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SF0036 • 2016

LLC member and manager liability.

AN ACT relating to limited liability companies; specifying standards for imposing liability on members and managers; repealing a related provision; and providing for an effective date.

Elections
Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor
Corporations
Last action
2016-03-07
Official status
enrolled
Effective date
3/4/2016

Plain English Breakdown

The plain English breakdown is still being put together. The official documents below are already here.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

SF0036HS001

Standing Committee • HAC

Adopted

Plain English: Adopted Standing Committee by HAC

  • This amendment summary is using official source text because generated interpretation was skipped for this run.
  • The official amendment text was available, but an easy plain-English summary could not be produced automatically during the last sync.
SF0036S2001

2nd reading • Nicholas, P.

Adopted

Plain English: Adopted 2nd reading by Nicholas, P.

  • This amendment summary is using official source text because generated interpretation was skipped for this run.
  • The official amendment text was available, but an easy plain-English summary could not be produced automatically during the last sync.
SF0036S3001

3rd reading • Case

Corrected, Corrected, Withdrawn

Plain English: Corrected, Corrected, Withdrawn 3rd reading by Case

  • This amendment summary is using official source text because generated interpretation was skipped for this run.
  • The official amendment text was available, but an easy plain-English summary could not be produced automatically during the last sync.
SF0036S3002

3rd reading • Case

Adopted

Plain English: Adopted 3rd reading by Case

  • This amendment summary is using official source text because generated interpretation was skipped for this run.
  • The official amendment text was available, but an easy plain-English summary could not be produced automatically during the last sync.
SF0036JC001

Conference Committee

S Adopted, H Adopted

Plain English: S Adopted, H Adopted Conference Committee

  • This amendment summary is using official source text because generated interpretation was skipped for this run.
  • The official amendment text was available, but an easy plain-English summary could not be produced automatically during the last sync.

Bill History

  1. 2016-03-07 LSO

    Assigned Chapter Number

  2. 2016-03-04 Governor

    Governor Signed SEA No. 0045

  3. 2016-03-03 House

    H Speaker Signed SEA No. 0045

  4. 2016-03-03 Senate

    S President Signed SEA No. 0045

  5. 2016-03-02 LSO

    Assigned Number SEA No. 0045

  6. 2016-03-02 House

    H Adopted SF0036JC001: 57-1-2-0-0

  7. 2016-03-01 Senate

    S Adopted SF0036JC001: 26-0-4-0-0

  8. 2016-02-26 House

    H Appointed JCC01 Members

  9. 2016-02-26 House

    H Appointed JCC01 Members

  10. 2016-02-25 Senate

    S Appointed JCC01 Members

  11. 2016-02-25 Senate

    S Concur:Failed 0-30-0-0-0

  12. 2016-02-25 Senate

    S Received for Concurrence

  13. 2016-02-25 House

    H 3rd Reading:Passed 59-0-1-0-0

  14. 2016-02-24 House

    H 2nd Reading:Passed

  15. 2016-02-23 House

    H COW:Passed

  16. 2016-02-23 House

    Amendment Adopted

  17. 2016-02-22 House

    H Placed on General File

  18. 2016-02-22 House

    H02 - Appropriations:Recommend Amend and Do Pass 7-0-0-0-0

  19. 2016-02-19 House

    H Introduced and Referred to H02 - Appropriations

  20. 2016-02-18 House

    H Received for Introduction

  21. 2016-02-17 Senate

    S 3rd Reading:Passed 30-0-0-0-0

  22. 2016-02-17 Senate

    Amendment Adopted

  23. 2016-02-17 Senate

    Amendment was withdrawn before vote

  24. 2016-02-16 Senate

    S 3rd Reading:Laid Back

  25. 2016-02-15 Senate

    S 3rd Reading:Laid Back

  26. 2016-02-11 Senate

    S 2nd Reading:Passed

  27. 2016-02-11 Senate

    Amendment Adopted

  28. 2016-02-10 Senate

    S 2nd Reading:Laid Back

  29. 2016-02-09 Senate

    S COW:Passed

  30. 2016-02-09 Senate

    S Placed on General File

  31. 2016-02-09 Senate

    S07 - Corporations:Recommend Do Pass 5-0-0-0-0

  32. 2016-02-08 Senate

    S Introduced and Referred to S07 - Corporations 30-0-0-0-0

  33. 2016-02-05 Senate

    S Received for Introduction

  34. 2016-01-20 LSO

    Bill Number Assigned

Official Summary Text

Summary for LSO115

Bill No.:
SF0036
Effective
:
3/4/2016
LSO No.:
16LSO-0097

Enrolled Act No.:
SEA No. 0045

Chapter No.:
54

Prime Sponsor:
Joint Corporations, Elections & Political Subdivisions Interim Committee

Catch Title:
LLC member and manager liability.

Subject:
Standards for individual liabili
ty for LLC members and managers

Summary/Major Elements:

This bill establishes factors that a court can and cannot consider when determining if an individual member or manager of a
n
LLC
can be held liable for the LLC’
s debts and obligations.

This bill was brought as a resu
lt of the Wyoming Supreme Court’
s decision in
Greenhunter Energy, Inc. v. Western Ecosystems Technology, Inc.
, 20
14 WY 144, 337 P.3d 454 (2014). In that case, the Court held the owner of a single membe
r/manger LLC liable for the LLC’
s debts.

Pursuant to the bill, a court may only consider fraud, inadequate capitalization, the failure to observe required company formalities, and the intermingling of assets, operations and finances when determining whether to impose personal liability on a member or manager of an LLC.

When determining whether to impose individual liability, a
court cannot consider facto
r
s intrinsic to the character and operation of a limited liability company, including having a single member or manger,
taxation as a
disregarded or pass-through entity, flexible operation
,
or the protection of members’ and managers’
personal assets from the obligations of the LLC.
The above summary is not an official publication of the Wyoming Legislature and is not an official statement of legislative intent. While the Legislative Service Office endeavored to provide accurate information in this summary, it should not be relied upon as a comprehensive abstract of the bill
.

Current Bill Text

Read the full stored bill text 
ORIGINAL
Senate
ENGROSSED
File No
.
SF0036

ENROLLED ACT NO. 45,

SENATE

SIXTY-THIRD LEGISLATURE OF THE STATE OF WYOMING
2016 Budget Session

AN ACT relating to limited liability companies; specifying standards for imposing liability on members and managers; repealing a related provision; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 17
‑
29
‑
304
by creating new subsections (c) and
(
d
) is amended to read:

17
‑
29
‑
304
.

Liability of members and managers
.

(c)

For purposes of imposing liability on any member or manager of a limited liability company for the debts, obligations or other liabilities of the company, a court shall consider only the following factors no one (1) of which, except fraud, is sufficient to impose liability:

(i)

Fraud;

(ii)

Inadequate capitalization;

(iii)

Failure to observe company formalities as required by law; and

(iv)

Intermingling
of assets, business operations and finances of the company and the members to such an extent that there is no distinction between them.

(d)

In any analysis conducted under subsection (c) of this section, a court shall not consider factors intrinsic to the character and operation of a limited liability company,

whether a single or multiple member limited
liability company
.
Factors intrinsic to the character and
operation of a limited liability company include but are not limited to:

(i)

The ability to elect t
reatment as a disregarded or pass
‑
through entity for tax purposes;

(ii)

Flexible operation or organization including the failure to observe any particular formality relating to the exercise of the company's powers or management of its activities;

(iii)

The exercise of ownership, influence and governance by a member or manager;

(iv)

The
protection of members' and managers' personal assets from the obligations and acts of the limited liability company.

Section 2
.

W.S. 17
‑
29
‑
304(
b) is repealed.

Section
3
.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the
Senate
.

Chief Clerk

1