Section 33-43-504. The term includes the certificate as amended or restated. Section 33-43-410. (b) A foreign limited liability company that has a certificate of authority under Section 33-43-802 shall designate and continuously maintain in this State a registered agent. (a) When a merger takes effect: (1) the separate existence of each limited liability company and other entity that is a party to the merger, other than the surviving entity, terminates; (2) all property owned by each of the limited liability companies and other entities that are party to the merger vests in the surviving entity; (3) all debts, liabilities, and other obligations of each limited liability company and other entity that is party to the merger become the obligations of the surviving entity; (4) an action or proceeding pending by or against a limited liability company or other party to a merger may be continued as if the merger had not occurred or the surviving entity may be substituted as a party to the action or proceeding; and. (4) 'Distribution', except as otherwise provided in Section 33-43-405(g), means a transfer of money or other property from a limited liability company to another person on account of a transferable interest. (g) In addition to any restriction or condition stated in its operating agreement, a limited liability company, as a matter within the ordinary course of its activities, may impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. (j) Unless earlier canceled, an effective statement of authority is canceled by operation of law five years after the date on which the statement, or its most recent amendment, becomes effective. (4) An act outside the ordinary course of the activities of the company may be undertaken only with the consent of all members. Unless a written operating agreement specifically includes additional fiduciary duties, the fiduciary duties provided in this section are the only ones that affect members or managers; judges should not impose any additional fiduciary duties. In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it. If a member dies, the deceased member's personal representative or other legal representative may exercise the rights of a transferee provided in Section 33-43-502(c) and, for the purposes of settling the estate, the rights of a current member under Section 33-43-410. (c) The surviving limited liability company or other entity shall furnish a copy of the plan of merger, on request and without cost, to any member of any limited liability company or any person holding an interest in any other entity that is to merge. Section 33-43-503. As an additional reminder, almost all provisions of the operating agreement may be orally agreed to; there is no statutory requirement that operating agreement must be in writing (other than modification of Section 33-43-409 fiduciary duties which must be in writing). WebWAYNE C. KREUSCHER, 1313 Merchants Bank Building, 11 South Meridian Street, Indianapolis, IN 46204 REED L. MARTINEAU, P.O. Section 33-43-702. An operating agreement of a limited liability company may contain a provision giving a member the right to dissent from, and obtain payment of the fair value of his membership in the event the limit liability company is converted into another entity, is merged, or is domesticated. (b) Except as otherwise provided in subsection (c), two years after the effective of this chapter, this chapter governs all limited liability companies. (i) After a statement of dissolution becomes effective, a limited liability company may deliver to the Secretary of State for filing and, if appropriate, may record a statement of authority that is designated as a post-dissolution statement of authority. (c) In a manager-managed limited liability company, the following rules apply: (1) Except as otherwise expressly provided in this chapter, any matter relating to the activities of the company is decided exclusively by the managers. In 2006, the Uniform Law Commission, on which South Carolina has four participating commissioners, developed and submitted to the various states for enactment the 2006 Revised Uniform Limited Liability Company Act. Section 33-43-603. (3) Subsection (d) applies to the members and managers. (c) If a record that has been delivered by a limited liability company to the Secretary of State for filing and has become effective under this chapter contains a provision that would be ineffective under Section 33-43-110(c) or (d) if contained in the operating agreement, the provision is likewise ineffective in the record. (a) Except as otherwise provided in subsection (b): (1) any proceeds or other benefits of a derivative action under Section 33-43-902, whether by judgment, compromise, or settlement, belong to the limited liability company and not to the plaintiff; and. Member's and manager's rights to payments and reimbursement. Section 33-43-112(b) confirms that the rights of a transferee and dissociated member are controlled by the operating agreement. A member may maintain a derivative action to enforce a right of a limited liability company if: (1) the member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or. To cancel its certificate of authority to transact business in this State, a foreign limited liability company must deliver to the Secretary of State for filing a notice of cancellation stating the name of the company and that the company desires to cancel its certificate of authority. Section 33-43-207. Sponsors: Rep. W. Newton (b) The Secretary of State is an agent for service of process in an action or proceeding against the surviving foreign entity to enforce an obligation of any party to a merger if the surviving foreign entity fails to appoint or maintain an agent designated for service of process in this State or the agent for service of process cannot with reasonable diligence be found at the designated office. (f) This section does not affect the right to serve process, notice, or demand in any other manner provided by law. The certificate is canceled when the notice becomes effective. In order to help minimize any questions as to what fiduciary duties exist, any change to the statutory duties must be in writing. A certificate of existence must state: (2) that the company was duly formed under the laws of this State and the date of formation; (3) whether all fees, taxes, and penalties due under this chapter or other law to the Secretary of State have been paid; (4) whether the Secretary of State has administratively dissolved the company; (5) whether the company has delivered to the Secretary of State for filing a statement of dissolution; (6) that a statement of termination has not been filed by the Secretary of State; and. Bishop & Kleinberger, LIMITED LIABILITY COMPANIES: TAX AND BUSINESS LAW, & paragraph 6.04(2)(a) (2012). (b) To the extent the operating agreement does not otherwise provide for a matter described in subsection (a), this chapter governs the matter. February 24, 2021 at 9:25 AM. WebUniversal Citation: SC Code 33-44-303 (2013) (a) Except as otherwise provided in subsection (c), the debts, obligations, and liabilities of a limited liability company, whether (a) Except as otherwise provided in subsection (b), if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of Section 33-43-405 and in consenting to the distribution fails to comply with Section 33-43-409, as may be modified by Section 33-43-110(d), the member or manager is personally liable to the company for the amount of the distribution that exceeds the amount that could have been distributed without the violation of Section 33-43-405. (a) The Secretary of State, upon request and payment of the requisite fee, shall furnish to any person a certificate of existence for a limited liability company if the records filed in the office of the Secretary of State show that the company has been formed under Section 33-43-201 and the Secretary of State has not filed a statement of termination pertaining to the company. This cancellation operates without need for any recording under subsection (f) or (g). (14) Amendment or Cancellation of Certificate of Authority (Section 33-43-302): $10.00. The members of the committee were: Scott Barnes, Rob Bethea, Tom Brumgardt, Jim Burkhard, Joe Clark, Frank Cureton, Jones DuBose, Melissa Dunlap, Todd Ellis, Jay Henning, Maurice Holloway, Ben Means, David Merline, Jr., George Morrison, Graham Newman, and Shannon Wiley. (a) A partnership or limited partnership may be converted to a limited liability company pursuant to this section. (a) A member is not an agent of a limited liability company solely by reason of being a member. (f) A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective as to a person having notice of the restriction at the time of transfer. The resignation does not affect any contractual rights the company or foreign company has against the agent or that the agent has against the company or foreign company. However, members and managers should be aware that decisions in other states have applied the Statute of Frauds to invalidate provisions of oral operating agreements. (f) A member who becomes a partner of a partnership as a result of a conversion remains liable as a member for the existing debts and obligation of the former limited liability company, only to the extent the member was liable for an obligation incurred by the limited liability company before the conversion takes effect and for which a member would be personally liable. Section 33-43-809. In South Carolina, the Uniform partnership Act provides requirements which must be met by a business wanting to register as an LLP in the state. (g) If a certified copy of an effective statement containing a limitation on the authority to transfer real property held in the name of a limited liability company is recorded in the register of deeds or clerk of court for that real property, all persons are deemed to know of the limitation. (a) A limited liability company that has been administratively dissolved may apply to the Secretary of State for reinstatement within two years after the effective date of dissolution. The South Carolina Limited Liability Company Act requires every limited liability company formed under S.C. Code Section 33-41-10 et seq. (c) A registered agent promptly shall furnish to the limited liability company or authorized foreign limited liability company notice in a record of the date on which a statement of resignation was filed. Section 33-43-805. (2) if assets of the company have been distributed after dissolution, against a member or transferee to the extent of that person's proportionate share of the claim or of the assets distributed to the member or transferee after dissolution, whichever is less, but a person's total liability for all claims under this paragraph does not exceed the total amount of assets distributed to the person after dissolution. Failure to make the required filing of a limited partnership name change does not affect the legality, force, effect, or enforceability as between the parties of any conveyance or other transaction involving the real estate owned by the affected limited partnership that is made after the change in name. (a) Except as provided in Section 12-2-25 for single-member limited liability companies, the law of the state or other jurisdiction under which a foreign limited liability company is formed governs: (1) the internal affairs of the company; and. (e) The operating agreement may alter or eliminate the indemnification for a member or manager provided by Section 33-43-408(a). (b) A limited liability company may purchase and maintain insurance on behalf of a member or manager of the company against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, under Section 33-43-110(g), the operating agreement could not eliminate or limit the person's liability to the company for the conduct giving rise to the liability. (20) Application for Amended Certificate of Authority (Section 33-43-805): $110.00. As a result, South Carolina Reporter's Comments as prepared by the drafting committee referenced in subsection (A) appear after certain code sections with the intent of aiding the user in understanding the provisions of that section and in some cases how the South Carolina version may differ from the ULC's version. (c) An agreement of conversion must include the terms and conditions of the conversion of the interests of members of a limited liability company into interests in the converted corporation or the cash or other consideration to be paid or delivered as a result of the conversion of the interest of the members, or both. Section 33-43-1002. Section 33-43-208. It should be noted that any statement of authority is only effective for five years. (2) the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company. that may impose personal liability on a member (here for a failure to pay wages), and as such, Section 33-43-304 provides no protection to the member. Such recorded certified statement of authority is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value: (1) the statement has been canceled or restrictively amended under subsection (b) and a certified copy of the cancellation or restrictive amendment has been recorded in the register of deeds or clerk of court; or. (b) After a limited liability company complies with subsection (a), any surplus must be distributed in the following order, subject to any charging order in effect under Section 33-43-503: (1) to each person owning a transferable interest that reflects contributions made by a member and not previously returned, an amount equal to the value of the unreturned contributions; and. If a process, notice, or demand is served on the Secretary of State, the Secretary of State shall forward one of the copies by registered or certified mail, return receipt requested, to the company at its principal office. After obtaining a certificate of authority with an alternate name, a foreign limited liability company shall transact business in this State under the alternate name. (a) A limited liability company is dissolved, and its activities must be wound up, upon the occurrence of any of the following: (1) an event or circumstance that the operating agreement states causes dissolution; (3) the passage of three hundred sixty-five consecutive days during which the company has no members; (4) on application by a member, the entry by appropriate court of an order dissolving the company on the grounds that: (A) the conduct of all or substantially all of the company's activities is unlawful; or, (B) it is not reasonably practicable to carry on the company's activities in conformity with the certificate of organization and the operating agreement; or. (F) perform other acts necessary or appropriate to the winding up. (4) if the record specifies an effective time and a delayed effective date, at the specified time on the earlier of: (B) the ninetieth day after the record is filed. One person intending to become the initial member of a limited liability company may assent to terms providing that upon the formation of the company the terms will become the operating agreement. South Carolina Section 33-43-304 is very similar to statutes in many other states, and the Bishop & Kleinberger text noted above is an excellent source when analyzing the complexities of this section. (f) A conversion takes effect when the certificate of limited partnership is filed with the Secretary of State or at a later date specified in the certificate of limited partnership. (3) The affidavit, filed articles, or deed must be duly indexed in both the grantor and grantee indices to deeds in the index of deeds. (d) Service is effected under subsection (c) at the earliest of: (1) the date the limited liability company or foreign limited liability company receives the process, notice, or demand; (2) the date shown on the return receipt, if signed on behalf of the company; or. 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