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• 2024 General Session
• S.B. 101

S.B. 101 Limited Liability Company Amendments

• Bill Text
• Status
• Hearings/Debate

Bill Sponsor: Sen. Weiler, Todd D.

Floor Sponsor: Rep. Maloy, A. Cory

• Drafting Attorney: Austin Weenig
• Fiscal Analyst: Timothy Kevin Bereece

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• Bill Text
  • Introduced
  • Enrolled

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• Related Documents
  • Fiscal Note
  • House Transmittal Letter 1
  • Senate Transmittal Letter 1

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• Information
  • Last Action: 13 Mar 2024, Governor Signed
  • Last Location: Lieutenant Governor's office for filing

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• Similar Bills
  • Business
  • Limited Liability Companies

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Enrolled

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S.B. 101

5 48-3a-701 48-3a-701 48-3a-1405

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LIMITED LIABILITY COMPANY AMENDMENTS 2024 GENERAL SESSION STATE OF UTAH Chief Sponsor: Todd D. Weiler House Sponsor: A. Cory Maloy

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LONG TITLE

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General Description:

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This bill provides guidelines regarding the dissolution of limited liability companies.

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Highlighted Provisions:

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This bill:

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▸provides that a limited liability company is dissolved on the date specified in the limited

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liability company's certificate of organization; and

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▸applies the dissolution requirement to any limited liability company regardless of the

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limited liability company's formation date.

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Money Appropriated in this Bill:

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None

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Other Special Clauses:

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This bill provides a special effective date.

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Utah Code Sections Affected:

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AMENDS:

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48-3a-701, (Effective 05/01/24) (Superseded 07/01/24) as enacted by Laws of Utah

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2013, Chapter 412

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48-3a-701, (Effective 07/01/24) as last amended by Laws of Utah 2023, Chapter 401

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48-3a-1405, (Effective 05/01/24) as enacted by Laws of Utah 2013, Chapter 412

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Be it enacted by the Legislature of the state of Utah:

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Section 1, Section 48-3a-701 is amended to read:

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48-3a-701 (Effective 05/01/24) (Superseded 07/01/24). Events causing dissolution. A limited liability company is dissolved, and its activities and affairs must be

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wound up, upon the occurrence of any of the following:

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(1)an event , or circumstance , or date that the certificate of organization or operating

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agreement states causes dissolution;

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(2)the consent of all the members;

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(3)the passage of 90 consecutive days during which the limited liability company has no

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members unless:

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(a)consent to admit at least one specified person as a member is given by transferees

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owning the rights to receive a majority of distributions as transferees at the time the

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consent is to be effective; and

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(b)at least one person becomes a member in accordance with the consent;

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(4)on application by a member, the entry by the district court of an order dissolving the

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limited liability company on the grounds that:

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(a)the conduct of all or substantially all of the limited liability company's activities and

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affairs is unlawful; or

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(b)it is not reasonably practicable to carry on the limited liability company's activities

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and affairs in conformity with the certificate of organization and the operating

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agreement;

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(5)on application by a member, the entry by the district court of an order dissolving the

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limited liability company on the grounds that the managers or those members in control

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of the limited liability company:

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(a)have acted, are acting, or will act in a manner that is illegal or fraudulent; or

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(b)have acted, are acting, or will act in a manner that is oppressive and was, is, or will

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be directly harmful to the applicant; or

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(6)the signing and filing of a statement of administrative dissolution by the division under

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Subsection 48-3a-708(3).

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Section 2, Section 48-3a-701 is amended to read:

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48-3a-701 (Effective 07/01/24). Events causing dissolution. A limited liability company is dissolved, and its activities and affairs must be

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wound up, upon the occurrence of any of the following:

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(1)an event , or circumstance , or date that the certificate of organization or operating

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agreement states causes dissolution;

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(2)the consent of all the members;

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(3)the passage of 90 consecutive days during which the limited liability company has no

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members unless:

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(a)consent to admit at least one specified person as a member is given by transferees

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owning the rights to receive a majority of distributions as transferees at the time the

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consent is to be effective; and

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(b)at least one person becomes a member in accordance with the consent;

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(4)upon a petition brought by a member, the entry of a court order dissolving the limited

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liability company on the grounds that:

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(a)the conduct of all or substantially all of the limited liability company's activities and

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affairs is unlawful; or

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(b)it is not reasonably practicable to carry on the limited liability company's activities

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and affairs in conformity with the certificate of organization and the operating

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agreement;

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(5)upon a petition brought by a member, the entry of a court order dissolving the limited

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liability company on the grounds that the managers or those members in control of the

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limited liability company:

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(a)have acted, are acting, or will act in a manner that is illegal or fraudulent; or

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(b)have acted, are acting, or will act in a manner that is oppressive and was, is, or will

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be directly harmful to the applicant; or

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(6)the signing and filing of a statement of administrative dissolution by the division under

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Subsection 48-3a-708(3).

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Section 3, Section 48-3a-1405 is amended to read:

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48-3a-1405 (Effective 05/01/24). Application to existing relationships.

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(1)Before January 1, 2016, this chapter governs only:

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(a)a limited liability company formed on or after January 1, 2014; and

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(b)except as otherwise provided in Subsection (3), a limited liability company formed

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before January 1, 2014, which elects, in the manner provided in its operating

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agreement or by law for amending the operating agreement, to be subject to this

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chapter.

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(2)Except as otherwise provided in Subsection (3), on and after January 1, 2016, this

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chapter governs all limited liability companies.

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(3)For the purposes of applying this chapter to a limited liability company formed before

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January 1, 2014:

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(a)the limited liability company's articles of organization are deemed to be the limited

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liability company's certificate of organization;

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(b)for the purposes of applying Subsection 48-3a-102(15) and subject to Subsection

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48-3a-114 (4), language in the limited liability company's articles of organization

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designating the limited liability company's management structure operates as if that

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language were in the operating agreement; and and

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(c) (i) the limited liability company has perpetual duration unless otherwise stated in

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the limited liability company's articles of organization . ; and

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(ii) after the limited liability company's duration ends in accordance with the articles

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of organization, the limited liability company is dissolved, and its activities and

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affairs must be wound up.

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Section 4. Effective date.

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(1) Except as provided in Subsection (2), this bill takes effect on May 1, 2024.

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(2) The actions affecting Section 48-3a-701 (Effective 07/01/24) take effect on July 1, 2024.