Revision: Dec. 24, 2015, midnight
\t \t\tSB 405 - AS INTRODUCED
2016 SESSION
\t16-2864
\t03/01
SENATE BILL\t405
AN ACT\tmaking changes to the limited liability companies statutes.
SPONSORS:\tSen. Bradley, Dist 3
COMMITTEE:\tCommerce
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ANALYSIS
\tThis bill clarifies various provisions relating to limited liability company operating agreements and the rights of limited liability company members.
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Explanation:\tMatter added to current law appears in bold italics.
\t\tMatter removed from current law appears [in brackets and struckthrough.]
\t\tMatter which is either (a) all new or (b) repealed and reenacted appears in regular type.
\t16-2864
\t03/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Sixteen
AN ACT\tmaking changes to the limited liability companies statutes.
Be it Enacted by the Senate and House of Representatives in General Court convened:
\t1 Member. Amend RSA 304-C:14 to read as follows:
\t304-C:14 Member. Unless the operating agreement provides otherwise, "member'' means a person who has been admitted to a limited liability company as a member as provided in RSA 304-C:53 or, in the case of a foreign limited liability company, in accordance with the laws of the state or foreign country or other foreign jurisdiction under which the foreign limited liability company is organized. A member does not include:
\t\tI. A dissociated member.
\t\tII. A member that has transferred or otherwise disposed of all of the member's membership rights.
\t\tIII. A member that has transferred or otherwise disposed of all of the member's membership rights except the member's limited liability company interest.
\t2 Form of Operating Agreement. Amend RSA 304-C:40 to read as follows:
\t304-C:40 Form of Operating Agreement. Unless a written operating agreement provides otherwise, an operating agreement, including amendments to the operating agreement, may be written, oral, or implied by course of dealing or otherwise.
\t3 Voting Requirements. Amend RSA 304-C:67, I to read as follows:
\t\tI. Unless paragraph II, RSA 304-C:68, RSA 304-C:69, RSA 304-C:87, V, or RSA 304-C:120, or the operating agreement provide otherwise, all matters that this act reserves for decision by the members shall be decided by majority vote of [a majority of] the members.
\t4 Allocation of Profits and Losses. Amend RSA 304-C:90, II to read as follows:
\t\tII. Unless the operating agreement provides otherwise, profits and losses shall be allocated on the basis of the agreed value, as of the date of contribution, of the contributions made by each member to the extent that the limited liability company has received these contributions and has not returned them in a return specifically identified in writing as a return of a capital contribution.
\t5 Limitations on Distributions. Amend RSA 304-C:93 to read as follows:
\t304-C:93 Limitations on Distributions.
\t\tI. A limited liability company shall not make a distribution to a member to the extent that at the time of the distribution, after giving effect to the distribution, [all liabilities of the limited liability company, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specified property of the limited liability company, exceed the fair market value of the assets of the limited liability company.
\t\tII. The fair market value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the limited liability company only to the extent that the fair market value of that property exceeds that liability] the company would not be able to pay its debts as they become due.
\t\t[III.] II.(a) A member who receives a distribution in violation of paragraph I, and who knew at the time of the distribution that it violated paragraph I, shall be liable to a limited liability company for the amount of the distribution, but only to the extent that the distribution exceeded the amount that could have been properly paid under paragraph I.
\t\t\t(b) A member who receives a distribution in violation of paragraph I, and who did not know at the time of the distribution that the distribution violated paragraph I shall not be liable for any amount of the distribution.
\t6 Allocation of Distributions. Amend RSA 304-C:95, II to read as follows:
\t\tII. Unless the operating agreement provides otherwise, distributions shall be made on the basis of the agreed value, as of the date of contribution, of the contributions made by each member to the extent the limited liability company has received these contributions and has not returned them in a return specifically identified in writing as a return of a capital contribution.
\t7 Member Dissociations. Amend RSA 304-C:99 to read as follows:
\t304-C:99 Certain Effects of Dissociation; Fiduciary Rights of Former Members, etc.
\t\tI. If, after dissociation, a former member retains all or any part of the former member's limited liability company interest, the former member shall be entitled to the following rights:
\t\t\t(a) Subject to reasonable restrictions as determined from time to time by the limited liability company, the former member shall be entitled to inspect and copy at the former member's own expense all information reasonably relevant to allocations and distributions to the former member in respect of the former member's limited liability company interest.
\t\t\t(b) Unless the operating agreement provides otherwise, the former member may invoke the dispute resolution provisions of RSA 304-C:186 with respect to the former member's limited liability company interest.
\t\tII. Subject to any contrary provision in paragraph IV or RSA 304-C:106 through RSA 304-C:117 and unless the operating agreement provides otherwise, a member who has been dissociated from a limited liability company shall have no fiduciary or other duties to the limited liability company.
\t\tIII. A person who has been dissociated from the limited liability company shall have no liabilities to the limited liability company except liabilities that accrued to the member before the member's dissociation and that were not discharged before or concurrent with the member's dissociation.
\t\tIV. Unless the operating agreement provides otherwise, former members and transferees of the limited liability company interests of former members may claim in the superior court under the implied contractual covenant of good faith and fair dealing that they are entitled to fiduciary rights against the limited liability company and its members.
\t8 Member Dissociation. Amend RSA 304-C:132,I(a) to read as follows:
\t\t\t(a) The death, [resignation] withdrawal, expulsion, bankruptcy, or dissolution of any member or the occurrence of any other event whose occurrence causes the dissociation of the member shall not cause the limited liability company to be dissolved or its internal affairs to be wound up; and
\t9 Right of Members to Dissent. Amend RSA 304-C:161, I to read as follows:
\t\tI. Unless the operating agreement provides otherwise, a member of a limited liability company is entitled to dissent from, and obtain payment of the fair value of the member's limited liability company interest, upon any of the following actions:
\t\t\t(a) Consummation of a plan of merger to which the limited liability company is a party;
\t\t\t(b) Consummation of a plan of statutory conversion of the limited liability company to some other business form;
\t\t\t(c) An amendment to the operating agreement:
\t\t\t\t(1) Altering or abolishing a right in respect of distribution, other than alteration by dilution through the admission of other members or acceptance of contributions;
\t\t\t\t(2) Altering or abolishing a right to voluntarily withdraw; or
\t\t\t\t(3) Altering or abolishing any right of a member to vote on any matter, other than alteration by dilution through the admission of other members or acceptance of contributions.
\t10 Effective Date. This act shall take effect 60 days after its passage.