Limited liability companies-series.

ORIGINAL
House
ENGROSSED
Bill No
.
HB0126

ENROLLED ACT NO. 24,

HOUSE OF REPRESENTATIVES

SIXTY-FOURTH LEGISLATURE OF THE STATE OF WYOMING
2018 Budget Session

AN ACT relating to limited liability companies; authorizing limited liability companies to establish series of members, managers, transferable interests or assets as specified; specifying powers; providing for limitations on liabilities; providing for management, termination and dissolution; authorizing distributions to members; imposing a requirement on foreign limited liability companies that establish series; requiring rulemaking; and providing for effective dates.

Be It Enacted by the Legislature of the State of Wyoming:
Section 1
.

W.S. 17
‑
29
‑
211 is created to read:

17
‑
29
‑
211
.

Series of members, managers,
transferable
interests or assets.

(a)

An operating agreement may establish or provide for the establishment of one (1) or more designated series of members, managers
,
transferable interests
or assets
.

This section shall govern any matter with respect to a series to
the extent
not otherwise provided in
the operating agreement.

(b)

Subject to subsection (
c
) of this section,
if an operating agreement establishes or provides for the establishment of a
particular
series
:

(
i
)

T
he debts,
obligations or other
liabilities
of

the
particular series
, whether arising in contract, tort or otherwise,
shall be enforceable against the assets of the series only and not against
:

(A)

T
he assets of the limited liability company generally or any other series thereof
;
(B)

Any member of the limited liability company.

(
ii
)

T
he
debts, obligations or other liabilities of
the limited liability company generally or any other series thereof
, whether arising in contract, tort or otherwise,
shall
not
be enforceable against the assets of
the

particular
series.

(
c
)

The limitations on liabilities in subsection (
b
) of this section shall only apply if:

(
i
)

The records for the particular series
that
account for the assets of the series
are
separately
maintained
from the
records that account for the assets
of the limited liability company or any other series thereof
. Records that reasonably identify the assets of a particular series, including by specific listing, category, type, quantity, computational or allocational formula or procedure such as a percentage or share of assets or by any other method where the identity of the assets is objectively determinable, shall be deemed to account for the assets of the particular series separately from the assets of the limited liability company or any other series thereof
;

(ii)

The operating agreement specifically provides for the limitation
s
on liabilities; and

(iii)

Notice of the limitation
s
on liabilities of the particular series is
included
in the articles of organization. Notice
under this paragraph
shall be sufficient whether or not the limited liability company has established
or referenced
any
particular
series
in the
notice.

(
d
)

Nothing in
this section
,
an
operating agreement
or
articles of organization
shall
restrict:

(
i
)

A
series or limited liability company on behalf of a series from agreeing in the
operating
agreement or otherwise that any or all of the
debts, obligations or other liabilities of
the limited liability company generally or any other series thereof shall be enforceable against the assets of
the s
eries
;

(ii)

A
limited liability company from agreeing in the
operating
agreement or otherwise that any or all of the
debts, obligations or other liabilities of
a series shall be enforceable against the assets of the limi
ted liability company generally;
or

(iii)

Notwithstanding W.S. 17
‑
29
‑
304(a), a
member or manager from agreeing in the operating agreement or otherwise to be
personally liable
for any or all of the debts, obligations or other liabilities of a series
.

(
e
)

A
series established
under
this section shall have the power and capacity to
,
in its own name, contract, hold title to assets including real, personal and intangible property, grant liens and security interests and sue and be sued.

A series may
:

(
i
)

Have separate rights, powers or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations;

(ii)

C
arry on any lawful purpose
regardless of w
hether for profit
,

except for the purpose of acting as a financial institution or acting as an insurer as defined in W.S. 26
‑
1
‑
102(a)(xvi)
;

(iii)

Hold assets directly or indirectly, including in the name of the series
or
the
name of the
limited liability company.

(
f
)

An operating
agreement
that establishes or provides for the establishment of a series
may
:

(
i
)

P
rovide for classes or groups of members or managers
of

the
series having
the
relative rights, powers and duties
specified in
the
operating
agreement;

(ii)

Provide
for
and specify
the future creation of additional classes or groups of members or managers
of
the series having
the
relative rights, powers and duties as may be established, including rights, powers and duties senior to existing classes and groups of members or managers
of
the series
;

(iii)

P
rovide for the taking of an action, including the amendment of the
operating
agreement, without the vote or approval of any member or manager or class
or group of members or managers
of the series
;

(iv)

P
rovide that any member or class or group of members
of
a series shall have no voting rights
;

(v)

G
rant to all or certain identified members or managers or class or group of members or managers
of

the
series the right to vote
on any matter
separately or with all or any class or group of members or managers
of
the series. Voting by members or managers may be on a per capita, number, financial interest, class, group or other basis.

(
g
)

T
he management of a series shall be vested
as follows:

(
i
)

I
n the members
of

the
series
pursuant to W.S. 17
‑
29
‑
407(b).
A member shall cease to be a member of a series upon the
divestment
of all of the member's transferable interests of the series.
The fact that a person
ceas
es

to be
a
member
of
a
particular
series shall not by itself cause the
person
to cease to be a member of
the limited liability company or
any other series
thereof
or cause the termination of the series, regardless of whether the
person
was the last remaining member
of
the series
; or

(ii)

I
f
the
operating
agreement provides for the management of the series in whole or in part by a manager,
the management shall be vested
in
one (1) or more
manager
s
who shall be chosen
as
provided in the
operating
agreement
and who shall
hold the offices and have the responsibilities
as specified
in
the

agreement.

A
manager shall cease to be a manager
of
a series as provided in
an operating
agreement
and subject to W.S. 17
‑
29
‑
407(c)(v)
.

The fact that a person ceases to
be a manager
of a particular series
shall not
by
itself cause
the

person
to cease to be a manager of the limited liability company or any other series thereof.

(
h
)

Notwithstanding W.S. 17
‑
29
‑
404 and subject to subsections (j) and (m) of this section, i
f a member of a series becomes entitled to receive a distribution,
the member has the status of, and is entitled to all remedies available to, a creditor of the series with respect to the distribution.
An operating
agreement may provide for the establishment of a record date
for
allocations and distributions
associated with a
series.

(
j
)

Notwithstanding W.S. 17
‑
29
‑
405(a), a
limited liability company may make a distribution with respect to a series that has been established
under
this section
unless the total assets of the series after the distribution w
ould be less than the sum of its total liabilities plus the amount that would be needed, if the series were to be
dissolved,
wound up and
terminated at the time of the distribution, to satisfy the preferential rights upon
winding up and
termination of members whose preferential rights are superior to those of the persons receiving the distribution.

A member
that
receives a distribution
knowing that
the distribution
was made in violation of this
subsection is personally
liable to
the
series for the amount of the distribution.

T
his subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution
, except
that any action under this subsection shall be subject to
W.S. 17
‑
29
‑
406(e)
.
For purposes of this subsection, "distribution"
does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business under a bona fide retirement plan or other benefits program.

(
k
)

Subject to W.S. 17
‑
29
‑
702, a
series
established under this section
may be terminated and its affairs wound up without causing the dissolution of the limited liability company.

The termination of
the
series shall not affect the limitation
s
on liabilities of
the
series
as
provided
in
subsection (
b
) of this section.

A series is terminated and its affairs shall be wound up
upon the occurrence of any of the following:

(
i
)

T
he dissolution of the limited liability company under
W.S. 17
‑
29
‑
702
;

(
i
i
)

T
he time
or
happening of events specified in the
operating
agreement;

(
ii
i
)

T
he vote or consent of members
of

the
series who own more than
two
‑
thirds (2/3)
of the
interests in the
profits of the series; or

(
iv
)

On application by a member or manager
of the series
, the entry of a court order terminating the series on the grounds that it is not reasonably practicable to carry on the purpose
s
of the series in conformity with the operating agreement.

(
m
)

A person winding up the affairs of a series may, in the name of the limited liability company and for and on behalf of the limited liability company and the series, take all actions with respect to the series as authorized by W.S. 17
‑
29
‑
702. The person shall provide for the claims and obligations of the series and distribute the assets of the series as provided in W.S. 17
‑
29
‑
708. Actions taken in accordance with this subsection shall not affect the liability of members and shall not impose liability on a liquidating trustee appointed in accordance with this
subsection. N
otwithstanding
W.S.

17
‑
29
‑
702
,
the following persons may wind up the affairs of a series:

(
i
)

A
manager
of the series
who has not wrongfully terminated the series
;

(ii)

If the series has no manager who qualifies under paragraph (i) of this subsection,
the members
of
the series or a person approved by the members
;

(iii)

The
members who own more than
fifty (50%)
percent of the
interests in the
profits of the series
;

(iv)

On application of a member or manager of the series or any personal representative or assignee of the member or manager,
and upon cause shown,
a
court
or a liquidating trustee appointed by the court
.

(
n
)

A
foreign limited liability company do
ing
business in
this state

and
governed by
an operating
agreement that establishes or provides for the establishment of
one (1) or more
designated series of members, managers,
transferable
interests or assets
shall state
the following
on its certificate of authority
:

(
i
)

That the operating agreement of the foreign limited liability company establishes or provides for the establishment of series having separate rights, powers or duties with respect to specified property or obligations of the foreign limited liability company or profits and losses associated with specified property or obligation
s
;

(
i
i)

If

any of
the
debts, obligations or other liabilities of
a
ny
particular series
, whether arising in contract, tort or otherwise,
shall be enforceable against
the assets of
the particular
series only and not against the assets of the foreign limited liability company generally or any other series thereof
;

(ii
i
)

If
any of the
debts, obligations or other liabilities of
the foreign limited liability company generally or any other series thereof
, whether arising in contract, tort or otherwise,
shall be enforceable against the assets of
the particular
series.

Section 2
.

The secretary of state shall promulgate reasonable rules and regulations necessary to carry out the purposes of this act.

Section
3
.

(a)

Except as provided in subsection (b) of this section, this act is
effective July 1, 201
8
.

(b)

Section 2 of 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 House.

Chief Clerk

1