Uniform Protected Series Act
Caution State Law Variances!
SECTION 607. EFFECT OF MERGER.
When a merger under Section 604 becomes effective, in addition to the effects stated in [cite the provisions of this state's limited liability company act stating the effect of a merger]:
JayNote: Once the merger has been completed, § 607 tells us what, if anything, was accomplished thereby.
(1) as provided in the plan of merger, each protected series of each merging company which was established before the merger:
(A) is a relocated protected series or continuing protected series; or
(B) is dissolved, wound up, and terminated;
Reporter's Comment to Paragraph (1)(B) – This provision triggers Section 502 and thereby (through extrapolation) the winding up requirements of an enacting state's limited liability company act. These requirements include settling debts with creditors. The rule here is the same as for any other dissolution and winding up of a protected series.
(2) any protected series to be established as a result of the merger is established;
(3) any relocated protected series or continuing protected series is the same person without interruption as it was before the merger;
JayNote: Paragraphs (1), (2) and (3) of § 607 basically say that if the Plan of Merger says that a protected series is terminated, established or relocated by the merger, then upon conclusion of the merger it is.
(4) all property of a relocated protected series or continuing protected series continues to be vested in the protected series without transfer, reversion, or impairment;
(5) all debts, obligations, and other liabilities of a relocated protected series or continuing protected series continue as debts, obligations, and other liabilities of the protected series;
JayNote: Paragraphs (4) and (5) of § 607 tell us that whatever assets and liabilities that a protected series had before the merger, whether protected series is relocated or simply continues, is exactly the same after the merger, i.e., the merger doesn't affect any of that.
(6) except as otherwise provided by law or the plan of merger, all the rights, privileges, immunities, powers, and purposes of a relocated protected series or continuing protected series remain in the protected series;
JayNote: The powers and rights, etc., of the protected series can be changed in the plan of merger per ¶ (6) of § 607.
(7) the new name of a relocated protected series may be substituted for the former name of the protected series in any pending action or proceeding;
JayNote: Under §607(7), any change of name of a protected series can become effective upon the merger.
(8) if provided in the plan of merger:
JayNote: Paragraph (8) of § 607 basically says that all changes regarding the associated members, managers and other persons involved with the protected series are given effect by the merger, including the payment of consideration to such person if that was part of the merger deal.
(A) a person becomes an associated member or protected-series transferee of a relocated protected series or continuing protected series;
Reporter's Comment to Paragraph (8)(A) – This provision is subject to Section 303(a): "A protected-series transferable interest of a protected series must be owned initially by an associated member of the protected series or the series limited liability company that establishes the protected series." Thus, for a person to become a protected-series transferee as a result of a merger, the plan of merger would have to provide for an existing associated member or protected series transferee to transfer a protected-series transferable interest to the person.
(B) a person becomes an associated member of a protected series established by the surviving company as a result of the merger;
Reporter's Comment to Paragraph (8)(B) – Under Section 303(a), discussed in the comment to Paragraph (8)(A), a protected-series transferable interest must first be owned by an associated member of the protected series or the series limited liability company that established the protected series. As a result, a merger under Section 604 cannot cause a person to become a protected-series transferee ab initio of a protected series established as a result of the merger.
(C) any change in the rights or obligations of a person in the person's capacity as an associated member or protected-series transferee of a relocated protected series or continuing protected series take effect; and
(D) any consideration to be paid to a person that before the merger was an associated member or protected-series transferee of a relocated protected series or continuing protected series is due; and
Reporter's Comment to Paragraphs (4)-(8) – These provisions are derived from Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1046(a) (effects of conversion). The list of effects does not include the taking effect of amendments to the operating agreement, because the merger provisions of an enacting state's limited liability company act should address the point. See, e.g., Uniform Limited Liability Company Act (2006) (Last Amended 2013), Section 1026(a)(8)(B) (stating that, "if the surviving entity exists before the merger .... its private organic rules that are to be in a record, if any, are amended to the extent provided in the plan of merger").
(9) any person that is a member of a relocated protected series becomes a member of the surviving company, if not already a member.
For section to be cited just before Paragraph (1): A state that has enacted Uniform Limited Liability Company Act (2006) (Last Amended 2013) would cite Section 1026.
JayNote: Paragraph (9) of § 607 adds that if a person is an associated member of a relocated protected series after the merger, then they automatically become a member of the surviving series organization if they weren't such a member before.
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
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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