Uniform Protected Series Act (UPSA)
Caution State Law Variances!
SECTION 601. DEFINITIONS.
JayNote: Consider that ULLCA brings its own unique vernacular to ordinary LLCs. Next, UPSA § 102 imposes upon the ULLCA a vernacular peculiar to Series LLCs. We see in § 601 that on top of those two sets of definitions, there is an entirely new vernacular just for mergers. The upshot to § 601 is that you'd better be an expert in ordinary LLCs, and an expert in Series LLC, or else you will have basically zero chance of even starting to understand the UPSA merger definition in § 601, which, as mentioned, are probably only practically decipherable by M&A experience counsel and quite likely nobody else.
As an aside, and directly because of all this, if you are advising on this stuff and charging a dime less than $2,000 per hour, odds are that you are shorting yourself in relation to the liability risk that you are taking on.
In this ARTICLE:
(1) "After a merger" or "after the merger" means when a merger under Section 604 becomes effective and afterwards.
JayNote: Section 601(1) defines the phrases "after a merger" and "after the merger" means the post-merger period, beginning with that instant in time when the merger is effective.
(2) "Before a merger" or "before the merger" means before a merger under Section 604 becomes effective.
JayNote: Similarly, § 602 defines the phrases "before a merger" and "before the merger" as the pre-merger time, which ends at the instant the merger becomes effective.
(3) "Continuing protected series" means a protected series of a surviving company which continues in uninterrupted existence after a merger under Section 604.
Reporter's Comment to Paragraphs (3) and (6) – These provisions provide two new and related terms to describe novel concepts.
JayNote: In § 601(3), a "continuing protected series" is defined to mean a protected series of the series organization that survives the merger.
In other words, the merger involves Alpha Series LLC and Beta Series LLC, at end of which Alpha Series LLC survives and Beta Series LLC dies. Alpha Series LLC Protected Series 111 existed as a protected series of Alpha Series LLC before the merger, and it continues to exist after the merger. Alpha Series LLC Protected Series 111 is a continuing protected series.
(4) "Merging company" means a limited liability company that is party to a merger under Section 604.
JayNote: Section 601(4) says that "merging company" means a series organization that is a party to a merger, i.e., either the surviving or dying company.
In our example, both Alpha Series LLC and Beta Series LLC would be considered the "merging companies under para. (4). But note that this definition would not extend to any of their respective protected series.
(5) "Non-surviving company" means a merging company that does not continue in existence after a merger under Section 604.
JayNote: The series organization that disappears because of the merger is the "non-surviving company" under § 601(5), or Beta Series LLC in our example.
(6) "Relocated protected series" means a protected series of a non-surviving company which, after a merger under Section 604, continues in uninterrupted existence as a protected series of the surviving company.
JayNote: A "relocated series" is a protected series that, because of the merger, moves from the dying series organization to the surviving series organization.
Using our same example, Beta Series LLC Protected Series 222 existed before the merger. The merger results in Beta Series LLC Protected Series 222 becoming a member of Alpha Series LLC and is now renamed Alpha Series LLC Protected Series 222. Beta Series LLC dies in the process. Here, under § 601(6), whether named called Beta Series LLC Protected Series 222 (old) or Alpha Series LLC Protected Series 222 (new), that series would be called a "relocated protected series".
(7) "Surviving company" means a merging company that continues in existence after a merger under Section 604.
Reporter's Comment to Paragraph (7) – This provision is derived from Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1001(37).
JayNote: The aptly-named "surviving company" would be Alpha Series LLC in our example.
Legislative Note: In addition to the definitions in this section, Article 6 also depends on several definitions in Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1001. See the Legislative Note to Section 102.
UPSA AND WEBSITE CONTENTS
ARTICLE 1. GENERAL PROVISIONS
SECTION 101. SHORT TITLE. SECTION 102. DEFINITIONS. SECTION 103. NATURE OF PROTECTED SERIES. SECTION 104. POWERS AND DURATION OF PROTECTED SERIES. SECTION 105. GOVERNING LAW. SECTION 106. RELATION OF OPERATING AGREEMENT, THIS ACT, AND LIMITED LIABILITY COMPANY ACT. SECTION 107. ADDITIONAL LIMITATIONS ON OPERATING AGREEMENT. SECTION 108. RULES FOR APPLYING LIMITED LIABILITY COMPANY ACT TO SPECIFIED PROVISIONS OF ACT.
ARTICLE 2. ESTABLISHING PROTECTED SERIES
SECTION 201. PROTECTED SERIES DESIGNATION; AMENDMENT. SECTION 202. NAME. SECTION 203. REGISTERED AGENT. SECTION 204. SERVICE OF PROCESS, NOTICE, DEMAND, OR OTHER RECORD. SECTION 205. CERTIFICATE OF GOOD STANDING FOR PROTECTED SERIES. SECTION 206. INFORMATION REQUIRED IN ANNUAL BIENNIAL REPORT; EFFECT OF FAILURE TO PROVIDE.
ARTICLE 3. ASSOCIATED ASSET; ASSOCIATED MEMBER; PROTECTED-SERIES TRANSFERABLE INTEREST; MANAGEMENT; RIGHT OF INFORMATION
SECTION 301. ASSOCIATED ASSET. SECTION 302. ASSOCIATED MEMBER. SECTION 303. PROTECTED-SERIES TRANSFERABLE INTEREST. SECTION 304. MANAGEMENT. SECTION 305. RIGHT OF PERSON NOT ASSOCIATED MEMBER OF PROTECTED SERIES TO INFORMATION CONCERNING PROTECTED SERIES.
ARTICLE 4. LIMITATION ON LIABILITY AND ENFORCEMENT OF CLAIMS
SECTION 401. LIMITATIONS ON LIABILITY. SECTION 402. CLAIM SEEKING TO DISREGARD LIMITATION OF LIABILITY. SECTION 403. REMEDIES OF JUDGMENT CREDITOR OF ASSOCIATED MEMBER OR PROTECTED-SERIES TRANSFEREE. SECTION 404. ENFORCEMENT AGAINST NON-ASSOCIATED ASSET.
ARTICLE 5. DISSOLUTION AND WINDING UP OF PROTECTED SERIES
SECTION 501. EVENTS CAUSING DISSOLUTION OF PROTECTED SERIES. SECTION 502. WINDING UP DISSOLVED PROTECTED SERIES. SECTION 503. EFFECT OF REINSTATEMENT OF SERIES LIMITED LIABILITY COMPANY OR REVOCATION OF VOLUNTARY DISSOLUTION.
ARTICLE 6. ENTITY TRANSACTIONS RESTRICTED
SECTION 601. DEFINITIONS. SECTION 602. PROTECTED SERIES MAY NOT BE PARTY TO ENTITY TRANSACTION. SECTION 603. RESTRICTION ON ENTITY TRANSACTION INVOLVING PROTECTED SERIES. SECTION 604. MERGER AUTHORIZED; PARTIES RESTRICTED. SECTION 605. PLAN OF MERGER. SECTION 606. STATEMENT OF MERGER. SECTION 607. EFFECT OF MERGER. SECTION 608. APPLICATION OF SECTION 404 AFTER MERGER.
ARTICLE 7. FOREIGN PROTECTED SERIES
SECTION 701. GOVERNING LAW. SECTION 702. NO ATTRIBUTION OF ACTIVITIES CONSTITUTING DOING BUSINESS OR FOR ESTABLISHING JURISDICTION. SECTION 703. REGISTRATION OF FOREIGN PROTECTED SERIES. SECTION 704. DISCLOSURE REQUIRED WHEN FOREIGN SERIES LIMITED LIABILITY COMPANY OR FOREIGN PROTECTED SERIES PARTY TO PROCEEDING.
ARTICLE 8. MISCELLANEOUS PROVISIONS
SECTION 801. UNIFORMITY OF APPLICATION AND CONSTRUCTION. SECTION 802. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT. SECTION 803. TRANSITIONAL PROVISIONS. SECTION 804. SAVINGS CLAUSE. SECTION 805. SEVERABILITY CLAUSE. SECTION 806. REPEALS; CONFORMING AMENDMENTS. SECTION 807. EFFECTIVE DATE.
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Protected Series Agreements and Forms -- A list of the "best practices" agreements and records that all protected series structures should have.
SERIES LLC COURT OPINIONS
UPSA COURT OPINIONS
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NON-UPSA COURT OPINIONS
191212 ... Ohio ... Delaware Act .. MSP Recovery Claims, Series LLC v. Phoenix Ins. Co., 2019 WL 6770981 (N.D. Ohio, 2019).
181019 ... Florida ... Delaware Act ... MRS Recovery Claims, Series LLC v. USAA General Indemnity Co., 2018 WL 5112998 (S.D.Fla., Oct. 19, 2018).
SERIES LLC ARTICLES BY JAY ADKISSON
2020.02.16 ... Talisman Casualty Denied Diversity Jurisdiction Of Protected Cell Series LLC In National WW II Museum Case
2019.01.28 ... Understanding The Protected Series Act: Article 8 And Final Thoughts
2018.11.24 ... Understanding The Protected Series Act: Treating Out-Of-State Series
2018.11.18 ... Understanding The Protected Series Act: Mergers
2018.10.29 ... Understanding The Protected Series Act: Dissolution And Winding Up Of Protected Series
2018.10.21 ... Understanding The Protected Series Act: Liability Limitations And Claims
2018.08.30 ... Understanding The Protected Series Act: Assets, Members And Management
2018.08.28 ... Understanding The Protected Series Act: Creating A Protected Series And Service Of Process
2018.07.18 ... Understanding The Protected Series Act: The Framework of UPSA - Part 2 of a Series
2018.06.18 ... Understanding The Protected Series Act: What Is A Protected Series?
More articles on Series LLCs by Jay Adkisson click here
THE CHARGING ORDER PRACTICE GUIDE BY JAY ADKISSON
The Charging Order Practice Guide: Understanding Judgment Creditor Rights Against LLC Members, by Jay D. Adkisson (2018), published by the LLCs, Partnerships and Unincorporated Entities Committee of the Business Law Section of the American Bar Association
Now available for purchase at https://goo.gl/faZzY6
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