conduct or winding up
3931 of the limited partnership's activities.
3932
3933 partners in the conduct and winding up of the limited partnership's activities is to refrain from
3934 conduct or inaction that constitutes:
3935 (a) gross negligence;
3936 (b) intentional misconduct; or
3937 (c) an intentional violation of law.
3938 (4) A general partner shall discharge the duties to the partnership and the other partners
3939 under this chapter or under the partnership agreement and exercise any rights consistently with
3940 the obligation of good faith and fair dealing.
3941 (5) A general partner does not violate a duty or obligation under this chapter or under
3942 the partnership agreement merely because the general partner's conduct furthers the general
3943 partner's own interest.
3944 Section 127. Section 48-2d-501 is enacted to read:
3945
3946 48-2d-501. Form of contribution.
3947 A contribution of a partner may consist of tangible or intangible property or other
3948 benefit to the limited partnership, including money, services performed, promissory notes,
3949 other agreements to contribute cash or property, and contracts for services to be performed.
3950 Section 128. Section 48-2d-502 is enacted to read:
3951 48-2d-502. Liability for contribution.
3952 (1) (a) A partner's obligation to contribute money or other property or other benefit to,
3953 or to perform services for, a limited partnership is not excused by the partner's death, disability,
3954 or other inability to perform personally.
3955 (b) Notwithstanding Subsection (1)(a), a limited partnership's partnership agreement
3956 may provide for a partner's obligation to contribute to be excused by the death of the partner.
3957 (2) If a partner does not make a promised non-monetary contribution, the partner is
3958 obligated at the option of the limited partnership to contribute money equal to that portion of
3959 the value, as stated in the required information, of the stated contribution which has not been
3960 made.
3961 (3) The obligation of a partner to make a contribution or return money or other
3962 property paid or distributed in violation of this chapter may be compromised only by consent of
3963
3964 reliance on an obligation described in Subsection (2), without notice of any compromise under
3965 this Subsection (3), may enforce the original obligation.
3966 Section 129. Section 48-2d-503 is enacted to read:
3967 48-2d-503. Sharing of distributions.
3968 A distribution by a limited partnership must be shared among the partners on the basis
3969 of the value, as stated in the required records when the limited partnership decides to make the
3970 distribution, of the contributions the limited partnership has received from each partner.
3971 Section 130. Section 48-2d-504 is enacted to read:
3972 48-2d-504. Interim distributions.
3973 A partner does not have a right to any distribution before the dissolution and winding
3974 up of the limited partnership unless the limited partnership decides to make an interim
3975 distribution.
3976 Section 131. Section 48-2d-505 is enacted to read:
3977 48-2d-505. No distribution on account of dissociation.
3978 A person does not have a right to receive a distribution on account of dissociation.
3979 Section 132. Section 48-2d-506 is enacted to read:
3980 48-2d-506. Distribution in kind.
3981 A partner does not have a right to demand or receive any distribution from a limited
3982 partnership in any form other than cash. Subject to Subsection 48-2d-812 (2), a limited
3983 partnership may distribute an asset in kind to the extent each partner receives a percentage of
3984 the asset equal to the partner's share of distributions.
3985 Section 133. Section 48-2d-507 is enacted to read:
3986 48-2d-507. Right to distribution.
3987 When a partner or transferee becomes entitled to receive a distribution, the partner or
3988 transferee has the status of, and is entitled to all remedies available to, a creditor of the limited
3989 partnership with respect to the distribution. However, the limited partnership's obligation to
3990 make a distribution is subject to offset for any amount owed to the limited partnership by the
3991 partner or dissociated partner on whose account the distribution is made.
3992 Section 134. Section 48-2d-508 is enacted to read:
3993 48-2d-508. Limitations on distribution.
3994
3995 agreement.
3996 (2) A limited partnership may not make a distribution if after the distribution:
3997 (a) the limited partnership would not be able to pay its debts as they become due in the
3998 ordinary course of the limited partnership's activities; or
3999 (b) the limited partnership's total assets would be less than the sum of its total liabilities
4000 plus the amount that would be needed, if the limited partnership were to be dissolved, wound
4001 up, and terminated at the time of the distribution, to satisfy the preferential rights upon
4002 dissolution, winding up, and termination of partners whose preferential rights are superior to
4003 those of persons receiving the distribution.
4004 (3) A limited partnership may base a determination that a distribution is not prohibited
4005 under Subsection (2) on financial statements prepared on the basis of accounting practices and
4006 principles that are reasonable in the circumstances or on a fair valuation or other method that is
4007 reasonable in the circumstances.
4008 (4) Except as otherwise provided in Subsection (7), the effect of a distribution under
4009 Subsection (2) is measured:
4010 (a) in the case of distribution by purchase, redemption, or other acquisition of a
4011 transferable interest in the limited partnership, as of the date money or other property is
4012 transferred or debt incurred by the limited partnership; and
4013 (b) in all other cases, as of the date:
4014 (i) the distribution is authorized, if the payment occurs within 120 days after that date;
4015 or
4016 (ii) the payment is made, if payment occurs more than 120 days after the distribution is
4017 authorized.
4018 (5) A limited partnership's indebtedness to a partner incurred by reason of a
4019 distribution made in accordance with this section is at parity with the limited partnership's
4020 indebtedness to its general, unsecured creditors.
4021 (6) A limited partnership's indebtedness, including indebtedness issued in connection
4022 with or as part of a distribution, is not considered a liability for purposes of Subsection (2) if
4023 the terms of the indebtedness provide that payment of principal and interest are made only to
4024 the extent that a distribution could then be made to partners under this section.
4025
4026 the indebtedness is treated as a distribution, the effect of which is measured on the date the
4027 payment is made.
4028 Section 135. Section 48-2d-509 is enacted to read:
4029 48-2d-509. Liability for improper distributions.
4030 (1) A general partner that consents to a distribution made in violation of Section
4031 48-2d-508 is personally liable to the limited partnership for the amount of the distribution
4032 which exceeds the amount that could have been distributed without the violation if it is
4033 established that in consenting to the distribution the general partner failed to comply with
4034 Section 48-2d-408 .
4035 (2) A partner or transferee that received a distribution knowing that the distribution to
4036 that partner or transferee was made in violation of Section 48-2d-508 is personally liable to the
4037 limited partnership but only to the extent that the distribution received by the partner or
4038 transferee exceeded the amount that could have been properly paid under Section 48-2d-508 .
4039 (3) A general partner against which an action is commenced under Subsection (1) may:
4040 (a) implead in the action any other person that is liable under Subsection (1) and
4041 compel contribution from the person; and
4042 (b) implead in the action any person that received a distribution in violation of
4043 Subsection (2) and compel contribution from the person in the amount the person received in
4044 violation of Subsection (2).
4045 (4) An action under this section is barred if it is not commenced within two years after
4046 the distribution.
4047 Section 136. Section 48-2d-601 is enacted to read:
4048
4049 48-2d-601. Dissociation as limited partner.
4050 (1) A person does not have a right to dissociate as a limited partner before the
4051 termination of the limited partnership.
4052 (2) A person is dissociated from a limited partnership as a limited partner upon the
4053 occurrence of any of the following events:
4054 (a) the limited partnership's having notice of the person's express will to withdraw as a
4055 limited partner or on a later date specified by the person;
4056
4057 as a limited partner;
4058 (c) the person's expulsion as a limited partner pursuant to the partnership agreement;
4059 (d) the person's expulsion as a limited partner by the unanimous consent of the other
4060 partners if:
4061 (i) it is unlawful to carry on the limited partnership's activities with the person as a
4062 limited partner;
4063 (ii) there has been a transfer of all of the person's transferable interest in the limited
4064 partnership, other than a transfer for security purposes, or a court order charging the person's
4065 interest, which has not been foreclosed;
4066 (iii) the person is a corporation and, within 90 days after the limited partnership
4067 notifies the person that it will be expelled as a limited partner because it has filed a certificate
4068 of dissolution or the equivalent, its charter has been revoked, or its right to conduct business
4069 has been suspended by the jurisdiction of its incorporation, there is no revocation of the
4070 certificate of dissolution or no reinstatement of its charter or its right to conduct business; or
4071 (iv) the person is a limited liability company or partnership that has been dissolved and
4072 whose business is being wound up;
4073 (e) on application by the limited partnership, the person's expulsion as a limited partner
4074 by judicial order because:
4075 (i) the person engaged in wrongful conduct that adversely and materially affected the
4076 limited partnership's activities;
4077 (ii) the person willfully or persistently committed a material breach of the partnership
4078 agreement or of the obligation of good faith and fair dealing under Subsection 48-2d-305 (2); or
4079 (iii) the person engaged in conduct relating to the limited partnership's activities which
4080 makes it not reasonably practicable to carry on the activities with the person as limited partner;
4081 (f) in the case of a person who is an individual, the person's death;
4082 (g) in the case of a person that is a trust or is acting as a limited partner by virtue of
4083 being a trustee of a trust, distribution of the trust's entire transferable interest in the limited
4084 partnership, but not merely by reason of the substitution of a successor trustee;
4085 (h) in the case of a person that is an estate or is acting as a limited partner by virtue of
4086 being a personal representative of an estate, distribution of the estate's entire transferable
4087
4088 personal representative;
4089 (i) termination of a limited partner that is not an individual, partnership, limited
4090 liability company, corporation, trust, or estate;
4091 (j) the limited partnership's participation in a conversion or merger under Part 11,
4092 Merger, Conversion, and Domestication, if the limited partnership:
4093 (i) is not the converted or surviving entity; or
4094 (ii) is the converted or surviving entity but, as a result of the conversion or merger, the
4095 person ceases to be a limited partner.
4096 Section 137. Section 48-2d-602 is enacted to read:
4097 48-2d-602. Effect of dissociation as limited partner.
4098 (1) Upon a person's dissociation as a limited partner:
4099 (a) subject to Section 48-2d-704 , the person does not have further rights as a limited
4100 partner;
4101 (b) the person's obligation of good faith and fair dealing as a limited partner under
4102 Subsection 48-2d-305 (2) continues only as to matters arising and events occurring before the
4103 dissociation; and
4104 (c) subject to Section 48-2d-704 and Part 11, Merger, Conversion, and Domestication,
4105 any transferable interest owned by the person in the person's capacity as a limited partner
4106 immediately before dissociation is owned by the person as a mere transferee.
4107 (2) A person's dissociation as a limited partner does not of itself discharge the person
4108 from any obligation to the limited partnership or the other partners which the person incurred
4109 while a limited partner.
4110 Section 138. Section 48-2d-603 is enacted to read:
4111 48-2d-603. Dissociation as general partner.
4112 A person is dissociated from a limited partnership as a general partner upon the
4113 occurrence of any of the following events:
4114 (1) the limited partnership's having notice of the person's express will to withdraw as a
4115 general partner or on a later date specified by the person;
4116 (2) an event agreed to in the partnership agreement as causing the person's dissociation
4117 as a general partner;
4118
4119 (4) the person's expulsion as a general partner by the unanimous consent of the other
4120 partners if:
4121 (a) it is unlawful to carry on the limited partnership's activities with the person as a
4122 general partner;
4123 (b) there has been a transfer of all or substantially all of the person's transferable
4124 interest in the limited partnership, other than a transfer for security purposes, or a court order
4125 charging the person's interest, which has not been foreclosed;
4126 (c) the person is a corporation and, within 90 days after the limited partnership notifies
4127 the person that it will be expelled as a general partner because it has filed a certificate of
4128 dissolution or the equivalent, its charter has been revoked, or its right to conduct business has
4129 been suspended by the jurisdiction of its incorporation, there is no revocation of the certificate
4130 of dissolution or no reinstatement of its charter or its right to conduct business; or
4131 (d) the person is a limited liability company or partnership that has been dissolved and
4132 whose business is being wound up;
4133 (5) on application by the limited partnership, the person's expulsion as a general partner
4134 by judicial determination because:
4135 (a) the person engaged in wrongful conduct that adversely and materially affected the
4136 limited partnership activities;
4137 (b) the person willfully or persistently committed a material breach of the partnership
4138 agreement or of a duty owed to the partnership or the other partners under Section 48-2d-408 ;
4139 or
4140 (c) the person engaged in conduct relating to the limited partnership's activities which
4141 makes it not reasonably practicable to carry on the activities of the limited partnership with the
4142 person as a general partner;
4143 (6) the person's:
4144 (a) becoming a debtor in bankruptcy;
4145 (b) execution of an assignment for the benefit of creditors;
4146 (c) seeking, consenting to, or acquiescing in the appointment of a trustee, receiver, or
4147 liquidator of the person or of all or substantially all of the person's property; or
4148 (d) failure, within 90 days after the appointment, to have vacated or stayed the
4149
4150 all of the person's property obtained without the person's consent or acquiescence, or failing
4151 within 90 days after the expiration of a stay to have the appointment vacated;
4152 (7) in the case of a person who is an individual:
4153 (a) the person's death;
4154 (b) the appointment of a guardian or general conservator for the person; or
4155 (c) a judicial determination that the person has otherwise become incapable of
4156 performing the person's duties as a general partner under the partnership agreement;
4157 (8) in the case of a person that is a trust or is acting as a general partner by virtue of
4158 being a trustee of a trust, distribution of the trust's entire transferable interest in the limited
4159 partnership, but not merely by reason of the substitution of a successor trustee;
4160 (9) in the case of a person that is an estate or is acting as a general partner by virtue of
4161 being a personal representative of an estate, distribution of the estate's entire transferable
4162 interest in the limited partnership, but not merely by reason of the substitution of a successor
4163 personal representative;
4164 (10) termination of a general partner that is not an individual, partnership, limited
4165 liability company, corporation, trust, or estate; or
4166 (11) the limited partnership's participation in a conversion or merger under Part 11,
4167 Merger, Conversion, and Domestication, if the limited partnership:
4168 (a) is not the converted or surviving entity; or
4169 (b) is the converted or surviving entity but, as a result of the conversion or merger, the
4170 person ceases to be a general partner.
4171 Section 139. Section 48-2d-604 is enacted to read:
4172 48-2d-604. Person's power to dissociate as general partner -- Wrongful
4173 dissociation.
4174 (1) A person has the power to dissociate as a general partner at any time, rightfully or
4175 wrongfully, by express will pursuant to Subsection 48-2d-603 (1).
4176 (2) A person's dissociation as a general partner is wrongful only if:
4177 (a) it is in breach of an express provision of the partnership agreement; or
4178 (b) it occurs before the termination of the limited partnership, and:
4179 (i) the person withdraws as a general partner by express will;
4180
4181 Subsection 48-2d-603 (5);
4182 (iii) the person is dissociated as a general partner by becoming a debtor in bankruptcy;
4183 or
4184 (iv) in the case of a person that is not an individual, trust other than a business trust, or
4185 estate, the person is expelled or otherwise dissociated as a general partner because it willfully
4186 dissolved or terminated.
4187 (3) A person that wrongfully dissociates as a general partner is liable to the limited
4188 partnership and, subject to Section 48-2d-1001 , to the other partners for damages caused by the
4189 dissociation. The liability is in addition to any other obligation of the general partner to the
4190 limited partnership or to the other partners.
4191 Section 140. Section 48-2d-605 is enacted to read:
4192 48-2d-605. Effect of dissociation as general partner.
4193 (1) Upon a person's dissociation as a general partner:
4194 (a) the person's right to participate as a general partner in the management and conduct
4195 of the partnership's activities terminates;
4196 (b) the person's duty of loyalty as a general partner under Subsection 48-2d-408 (2)(c)
4197 terminates;
4198 (c) the person's duty of loyalty as a general partner under Subsections 48-2d-408 (2)(a)
4199 and (b) and duty of care under Subsection 48-2d-408 (3) continue only with regard to matters
4200 arising and events occurring before the person's dissociation as a general partner;
4201 (d) the person may sign and deliver to the division for filing a statement of dissociation
4202 pertaining to the person and, at the request of the limited partnership, shall sign an amendment
4203 to the certificate of limited partnership which states that the person has dissociated; and
4204 (e) subject to Section 48-2d-704 and Part 11, Merger, Conversion, and Domestication,
4205 any transferable interest owned by the person immediately before dissociation in the person's
4206 capacity as a general partner is owned by the person as a mere transferee.
4207 (2) A person's dissociation as a general partner does not of itself discharge the person
4208 from any obligation to the limited partnership or the other partners which the person incurred
4209 while a general partner.
4210 Section 141. Section 48-2d-606 is enacted to read:
4211
4212 partnership of person dissociated as general partner.
4213 (1) After a person is dissociated as a general partner and before the limited partnership
4214 is dissolved, converted under Part 11, Merger, Conversion, and Domestication, or merged out
4215 of existence under Part 11, the limited partnership is bound by an act of the person only if:
4216 (a) the act would have bound the limited partnership under Section 48-2d-402 before
4217 the dissociation; and
4218 (b) at the time the other party enters into the transaction:
4219 (i) less than two years have passed since the dissociation; and
4220 (ii) the other party does not have notice of the dissociation and reasonably believes that
4221 the person is a general partner.
4222 (2) If a limited partnership is bound under Subsection (1), the person dissociated as a
4223 general partner which caused the limited partnership to be bound is liable:
4224 (a) to the limited partnership for any damage caused to the limited partnership arising
4225 from the obligation incurred under Subsection (1); and
4226 (b) if a general partner or another person dissociated as a general partner is liable for
4227 the obligation, to the general partner or other person for any damage caused to the general
4228 partner or other person arising from the liability.
4229 Section 142. Section 48-2d-607 is enacted to read:
4230 48-2d-607. Liability to other persons of person dissociated as general partner.
4231 (1) A person's dissociation as a general partner does not of itself discharge the person's
4232 liability as a general partner for an obligation of the limited partnership incurred before
4233 dissociation. Except as otherwise provided in Subsections (2) and (3), the person is not liable
4234 for a limited partnership's obligation incurred after dissociation.
4235 (2) A person whose dissociation as a general partner resulted in a dissolution and
4236 winding up of the limited partnership's activities is liable to the same extent as a general partner
4237 under Section 48-2d-404 on an obligation incurred by the limited partnership under Section
4238 48-2d-804 .
4239 (3) A person that has dissociated as a general partner but whose dissociation did not
4240 result in a dissolution and winding up of the limited partnership's activities is liable on a
4241 transaction entered into by the limited partnership after the dissociation only if:
4242
4243 (b) at the time the other party enters into the transaction:
4244 (i) less than two years have passed since the dissociation; and
4245 (ii) the other party does not have notice of the dissociation and reasonably believes that
4246 the person is a general partner.
4247 (4) By agreement with a creditor of a limited partnership and the limited partnership, a
4248 person dissociated as a general partner may be released from liability for an obligation of the
4249 limited partnership.
4250 (5) A person dissociated as a general partner is released from liability for an obligation
4251 of the limited partnership if the limited partnership's creditor, with notice of the person's
4252 dissociation as a general partner but without the person's consent, agrees to a material alteration
4253 in the nature or time of payment of the obligation.
4254 Section 143. Section 48-2d-701 is enacted to read:
4255
4256 48-2d-701. Partner's transferable interest.
4257 The only interest of a partner which is transferable is the partner's transferable interest.
4258 A transferable interest is personal property.
4259 Section 144. Section 48-2d-702 is enacted to read:
4260 48-2d-702. Transfer of partner's transferable interest.
4261 (1) A transfer, in whole or in part, of a partner's transferable interest:
4262 (a) is permissible;
4263 (b) does not by itself cause the partner's dissociation or a dissolution and winding up of
4264 the limited partnership's activities; and
4265 (c) does not, as against the other partners or the limited partnership, entitle the
4266 transferee to participate in the management or conduct of the limited partnership's activities, to
4267 require access to information concerning the limited partnership's transactions except as
4268 otherwise provided in Subsection (3), or to inspect or copy the required information or the
4269 limited partnership's other records.
4270 (2) A transferee has a right to receive, in accordance with the transfer:
4271 (a) distributions to which the transferor would otherwise be entitled; and
4272 (b) upon the dissolution and winding up of the limited partnership's activities the net
4273
4274 (3) In a dissolution and winding up, a transferee is entitled to an account of the limited
4275 partnership's transactions only from the date of dissolution.
4276 (4) Upon transfer, the transferor retains the rights of a partner other than the interest in
4277 distributions transferred and retains all duties and obligations of a partner.
4278 (5) A limited partnership need not give effect to a transferee's rights under this section
4279 until the limited partnership has notice of the transfer.
4280 (6) A transfer of a partner's transferable interest in the limited partnership in violation
4281 of a restriction on transfer contained in the partnership agreement is ineffective as to a person
4282 having notice of the restriction at the time of transfer.
4283 (7) A transferee that becomes a partner with respect to a transferable interest is liable
4284 for the transferor's obligations under Sections 48-2d-502 and 48-2d-509 . However, the
4285 transferee is not obligated for liabilities unknown to the transferee at the time the transferee
4286 became a partner.
4287 Section 145. Section 48-2d-703 is enacted to read:
4288 48-2d-703. Rights of creditor of partner or transferee.
4289 (1) (a) On application to a district court by any judgment creditor of a partner or
4290 transferee, the court may charge the transferable interest of the judgment debtor with payment
4291 of the unsatisfied amount of the judgment with interest. To the extent so charged, the judgment
4292 creditor has only the rights of a transferee.
4293 (b) The court may appoint a receiver of the share of the distributions due or to become
4294 due to the judgment debtor in respect of the partnership and make all other orders, directions,
4295 accounts, and inquiries the judgment debtor might have made or which the circumstances of
4296 the case may require to give effect to the charging order.
4297 (2) A charging order constitutes a lien on the judgment debtor's transferable interest.
4298 The court may order a foreclosure upon the interest subject to the charging order at any time.
4299 The purchaser at the foreclosure sale has the rights of a transferee.
4300 (3) At any time before foreclosure, an interest charged may be redeemed:
4301 (a) by the judgment debtor;
4302 (b) with property other than limited partnership property, by one or more of the other
4303 partners; or
4304
4305 partners whose interests are not so charged.
4306 (4) This chapter does not deprive any partner or transferee of the benefit of any
4307 exemption laws applicable to the partner's or transferee's transferable interest.
4308 (5) This section provides the exclusive remedy by which a judgment creditor of a
4309 partner or transferee may satisfy a judgment out of the judgment debtor's transferable interest.
4310 Section 146. Section 48-2d-704 is enacted to read:
4311 48-2d-704. Power of estate of deceased partner.
4312 If a partner dies, the deceased partner's personal representative or other legal
4313 representative may exercise the rights of a transferee as provided in Section 48-2d-702 and, for
4314 the purposes of settling the estate, may exercise the rights of a current limited partner under
4315 Section 48-2d-304 .
4316 Section 147. Section 48-2d-801 is enacted to read:
4317
4318 48-2d-801. Nonjudicial dissolution.
4319 Except as otherwise provided in Section 48-2d-802 , a limited partnership is dissolved,
4320 and its activities must be wound up, only upon the occurrence of any of the following:
4321 (1) the happening of an event specified in the partnership agreement;
4322 (2) the consent of all general partners and of limited partners owning a majority of the
4323 rights to receive distributions as limited partners at the time the consent is to be effective;
4324 (3) after the dissociation of a person as a general partner:
4325 (a) if the limited partnership has at least one remaining general partner, the consent to
4326 dissolve the limited partnership given within 90 days after the dissociation by partners owning
4327 a majority of the rights to receive distributions as partners at the time the consent is to be
4328 effective; or
4329 (b) if the limited partnership does not have a remaining general partner, the passage of
4330 90 days after the dissociation, unless before the end of the period:
4331 (i) consent to continue the activities of the limited partnership and admit at least one
4332 general partner is given by limited partners owning a majority of the rights to receive
4333 distributions as limited partners at the time the consent is to be effective; and
4334 (ii) at least one person is admitted as a general partner in accordance with the consent
4335
4336 partner;
4337 (4) the passage of 90 days after the dissociation of the limited partnership's last limited
4338 partner, unless before the end of the period the limited partnership admits at least one limited
4339 partner; or
4340 (5) the signing and filing of a declaration of dissolution by the division under
4341 Subsection 48-2d-809 (3).
4342 Section 148. Section 48-2d-802 is enacted to read:
4343 48-2d-802. Judicial dissolution.
4344 On application by a partner the court of appropriate jurisdiction may order dissolution
4345 of a limited partnership if it is not reasonably practicable to carry on the activities of the limited
4346 partnership in conformity with the partnership agreement.
4347 Section 149. Section 48-2d-803 is enacted to read:
4348 48-2d-803. Winding up.
4349 (1) A limited partnership continues after dissolution only for the purpose of winding up
4350 its activities.
4351 (2) In winding up its activities, the limited partnership:
4352 (a) may amend its certificate of limited partnership to state that the limited partnership
4353 is dissolved, preserve the limited partnership business or property as a going concern for a
4354 reasonable time, prosecute and defend actions and proceedings, whether civil, criminal, or
4355 administrative, transfer the limited partnership's property, settle disputes by mediation or
4356 arbitration, file a statement of termination as provided in Section 48-2d-203 , and perform other
4357 necessary acts; and
4358 (b) shall discharge the limited partnership's liabilities, settle and close the limited
4359 partnership's activities, and marshal and distribute the assets of the partnership.
4360 (3) If a dissolved limited partnership does not have a general partner, a person to wind
4361 up the dissolved limited partnership's activities may be appointed by the consent of limited
4362 partners owning a majority of the rights to receive distributions as limited partners at the time
4363 the consent is to be effective. A person appointed under this Subsection (3):
4364 (a) has the powers of a general partner under Section 48-2d-804 ; and
4365 (b) shall promptly amend the certificate of limited partnership to state:
4366
4367 (ii) the name of the person that has been appointed to wind up the limited partnership;
4368 and
4369 (iii) the street and mailing address of the person.
4370 (4) On the application of any partner, a district court may order judicial supervision of
4371 the winding up, including the appointment of a person to wind up the dissolved limited
4372 partnership's activities, if:
4373 (a) a limited partnership does not have a general partner and within a reasonable time
4374 following the dissolution no person has been appointed pursuant to Subsection (3); or
4375 (b) the applicant establishes other good cause.
4376 Section 150. Section 48-2d-804 is enacted to read:
4377 48-2d-804. Power of general partner and person dissociated as general partner to
4378 bind partnership after dissolution.
4379 (1) A limited partnership is bound by a general partner's act after dissolution which:
4380 (a) is appropriate for winding up the limited partnership's activities; or
4381 (b) would have bound the limited partnership under Section 48-2d-402 before
4382 dissolution, if, at the time the other party enters into the transaction, the other party does not
4383 have notice of the dissolution.
4384 (2) A person dissociated as a general partner binds a limited partnership through an act
4385 occurring after dissolution if:
4386 (a) at the time the other party enters into the transaction:
4387 (i) less than two years have passed since the dissociation; and
4388 (ii) the other party does not have notice of the dissociation and reasonably believes that
4389 the person is a general partner; and
4390 (b) the act:
4391 (i) is appropriate for winding up the limited partnership's activities; or
4392 (ii) would have bound the limited partnership under Section 48-2d-402 before
4393 dissolution and at the time the other party enters into the transaction the other party does not
4394 have notice of the dissolution.
4395 Section 151. Section 48-2d-805 is enacted to read:
4396 48-2d-805. Liability after dissolution of general partner and person dissociated as
4397
4398 general partner.
4399 (1) If a general partner having knowledge of the dissolution causes a limited
4400 partnership to incur an obligation under Subsection 48-2d-804 (1) by an act that is not
4401 appropriate for winding up the partnership's activities, the general partner is liable:
4402 (a) to the limited partnership for any damage caused to the limited partnership arising
4403 from the obligation; and
4404 (b) if another general partner or a person dissociated as a general partner is liable for
4405 the obligation, to that other general partner or person for any damage caused to that other
4406 general partner or person arising from the liability.
4407 (2) If a person dissociated as a general partner causes a limited partnership to incur an
4408 obligation under Subsection 48-2d-804 (2), the person is liable:
4409 (a) to the limited partnership for any damage caused to the limited partnership arising
4410 from the obligation; and
4411 (b) if a general partner or another person dissociated as a general partner is liable for
4412 the obligation, to the general partner or other person for any damage caused to the general
4413 partner or other person arising from the liability.
4414 Section 152. Section 48-2d-806 is enacted to read:
4415 48-2d-806. Known claims against dissolved limited partnership.
4416 (1) A dissolved limited partnership in winding up may dispose of the known claims
4417 against it by following the procedures described in this section.
4418 (2) A limited partnership in winding up that elects to dispose of known claims pursuant
4419 to this section may give written notice of the limited partnership 's dissolution to known
4420 claimants at any time after the effective date of the dissolution. The written notice must:
4421 (a) describe the information that must be included in a claim;
4422 (b) provide an address to which written notice of any claim must be given to the
4423 limited partnership;
4424 (c) state the deadline, which may not be fewer than 120 days after the effective date of
4425 the notice, by which the dissolved limited partnership must receive the claim; and
4426 (d) state that, unless sooner barred by another state statute limiting actions, the claim
4427 will be barred if not received by the deadline.
4428
4429 dissolved limited partnership is barred if:
4430 (a) a claimant was given notice under Subsection (2) and the claim is not received by
4431 the dissolved limited partnership by the deadline; or
4432 (b) the dissolved limited partnership delivers to the claimant written notice of rejection
4433 of the claim within 90 days after receipt of the claim and the claimant whose claim was
4434 rejected by the dissolved limited partnership does not commence a proceeding to enforce the
4435 claim within 90 days after the effective date of the rejection notice.
4436 (4) Claims that are not rejected by the dissolved limited partnership in writing within
4437 90 days after receipt of the claim by the dissolved limited partnership are considered approved.
4438 (5) The failure of the dissolved limited partnership to give notice to any known
4439 claimant pursuant to Subsection (2) does not affect the disposition under this section of any
4440 claim held by any other known claimant.
4441 (6) This section does not apply to a claim based on an event occurring after the
4442 effective date of dissolution or a liability that is contingent on that date.
4443 Section 153. Section 48-2d-807 is enacted to read:
4444 48-2d-807. Other claims against dissolved limited partnership.
4445 (1) A dissolved limited partnership may publish notice of its dissolution and request
4446 persons having claims against the limited partnership to present them in accordance with the
4447 notice.
4448 (2) The notice must:
4449 (a) be published:
4450 (i) at least once in a newspaper of general circulation in the county in which the
4451 dissolved limited partnership's principal office is located or, if it has none in this state, in Salt
4452 Lake County; and
4453 (ii) in accordance with Section 45-1-101 ;
4454 (b) describe the information required to be contained in a claim and provide a mailing
4455 address to which the claim is to be sent;
4456 (c) state that a claim against the limited partnership is barred unless an action to
4457 enforce the claim is commenced within five years after publication of the notice; and
4458 (d) unless the limited partnership has been throughout its existence a limited liability
4459
4460 any corresponding claim against any general partner or person dissociated as a general partner
4461 which is based on Section 48-2d-404 .
4462 (3) If a dissolved limited partnership publishes a notice in accordance with Subsection
4463 (2), the claim of each of the following claimants is barred unless the claimant commences an
4464 action to enforce the claim against the dissolved limited partnership within five years after the
4465 publication date of the notice:
4466 (a) a claimant that did not receive notice in a record under Section 48-2d-806 ;
4467 (b) a claimant whose claim was timely sent to the dissolved limited partnership but not
4468 acted on; and
4469 (c) a claimant whose claim is contingent or based on an event occurring after the
4470 effective date of dissolution.
4471 (4) A claim not barred under this section may be enforced:
4472 (a) against the dissolved limited partnership, to the extent of its undistributed assets;
4473 (b) if the assets have been distributed in liquidation, against a partner or transferee to
4474 the extent of that person's proportionate share of the claim or the limited partnership's assets
4475 distributed to the partner or transferee in liquidation, whichever is less, but a person's total
4476 liability for all claims under this Subsection (4)(b) does not exceed the total amount of assets
4477 distributed to the person as part of the winding up of the dissolved limited partnership; or
4478 (c) against any person liable on the claim under Section 48-2d-404 .
4479 Section 154. Section 48-2d-808 is enacted to read:
4480 48-2d-808. Liability of general partner and person dissociated as general partner
4481 when claim against limited partnership barred.
4482 If a claim against a dissolved limited partnership is barred under Section 48-2d-806 or
4483 48-2d-807 , any corresponding claim under Section 48-2d-404 is also barred.
4484 Section 155. Section 48-2d-809 is enacted to read:
4485 48-2d-809. Administrative dissolution.
4486 (1) The division may dissolve a limited partnership administratively if the limited
4487 partnership does not, within 60 days after the due date:
4488 (a) pay any fee, tax, or penalty due to the division under this chapter or other law; or
4489 (b) deliver its annual report to the division.
4490
4491 limited partnership, the division shall file a record of the determination and serve the limited
4492 partnership with a copy of the filed record.
4493 (3) If within 60 days after service of the copy the limited partnership does not correct
4494 each ground for dissolution or demonstrate to the reasonable satisfaction of the division that
4495 each ground determined by the division does not exist, the division shall administratively
4496 dissolve the limited partnership by preparing, signing, and filing a declaration of dissolution
4497 that states the grounds for dissolution. The division shall serve the limited partnership with a
4498 copy of the filed declaration.
4499 (4) A limited partnership administratively dissolved continues its existence but may
4500 carry on only activities necessary to wind up its activities and liquidate its assets under Sections
4501 48-2d-803 and 48-2d-812 and to notify claimants under Sections 48-2d-806 and 48-2d-807 .
4502 (5) The administrative dissolution of a limited partnership does not terminate the
4503 authority of its agent for service of process.
4504 Section 156. Section 48-2d-810 is enacted to read:
4505 48-2d-810. Reinstatement following administrative dissolution.
4506 (1) A limited partnership that has been administratively dissolved may apply to the
4507 division for reinstatement within two years after the effective date of dissolution. The
4508 application must be delivered to the division for filing and state:
4509 (a) the name of the limited partnership and the effective date of its administrative
4510 dissolution;
4511 (b) that the grounds for dissolution either did not exist or have been eliminated; and
4512 (c) that the limited partnership's name satisfies the requirements of Section 48-2d-108 .
4513 (2) If the division determines that an application contains the information required by
4514 Subsection (1) and that the information is correct, the division shall prepare a declaration of
4515 reinstatement that states this determination, sign and file the original of the declaration of
4516 reinstatement, and serve the limited partnership with a copy.
4517 (3) When reinstatement becomes effective, it relates back to and takes effect as of the
4518 effective date of the administrative dissolution and the limited partnership may resume its
4519 activities as if the administrative dissolution had never occurred.
4520 Section 157. Section 48-2d-811 is enacted to read:
4521
4522 (1) If the division denies a limited partnership's application for reinstatement following
4523 administrative dissolution, the division shall prepare, sign and file a notice that explains the
4524 reason or reasons for denial and serve the limited partnership with a copy of the notice.
4525 (2) Within 30 days after service of the notice of denial, the limited partnership may
4526 appeal from the denial of reinstatement by petitioning a district court to set aside the
4527 dissolution. The petition must be served on the division and contain a copy of the division's
4528 declaration of dissolution, the limited partnership's application for reinstatement, and the
4529 division's notice of denial.
4530 (3) The court may summarily order the division to reinstate the dissolved limited
4531 partnership or may take other action the court considers appropriate.
4532 Section 158. Section 48-2d-812 is enacted to read:
4533 48-2d-812. Disposition of assets -- When contributions required.
4534 (1) In winding up a limited partnership's activities, the assets of the limited partnership,
4535 including the contributions required by this section, must be applied to satisfy the limited
4536 partnership's obligations to creditors, including, to the extent permitted by law, partners that are
4537 creditors.
4538 (2) Any surplus remaining after the limited partnership complies with Subsection (1)
4539 must be paid in cash as a distribution.
4540 (3) If a limited partnership's assets are insufficient to satisfy all of its obligations under
4541 Subsection (1), with respect to each unsatisfied obligation incurred when the limited
4542 partnership was not a limited liability limited partnership, the following rules apply:
4543 (a) Each person that was a general partner when the obligation was incurred and that
4544 has not been released from the obligation under Section 48-2d-607 shall contribute to the
4545 limited partnership for the purpose of enabling the limited partnership to satisfy the obligation.
4546 The contribution due from each of those persons is in proportion to the right to receive
4547 distributions in the capacity of general partner in effect for each of those persons when the
4548 obligation was incurred.
4549 (b) If a person does not contribute the full amount required under Subsection (3)(a)
4550 with respect to an unsatisfied obligation of the limited partnership, the other persons required
4551 to contribute by Subsection (3)(a) on account of the obligation shall contribute the additional
4552
4553 those other persons is in proportion to the right to receive distributions in the capacity of
4554 general partner in effect for each of those other persons when the obligation was incurred.
4555 (c) If a person does not make the additional contribution required by Subsection (3)(b),
4556 further additional contributions are determined and due in the same manner as provided in
4557 Subsection (3)(b).
4558 (4) A person that makes an additional contribution under Subsection (3)(b) or (c) may
4559 recover from any person whose failure to contribute under Subsection (3)(a) or (b) necessitated
4560 the additional contribution. A person may not recover under this Subsection (4) more than the
4561 amount additionally contributed. A person's liability under this Subsection (4) may not exceed
4562 the amount the person failed to contribute.
4563 (5) The estate of a deceased individual is liable for the person's obligations under this
4564 section.
4565 (6) An assignee for the benefit of creditors of a limited partnership or a partner, or a
4566 person appointed by a court to represent creditors of a limited partnership or a partner, may
4567 enforce a person's obligation to contribute under Subsection (3).
4568 Section 159. Section 48-2d-901 is enacted to read:
4569
4570 48-2d-901. Governing law.
4571 (1) The laws of the state or other jurisdiction under which a foreign limited partnership
4572 is organized govern relations among the partners of the foreign limited partnership and between
4573 the partners and the foreign limited partnership and the liability of partners as partners for an
4574 obligation of the foreign limited partnership.
4575 (2) A foreign limited partnership may not be denied a certificate of authority by reason
4576 of any difference between the laws of the jurisdiction under which the foreign limited
4577 partnership is organized and the laws of this state.
4578 (3) A certificate of authority does not authorize a foreign limited partnership to engage
4579 in any business or exercise any power that a limited partnership may not engage in or exercise
4580 in this state.
4581 (4) (a) The division may permit a tribal limited partnership to register with the division
4582 in the same manner as a foreign limited partnership formed in another state.
4583
4584 chapter, the tribal limited partnership shall be treated in the same manner as a foreign limited
4585 partnership formed under the laws of another state.
4586 Section 160. Section 48-2d-902 is enacted to read:
4587 48-2d-902. Application for certificate of authority.
4588 (1) A foreign limited partnership may apply for a certificate of authority to transact
4589 business in this state by delivering an application to the division for filing. The application
4590 must state:
4591 (a) the name of the foreign limited partnership and, if the name does not comply with
4592 Section 48-2d-108 , an alternate name adopted pursuant to Subsection 48-2d-905 (1).
4593 (b) the name of the state or other jurisdiction under whose law the foreign limited
4594 partnership is organized;
4595 (c) the street and mailing address of the foreign limited partnership's principal office
4596 and, if the laws of the jurisdiction under which the foreign limited partnership is organized
4597 require the foreign limited partnership to maintain an office in that jurisdiction, the street and
4598 mailing address of the required office;
4599 (d) the information required by Subsection 16-17-203 (1);
4600 (e) the name and street and mailing address of each of the foreign limited partnership's
4601 general partners; and
4602 (f) whether the foreign limited partnership is a foreign limited liability limited
4603 partnership.
4604 (2) A foreign limited partnership shall deliver with the completed application a
4605 certificate of existence or a record of similar import signed by the division or other official
4606 having custody of the foreign limited partnership's publicly filed records in the state or other
4607 jurisdiction under whose law the foreign limited partnership is organized.
4608 Section 161. Section 48-2d-903 is enacted to read:
4609 48-2d-903. Activities not constituting transacting business.
4610 (1) Activities of a foreign limited partnership which do not constitute transacting
4611 business in this state within the meaning of this part include:
4612 (a) maintaining, defending, and settling an action or proceeding;
4613 (b) holding meetings of its partners or carrying on any other activity concerning its
4614
4615 (c) maintaining accounts in financial institutions;
4616 (d) maintaining offices or agencies for the transfer, exchange, and registration of the
4617 foreign limited partnership's own securities or maintaining trustees or depositories with respect
4618 to those securities;
4619 (e) selling through independent contractors;
4620 (f) soliciting or obtaining orders, whether by mail or electronic means or through
4621 employees or agents or otherwise, if the orders require acceptance outside this state before they
4622 become contracts;
4623 (g) creating or acquiring indebtedness, mortgages, or security interests in real or
4624 personal property;
4625 (h) securing or collecting debts or enforcing mortgages or other security interests in
4626 property securing the debts, and holding, protecting, and maintaining property so acquired;
4627 (i) conducting an isolated transaction that is completed within 30 days and is not one in
4628 the course of similar transactions of a like manner; and
4629 (j) transacting business in interstate commerce.
4630 (2) For purposes of this part, the ownership in this state of income-producing real
4631 property or tangible personal property, other than property excluded under Subsection (1),
4632 constitutes transacting business in this state.
4633 (3) This section does not apply in determining the contacts or activities that may
4634 subject a foreign limited partnership to service of process, taxation, or regulation under any
4635 other law of this state.
4636 Section 162. Section 48-2d-904 is enacted to read:
4637 48-2d-904. Filing of certificate of authority.
4638 Unless the division determines that an application for a certificate of authority does not
4639 comply with the filing requirements of this chapter, the division, upon payment of all filing
4640 fees, shall file the application, prepare, sign and file a certificate of authority to transact
4641 business in this state, and send a copy of the filed certificate, together with a receipt for the
4642 fees, to the foreign limited partnership or its representative.
4643 Section 163. Section 48-2d-905 is enacted to read:
4644 48-2d-905. Noncomplying name of foreign limited partnership.
4645
4646 may not obtain a certificate of authority until it adopts, for the purpose of transacting business
4647 in this state, an alternate name that complies with Section 48-2d-108 . A foreign limited
4648 partnership that adopts an alternate name under this Subsection (1) and then obtains a
4649 certificate of authority with the name need not comply with Title 42, Chapter 2, Conducting
4650 Business Under Assumed Name. After obtaining a certificate of authority with an alternate
4651 name, a foreign limited partnership shall transact business in this state under the name unless
4652 the foreign limited partnership is authorized under Title 42, Chapter 2, Conducting Business
4653 Under Assumed Name, to transact business in this state under another name.
4654 (2) If a foreign limited partnership authorized to transact business in this state changes
4655 its name to one that does not comply with Section 48-2d-108 , it may not thereafter transact
4656 business in this state until it complies with Subsection (1) and obtains an amended certificate of
4657 authority.
4658 Section 164. Section 48-2d-906 is enacted to read:
4659 48-2d-906. Revocation of certificate of authority.
4660 (1) A certificate of authority of a foreign limited partnership to transact business in this
4661 state may be revoked by the division in the manner provided in Subsections (2) and (3) if the
4662 foreign limited partnership does not:
4663 (a) pay, within 60 days after the due date, any fee, tax, or penalty due to the division
4664 under this chapter or other law;
4665 (b) deliver to the division, within 60 days after the due date, its annual report required
4666 under Section 48-2d-210 ;
4667 (c) appoint and maintain an agent for service of process as required by Subsection
4668 16-17-203 (1); or
4669 (d) deliver to the division for filing a statement of a change under Section 16-17-206
4670 within 30 days after a change has occurred in the name or address of the agent.
4671 (2) To revoke a certificate of authority, the division must prepare, sign, and file a
4672 notice of revocation and send a copy to the foreign limited partnership's agent for service of
4673 process in this state, or if the foreign limited partnership does not appoint and maintain a
4674 proper agent in this state, to the foreign limited partnership's principal office. The notice must
4675 state:
4676
4677 division sends the copy; and
4678 (b) the foreign limited partnership's failures to comply with Subsection (1) which are
4679 the reason for the revocation.
4680 (3) The authority of the foreign limited partnership to transact business in this state
4681 ceases on the effective date of the notice of revocation unless before that date the foreign
4682 limited partnership cures each failure to comply with Subsection (1) stated in the notice. If the
4683 foreign limited partnership cures the failures, the division shall so indicate on the filed notice.
4684 Section 165. Section 48-2d-907 is enacted to read:
4685 48-2d-907. Cancellation of certificate of authority -- Effect of failure to have
4686 certificate.
4687 (1) In order to cancel its certificate of authority to transact business in this state, a
4688 foreign limited partnership must deliver to the division for filing a notice of cancellation. The
4689 certificate is canceled when the notice becomes effective under Section 48-2d-206 .
4690 (2) A foreign limited partnership transacting business in this state may not maintain an
4691 action or proceeding in this state unless it has a certificate of authority to transact business in
4692 this state.
4693 (3) The failure of a foreign limited partnership to have a certificate of authority to
4694 transact business in this state does not impair the validity of a contract or act of the foreign
4695 limited partnership or prevent the foreign limited partnership from defending an action or
4696 proceeding in this state.
4697 (4) A partner of a foreign limited partnership is not liable for the obligations of the
4698 foreign limited partnership solely by reason of the foreign limited partnership's having
4699 transacted business in this state without a certificate of authority.
4700 (5) If a foreign limited partnership transacts business in this state without a certificate
4701 of authority or cancels its certificate of authority, service of process for rights of action arising
4702 out of the transaction of business in this state shall be served in accordance with Section
4703 16-17-301 .
4704 Section 166. Section 48-2d-908 is enacted to read:
4705 48-2d-908. Action by attorney general.
4706 The attorney general may maintain an action to restrain a foreign limited partnership
4707
4708 Section 167. Section 48-2d-1001 is enacted to read:
4709
4710 48-2d-1001. Direct action by partner.
4711 (1) Subject to Subsection (2), a partner may maintain a direct action against the limited
4712 partnership or another partner for legal or equitable relief, with or without an accounting as to
4713 the partnership's activities, to enforce the rights and otherwise protect the interests of the
4714 partner, including rights and interests under the partnership agreement or this chapter or arising
4715 independently of the partnership relationship.
4716 (2) A partner commencing a direct action under this section is required to plead and
4717 prove an actual or threatened injury that is not solely the result of an injury suffered or
4718 threatened to be suffered by the limited partnership.
4719 (3) The accrual of, and any time limitation on, a right of action for a remedy under this
4720 section is governed by other law. A right to an accounting upon a dissolution and winding up
4721 does not revive a claim barred by law.
4722 Section 168. Section 48-2d-1002 is enacted to read:
4723 48-2d-1002. Derivative action.
4724 A partner may maintain a derivative action to enforce a right of a limited partnership if:
4725 (1) the partner first makes a demand on the general partners, requesting that they cause
4726 the limited partnership to bring an action to enforce the right, and the general partners do not
4727 bring the action within a reasonable time; or
4728 (2) a demand would be futile.
4729 Section 169. Section 48-2d-1003 is enacted to read:
4730 48-2d-1003. Proper plaintiff.
4731 A derivative action may be maintained only by a person that is a partner at the time the
4732 action is commenced and:
4733 (1) that was a partner when the conduct giving rise to the action occurred; or
4734 (2) whose status as a partner devolved upon the person by operation of law or pursuant
4735 to the terms of the partnership agreement from a person that was a partner at the time of the
4736 conduct.
4737 Section 170. Section 48-2d-1004 is enacted to read:
4738
4739 In a derivative action, the complaint must state with particularity:
4740 (1) the date and content of plaintiff's demand and the general partners' response to the
4741 demand; or
4742 (2) why demand should be excused as futile.
4743 Section 171. Section 48-2d-1005 is enacted to read:
4744 48-2d-1005. Proceeds and expenses.
4745 (1) Except as otherwise provided in Subsection (2):
4746 (a) any proceeds or other benefits of a derivative action, whether by judgment,
4747 compromise, or settlement, belong to the limited partnership and not to the derivative plaintiff;
4748 and
4749 (b) if the derivative plaintiff receives any proceeds, the derivative plaintiff shall
4750 immediately remit them to the limited partnership.
4751 (2) If a derivative action is successful in whole or in part, the court may award the
4752 plaintiff reasonable expenses, including reasonable attorney fees, from the recovery of the
4753 limited partnership.
4754 Section 172. Section 48-2d-1101 is enacted to read:
4755
4756 48-2d-1101. Definitions.
4757 In this part:
4758 (1) "Constituent limited partnership" means a constituent organization that is a limited
4759 partnership.
4760 (2) "Constituent organization" means an organization that is party to a merger.
4761 (3) "Converted organization" means the organization into which a converting
4762 organization converts pursuant to Sections 48-2d-1106 through 48-2d-1109 .
4763 (4) "Converting limited partnership" means a converting organization that is a limited
4764 partnership.
4765 (5) "Converting organization" means an organization that converts into another
4766 organization pursuant to Section 48-2d-1106 .
4767 (6) "Domesticated limited partnership" means a limited partnership that exists after a
4768 domesticating foreign limited partnership or limited partnership effects a domestication
4769
4770 (7) "Domesticating limited partnership" means a limited partnership that effects a
4771 domestication pursuant to Sections 48-2d-1110 through 48-2d-1113 .
4772 (8) "Foreign limited partnership" means a limited partnership that:
4773 (a) has its chief executive office in a jurisdiction other than this state; or
4774 (b) specified in its partnership agreement that relations among the partners and between
4775 the partners and the limited partnership will be governed by the law of a jurisdiction other than
4776 this state.
4777 (9) "Governing statute" means the statute that governs an organization's internal affairs.
4778 (10) (a) "Organization" means:
4779 (i) a general partnership, including a limited liability partnership;
4780 (ii) a limited partnership, including a limited liability limited partnership;
4781 (iii) a limited liability company;
4782 (iv) a business trust;
4783 (v) a corporation; or
4784 (vi) any other person having a governing statute.
4785 (b) "Organization" includes a domestic or foreign organization regardless of whether
4786 organized for profit.
4787 (11) "Organizational documents" means:
4788 (a) for a domestic or foreign general partnership, its partnership agreement;
4789 (b) for a limited partnership or foreign limited partnership, its certificate of limited
4790 partnership and partnership agreement;
4791 (c) for a domestic or foreign limited liability company, its certificate or articles of
4792 organization and operating agreement, or comparable records as provided in its governing
4793 statute;
4794 (d) for a business trust, its agreement of trust and declaration of trust;
4795 (e) for a domestic or foreign corporation for profit, its articles of incorporation, bylaws,
4796 and other agreements among its shareholders which are authorized by its governing statute, or
4797 comparable records as provided in its governing statute; and
4798 (f) for any other organization, the basic records that create the organization and
4799 determine its internal governance and the relations among the persons that own it, have an
4800
4801 (12) "Personal liability" means liability for a debt, obligation, or other liability of an
4802 organization which is imposed on a person that co-owns, has an interest in, or is a member of
4803 the organization:
4804 (a) by the governing statute solely by reason of the person co-owning, having an
4805 interest in, or being a member of the organization; or
4806 (b) by the organization's organizational documents under a provision of the governing
4807 statute authorizing those documents to make one or more specified persons liable for all or
4808 specified debts, obligations, or other liabilities of the organization solely by reason of the
4809 person or persons co-owning, having an interest in, or being a member of the organization.
4810 (13) "Surviving organization" means an organization into which one or more other
4811 organizations are merged whether the organization preexisted the merger or was created by the
4812 merger.
4813 Section 173. Section 48-2d-1102 is enacted to read:
4814 48-2d-1102. Merger.
4815 (1) A limited partnership may merge with one or more other constituent organizations
4816 pursuant to this section, Sections 48-2d-1103 through 48-2d-1105 , and a plan of merger, if:
4817 (a) the governing statute of each of the other organizations authorizes the merger;
4818 (b) the merger is not prohibited by the law of a jurisdiction that enacted any of the
4819 governing statutes; and
4820 (c) each of the other organizations complies with its governing statute in effecting the
4821 merger.
4822 (2) A plan of merger must be in a record and must include:
4823 (a) the name and form of each constituent organization;
4824 (b) the name and form of the surviving organization and, if the surviving organization
4825 is to be created by the merger, a statement to that effect;
4826 (c) the terms and conditions of the merger, including the manner and basis for
4827 converting the interests in each constituent organization into any combination of money,
4828 interests in the surviving organization, and other consideration;
4829 (d) if the surviving organization is to be created by the merger, the surviving
4830 organization's organizational documents that are proposed to be in a record; and
4831
4832 be made by the merger to the surviving organization's organizational documents that are, or are
4833 proposed to be, in a record.
4834 Section 174. Section 48-2d-1103 is enacted to read:
4835 48-2d-1103. Action on plan of merger by constituent partnership.
4836 (1) Subject to Section 48-2d-1114 , a plan of merger must be consented to by all the
4837 partners of a constituent limited partnership.
4838 (2) Subject to Section 48-2d-1114 and any contractual rights, after a merger is
4839 approved, and at any time before articles of merger are delivered to the division for filing under
4840 Section 48-2d-1104 , a constituent limited partnership may amend the plan or abandon the
4841 merger:
4842 (a) as provided in the plan; or
4843 (b) except as otherwise prohibited in the plan, with the same consent as was required to
4844 approve the plan.
4845 Section 175. Section 48-2d-1104 is enacted to read:
4846 48-2d-1104. Filings required and permitted for merger -- Effective date.
4847 (1) After each constituent organization has approved a merger, articles of merger must
4848 be signed on behalf of:
4849 (a) each constituent limited partnership, by each general partner listed in the certificate
4850 of limited partnership; and
4851 (b) each other constituent organization, as provided in its governing statute.
4852 (2) Articles of merger under this section must include:
4853 (a) the name and form of each constituent organization and the jurisdiction of its
4854 governing statute;
4855 (b) the name and form of the surviving organization, the jurisdiction of its governing
4856 statute, and, if the surviving organization is created by the merger, a statement to that effect;
4857 (c) the date the merger is effective under the governing statute of the surviving
4858 organization;
4859 (d) if the surviving organization is to be created by the merger:
4860 (i) if it will be a limited partnership, the limited partnership's certificate of limited
4861 partnership; or
4862
4863 document that creates the organization that is in a public record;
4864 (e) if the surviving organization preexists the merger, any amendments provided for in
4865 the plan of merger for the organizational document that created the organization that are in a
4866 public record;
4867 (f) a statement as to each constituent organization that the merger was approved as
4868 required by the organization's governing statute;
4869 (g) if the surviving organization is a foreign organization not authorized to transact
4870 business in this state, the street and mailing addresses of an office that may be used for service
4871 of process under Section 48-2d-1105 (2); and
4872 (h) any additional information required by the governing statute of any constituent
4873 organization.
4874 (3) Each constituent limited partnership shall deliver the articles of merger for filing in
4875 the division.
4876 (4) A merger becomes effective under this part:
4877 (a) if the surviving organization is a limited partnership, upon the later of:
4878 (i) compliance with Subsection (3); or
4879 (ii) subject to Subsection 48-2d-206 (3), as specified in the articles of merger; or
4880 (b) if the surviving organization is not a limited partnership, as provided by the
4881 governing statute of the surviving organization.
4882 Section 176. Section 48-2d-1105 is enacted to read:
4883 48-2d-1105. Effect of merger.
4884 (1) When a merger becomes effective:
4885 (a) the surviving organization continues or comes into existence;
4886 (b) each constituent organization that merges into the surviving organization ceases to
4887 exist as a separate entity;
4888 (c) all property owned by each constituent organization that ceases to exist vests in the
4889 surviving organization;
4890 (d) all debts, obligations, or other liabilities of each constituent organization that ceases
4891 to exist continue as debts, obligations, or other liabilities of the surviving organization;
4892 (e) an action or proceeding pending by or against any constituent organization that
4893
4894 (f) except as prohibited by other law, all of the rights, privileges, immunities, powers,
4895 and purposes of each constituent organization that ceases to exist vest in the surviving
4896 organization;
4897 (g) except as otherwise provided in the plan of merger, the terms and conditions of the
4898 plan of merger take effect; and
4899 (h) except as otherwise agreed, if a constituent limited partnership ceases to exist, the
4900 merger does not dissolve the limited partnership for the purposes of Part 8, Dissolution;
4901 (i) if the surviving organization is created by the merger:
4902 (i) if it is a limited partnership, the certificate of limited partnership becomes effective;
4903 or
4904 (ii) if it is an organization other than a limited partnership, the organizational document
4905 that creates the organization becomes effective; and
4906 (j) if the surviving organization preexisted the merger, any amendments provided for in
4907 the articles of merger for the organizational document that created the organization become
4908 effective.
4909 (2) A surviving organization that is a foreign organization consents to the jurisdiction
4910 of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent
4911 organization, if before the merger the constituent organization was subject to suit in this state
4912 on the debt, obligation, or other liability. A surviving organization that is a foreign
4913 organization and not authorized to transact business in this state may be served with process at
4914 the address required in the articles of merger under 48-2d-1104 (2)(g).
4915 Section 177. Section 48-2d-1106 is enacted to read:
4916 48-2d-1106. Conversion.
4917 (1) An organization other than a partnership or a foreign partnership may convert to a
4918 limited partnership, and a limited partnership may convert to an organization other than a
4919 foreign partnership pursuant to this section, Sections 48-2d-1107 through 48-2d-1109 , and a
4920 plan of conversion, if:
4921 (a) the other organization's governing statute authorizes the conversion;
4922 (b) the conversion is not prohibited by the law of the jurisdiction that enacted the other
4923 organization's governing statute; and
4924
4925 conversion.
4926 (2) A plan of conversion must be in a record and must include:
4927 (a) the name and form of the organization before conversion;
4928 (b) the name and form of the organization after conversion;
4929 (c) the terms and conditions of the conversion, including the manner and basis for
4930 converting interests in the converting organization into any combination of money, interests in
4931 the converted organization, and other consideration; and
4932 (d) the organizational documents of the converted organization that are, or are
4933 proposed to be, in a record.
4934 Section 178. Section 48-2d-1107 is enacted to read:
4935 48-2d-1107. Action on plan of conversion by converting partnership.
4936 (1) Subject to Section 48-2d-1114 , a plan of conversion must be consented to by all the
4937 partners of a converting limited partnership.
4938 (2) Subject to Section 48-2d-1114 and any contractual rights, after a conversion is
4939 approved, and at any time before articles of conversion are delivered to the division for filing
4940 under Section 48-2d-1108 , a converting limited partnership may amend the plan or abandon the
4941 conversion:
4942 (a) as provided in the plan; or
4943 (b) except as otherwise prohibited in the plan, by the same consent as was required to
4944 approve the plan.
4945 Section 179. Section 48-2d-1108 is enacted to read:
4946 48-2d-1108. Filings required for conversion -- Effective date.
4947 (1) After a plan of conversion is approved:
4948 (a) a converting limited partnership shall deliver to the division for filing articles of
4949 conversion and must include:
4950 (i) a statement that the limited partnership has been converted into another
4951 organization;
4952 (ii) the name and form of the converted organization and the jurisdiction of its
4953 governing statute;
4954 (iii) the date the conversion is effective under the governing statute of the converted
4955
4956 (iv) a statement that the conversion was approved as required by this chapter;
4957 (v) a statement that the conversion is authorized by the governing statute of the
4958 converted organization; and
4959 (vi) if the converted organization is a foreign organization not authorized to transact
4960 business in this state, the street and mailing addresses of an office that may be used for
4961 purposes of Subsection 48-2d-1109 (3); and
4962 (b) if the converting organization is not a converting limited partnership, the converting
4963 organization shall deliver to the division for filing articles of conversion, which must include:
4964 (i) a statement that the converted organization was converted from another
4965 organization, and whether the converted organization is a partnership or a limited liability
4966 partnership;
4967 (ii) the name and form of that converting organization and the jurisdiction of its
4968 governing statute; and
4969 (iii) a statement that the conversion was approved in a manner that complied with the
4970 converting organization's governing statute.
4971 (2) A conversion becomes effective:
4972 (a) if the converted organization is a limited partnership, when the certificate of limited
4973 partnership takes effect; or
4974 (b) if the converted organization is not a limited partnership, as provided by the
4975 governing statute of the converted organization.
4976 Section 180. Section 48-2d-1109 is enacted to read:
4977 48-2d-1109. Effect of conversion.
4978 (1) An organization that has been converted pursuant to this part is for all purposes the
4979 same entity that existed before the conversion.
4980 (2) When a conversion takes effect:
4981 (a) all property owned by the converting organization remains vested in the converted
4982 organization;
4983 (b) all debts, obligations, or other liabilities of the converting organization continue as
4984 debts, obligations, or other liabilities of the converted organization;
4985 (c) an action or proceeding pending by or against the converting organization may be
4986
4987 (d) except as prohibited by law other than this chapter, all of the rights, privileges,
4988 immunities, powers, and purposes of the converting organization remain vested in the
4989 converted organization;
4990 (e) except as otherwise provided in the plan of conversion, the terms and conditions of
4991 the plan of conversion take effect; and
4992 (f) except as otherwise agreed, the conversion does not dissolve a converting limited
4993 partnership for the purposes of Part 8, Dissolution.
4994 (3) A converted organization that is a foreign organization consents to the jurisdiction
4995 of the courts of this state to enforce any debt, obligation, or other liability for which the
4996 converting limited partnership is liable if, before the conversion, the converting limited
4997 partnership was subject to suit in this state on the debt, obligation, or other liability. A
4998 converted organization that is a foreign organization and not authorized to transact business in
4999 this state may be served with process at the address required in the articles of conversion under
5000 Subsection 48-2d-1108 (1)(a)(vi).
5001 Section 181. Section 48-2d-1110 is enacted to read:
5002 48-2d-1110. Domestication.
5003 (1) A foreign limited partnership may become a limited partnership pursuant to this
5004 section, Sections 48-2d-1111 through 48-2d-1113 , and a plan of domestication, if:
5005 (a) the foreign limited partnership's governing statute authorizes the domestication;
5006 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
5007 governing statute; and
5008 (c) the foreign limited partnership complies with its governing statute in effecting the
5009 domestication.
5010 (2) A limited partnership may become a foreign limited partnership pursuant to this
5011 section, Sections 48-2d-1111 through 48-2d-1113 , and a plan of domestication, if:
5012 (a) the foreign limited partnership's governing statute authorizes the domestication;
5013 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
5014 governing statute; and
5015 (c) the foreign limited partnership complies with its governing statute in effecting the
5016 domestication.
5017
5018 (a) the name of the domesticating limited partnership before domestication and the
5019 jurisdiction of its governing statute;
5020 (b) the name of the domesticated limited partnership after domestication and the
5021 jurisdiction of its governing statute;
5022 (c) the terms and conditions of the domestication, including the manner and basis for
5023 converting interests in the domesticating limited partnership into any combination of money,
5024 interests in the domesticated limited partnership, and other consideration; and
5025 (d) the organizational documents of the domesticated limited partnership that are, or
5026 are proposed to be, in a record.
5027 Section 182. Section 48-2d-1111 is enacted to read:
5028 48-2d-1111. Action on plan of domestication by domesticating partnership.
5029 (1) A plan of domestication must be consented to:
5030 (a) by all the partners, subject to Section 48-2d-1114 , if the domesticating limited
5031 partnership is a limited partnership; and
5032 (b) as provided in the domesticating limited partnership's governing statute, if the
5033 limited partnership is a foreign limited partnership.
5034 (2) Subject to any contractual rights, after a domestication is approved, and at any time
5035 before articles of domestication are delivered to the division for filing under Section
5036 48-2d-1112 , a domesticating limited partnership may amend the plan or abandon the
5037 domestication:
5038 (a) as provided in the plan; or
5039 (b) except as otherwise prohibited in the plan, by the same consent as was required to
5040 approve the plan.
5041 Section 183. Section 48-2d-1112 is enacted to read:
5042 48-2d-1112. Filings required for domestication -- Effective date.
5043 (1) After a plan of domestication is approved, a domesticating limited partnership shall
5044 deliver to the division for filing articles of domestication, which must include:
5045 (a) a statement, as the case may be, that the limited partnership has been domesticated
5046 from or into another jurisdiction;
5047 (b) the name of the domesticating limited partnership and the jurisdiction of its
5048
5049 (c) the name of the domesticated limited partnership and the jurisdiction of its
5050 governing statute;
5051 (d) the date the domestication is effective under the governing statute of the
5052 domesticated limited partnership;
5053 (e) if the domesticating limited partnership was a limited partnership, a statement that
5054 the domestication was approved as required by this chapter;
5055 (f) if the domesticating limited partnership was a foreign limited partnership, a
5056 statement that the domestication was approved as required by the governing statute of the other
5057 jurisdiction; and
5058 (g) if the domesticated limited partnership is a foreign limited partnership not
5059 authorized to transact business in this state, the street and mailing addresses of an office that
5060 the division may use for the purposes of Subsection 48-2d-1113 (2).
5061 (2) A domestication becomes effective:
5062 (a) upon the filing of the statement of qualification pursuant to Section 48-2d-1001 or
5063 on the date provided therein, whichever is later, if the domesticated limited partnership is a
5064 limited partnership; and
5065 (b) according to the governing statute of the domesticated limited partnership, if it is a
5066 foreign limited partnership.
5067 Section 184. Section 48-2d-1113 is enacted to read:
5068 48-2d-1113. Effect of domestication.
5069 (1) When a domestication takes effect:
5070 (a) the domesticated limited partnership is for all purposes the limited partnership that
5071 existed before the domestication;
5072 (b) all property owned by the domesticating limited partnership remains vested in the
5073 domesticated limited partnership;
5074 (c) all debts, obligations, or other liabilities of the domesticating limited partnership
5075 continue as debts, obligations, or other liabilities of the domesticated limited partnership;
5076 (d) an action or proceeding pending by or against a domesticating limited partnership
5077 may be continued as if the domestication had not occurred;
5078 (e) except as prohibited by other law, all of the rights, privileges, immunities, powers,
5079
5080 limited partnership;
5081 (f) except as otherwise provided in the plan of domestication, the terms and conditions
5082 of the plan of domestication take effect; and
5083 (g) except as otherwise agreed, the domestication does not dissolve a domesticating
5084 limited partnership for the purposes of Part 8, Dissolution.
5085 (2) A domesticated limited partnership that is a foreign limited partnership consents to
5086 the jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed
5087 by the domesticating limited partnership, if, before the domestication, the domesticating
5088 limited partnership was subject to suit in this state on the debt, obligation, or other liability. A
5089 domesticated limited partnership that is a foreign limited partnership and not authorized to
5090 transact business in this state may be served with process at the address required in the articles
5091 of domestication under Subsection 48-2d-1112 (1)(g).
5092 (3) If a limited partnership has adopted and approved a plan of domestication under
5093 Section 48-2d-1110 providing for the limited partnership to be domesticated in a foreign
5094 jurisdiction, a statement pursuant to Subsection 48-2d-907 cancelling the limited partnership's
5095 certificate of authority must be delivered to the division for filing setting forth:
5096 (a) the name of the limited partnership;
5097 (b) a statement that the limited partnership's certificate of authority is being cancelled
5098 in connection with the domestication of the limited partnership in a foreign jurisdiction;
5099 (c) a statement the domestication was approved as required by this chapter; and
5100 (d) the jurisdiction of formation of the domesticated foreign limited partnership.
5101 Section 185. Section 48-2d-1114 is enacted to read:
5102 48-2d-1114. Restrictions on approval of mergers, conversions, and domestications
5103 -- Relinquishing limited liability partnership status.
5104 (1) If a partner of a constituent, converting, or domesticating limited partnership will
5105 have personal liability with respect to a surviving, converted, or domesticated organization,
5106 approval or amendment of a plan of merger, conversion, or domestication is ineffective without
5107 the consent of the partner, unless:
5108 (a) the limited partnership's partnership agreement provides for approval of a merger,
5109 conversion, or domestication with the consent of fewer than all the partners; and
5110
5111 (2) An amendment to a certificate of limited partnership which deletes a statement that
5112 the limited partnership is a limited liability limited partnership is ineffective without the
5113 consent of each general partner unless:
5114 (a) the limited partnership's partnership agreement provides for the amendment with
5115 the consent of less than all the general partners; and
5116 (b) each general partner that does not consent to the amendment has consented to the
5117 provision of the partnership agreement.
5118 (3) A partner does not give the consent required by Subsection (1) or (2) merely by
5119 consenting to a provision of the partnership agreement that permits the partnership agreement
5120 to be amended with the consent of fewer than all the partners.
5121 Section 186. Section 48-2d-1115 is enacted to read:
5122 48-2d-1115. Liability of general partner after conversion or merger.
5123 (1) A conversion or merger under this part does not discharge any liability under
5124 Sections 48-2d-404 and 48-2d-607 of a person that was a general partner in or dissociated as a
5125 general partner from a converting or constituent limited partnership, but:
5126 (a) the provisions of this chapter pertaining to the collection or discharge of the liability
5127 continue to apply to the liability;
5128 (b) for the purposes of applying those provisions, the converted or surviving
5129 organization is deemed to be the converting or constituent limited partnership; and
5130 (c) if a person is required to pay any amount under this Subsection (1):
5131 (i) the person has a right of contribution from each other person that was liable as a
5132 general partner under Section 48-2d-404 when the obligation was incurred and has not been
5133 released from the obligation under Section 48-2d-607 ; and
5134 (ii) the contribution due from each of those persons is in proportion to the right to
5135 receive distributions in the capacity of general partner in effect for each of those persons when
5136 the obligation was incurred.
5137 (2) In addition to any other liability provided by law:
5138 (a) a person that immediately before a conversion or merger became effective was a
5139 general partner in a converting or constituent limited partnership that was not a limited liability
5140 limited partnership is personally liable for each obligation of the converted or surviving
5141
5142 becomes effective, if, at the time the third party enters into the transaction, the third party:
5143 (i) does not have notice of the conversion or merger; and
5144 (ii) reasonably believes that:
5145 (A) the converted or surviving business is the converting or constituent limited
5146 partnership;
5147 (B) the converting or constituent limited partnership is not a limited liability limited
5148 partnership; and
5149 (C) the person is a general partner in the converting or constituent limited partnership;
5150 and
5151 (b) a person that was dissociated as a general partner from a converting or constituent
5152 limited partnership before the conversion or merger became effective is personally liable for
5153 each obligation of the converted or surviving organization arising from a transaction with a
5154 third party after the conversion or merger becomes effective, if:
5155 (i) immediately before the conversion or merger became effective the converting or
5156 surviving limited partnership was a not a limited liability limited partnership; and
5157 (ii) at the time the third party enters into the transaction less than two years have passed
5158 since the person dissociated as a general partner and the third party:
5159 (A) does not have notice of the dissociation;
5160 (B) does not have notice of the conversion or merger; and
5161 (C) reasonably believes that the converted or surviving organization is the converting
5162 or constituent limited partnership, the converting or constituent limited partnership is not a
5163 limited liability limited partnership, and the person is a general partner in the converting or
5164 constituent limited partnership.
5165 Section 187. Section 48-2d-1116 is enacted to read:
5166 48-2d-1116. Power of general partners and persons dissociated as general
5167 partners to bind organization after conversion or merger.
5168 (1) An act of a person that immediately before a conversion or merger became effective
5169 was a general partner in a converting or constituent limited partnership binds the converted or
5170 surviving organization after the conversion or merger becomes effective, if:
5171 (a) before the conversion or merger became effective, the act would have bound the
5172
5173 (b) at the time the third party enters into the transaction, the third party:
5174 (i) does not have notice of the conversion or merger; and
5175 (ii) reasonably believes that the converted or surviving business is the converting or
5176 constituent limited partnership and that the person is a general partner in the converting or
5177 constituent limited partnership.
5178 (2) An act of a person that before a conversion or merger became effective was
5179 dissociated as a general partner from a converting or constituent limited partnership binds the
5180 converted or surviving organization after the conversion or merger becomes effective, if:
5181 (a) before the conversion or merger became effective, the act would have bound the
5182 converting or constituent limited partnership under Section 48-2d-402 if the person had been a
5183 general partner; and
5184 (b) at the time the third party enters into the transaction, less than two years have
5185 passed since the person dissociated as a general partner and the third party:
5186 (i) does not have notice of the dissociation;
5187 (ii) does not have notice of the conversion or merger; and
5188 (iii) reasonably believes that the converted or surviving organization is the converting
5189 or constituent limited partnership and that the person is a general partner in the converting or
5190 constituent limited partnership.
5191 (3) If a person having knowledge of the conversion or merger causes a converted or
5192 surviving organization to incur an obligation under Subsection (1) or (2), the person is liable:
5193 (a) to the converted or surviving organization for any damage caused to the
5194 organization arising from the obligation; and
5195 (b) if another person is liable for the obligation, to that other person for any damage
5196 caused to that other person arising from the liability.
5197 Section 188. Section 48-2d-1117 is enacted to read:
5198 48-2d-1117. Part not exclusive.
5199 This part does not preclude an entity from being merged, converted, or domesticated
5200 under law other than this chapter.
5201 Section 189. Section 48-2d-1201 is enacted to read:
5202
5203
5204 In applying and construing this chapter, consideration must be given to the need to
5205 promote uniformity of the law with respect to its subject matter among states that enact this
5206 uniform act.
5207 Section 190. Section 48-2d-1202 is enacted to read:
5208 48-2d-1202. Relation to electronic signatures in global and national commerce act.
5209 This chapter modifies, limits, and supersedes the federal Electronic Signatures in
5210 Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or
5211 supersede Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of
5212 any of the notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
5213 Section 191. Section 48-2d-1203 is enacted to read:
5214 48-2d-1203. Severability clause.
5215 If any provision of this chapter or its application to any person or circumstance is held
5216 invalid, the invalidity does not affect other provisions or applications of this chapter which can
5217 be given effect without the invalid provision or application, and to this end the provisions of
5218 this chapter are severable.
5219 Section 192. Section 48-2d-1204 is enacted to read:
5220 48-2d-1204. Savings clause.
5221 This chapter does not affect an action commenced, proceeding brought, or right accrued
5222 before July 1, 2012.
5223 Section 193. Section 48-2d-1205 is enacted to read:
5224 48-2d-1205. Application to existing relationships.
5225 (1) Before January 1, 2014, this chapter governs only:
5226 (a) a limited partnership formed on or after July 1, 2012; and
5227 (b) subject to Subsections (3) and (4), a limited partnership formed before July 1, 2012,
5228 which elects, in the manner provided in its partnership agreement or by law for amending the
5229 partnership agreement, to be subject to this chapter.
5230 (2) Subject to Subsection (3), on and after January 1, 2014, this chapter governs all
5231 limited partnerships.
5232 (3) With respect to a limited partnership formed before July 1, 2012, the following
5233 rules apply except as the partners otherwise elect in the manner provided in the partnership
5234
5235 (a) Subsection 48-2d-104 (3) does not apply and the limited partnership has whatever
5236 duration it had under the law applicable immediately before July 1, 2012.
5237 (b) The limited partnership is not required to amend its certificate of limited
5238 partnership to comply with Subsection 48-2d-201 (1)(d).
5239 (c) Sections 48-2d-601 and 48-2d-602 do not apply and a limited partner has the same
5240 right and power to dissociate from the limited partnership, with the same consequences, as
5241 existed immediately before July 1, 2012.
5242 (d) Subsection 48-2d-603 (4) does not apply.
5243 (e) Subsection 48-2d-603 (5) does not apply and a court has the same power to expel a
5244 general partner as the court had immediately before July 1, 2012.
5245 (f) Subsection 48-2d-801 (3) does not apply and the connection between a person's
5246 dissociation as a general partner and the dissolution of the limited partnership is the same as
5247 existed immediately before July 1, 2012.
5248 (4) With respect to a limited partnership that elects pursuant to Subsection (1)(b) to be
5249 subject to this chapter, after the election takes effect the provisions of this chapter relating to
5250 the liability of the limited partnership's general partners to third parties apply:
5251 (a) before July 1, 2012, to:
5252 (i) a third party that had not done business with the limited partnership in the year
5253 before the election took effect; and
5254 (ii) a third party that had done business with the limited partnership in the year before
5255 the election took effect only if the third party knows or has received a notification of the
5256 election; and
5257 (b) on and after July 1, 2012, to all third parties, but those provisions remain
5258 inapplicable to any obligation incurred while those provisions were inapplicable under
5259 Subsection (4)(a)(ii).
5260 Section 194. Section 48-3-101 is enacted to read:
5261
5262
5263
5264 48-3-101. Title.
5265
5266 Act."
5267 Section 195. Section 48-3-102 is enacted to read:
5268 48-3-102. Definitions.
5269 As used in this chapter:
5270 (1) (a) "Certificate of organization" means the certificate required by Section 48-3-201 .
5271 (b) "Certificate of organization" includes the certificate as amended or restated.
5272 (2) "Contribution" means any benefit provided by a person to a limited liability
5273 company:
5274 (a) in order to become a member upon formation of the limited liability company and
5275 in accordance with an agreement between or among the persons that have agreed to become the
5276 initial members of the limited liability company;
5277 (b) in order to become a member after formation of the limited liability company and in
5278 accordance with an agreement between the person and the limited liability company; or
5279 (c) in the person's capacity as a member and in accordance with the operating
5280 agreement or an agreement between the member and the limited liability company.
5281 (3) "Debtor in bankruptcy" means a person that is the subject of:
5282 (a) an order for relief under United States Code, Title 11, or a successor statute of
5283 general application; or
5284 (b) a comparable order under federal, state, or foreign law governing insolvency.
5285 (4) "Distribution," except as otherwise provided in Subsection 48-3-405 (7), means a
5286 transfer of money or other property from a limited liability company to another person on
5287 account of a transferable interest.
5288 (5) "Effective," with respect to a record required or permitted to be delivered to the
5289 division for filing under this chapter, means effective under Subsection 48-3-205 (3).
5290 (6) "Foreign limited liability company" means an unincorporated entity formed under
5291 the law of a jurisdiction other than this state and denominated by that law as a limited liability
5292 company, including a low-profit limited liability company.
5293 (7) "Limited liability company," except in the phrase "foreign limited liability
5294 company," means an entity formed under this chapter, including a low-profit limited liability
5295 company formed under this chapter.
5296
5297 the requirements of Part 13, Low-profit Limited Liability Companies.
5298 (9) "Manager" means a person that under the operating agreement of a
5299 manager-managed limited liability company is responsible, alone or in concert with others, for
5300 performing the management functions stated in Subsection 48-3-407 (3).
5301 (10) "Manager-managed limited liability company" means a limited liability company
5302 that qualifies under Subsection 48-3-407 (1).
5303 (11) "Member" means a person that has become a member of a limited liability
5304 company under Section 48-3-401 and has not dissociated under Section 48-3-602 .
5305 (12) "Member-managed limited liability company" means a limited liability company
5306 that is not a manager-managed limited liability company.
5307 (13) (a) "Operating agreement" means the agreement, whether or not referred to as an
5308 operating agreement and whether oral, in a record, implied, or in any combination thereof, of
5309 all the members of a limited liability company, including a sole member, concerning the
5310 matters described in Subsection 48-3-110 (1).
5311 (b) "Operating agreement" includes the agreement as amended or restated.
5312 (14) "Organizer" means a person that acts under Section 48-3-201 to form a limited
5313 liability company.
5314 (15) "Person" means:
5315 (a) an individual;
5316 (b) a corporation;
5317 (c) a business trust;
5318 (d) an estate;
5319 (e) a trust;
5320 (f) a partnership;
5321 (g) a limited liability company;
5322 (h) an association;
5323 (i) a joint venture;
5324 (j) a public corporation;
5325 (k) government;
5326 (l) a governmental subdivision, agency, or instrumentality; or
5327
5328 (16) "Principal office" means the principal executive office of a limited liability
5329 company or foreign limited liability company, whether or not the office is located in this state.
5330 (17) "Professional services company" means a limited liability company meeting the
5331 requirements of Part 11, Professional Services Companies.
5332 (18) "Record" means information that is inscribed on a tangible medium or that is
5333 stored in an electronic or other medium and is retrievable in perceivable form.
5334 (19) "Series" means a series created in accordance with Part 12, Series Limited
5335 Liability Companies.
5336 (20) "Sign" means, with the present intent to authenticate or adopt a record:
5337 (a) to execute or adopt a tangible symbol; or
5338 (b) to attach to or logically associate with the record an electronic symbol, sound, or
5339 process.
5340 (21) "State" means a state of the United States, the District of Columbia, Puerto Rico,
5341 the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction
5342 of the United States.
5343 (22) "Transfer" includes an assignment, conveyance, deed, bill of sale, lease, mortgage,
5344 security interest, encumbrance, gift, and transfer by operation of law.
5345 (23) "Transferable interest" means the right, as originally associated with a person's
5346 capacity as a member, to receive distributions from a limited liability company in accordance
5347 with the operating agreement, whether or not the person remains a member or continues to own
5348 any part of the right.
5349 (24) "Transferee" means a person to which all or part of a transferable interest has been
5350 transferred, whether or not the transferor is a member.
5351 (25) "Tribal limited liability company" means a limited liability company:
5352 (a) formed under the law of a tribe; and
5353 (b) that is at least 51% owned or controlled by the tribe.
5354 (26) "Tribe" means a tribe, band, nation, pueblo, or other organized group or
5355 community of Indians, including an Alaska Native village, that is legally recognized as eligible
5356 for and is consistent with a special program, service, or entitlement provided by the United
5357 States to Indians because of their status as Indians.
5358
5359 48-3-103. Knowledge -- Notice.
5360 (1) A person knows a fact when the person:
5361 (a) has actual knowledge of it; or
5362 (b) is deemed to know it under Subsection (4)(a) or law other than this chapter.
5363 (2) A person has notice of a fact when the person:
5364 (a) has reason to know the fact from all of the facts known to the person at the time in
5365 question; or
5366 (b) is deemed to have notice of the fact under Subsection (4)(b).
5367 (3) A person notifies another of a fact by taking steps reasonably required to inform the
5368 other person in ordinary course, whether or not the other person knows the fact.
5369 (4) A person that is not a member is deemed:
5370 (a) to know of a limitation on authority to transfer real property as provided in
5371 Subsection 48-3-302 (7);
5372 (b) to have notice of a limited liability company's:
5373 (i) dissolution, 90 days after a statement of dissolution under Subsection
5374 48-3-703 (2)(b)(i) becomes effective;
5375 (ii) termination, 90 days after a statement of termination Subsection 48-3-703 (2)(b)(vi)
5376 becomes effective; and
5377 (iii) merger, conversion, or domestication, 90 days after articles of merger, conversion,
5378 or domestication under Part 10, Merger, Conversion, and Domestication, become effective; and
5379 (c) for a filing not described in Subsection (4)(b), to have constructive notice of an
5380 action taken by a filing that is filed with the division.
5381 Section 197. Section 48-3-104 is enacted to read:
5382 48-3-104. Nature, purpose, and duration of limited liability company.
5383 (1) A limited liability company is an entity distinct from its members.
5384 (2) A limited liability company may have any lawful purpose, regardless of whether for
5385 profit.
5386 (3) A limited liability company has perpetual duration.
5387 Section 198. Section 48-3-105 is enacted to read:
5388 48-3-105. Powers.
5389
5390 power to do all things necessary or convenient to carry on its activities.
5391 Section 199. Section 48-3-106 is enacted to read:
5392 48-3-106. Governing law.
5393 The law of this state governs:
5394 (1) the internal affairs of a limited liability company; and
5395 (2) the liability of a member as member and a manager as manager for the debts,
5396 obligations, or other liabilities of a limited liability company.
5397 Section 200. Section 48-3-107 is enacted to read:
5398 48-3-107. Supplemental principles of law.
5399 Unless displaced by particular provisions of this chapter, the principles of law and
5400 equity supplement this chapter.
5401 Section 201. Section 48-3-108 is enacted to read:
5402 48-3-108. Name.
5403 (1) (a) Except as provided in Section 48-3-1104 or 48-3-1302 , the name of a limited
5404 liability company must contain the words "limited liability company" or "limited company" or
5405 the abbreviation "L.L.C.," "LLC," "L.C.," or "LC".
5406 (b) "Company" may be abbreviated as "Co.".
5407 (c) The name of a limited liability company may not contain:
5408 (i) without the written consent of the United States Olympic Committee, the words:
5409 (A) "Olympic";
5410 (B) "Olympiad"; or
5411 (C) "Citius Altius Fortius"; and
5412 (ii) without the written consent of the Division of Consumer Protection issued in
5413 accordance with Section 13-34-114 , the words:
5414 (A) "university";
5415 (B) "college"; or
5416 (C) "institute" or "institution".
5417 (2) Unless authorized by Subsection (3), the name of a limited liability company must
5418 be distinguishable in the records of the division from:
5419 (a) the name of each person that is not an individual and that is incorporated,
5420
5421 (b) each name reserved under Section 48-3-109 and:
5422 (i) Section 16-6a-401 or 16-6a-402 ;
5423 (ii) Section 16-10a-401 or 16-10a-402 ;
5424 (iii) Section 16-11-16 ;
5425 (iv) Section 42-2-6.6 ;
5426 (v) Section 48-1b-1002 ; or
5427 (vi) Section 48-2d-108 or 48-2d-109 .
5428 (3) A limited liability company may apply to the division for authorization to use a
5429 name that does not comply with Subsection (2). The division shall authorize use of the name
5430 applied for if, as to each noncomplying name:
5431 (a) the present user, registrant, or owner of the noncomplying name consents in a
5432 signed record to the use and submits an undertaking in a form satisfactory to the division to
5433 change the noncomplying name to a name that complies with Subsection (2) and is
5434 distinguishable in the records of the division from the name applied for; or
5435 (b) the applicant delivers to the division a certified copy of the final judgment of a
5436 court establishing the applicant's right to use in this state the name applied for.
5437 (4) Subject to Section 48-3-805 , this section applies to a foreign limited liability
5438 company transacting business in this state which has a certificate of authority to transact
5439 business in this state or which has applied for a certificate of authority.
5440 (5) The division may not approve for filing a name that implies that a limited liability
5441 company is an agency of this state or any of its political subdivisions, if it is not actually such a
5442 legally established agency or subdivision.
5443 (6) The authorization to file a certificate under or to reserve or register a limited
5444 liability company name as granted by the division does not:
5445 (a) abrogate or limit the law governing unfair competition or unfair trade practices;
5446 (b) derogate from the common law, the principles of equity, or the statutes of this state
5447 or of the United States with respect to the right to acquire and protect names and trademarks; or
5448 (c) create an exclusive right in geographic or generic terms contained within a name.
5449 Section 202. Section 48-3-109 is enacted to read:
5450 48-3-109. Reservation of name.
5451
5452 including a fictitious or assumed name for a foreign limited liability company whose name is
5453 not available, by delivering an application to the division for filing. The application must state
5454 the name and address of the applicant and the name proposed to be reserved. If the division
5455 finds that the name applied for is available, it must be reserved for the applicant's exclusive use
5456 for a 120-day period.
5457 (2) The owner of a name reserved for a limited liability company may transfer the
5458 reservation to another person by delivering to the division for filing a signed notice of the
5459 transfer which states the name and address of the transferee.
5460 Section 203. Section 48-3-110 is enacted to read:
5461 48-3-110. Operating agreement -- Scope, function, and limitations.
5462 (1) Except as otherwise provided in Subsections (2) and (3), the operating agreement
5463 governs:
5464 (a) relations among the members as members and between the members and the
5465 limited liability company;
5466 (b) the rights and duties under this chapter of a person in the capacity of manager;
5467 (c) the activities of the limited liability company and the conduct of those activities;
5468 and
5469 (d) the means and conditions for amending the operating agreement.
5470 (2) To the extent the operating agreement does not otherwise provide for a matter
5471 described in Subsection (1), this chapter governs the matter.
5472 (3) An operating agreement may not:
5473 (a) vary a limited liability company's capacity under Section 48-3-105 to sue and be
5474 sued in its own name;
5475 (b) vary the law applicable under Section 48-3-106 ;
5476 (c) vary the power of the court under Section 48-3-204 ;
5477 (d) subject to Subsections (4) through (7), eliminate the duty of loyalty, the duty of
5478 care, or any other fiduciary duty;
5479 (e) subject to Subsections (4) through (7), eliminate the contractual obligation of good
5480 faith and fair dealing under Subsection 48-3-409 (4);
5481 (f) unreasonably restrict the duties and rights stated in Section 48-3-410 ;
5482
5483 Subsections 48-3-701 (4) and (5);
5484 (h) vary the requirement to wind up a limited liability company's business as specified
5485 in Subsections 48-3-703 (1) and (2)(a);
5486 (i) unreasonably restrict the right of a member to maintain an action under Part 9,
5487 Actions By Members;
5488 (j) restrict the right to approve a merger, conversion, or domestication under Section
5489 48-3-1014 to a member that will have personal liability with respect to a surviving, converted,
5490 or domesticated organization; or
5491 (k) except as otherwise provided in Subsection 48-3-112 (2), restrict the rights under
5492 this chapter of a person other than a member or manager.
5493 (4) If not unconscionable or against public policy, the operating agreement may:
5494 (a) restrict or eliminate the duty:
5495 (i) as required in Subsections 48-3-409 (2)(a) and (7), to account to the limited liability
5496 company and to hold as trustee for it any property, profit, or benefit derived by the member in
5497 the conduct or winding up of the limited liability company's business, from a use by the
5498 member of the limited liability company's property, or from the appropriation of a limited
5499 liability company opportunity;
5500 (ii) as required in Subsections 48-3-409 (2)(b) and (7), to refrain from dealing with the
5501 limited liability company in the conduct or winding up of the limited liability company's
5502 business as or on behalf of a party having an interest adverse to the limited liability company;
5503 and
5504 (iii) as required by Subsections 48-3-409 (2)(c) and (7), to refrain from competing with
5505 the limited liability company in the conduct of the limited liability company's business before
5506 the dissolution of the limited liability company;
5507 (b) identify specific types or categories of activities that do not violate the duty of
5508 loyalty;
5509 (c) alter the duty of care, except to authorize intentional misconduct or knowing
5510 violation of law;
5511 (d) alter or eliminate any other fiduciary duty; and
5512 (e) prescribe the standards by which to measure the performance of the contractual
5513
5514 manifestly unreasonable.
5515 (5) The operating agreement may specify the method by which a specific act or
5516 transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one
5517 or more disinterested and independent persons after full disclosure of all material facts.
5518 (6) To the extent the operating agreement of a member-managed limited liability
5519 company expressly relieves a member of a responsibility that the member would otherwise
5520 have under this chapter and imposes the responsibility on one or more other members, the
5521 operating agreement may, to the benefit of the member that the operating agreement relieves of
5522 the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the
5523 responsibility.
5524 (7) The operating agreement may alter or eliminate the indemnification for a member
5525 or manager provided by Subsection 48-3-408 (1) and may eliminate or limit a member or
5526 manager's liability to the limited liability company and members for money damages, except
5527 for:
5528 (a) breach of the duty of loyalty;
5529 (b) a financial benefit received by the member or manager to which the member or
5530 manager is not entitled;
5531 (c) a breach of a duty under Section 48-3-406 ; or
5532 (d) an intentional violation of criminal law.
5533 (8) The court shall decide any claim under Subsection (4) that a term of an operating
5534 agreement is unconscionable or against public policy. The court:
5535 (a) shall make its determination as of the time the challenged term became part of the
5536 operating agreement and by considering only circumstances existing at that time; and
5537 (b) may invalidate the term only if, in light of the purposes and activities of the limited
5538 liability company, it is readily apparent that:
5539 (i) the objective of the term is unconscionable or against public policy; or
5540 (ii) the means to achieve the term's objective is unconscionable or against public
5541 policy.
5542 Section 204. Section 48-3-111 is enacted to read:
5543 48-3-111. Operating agreement -- Effect on limited liability company and persons
5544
5545 (1) A limited liability company is bound by and may enforce the operating agreement,
5546 whether or not the limited liability company has itself manifested assent to the operating
5547 agreement.
5548 (2) A person that becomes a member of a limited liability company is deemed to assent
5549 to the operating agreement.
5550 (3) Two or more persons intending to become the initial members of a limited liability
5551 company may make an agreement providing that upon the formation of the limited liability
5552 company the agreement will become the operating agreement. One person intending to
5553 become the initial member of a limited liability company may assent to terms providing that
5554 upon the formation of the limited liability company the terms will become the operating
5555 agreement.
5556 Section 205. Section 48-3-112 is enacted to read:
5557 48-3-112. Operating agreement -- Effect on third parties and relationship to
5558 records effective on behalf of limited liability company.
5559 (1) An operating agreement may specify that its amendment requires the approval of a
5560 person that is not a party to the operating agreement or the satisfaction of a condition. An
5561 amendment is ineffective if its adoption does not include the required approval or satisfy the
5562 specified condition.
5563 (2) The obligations of a limited liability company and its members to a person in the
5564 person's capacity as a transferee or dissociated member are governed by the operating
5565 agreement. Subject only to any court order issued under Subsection 48-3-503 (2)(b) to
5566 effectuate a charging order, an amendment to the operating agreement made after a person
5567 becomes a transferee or dissociated member is effective with regard to any debt, obligation, or
5568 other liability of the limited liability company or its members to the person in the person's
5569 capacity as a transferee or dissociated member.
5570 (3) If a record that has been delivered by a limited liability company to the division for
5571 filing and has become effective under this chapter contains a provision that would be
5572 ineffective under Subsection 48-3-110 (3) if contained in the operating agreement, the provision
5573 is likewise ineffective in the record.
5574 (4) Subject to Subsection (3), if a record that has been delivered by a limited liability
5575
5576 provision of the operating agreement:
5577 (a) the operating agreement prevails as to members, dissociated members, transferees,
5578 and managers; and
5579 (b) the record prevails as to other persons to the extent they reasonably rely on the
5580 record.
5581 Section 206. Section 48-3-201 is enacted to read:
5582
5583 48-3-201. Formation of limited liability company -- Certificate of organization.
5584 (1) One or more persons may act as organizers to form a limited liability company by
5585 signing and delivering to the division for filing a certificate of organization.
5586 (2) A certificate of organization must state:
5587 (a) the name of the limited liability company, which must comply with Section
5588 48-3-108 ;
5589 (b) the information required by Subsection 16-17-203 (1); and
5590 (c) (i) if the limited liability company is a low-profit limited liability company, that the
5591 limited liability company is a low-profit limited liability company; and
5592 (ii) if the limited liability company is a professional services company, the information
5593 required by Section 48-3-1103 .
5594 (3) (a) Subject to Subsection 48-3-112 (3), a certificate of organization may also
5595 contain statements as to matters other than those required by Subsection (2). However, a
5596 statement in a certificate of organization is not effective as a statement of authority.
5597 (b) A certificate of organization may also contain a notice of a series in accordance
5598 with Section 48-3-1203 .
5599 (4) (a) A limited liability company is formed when the division has filed the certificate
5600 of organization, unless the certificate states a delayed effective date pursuant to Subsection
5601 48-3-205 (3).
5602 (b) If the certificate states a delayed effective date, a limited liability company is not
5603 formed if, before the certificate takes effect, a statement of cancellation is signed and delivered
5604 to the division for filing and the division files the certificate.
5605 (c) Subject to any delayed effective date and except in a proceeding by this state to
5606
5607 is conclusive proof that the organizer satisfied all conditions to the formation of a limited
5608 liability company.
5609 Section 207. Section 48-3-202 is enacted to read:
5610 48-3-202. Amendment or restatement of certificate of organization.
5611 (1) A certificate of organization may be amended or restated at any time, except that in
5612 accordance with Section 48-3-1303 , a low-profit limited liability company shall amend its
5613 certificate of organization if the limited liability company ceases to be a low-profit limited
5614 liability company.
5615 (2) To amend its certificate of organization, a limited liability company must deliver to
5616 the division for filing an amendment stating:
5617 (a) the name of the limited liability company;
5618 (b) the date of filing of its certificate of organization; and
5619 (c) the changes the amendment makes to the certificate as most recently amended or
5620 restated.
5621 (3) To restate its certificate of organization, a limited liability company must deliver to
5622 the division for filing a restatement, designated as such in its heading, stating:
5623 (a) in the heading or an introductory paragraph, the limited liability company's present
5624 name and the date of the filing of the limited liability company's initial certificate of
5625 organization;
5626 (b) if the limited liability company's name has been changed at any time since the
5627 limited liability company's formation, each of the limited liability company's former names;
5628 and
5629 (c) the changes the restatement makes to the certificate as most recently amended or
5630 restated.
5631 (4) Subject to Subsections 48-3-112 (3) and 48-3-205 (3), an amendment to or
5632 restatement of a certificate of organization is effective when filed by the division.
5633 (5) If a member of a member-managed limited liability company, or a manager of a
5634 manager-managed limited liability company, knows that any information in a filed certificate
5635 of organization was inaccurate when the certificate was filed or has become inaccurate owing
5636 to changed circumstances, the member or manager shall promptly:
5637
5638 (b) if appropriate, deliver to the division for filing a statement of change under Section
5639 16-17-206 or a statement of correction under Section 48-3-206 .
5640 Section 208. Section 48-3-203 is enacted to read:
5641 48-3-203. Signing of records to be delivered for filing to division.
5642 (1) A record delivered to the division for filing pursuant to this chapter must be signed
5643 as follows:
5644 (a) Except as otherwise provided in Subsections (1)(b) through (d), a record signed on
5645 behalf of a limited liability company must be signed by a person authorized by the limited
5646 liability company.
5647 (b) A limited liability company's initial certificate of organization must be signed by at
5648 least one person acting as an organizer.
5649 (c) A record filed on behalf of a dissolved limited liability company that has no
5650 members must be signed by the person winding up the limited liability company's activities
5651 under Subsection 48-3-703 (3) or a person appointed under Subsection 48-3-703 (4) to wind up
5652 those activities.
5653 (d) A statement of cancellation under Subsection 48-3-201 (4)(b) must be signed by
5654 each organizer that signed the initial certificate of organization, but a personal representative of
5655 a deceased or incompetent organizer may sign in the place of the decedent or incompetent.
5656 (e) A statement of denial by a person under Section 48-3-303 must be signed by that
5657 person.
5658 (f) Any other record must be signed by the person on whose behalf the record is
5659 delivered to the division.
5660 (2) Any record filed under this chapter may be signed by an agent.
5661 Section 209. Section 48-3-204 is enacted to read:
5662 48-3-204. Signing and filing pursuant to judicial order.
5663 (1) If a person required by this chapter to sign a record or deliver a record to the
5664 division for filing under this chapter does not do so, any other person that is aggrieved may
5665 petition a district court to order:
5666 (a) the person to sign the record;
5667 (b) the person to deliver the record to the division for filing; or
5668
5669 by the person required by this chapter to sign the record.
5670 (2) If a petitioner under Subsection (1) is not the limited liability company or foreign
5671 limited liability company to which the record pertains, the petitioner shall make the limited
5672 liability company a party to the action.
5673 Section 210. Section 48-3-205 is enacted to read:
5674 48-3-205. Delivery to and filing of records by division -- Effective time and date.
5675 (1) A record authorized or required to be delivered to the division for filing under this
5676 chapter must be captioned to describe the record's purpose, be in a medium permitted by the
5677 division, and be delivered to the division. If the filing fees have been paid, unless the division
5678 determines that a record does not comply with the filing requirements of this chapter, the
5679 division shall file the record and:
5680 (a) for a statement of denial under Section 48-3-303 , send a copy of the filed statement
5681 and a receipt for the fees to the person on whose behalf the statement was delivered for filing
5682 and to the limited liability company; and
5683 (b) for all other records, send a copy of the filed record and a receipt for the fees to the
5684 person on whose behalf the record was filed.
5685 (2) Upon request and payment of the requisite fee, the division shall send to the
5686 requester a certified copy of a requested record.
5687 (3) Except as otherwise provided in Section 48-3-206 , a record delivered to the
5688 division for filing under this chapter may specify an effective time and a delayed effective date.
5689 Subject to Subsection 48-3-201 (4)(a) and Section 48-3-206 , a record filed by the division is
5690 effective:
5691 (a) if the record does not specify either an effective time or a delayed effective date, on
5692 the date and at the time the record is filed as evidenced by the division's endorsement of the
5693 date and time on the record;
5694 (b) if the record specifies an effective time but not a delayed effective date, on the date
5695 the record is filed at the time specified in the record;
5696 (c) if the record specifies a delayed effective date but not an effective time, at 12:01
5697 a.m. on the earlier of:
5698 (i) the specified date; or
5699
5700 (d) if the record specifies an effective time and a delayed effective date, at the specified
5701 time on the earlier of:
5702 (i) the specified date; or
5703 (ii) the 90th day after the record is filed.
5704 Section 211. Section 48-3-206 is enacted to read:
5705 48-3-206. Correcting filed record.
5706 (1) A limited liability company or foreign limited liability company may deliver to the
5707 division for filing a statement of correction to correct a record previously delivered by the
5708 limited liability company to the division and filed by the division, if at the time of filing the
5709 record contained inaccurate information or was defectively signed.
5710 (2) A statement of correction under Subsection (1) may not state a delayed effective
5711 date and must:
5712 (a) describe the record to be corrected, including its filing date, or attach a copy of the
5713 record as filed;
5714 (b) specify the inaccurate information and the reason it is inaccurate or the manner in
5715 which the signing was defective; and
5716 (c) correct the defective signature or inaccurate information.
5717 (3) When filed by the division, a statement of correction under Subsection (1) is
5718 effective retroactively as of the effective date of the record the statement corrects, but the
5719 statement is effective when filed:
5720 (a) for the purposes of Subsection 48-3-103 (4); and
5721 (b) as to persons that previously relied on the uncorrected record and would be
5722 adversely affected by the retroactive effect.
5723 Section 212. Section 48-3-207 is enacted to read:
5724 48-3-207. Liability for inaccurate information in filed record.
5725 (1) If a record delivered to the division for filing under this chapter and filed by the
5726 division contains inaccurate information, a person that suffers a loss by reliance on the
5727 information may recover damages for the loss from:
5728 (a) a person that signed the record, or caused another to sign it on the person's behalf,
5729 and knew the information to be inaccurate at the time the record was signed; and
5730
5731 company or the manager of a manager-managed limited liability company, if:
5732 (i) the record was delivered for filing on behalf of the limited liability company; and
5733 (ii) the member or manager had notice of the inaccuracy for a reasonably sufficient
5734 time before the information was relied upon so that, before the reliance, the member or
5735 manager reasonably could have:
5736 (A) effected an amendment under Section 48-3-202 ;
5737 (B) filed a petition under Section 48-3-204 ; or
5738 (C) delivered to the division for filing a statement of change pursuant to Section
5739 16-17-206 or a statement of correction under Section 48-3-206 .
5740 (2) To the extent that the operating agreement of a member-managed limited liability
5741 company expressly relieves a member of responsibility for maintaining the accuracy of
5742 information contained in records delivered on behalf of the limited liability company to the
5743 division for filing under this chapter and imposes that responsibility on one or more other
5744 members, the liability stated in Subsection (1)(b) applies to those other members and not to the
5745 member that the operating agreement relieves of the responsibility.
5746 (3) An individual who signs a record authorized or required to be filed under this
5747 chapter affirms under penalty of perjury that the information stated in the record is accurate.
5748 Section 213. Section 48-3-208 is enacted to read:
5749 48-3-208. Certificate of existence or authorization.
5750 (1) The division, upon request and payment of the requisite fee, shall furnish to any
5751 person a certificate of existence for a limited liability company if the records filed in the
5752 division show that the limited liability company has been formed under Section 48-3-201 and
5753 the division has not filed a statement of termination pertaining to the limited liability company.
5754 A certificate of existence must state:
5755 (a) the limited liability company's name;
5756 (b) that the limited liability company was duly formed under the laws of this state and
5757 the date of formation;
5758 (c) whether all fees, taxes, and penalties due under this chapter or other law to the
5759 division have been paid;
5760 (d) whether the limited liability company's most recent annual report required by
5761
5762 (e) whether the division has administratively dissolved the limited liability company;
5763 (f) whether the limited liability company has delivered to the division for filing a
5764 statement of dissolution;
5765 (g) that a statement of termination has not been filed by the division; and
5766 (h) other facts of record in the division which are specified by the person requesting the
5767 certificate.
5768 (2) The division, upon request and payment of the requisite fee, shall furnish to any
5769 person a certificate of authorization for a foreign limited liability company if the records filed
5770 in the division show that the division has filed a certificate of authority, has not revoked the
5771 certificate of authority, and has not filed a notice of cancellation. A certificate of authorization
5772 must state:
5773 (a) the limited liability company's name and any alternate name adopted under
5774 Subsection 48-3-805 (1) for use in this state;
5775 (b) that the limited liability company is authorized to transact business in this state;
5776 (c) whether all fees, taxes, and penalties due under this chapter or other law to the
5777 division have been paid;
5778 (d) whether the limited liability company's most recent annual report required by
5779 Section 48-3-209 has been filed by the division;
5780 (e) that the division has not revoked the limited liability company's certificate of
5781 authority and has not filed a notice of cancellation; and
5782 (f) other facts of record in the division which are specified by the person requesting the
5783 certificate.
5784 (3) Subject to any qualification stated in the certificate, a certificate of existence or
5785 certificate of authorization issued by the division is conclusive evidence that the limited
5786 liability company is in existence or the foreign limited liability company is authorized to
5787 transact business in this state.
5788 Section 214. Section 48-3-209 is enacted to read:
5789 48-3-209. Annual report for division.
5790 (1) Each year, a limited liability company or a foreign limited liability company
5791 authorized to transact business in this state shall deliver to the division for filing a report that
5792
5793 (a) the name of the limited liability company;
5794 (b) the information required by Subsection 16-17-203 (1);
5795 (c) the street and mailing addresses of its principal office; and
5796 (d) in the case of a foreign limited liability company, the state or other jurisdiction
5797 under whose law the limited liability company is formed and any alternate name adopted under
5798 Subsection 48-3-805 (1).
5799 (2) Information in an annual report under this section must be current as of the date the
5800 report is delivered to the division for filing.
5801 (3) A report must be delivered to the division:
5802 (a) during the month of its anniversary date of formation, in the case of a domestic
5803 limited liability company; or
5804 (b) during the month of the anniversary date of being granted authority to transact
5805 business in this state, in the case of a foreign limited liability company authorized to transact
5806 business in this state.
5807 (4) If an annual report under this section does not contain the information required in
5808 Subsection (1), the division shall promptly notify the reporting limited liability company or
5809 foreign limited liability company and return the report to it for correction. If the report is
5810 corrected to contain the information required in Subsection (1) and delivered to the division
5811 within 30 days after the effective date of the notice, it is timely delivered.
5812 (5) If an annual report under this section contains information provided under
5813 Subsection (1)(b) that differs from the information shown in the records of the division
5814 immediately before the annual report becomes effective, the differing information in the annual
5815 report is considered a statement of change under Section 16-17-206 .
5816 Section 215. Section 48-3-301 is enacted to read:
5817
5818
5819 48-3-301. No agency power of member as member.
5820 (1) A member is not an agent of a limited liability company solely by reason of being a
5821 member.
5822 (2) A person's status as a member does not prevent or restrict law other than this
5823
5824 Section 216. Section 48-3-302 is enacted to read:
5825 48-3-302. Statement of authority.
5826 (1) A limited liability company may deliver to the division for filing a statement of
5827 authority. The statement:
5828 (a) must include the name of the limited liability company and the street and mailing
5829 addresses of its principal office;
5830 (b) with respect to any position that exists in or with respect to the limited liability
5831 company, may state the authority, or limitations on the authority, of all persons holding the
5832 position to:
5833 (i) execute an instrument transferring real property held in the name of the limited
5834 liability company; or
5835 (ii) enter into other transactions on behalf of, or otherwise act for or bind, the limited
5836 liability company; and
5837 (c) may state the authority, or limitations on the authority, of a specific person to:
5838 (i) execute an instrument transferring real property held in the name of the limited
5839 liability company; or
5840 (ii) enter into other transactions on behalf of, or otherwise act for or bind, the limited
5841 liability company.
5842 (2) To amend or cancel a statement of authority filed by the division under Subsection
5843 48-3-205 (1), a limited liability company must deliver to the division for filing an amendment
5844 or cancellation stating:
5845 (a) the name of the limited liability company;
5846 (b) the street and mailing addresses of the limited liability company's principal office;
5847 (c) the caption of the statement being amended or canceled and the date the statement
5848 being affected became effective; and
5849 (d) the contents of the amendment or a declaration that the statement being affected is
5850 canceled.
5851 (3) A statement of authority affects only the power of a person to bind a limited
5852 liability company to persons that are not members.
5853 (4) Subject to Subsection (3) and Subsection 48-3-103 (4) and except as otherwise
5854
5855 contained in an effective statement of authority is not by itself evidence of knowledge or notice
5856 of the limitation by any person.
5857 (5) Subject to Subsection (3), a grant of authority not pertaining to transfers of real
5858 property and contained in an effective statement of authority is conclusive in favor of a person
5859 that gives value in reliance on the grant, except to the extent that when the person gives value:
5860 (a) the person has knowledge to the contrary;
5861 (b) the statement has been canceled or restrictively amended under Subsection (2); or
5862 (c) a limitation on the grant is contained in another statement of authority that became
5863 effective after the statement containing the grant became effective.
5864 (6) Subject to Subsection (3), an effective statement of authority that grants authority to
5865 transfer real property held in the name of the limited liability company and that is recorded by
5866 certified copy in the office for recording transfers of the real property is conclusive in favor of a
5867 person that gives value in reliance on the grant without knowledge to the contrary, except to the
5868 extent that when the person gives value:
5869 (a) the statement has been canceled or restrictively amended under Subsection (2) and a
5870 certified copy of the cancellation or restrictive amendment has been recorded in the office for
5871 recording transfers of the real property; or
5872 (b) a limitation on the grant is contained in another statement of authority that became
5873 effective after the statement containing the grant became effective and a certified copy of the
5874 later-effective statement is recorded in the office for recording transfers of the real property.
5875 (7) Subject to Subsection (3), if a certified copy of an effective statement containing a
5876 limitation on the authority to transfer real property held in the name of a limited liability
5877 company is recorded in the office for recording transfers of that real property, all persons are
5878 deemed to know of the limitation.
5879 (8) Subject to Subsection (9), an effective statement of dissolution or termination is a
5880 cancellation of any filed statement of authority for the purposes of Subsection (6) and is a
5881 limitation on authority for the purposes of Subsection (7).
5882 (9) After a statement of dissolution becomes effective, a limited liability company may
5883 deliver to the division for filing and, if appropriate, may record a statement of authority that is
5884 designated as a post-dissolution statement of authority. The statement operates as provided in
5885
5886 (10) Unless earlier canceled, an effective statement of authority is canceled by
5887 operation of law five years after the date on which the statement, or its most recent amendment,
5888 becomes effective. This cancellation operates without need for any recording under Subsection
5889 (6) or (7).
5890 (11) An effective statement of denial operates as a restrictive amendment under this
5891 section and may be recorded by certified copy for the purposes of Subsection (6)(a).
5892 Section 217. Section 48-3-303 is enacted to read:
5893 48-3-303. Statement of denial.
5894 A person named in a filed statement of authority granting that person authority may
5895 deliver to the division for filing a statement of denial that:
5896 (1) provides the name of the limited liability company and the caption of the statement
5897 of authority to which the statement of denial pertains; and
5898 (2) denies the grant of authority.
5899 Section 218. Section 48-3-304 is enacted to read:
5900 48-3-304. Liability of members and managers.
5901 (1) The debts, obligations, or other liabilities of a limited liability company, whether
5902 arising in contract, tort, or otherwise:
5903 (a) are solely the debts, obligations, or other liabilities of the limited liability company;
5904 and
5905 (b) do not become the debts, obligations, or other liabilities of a member or manager
5906 solely by reason of the member acting as a member or manager acting as a manager.
5907 (2) The failure of a limited liability company to observe any particular formalities
5908 relating to the exercise of its powers or management of its activities is not a ground for
5909 imposing liability on the members or managers for the debts, obligations, or other liabilities of
5910 the limited liability company.
5911 Section 219. Section 48-3-401 is enacted to read:
5912
5913 48-3-401. Becoming member.
5914 (1) If a limited liability company is to have only one member upon formation, the
5915 person becomes a member as agreed by that person and the organizer of the limited liability
5916
5917 different, the organizer acts on behalf of the initial member.
5918 (2) If a limited liability company is to have more than one member upon formation,
5919 those persons become members as agreed by the persons before the formation of the limited
5920 liability company. The organizer acts on behalf of the persons in forming the limited liability
5921 company and may be, but need not be, one of the persons.
5922 (3) After formation of a limited liability company, a person becomes a member:
5923 (a) as provided in the operating agreement;
5924 (b) as the result of a transaction effective under Part 10, Merger, Conversion, and
5925 Domestication;
5926 (c) with the consent of all the members; or
5927 (d) if, within 90 consecutive days after the limited liability company ceases to have any
5928 members:
5929 (i) the last person to have been a member, or the legal representative of that person,
5930 designates a person to become a member; and
5931 (ii) the designated person consents to become a member effective as of the date the last
5932 person to have been a member ceased to be a member.
5933 (4) A person may become a member without acquiring a transferable interest and
5934 without making or being obligated to make a contribution to the limited liability company.
5935 Section 220. Section 48-3-402 is enacted to read:
5936 48-3-402. Form of contribution.
5937 A contribution may consist of tangible or intangible property or other benefit to a
5938 limited liability company, including money, services performed, promissory notes, other
5939 agreements to contribute money or property, and contracts for services to be performed.
5940 Section 221. Section 48-3-403 is enacted to read:
5941 48-3-403. Liability for contributions.
5942 (1) (a) A person's obligation to make a contribution to a limited liability company is
5943 not excused by the person's death, disability, or other inability to perform personally.
5944 (b) If a person does not make a required contribution, the person or the person's estate
5945 is obligated to contribute money equal to the value of the part of the contribution which has not
5946 been made, at the option of the limited liability company.
5947
5948 agreement of a limited liability company may allow a person's obligation to make a
5949 contribution to be excused by the person's death.
5950 (2) A creditor of a limited liability company which extends credit or otherwise acts in
5951 reliance on an obligation described in Subsection (1) may enforce the obligation.
5952 Section 222. Section 48-3-404 is enacted to read:
5953 48-3-404. Sharing of and right to distributions before dissolution.
5954 (1) Except as otherwise provided in the operating agreement, any distributions made by
5955 a limited liability company before its dissolution and winding up must be in equal shares
5956 among members and dissociated members, except to the extent necessary to comply with any
5957 transfer effective under Section 48-3-502 and any charging order in effect under Section
5958 48-3-503 .
5959 (2) A person has a right to a distribution before the dissolution and winding up of a
5960 limited liability company only if the limited liability company decides to make an interim
5961 distribution. A person's dissociation does not entitle the person to a distribution.
5962 (3) A person does not have a right to demand or receive a distribution from a limited
5963 liability company in any form other than money. Except as otherwise provided in Subsection
5964 48-3-709 (3), a limited liability company may distribute an asset in kind if each part of the asset
5965 is fungible with each other part and each person receives a percentage of the asset equal in
5966 value to the person's share of distributions.
5967 (4) If a member or transferee becomes entitled to receive a distribution, the member or
5968 transferee has the status of, and is entitled to all remedies available to, a creditor of the limited
5969 liability company with respect to the distribution.
5970 Section 223. Section 48-3-405 is enacted to read:
5971 48-3-405. Limitations on distribution.
5972 (1) A limited liability company may not make a distribution if after the distribution:
5973 (a) the limited liability company would not be able to pay its debts as they become due
5974 in the ordinary course of the limited liability company's activities; or
5975 (b) the limited liability company's total assets would be less than the sum of its total
5976 liabilities plus the amount that would be needed, if the limited liability company were to be
5977 dissolved, wound up, and terminated at the time of the distribution, to satisfy the preferential
5978
5979 superior to those of persons receiving the distribution.
5980 (2) A limited liability company may base a determination that a distribution is not
5981 prohibited under Subsection (1) on financial statements prepared on the basis of accounting
5982 practices and principles that are reasonable in the circumstances or on a fair valuation or other
5983 method that is reasonable under the circumstances.
5984 (3) Except as otherwise provided in Subsection (6), the effect of a distribution under
5985 Subsection (1) is measured:
5986 (a) in the case of a distribution by purchase, redemption, or other acquisition of a
5987 transferable interest in the limited liability company, as of the date money or other property is
5988 transferred or debt incurred by the limited liability company; and
5989 (b) in all other cases, as of the date:
5990 (i) the distribution is authorized, if the payment occurs within 120 days after that date;
5991 or
5992 (ii) the payment is made, if the payment occurs more than 120 days after the
5993 distribution is authorized.
5994 (4) A limited liability company's indebtedness to a member incurred by reason of a
5995 distribution made in accordance with this section is at parity with the limited liability
5996 company's indebtedness to its general, unsecured creditors.
5997 (5) A limited liability company's indebtedness, including indebtedness issued in
5998 connection with or as part of a distribution, is not a liability for purposes of Subsection (1) if
5999 the terms of the indebtedness provide that payment of principal and interest are made only to
6000 the extent that a distribution could be made to members under this section.
6001 (6) If indebtedness is issued as a distribution, each payment of principal or interest on
6002 the indebtedness is treated as a distribution, the effect of which is measured on the date the
6003 payment is made.
6004 (7) In Subsection (1), "distribution" does not include amounts constituting reasonable
6005 compensation for present or past services or reasonable payments made in the ordinary course
6006 of business under a bona fide retirement plan or other benefits program.
6007 Section 224. Section 48-3-406 is enacted to read:
6008 48-3-406. Liability for improper distributions.
6009
6010 limited liability company or manager of a manager-managed limited liability company consents
6011 to a distribution made in violation of Section 48-3-405 and in consenting to the distribution
6012 fails to comply with Section 48-3-409 , the member or manager is personally liable to the
6013 limited liability company for the amount of the distribution that exceeds the amount that could
6014 have been distributed without the violation of Section 48-3-405 .
6015 (2) To the extent the operating agreement of a member-managed limited liability
6016 company expressly relieves a member of the authority and responsibility to consent to
6017 distributions and imposes that authority and responsibility on one or more other members, the
6018 liability stated in Subsection (1) applies to the other members and not the member that the
6019 operating agreement relieves of authority and responsibility.
6020 (3) A person that receives a distribution knowing that the distribution to that person
6021 was made in violation of Section 48-3-405 is personally liable to the limited liability company
6022 but only to the extent that the distribution received by the person exceeded the amount that
6023 could have been properly paid under Section 48-3-405 .
6024 (4) A person against which an action is commenced because the person is liable under
6025 Subsection (1) may:
6026 (a) implead any other person that is subject to liability under Subsection (1) and seek to
6027 compel contribution from the person; and
6028 (b) implead any person that received a distribution in violation of Subsection (3) and
6029 seek to compel contribution from the person in the amount the person received in violation of
6030 Subsection (3).
6031 (5) An action under this section is barred if not commenced within two years after the
6032 distribution.
6033 Section 225. Section 48-3-407 is enacted to read:
6034 48-3-407. Management of limited liability company.
6035 (1) A limited liability company is a member-managed limited liability company unless
6036 the operating agreement:
6037 (a) expressly provides that:
6038 (i) the limited liability company is or will be "manager-managed";
6039 (ii) the limited liability company is or will be "managed by managers"; or
6040
6041 (b) includes words of similar import.
6042 (2) In a member-managed limited liability company, the following rules apply:
6043 (a) The management and conduct of the limited liability company are vested in the
6044 members.
6045 (b) Each member has equal rights in the management and conduct of the limited
6046 liability company's activities.
6047 (c) A difference arising among members as to a matter in the ordinary course of the
6048 activities of the limited liability company shall be decided by a majority of the members.
6049 (d) An act outside the ordinary course of the activities of the limited liability company
6050 may be undertaken only with the consent of all members.
6051 (e) The operating agreement may be amended only with the consent of all members.
6052 (3) In a manager-managed limited liability company, the following rules apply:
6053 (a) Except as otherwise expressly provided in this chapter, any matter relating to the
6054 activities of the limited liability company is decided exclusively by the managers.
6055 (b) Each manager has equal rights in the management and conduct of the activities of
6056 the limited liability company.
6057 (c) A difference arising among managers as to a matter in the ordinary course of the
6058 activities of the limited liability company shall be decided by a majority of the managers.
6059 (d) The consent of all members is required to:
6060 (i) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited
6061 liability company's property, with or without the good will, outside the ordinary course of the
6062 limited liability company's activities;
6063 (ii) approve a merger, conversion, or domestication under Part 10, Merger, Conversion,
6064 and Domestication;
6065 (iii) undertake any other act outside the ordinary course of the limited liability
6066 company's activities; and
6067 (iv) amend the operating agreement.
6068 (e) A manager may be chosen at any time by the consent of a majority of the members
6069 and remains a manager until a successor has been chosen, unless the manager at an earlier time
6070 resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates.
6071
6072 notice or cause.
6073 (f) A person need not be a member to be a manager, but the dissociation of a member
6074 that is also a manager removes the person as a manager. If a person that is both a manager and
6075 a member ceases to be a manager, that cessation does not by itself dissociate the person as a
6076 member.
6077 (g) A person's ceasing to be a manager does not discharge any debt, obligation, or other
6078 liability to the limited liability company or members which the person incurred while a
6079 manager.
6080 (4) An action requiring the consent of members under this chapter may be taken
6081 without a meeting, and a member may appoint a proxy or other agent to consent or otherwise
6082 act for the member by signing an appointing record, personally or by the member's agent.
6083 (5) The dissolution of a limited liability company does not affect the applicability of
6084 this section. However, a person that wrongfully causes dissolution of the limited liability
6085 company loses the right to participate in management as a member and a manager.
6086 (6) This chapter does not entitle a member to remuneration for services performed for a
6087 member-managed limited liability company, except for reasonable compensation for services
6088 rendered in winding up the activities of the limited liability company.
6089 Section 226. Section 48-3-408 is enacted to read:
6090 48-3-408. Indemnification and insurance.
6091 (1) A limited liability company shall reimburse for any payment made and indemnify
6092 for any debt, obligation, or other liability incurred by a member of a member-managed
6093 company or the manager of a manager-managed company in the course of the member's or
6094 manager's activities on behalf of the limited liability company, if, in making the payment or
6095 incurring the debt, obligation, or other liability, the member or manager complied with the
6096 duties stated in Sections 48-3-405 and 48-3-409 .
6097 (2) A limited liability company may purchase and maintain insurance on behalf of a
6098 member or manager of the limited liability company against liability asserted against or
6099 incurred by the member or manager in that capacity or arising from that status even if, under
6100 Subsection 48-3-110 (7), the operating agreement could not eliminate or limit the person's
6101 liability to the limited liability company for the conduct giving rise to the liability.
6102
6103 48-3-409. Standards of conduct for members and managers.
6104 (1) A member of a member-managed limited liability company owes to the limited
6105 liability company and, subject to Subsection 48-3-901 (2), the other members the fiduciary
6106 duties of loyalty and care stated in Subsections (2) and (3).
6107 (2) The duty of loyalty of a member in a member-managed limited liability company
6108 includes the duties:
6109 (a) to account to the limited liability company and to hold as trustee for it any property,
6110 profit, or benefit derived by the member:
6111 (i) in the conduct or winding up of the limited liability company's activities;
6112 (ii) from a use by the member of the limited liability company's property; or
6113 (iii) from the appropriation of a limited liability company opportunity;
6114 (b) to refrain from dealing with the limited liability company in the conduct or winding
6115 up of the limited liability company's activities as or on behalf of a person having an interest
6116 adverse to the limited liability company; and
6117 (c) to refrain from competing with the limited liability company in the conduct of the
6118 limited liability company's activities before the dissolution of the limited liability company.
6119 (3) The duty of care of a member in a member-managed limited liability company in
6120 the conduct and winding up of the limited liability company's activities is to refrain from
6121 conduct or inaction that constitutes:
6122 (a) gross negligence;
6123 (b) intentional misconduct; or
6124 (c) an intentional violation of law.
6125 (4) A member in a member-managed limited liability company or a manager-managed
6126 limited liability company shall discharge the duties under this chapter or under the operating
6127 agreement and exercise any rights consistently with the contractual obligation of good faith and
6128 fair dealing.
6129 (5) It is a defense to a claim under Subsection (2)(b) and any comparable claim in
6130 equity or at common law that the transaction was fair to the limited liability company.
6131 (6) All of the members of a member-managed limited liability company or a
6132 manager-managed limited liability company may authorize or ratify, after full disclosure of all
6133
6134 (7) In a manager-managed limited liability company, the following rules apply:
6135 (a) Subsections (1), (2), (3), and (5) apply to the manager or managers and not the
6136 members, except that the operating agreement of a limited liability company may apply the
6137 duty stated in Subsection (2)(c) to a member.
6138 (b) The duty stated under Subsection (2)(c) continues until winding up is completed.
6139 (c) Subsection (4) applies to the members and managers.
6140 (d) Subsection (6) applies only to the members.
6141 (e) A member does not have any fiduciary duty to the limited liability company or to
6142 any other member solely by reason of being a member.
6143 Section 228. Section 48-3-410 is enacted to read:
6144 48-3-410. Right of members, managers, and dissociated members to information.
6145 (1) In a member-managed limited liability company, the following rules apply:
6146 (a) On reasonable notice, a member may inspect and copy during regular business
6147 hours, at a reasonable location specified by the limited liability company, any record
6148 maintained by the limited liability company regarding the limited liability company's activities,
6149 financial condition, and other circumstances, to the extent the information is material to the
6150 member's rights and duties under the operating agreement or this chapter.
6151 (b) The limited liability company shall furnish to each member:
6152 (i) without demand, any information concerning the limited liability company's
6153 activities, financial condition, and other circumstances which the limited liability company
6154 knows and is material to the proper exercise of the member's rights and duties under the
6155 operating agreement or this chapter, except to the extent the limited liability company can
6156 establish that it reasonably believes the member already knows the information; and
6157 (ii) on demand, any other information concerning the limited liability company's
6158 activities, financial condition, and other circumstances, except to the extent the demand or
6159 information demanded is unreasonable or otherwise improper under the circumstances.
6160 (c) The duty to furnish information under Subsection (1)(b) also applies to each
6161 member to the extent the member knows any of the information described in Subsection (1)(b).
6162 (2) In a manager-managed limited liability company, the following rules apply:
6163 (a) The informational rights stated in Subsection (1) and the duty stated in Subsection
6164
6165 (b) During regular business hours and at a reasonable location specified by the limited
6166 liability company, a member may obtain from the limited liability company and inspect and
6167 copy full information regarding the activities, financial condition, and other circumstances of
6168 the limited liability company as is just and reasonable if:
6169 (i) the member seeks the information for a purpose material to the member's interest as
6170 a member;
6171 (ii) the member makes a demand in a record received by the limited liability company,
6172 describing with reasonable particularity the information sought and the purpose for seeking the
6173 information; and
6174 (iii) the information sought is directly connected to the member's purpose.
6175 (c) Within 10 days after receiving a demand pursuant to Subsection (2)(b)(ii), the
6176 limited liability company shall in a record inform the member that made the demand:
6177 (i) of the information that the limited liability company will provide in response to the
6178 demand and when and where the limited liability company will provide the information; and
6179 (ii) if the limited liability company declines to provide any demanded information, the
6180 limited liability company's reasons for declining.
6181 (d) Whenever this chapter or an operating agreement provides for a member to give or
6182 withhold consent to a matter, before the consent is given or withheld, the limited liability
6183 company shall, without demand, provide the member with all information that is known to the
6184 limited liability company and is material to the member's decision.
6185 (3) On 10 days' demand made in a record received by a limited liability company, a
6186 dissociated member may have access to information to which the person was entitled while a
6187 member if the information pertains to the period during which the person was a member, the
6188 person seeks the information in good faith, and the person satisfies the requirements imposed
6189 on a member by Subsection (2)(b). The limited liability company shall respond to a demand
6190 made pursuant to this Subsection (3) in the manner provided in Subsection (2)(c).
6191 (4) A limited liability company may charge a person that makes a demand under this
6192 section the reasonable costs of copying, limited to the costs of labor and material.
6193 (5) A member or dissociated member may exercise rights under this section through an
6194 agent or, in the case of an individual under legal disability, a legal representative. Any
6195
6196 both to the agent or legal representative and the member or dissociated member.
6197 (6) The rights under this section do not extend to a person as transferee.
6198 (7) In addition to any restriction or condition stated in its operating agreement, a
6199 limited liability company, as a matter within the ordinary course of its activities, may impose
6200 reasonable restrictions and conditions on access to and use of information to be furnished under
6201 this section, including designating information confidential and imposing nondisclosure and
6202 safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a
6203 restriction under this Subsection (7), the limited liability company has the burden of proving
6204 reasonableness.
6205 Section 229. Section 48-3-501 is enacted to read:
6206
6207 48-3-501. Nature of transferable interest.
6208 A transferable interest is personal property.
6209 Section 230. Section 48-3-502 is enacted to read:
6210 48-3-502. Transfer of transferable interest.
6211 (1) A transfer, in whole or in part, of a transferable interest:
6212 (a) is permissible;
6213 (b) does not by itself cause a member's dissociation or a dissolution and winding up of
6214 the limited liability company's activities; and
6215 (c) subject to Section 48-3-504 , does not entitle the transferee to:
6216 (i) participate in the management or conduct of the limited liability company's
6217 activities; or
6218 (ii) except as otherwise provided in Subsection (3), have access to records or other
6219 information concerning the limited liability company's activities.
6220 (2) A transferee has the right to receive, in accordance with the transfer, distributions to
6221 which the transferor would otherwise be entitled.
6222 (3) In a dissolution and winding up of a limited liability company, a transferee is
6223 entitled to an account of the limited liability company's transactions only from the date of
6224 dissolution.
6225 (4) A transferable interest may be evidenced by a certificate of the interest issued by
6226
6227 the certificate may be transferred by a transfer of the certificate.
6228 (5) A limited liability company need not give effect to a transferee's rights under this
6229 section until the limited liability company has notice of the transfer.
6230 (6) A transfer of a transferable interest in violation of a restriction on transfer contained
6231 in the operating agreement is ineffective as to a person having notice of the restriction at the
6232 time of transfer.
6233 (7) Except as otherwise provided in Subsection 48-3-602 (4)(b), when a member
6234 transfers a transferable interest, the transferor retains the rights of a member other than the
6235 interest in distributions transferred and retains all duties and obligations of a member.
6236 (8) When a member transfers a transferable interest to a person that becomes a member
6237 with respect to the transferred interest, the transferee is liable for the member's obligations
6238 under Section 48-3-403 and Subsection 48-3-406 (3) known to the transferee when the
6239 transferee becomes a member.
6240 Section 231. Section 48-3-503 is enacted to read:
6241 48-3-503. Charging order.
6242 (1) On application by a judgment creditor of a member or transferee, a court may enter
6243 a charging order against the transferable interest of the judgment debtor for the unsatisfied
6244 amount of the judgment. A charging order constitutes a lien on a judgment debtor's
6245 transferable interest and, after the limited liability company has been served with the charging
6246 order, requires the limited liability company to pay over to the person to which the charging
6247 order was issued any distribution that would otherwise be paid to the judgment debtor.
6248 (2) To the extent necessary to effectuate the collection of distributions pursuant to a
6249 charging order in effect under Subsection (1), the court may:
6250 (a) appoint a receiver of the distributions subject to the charging order, with the power
6251 to make all inquiries the judgment debtor might have made; and
6252 (b) make all other orders necessary to give effect to the charging order.
6253 (3) Upon a showing that distributions under a charging order will not pay the judgment
6254 debt within a reasonable time, the court may foreclose the lien and order the sale of the
6255 transferable interest. The purchaser at the foreclosure sale only obtains the transferable
6256 interest, does not thereby become a member, and is subject to Section 48-3-502 .
6257
6258 section is the sole member of the company when the charging order is entered:
6259 (a) the purchaser at a foreclosure sale acquires all rights of the member, including
6260 voting rights; and
6261 (b) the member is considered to have consented to the admission of the purchaser as a
6262 member of the company.
6263 (5) At any time before foreclosure under Subsection (3), the member or transferee
6264 whose transferable interest is subject to a charging order under Subsection (1) may extinguish
6265 the charging order by satisfying the judgment and filing a certified copy of the satisfaction with
6266 the court that issued the charging order.
6267 (6) At any time before foreclosure under Subsection (3), a limited liability company or
6268 one or more members whose transferable interests are not subject to the charging order may
6269 pay to the judgment creditor the full amount due under the judgment and thereby succeed to the
6270 rights of the judgment creditor, including the charging order.
6271 (7) This chapter does not deprive any member or transferee of the benefit of any
6272 exemption laws applicable to the member's or transferee's transferable interest.
6273 (8) This section provides the exclusive remedy by which a person seeking to enforce a
6274 judgment against a member or transferee may, in the capacity of judgment creditor, satisfy the
6275 judgment from the judgment debtor's transferable interest.
6276 Section 232. Section 48-3-504 is enacted to read:
6277 48-3-504. Power of personal representative of deceased member.
6278 If a member dies, the deceased member's personal representative or other legal
6279 representative may exercise the rights of a transferee provided in Subsection 48-3-502 (3) and,
6280 for the purposes of settling the estate, the rights of a current member under Section 48-3-410 .
6281 Section 233. Section 48-3-601 is enacted to read:
6282
6283 48-3-601. Member's power to dissociate -- Wrongful dissociation.
6284 (1) A person has the power to dissociate as a member at any time, rightfully or
6285 wrongfully, by withdrawing as a member by express will under Subsection 48-3-602 (1).
6286 (2) A person's dissociation from a limited liability company is wrongful only if the
6287 dissociation:
6288
6289 (b) occurs before the termination of the limited liability company and:
6290 (i) the person withdraws as a member by express will;
6291 (ii) the person is expelled as a member by judicial order under Subsection 48-3-602 (5);
6292 (iii) the person is dissociated under Subsection 48-3-602 (7)(a) by becoming a debtor in
6293 bankruptcy; or
6294 (iv) in the case of a person that is not a trust other than a business trust, an estate, or an
6295 individual, the person is expelled or otherwise dissociated as a member because it willfully
6296 dissolved or terminated.
6297 (3) A person that wrongfully dissociates as a member is liable to the limited liability
6298 company and, subject to Section 48-3-901 , to the other members for damages caused by the
6299 dissociation. The liability is in addition to any other debt, obligation, or other liability of the
6300 member to the limited liability company or the other members.
6301 Section 234. Section 48-3-602 is enacted to read:
6302 48-3-602. Events causing dissociation.
6303 A person is dissociated as a member from a limited liability company when:
6304 (1) the limited liability company has notice of the person's express will to withdraw as
6305 a member, but, if the person specified a withdrawal date later than the date the limited liability
6306 company had notice, on that later date;
6307 (2) an event stated in the operating agreement as causing the person's dissociation
6308 occurs;
6309 (3) the person is expelled as a member pursuant to the operating agreement;
6310 (4) the person is expelled as a member by the unanimous consent of the other members
6311 if:
6312 (a) it is unlawful to carry on the limited liability company's activities with the person as
6313 a member;
6314 (b) there has been a transfer of all of the person's transferable interest in the limited
6315 liability company, other than:
6316 (i) a transfer for security purposes; or
6317 (ii) a charging order in effect under Section 48-3-503 which has not been foreclosed;
6318 (c) the person is a corporation and, within 90 days after the limited liability company
6319
6320 certificate of dissolution or the equivalent, its charter has been revoked, or its right to conduct
6321 business has been suspended by the jurisdiction of its incorporation, the certificate of
6322 dissolution has not been revoked or its charter or right to conduct business has not been
6323 reinstated; or
6324 (d) the person is a limited liability company or partnership that has been dissolved and
6325 whose business is being wound up;
6326 (5) on application by the limited liability company, the person is expelled as a member
6327 by judicial order because the person:
6328 (a) has engaged, or is engaging, in wrongful conduct that has adversely and materially
6329 affected, or will adversely and materially affect, the limited liability company's activities;
6330 (b) has willfully or persistently committed, or is willfully and persistently committing,
6331 a material breach of the operating agreement or the person's duties or obligations under Section
6332 48-3-409 ; or
6333 (c) has engaged in, or is engaging, in conduct relating to the limited liability company's
6334 activities which makes it not reasonably practicable to carry on the activities with the person as
6335 a member;
6336 (6) in the case of a person who is an individual:
6337 (a) the person dies; or
6338 (b) in a member-managed limited liability company:
6339 (i) a guardian or general conservator for the person is appointed; or
6340 (ii) there is a judicial order that the person has otherwise become incapable of
6341 performing the person's duties as a member under this chapter or the operating agreement;
6342 (7) in a member-managed limited liability company, the person:
6343 (a) becomes a debtor in bankruptcy;
6344 (b) executes an assignment for the benefit of creditors; or
6345 (c) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or
6346 liquidator of the person or of all or substantially all of the person's property;
6347 (8) in the case of a person that is a trust or is acting as a member by virtue of being a
6348 trustee of a trust, the trust's entire transferable interest in the limited liability company is
6349 distributed;
6350
6351 personal representative of an estate, the estate's entire transferable interest in the limited
6352 liability company is distributed;
6353 (10) in the case of a member that is not an individual, partnership, limited liability
6354 company, corporation, trust, or estate, the termination of the member;
6355 (11) the limited liability company participates in a merger under Part 10, Merger,
6356 Conversion, and Domestication, if:
6357 (a) the limited liability company is not the surviving entity; or
6358 (b) otherwise as a result of the merger, the person ceases to be a member;
6359 (12) the limited liability company participates in a conversion under Part 10, Merger,
6360 Conversion, and Domestication;
6361 (13) the limited liability company participates in a domestication under Part 10,
6362 Merger, Conversion, and Domestication, if, as a result of the domestication, the person ceases
6363 to be a member; or
6364 (14) the limited liability company terminates.
6365 Section 235. Section 48-3-603 is enacted to read:
6366 48-3-603. Effect of person's dissociation as member.
6367 (1) When a person is dissociated as a member of a limited liability company:
6368 (a) the person's right to participate as a member in the management and conduct of the
6369 limited liability company's activities terminates;
6370 (b) if the limited liability company is member-managed, the person's fiduciary duties as
6371 a member end with regard to matters arising and events occurring after the person's
6372 dissociation; and
6373 (c) subject to Section 48-3-504 and Part 10, Merger, Conversion, and Domestication,
6374 any transferable interest owned by the person immediately before dissociation in the person's
6375 capacity as a member is owned by the person solely as a transferee.
6376 (2) A person's dissociation as a member of a limited liability company does not of itself
6377 discharge the person from any debt, obligation, or other liability to the limited liability
6378 company or the other members which the person incurred while a member.
6379 Section 236. Section 48-3-701 is enacted to read:
6380
6381
6382 A limited liability company is dissolved, and its activities must be wound up, upon the
6383 occurrence of any of the following:
6384 (1) an event or circumstance that the operating agreement states causes dissolution;
6385 (2) the consent of all the members;
6386 (3) the passage of 90 consecutive days during which the limited liability company has
6387 no members;
6388 (4) on application by a member, the entry by a district court of an order dissolving the
6389 limited liability company on the grounds that:
6390 (a) the conduct of all or substantially all of the limited liability company's activities is
6391 unlawful; or
6392 (b) it is not reasonably practicable to carry on the limited liability company's activities
6393 in conformity with the certificate of organization and the operating agreement; or
6394 (5) on application by a member, the entry by a district court of an order dissolving the
6395 limited liability company on the grounds that the managers or those in control of the limited
6396 liability company have acted, are acting, or will act in a manner that is illegal, oppressive, or
6397 fraudulent.
6398 Section 237. Section 48-3-702 is enacted to read:
6399 48-3-702. Election to purchase in lieu of dissolution.
6400 (1) In a proceeding under Subsection 48-3-701 (5) to dissolve a limited liability
6401 company, the limited liability company may elect, or if it fails to elect, one or more members
6402 may elect to purchase the interest in the limited liability company owned by the petitioning
6403 member at the fair market value of the interest, determined as provided in this section. An
6404 election pursuant to this section is irrevocable unless the court determines that it is equitable to
6405 set aside or modify the election.
6406 (2) (a) An election to purchase pursuant to this section may be filed with the court at
6407 any time within 90 days after the filing of the petition in a proceeding under Subsection
6408 48-3-701 (5) or at any later time as the court in its discretion may allow. If the limited liability
6409 company files an election with the court within the 90-day period, or at any later time allowed
6410 by the court, to purchase the interest in the limited liability company owned by the petitioning
6411 member, the limited liability company shall purchase the interest in the manner provided in this
6412
6413 (b) If the limited liability company does not file an election with the court within the
6414 time period, but an election to purchase the interest in the limited liability company owned by
6415 the petitioning member is filed by one or more members within the time period, the limited
6416 liability company shall, within 10 days after the later of the end of the time period allowed for
6417 the filing of elections to purchase under this section or notification from the court of an election
6418 by members to purchase the interest in the limited liability company owned by the petitioning
6419 member as provided in this section, give written notice of the election to purchase to all
6420 members of the limited liability company, other than the petitioning member. The notice shall
6421 state the name and the percentage interest in the limited liability company owned by the
6422 petitioning member and the name and the percentage interest in the limited liability company
6423 owned by each electing member. The notice shall advise any recipients who have not
6424 participated in the election of their right to join in the election to purchase the interest in the
6425 limited liability company in accordance with this section, and of the date by which any notice
6426 of intent to participate must be filed with the court.
6427 (c) Members who wish to participate in the purchase of the interest in the limited
6428 liability company of the petitioning member must file notice of their intention to join in the
6429 purchase by electing members, no later than 30 days after the effective date of the limited
6430 liability company's notice of their right to join in the election to purchase.
6431 (d) All members who have filed with the court an election or notice of their intention to
6432 participate in the election to purchase the interest in the limited liability company of the
6433 petitioning member thereby become irrevocably obligated to participate in the purchase of the
6434 interest from the petitioning member upon the terms and conditions of this section, unless the
6435 court otherwise directs.
6436 (e) After an election has been filed by the limited liability company or one or more
6437 members, the proceedings under Subsection 48-3-701 (5) may not be discontinued or settled,
6438 nor may the petitioning member sell or otherwise dispose of the petitioning member's interest
6439 in the limited liability company, unless the court determines that it would be equitable to the
6440 limited liability company and the members, other than the petitioning member, to permit any
6441 discontinuance, settlement, sale, or other disposition.
6442 (3) If, within 60 days after the earlier of the limited liability company filing of an
6443
6444 the limited liability company's mailing of a notice to its members of the filing of an election by
6445 the members to purchase the interest in the limited liability company of the petitioning
6446 member, the petitioning member and electing limited liability company or members reach
6447 agreement as to the fair market value and terms of the purchase of the petitioning member's
6448 interest, the court shall enter an order directing the purchase of the petitioning member's
6449 interest, upon the terms and conditions agreed to by the parties.
6450 (4) If the parties are unable to reach an agreement as provided for in Subsection (3),
6451 upon application of any party, the court shall stay the proceedings under Subsection
6452 48-3-701 (5) and determine the fair market value of the petitioning member's interest in the
6453 limited liability company as of the day before the date on which the petition under Subsection
6454 48-3-701 (5) was filed or as of any other date the court determines to be appropriate under the
6455 circumstances and based on the factors the court determines to be appropriate.
6456 (5) (a) Upon determining the fair market value of the interest in the limited liability
6457 company of the petitioning member, the court shall enter an order directing the purchase of the
6458 interest in the limited liability company upon terms and conditions the court determines to be
6459 appropriate. The terms and conditions may include payment of the purchase price in
6460 installments, where necessary in the interest of equity, provision for security to assure payment
6461 of the purchase price and any additional costs, fees, and expenses awarded by the court, and an
6462 allocation of the interest in the limited liability company among members if the interest in the
6463 limited liability company is to be purchased by members.
6464 (b) In allocating the petitioning member's interest in the limited liability company
6465 among holders of different classes of members, the court shall attempt to preserve the existing
6466 distribution of voting rights among member classes to the extent practicable. The court may
6467 direct that holders of a specific class or classes may not participate in the purchase. The court
6468 may not require any electing member to purchase more of the interest in the limited liability
6469 company owned by the petitioning member than the percentage interest that the purchasing
6470 member may have set forth in the purchasing member's election or notice of intent to
6471 participate filed with the court.
6472 (c) Interest may be allowed at the rate and from the date determined by the court to be
6473 equitable. However, if the court finds that the refusal of the petitioning member to accept an
6474
6475 (d) If the court finds that the petitioning member had probable ground for relief under
6476 Subsection 48-3-701 (5), the court may award to the petitioning member reasonable fees and
6477 expenses of counsel and experts employed by the petitioning member.
6478 (6) Upon entry of an order under Subsection (3) or (5), the court shall dismiss the
6479 petition to dissolve the limited liability company under Subsection 48-3-701 (5) and the
6480 petitioning member shall no longer have any rights or status as a member of the limited liability
6481 company, except the right to receive the amounts awarded to him by the court. The award is
6482 enforceable in the same manner as any other judgment.
6483 (7) (a) The purchase ordered pursuant to Subsection (5) shall be made within 10 days
6484 after the date the order becomes final, unless before that time the limited liability company files
6485 with the court a notice of its intention to file a certificate of dissolution. The certificate of
6486 dissolution must then be adopted and filed within 60 days after notice.
6487 (b) Upon filing of articles of dissolution, the limited liability company is dissolved and
6488 shall be wound up pursuant to Section 48-3-703 , and the order entered pursuant to Subsection
6489 (5) is no longer of any force or effect. However, the court may award the petitioning member
6490 reasonable fees and expenses in accordance with Subsection (5)(d). The petitioning member
6491 may continue to pursue any claims previously asserted on behalf of the limited liability
6492 company.
6493 (8) Any payment by the limited liability company pursuant to an order under
6494 Subsection (3) or (5), other than an award of fees and expenses pursuant to Subsection (5)(d),
6495 is subject to the provisions of Sections 48-3-405 and 48-3-406 .
6496 Section 238. Section 48-3-703 is enacted to read:
6497 48-3-703. Winding up.
6498 (1) A dissolved limited liability company shall wind up its activities, and the limited
6499 liability company continues after dissolution only for the purpose of winding up.
6500 (2) In winding up its activities, a limited liability company:
6501 (a) shall discharge the limited liability company's debts, obligations, or other liabilities,
6502 settle and close the limited liability company's activities, and marshal and distribute the assets
6503 of the limited liability company; and
6504 (b) may:
6505
6506 limited liability company and that the limited liability company is dissolved;
6507 (ii) preserve the limited liability company activities and property as a going concern for
6508 a reasonable time;
6509 (iii) prosecute and defend actions and proceedings, whether civil, criminal, or
6510 administrative;
6511 (iv) transfer the limited liability company's property;
6512 (v) settle disputes by mediation or arbitration;
6513 (vi) deliver to the division for filing a statement of termination stating the name of the
6514 limited liability company and that the limited liability company is terminated; and
6515 (vii) perform other acts necessary or appropriate to the winding up.
6516 (3) If a dissolved limited liability company has no members, the legal representative of
6517 the last person to have been a member may wind up the activities of the limited liability
6518 company. If the person does so, the person has the powers of a sole manager under Subsection
6519 48-3-407 (3) and is deemed to be a manager for the purposes of Subsection 48-3-304 (1)(b).
6520 (4) If the legal representative under Subsection (3) declines or fails to wind up the
6521 limited liability company's activities, a person may be appointed to do so by the consent of
6522 transferees owning a majority of the rights to receive distributions as transferees at the time the
6523 consent is to be effective. A person appointed under this Subsection (4):
6524 (a) has the powers of a sole manager under Subsection 48-3-407 (3) and is deemed to
6525 be a manager for the purposes of Subsection 48-3-304 (1)(b); and
6526 (b) shall promptly deliver to the division for filing an amendment to the limited
6527 liability company's certificate of organization to:
6528 (i) state that the limited liability company has no members;
6529 (ii) state that the person has been appointed pursuant to this Subsection (4) to wind up
6530 the limited liability company; and
6531 (c) provide the street and mailing addresses of the person.
6532 (5) A district court may order judicial supervision of the winding up of a dissolved
6533 limited liability company, including the appointment of a person to wind up the limited liability
6534 company's activities:
6535 (a) on application of a member, if the applicant establishes good cause;
6536
6537 (i) the limited liability company does not have any members;
6538 (ii) the legal representative of the last person to have been a member declines or fails to
6539 wind up the limited liability company's activities; and
6540 (iii) within a reasonable time following the dissolution a person has not been appointed
6541 pursuant to Subsection (4); or
6542 (c) in connection with a proceeding under Subsection 48-3-701 (4) or (5).
6543 Section 239. Section 48-3-704 is enacted to read:
6544 48-3-704. Known claims against dissolved limited liability company.
6545 (1) A dissolved limited liability company in winding up may dispose of the known
6546 claims against it by following the procedures described in this section.
6547 (2) A limited liability company in winding up electing to dispose of known claims
6548 pursuant to this section may give written notice of the limited liability company 's dissolution
6549 to known claimants at any time after the effective date of the dissolution. The written notice
6550 must:
6551 (a) describe the information that must be included in a claim;
6552 (b) provide an address to which written notice of any claim must be given to the
6553 limited liability company;
6554 (c) state the deadline, which may not be fewer than 120 days after the effective date of
6555 the notice, by which the dissolved limited liability company must receive the claim; and
6556 (d) state that, unless sooner barred by another state statute limiting actions, the claim
6557 will be barred if not received by the deadline.
6558 (3) Unless sooner barred by another statute limiting actions, a claim against the
6559 dissolved limited liability company is barred if:
6560 (a) a claimant was given notice under Subsection (2) and the claim is not received by
6561 the dissolved limited liability company by the deadline; or
6562 (b) the dissolved limited liability company delivers to the claimant written notice of
6563 rejection of the claim within 90 days after receipt of the claim and the claimant whose claim
6564 was rejected by the dissolved limited liability company does not commence a proceeding to
6565 enforce the claim within 90 days after the effective date of the rejection notice.
6566 (4) Claims which are not rejected by the dissolved limited liability company in writing
6567
6568 considered approved.
6569 (5) The failure of the dissolved limited liability company to give notice to any known
6570 claimant pursuant to Subsection (2) does not affect the disposition under this section of any
6571 claim held by any other known claimant.
6572 (6) This section does not apply to a claim based on an event occurring after the
6573 effective date of dissolution or a liability that on that date is contingent.
6574 Section 240. Section 48-3-705 is enacted to read:
6575 48-3-705. Other claims against dissolved limited liability company.
6576 (1) A dissolved limited liability company may publish notice of its dissolution and
6577 request persons having claims against the limited liability company to present them in
6578 accordance with the notice.
6579 (2) The notice authorized by Subsection (1) must:
6580 (a) be published:
6581 (i) at least once in a newspaper of general circulation in the county in this state in
6582 which the dissolved limited liability company's principal office is located or, if it has none in
6583 this state, in Salt Lake County; and
6584 (ii) in accordance with Section 45-1-101 ;
6585 (b) describe the information required to be contained in a claim and provide a mailing
6586 address to which the claim is to be sent; and
6587 (c) state that a claim against the limited liability company is barred unless an action to
6588 enforce the claim is commenced within five years after publication of the notice.
6589 (3) If a dissolved limited liability company publishes a notice in accordance with
6590 Subsection (2), unless the claimant commences an action to enforce the claim against the
6591 limited liability company within five years after the publication date of the notice, the claim of
6592 each of the following claimants is barred:
6593 (a) a claimant that did not receive notice in a record under Section 48-3-704 ;
6594 (b) a claimant whose claim was timely sent to the limited liability company but not
6595 acted on; and
6596 (c) a claimant whose claim is contingent at, or based on an event occurring after, the
6597 effective date of dissolution.
6598
6599 (a) against a dissolved limited liability company, to the extent of its undistributed
6600 assets; and
6601 (b) if assets of the limited liability company have been distributed after dissolution,
6602 against a member or transferee to the extent of that person's proportionate share of the claim or
6603 of the assets distributed to the member or transferee after dissolution, whichever is less, but a
6604 person's total liability for all claims under this Subsection (4)(b) does not exceed the total
6605 amount of assets distributed to the person after dissolution.
6606 Section 241. Section 48-3-706 is enacted to read:
6607 48-3-706. Administrative dissolution.
6608 (1) The division may dissolve a limited liability company administratively if the
6609 limited liability company does not:
6610 (a) pay, within 60 days after the due date, any fee, tax, or penalty due to the division
6611 under this chapter or law other than this chapter; or
6612 (b) deliver, within 60 days after the due date, its annual report to the division.
6613 (2) If the division determines that a ground exists for administratively dissolving a
6614 limited liability company, the division shall file a record of the determination and serve the
6615 limited liability company with a copy of the filed record.
6616 (3) If within 60 days after service of the copy pursuant to Subsection (2) a limited
6617 liability company does not correct each ground for dissolution or demonstrate to the reasonable
6618 satisfaction of the division that each ground determined by the division does not exist, the
6619 division shall dissolve the limited liability company administratively by preparing, signing, and
6620 filing a declaration of dissolution that states the grounds for dissolution. The division shall
6621 serve the limited liability company with a copy of the filed declaration.
6622 (4) A limited liability company that has been administratively dissolved continues in
6623 existence but, subject to Section 48-3-707 , may carry on only activities necessary to wind up its
6624 activities and liquidate its assets under Sections 48-3-703 and 48-3-709 and to notify claimants
6625 under Sections 48-3-704 and 48-3-705 .
6626 (5) The administrative dissolution of a limited liability company does not terminate the
6627 authority of its agent for service of process.
6628 Section 242. Section 48-3-707 is enacted to read:
6629
6630 (1) A limited liability company that has been administratively dissolved may apply to
6631 the division for reinstatement within two years after the effective date of dissolution. The
6632 application must be delivered to the division for filing and state:
6633 (a) the name of the limited liability company and the effective date of its dissolution;
6634 (b) that the grounds for dissolution did not exist or have been eliminated; and
6635 (c) that the limited liability company's name satisfies the requirements of Section
6636 48-3-108 .
6637 (2) If the division determines that an application under Subsection (1) contains the
6638 required information and that the information is correct, the division shall prepare a declaration
6639 of reinstatement that states this determination, sign and file the original of the declaration of
6640 reinstatement, and serve the limited liability company with a copy.
6641 (3) When a reinstatement becomes effective, it relates back to and takes effect as of the
6642 effective date of the administrative dissolution and the limited liability company may resume
6643 its activities as if the dissolution had not occurred.
6644 Section 243. Section 48-3-708 is enacted to read:
6645 48-3-708. Appeal from rejection of reinstatement.
6646 (1) If the division rejects a limited liability company's application for reinstatement
6647 following administrative dissolution, the division shall prepare, sign, and file a notice that
6648 explains the reason for rejection and serve the limited liability company with a copy of the
6649 notice.
6650 (2) Within 30 days after service of a notice of rejection of reinstatement under
6651 Subsection (1), a limited liability company may appeal from the rejection by petitioning a court
6652 of appropriate jurisdiction to set aside the dissolution. The petition must be served on the
6653 division and contain a copy of the division's declaration of dissolution, the limited liability
6654 company's application for reinstatement, and the division's notice of rejection.
6655 (3) The court may order the division to reinstate a dissolved limited liability company
6656 or take other action the court considers appropriate.
6657 Section 244. Section 48-3-709 is enacted to read:
6658 48-3-709. Distribution of assets in winding up limited liability company's
6659 activities.
6660
6661 discharge its obligations to creditors, including members that are creditors.
6662 (2) After a limited liability company complies with Subsection (1), any surplus must be
6663 distributed in the following order, subject to any charging order in effect under Section
6664 48-3-503 :
6665 (a) to each person owning a transferable interest that reflects contributions made by a
6666 member and not previously returned, an amount equal to the value of the unreturned
6667 contributions; and
6668 (b) in equal shares among members and dissociated members, except to the extent
6669 necessary to comply with any transfer effective under Section 48-3-502 .
6670 (3) If a limited liability company does not have sufficient surplus to comply with
6671 Subsection (2)(a), any surplus must be distributed among the owners of transferable interests in
6672 proportion to the value of their respective unreturned contributions.
6673 (4) All distributions made under Subsections (2) and (3) must be paid in money.
6674 Section 245. Section 48-3-801 is enacted to read:
6675
6676 48-3-801. Governing law.
6677 (1) The law of the state or other jurisdiction under which a foreign limited liability
6678 company is formed governs:
6679 (a) the internal affairs of the limited liability company; and
6680 (b) the liability of a member as member and a manager as manager for the debts,
6681 obligations, or other liabilities of the limited liability company.
6682 (2) A foreign limited liability company may not be denied a certificate of authority by
6683 reason of any difference between the law of the jurisdiction under which the limited liability
6684 company is formed and the law of this state.
6685 (3) A certificate of authority does not authorize a foreign limited liability company to
6686 engage in any business or exercise any power that a limited liability company may not engage
6687 in or exercise in this state.
6688 (4) (a) The division may permit a tribal limited liability company to apply for authority
6689 to transact business in the state in the same manner as a foreign company formed in another
6690 state.
6691
6692 in the state, for purposes of this chapter, the tribal limited liability company shall be treated in
6693 the same manner as a foreign company formed under the laws of another state.
6694 Section 246. Section 48-3-802 is enacted to read:
6695 48-3-802. Application for certificate of authority.
6696 (1) A foreign limited liability company may apply for a certificate of authority to
6697 transact business in this state by delivering an application to the division for filing. The
6698 application must state:
6699 (a) the name of the limited liability company and, if the name does not comply with
6700 Section 48-3-108 , an alternate name adopted pursuant to Subsection 48-3-805 (1);
6701 (b) the name of the state or other jurisdiction under whose law the limited liability
6702 company is formed;
6703 (c) the street and mailing addresses of the limited liability company's principal office
6704 and, if the law of the jurisdiction under which the limited liability company is formed requires
6705 the limited liability company to maintain an office in that jurisdiction, the street and mailing
6706 addresses of the required office; and
6707 (d) the information required by Subsection 16-17-203 (1).
6708 (2) A foreign limited liability company shall deliver with a completed application
6709 under Subsection (1) a certificate of existence or a record of similar import signed by the
6710 division or other official having custody of the limited liability company's publicly filed records
6711 in the state or other jurisdiction under whose law the limited liability company is formed.
6712 Section 247. Section 48-3-803 is enacted to read:
6713 48-3-803. Activities not constituting transacting business.
6714 (1) Activities of a foreign limited liability company which do not constitute transacting
6715 business in this state within the meaning of this part include:
6716 (a) maintaining, defending, or settling an action or proceeding;
6717 (b) carrying on any activity concerning its internal affairs, including holding meetings
6718 of its members or managers;
6719 (c) maintaining accounts in financial institutions;
6720 (d) maintaining offices or agencies for the transfer, exchange, and registration of the
6721 limited liability company's own securities or maintaining trustees or depositories with respect
6722
6723 (e) selling through independent contractors;
6724 (f) soliciting or obtaining orders, whether by mail or electronic means or through
6725 employees or agents or otherwise, if the orders require acceptance outside this state before they
6726 become contracts;
6727 (g) creating or acquiring indebtedness, mortgages, or security interests in real or
6728 personal property;
6729 (h) securing or collecting debts or enforcing mortgages or other security interests in
6730 property securing the debts and holding, protecting, or maintaining property so acquired;
6731 (i) conducting an isolated transaction that is completed within 30 days and is not in the
6732 course of similar transactions; and
6733 (j) transacting business in interstate commerce.
6734 (2) For purposes of this part, the ownership in this state of income-producing real
6735 property or tangible personal property, other than property excluded under Subsection (1),
6736 constitutes transacting business in this state.
6737 (3) This section does not apply in determining the contacts or activities that may
6738 subject a foreign limited liability company to service of process, taxation, or regulation under
6739 law of this state other than this chapter.
6740 Section 248. Section 48-3-804 is enacted to read:
6741 48-3-804. Filing of certificate of authority.
6742 Unless the division determines that an application for a certificate of authority does not
6743 comply with the filing requirements of this chapter, the division, upon payment of all filing
6744 fees, shall file the application of a foreign limited liability company, prepare, sign, and file a
6745 certificate of authority to transact business in this state, and send a copy of the filed certificate,
6746 together with a receipt for the fees, to the limited liability company or its representative.
6747 Section 249. Section 48-3-805 is enacted to read:
6748 48-3-805. Noncomplying name of foreign limited liability company.
6749 (1) A foreign limited liability company whose name does not comply with Section
6750 48-3-108 may not obtain a certificate of authority until it adopts, for the purpose of transacting
6751 business in this state, an alternate name that complies with Section 48-3-108 . A foreign limited
6752 liability company that adopts an alternate name under this Subsection (1) and obtains a
6753
6754 Conducting Business Under Assumed Name. After obtaining a certificate of authority with an
6755 alternate name, a foreign limited liability company shall transact business in this state under the
6756 alternate name unless the limited liability company is authorized under Title 42, Chapter 2,
6757 Conducting Business Under Assumed Name, to transact business in this state under another
6758 name.
6759 (2) If a foreign limited liability company authorized to transact business in this state
6760 changes its name to one that does not comply with Section 48-3-108 , it may not thereafter
6761 transact business in this state until it complies with Subsection (1) and obtains an amended
6762 certificate of authority.
6763 Section 250. Section 48-3-806 is enacted to read:
6764 48-3-806. Revocation of certificate of authority.
6765 (1) A certificate of authority of a foreign limited liability company to transact business
6766 in this state may be revoked by the division in the manner provided in Subsections (2) and (3)
6767 if the limited liability company does not:
6768 (a) pay, within 60 days after the due date, any fee, tax, or penalty due to the division
6769 under this chapter or law other than this chapter;
6770 (b) deliver, within 60 days after the due date, its annual report required under Section
6771 48-3-209 ;
6772 (c) appoint and maintain an agent for service of process as required by Subsection
6773 16-17-203 (1); or
6774 (d) deliver for filing a statement of a change under Section 16-17-206 within 30 days
6775 after a change has occurred in the name or address of the agent.
6776 (2) To revoke a certificate of authority of a foreign limited liability company, the
6777 division must prepare, sign, and file a notice of revocation and send a copy to the limited
6778 liability company's agent for service of process in this state, or if the limited liability company
6779 does not appoint and maintain a proper agent in this state, to the limited liability company's
6780 principal office. The notice must state:
6781 (a) the revocation's effective date, which must be at least 60 days after the date the
6782 division sends the copy; and
6783 (b) the grounds for revocation under Subsection (1).
6784
6785 ceases on the effective date of the notice of revocation unless before that date the limited
6786 liability company cures each ground for revocation stated in the notice filed under Subsection
6787 (2). If the limited liability company cures each ground, the division shall file a record so
6788 stating.
6789 Section 251. Section 48-3-807 is enacted to read:
6790 48-3-807. Cancellation of certificate of authority.
6791 To cancel its certificate of authority to transact business in this state, a foreign limited
6792 liability company must deliver to the division for filing a notice of cancellation stating the
6793 name of the limited liability company and that the limited liability company desires to cancel
6794 its certificate of authority. The certificate is canceled when the notice becomes effective.
6795 Section 252. Section 48-3-808 is enacted to read:
6796 48-3-808. Effect of failure to have certificate of authority.
6797 (1) A foreign limited liability company transacting business in this state may not
6798 maintain an action or proceeding in this state unless it has a certificate of authority to transact
6799 business in this state.
6800 (2) The failure of a foreign limited liability company to have a certificate of authority
6801 to transact business in this state does not impair the validity of a contract or act of the limited
6802 liability company or prevent the limited liability company from defending an action or
6803 proceeding in this state.
6804 (3) A member or manager of a foreign limited liability company is not liable for the
6805 debts, obligations, or other liabilities of the limited liability company solely because the limited
6806 liability company transacted business in this state without a certificate of authority.
6807 (4) If a foreign limited liability company transacts business in this state without a
6808 certificate of authority or cancels its certificate of authority, service of process for rights of
6809 action arising out of the transaction of business in this state shall be served in accordance with
6810 Section 16-17-301 .
6811 Section 253. Section 48-3-809 is enacted to read:
6812 48-3-809. Action by attorney general.
6813 The attorney general may maintain an action to enjoin a foreign limited liability
6814 company from transacting business in this state in violation of this part.
6815
6816
6817 48-3-901. Direct action by member.
6818 (1) Subject to Subsection (2), a member may maintain a direct action against another
6819 member, a manager, or the limited liability company to enforce the member's rights and
6820 otherwise protect the member's interests, including rights and interests under the operating
6821 agreement or this chapter or arising independently of the membership relationship.
6822 (2) A member maintaining a direct action under this section must plead and prove an
6823 actual or threatened injury that is not solely the result of an injury suffered or threatened to be
6824 suffered by the limited liability company.
6825 Section 255. Section 48-3-902 is enacted to read:
6826 48-3-902. Derivative action.
6827 A member may maintain a derivative action to enforce a right of a limited liability
6828 company if:
6829 (1) the member first makes a demand on the other members in a member-managed
6830 limited liability company, or the managers of a manager-managed limited liability company,
6831 requesting that they cause the limited liability company to bring an action to enforce the right,
6832 and the managers or other members do not bring the action within a reasonable time; or
6833 (2) a demand under Subsection (1) would be futile.
6834 Section 256. Section 48-3-903 is enacted to read:
6835 48-3-903. Proper plaintiff.
6836 (1) Except as otherwise provided in Subsection (2), a derivative action under Section
6837 48-3-902 may be maintained only by a person that is a member at the time the action is
6838 commenced and remains a member while the action continues.
6839 (2) If the sole plaintiff in a derivative action dies while the action is pending, the court
6840 may permit another member of the limited liability company to be substituted as plaintiff.
6841 Section 257. Section 48-3-904 is enacted to read:
6842 48-3-904. Pleading.
6843 In a derivative action under Section 48-3-902 , the complaint must state with
6844 particularity:
6845 (1) the date and content of plaintiff's demand and the response to the demand by the
6846
6847 (2) if a demand has not been made, the reasons a demand under Subsection
6848 48-3-902 (1) would be futile.
6849 Section 258. Section 48-3-905 is enacted to read:
6850 48-3-905. Special litigation committee.
6851 (1) If a limited liability company is named as or made a party in a derivative
6852 proceeding, the limited liability company may appoint a special litigation committee to
6853 investigate the claims asserted in the proceeding and determine whether pursuing the action is
6854 in the best interests of the limited liability company. If the limited liability company appoints a
6855 special litigation committee, on motion by the committee made in the name of the limited
6856 liability company, except for good cause shown, the court shall stay discovery for the time
6857 reasonably necessary to permit the committee to make its investigation. This Subsection (1)
6858 does not prevent the court from enforcing a person's right to information under Section
6859 48-3-410 or, for good cause shown, granting extraordinary relief in the form of a temporary
6860 restraining order or preliminary injunction.
6861 (2) A special litigation committee may be composed of one or more disinterested and
6862 independent individuals, who may be members.
6863 (3) A special litigation committee may be appointed:
6864 (a) in a member-managed limited liability company:
6865 (i) by the consent of a majority of the members not named as defendants or plaintiffs in
6866 the proceeding; and
6867 (ii) if all members are named as defendants or plaintiffs in the proceeding, by a
6868 majority of the members named as defendants; or
6869 (b) in a manager-managed limited liability company:
6870 (i) by a majority of the managers not named as defendants or plaintiffs in the
6871 proceeding; and
6872 (ii) if all managers are named as defendants or plaintiffs in the proceeding, by a
6873 majority of the managers named as defendants.
6874 (4) After appropriate investigation, a special litigation committee may determine that it
6875 is in the best interests of the limited liability company that the proceeding:
6876 (a) continue under the control of the plaintiff;
6877
6878 (c) be settled on terms approved by the committee; or
6879 (d) be dismissed.
6880 (5) After making a determination under Subsection (4), a special litigation committee
6881 shall file with the court a statement of its determination and its report supporting its
6882 determination, giving notice to the plaintiff. The court shall determine whether the members of
6883 the committee were disinterested and independent and whether the committee conducted its
6884 investigation and made its recommendation in good faith, independently, and with reasonable
6885 care, with the committee having the burden of proof. If the court finds that the members of the
6886 committee were disinterested and independent and that the committee acted in good faith,
6887 independently, and with reasonable care, the court shall enforce the determination of the
6888 committee. Otherwise, the court shall dissolve the stay of discovery entered under Subsection
6889 (1) and allow the action to proceed under the direction of the plaintiff.
6890 Section 259. Section 48-3-906 is enacted to read:
6891 48-3-906. Proceeds and expenses.
6892 (1) Except as otherwise provided in Subsection (2):
6893 (a) any proceeds or other benefits of a derivative action under Section 48-3-902 ,
6894 whether by judgment, compromise, or settlement, belong to the limited liability company and
6895 not to the plaintiff; and
6896 (b) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to
6897 the limited liability company.
6898 (2) If a derivative action under Section 48-3-902 is successful in whole or in part, the
6899 court may award the plaintiff reasonable expenses, including reasonable attorney fees and
6900 costs, from the recovery of the limited liability company.
6901 Section 260. Section 48-3-1001 is enacted to read:
6902
6903 48-3-1001. Definitions.
6904 As used in this part:
6905 (1) "Constituent limited liability company" means a constituent organization that is a
6906 limited liability company.
6907 (2) "Constituent organization" means an organization that is party to a merger.
6908
6909 organization converts pursuant to Sections 48-3-1006 through 48-3-1009 .
6910 (4) "Converting limited liability company" means a converting organization that is a
6911 limited liability company.
6912 (5) "Converting organization" means an organization that converts into another
6913 organization pursuant to Section 48-3-1006 .
6914 (6) "Domesticated company" means the limited liability company that exists after a
6915 domesticating foreign limited liability company or limited liability company effects a
6916 domestication pursuant to Sections 48-3-1010 through 48-3-1013 .
6917 (7) "Domesticating company" means the limited liability company that effects a
6918 domestication pursuant to Sections 48-3-1010 through 48-3-1013 .
6919 (8) "Governing statute" means the statute that governs an organization's internal affairs.
6920 (9) (a) "Organization" means:
6921 (i) a general partnership, including a limited liability partnership;
6922 (ii) a limited partnership, including a limited liability limited partnership;
6923 (iii) a limited liability company;
6924 (iv) a business trust;
6925 (v) a corporation; or
6926 (vi) any other person having a governing statute.
6927 (b) "Organization" includes a domestic or foreign organization regardless of whether
6928 organized for profit.
6929 (10) "Organizational documents" means:
6930 (a) for a domestic or foreign general partnership, its partnership agreement;
6931 (b) for a limited partnership or foreign limited partnership, its certificate of limited
6932 partnership and partnership agreement;
6933 (c) for a domestic or foreign limited liability company, its certificate or articles of
6934 organization and operating agreement, or comparable records as provided in its governing
6935 statute;
6936 (d) for a business trust, its agreement of trust and declaration of trust;
6937 (e) for a domestic or foreign corporation for profit, its articles of incorporation, bylaws,
6938 and other agreements among its shareholders which are authorized by its governing statute, or
6939
6940 (f) for any other organization, the basic records that create the organization and
6941 determine its internal governance and the relations among the persons that own it, have an
6942 interest in it, or are members of it.
6943 (11) "Personal liability" means liability for a debt, obligation, or other liability of an
6944 organization which is imposed on a person that co-owns, has an interest in, or is a member of
6945 the organization:
6946 (a) by the governing statute solely by reason of the person co-owning, having an
6947 interest in, or being a member of the organization; or
6948 (b) by the organization's organizational documents under a provision of the governing
6949 statute authorizing those documents to make one or more specified persons liable for all or
6950 specified debts, obligations, or other liabilities of the organization solely by reason of the
6951 person or persons co-owning, having an interest in, or being a member of the organization.
6952 (12) "Surviving organization" means an organization into which one or more other
6953 organizations are merged whether the organization preexisted the merger or was created by the
6954 merger.
6955 Section 261. Section 48-3-1002 is enacted to read:
6956 48-3-1002. Merger.
6957 (1) A limited liability company may merge with one or more other constituent
6958 organizations pursuant to this section, Sections 48-3-1003 through 48-3-1005 , and a plan of
6959 merger, if:
6960 (a) the governing statute of each of the other organizations authorizes the merger;
6961 (b) the merger is not prohibited by the law of a jurisdiction that enacted any of the
6962 governing statutes; and
6963 (c) each of the other organizations complies with its governing statute in effecting the
6964 merger.
6965 (2) A plan of merger must be in a record and must include:
6966 (a) the name and form of each constituent organization;
6967 (b) the name and form of the surviving organization and, if the surviving organization
6968 is to be created by the merger, a statement to that effect;
6969 (c) the terms and conditions of the merger, including the manner and basis for
6970
6971 interests in the surviving organization, and other consideration;
6972 (d) if the surviving organization is to be created by the merger, the surviving
6973 organization's organizational documents that are proposed to be in a record; and
6974 (e) if the surviving organization is not to be created by the merger, any amendments to
6975 be made by the merger to the surviving organization's organizational documents that are, or are
6976 proposed to be, in a record.
6977 Section 262. Section 48-3-1003 is enacted to read:
6978 48-3-1003. Action on plan of merger by constituent limited liability company.
6979 (1) Subject to Section 48-3-1014 , a plan of merger must be consented to by all the
6980 members of a constituent limited liability company.
6981 (2) Subject to Section 48-3-1014 and any contractual rights, after a merger is approved,
6982 and at any time before articles of merger are delivered to the division for filing under Section
6983 48-3-1004 , a constituent limited liability company may amend the plan or abandon the merger:
6984 (a) as provided in the plan; or
6985 (b) except as otherwise prohibited in the plan, with the same consent as was required to
6986 approve the plan.
6987 Section 263. Section 48-3-1004 is enacted to read:
6988 48-3-1004. Filings required for merger -- Effective date.
6989 (1) After each constituent organization has approved a merger, articles of merger must
6990 be signed on behalf of:
6991 (a) each constituent limited liability company, as provided in Subsection 48-3-203 (1);
6992 and
6993 (b) each other constituent organization, as provided in its governing statute.
6994 (2) Articles of merger under this section must include:
6995 (a) the name and form of each constituent organization and the jurisdiction of its
6996 governing statute;
6997 (b) the name and form of the surviving organization, the jurisdiction of its governing
6998 statute, and, if the surviving organization is created by the merger, a statement to that effect;
6999 (c) the date the merger is effective under the governing statute of the surviving
7000 organization;
7001
7002 (i) if it will be a limited liability company, the limited liability company's certificate of
7003 organization; or
7004 (ii) if it will be an organization other than a limited liability company, the
7005 organizational document that creates the organization that is in a public record;
7006 (e) if the surviving organization preexists the merger, any amendments provided for in
7007 the plan of merger for the organizational document that created the organization that are in a
7008 public record;
7009 (f) a statement as to each constituent organization that the merger was approved as
7010 required by the organization's governing statute;
7011 (g) if the surviving organization is a foreign organization not authorized to transact
7012 business in this state, the street and mailing addresses of an office that may be used for service
7013 of process under Subsection 48-3-1005 (2); and
7014 (h) any additional information required by the governing statute of any constituent
7015 organization.
7016 (3) Each constituent limited liability company shall deliver the articles of merger for
7017 filing in the division.
7018 (4) A merger becomes effective under this part:
7019 (a) if the surviving organization is a limited liability company, upon the later of:
7020 (i) compliance with Subsection (3); or
7021 (ii) subject to Subsection 48-3-205 (3), as specified in the articles of merger; or
7022 (b) if the surviving organization is not a limited liability company, as provided by the
7023 governing statute of the surviving organization.
7024 Section 264. Section 48-3-1005 is enacted to read:
7025 48-3-1005. Effect of merger.
7026 (1) When a merger becomes effective:
7027 (a) the surviving organization continues or comes into existence;
7028 (b) each constituent organization that merges into the surviving organization ceases to
7029 exist as a separate entity;
7030 (c) all property owned by each constituent organization that ceases to exist vests in the
7031 surviving organization;
7032
7033 to exist continue as debts, obligations, or other liabilities of the surviving organization;
7034 (e) an action or proceeding pending by or against any constituent organization that
7035 ceases to exist may be continued as if the merger had not occurred;
7036 (f) except as prohibited by other law, all of the rights, privileges, immunities, powers,
7037 and purposes of each constituent organization that ceases to exist vest in the surviving
7038 organization;
7039 (g) except as otherwise provided in the plan of merger, the terms and conditions of the
7040 plan of merger take effect; and
7041 (h) except as otherwise agreed, if a constituent limited liability company ceases to
7042 exist, the merger does not dissolve the limited liability company for the purposes of Part 7,
7043 Dissolution and Winding Up;
7044 (i) if the surviving organization is created by the merger:
7045 (A) if it is a limited liability company, the certificate of organization becomes
7046 effective; or
7047 (B) if it is an organization other than a limited liability company, the organizational
7048 document that creates the organization becomes effective; and
7049 (j) if the surviving organization preexisted the merger, any amendments provided for in
7050 the articles of merger for the organizational document that created the organization become
7051 effective.
7052 (2) A surviving organization that is a foreign organization consents to the jurisdiction
7053 of the courts of this state to enforce any debt, obligation, or other liability owed by a constituent
7054 organization, if before the merger the constituent organization was subject to suit in this state
7055 on the debt, obligation, or other liability. A surviving organization that is a foreign
7056 organization and not authorized to transact business in this state may be served with process at
7057 the address required in the articles of merger under Subsection 48-3-1004 (2)(g).
7058 Section 265. Section 48-3-1006 is enacted to read:
7059 48-3-1006. Conversion.
7060 (1) An organization other than a limited liability company or a foreign limited liability
7061 company may convert to a limited liability company, and a limited liability company may
7062 convert to an organization other than a foreign limited liability company pursuant to this
7063
7064 (a) the other organization's governing statute authorizes the conversion;
7065 (b) the conversion is not prohibited by the law of the jurisdiction that enacted the other
7066 organization's governing statute; and
7067 (c) the other organization complies with its governing statute in effecting the
7068 conversion.
7069 (2) A plan of conversion must be in a record and must include:
7070 (a) the name and form of the organization before conversion;
7071 (b) the name and form of the organization after conversion;
7072 (c) the terms and conditions of the conversion, including the manner and basis for
7073 converting interests in the converting organization into any combination of money, interests in
7074 the converted organization, and other consideration; and
7075 (d) the organizational documents of the converted organization that are, or are
7076 proposed to be, in a record.
7077 Section 266. Section 48-3-1007 is enacted to read:
7078 48-3-1007. Action on plan of conversion by converting limited liability company.
7079 (1) Subject to Section 48-3-1014 , a plan of conversion must be consented to by all the
7080 members of a converting limited liability company.
7081 (2) Subject to Section 48-3-1014 and any contractual rights, after a conversion is
7082 approved, and at any time before articles of conversion are delivered to the division for filing
7083 under Section 48-3-1008 , a converting limited liability company may amend the plan or
7084 abandon the conversion:
7085 (a) as provided in the plan; or
7086 (b) except as otherwise prohibited in the plan, by the same consent as was required to
7087 approve the plan.
7088 Section 267. Section 48-3-1008 is enacted to read:
7089 48-3-1008. Filings required for conversion -- Effective date.
7090 (1) After a plan of conversion is approved:
7091 (a) a converting limited liability company shall deliver to the division for filing articles
7092 of conversion, which must be signed as provided in Subsection 48-3-203 (1) and must include:
7093 (i) a statement that the limited liability company has been converted into another
7094
7095 (ii) the name and form of the organization and the jurisdiction of its governing statute;
7096 (iii) the date the conversion is effective under the governing statute of the converted
7097 organization;
7098 (iv) a statement that the conversion was approved as required by this chapter;
7099 (v) a statement that the conversion was approved as required by the governing statute
7100 of the converted organization; and
7101 (vi) if the converted organization is a foreign organization not authorized to transact
7102 business in this state, the street and mailing addresses of an office that may be used for service
7103 of process under Subsection 48-3-1009 (3); and
7104 (b) if the converting organization is not a converting limited liability company, the
7105 converting organization shall deliver to the division for filing a certificate of organization,
7106 which must include, in addition to the information required by Subsection 48-3-201 (2):
7107 (i) a statement that the converted organization was converted from another
7108 organization;
7109 (ii) the name and form of that converting organization and the jurisdiction of its
7110 governing statute; and
7111 (iii) a statement that the conversion was approved in a manner that complied with the
7112 converting organization's governing statute.
7113 (2) A conversion becomes effective:
7114 (a) if the converted organization is a limited liability company, when the certificate of
7115 organization takes effect; and
7116 (b) if the converted organization is not a limited liability company, as provided by the
7117 governing statute of the converted organization.
7118 Section 268. Section 48-3-1009 is enacted to read:
7119 48-3-1009. Effect of conversion.
7120 (1) An organization that has been converted pursuant to this part is for all purposes the
7121 same entity that existed before the conversion.
7122 (2) When a conversion takes effect:
7123 (a) all property owned by the converting organization remains vested in the converted
7124 organization;
7125
7126 debts, obligations, or other liabilities of the converted organization;
7127 (c) an action or proceeding pending by or against the converting organization may be
7128 continued as if the conversion had not occurred;
7129 (d) except as prohibited by law other than this chapter, all of the rights, privileges,
7130 immunities, powers, and purposes of the converting organization remain vested in the
7131 converted organization;
7132 (e) except as otherwise provided in the plan of conversion, the terms and conditions of
7133 the plan of conversion take effect; and
7134 (f) except as otherwise agreed, the conversion does not dissolve a converting limited
7135 liability company for the purposes of Part 7, Dissolution and Winding Up.
7136 (3) A converted organization that is a foreign organization consents to the jurisdiction
7137 of the courts of this state to enforce any debt, obligation, or other liability for which the
7138 converting limited liability company is liable if, before the conversion, the converting limited
7139 liability company was subject to suit in this state on the debt, obligation, or other liability. A
7140 converted organization that is a foreign organization and not authorized to transact business in
7141 this state may be served with process at the address required in the articles of conversion under
7142 Subsection 48-3-1008 (1)(a)(vi).
7143 Section 269. Section 48-3-1010 is enacted to read:
7144 48-3-1010. Domestication.
7145 (1) A foreign limited liability company may become a limited liability company
7146 pursuant to this section, Sections 48-3-1011 through 48-3-1013 , and a plan of domestication,
7147 if:
7148 (a) the foreign limited liability company's governing statute authorizes the
7149 domestication;
7150 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
7151 governing statute; and
7152 (c) the foreign limited liability company complies with its governing statute in
7153 effecting the domestication.
7154 (2) A limited liability company may become a foreign limited liability company
7155 pursuant to this section, Sections 48-3-1011 through 48-3-1013 , and a plan of domestication,
7156
7157 (a) the foreign limited liability company's governing statute authorizes the
7158 domestication;
7159 (b) the domestication is not prohibited by the law of the jurisdiction that enacted the
7160 governing statute; and
7161 (c) the foreign limited liability company complies with its governing statute in
7162 effecting the domestication.
7163 (3) A plan of domestication must be in a record and must include:
7164 (a) the name of the domesticating company before domestication and the jurisdiction of
7165 its governing statute;
7166 (b) the name of the domesticated company after domestication and the jurisdiction of
7167 its governing statute;
7168 (c) the terms and conditions of the domestication, including the manner and basis for
7169 converting interests in the domesticating company into any combination of money, interests in
7170 the domesticated company, and other consideration; and
7171 (d) the organizational documents of the domesticated company that are, or are
7172 proposed to be, in a record.
7173 Section 270. Section 48-3-1011 is enacted to read:
7174 48-3-1011. Action on plan of domestication by domesticating limited liability
7175 company.
7176 (1) A plan of domestication must be consented to:
7177 (a) by all the members, subject to Section 48-3-1014 , if the domesticating company is a
7178 limited liability company; and
7179 (b) as provided in the domesticating company's governing statute, if the limited
7180 liability company is a foreign limited liability company.
7181 (2) Subject to any contractual rights, after a domestication is approved, and at any time
7182 before articles of domestication are delivered to the division for filing under Section
7183 48-3-1012 , a domesticating company may amend the plan or abandon the domestication:
7184 (a) as provided in the plan; or
7185 (b) except as otherwise prohibited in the plan, by the same consent as was required to
7186 approve the plan.
7187
7188 48-3-1012. Filings required for domestication -- Effective date.
7189 (1) After a plan of domestication is approved, a domesticating company shall deliver to
7190 the division for filing articles of domestication, which must include:
7191 (a) a statement, as the case may be, that the limited liability company has been
7192 domesticated from or into another jurisdiction;
7193 (b) the name of the domesticating company and the jurisdiction of its governing
7194 statute;
7195 (c) the name of the domesticated company and the jurisdiction of its governing statute;
7196 (d) the date the domestication is effective under the governing statute of the
7197 domesticated company;
7198 (e) if the domesticating company was a limited liability company, a statement that the
7199 domestication was approved as required by this chapter;
7200 (f) if the domesticating company was a foreign limited liability company, a statement
7201 that the domestication was approved as required by the governing statute of the other
7202 jurisdiction; and
7203 (g) if the domesticated company was a foreign limited liability company not authorized
7204 to transact business in this state, the street and mailing addresses of an office that may be used
7205 for service of process under Subsection 48-3-1013 (2).
7206 (2) A domestication becomes effective:
7207 (a) when the certificate of organization takes effect, if the domesticated company is a
7208 limited liability company; and
7209 (b) according to the governing statute of the domesticated company, if the
7210 domesticated organization is a foreign limited liability company.
7211 Section 272. Section 48-3-1013 is enacted to read:
7212 48-3-1013. Effect of domestication.
7213 (1) When a domestication takes effect:
7214 (a) the domesticated company is for all purposes the limited liability company that
7215 existed before the domestication;
7216 (b) all property owned by the domesticating company remains vested in the
7217 domesticated company;
7218
7219 debts, obligations, or other liabilities of the domesticated company;
7220 (d) an action or proceeding pending by or against a domesticating company may be
7221 continued as if the domestication had not occurred;
7222 (e) except as prohibited by other law, all of the rights, privileges, immunities, powers,
7223 and purposes of the domesticating company remain vested in the domesticated company;
7224 (f) except as otherwise provided in the plan of domestication, the terms and conditions
7225 of the plan of domestication take effect; and
7226 (g) except as otherwise agreed, the domestication does not dissolve a domesticating
7227 company for the purposes of Part 7, Dissolution and Winding Up.
7228 (2) A domesticated company that is a foreign limited liability company consents to the
7229 jurisdiction of the courts of this state to enforce any debt, obligation, or other liability owed by
7230 the domesticating company, if, before the domestication, the domesticating company was
7231 subject to suit in this state on the debt, obligation, or other liability. A domesticated company
7232 that is a foreign limited liability company and not authorized to transact business in this state
7233 may be served with process at the address required in the articles of domestication under
7234 Subsection 48-3-1012 (1)(g).
7235 (3) If a limited liability company has adopted and approved a plan of domestication
7236 under Section 48-3-1010 providing for the limited liability company to be domesticated in a
7237 foreign jurisdiction, a statement surrendering the limited liability company's certificate of
7238 organization must be delivered to the division for filing setting forth:
7239 (a) the name of the limited liability company;
7240 (b) a statement that the certificate of organization is being surrendered in connection
7241 with the domestication of the limited liability company in a foreign jurisdiction;
7242 (c) a statement that the domestication was approved as required by this chapter; and
7243 (d) the jurisdiction of formation of the domesticated foreign limited liability company.
7244 Section 273. Section 48-3-1014 is enacted to read:
7245 48-3-1014. Restrictions on approval of mergers, conversions, and domestications.
7246 (1) If a member of a constituent, converting, or domesticating limited liability company
7247 will have personal liability with respect to a surviving, converted, or domesticated
7248 organization, approval or amendment of a plan of merger, conversion, or domestication are
7249
7250 (a) the limited liability company's operating agreement provides for approval of a
7251 merger, conversion, or domestication with the consent of fewer than all the members; and
7252 (b) the member has consented to the provision of the operating agreement.
7253 (2) A member does not give the consent required by Subsection (1) merely by
7254 consenting to a provision of the operating agreement that permits the operating agreement to be
7255 amended with the consent of fewer than all the members.
7256 Section 274. Section 48-3-1015 is enacted to read:
7257 48-3-1015. Part not exclusive.
7258 This part does not preclude an entity from being merged, converted, or domesticated
7259 under law other than this chapter.
7260 Section 275. Section 48-3-1101 is enacted to read:
7261
7262 48-3-1101. Definitions.
7263 As used in this part:
7264 (1) "Professional services" means a personal service provided by:
7265 (a) a public accountant holding a license under Title 58, Chapter 26a, Certified Public
7266 Accountant Licensing Act, or a subsequent law regulating the practice of public accounting;
7267 (b) an architect holding a license under Title 58, Chapter 3a, Architects Licensing Act,
7268 or a subsequent law regulating the practice of architecture;
7269 (c) an attorney granted the authority to practice law by the:
7270 (i) Utah Supreme Court; or
7271 (ii) one or more of the following that licenses or regulates the authority to practice law
7272 in a state or territory of the United States other than Utah:
7273 (A) a supreme court;
7274 (B) a court other than a supreme court;
7275 (C) an agency;
7276 (D) an instrumentality; or
7277 (E) a regulating board;
7278 (d) a chiropractor holding a license under Title 58, Chapter 73, Chiropractic Physician
7279 Practice Act, or any subsequent law regulating the practice of chiropractics;
7280
7281 Dental Hygienist Practice Act, or a subsequent law, regulating the practice of dentistry;
7282 (f) a professional engineer registered under Title 58, Chapter 22, Professional
7283 Engineers and Professional Land Surveyors Licensing Act;
7284 (g) a naturopath holding a license under Title 58, Chapter 71, Naturopathic Physician
7285 Practice Act, or a subsequent law regulating the practice of naturopathy;
7286 (h) a nurse licensed under Title 58, Chapter 31b, Nurse Practice Act, or Title 58,
7287 Chapter 44a, Nurse Midwife Practice Act;
7288 (i) an optometrist holding a license under Title 58, Chapter 16a, Utah Optometry
7289 Practice Act, or a subsequent law regulating the practice of optometry;
7290 (j) an osteopathic physician or surgeon holding a license under Title 58, Chapter 68,
7291 Utah Osteopathic Medical Practice Act, or a subsequent law regulating the practice of
7292 osteopathy;
7293 (k) a pharmacist holding a license under Title 58, Chapter 17b, Pharmacy Practice Act,
7294 or a subsequent law regulating the practice of pharmacy;
7295 (l) a physician, surgeon, or doctor of medicine holding a license under Title 58,
7296 Chapter 67, Utah Medical Practice Act, or a subsequent law regulating the practice of
7297 medicine;
7298 (m) a physical therapist holding a license under Title 58, Chapter 24b, Physical
7299 Therapy Practice Act, or a subsequent law regulating the practice of physical therapy;
7300 (n) a podiatric physician holding a license under Title 58, Chapter 5a, Podiatric
7301 Physician Licensing Act, or a subsequent law regulating the practice of podiatry;
7302 (o) a psychologist holding a license under Title 58, Chapter 61, Psychologist Licensing
7303 Act, or any subsequent law regulating the practice of psychology;
7304 (p) a principal broker, associate broker, or sales agent holding a license under Title 61,
7305 Chapter 2f, Real Estate Licensing and Practices Act, or a subsequent law regulating the sale,
7306 exchange, purchase, rental, or leasing of real estate;
7307 (q) a clinical or certified social worker holding a license under Title 58, Chapter 60,
7308 Part 2, Social Worker Licensing Act, or a subsequent law regulating the practice of social
7309 work;
7310 (r) a mental health therapist holding a license under Title 58, Chapter 60, Mental
7311
7312 therapy;
7313 (s) a veterinarian holding a license under Title 58, Chapter 28, Veterinary Practice Act,
7314 or a subsequent law regulating the practice of veterinary medicine; or
7315 (t) an individual licensed, certified, or registered under Title 61, Chapter 2b, Real
7316 Estate Appraiser Licensing and Certification Act, or a subsequent law regulating the practice of
7317 appraising real estate.
7318 (2) "Professional services company" means a limited liability company organized
7319 under this part to provide professional services.
7320 (3) "Regulating board" means the entity organized pursuant to state law that licenses
7321 and regulates the practice of the profession that a limited liability company is organized to
7322 provide.
7323 Section 276. Section 48-3-1102 is enacted to read:
7324 48-3-1102. Application of this part.
7325 (1) If a conflict arises between this part and another provision of this chapter, this part
7326 controls.
7327 (2) Notwithstanding the other provisions of this part, on and after January 1, 2014:
7328 (a) a professional services company may not designate series of transferable interests;
7329 and
7330 (b) a limited liability company may not form a professional services company as a
7331 series of the limited liability company.
7332 Section 277. Section 48-3-1103 is enacted to read:
7333 48-3-1103. Additional requirements for certificate of organization.
7334 The certificate of organization of a professional services company shall:
7335 (1) comply with Section 48-3-201 ; and
7336 (2) contain the following:
7337 (a) a name consistent with Section 48-3-1104 ;
7338 (b) a description of the profession to be practiced through the professional services
7339 company; and
7340 (c) notwithstanding Section 48-3-201 , the name and street address of each member or
7341 manager of the professional services company.
7342
7343 48-3-1104. Name limitations.
7344 (1) The name of a domestic professional services company and of a foreign
7345 professional services company authorized to transact business in this state, in addition to
7346 complying with Sections 48-3-108 , 48-3-802 , and 48-3-805 :
7347 (a) may not contain language stating or implying that it is formed for a purpose other
7348 than that authorized by:
7349 (i) its certificate of organization; or
7350 (ii) Section 48-3-1105 ;
7351 (b) must conform with any rule made by the regulating board having jurisdiction over a
7352 professional service described in the professional services company's certificate of
7353 organization; and
7354 (c) in lieu of the requirement of Subsection 48-3-108 (1), must contain the words
7355 "professional limited liability company" or the abbreviations "P.L.L.C." or "PLLC" in:
7356 (i) its certificate of organization; and
7357 (ii) a report or document filed with the division.
7358 (2) Notwithstanding Subsection (1)(c), a professional services company may hold itself
7359 out to the public under a name that does not contain the words "professional limited liability
7360 company" or the abbreviations "P.L.L.C." or "PLLC" if that name complies with Subsection
7361 48-3-108 (1).
7362 (3) Sections 48-3-108 , 48-3-802 , and 48-3-805 do not prevent the use of a name
7363 otherwise prohibited by those sections if the name is:
7364 (a) the personal name of an individual member or individual former member of the
7365 professional services company; or
7366 (b) the name of an individual who was associated with a predecessor of the
7367 professional services company.
7368 Section 279. Section 48-3-1105 is enacted to read:
7369 48-3-1105. Providing a professional service.
7370 (1) A professional services company may provide a professional service in this state
7371 only through an individual licensed or otherwise authorized in this state to provide the
7372 professional service.
7373
7374 (a) require an individual employed by a professional services company to be licensed
7375 to perform a service for the professional services company if a license is not otherwise
7376 required;
7377 (b) prohibit a licensed individual from providing a professional service in the
7378 individual's professional capacity although the individual is a member, manager, employee, or
7379 agent of a professional services company; or
7380 (c) prohibit an individual licensed in another state from providing a professional
7381 service for a professional services company in this state if not prohibited by the regulating
7382 board.
7383 (3) A professional services company may not provide a professional service other than
7384 the professional service authorized by its certificate of organization.
7385 Section 280. Section 48-3-1106 is enacted to read:
7386 48-3-1106. Limit of one profession.
7387 (1) A professional services company organized to provide a professional service under
7388 this chapter may provide only:
7389 (a) one specific type of professional service; and
7390 (b) a service ancillary to the professional service described in Subsection (1)(a).
7391 (2) A professional services company organized to provide a professional service under
7392 this chapter may not engage in a business other than to provide:
7393 (a) the professional service that it was organized to provide; and
7394 (b) services ancillary to the professional service described in Subsection (2)(a).
7395 (3) Notwithstanding Subsection (1) or (2), a professional services company may:
7396 (a) own real and personal property necessary or appropriate for providing the type of
7397 professional service it was organized to provide; and
7398 (b) invest the professional services company's money in one or more of the following:
7399 (i) real estate;
7400 (ii) mortgages;
7401 (iii) stocks;
7402 (iv) bonds; or
7403 (vi) another type of investment.
7404
7405 48-3-1107. Activity limitations.
7406 A professional services company may not do anything that an individual licensed to
7407 practice the profession that the professional services company is organized to provide is
7408 prohibited from doing.
7409 Section 282. Section 48-3-1108 is enacted to read:
7410 48-3-1108. Part does not limit regulating board.
7411 This chapter does not restrict the authority or duty of a regulating board to license an
7412 individual providing a professional service or the practice of the profession that is within the
7413 jurisdiction of the regulating board, notwithstanding that the individual:
7414 (1) is a member, manager, or employee of a professional services company; and
7415 (2) provides the professional service or engages in the practice of the profession
7416 through a professional services company.
7417 Section 283. Section 48-3-1109 is enacted to read:
7418 48-3-1109. Member or manager of a professional services company.
7419 A professional services company organized to provide a professional service:
7420 (1) may include a member, manager, or employee who is authorized under the laws of
7421 the jurisdiction where the member, manager, or employee resides to provide a similar
7422 professional service;
7423 (2) may include a member who is not licensed or registered by the state to provide the
7424 professional service to the extent allowed by the applicable licensing or registration act relating
7425 to the professional service;
7426 (3) may render a professional service in this state only through a member, manager, or
7427 employee who is licensed or registered by this state to render the professional service; and
7428 (4) as a power provided under Section 48-3-105 .
7429 Section 284. Section 48-3-1110 is enacted to read:
7430 48-3-1110. Restriction on transfer by member.
7431 (1) Except as provided in Subsection (2), a member of a professional services company
7432 may sell or transfer the member's interest in the professional services company only to:
7433 (a) the professional services company; or
7434 (b) an individual who is licensed or registered by this state to provide the same type of
7435
7436 organized.
7437 (2) (a) Upon the death or incapacity of a member of a professional services company,
7438 the member's interest in the professional services company may be transferred to the personal
7439 representative or estate of the deceased or incapacitated member.
7440 (b) The person to whom an interest is transferred under Subsection (2)(a) may continue
7441 to hold the interest for a reasonable period, but may not participate in a decision concerning the
7442 providing of a professional service.
7443 Section 285. Section 48-3-1111 is enacted to read:
7444 48-3-1111. Purchase of interest upon death, incapacity, or disqualification of
7445 member.
7446 (1) Subject to this part, one or more of the following may provide for the purchase of a
7447 member's interest in a professional services company upon the death, incapacity, or
7448 disqualification of the member:
7449 (a) the certificate of organization;
7450 (b) the operating agreement; or
7451 (c) a private agreement.
7452 (2) (a) In the absence of a provision described in Subsection (1), a professional services
7453 company shall purchase the interest of a member who is deceased, incapacitated, or no longer
7454 qualified to own an interest in the professional services company within 90 days after the day
7455 on which the professional services company is notified of the death, incapacity, or
7456 disqualification.
7457 (b) If a professional services company purchases a member's interest under this
7458 Subsection (2), the professional services company shall purchase the interest at a price that is
7459 the reasonable fair market value as of the date of death, incapacity, or disqualification.
7460 (3) (a) If a professional services company fails to purchase a member's interest as
7461 required by Subsection (2)(a) at the end of the 90-day period described in Subsection (2)(a),
7462 one of the following may bring an action in the district court of the county in which the
7463 principal office or place of practice of the professional services company is located to enforce
7464 Subsection (2):
7465 (i) the personal representative of a deceased member;
7466
7467 (iii) the disqualified member.
7468 (b) A court in which an action is brought under this Subsection (3) may:
7469 (i) award the person bringing the action the reasonable fair market value of the interest;
7470 or
7471 (ii) within its jurisdiction, order the liquidation of the professional services company.
7472 (c) If a person described in Subsection (3)(a)(i) through (iii) is successful in an action
7473 under this Subsection (3), the court shall award the person reasonable attorney fees and costs.
7474 Section 286. Section 48-3-1112 is enacted to read:
7475 48-3-1112. Conversion to nonprofessional company.
7476 (1) A professional services company subject to this part converts into a limited liability
7477 company subject to this chapter, but not subject to this part on the day on which:
7478 (a) no member of the professional services company is licensed or registered for the
7479 professional service for which the professional services company is organized; or
7480 (b) members holding at least two-thirds interest in the profits of the professional
7481 services company vote to not be subject to this part.
7482 (2) A professional services company converted as provided in Subsection (1) shall
7483 upon the event described in Subsection (1) operate as and be treated as a limited liability
7484 company subject to this chapter, but not subject to this part.
7485 (3) A limited liability company converted under this section may reconvert to a
7486 professional services company:
7487 (a) upon a member of the professional services company being licensed or registered
7488 for the professional service for which the professional services company is organized; or
7489 (b) by the vote of members holding at least two-thirds interests in the profits of the
7490 professional services company, if at least one member of the professional services company is
7491 licensed or registered for the professional service for which the professional services company
7492 is organized.
7493 (4) If a professional services company is converted or reconverted under this section,
7494 the professional services company shall file a certificate of amendment to the certificate of
7495 organization with the division within a reasonable time after the conversion or reconversion to
7496 reflect the changes.
Senate 3rd Reading Amendments 2-28-2011 kc/po
7497
Section 287.
Section
48-3-1201
is enacted to read:7497
7498
7499 48-3-1201. Application of this part.
7500 If a conflict arises between this part and another provision of this chapter, this part
7501 controls.
7502 Section 288. Section 48-3-1202 is enacted to read:
7503 48-3-1202. Series of transferable interests.
7504 (1) (a) An operating agreement may establish or provide for the establishment of a
7505 designated series of transferable interests having separate rights, powers, or duties with respect
7506 to specified property or obligations of the limited liability company or profits and losses
7507 associated with specified property or obligations, and, to the extent provided in the operating
7508 agreement, any such series may have a separate business purpose or investment objective. The
7509 name of each series must contain the name of the limited liability company and be
7510 distinguishable from the name of any other series set forth in the certificate of organization..
7511 (b) An operating agreement shall identify a separate right, power, or duty of a series
7512 described in Subsection (1)(a).
7513 (c) Notwithstanding the other provisions of this part, on and after January 1, 2014:
7514 (i) a professional services company may not designate series of transferable interests;
7515 and
7516 (ii) a limited liability company may not form a professional services company as a
7517 series of the limited liability company.
7518 (2) A series may have a business purpose or investment objective different from the
7519 limited liability company.
7520 (3) Notwithstanding contrary provisions of this chapter, a series' debts, liabilities,
7521 obligations, and expenses are enforceable against the assets of that series only and may not be
7522 enforced against the assets of the limited liability company generally or another series S. [
7523 (a) the operating agreement provides for separate treatment of the series;
7524 (b) separate and distinct records are maintained concerning the series;
7525 (c) the assets associated with the series are held and accounted for separately from the
7526 other assets of the limited liability company and any other series; and
7527 (d) notice of the limitation on liability of a series is included in the limited liability
7528
7529 (4) A debt, liability, obligation, or expense incurred, contracted for, or otherwise
7530 existing with respect to the limited liability company generally or another series may not be
7531 enforced against the assets of a series if:
7532 (a) the operating agreement provides for separate treatment of the series;
7533 (b) separate and distinct records are maintained concerning the series;
7534 (c) the assets associated with the series are held and accounted for separately from the
7535 other assets of the limited liability company and any other series; and
7536 (d) notice of the limitation on liability of a series is included in the limited liability
7537 company's certificate of organization in accordance with Section 48-3-1203 .
7538 (5) A series may contract on its own behalf and in its own name, including through a
7539 manager.
7540 (6) Notwithstanding other provisions of this section:
7541 (a) property and assets of a series may not be transferred to the limited liability
7542 company generally or another series if the transfer impairs the ability of the series releasing the
7543 property or assets to pay its debts existing at the time of the transfer unless fair value is given to
7544 the transferring series for the property or assets transferred; and
7545 (b) a tax or other liability of the limited liability company generally or of a series may
7546 not be assigned by the series against which the tax or other liability is imposed to the limited
7547 liability company generally or to another series within the limited liability company if the
7548 assignment impairs a creditor's right and ability to fully collect an amount due when owed.
7549 Section 289. Section 48-3-1203 is enacted to read:
7550 48-3-1203. Notice of series -- Certificate of organization.
7551 (1) Notice in a limited liability company's certificate of organization of the limitation
7552 on liabilities of a series, as required by Section 48-3-1202 , is sufficient whether or not the
7553 limited liability company has established a series at the time the notice is included in the
7554 certificate of organization.
7555 (2) The notice required by Section 48-3-1202 :
7556 (a) is not required to reference a specific series; and
7557 (b) for a certificate of organization or an amendment to a certificate of organization
7558 made to include notice of series that is filed on or after May 11, 2010, notice in a company's
7559
7560 appears immediately following the provision stating the name of the company.
7561 (3) The filing of the notice required by Section 48-3-1202 with the division constitutes
7562 notice of the limitation on liability of a series.
7563 Section 290. Section 48-3-1204 is enacted to read:
7564 48-3-1204. Agreement to be liable.
7565 Notwithstanding Section 48-3-304 , a member or manager may agree to be obligated
7566 personally for any or all of the debts, obligations, and liabilities of one or more series.
7567 Section 291. Section 48-3-1205 is enacted to read:
7568 48-3-1205. Series related provisions in operating agreement.
7569 (1) An operating agreement may provide for classes or groups of members or managers
7570 associated with a series with separate rights, powers, or duties as provided in Subsection
7571 48-3-1202 (1).
7572 (2) An operating agreement may provide for the future creation of one or more
7573 additional classes or groups of members or managers associated with a series that have the
7574 rights, powers, and duties that as may from time to time be established, including a right,
7575 power, or duty that is senior to an existing class or group of members or managers associated
7576 with the series.
7577 (3) An operating agreement may provide for the taking of an action without the vote or
7578 approval of any member or manager, or class or group of members or managers, including:
7579 (a) an action to create a class or group of a series of interests in the limited liability
7580 company that was not previously outstanding; and
7581 (b) amending the operating agreement.
7582 (4) An operating agreement may provide that a member or class or group of members
7583 associated with a series has no voting rights.
7584 (5) (a) An operating agreement may on any matter grant to all members or managers, a
7585 specific member or manager, or a specific class or group of members or managers associated
7586 with a series, the right to vote separately or with all or any class or group of the members or
7587 managers associated with the series.
7588 (b) Voting by members or managers associated with a series may be on any basis
7589 including:
7590
7591 (ii) a number basis;
7592 (iii) on the basis of a financial interest; or
7593 (iv) by class or group.
7594 (6) Except to the extent modified by this part, the provisions of this chapter that are
7595 generally applicable to a limited liability company, and its managers, members, and transferees,
7596 are applicable to each series with respect to the operations of the series
7597 Section 292. Section 48-3-1206 is enacted to read:
7598 48-3-1206. Management of a series.
7599 (1) A series is member-managed unless the operating agreement:
7600 (a) expressly provides that:
7601 (i) the series is or will be "manager-managed";
7602 (ii) the series is or will be "managed by managers"; or
7603 (iii) management of the series is or will be "vested in managers"; or
7604 (b) includes words of similar import.
7605 (2) In a member-managed series, unless modified pursuant to Section 48-3-1205 , the
7606 following rules apply:
7607 (a) The management and conduct of the series are vested in the members of the series.
7608 (b) Each series member has equal rights in the management and conduct of the series'
7609 activities.
7610 (c) A difference arising among series members as to a matter in the ordinary course of
7611 the activities of the series shall be decided by a majority of the series members.
7612 (d) An act outside the ordinary course of the activities of the series may be undertaken
7613 only with the consent of all members of the series.
7614 (e) The operating agreement may be amended only with the consent of all members of
7615 the series.
7616 (3) In a manager-managed series, the following rules apply:
7617 (a) Except as otherwise expressly provided in this chapter, any matter relating to the
7618 activities of the series is decided exclusively by the managers of the series.
7619 (b) Each series manager has equal rights in the management and conduct of the
7620 activities of the series.
7621
7622 course of the activities of the series shall be decided by a majority of the managers of the series.
7623 (d) Unless modified pursuant to Section 48-3-1205 , the consent of all members of the
7624 series is required to:
7625 (i) sell, lease, exchange, or otherwise dispose of all, or substantially all, of the series'
7626 property, with or without the goodwill, outside the ordinary course of the series' activities;
7627 (ii) approve a merger, conversion, or domestication under Part 10, Merger, Conversion,
7628 and Domestication;
7629 (iii) undertake any other act outside the ordinary course of the series' activities; and
7630 (iv) amend the operating agreement.
7631 (e) A manager of the series may be chosen at any time by the consent of a majority of
7632 the members of the series and remains a manager of the series until a successor has been
7633 chosen, unless the series manager at an earlier time resigns, is removed, or dies, or, in the case
7634 of a series manager that is not an individual, terminates. A series manager may be removed at
7635 any time by the consent of a majority of the members without notice or cause.
7636 (f) A person need not be a series member to be a manager of a series, but the
7637 dissociation of a series member that is also a series manager removes the person as a manager
7638 of the series. If a person that is both a series manager and a series member ceases to be a
7639 manager of the series, that cessation does not by itself dissociate the person as a member of the
7640 series.
7641 (g) A person's ceasing to be a series manager does not discharge any debt, obligation,
7642 or other liability to the series or members of the series which the person incurred while a
7643 manager of the series.
7644 (4) An action requiring the consent of members of a series under this chapter may be
7645 taken without a meeting, and a member of a series may appoint a proxy or other agent to
7646 consent or otherwise act for the series member by signing an appointing record, personally or
7647 by the series member's agent.
7648 (5) The dissolution of a series does not affect the applicability of this section.
7649 However, a person that wrongfully causes dissolution of the series loses the right to participate
7650 in management as a series member and a series manager.
7651 (6) This chapter does not entitle a series member of a series to remuneration for
7652
7653 services rendered in winding up the activities of the series.
7654 Section 293. Section 48-3-1207 is enacted to read:
7655 48-3-1207. Distribution concerning a series.
7656 (1) Except as otherwise provided in the operating agreement, any distribution made by
7657 a series before its dissolution and winding up must be in equal shares among the series
7658 members and dissociated series members, except to the extent necessary to comply with any
7659 transfer effective under Section 48-3-502 and any charging order in effect under Section
7660 48-3-503 .
7661 (2) A person has a right to a distribution before the dissolution and winding up of a
7662 series only if the series decides to make an interim distribution. A person's dissociation does
7663 not entitle the person to a distribution.
7664 (3) A person does not have a right to demand or receive a distribution from a series in
7665 any form other than money. Except as otherwise provided in Subsection 48-3-709 (3), a series
7666 may distribute an asset in kind if each part of the asset is fungible with each other part and each
7667 person receives a percentage of the asset equal in value to the person's share of distributions.
7668 (4) If a series member or transferee becomes entitled to receive a distribution, the series
7669 member or transferee has the status of, and is entitled to all remedies available to, a creditor of
7670 the series with respect to the distribution.
7671 (5) A series may not make a distribution if after the distribution:
7672 (a) the series would not be able to pay its debts as they become due in the ordinary
7673 course of the series' activities; or
7674 (b) the series' total assets would be less than the sum of its total liabilities plus the
7675 amount that would be needed, if the series were to be dissolved, wound up, and terminated at
7676 the time of the distribution, to satisfy the preferential rights upon dissolution, winding up, and
7677 termination of members whose preferential rights are superior to those of persons receiving the
7678 distribution.
7679 (6) A series may base a determination that a distribution is not prohibited under
7680 Subsection (5) on financial statements prepared on the basis of accounting practices and
7681 principles that are reasonable in the circumstances or on a fair valuation or other method that is
7682 reasonable under the circumstances.
7683
7684 Subsection (5) is measured:
7685 (a) in the case of a distribution by purchase, redemption, or other acquisition of a
7686 transferable interest in the series, as of the date money or other property is transferred or debt
7687 incurred by the series; or
7688 (b) in all other cases, as of the date:
7689 (i) the distribution is authorized, if the payment occurs within 120 days after that date;
7690 or
7691 (ii) the payment is made, if the payment occurs more than 120 days after the
7692 distribution is authorized.
7693 (8) A series' indebtedness to a series member incurred by reason of a distribution made
7694 in accordance with this section is at parity with the series' indebtedness to its general,
7695 unsecured creditors.
7696 (9) A series' indebtedness, including indebtedness issued in connection with or as part
7697 of a distribution, is not a liability for purposes of Subsection (5) if the terms of the indebtedness
7698 provide that payment of principal and interest are made only to the extent that a distribution
7699 could be made to members of the series under this section. If such indebtedness is issued as a
7700 distribution, each payment of principal or interest on the indebtedness is treated as a
7701 distribution, the effect of which is measured on the date the payment is made.
7702 (10) As used in Subsection (5) "distribution" does not include amounts constituting
7703 reasonable compensation for present or past services or reasonable payments made in the
7704 ordinary course of business under a bona fide retirement plan or other benefits program.
7705 (11) (a) Except as otherwise provided in Subsection (11)(b), if a member of a
7706 member-managed series or manager of a manager-managed series consents to a distribution
7707 made in violation of this section and in consenting to the distribution fails to comply with
7708 Section 48-3-409 , the member or manager is personally liable to the series for the amount of
7709 the distribution that exceeds the amount that could have been distributed without the violation
7710 of Section 48-3-405 .
7711 (b) To the extent the operating agreement of a member-managed series expressly
7712 relieves a series member of the authority and responsibility to consent to distributions and
7713 imposes that authority and responsibility on one or more other members of the series, the
7714
7715 member of the series that the operating agreement relieves of authority and responsibility.
7716 (12) A person that receives a distribution knowing that the distribution to that person
7717 was made in violation of Section 48-3-405 is personally liable to the limited liability company
7718 but only to the extent that the distribution received by the person exceeded the amount that
7719 could have been properly paid under Section 48-3-405 .
7720 (13) A person against which an action is commenced because the person is liable under
7721 Subsection (11) may:
7722 (a) implead any other person that is subject to liability under Subsection (11) and seek
7723 to compel contribution from the person; and
7724 (b) implead any person that received a distribution in violation of Subsection (12) and
7725 seek to compel contribution from the person in the amount the person received in violation of
7726 Subsection (12).
7727 (14) An action under this section is barred if not commenced within two years after the
7728 distribution.
7729 Section 294. Section 48-3-1208 is enacted to read:
7730 48-3-1208. Events causing dissociation from a series.
7731 (1) Unless otherwise provided in the operating agreement, a member ceases to be
7732 associated with a series and to have the power to exercise a right or power of a member with
7733 respect to the series upon the assignment of all of the member's interest in the limited liability
7734 company with respect to the series.
7735 (2) Unless otherwise provided in an operating agreement, an event under this chapter
7736 or the operating agreement that causes a member to cease to be associated with a series does
7737 not, by itself:
7738 (a) cause the member to cease to be associated with another series;
7739 (b) terminate the continued membership of a member in the limited liability company;
7740 or
7741 (c) cause the termination of the series, regardless of whether the member is the last
7742 remaining member associated with the series.
7743 Section 295. Section 48-3-1209 is enacted to read:
7744 48-3-1209. Termination of a series.
Senate 3rd Reading Amendments 2-28-2011 kc/po
7745
(1) Except to the extent otherwise provided in the operating agreement, a series may be7745
7746 terminated and its affairs wound up without causing the dissolution of the limited liability
7747 company.
7748 (2) The termination of a series does not affect the limitation on liabilities of the series
7749 under Section 48-3-1202 .
7750 (3) A series is terminated and its affairs shall be wound up upon the dissolution of the
7751 limited liability company under Section 48-3-701 or upon the occurrence of any of the events
7752 described in Section 48-3-701 , as applied to the series.
7753 (4) Notwithstanding Section 48-3-703 , unless otherwise provided in the operating
7754 agreement, any of the following persons may wind up the affairs of a series:
7755 (a) a manager associated with a series who has not wrongfully terminated the series;
7756 (b) if there is no manager of a series, the members associated with the series or a
7757 person approved by the members associated with the series; or
7758 (c) if there is more than one class or group of members associated with the series, then
7759 by each class or group of members associated with the series, in either case, by members who
7760 own more than 50% of the transferable interests of the series owned by all of the members
7761 associated with the series or by the members of each class or group associated with the series.
7762 (5) The persons winding up the affairs of a series, in the name of the series and for and
7763 on behalf of the series, may take all actions with respect to the series as are permitted under
7764 Section 48-3-703 for a limited liability company. The persons winding up the affairs of a
7765 series shall provide for the claims and obligations of the series as provided in Section 48-3-709
7766 for a limited liability company and distribute the assets of the series as provided in Section
7767 48-3-709 for a limited liability company. An action taken pursuant to this Subsection (5) may
7768 not affect the liability of a member and may not impose liability on a liquidating trustee.
7769 Section 296. Section 48-3-1210 is enacted to read:
7770 48-3-1210. Foreign limited liability company -- Series.
7771 (1) A foreign limited liability company that is authorized to do business in this state
7772 that is governed by an operating agreement that establishes or provides for the establishment of
7773 a series, S. [
7774 certificate of authority as a foreign limited liability company.
7775 (2) (a) A foreign limited liability company shall state on the application for a certificate
7776
7777 foreign limited liability company found in Section 48-3-1202 apply to a series.
7778 (b) If different protections found in Section 48-3-1202 apply to different series of a
7779 foreign limited liability company, the application for authority to transact business in the state
7780 shall state:
7781 (i) the protections that apply to each existing series; and
7782 (ii) the protections that will apply to any series after registering to do business.
7783 Section 297. Section 48-3-1301 is enacted to read:
7784
7785 48-3-1301. Application of this part.
7786 If a conflict arises between this part and another provision of this chapter, this part
7787 controls.
7788 Section 298. Section 48-3-1302 is enacted to read:
7789 48-3-1302. Requirements.
7790 (1) To be a low-profit limited liability company, a limited liability company shall:
7791 (a) contain in its name the abbreviation "L3C" or "l3c";
7792 (b) state in its certificate of organization that it is a low-profit limited liability
7793 company;
7794 (c) organize under this chapter; and
7795 (d) be organized for a business purpose that satisfies, and at all times operates to satisfy
7796 each of the requirements under Subsection (2).
7797 (2) A low-profit limited liability company:
7798 (a) shall significantly further the accomplishment of one or more charitable or
7799 educational purposes within the meaning of Section 170(c)(2)(B), Internal Revenue Code;
7800 (b) shall demonstrate that it would not be formed but for the limited liability company's
7801 relationship to the accomplishment of a charitable or educational purpose;
7802 (c) subject to Subsection (3), may not have as a significant purpose the production of
7803 income or the appreciation of property; and
7804 (d) may not have as a purpose to accomplish one or more political or legislative
7805 purposes within the meaning of Section 170(c)(2)(D), Internal Revenue Code.
7806 (3) Notwithstanding Subsection (2), if a low-profit limited liability company produces
7807
7808 low-profit limited liability company produces significant income or capital appreciation is not
7809 conclusive evidence of a significant purpose involving the production of income or the
7810 appreciation of property.
7811 Section 299. Section 48-3-1303 is enacted to read:
7812 48-3-1303. Ceasing to be a low-profit limited liability company.
7813 (1) If a company that is a low-profit limited liability company at its formation at any
7814 time ceases to meet a requirement to be a low-profit limited liability company under Section
7815 48-3-1302 , the limited liability company:
7816 (a) ceases to be a low-profit limited liability company on the day on which the limited
7817 liability company no longer meets the requirement; and
7818 (b) if it continues to meet the requirements of this chapter to be a limited liability
7819 company, continues to exist as a limited liability company that is not a low-profit limited
7820 liability company.
7821 (2) A low-profit limited liability company's failure to meet a requirement of Section
7822 48-3-1302 may be:
7823 (a) voluntary, in order to convert to a limited liability company that is not a low-profit
7824 limited liability company; or
7825 (b) involuntary.
7826 (3) If a low-profit limited liability company ceases to be a low-profit limited liability
7827 company in accordance with this section, the limited liability company shall:
7828 (a) change its name to conform with Section 48-3-108 ; and
7829 (b) amend its articles of organization in accordance with Section 48-3-202 .
7830 Section 300. Section 48-3-1304 is enacted to read:
7831 48-3-1304. Conversion or merger of a low-profit limited liability company.
7832 A low-profit limited liability company may engage in the following to the same extent
7833 as a limited liability company that is not a low-profit limited liability company may do so under
7834 Part 10, Merger, Conversion, and Domestication:
7835 (1) convert to another subject entity;
7836 (2) convert from another subject entity; or
7837 (3) participate in a merger.
7838
7839
7840 48-3-1401. Uniformity of application and construction.
7841 In applying and construing this chapter, consideration must be given to the need to
7842 promote uniformity of the law with respect to its subject matter among states that enact the
7843 uniform act.
7844 Section 302. Section 48-3-1402 is enacted to read:
7845 48-3-1402. Relation to Electronic Signatures in Global and National Commerce
7846 Act.
7847 This chapter modifies, limits, and supersedes the federal Electronic Signatures in
7848 Global and National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or
7849 supersede Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of
7850 any of the notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
7851 Section 303. Section 48-3-1403 is enacted to read:
7852 48-3-1403. Severability clause.
7853 If any provision of this chapter or its application to any person or circumstance is held
7854 invalid, the invalidity does not affect other provisions or applications of this chapter which can
7855 be given effect without the invalid provision or application, and to this end the provisions of
7856 this chapter are severable.
7857 Section 304. Section 48-3-1404 is enacted to read:
7858 48-3-1404. Savings clause.
7859 This chapter does not affect an action commenced, proceeding brought, or right accrued
7860 before this chapter takes effect.
7861 Section 305. Section 48-3-1405 is enacted to read:
7862 48-3-1405. Application to existing relationships.
7863 (1) Before January 1, 2014, this chapter governs only:
7864 (a) a limited liability company formed on or after July 1, 2012; and
7865 (b) subject to Subsection (3), a limited liability company formed before July 1, 2012,
7866 which elects, in the manner provided in its operating agreement or by law for amending the
7867 operating agreement, to be subject to this chapter.
7868 (2) Subject to Subsection (3), on and after January 1, 2014, this chapter governs all
7869
7870 (3) For the purposes of applying this chapter to a limited liability company formed
7871 before July 1, 2012:
7872 (a) the limited liability company's articles of organization are deemed to be the
7873 company's certificate of organization;
7874 (b) for the purposes of applying Subsection 48-3-102 (10) and subject to Subsection
7875 48-3-112 (4), language in the company's certificates of organization designating the limited
7876 liability company's management structure operates as if that language were in the operating
7877 agreement; and
7878 (c) the limited liability company has a perpetual duration unless otherwise stated in the
7879 limited liability company's articles of organization.
7880 Section 306. Section 53C-1-201 is amended to read:
7881 53C-1-201. Creation of administration -- Purpose -- Director.
7882 (1) (a) There is established within state government the School and Institutional Trust
7883 Lands Administration.
7884 (b) The administration shall manage all school and institutional trust lands and assets
7885 within the state, except as otherwise provided in Title 53C, Chapter 3, Deposit and Allocation
7886 of Revenue from Trust Lands, and Sections 51-7a-201 and 51-7a-202 .
7887 (2) The administration is an independent state agency and not a division of any other
7888 department.
7889 (3) (a) It is subject to the usual legislative and executive department controls except as
7890 provided in this Subsection (3).
7891 (b) (i) The director may make rules as approved by the board that allow the
7892 administration to classify a business proposal submitted to the administration as protected
7893 under Section 63G-2-305 , for as long as is necessary to evaluate the proposal.
7894 (ii) The administration shall return the proposal to the party who submitted the
7895 proposal, and incur no further duties under Title 63G, Chapter 2, Government Records Access
7896 and Management Act, if the administration determines not to proceed with the proposal.
7897 (iii) The administration shall classify the proposal pursuant to law if it decides to
7898 proceed with the proposal.
7899 (iv) Section 63G-2-403 does not apply during the review period.
7900
7901 Administrative Rulemaking Act, except that the administration is not subject to Subsections
7902 63G-3-301 (6) and (7), and the director, with the board's approval, may establish a procedure
7903 for the expedited approval of rules, based on written findings by the director showing:
7904 (i) the changes in business opportunities affecting the assets of the trust;
7905 (ii) the specific business opportunity arising out of those changes which may be lost
7906 without the rule or changes to the rule;
7907 (iii) the reasons the normal procedures under Section 63G-3-301 cannot be met without
7908 causing the loss of the specific opportunity;
7909 (iv) approval by at least five board members; and
7910 (v) that the director has filed a copy of the rule and a rule analysis, stating the specific
7911 reasons and justifications for its findings, with the Division of Administrative Rules and
7912 notified interested parties as provided in Subsection 63G-3-301 (10).
7913 (d) (i) The administration shall comply with Title 67, Chapter 19, Utah State Personnel
7914 Management Act, except as provided in this Subsection (3)(d).
7915 (ii) The board may approve, upon recommendation of the director, that exemption for
7916 specific positions under Subsections 67-19-12 (2) and 67-19-15 (1) is required in order to enable
7917 the administration to efficiently fulfill its responsibilities under the law. The director shall
7918 consult with the executive director of the Department of Human Resource Management prior
7919 to making such a recommendation.
7920 (iii) The positions of director, deputy director, associate director, assistant director,
7921 legal counsel appointed under Section 53C-1-305 , administrative assistant, and public affairs
7922 officer are exempt under Subsections 67-19-12 (2) and 67-19-15 (1).
7923 (iv) Salaries for exempted positions, except for the director, shall be set by the director,
7924 after consultation with the executive director of the Department of Human Resource
7925 Management, within ranges approved by the board. The board and director shall consider
7926 salaries for similar positions in private enterprise and other public employment when setting
7927 salary ranges.
7928 (v) The board may create an annual incentive and bonus plan for the director and other
7929 administration employees designated by the board, based upon the attainment of financial
7930 performance goals and other measurable criteria defined and budgeted in advance by the board.
7931
7932 Code, except where the board approves, upon recommendation of the director, exemption from
7933 the Utah Procurement Code, and simultaneous adoption of rules under Title 63G, Chapter 3,
7934 Utah Administrative Rulemaking Act, for procurement, which enable the administration to
7935 efficiently fulfill its responsibilities under the law.
7936 (f) (i) The board and director shall review the exceptions under this Subsection (3) and
7937 make recommendations for any modification, if required, which the Legislature would be asked
7938 to consider during its annual general session.
7939 (ii) The board and director may include in their recommendations any other proposed
7940 exceptions from the usual executive and legislative controls the board and director consider
7941 necessary to accomplish the purpose of this title.
7942 (4) The administration is managed by a director of school and institutional trust lands
7943 appointed by a majority vote of the board of trustees with the consent of the governor.
7944 (5) (a) The board of trustees shall provide policies for the management of the
7945 administration and for the management of trust lands and assets.
7946 (b) The board shall provide policies for the ownership and control of Native American
7947 remains that are discovered or excavated on school and institutional trust lands in consultation
7948 with the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4,
7949 Native American Grave Protection and Repatriation Act. The director may make rules in
7950 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to implement
7951 policies provided by the board regarding Native American remains.
7952 (6) In connection with joint ventures for the development of trust lands and minerals
7953 approved by the board under Sections 53C-1-303 and 53C-2-401 , the administration may
7954 become a member of a limited liability company under Title 48, Chapter [
7955 Uniform Limited Liability Company Act, and is considered a person under Section [
7956 48-3-102 .
7957 Section 307. Section 61-2b-25 is amended to read:
7958 61-2b-25. Other law unaffected.
7959 This chapter may not be considered to prohibit a person approved, licensed, certified, or
7960 registered under this chapter from engaging in the practice of real estate appraising as a
7961 professional corporation or a limited liability company in accordance with:
7962
7963 (2) Title 48, Chapter [
7964 Section 308. Section 61-2f-401 is amended to read:
7965 61-2f-401. Grounds for disciplinary action.
7966 The following acts are unlawful for a person required to be licensed under this chapter:
7967 (1) (a) making a substantial misrepresentation;
7968 (b) making an intentional misrepresentation;
7969 (c) pursuing a continued and flagrant course of misrepresentation;
7970 (d) making a false representation or promise through an agent, sales agent, advertising,
7971 or otherwise; or
7972 (e) making a false representation or promise of a character likely to influence,
7973 persuade, or induce;
7974 (2) acting for more than one party in a transaction without the informed consent of all
7975 parties;
7976 (3) (a) acting as an associate broker or sales agent while not affiliated with a principal
7977 broker;
7978 (b) representing or attempting to represent a principal broker other than the principal
7979 broker with whom the person is affiliated; or
7980 (c) representing as sales agent or having a contractual relationship similar to that of
7981 sales agent with a person other than a principal broker;
7982 (4) (a) failing, within a reasonable time, to account for or to remit money that belongs
7983 to another and comes into the person's possession;
7984 (b) commingling money described in Subsection (4)(a) with the person's own money;
7985 or
7986 (c) diverting money described in Subsection (4)(a) from the purpose for which the
7987 money is received;
7988 (5) paying or offering to pay valuable consideration, as defined by the commission, to a
7989 person not licensed under this chapter, except that valuable consideration may be shared:
7990 (a) with a principal broker of another jurisdiction; or
7991 (b) as provided under:
7992 (i) Title 16, Chapter 10a, Utah Revised Business Corporation Act;
7993
7994 (iii) Title 48, Chapter [
7995 (6) being incompetent to act as a principal broker, associate broker, or sales agent in
7996 such manner as to safeguard the interests of the public;
7997 (7) failing to voluntarily furnish a copy of a document to all parties before and after the
7998 execution of a document;
7999 (8) failing to keep and make available for inspection by the division a record of each
8000 transaction, including:
8001 (a) the names of buyers and sellers or lessees and lessors;
8002 (b) the identification of real estate;
8003 (c) the sale or rental price;
8004 (d) money received in trust;
8005 (e) agreements or instructions from buyers and sellers or lessees and lessors; and
8006 (f) any other information required by rule;
8007 (9) failing to disclose, in writing, in the purchase, sale, or rental of real estate, whether
8008 the purchase, sale, or rental is made for that person or for an undisclosed principal;
8009 (10) being convicted of a criminal offense involving moral turpitude within five years
8010 of the most recent application:
8011 (a) regardless of whether the criminal offense is related to real estate; and
8012 (b) including:
8013 (i) a conviction based upon a plea of nolo contendere; or
8014 (ii) a plea held in abeyance to a criminal offense involving moral turpitude;
8015 (11) advertising the availability of real estate or the services of a licensee in a false,
8016 misleading, or deceptive manner;
8017 (12) in the case of a principal broker or a licensee who is a branch manager, failing to
8018 exercise reasonable supervision over the activities of the principal broker's or branch manager's
8019 licensed or unlicensed staff;
8020 (13) violating or disregarding:
8021 (a) this chapter;
8022 (b) an order of the commission; or
8023 (c) the rules adopted by the commission and the division;
8024
8025 estate transaction;
8026 (15) any other conduct which constitutes dishonest dealing;
8027 (16) unprofessional conduct as defined by statute or rule;
8028 (17) having one of the following suspended, revoked, surrendered, or cancelled on the
8029 basis of misconduct in a professional capacity that relates to character, honesty, integrity, or
8030 truthfulness:
8031 (a) a real estate license, registration, or certificate issued by another jurisdiction; or
8032 (b) another license, registration, or certificate to engage in an occupation or profession
8033 issued by this state or another jurisdiction;
8034 (18) failing to respond to a request by the division in an investigation authorized under
8035 this chapter, including:
8036 (a) failing to respond to a subpoena;
8037 (b) withholding evidence; or
8038 (c) failing to produce documents or records;
8039 (19) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
8040 (a) providing a title insurance product or service without the approval required by
8041 Section 31A-2-405 ; or
8042 (b) knowingly providing false or misleading information in the statement required by
8043 Subsection 31A-2-405 (2);
8044 (20) violating an independent contractor agreement between a principal broker and a
8045 sales agent or associate broker as evidenced by a final judgment of a court;
8046 (21) (a) engaging in a foreclosure rescue if not licensed under this chapter;
8047 (b) engaging in an act of loan modification assistance that requires licensure as a
8048 mortgage officer under Chapter 2c, Utah Residential Mortgage Practices and Licensing Act,
8049 without being licensed under that chapter;
8050 (c) requesting or requiring a person to pay a fee if:
8051 (i) the person is required to pay the fee before entering into a written agreement
8052 specifying what one or more acts of foreclosure rescue will be completed if the fee is paid; or
8053 (ii) in a case when the financing that is the subject of the foreclosure rescue is
8054 foreclosed within one year from the day on which the person enters into a written agreement,
8055
8056 (d) inducing a person who is at risk of foreclosure to hire the licensee to engage in an
8057 act of foreclosure rescue by:
8058 (i) suggesting to the person that the licensee has a special relationship with the person's
8059 lender or loan servicer; or
8060 (ii) falsely representing or advertising that the licensee is acting on behalf of:
8061 (A) a government agency;
8062 (B) the person's lender or loan servicer; or
8063 (C) a nonprofit or charitable institution; or
8064 (e) recommending or participating in a foreclosure rescue that requires a person to:
8065 (i) transfer title to real property to the licensee or to a third party with whom the
8066 licensee has a business relationship or financial interest;
8067 (ii) make a mortgage payment to a person other than the person's loan servicer; or
8068 (iii) refrain from contacting the person's:
8069 (A) lender;
8070 (B) loan servicer;
8071 (C) attorney;
8072 (D) credit counselor; or
8073 (E) housing counselor; or
8074 (22) for an agreement for foreclosure rescue entered into on or after May 11, 2010,
8075 engaging in an act of foreclosure rescue without offering in writing to the person entering into
8076 the agreement for foreclosure rescue a right to cancel the agreement within three business days
8077 after the day on which the person enters the agreement.
8078 Section 309. Section 75-7-1011 is amended to read:
8079 75-7-1011. Interest as general partner.
8080 (1) Except as otherwise provided in Subsection (3) or unless personal liability is
8081 imposed in the contract, a trustee who holds an interest as a general partner in a general or
8082 limited partnership is not personally liable on a contract entered into by the partnership after
8083 the trust's acquisition of the interest if the fiduciary capacity was disclosed in the contract or in
8084 a statement previously filed pursuant to Title 48, Chapter [
8085 Limited Partnership Act.
8086
8087 general partner is not personally liable for torts committed by the partnership or for obligations
8088 arising from ownership or control of the interest unless the trustee is personally at fault.
8089 (3) The immunity provided by this section does not apply if an interest in the
8090 partnership is held by the trustee in a capacity other than that of trustee or is held by the
8091 trustee's spouse or one or more of the trustee's descendants, siblings, or parents, or the spouse
8092 of any of them.
8093 (4) If the trustee of a revocable trust holds an interest as a general partner, the settlor is
8094 personally liable for contracts and other obligations of the partnership as if the settlor were a
8095 general partner.
8096 Section 310. Repealer.
8097 This bill repeals:
8098 Section 48-1-1, Definition of terms.
8099 Section 48-1-2, Interpretation of knowledge and notice.
8100 Section 48-1-3,"Partnership" defined.
8101 Section 48-1-3.1, Joint venture defined -- Application of chapter.
8102 Section 48-1-4, Rules for determining the existence of a partnership.
8103 Section 48-1-5, Partnership property.
8104 Section 48-1-6, Partner agent of partnership as to partnership business.
8105 Section 48-1-7, Conveyance of real property of partnership.
8106 Section 48-1-8, Partnership bound by admission of partner.
8107 Section 48-1-9, Partnership charged with knowledge of or notice to partner.
8108 Section 48-1-10, Partnership bound by partner's wrongful act.
8109 Section 48-1-11, Partnership bound by partner's breach of trust.
8110 Section 48-1-12, Nature of partner's liability.
8111 Section 48-1-13, Partner by estoppel.
8112 Section 48-1-14, Liability of incoming partner.
8113 Section 48-1-15, Rules determining rights and duties of partners.
8114 Section 48-1-16, Partnership books.
8115 Section 48-1-17, Duty of partners to render information.
8116 Section 48-1-18, Partner accountable as a fiduciary.
8117
8118 Section 48-1-20, Continuation of partnership beyond fixed term.
8119 Section 48-1-21, Extent of property rights of a partner.
8120 Section 48-1-22, Nature of a partner's right in specific partnership property.
8121 Section 48-1-23, Nature of partner's interest in the partnership.
8122 Section 48-1-24, Assignment of partner's interest.
8123 Section 48-1-25, Partner's interest subject to charging order.
8124 Section 48-1-26,"Dissolution" defined.
8125 Section 48-1-27, Partnership not terminated by dissolution.
8126 Section 48-1-28, Causes of dissolution.
8127 Section 48-1-29, Dissolution by decree of court.
8128 Section 48-1-30, General effect of dissolution on authority of partner.
8129 Section 48-1-31, Right of partner to contribution from copartners after dissolution.
8130 Section 48-1-32, Power of partner to bind partnership to third persons after
8131 dissolution.
8132 Section 48-1-33, Effect of dissolution on partner's existing liability.
8133 Section 48-1-34, Right to wind up.
8134 Section 48-1-35, Rights of partners to application of partnership property.
8135 Section 48-1-36, Rights where partnership is dissolved for fraud or
8136 misrepresentation.
8137 Section 48-1-37, Rules for distribution.
8138 Section 48-1-38, Liability of persons continuing the business in certain cases.
8139 Section 48-1-39, Rights of retiring or estate of deceased partner when the business
8140 is continued.
8141 Section 48-1-40, Accrual of actions.
8142 Section 48-1-41, Title.
8143 Section 48-1-42, Registration of limited liability partnerships.
8144 Section 48-1-43, Scope of chapter -- Choice of law.
8145 Section 48-1-44, Foreign limited liability partnerships.
8146 Section 48-1-45, Name of registered limited liability partnership.
8147 Section 48-1-46, Professional relationship -- Personal liability.
8148
8149 individuals apply.
8150 Section 48-1-48, Limited liability partnerships providing professional services.
8151 Section 48-2a-101, Definitions.
8152 Section 48-2a-102, Name.
8153 Section 48-2a-103, Reservation of name.
8154 Section 48-2a-103.5, Limited partnership name -- Limited rights.
8155 Section 48-2a-105, Records to be kept.
8156 Section 48-2a-106, Nature of business.
8157 Section 48-2a-107, Business transactions of partner with partnership.
8158 Section 48-2a-108, Conversion of certain entities to a limited partnership.
8159 Section 48-2a-109, Articles of conversion.
8160 Section 48-2a-110, Effect of conversion.
8161 Section 48-2a-111, Approval of conversion.
8162 Section 48-2a-112, No limitation on other changes.
8163 Section 48-2a-113, Approval of limited partnership conversion to subject entity.
8164 Section 48-2a-201, Certificate of limited partnerships.
8165 Section 48-2a-202, Amendment to certificate.
8166 Section 48-2a-202.5, Actions not requiring amendment.
8167 Section 48-2a-203, Voluntary cancellation of certificate.
8168 Section 48-2a-203.5, Involuntary dissolution of certificate.
8169 Section 48-2a-204, Execution of certificates.
8170 Section 48-2a-205, Execution by judicial act.
8171 Section 48-2a-206, Filing with the division.
8172 Section 48-2a-207, Liability for false statement in certificate.
8173 Section 48-2a-208, Scope of notice.
8174 Section 48-2a-209, Delivery of certificates to limited partners.
8175 Section 48-2a-210, Annual report.
8176 Section 48-2a-301, Admission of additional limited partners.
8177 Section 48-2a-302, Voting.
8178 Section 48-2a-303, Liability to third parties.
8179
8180 Section 48-2a-305, Inspection of records -- Right to information.
8181 Section 48-2a-401, Admission of additional general partners.
8182 Section 48-2a-402, Events of withdrawal.
8183 Section 48-2a-403, General powers and liabilities.
8184 Section 48-2a-404, Contributions by general partners.
8185 Section 48-2a-405, Voting.
8186 Section 48-2a-501, Form of contribution.
8187 Section 48-2a-502, Liability for contribution.
8188 Section 48-2a-503, Sharing of profits and losses.
8189 Section 48-2a-504, Sharing of distributions.
8190 Section 48-2a-601, Interim distributions.
8191 Section 48-2a-602, Withdrawal of general partner.
8192 Section 48-2a-603, Withdrawal of limited partners.
8193 Section 48-2a-604, Distribution upon withdrawal.
8194 Section 48-2a-605, Distribution in kind.
8195 Section 48-2a-606, Right to distribution.
8196 Section 48-2a-607, Limitations on distributions.
8197 Section 48-2a-608, Liability upon return of contribution.
8198 Section 48-2a-701, Nature of partnership interest.
8199 Section 48-2a-702, Assignment of partnership interest.
8200 Section 48-2a-703, Rights of creditor.
8201 Section 48-2a-704, Right of assignee to become limited partner.
8202 Section 48-2a-705, Power of estate of deceased or incompetent partner.
8203 Section 48-2a-801, Nonjudicial dissolution.
8204 Section 48-2a-802, Judicial dissolution.
8205 Section 48-2a-803, Winding up.
8206 Section 48-2a-804, Distribution of assets.
8207 Section 48-2a-901, Law governing.
8208 Section 48-2a-902, Registration.
8209 Section 48-2a-903, Issuance of registration.
8210
8211 Section 48-2a-905, Changes and amendments.
8212 Section 48-2a-906, Cancellation of registration.
8213 Section 48-2a-907, Transaction of business without registration.
8214 Section 48-2a-908, Action by director of division.
8215 Section 48-2a-1001, Right of action.
8216 Section 48-2a-1002, Proper plaintiff.
8217 Section 48-2a-1003, Pleading.
8218 Section 48-2a-1004, Expenses.
8219 Section 48-2a-1005, Security and costs.
8220 Section 48-2a-1006, Indemnification of a general partner.
8221 Section 48-2a-1101, Construction and application.
8222 Section 48-2a-1102, Short title.
8223 Section 48-2a-1103, Severability.
8224 Section 48-2a-1104, Effective date -- Extended effective date -- Applicability of
8225 former law.
8226 Section 48-2a-1105, Rules for cases not provided for in this chapter.
8227 Section 48-2a-1106, Savings clause.
8228 Section 48-2a-1107, Fees.
8229 Section 48-2c-101, Title.
8230 Section 48-2c-102, Definitions.
8231 Section 48-2c-103, Application of partnership provisions.
8232 Section 48-2c-104, Separate legal entity.
8233 Section 48-2c-105, Purpose.
8234 Section 48-2c-106, Name -- Exclusive right.
8235 Section 48-2c-107, Limited liability company name -- Limited rights.
8236 Section 48-2c-108, Reservation of name.
8237 Section 48-2c-109, Transaction of business outside state.
8238 Section 48-2c-110, Powers.
8239 Section 48-2c-113, Inspection of records by members and managers.
8240 Section 48-2c-114, Scope of inspection right.
8241
8242 Section 48-2c-116, Member or manager as a party to proceedings.
8243 Section 48-2c-118, Waiver of notice.
8244 Section 48-2c-119, Transaction of members or managers with company.
8245 Section 48-2c-120, Articles of organization and operating agreement.
8246 Section 48-2c-121, Scope of notice.
8247 Section 48-2c-122, Statement of person named as manager or member.
8248 Section 48-2c-201, Place for filings.
8249 Section 48-2c-202, Record of filings.
8250 Section 48-2c-203, Annual report.
8251 Section 48-2c-204, Signing of documents filed with division.
8252 Section 48-2c-205, Penalty for signing false documents.
8253 Section 48-2c-206, Powers of the division.
8254 Section 48-2c-207, Filing requirements.
8255 Section 48-2c-208, Effective time and date of filed documents.
8256 Section 48-2c-209, Correcting filed documents.
8257 Section 48-2c-210, Filing duty of division.
8258 Section 48-2c-211, Appeal from division's refusal to file document.
8259 Section 48-2c-212, Evidentiary effect of copy of filed document.
8260 Section 48-2c-213, Certificates issued by the division.
8261 Section 48-2c-214, Fees.
8262 Section 48-2c-305, Director of division as agent for service of process -- Records of
8263 process served.
8264 Section 48-2c-309, Service on withdrawn foreign company.
8265 Section 48-2c-311, Venue for action against foreign company.
8266 Section 48-2c-401, Organizer.
8267 Section 48-2c-402, Formation of company.
8268 Section 48-2c-403, Articles of organization.
8269 Section 48-2c-404, Prefiling activities.
8270 Section 48-2c-405, When amendment to articles of organization required.
8271 Section 48-2c-406, Actions not requiring amendment.
8272
8273 Section 48-2c-408, Certificate of amendment to articles of organization.
8274 Section 48-2c-409, Restated articles of organization.
8275 Section 48-2c-410, Transfer to other jurisdiction.
8276 Section 48-2c-411, Domestication of foreign company.
8277 Section 48-2c-412, Low-profit limited liability company.
8278 Section 48-2c-501, Initial agreement.
8279 Section 48-2c-502, General rules for operating agreements.
8280 Section 48-2c-503, Timing.
8281 Section 48-2c-504, Operating agreement for a one-member company.
8282 Section 48-2c-505, Interpretation and enforcement.
8283 Section 48-2c-506, Amendment.
8284 Section 48-2c-601, General rule.
8285 Section 48-2c-602, Exceptions to limited liability.
8286 Section 48-2c-603, Waiver of exceptions to limited liability.
8287 Section 48-2c-604, Waiver of protection of limited liability.
8288 Section 48-2c-605, No formalities required to maintain limited liability.
8289 Section 48-2c-606, Series of members, managers, or limited liability company
8290 interests.
8291 Section 48-2c-607, Notice of series -- Articles of organization.
8292 Section 48-2c-608, Agreement to be liable.
8293 Section 48-2c-609, Series related provisions in operating agreement.
8294 Section 48-2c-610, Management of a series.
8295 Section 48-2c-611, Distributions concerning a series.
8296 Section 48-2c-612, Member removal from a series -- Effect.
8297 Section 48-2c-613, Termination of series.
8298 Section 48-2c-614, Court-decreed termination of series.
8299 Section 48-2c-615, Participation in winding up.
8300 Section 48-2c-616, Foreign limited liability company -- Series.
8301 Section 48-2c-701, Nature of member interest.
8302 Section 48-2c-702, Initial members.
8303
8304 Section 48-2c-704, Meetings of members.
8305 Section 48-2c-705, Voting.
8306 Section 48-2c-706, Action by members without a meeting.
8307 Section 48-2c-707, Classes of members.
8308 Section 48-2c-708, Cessation of membership.
8309 Section 48-2c-709, Withdrawal of a member.
8310 Section 48-2c-710, Expulsion of a member.
8311 Section 48-2c-801, Management structure.
8312 Section 48-2c-802, Agency authority of members and managers.
8313 Section 48-2c-803, Management by members.
8314 Section 48-2c-803.1, Individual profits interest.
8315 Section 48-2c-804, Management by managers.
8316 Section 48-2c-805, Delegation of authority and power to manage.
8317 Section 48-2c-806, Reliance by member or manager on reports and information.
8318 Section 48-2c-807, Duties of managers and members.
8319 Section 48-2c-808, Actions by multiple managers.
8320 Section 48-2c-809, Removal by judicial proceeding.
8321 Section 48-2c-901, Form of contribution.
8322 Section 48-2c-902, Assessments for additional contributions.
8323 Section 48-2c-903, Capital accounts.
8324 Section 48-2c-904, Valuation of member's interest in the company.
8325 Section 48-2c-905, Redemption of interest.
8326 Section 48-2c-906, Allocation of profits and losses.
8327 Section 48-2c-1001, Allocation of current distributions.
8328 Section 48-2c-1002, Timing of distributions.
8329 Section 48-2c-1003, Liquidating distributions.
8330 Section 48-2c-1004, Right to distributions.
8331 Section 48-2c-1005, Limitations on distributions.
8332 Section 48-2c-1006, Duty to return wrongful distributions.
8333 Section 48-2c-1007, Distribution in kind.
8334
8335 Section 48-2c-1101, Assignment of interests.
8336 Section 48-2c-1102, Rights of assignee.
8337 Section 48-2c-1103, Rights of creditor of member.
8338 Section 48-2c-1104, Right of assignee to become member.
8339 Section 48-2c-1105, Liability of assignor continues.
8340 Section 48-2c-1106, Invalid transfers.
8341 Section 48-2c-1201, Events of dissolution.
8342 Section 48-2c-1202, Voluntary cancellation of certificate.
8343 Section 48-2c-1203, Effect of dissolution.
8344 Section 48-2c-1204, Articles of dissolution.
8345 Section 48-2c-1205, Revocation of voluntary dissolution.
8346 Section 48-2c-1206, Grounds for administrative dissolution.
8347 Section 48-2c-1207, Procedure for and effect of administrative dissolution.
8348 Section 48-2c-1208, Reinstatement following administrative dissolution.
8349 Section 48-2c-1209, Appeal from denial of reinstatement.
8350 Section 48-2c-1210, Grounds for judicial dissolution.
8351 Section 48-2c-1211, Procedure for judicial dissolution.
8352 Section 48-2c-1212, Receivership or custodianship.
8353 Section 48-2c-1213, Decree of dissolution.
8354 Section 48-2c-1214, Election to purchase in lieu of dissolution.
8355 Section 48-2c-1301, Winding up defined.
8356 Section 48-2c-1302, Powers of company in winding up.
8357 Section 48-2c-1303, Persons authorized to wind up.
8358 Section 48-2c-1304, Payment of claims and obligations.
8359 Section 48-2c-1305, Disposition of known claims by notification.
8360 Section 48-2c-1306, Disposition of claims by publication.
8361 Section 48-2c-1307, Enforcement of claims against dissolved company in winding
8362 up.
8363 Section 48-2c-1308, Distribution of assets on winding up.
8364 Section 48-2c-1309, Deposit with state treasurer.
8365
8366 Section 48-2c-1402, Articles of conversion.
8367 Section 48-2c-1403, Effect of conversion.
8368 Section 48-2c-1404, Approval of conversion.
8369 Section 48-2c-1405, No limitation on other changes.
8370 Section 48-2c-1406, Approval of company conversion to other entity.
8371 Section 48-2c-1407, Merger.
8372 Section 48-2c-1408, Approval of merger.
8373 Section 48-2c-1409, Articles of merger.
8374 Section 48-2c-1410, Effect of merger.
8375 Section 48-2c-1411, Conversion or merger of a low-profit limited liability
8376 company.
8377 Section 48-2c-1501, Purpose of Part 15.
8378 Section 48-2c-1502, Definitions.
8379 Section 48-2c-1503, Rendering professional services.
8380 Section 48-2c-1504, No limits on regulating board.
8381 Section 48-2c-1505, Name limitations.
8382 Section 48-2c-1506, Activity limitations.
8383 Section 48-2c-1507, Limit of one profession.
8384 Section 48-2c-1508, Members and managers restricted to professionals.
8385 Section 48-2c-1509, Additional requirements for articles of organization.
8386 Section 48-2c-1510, Restrictions on transfers by members.
8387 Section 48-2c-1511, Purchase of interest upon death, incapacity, or disqualification
8388 of members.
8389 Section 48-2c-1512, Conversion to nonprofessional company.
8390 Section 48-2c-1513, Application of Part 15.
8391 Section 48-2c-1601, Law governing foreign companies.
8392 Section 48-2c-1602, Authority to transact business required.
8393 Section 48-2c-1603, Consequences of transacting business without authority.
8394 Section 48-2c-1604, Application for authority to transact business.
8395 Section 48-2c-1605, Amended application for authority to transact business.
8396
8397 business.
8398 Section 48-2c-1607, Company name and assumed company name of foreign
8399 company.
8400 Section 48-2c-1608, Registered name of foreign company.
8401 Section 48-2c-1609, Amendment of articles of organization of foreign company.
8402 Section 48-2c-1610, Merger of foreign company authorized to transact business in
8403 this state.
8404 Section 48-2c-1611, Withdrawal of foreign company.
8405 Section 48-2c-1612, Grounds for revocation.
8406 Section 48-2c-1613, Procedure for and effect of revocation.
8407 Section 48-2c-1614, Appeal from revocation.
8408 Section 48-2c-1615, Actions to restrain transaction of business in state.
8409 Section 48-2c-1701, Right of action.
8410 Section 48-2c-1702, Proper plaintiff.
8411 Section 48-2c-1703, Pleading.
8412 Section 48-2c-1704, Stay of proceedings.
8413 Section 48-2c-1705, Expenses.
8414 Section 48-2c-1706, Security and costs.
8415 Section 48-2c-1801, Definitions.
8416 Section 48-2c-1802, Authority to indemnify.
8417 Section 48-2c-1803, Mandatory indemnification of managers.
8418 Section 48-2c-1804, Advancement of expenses.
8419 Section 48-2c-1805, Court-ordered indemnification.
8420 Section 48-2c-1806, Determination and authorization of indemnification.
8421 Section 48-2c-1807, Indemnification of members, employees, fiduciaries, and
8422 agents.
8423 Section 48-2c-1808, Insurance.
8424 Section 48-2c-1809, Limitations on indemnification.
8425 Section 48-2c-1901, Legislative intent -- Freedom of contract.
8426 Section 48-2c-1902, Transitional provisions.
8427
8428 This bill takes effect on July 1, 2012.
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