Uniform Protected Series Act
Caution State Law Variances!
SECTION 605. PLAN OF MERGER.
JayNote: We're halfway through Article 6, and so far we've only learned that protected series can't merge or otherwise self-propagate, and that a series organization can only merge with another series organization or a non-series LLC. It is only when we get to § 605 that we learn how that merger is to occur, which is through a plan of merger.
In a merger under Section 604, the plan of merger must:
(1) comply with [cite the provisions of this state's limited liability company act pertaining to the contents of a plan of merger]; and
Reporter's Comment to Paragraph (1) – This article rests and is linked to the merger provisions in an enacting state's limited liability company act. A state that has enacted Uniform Limited Liability Company Act (2006) (Last Amended 2013) would cite Section 1022.
JayNote: Paragraph (1) of § 604 first says that whatever else happens, the plan of merger must comply with ULLCA, which of course is just another big extrapolation provision.
(2) state in a record:
Reporter's Comment to Paragraph (2) – These requirements supplement the requirements stated in the merger provisions of an enacting state's limited liability company act. See, e.g., Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1022 (stating what the plan of merger must include).
(A) for any protected series of a non-surviving company, whether after the merger the protected series will be a relocated protected series or be dissolved, wound up, and terminated;
JayNote: Paragraph (2) of § 604 next has a list of requirements that must be "state[d] in a record" regarding the merger. The first of these requirements, in § 604(2)(A), is that for the company that terminates because of the merger (called the "non-surviving company"), what happens to its protected series, i.e., whether those protected series will either be relocated to the surviving company, or whether those protected series will be terminated.
(B) for any protected series of the surviving company which exists before the merger, whether after the merger the protected series will be a continuing protected series or be dissolved, wound up, and terminated;
JayNote: The same requirement of ¶ (2)(A) is applied to the surviving company in ¶ (2)(B).
(C) for each relocated protected series or continuing protected series:
JayNote: Paragraph (2)(C) presents a laundry list of record requirements for each and every protected series that survives the merger, whether it was originally part of the of the surviving company or was relocated to the surviving company from the terminating company.
(i) the name of any person that becomes an associated member or protected-series transferee of the protected series after the merger, any consideration to be paid by, on behalf of, or in respect of the person, the name of the payor, and the name of the payee;
JayNote: First, by ¶ (2)(C)(i), there must be a record of all the persons who end up as associated members of the protected series after the merger, including any consideration paid for their membership interest, who that was consideration was paid by, and who that consideration was paid to.
(ii) the name of any person whose rights or obligations in the person's capacity as an associated member or protected-series transferee will change after the merger;
JayNote: Second, by ¶ (2)(C)(ii), there must be a record of any person whose capacity changes as a result of the merger and how that change affects their rights and obligations, e.g., a change in management rights. In this connection, the "person" is not necessarily an associated member of the protected series, since that person might be a manager who is not also an associated member
(iii) any consideration to be paid to a person who before the merger was an associated member or protected-series transferee of the protected series and the name of the payor; and
Reporter's Comment to Paragraph (2)(C)(i)-(iii) – These provisions are the analog to Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1002(a)(3) (requiring a plan of merger to state "the manner of converting the interests in each party to the merger into interests, securities, obligations, money, other property, rights to acquire interests or securities, or any combination of the foregoing").
JayNote: Third, by ¶ (2)(C)(iii), there must be a record of any consideration to somebody who was an associated member of the protected series before the merger, which record must include the name of the person
(iv) if after the merger the protected series will be a relocated protected series, its new name;
JayNote: Fourth, and last, by ¶ (2)(C)(iv), the new name of the protected series if its name changes as a result of the merger.
(D) for any protected series to be established by the surviving company as a result of the merger:
(i) the name of the protected series;
(ii) any protected-series transferable interest to be owned by the surviving company when the protected series is established; and
(iii) the name of and any protected-series transferable interest owned by any person that will be an associated member of the protected series when the protected series is established; and
Reporter's Comment to Paragraph (2)(D)(iii) – With regard to "any", see Section 302(b)(3) and the Legislative Note to Section 302.
JayNote: If a new protected series is created as a result of the merger, then under ¶ (2)(D) there must be a record of the name of the new protected series, the amount of interest owned by the surviving company when the protected series is created, and the name of the associated members and the interests they hold.
(E) for any person that is an associated member of a relocated protected series and will remain a member after the merger, any amendment to the operating agreement of the surviving company which:
(1) is or is proposed to be in a record; and
(2) is necessary or appropriate to state the rights and obligations of the person as a member of the surviving company.
Reporter's Comment to Paragraph 2(E) – This language derived from the Model Entity Transactions Act (2007) (Last Amended 2013), Section 202(a)(4).
JayNote: Paragraph (2)(E) provides that for relocated protected series, which requires a record which sets out an associated member's new membership rights and any obligations in the surviving series organization, recalling that a person cannot be an associated member of a protected series unless they are also a member of the series organization, i.e., in this case meaning that such person must become a new member of the surviving series organization.
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.
- - - - -
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
- - - - -
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
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
MORE INFORMATIONAL WEBSITES BY JAY ADKISSON
CONTACT JAY ADKISSON
Contact Jay Adkisson:
Phone: 702-953-9617 Fax: 877-698-0678 jay [at] jayad.com
Unless a dire emergency, please send me an e-mail first in lieu of calling to set up a telephone appointment for a date an time certain.
Las Vegas Office: 6671 S. Las Vegas Blvd., Suite 210, Las Vegas, NV 89119, Ph: 702-953-9617, Fax: 877-698-0678. By appointment only.
Newport Beach Office: 100 Bayview Circle, Suite 210, Newport Beach, California 92660. Ph: 949-200-7773, Fax: 877-698-0678. By appointment only.
© 2019 by Jay D. Adkisson. All rights reserved. No part of this website may be copied in whole or in any part without the express written permission of Jay D. Adkisson. Nothing herein is any advertisement or offer by the firm to practice in any jurisdiction where no attorney of the firm is licensed to practice law. This website does not give any legal advice or opinion, and is no substitute for the advice and counsel of an attorney consulted in the relevant jurisdiction. Other. Questions about this website should be directed to jay [at] jayad.com, by phone to 702-953-9617 or by fax to 877-698-0678. This website is http://www.protectedseriesact.com