AN ACT TO AMEND AND RESTATE THE NORTH CAROLINA LIMITED LIABILITY COMPANY ACT AND TO MAKE OTHER CONFORMING CHANGES. Enacted June 19, 2013. Effective January 1, 2014, except as otherwise provided.
Summary date: Jun 24 2013 - More information
Summary date: Jun 6 2013 - More information
House committee substitute makes the following changes to the 3rd edition.
Makes various technical corrections throughout the act.
Summary date: Apr 25 2013 - More information
Senate amendment to the 2nd edition makes the following changes. Amends proposed GS 57D-2-30(c) to limit the provision that oral or implied provisions in the operating agreement may not supplant, vary, disclaim, or nullify any contrary or inconsistent written provision in the operating agreement to the detriment of the rights of the persons who are not parties to the operating agreement, to the extent that they reasonably rely on those written provisions in the operating agreement.
Summary date: Apr 24 2013 - More information
Senate committee substitute makes the following changes to the 1st edition.
Amends GS 57D-2-30(c), providing that oral or implied provisions in the operating agreement cannot supplant or nullify any contrary or inconsistent written provisions in the operating agreement to the detriment of the rights of persons who are not parties to the operating agreement. Amends GS 57D-2-30, making conforming changes.
Enacts new GS 57D-2-30(d), setting out the priority between conflicting operating agreements or documents filed with the Secretary of State (Secretary), providing that an operating agreement prevails as to parties to the operating agreement and company officials but that a document filed with the Secretary will prevail as to persons not party to the operating agreement to the extent they reasonably rely on the filed document.
Amends GS 57D-5-03(b), providing that the priority among multiple charging orders would be determined by the date of service of the charging order upon the LLC, except that a charging order in favor of a judgment creditor which has been previously issued for garnishment to the LLC would relate back to the original date of the service of garnishment process.
Summary date: Apr 2 2013 - More information
Repeals GS Chapter 57C, the "NC Limited Liability Company Act" and enacts a new GS Chapter 57D, also to be known as the "North Carolina Limited Liability Company Act" (Act) to amend, restate, and make conforming changes to the Act as the title indicates.
Provides that new Chapter 57D and any other applicable state laws govern the internal affairs of every Limited Liability Corporation (LLC) and any liability that interest owners, managers, or other company officials may have for the liabilities of the LLC. Declares that North Carolina's superior courts have jurisdiction to enforce the provisions of this Chapter. Reserves the power to amend or repeal all or any part of this Chapter at any time to the General Assembly. Provides that the scope of any amendments to this Chapter applies to all LLCs, foreign LLCs, interest owners, managers, and other company officials and includes LLCs and foreign LLCs in existence, or persons having such interests and status, at the time any amendments are enacted. Makes each provision of this Chapter severable, so that if any provision or application of this Chapter is held to be invalid, its invalidity will not affect other provisions or applications of the Chapter that can be given effect without the invalid provision or application.
Sets out definitions of terms as they apply in this Chapter, including: (1) defines LLC as an entity formed under new Chapter 57D or former Chapter 57C that has not become another entity or form of entity by merger, conversion, or other means; (2) defines Limited liability company to mean an LLC or a foreign LLC; (3) defines person to mean an individual or an entity, and defines individual to mean a human being; and (4) provides that liabilities, debts, and obligations have the same meaning and are used interchangeably through this Chapter.
Specifies requirements for the filing of documents under this Chapter. Requires that a document filed by the Secretary of State of North Carolina (Secretary) must be filed as provided in GS Chapter 55D. Identifies persons who are authorized to file documents on behalf of an LLC under specified circumstances.
Authorizes the Secretary to make the use of certain application forms mandatory and provides that the Secretary may promulgate and furnish other forms for documents required or permitted to be filed under this Chapter, but their use is not mandatory.
Delineates fees to be collected by the Secretary (1) for filing documents with the Secretary, (2) for service of process on the Secretary (if the serving party prevails then the party may recover the process fee), and (3) for copying and certifying a copy of any filed document related to an LLC.
Provides that any person adversely affected by the failure or refusal of any person to execute and deliver any document to the Secretary that required to be filed under this Chapter may petition the superior court with appropriate jurisdiction as specified in this Chapter to direct the filing and execution of the document. If the court finds that it is proper for the document to be executed and delivered to the Secretary and the applicable company official has refused or failed to do so, then the court must order the Secretary to make the filing.
Permits anyone to apply to the Secretary for a certificate of existence for an LLC or a certificate of authorization for a foreign LLC. Specifies the information that the certificate or existence or authorization must contain. Provides that a certificate of existence or authorization issued by the Secretary may be relied upon as conclusive evidence as to the accuracy of its contents.
Declares that the Secretary has the power necessary to perform the duties required by this Chapter. Authorizes the Secretary to present written interrogatories to any LLC to enable the Secretary to determine if the LLC has complied with all applicable provisions of this Chapter. Indicates timelines (30 days from the request by the Secretary or within an additional time frame set by the Secretary) for a response from the LLC and requires that the answers to the Secretary's interrogatories must be full and complete, and made in writing and under oath. Makes it a Class 1 misdemeanor for a manager or other company official of an LLC to fail or refuse to respond within the prescribed time to answer truthfully and fully the interrogatories proposed by the Secretary. Provides that the interrogatories and the answers are not open to public inspection. Prohibits the Secretary from disclosing any facts or information gained from the interrogatories except to the extent applicable law requires the Secretary to disclose the information publicly, or the interrogatories or the answers are required as evidence in any proceedings by the state. Directs the Secretary to certify to the state Attorney General all interrogatories and answers that disclose a violation of any provisions under this Chapter which require or permit action by the Attorney General. Provides that the Secretary may impose penalties on an LLC for failing to answer interrogatories. Penalties include the suspension of an LLC's articles of organization or its certificate of authority to do business in this state. Requires the Secretary to immediately notify an LLC of its suspension by mail. Sets out criteria under which the Secretary is to reinstate a suspended LLC. Requires the LLC to fully comply with its obligations under new GS 57D-1-31, pay all state taxes, fees, and penalties that are due, and pay a $25.00 fee to the secretary to cover the cost of reinstatement. Directs the Secretary to immediately notify the LLC of the reinstatement by mail. Also provides criteria for disposing of the assets of an LLC when its articles of organization or certificate of authority have been suspended and the LLC has ceased to operate, but property remains in the name of the LLC or there remain future interests that may accrue to the LLC, its successor, or its interest owners.
Provides that an LLC is an entity distinct from its interest owners; has perpetual duration; and continues its existence after its dissolution subject to wind up under the provisions of new GS 57D-6-07. Provides that an LLC may engage in any lawful business but provides that an LLC engaging in a business subject to regulation under another North Carolina statute may be formed under this Chapter if not precluded by the provisions of the other statute. Provides guidelines regarding an LLC rendering professional services. Except as otherwise indicated in subsection (a) of new GS 57D-2-02, limits an LLC to rendering professional services only to the extent that it would be able to provide those services if it were a corporation, including complying as applicable with GS Chapter 55B and the statutes referenced in the definition of "professional service" in GS 55B-2(6). Provides rules of construction for applying the provisions of GS Chapter 55B and the statutes referenced in Chapter 55B to LLCs that render professional services, unless the context specifically requires a different construction. Asserts that nothing in new GS Chapter 57D alters or abolishes North Carolina's law applicable to the professional relationship and liabilities between a provider of professional services and the person receiving the professional services, the standards of professional conduct in rendering the professional service, or any responsibilities, obligations, or sanctions imposed by applicable licensing statutes. Provides criteria regarding the question of liability of a member or manager or other company official of a professional LLC.
Unless provided otherwise under this Chapter or limited under the operating agreement, an LLC has the same powers as an individual or a domestic corporation to do everything necessary to carry out its business.
Provides that one or more persons may form an LLC by delivering executed articles of organization to the Secretary for filing in accordance with this Chapter and Chapter 55D. Also provides for the formation of an LLC through the conversion of another eligible entity into an LLC under Part 2 of Article 9 of GS Chapter 57D. Declares that an LLC is formed at the time that the articles of organization filed by the Secretary become effective. Provides additional guidelines regarding the formation of an LLC.
Specifies the required content of the articles of organization, and indicates the process of amending the articles of organization. Permits an LLC to restate its articles of organization at any time. Requires that the restated articles of organization must be delivered to the Secretary for filing and indicates the required elements of the restatement to be filed with the Secretary.
Requires each LLC and each foreign LLC, except for professional LLCs governed by new GS 57D-2-02, to file annual reports with the Secretary on a form and in a manner as prescribed by the Secretary. Specifies information that must be included in each annual report. Directs the Secretary to notify LLCs of the annual report filing requirement. Provides schedule for submitting the annual report.
Provides for the scope, function, and limitations of the operating agreement that governs the internal affairs of an LLC, and the rights, duties, and obligations of (1) the interest owners, and the rights of any other persons to become interests owners, in relation to each other, the LLC, and their ownership interests or rights to acquire ownership interests, and (2) the company officials in relation to each other, the LLC, and the interest owners. Provides that the provisions of the operating agreement are severable and each provision will apply to the extent that it is valid and enforceable. Declares that the operating agreement may not supplant, vary, disclaim, or nullify specified provisions of this Chapter or the application of those provisions. Provides that except as otherwise provide in this Chapter or other applicable law, the laws of agency and contract govern the administration and enforcement of operating agreements.
Identifies persons deemed to be a party to the operating agreement and other persons subject to or having rights under the operating agreement. Provides that a person does not have to be an interest owner to be a party to the operating agreement. Provides that any person bound by the operating agreement is also bound by any adopted amendment to the operating agreement. Indicates that an operating agreement may contain specified remedies applicable to the breach of the operation agreement or the occurrence of a specified event. Provides that unless otherwise specified in the operating agreement, an interest owner or other person, who is a party or bound by the operating agreement, will not be liable to the LLC, an interest owner, or a party to the operating agreement for that person's reliance on the provisions of the operating agreement.
Requires each LLC to maintain a registered office and registered agent as required under Article 4 of GS Chapter 55D and provides that each LLC is subject to service on the Secretary under that Article.
Provides criteria for the admission of members to an LLC and for becoming an economic interest owner. Also provides criteria for ceasing to be a member of an LLC, including death and a declaration of incompetence.
Requires the approval of all members to (1) adopt or amend an operating agreement, (2) admit any person as a member, (3) transfer in one transaction or series of related transactions all or substantially all of the assets of the LLC prior to the dissolution of the LLC, other than in the ordinary course of business, (4) dissolve the LLC under circumstances other than those for which an LLC may be dissolved under Article 6 of this Chapter, (5) convert the LLC into a different eligible entity under Article 9 of this Chapter, or (6) merge the LLC with or into another eligible entity under Article 9 of this Chapter.
Specifies the rights of members to inspect and review information including the articles of organization, tax returns, and other information from which the status of the business and financial condition of the LLC may be ascertained. Permits the inspection rights and rights to copy LLC records to be exercised through a member's agent.
Provides standards of conduct for managers in the discharge of their duties in managing the LLC and conducting its business. Provides that the management of an LLC and its business is vested in the managers, and that all members are managers of the LLC, as well as any person or persons designated as a manager in the operating agreement. However, the operating agreement may provide that members are not managers by virtue of their status as members and may also designate that the LLC is to be managed by company officials who are not managers. Provides additional criteria regarding terms of service as a manager and the duties of company officials. Directs mangers to manage the LLC and conduct its business in accordance with the operating agreement and asserts that a manager acting in compliance with this section is not liable to the LLC for any act or omission as a manager.
Attaches no liability to a person who is an interest owner, manager, or other company official for the obligations of the LLC solely because of their position in the LLC. Provides criteria for when indemnification is required for an LLC member, manager, or other company official and criteria when the LLC must reimburse a person who is or was a member for any payment made by that person, in the authorized conduct of the LLC's business or preservation of the LLC's business or property.
Also provides criteria for contributions by an interest owner in any form including money or other property, or services rendered, for interim distribution to interest owners before the dissolution and winding up of an LLC, and restrictions on making distributions. Provides additional information on liability for contributions, liability for wrongful distributions distribution in kind, and the right to distribution.
Categorizes an ownership interest as personal property. States that an economic interest may be transferred in whole or part; however, the transfer, in whole or part, of an economic interest does not entitle the recipient of the transfer to become a member or exercise any rights of a member other than to receive the economic interest. Provides for the rights of a judgment creditor of an interest owner. Provides additional criteria regarding the transfer of ownership interests with respect to an LLC. Declares that there is no right for an interest owner to voluntarily withdraw capital or terminate obligations except as may be required by this Chapter or other applicable law.
Specifies occurrences which dissolve an LLC. Provides the grounds and procedure for a judicial dissolution of an LLC. Authorizes the court in a proceeding to dissolve an LLC, to create a receivership pending the court's decision on dissolution, and provides specifications regarding a decree of judicial dissolution and the court's authority to direct the winding up of the LLC. Also provides acts or omissions that serve as grounds to permit the Secretary to administratively dissolve an LLC. Allows an LLC dissolved under this section to apply to the Secretary for reinstatement.
Directs an LLC to wind up after its dissolution and provides that the winding up may include continuing the business of the LLC for a period of time. Elaborates on the process of winding up an LLC after its dissolution, identifying the process for determining the person or persons charged with winding up the LLC. Provides that during the winding up of an LLC, the LLC's assets are to be applied first to creditors and the balance to the interest owners as distributions made in the manner provided in GS 57D-4-03.
Requires the LLC to deliver articles of dissolution to the Secretary for filing upon the dissolution of the LLC. Specifies that the articles of dissolution must contain (1) the name of the LLC, (2) the effective date of the dissolution, and (3) any other information the LLC elects to provide.
Permits a dissolved LLC with articles of dissolution, a certificate of dissolution, or an effective decree of dissolution filed by the Secretary, to dispose of known claims against it by providing claimants with a written notification of the dissolution with specified content. Also provides for the publication of notice of an LLC's dissolution to request that persons with claims against the LLC present those claims as prescribed in the notice. Provides for the content requirements of the notice.
Provides criteria for the enforcement of claims against a dissolved LLC under new GS 57D-6-10 or GS 57D-6-11, and provides that neither of the proposed statutes extends any applicable period of limitation. Describes the procedures for court proceedings for contingent claims against a dissolved LLC.
GS 57D-7-01, (Authority to transact business), establishes that a foreign LLC may only transact business in NC after obtaining a certificated of authority (certificate) from the Secretary. Provides a list of 12 activities, which when done are not considered to be the transaction of business by a foreign LLC, including selling property or services through independent contractors and owning real or personal property.
Enacts GS 57D-7-02, (Consequences of transacting business without authority), providing that no foreign LLC may maintain a proceeding in any court of NC without first obtaining a certificate of authority. Such an issue must be raised by motion and determined by the trial judge before trial begins. Provides that a foreign LLC failing to obtain a certificate is liable to NC for any amount of fees and taxes that would have been imposed by law had the foreign LLC properly applied for and received permission to transact business in NC. A civil penalty of $10 for each day that a foreign LLC transacts business will be assessed, not to exceed $1,000 per year. Such penalty funds are to be sent to the Civil Penalty and Forfeiture Fund. Establishes that a failure of the LLC to obtain a certificate does not otherwise impair or invalidate its acts or prevent it from defending any proceeding in NC. Provides that the Secretary requires every foreign LLC transacting business in NC to comply with the provisions of this Chapter. Authorizes the Secretary to undertake investigations necessary to determine compliance of this Chapter.
GS 57D-7-03, (Application for certificate of authority), states that a foreign LLC may apply for a certificate by submitting an application to the Secretary. Provides what information must be provided in the application, including, the name of the foreign LLC, the jurisdiction under whose law it is organized, and the names, titles, and business addresses of the principal company officials. The foreign LLC will also submit with the application for certificate, a certificate of existence, or a similar document, authenticated by the secretary of state or other proper official who has custody of LLC records in the jurisdiction where the foreign LLC is organized. When the Secretary deems the application as conforming to law and all applicable taxes and fees have been paid, the application and certificate of existence will be filed, and a certificate will be issued to transact business in NC and sent to the foreign LLC.
GS 57D-7-04, (Amended certificate of authority) provides that a foreign LLC must amend its certificate if its name or jurisdiction of organization changes. A foreign LLC can apply for an amended certificate by submitting an application to the Secretary that sets forth the name, organizing jurisdiction name, the date it was originally authorized to transact business in NC, and a statement of the change(s) being made. Provides that the requirements of GS 57D-7-03 are applicable when applying for an amended certificate.
GS 57D-7-05, (Effect of certificate of authority), establishes that a certificate authorizes the foreign LLC to transact business in NC and to qualify as an executor, administrator, guardian, or trustee under the will of any person. If qualifying as a testamentary trustee or executor the foreign LLC must appoint a process agent and file that appointment with the court per GS 28A-4-2. Provides that an LLC is held to the same duties, restrictions, penalties, and liabilities as LLCs of like character.
GS 57D-7-06, (Registered office and registered agent of foreign LLC), provides that each authorized foreign LLC must maintain a registered office and agent pursuant to GS 55D, Article 4.
GS 57D-7-20, (Withdrawal of foreign LLC), requires a foreign LLC to obtain a certificate of withdrawal from the Secretary before being able to withdraw from NC. In order to obtain a withdrawal certificate, the foreign LLC must submit an application to the Secretary stating, among other things, that the foreign LLC revokes its authority of its registered agent to accept service of process and that it is not transacting business in NC and it surrenders its authority to transact business in NC. When the Secretary deems the application for withdrawal as conforming to law, the application and certificate of withdrawal will be filed and sent to the foreign LLC. Provides for the service of process after the withdrawal of the foreign LLC is effective.
GS 57D-7-21, (Withdrawal of foreign LLC by reason of a merger, consolidation, or conversion; qualification of successor), provides that if a foreign LLC ceases to exist as a result of merger, consolidation, or other reorganization, the resulting entity must apply for a certificate of withdrawal for the foreign LLC. If the resulting entity is not authorized to transact business in NC, the application for withdrawal must state and otherwise modify the described information required pursuant to GS 57D-7-20(b). When the Secretary deems the information submitted by the resulting entity conforms to law, the application and certificate of withdrawal will be filed and sent to the foreign LLC. Provides for the service of process after the withdrawal of the foreign LLC is effective.
GS 57D-7-22, (Authority of Attorney General), establishes that the Attorney General (AG) can maintain an action to restrain a foreign LLC from transacting business in NC, in violation of this Article.
GS 57D-7-30, (Grounds for revocation), provides that the Secretary can commence a proceeding to revoke the certificate of a foreign LLC in certain situations, including, the foreign LLC is delinquent in delivering its annual report, or the foreign LLC is exceeding the authority conferred upon it by this Chapter. Provides that the Revenue Act, relating to the suspension of the certificate, is not preempted by this section.
GS 57D-7-31, (Procedures for and effect of revocation), provides that if the Secretary determines that one or more grounds exist for revocation under GS 57D-7-30, the Secretary will mail to the foreign LLC a written notice of that determination. If the grounds for revocation are not corrected to the satisfaction of the Secretary within 60 days after having received notice, the Secretary can revoke the foreign LLCs certificate, filing the revocation and sending a copy of it to the foreign LLC. After which, the authority of the foreign LLC to transact business in NC ceases. Such revocation results in the Secretary becoming the agent for service of process for the foreign LLC; however the authority of the registered agent of the foreign LLC is not terminated by the revocation. A new certificate will not be granted until the grounds for revocation have been substantially corrected to the satisfaction of the Secretary.
GS 57D-7-32, (Appeal from revocation), enacts that a foreign LLC can appeal the Secretary's revocation of its certificate to the Superior Court of Wake County within 30 days after the revocation is mailed to the foreign LLC. The foreign LLC must file a petition with the court and with the Secretary, requesting to set aside the revocation. Provides the further process and procedure of the appeal. States that any final decision by the court can be appealed as in other civil proceedings.
GS 57D-7-33 (Inapplicability of Administrative Procedure Act), states that the Administrative Procedure Act does not apply to proceedings or appeals provided for in GS 57D-7-30 through GS 57D-7-32.
GS 57D-8-01, (Member derivative actions), establishes the reasons and conditions by which a member may bring a derivative action. Defines, for the purpose of this article, the terms "derivative action" and "derivative proceeding".
GS 57D-8-02, (Stay of proceedings), provides that if the LLC commences an inquiry into the allegations in the derivative suit, the court can stay the derivative proceeding.
GS 57D-8-03, (Dismissal), provides the processes and procedures for the dismissal of a derivative proceeding, including, a court appointed panel composed of one or more independent persons tasked with determining whether the derivative proceeding is in the best interest of the LLC. The plaintiff bears the burden of proving that the suit is in the interest of the LLC.
GS 57D-8-04, (Discontinuance or settlement), establishing that a derivative proceeding cannot be discontinued or settled without the court's approval. On the court's determination that a proposed discontinuance or settlement will substantially affect the interest of the LLC's members, a notice will be given to the members who would be affected. The manner, form of the notice, and who will bear the cost of the notice, will be determined by the court.
GS 57D-8-05, (Payment of expenses), provides what the court may do on the termination of the derivative proceeding, including, but not limited to, ordering the LLC to pay the plaintiff's expenses, including attorney's fees.
GS 57D-06, (Applicability to foreign LLCs), provides that except for the matters governed by GS 57D-8-02, GS 57D-8-04, and GS 57D-8-05, the matters of any derivative proceeding in the right of a foreign LLC will be governed by the law of the jurisdiction of the LLC.
GS 57D-8-7, (Privileged communications), provides that in any derivative proceeding, no member is entitled to access to any communication within the scope of the LLC's attorney-client privilege that is not otherwise accessible in a proceeding other than on behalf of the LLC.
GS 57D-9-01, (Definitions), provides the terms and definitions to be used in this article, including Articles of organization and conversion, converting entity, converting LLC, eligible entity, merging entity, merging LLC, and surviving entity.
GS 57D-9-20, (Conversion), provides the requirements by which an eligible entity, other than an LLC, may convert to an LLC.
GS 57D-9-21, (Plan of conversion), establishes that a converting entity must approve a written plan of conversion which includes specified information such as, but not limited to, the terms and conditions of the conversion and the name the entity will have after an effective conversion. Provides that certain provisions of the plan can be made on facts objectively ascertainable outside the plan of conversion. Plans of conversions must be approved in accordance with the law governing the organizations and internal affairs of the converting entity. Provides when the plan of conversion can be amended or abandoned.
GS 57D-9-22, (Filing articles of organization and conversion by the converting entity), establishes that after the plan of conversion has been approved by the converting entity, the entity must deliver articles of organization and conversion to the Secretary for filing. Specifies the information the articles must contain. Details what must happen if a plan of conversion is abandoned after delivery to the Secretary but before the conversion is effective. Requires certificates of conversion to be registered, pursuant to GS 47-18.1.
GS 57D-9-23, (Effective date; Effects of conversion), provides when the conversion is final and takes effect as well as what occurs when the conversion is final, including, but not limited to, the converting entity ceases its prior form or organization and continues as the surviving entity and all liabilities of the converting entity continue as liabilities of the surviving entity.
GS 57D-9-30, (Conversion), provides the requirements by which a LLC may convert to a different eligible entity.
GS 57D-9-31, (Plan of conversion), establishes that a converting LLC must approve a written plan of conversion which includes specified information such as, but not limited to, the terms and conditions of the conversion and the name the entity will have after an effective conversion. Provides that certain provisions of the plan can be made on facts objectively ascertainable outside the plan of conversion. The converting LLC must provide a copy of the plan of conversion to each member of the converting LLC prior to its approval; all members must approve the plan of conversion. Provides when the plan of conversion can be amended or abandoned.
GS 57D-9-32, (Articles of conversion), establishes that after the plan of conversion has been approved by the converting entity, the entity must deliver articles of organization and conversion to the Secretary for filing. Specifies the information the articles must contain. Describes what must happen if a plan of conversion is abandoned after delivery to the Secretary but before the conversion is effective. Requires certificates of conversion to be registered, pursuant to GS 47-18.1.
GS 57D-9-33, (Effects of conversion), provides what occurs when the conversion is final, including, but not limited to, the converting entity ceases its prior form or organization and continues as the surviving entity, and the title to all real estate and other property owned by the converting LLC continues to be vested in the surviving entity without reversion or impairment. The surviving entity, if not a domestic corporation or a domestic limited partnership, is deemed to consent to being served with process in this State for enforcement of specified obligations and rights and as having appointed the Secretary as its agent for service of process in any such proceeding.
GS 57D-9-40, (Merger), establishes that an LLC may merge with one or more eligible entities if specified requirements are met.
Gs 57D-9-41, (Plan of merger), establishes that a merging entity must approve a written plan of merger which includes specified information such as, but not limited to, the terms and conditions of the merger and the name of the surviving entity. Provides that certain provisions of the plan can be made on facts objectively ascertainable outside the plan of merger. Plans of merger must be approved in accordance with the law governing the organizations and internal affairs of the converting entity. The merging entity must provide a copy of the plan of merger to each member of the merging entity prior to its approval; all members must approve the plan of merger. Provides when the plan of conversion can be amended or abandoned.
GS 57d-9-42, (Articles of merger), establishes that after the plan of merger has been approved by the merging entity, the entity must deliver articles of merger to the Secretary for filing. Specifies the information the articles must contain. Details what must happen if a plan of merger is amended or abandoned after delivery to the Secretary but before the merger is effective. Merger becomes effective when the articles of merger filed by the Secretary of State become effective. Requires certificates of merger to be registered, pursuant to GS 47-18.1.
GS 57D-9-43, (Effects of merger), provides what occurs when the merger is final, including, but not limited to, the merging entity ceases its prior form or organization and merges into the surviving entity and the title to all real estate and other property owned by the merging entity continues to be vested in the surviving entity without reversion or impairment. The surviving entity, if not a domestic eligible entity, is deemed to consent to being served with process in this State for enforcement of specified obligations and rights and as having appointed the Secretary as its agent for service of process in any such proceeding.
GS 57D-10-01, (Purpose; public policy), states that the purpose of this Chapter is to provide a flexible framework under which one or more person may organize and manage one or more businesses. Provides that the policy of this Chapter is to give maximum effect to the principle of freedom of contract and the enforceability of operating agreements.
GS 57D-10-02, (Rules of construction; coordination with other law), establishes that the rule of law and equity supplement this Chapter. Statutes in derogation of the common law are not to be strictly construed, in regards to this Chapter. Provides that this Chapter modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, with specified limitations. Provides the limitations of this Chapter and issues of applicability. Establishes the applicable rules of construction for the Chapter.
GS 57D-11-01, (Applicability of act), provides that this Chapter applies to every LLC, regardless of time of formation, and the interest owners of every LLC, unless otherwise excepted by this Chapter.
GS 57D-11-02, (Application to qualified foreign LLCs), provides that a foreign LLC that was authorized to transact business in this State immediately before the repeal of GS Chapter 57C is subject to this Chapter but is not required to obtain a new certificate of authority.
GS 57D-11-03, (Saving provisions), provides that LLCs formed before January 1, 2014, will not be impaired by the repeal of GS Chapter 57C or the enactment of any part of this Chapter. Provides the procedures for dealing with proceedings commenced before January 1, 2014, as well as dissolutions of LLCs that occurred before that date. Provides that any references in articles of organizations or operating agreements of LLC made before January 1, 2014 concerning GS Chapter 57C are deemed, where possible, to be made to the corresponding provisions of GS Chapter 57D.
Amends GS 55-1-40 and GS 55A-1-40, making conforming changes.
Amends GS 55A-11-02(a), making technical and conforming changes.
Amends GS 55D-1, making clarifying and conforming changes.
Amends GS 55D-10, making conforming and clarifying changes.
Amends GS 55D-13(c), GS 55D-15, and GS 55D-17, making conforming changes.
Amends GS 55D-20, deleting the provision concerning and allowing "low-profit limited liability companies", as well as deleting the naming requirements for such companies. Provides an exception to the naming requirement that requires "limited liability company", "L.L.C.", "LLC", or other specified abbreviations to used in the name, allowing any limited liability company whose name contained the words "low-profit limited liability company" or the abbreviation "L3C" pursuant to subdivision (6) prior to its repeal on January 1, 2014, may continue to use that name unless the limited liability company amends its articles of organization to change its name. Makes conforming changes.
Amends GS 55D-21(d), GS 55D-22(b), and GS 55D-31(c), making conforming changes.
Amends GS 59-32 and GS 59-102, making clarifying and conforming changes.
Amends GS 66-260(11)(n), GS 66-352(a), GS 66-353, making conforming changes.
Amends GS 87-10.1, GS 87-22.2, GS 87-44.2 and GS 89C-18.1, making clarifying and technical changes.
Amends GS 89F-6, making a conforming change.
Amends GS 105-114.1(a)(4), providing that the governing law is defined as the law under which a LLC is organized (was, LLC's governing law is determined under GS 57C-6-05 or GS 57C-7-01, as applicable).
Amends GS 105-122.1, GS 105-130.2(11), and GS 105-134.1(7a), making conforming changes.
Amends GS 105-163.1(8), making a technical and clarifying change.
Amends GS 117-18.1(a)(4), making a conforming change.
Amends GS 25-9-406(i), (Inapplicability), providing that this section does not apply to an assignment of a health-care-insurance receivable or an interest in a partnership or LLC.
Amends GS 25-9-408(f), (Inapplicability), providing that this section does not apply to an assignment of an interest in a partnership or LLC.
Except as otherwise provided, this act becomes effective January 1, 2014.
Summary date: Mar 26 2013 - More information
To be summarized at a later date.