TITLE 12 CHAPTER 22. LIMITED LIABILITY COMPANIES

Transcription

1 TITLE 12 CHAPTER 22. LIMITED LIABILITY COMPANIES Table of Contents PART I. DEFINITIONS Definitions...3 PART II. FORMATION Purpose Powers Formation Articles of organization; initial report Name Reservation of name; transfer of reserved name Registered office and registered agent Annual report Conversion of state of organization Amendment of articles of organization Certificates of correction Retroactivity of company's existence; acquisition of immovable property prior to limited liability company's existence...17 PART III. MANAGEMENT AND MANAGEMENT RIGHTS OF MEMBERS Management by members Managers Election and removal of managers Duties of members and managers Limitation of liability and indemnification of members and managers Voting by managers Agency power of managers or members Company representation; state entities Voting rights of members Records and information Liability to third parties of members and managers Contributions to capital Liability for contribution Sharing of profits and losses...25 PART V. DISTRIBUTIONS Interim distributions Distributions upon withdrawal Distribution in kind Restrictions on making distributions Liability upon wrongful distribution...28 PART VI. ASSIGNMENT OF MEMBERSHIP INTERESTS Nature of membership interest Assignment of membership interest Rights of judgment creditor Right of assignee to become a member...29 PART VII. DISSOLUTION

2 1334. Dissolution Judicial dissolution Dissolution by affidavit Winding up Distribution of assets Claims against limited liability company in liquidation; peremption Articles of dissolution Certificate of dissolution; assets omitted from liquidation; post-dissolution proceedings Liability of members of dissolved limited liability companies...34 PART VIII. FOREIGN LIMITED LIABILITY COMPANIES Admission of foreign limited liability company Transactions not constituting transacting business Name of authorized foreign limited company Application for certificate of authority Issuance of certificate of authority Effect of certificate of authority Amended certificate of authority Certificate of correction by a foreign limited liability company Registered agent; registered office and principal business establishment; keeping of records by foreign limited liability company Annual report Withdrawal Termination of withdrawal proceedings Revocation or suspension of certificate of authority; limitation on authority to do business with the state Transacting business without authority Authority to investigate; penalty Penalties...45 PART IX. MERGER Merger or consolidation Agreement of merger or consolidation Approval of merger or consolidation Certificate of merger or consolidation Effects of merger or consolidation Merger or consolidation with foreign entity...51 PART X. MISCELLANEOUS Revocation and reinstatement of articles; limitation on authority to do business within the state Filing, service, and copying fees Derivative actions Applicability of provisions to foreign and interstate commerce Rules of construction Taxation Short title

3 PART I. DEFINITIONS Definitions A. As used in this Chapter, unless the context otherwise requires: (1) "Articles of organization" means documents filed under R.S. 12:1304 for the purpose of forming a limited liability company and those documents as amended or restated. (2) "Business" means any trade, occupation, profession, or other commercial activity, including but not limited to professions licensed by a state or other governmental agency whether or not engaged in for profit. (3) "Capital contribution" means anything of value that a person contributes to the limited liability company as a prerequisite for, or in connection with, membership, including cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services. (4) "Constituent entity" means each limited liability company, partnership, partnership in commendam, limited partnership, or corporation which is party to an agreement of merger or consolidation pursuant to R.S. 12:1358. (5) "Corporation" means a corporation formed under the laws of this state or a foreign corporation as defined in R.S. 12:1301(6). (6) "Foreign corporation" means a corporation formed under the laws of any state other than this state or under the laws of any foreign country. (7) "Foreign limited liability company" means a limited liability company formed under the laws of any state other than this state. (8) "Foreign limited partnership" means a limited partnership formed under the laws of any state other than this state or under the laws of any foreign country. (9) "Foreign partnership" means a partnership formed under the laws of any state other than this state, or under the laws of any foreign country. (10) "Limited liability company" or "domestic limited liability company" means an entity that is an unincorporated association having one or more members that is organized and existing under this Chapter. No limited liability company organized under this Chapter shall be deemed, described as, or referred to as an incorporated entity, corporation, body corporate, body politic, joint stock company, or joint stock association. (11) "Limited partnership" means a partnership in commendam formed under the laws of this state or a foreign limited partnership as defined in R.S. 12:1301(8). (11.1) "Low-profit limited liability company" or "L3C" means a limited liability company organized for the purposes set forth in R.S. 12:1302(C). (12) "Manager" or "managers" means a person or persons designated by the members of a limited liability company to manage the limited liability company as provided in its articles of organization. (13) "Member" means a person with a membership interest in a limited liability company with the rights and obligations specified under this Chapter

4 (14) "Membership interest" or "interest" means a member's rights in a limited liability company, collectively, including the member's share of the profits and losses of the limited liability company, the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management. (15) "New entity" means the entity into which constituent entities consolidate, as identified in the agreement or certificate of consolidation provided for in R.S. 12:1360. (16) "Operating agreement" means any agreement, written or oral, of the members as to, or in the case of a limited liability company having a single member, any written agreement between the member and the company memorializing the affairs of a limited liability company and the conduct of its business. (17) "Partnership" means a partnership formed under the laws of this state or a foreign partnership as defined in R.S. 12:1301(9). (18) "Person" means a natural person, corporation, partnership, limited partnership, domestic or foreign limited liability company, joint venture, trust, estate, or association. (19) "State" means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico. (20) "Surviving entity" means the constituent entity surviving a merger, as identified in the agreement or certificate of merger provided for in R.S. 12:1360. B. Paragraphs A(2), (10), and (16) of this Section shall apply to all limited liability companies regardless of date of organization. PART II. FORMATION Purpose A. A limited liability company may be organized under this Chapter and may conduct business for any lawful purpose, unless a more limited purpose is stated in its articles of organization. A limited liability company shall not be formed for the purpose of insurance underwriting in all of its several forms. B. A limited liability company that is subject to regulation by another provision of state law may be formed under this Chapter if not prohibited by such other law. Such a limited liability company shall be subject to all limitations of such other law. C.(1) A limited liability company organized as a low-profit limited liability company shall set forth in its articles of organization a business purpose that satisfies and which limited liability company is at all times operated to satisfy each of the following requirements: (a) The entity significantly furthers the accomplishment of one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B) of the Internal Revenue Code and would not have been formed but for the entity's relationship to the accomplishment of charitable or educational purposes. (b) No significant purpose of the entity is the production of income or the appreciation of property provided; however, the fact that an entity produces significant income or capital appreciation shall not, - 4 -

5 in the absence of other factors, be conclusive evidence of a significant purpose involving the production of income or the appreciation of property. (c) No purpose of the entity is to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D) of the Internal Revenue Code. (2) If a company that is organized pursuant to the requirements of Paragraph (1) of this Subsection at its formation at any time ceases to satisfy any one of the requirements, it shall immediately cease to be a low-profit limited liability company, but by continuing to meet all the other requirements of this Chapter, shall continue to exist as a limited liability company. The name of the company shall be changed to be in conformance with R.S. 12: Powers A. All limited liability companies, regardless of date of organization, shall have the powers, rights, and privileges provided for a corporation organized under the Business Corporation Law (R.S. 12:1 et seq.), and provided for a partnership organized under Title XI of Book III of the Louisiana Civil Code. B. Without limiting the grant of powers, rights, and privileges contained in Subsection A of this Section, every limited liability company shall have perpetual existence, unless a limited period of duration is stated in the articles of organization Formation A. One or more persons capable of contracting may form a limited liability company by filing the articles of organization and the initial report with the secretary of state. The articles of organization and initial report may be delivered to the secretary of state in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date within thirty days after the date of delivery. B. If the secretary of state finds that the articles of organization and initial report are in compliance with the provisions of this Chapter and after all fees have been paid as required by law, the secretary of state shall record the articles of organization and initial report in his office, endorse on each the date, and if requested, the hour of filing thereof with him, and issue a certificate of organization which shall show the date and, if endorsed on the articles of organization, the hour of filing of the articles of organization with him. The certificate of organization shall be conclusive evidence of the fact that the limited liability company has been duly organized, except that in any proceeding brought by the state to annul, forfeit, or vacate a limited liability company's articles of organization, the certificate of organization shall be only prima facie evidence of due organization. C. Upon the issuance of the certificate of organization, the limited liability company shall be duly organized, and its separate existence shall begin as of the time of filing of the articles of organization with the secretary of state. However, if the articles were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the limited liability company shall be duly organized, and its separate existence shall begin, as of the time of such acknowledgment or execution

6 1305. Articles of organization; initial report A. The articles of organization shall be written in the English language and shall be executed by at least one person, who need not be a member or manager of the limited liability company. The articles of organization shall be acknowledged by the person or one of the persons who signed the articles of organization or may be executed by authentic act. B. The articles of organization shall set forth the following: (1) The name of the limited liability company. (2) The purposes for which the limited liability company is formed or that its purpose is to engage in any lawful activity for which limited liability companies may be formed under this Chapter. (3) Whether the company is a low-profit limited liability company. C. The articles of organization may set forth the following: (1) A statement of whether and to what extent there are limitations on the authority of members to bind the limited liability company or that such limitations are contained in a written operating agreement. (2) A statement of whether and to what extent the limited liability company will be managed by managers. (3) A statement regarding restrictions on the authority of managers or that such restrictions are contained in a written operating agreement. (4) The latest date, if any, on which the limited liability company is to dissolve. (5) A statement that persons dealing with the limited liability company may rely upon a certificate of one or more managers, members, or other certifying officials, whose names are included in the statement, to establish the membership of any member, the authenticity of any records of the limited liability company, or the authority of any person to act on behalf of the limited liability company, including but not limited to the authority to take the actions referred to in R.S. 12:1318(B), unless otherwise provided in the articles of organization. (6) Any other provision, not inconsistent with law, that the members elect to set forth in the articles of organization. D. It shall not be necessary to set forth in the articles of organization any of the powers enumerated in this Chapter. E. The initial report shall be signed by each person who signed the articles of organization, or by his agent duly authorized by a document attached to the report, and shall set forth the following: (1) The location and municipal address, if any, not a post office box only, of the limited liability company's registered office. (2) The full name and municipal address, if any, not a post office box only, of each of its registered agents. (3) A notarized affidavit of acknowledgment and acceptance signed by each of its registered agents

7 (4) The names and municipal addresses, not a post office box only, of the first managers, if management of the limited liability company is vested in one or more managers, or the members, if management of the limited liability company is reserved to the members, and if, in either case, they have been selected when the articles of organization are filed with the secretary of state. If the initial managers, if management of the limited liability company is vested in one or more managers, or initial members, if management of the limited liability company is reserved to the members, are not named in the initial report, a supplementary report setting forth their names and addresses and signed by each person who signed the articles of organization shall be filed with the secretary of state as soon as they have been selected Name A. The name of each limited liability company as set forth in its articles of organization: (1)(a) Except for low-profit limited liability companies, shall contain the words "limited liability company", the abbreviation "L.L.C.", or the abbreviation "L.C.". (b) For low-profit limited liability companies, shall contain the words "low-profit limited liability company", the abbreviation "L3C", or the abbreviation "l3c". (2) Shall not contain any word or phrase which indicates or implies that it is organized for any purpose not lawful for a limited liability company or contrary to its articles of organization and shall not contain the phrase "doing business as" or the abbreviation "d/b/a". (3) Shall be distinguishable from the name of any corporation or other limited liability company organized under the laws of this state, any foreign corporation or limited liability company registered or qualified to do business in this state, any name which is reserved under R.S. 12:1307 or R.S. 12:23(G), or any trade name registered with the secretary of state, unless any of the following Paragraphs apply: (a) The corporation or other limited liability company is about to change its name, to cease doing business, or is being liquidated, or, if a foreign corporation or limited liability company, is about to withdraw from doing business in this state, and the written consent of the corporation or other limited liability company to the adoption of its name or a nondistinguishable name has been given and is filed with the articles of organization. (b) The corporation or other limited liability company has theretofore been authorized to do business in this state for more than two years and has never actively engaged in business in this state. The failure of a domestic or foreign corporation to file a Louisiana corporate franchise tax return for two consecutive years shall constitute prima facie evidence that it has not actively engaged in business in this state during such period. (c) The corporation or other limited liability company has failed to pay the taxes due by it to the state for the preceding five consecutive years. (d) The corporation, if it is a foreign corporation, has not been authorized to do business in the state and has not filed a Louisiana corporate franchise tax return for two consecutive years. (e) The charter of the corporation has been revoked by the secretary of state and that corporation has not filed a Louisiana corporate franchise tax return for two consecutive years

8 (f) The other corporation or limited liability company filed for dissolution or withdrawal prior to the preceding five years and has not received the tax clearances required for final dissolution or withdrawal. (4) Shall not imply that the company is an administrative agency of any parish or of this state or of the United States. B. Nothing in this Section shall abrogate or limit the law as to unfair competition or unfair practice in the use of trade names, nor derogate from principles of law or the statutes of this state, or of the United States, with respect to the right to acquire and protect trade names. C. The assumption of a name in violation of this Section shall not affect or vitiate the existence of the limited liability company, but any court having jurisdiction may, upon application of the state or of any person interested or affected, enjoin a limited liability company from doing business under a name assumed in violation of this Section, although its articles of organization may have been filed and recorded and a certificate of organization issued. D. No limited liability company shall include in its name any words which deceptively or falsely suggest a charitable or nonprofit nature. E. If the limited liability company seeking the issuance of a certificate of organization in this state includes in its name the word "engineer", "engineering", "surveyor", or "surveying", the secretary of state shall require, prior to the issuance of the certificate of organization, evidence satisfactory to him that written notice of such application for a certificate of organization has been delivered to the Louisiana Professional Engineering and Land Surveying Board in writing not less than ten days prior to the date of issuance of the certificate of organization. If the applicant limited liability company files with its application to the secretary of state a written waiver signed by the executive secretary or any officer of the Louisiana Professional Engineering and Land Surveying Board waiving the requirement of ten days written notice to said board, as set forth in the preceding sentence, the secretary of state shall be authorized to proceed immediately with the processing of such application. F. If a limited liability company seeking issuance of a certificate of organization in Louisiana includes in its name the words "bank", "banker", "banking", "savings", "safe deposit", "trust", "trustee", "building and loan", "homestead", or "credit union", the secretary of state shall require written approval from the commissioner of the office of financial institutions dated not less than ten days prior to the issuance of the certificate of organization Reservation of name; transfer of reserved name A. The exclusive right to use a specified name for a domestic or foreign limited liability company may be reserved by any of the following: (1) A person who intends to organize a domestic limited liability company under this Chapter. (2) A domestic limited liability company which proposes to change its name. (3) A foreign limited liability company which intends to apply for authority to do business in this state. (4) A foreign limited liability company authorized to do business in this state which proposes to change its name. B.(1) A person may reserve a specified name by filing a signed application with the secretary of state

9 (2) If the secretary of state finds that the name is available for use by a limited liability company, he shall reserve the name for the exclusive use of the applicant for sixty days or such shorter period as may be requested. (3) The secretary of state may, for good cause shown, extend the reservation for an additional period of not more than thirty days. Not more than two such extensions shall be granted. C. The exclusive right to use a reserved name may be transferred to another person by filing with the secretary of state a notice of the transfer that specifies the name and address of the transferee and is signed by the applicant for whom the name was reserved Registered office and registered agent A. Each limited liability company shall continuously maintain: (1) A registered office in this state. (2) At least one registered agent who shall be one of the following: (a) A citizen of the state who resides in this state. (b) A partnership or professional law corporation, which is authorized to practice law in this state, or a domestic corporation, domestic limited liability company, or foreign corporation authorized to transact business in this state, which is authorized by its articles or certificate of incorporation to act as the agent of a limited liability company for service of process and which has on file with the secretary of state a certificate setting forth the name of at least two individuals at its address in this state, each of whom is authorized to receive any process served upon it as such agent. Legal process and other notices or demands may be served on the limited liability company by service upon this agent and, if the agent is a partnership, upon any partner. B. The location and post office address of the original registered office and the full name and post office address of the original registered agent shall be stated in the initial report as provided in R.S. 12:1305(E). C.(1) After organization, a limited liability company may change its registered agent or registered office by filing for record with the secretary of state a statement authorizing the designation or change signed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members. Any change of registered agent shall be accompanied by a notarized affidavit of acknowledgment and acceptance signed by the new registered agent. (2) A limited liability company may change the address of its registered agent by filing for record with the secretary of state a statement of the change signed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members. (3) A change of a registered office or registered agent or address of the registered agent for a limited liability company under this Subsection shall be effective when the secretary of state accepts the statement for record

10 D.(1) A registered agent may change his address in this state by filing for record with the secretary of state a statement of the change signed by him or on his behalf. (2) The statement shall include the name of the limited liability company for which the change is effective and the new address of the registered agent. (3) If the old and new addresses of the registered agent are the same as the old and new addresses of the registered office of the limited liability company, the statement may include a change of address of the registered office if: (a) The registered agent notifies the limited liability company in writing. (b) The statement recites that the registered agent has done so. (4) The change of address of the registered agent or registered office is effective when the secretary of state accepts the statement for record. E.(1) A registered agent may resign but such resignation shall be effective only by providing written notice to the limited liability company and the secretary of state. If the registered agent resigns, or for any other reason the limited liability company ceases to maintain a registered agent, a successor agent shall be appointed pursuant to Paragraph (C)(1) of this Section and the successor agent's address shall be filed pursuant to Paragraph (C)(2) of this Section, within thirty days of the resignation or other event which terminated the tenure of the former agent. Upon compliance with the provisions of this Section, the successor agent shall be vested with the powers of the agent succeeded. (2) Repealed by Acts 2003, No. 367, 2. F. The designation of a registered office shall remain effective until a change is made therein and notice of the change is filed in the manner hereinabove provided. However, if no statement of change is filed within thirty days after the registered office has been vacated, the office of the secretary of state may thereafter be treated as the registered office by any person other than the limited liability company itself. The registered office shall be considered the domicile of the limited liability company for all purposes Annual report A. On or before the anniversary date of organization of each limited liability company, a manager of the company, if its management is vested in one or more managers, or a member of the company, if its management is reserved to the members, shall file an annual report each year with the secretary of state, signed in the name of the limited liability company by the manager, member, or agent stating the following: (1) The municipal address, which shall not be a post office box only, of its registered office. (2) The name and municipal address, which shall not be a post office box only, of each of its registered agents. (3) The name and municipal address, which shall not be a post office box only, of each manager, if management of the limited liability company is vested in one or more managers, or each member, if management of the limited liability company is reserved to the members. B. The provisions of this Section shall apply to any domestic limited liability company organized on or after July 7,

11 Failure to file annual report; revocation and reinstatement of articles; limitation on authority to do business with the state A. The secretary of state shall revoke the articles of organization of a domestic limited liability company if it fails to file an annual report for three consecutive years according to the records of the secretary of state. B. At least thirty days prior to revoking the articles of organization pursuant to this Section, the secretary of state shall give notice to the affected limited liability company of his intent to revoke its articles of organization by directing notice of such intention to its last designated registered agent, as shown on the records of the secretary of state. Such notice shall be in writing and shall be sent to the registered agent by United States mail at the last known address of the agent. If there is no registered agent of record, the notice shall be directed to the limited liability company at its registered office. C.(1) The articles of organization shall be reinstated if each of the following is filed with the secretary of state within three years of the effective date of the revocation: (a) An application for reinstatement, signed and acknowledged by a member or manager. If a suit for liquidation or receivership of the limited liability company has been filed at the time at which such application is made, the application shall be accompanied by a document indicating the unanimous written consent to the reinstatement by all members or managers. The limited liability company shall certify the signatures of all managers or members on such document. (b) The current annual report of the limited liability company. (c) The fee for reinstatement proceedings authorized by R.S. 12:1364(A)(1). (2) Upon reinstatement pursuant to this Subsection, the secretary of state shall furnish a certificate of reinstatement to the limited liability company. The certificate of reinstatement and articles of organization shall be retroactive, and the articles of organization shall continue in existence as though the revocation had not occurred. D. Upon revocation of its articles of organization, the name of the limited liability company shall not be available to another entity as a limited liability name, corporate name, or trade name for a three-year period. If the name is available after the three years, the limited liability company may reinstate it by following the same procedures and by satisfying the same provisions and requirements as set forth in this Section. If the name is not available, an amendment changing the original name shall be filed as provided in R.S. 12:1309. E.(1) As used in this Subsection, the term "not in good standing" means that a limited liability company is delinquent in filing the annual report required by R.S. 12: (2) Each limited liability company which is not in good standing shall be prohibited from engaging in commercial business operations with the state or its boards, agencies, departments, or commissions. Any contract between the state or its boards, agencies, departments, or commissions and a limited liability company which is not in good standing may be declared null and void by the board, agency, department, commission, or the division of administration. F. Nothing contained in this Section shall be construed to prevent the state, through the office of the attorney general, from asserting a cause of action to revoke the articles of organization of a limited liability company on any of the following grounds:

12 (1) That the limited liability company was procured through fraud practiced upon the state. (2) That the limited liability company has continued to abuse authority conferred upon it. (3) That the limited liability company should not have been formed under this Chapter or has been so formed without substantial compliance with the requirements of this Chapter. G. Revocation of the articles of organization of a limited liability company pursuant to this Section shall not affect any cause of action against the limited liability company or the right to proceed against any property owned by the limited liability company. Such revocation shall also not prohibit a limited liability company from selling property belonging to the company in the same manner as if the revocation had not occurred Conversion of state of organization A. Unless prohibited by the laws of the other state, a domestic limited liability company may convert its state of organization from this state to any other state, and a foreign limited liability company may convert its state of organization from any other state to this state. B. Such conversion may be made by a limited liability company only pursuant to this Section and only after authorization by a majority of the members, or by such larger vote as the articles of organization or an operating agreement may require. C. The domestic or foreign limited liability company seeking conversion shall file with the secretary of state a written request for conversion of the state of organization. Such request shall contain all of the following: (1) The name of the limited liability company, which shall comply with the provisions of R.S. 12:1306. (2) The full name and municipal address of either each current manager of the limited liability company, if management of the limited liability company is vested in one or more managers, or of each of the current members, if management of the limited liability company is reserved to the members. (3) A statement, as appropriate, that the limited liability company is converting its state of organization from another named state to this state and is continuing its existence in and under the laws of this state, or is converting its state of organization from this state to another named state and is continuing its existence in and under the laws of such other named state. (4) A statement that a majority of the members, or such larger vote as the articles of organization or the operating agreement may require, has approved the conversion of the state of organization. (5) The manner and basis of converting the interests of the members of the limited liability company into the interests of the members in the converted limited liability company. (6) A statement that the limited liability company, in changing its state of organization, has complied with the laws and requirements of both the prior and new state of organization. (7) Any other provision, attachment, or exhibit, not inconsistent with law, that the members elect to set forth or include in the certificate of conversion. (8) If the limited liability company is converting its state of organization from another state to this state:

13 (a) The location and municipal street address, if any, of the limited liability company's registered office. An address consisting of a post office box alone is insufficient. (b) The location and municipal street address, if any, of each of the limited liability company's registered agents, together with a notarized affidavit of acknowledgment and acceptance signed by each such agent. An address consisting of a post office box alone is insufficient. D. The request for conversion may be delivered to the secretary of state for filing as of any specified date, and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. E. If the secretary of state finds that the request for conversion is in compliance with the provisions of this Section, and after all fees have been paid as required by law, the secretary of state shall record in his office the request for conversion and any attachments or exhibits thereto, after endorsing thereon the date and, if requested, the hour of filing. Thereafter, the secretary of state shall either issue to the limited liability company a certificate of conversion, reciting that such limited liability company has complied with the requirements of this state for converting its state of organization, or advise the limited liability company with reasons why it has denied the request for conversion. F. Upon receipt of the certificate of conversion from the secretary of state, and after compliance as applicable with the laws of the other state: (1) A domestic limited liability company converting its state of organization from this state to another state shall be deemed to be organized solely under the laws of such other state and no longer under the laws of this state. The limited liability company shall continue to exist without interruption in its organizational form. All rights, title, interests, obligations, and liabilities of the limited liability company shall continue in the limited liability company without impairment, diminution, or termination. Any proceeding pending by or against the limited liability company or its members or managers, in their capacities as such, may be continued by or against the limited liability company without the need for substituting a new party to such proceeding as a result of any conversion of the state of organization as authorized in this Section. The limited liability company shall be deemed to have appointed the secretary of state in this state as its agent for service of process in any proceeding to enforce any liability or obligation against the limited liability company arising or existing prior to the effective time of the conversion of the state of organization. (2) A foreign limited liability company converting its state of organization from another state to this state shall be deemed to be organized solely under the laws of this state and no longer under the laws of such other state. The limited liability company shall continue to exist without interruption in its organizational form. All rights, title, interests, obligations, and liabilities of the limited liability company shall continue in the limited liability company without impairment, diminution, or termination. Any proceeding pending by or against the limited liability company or its members or managers, in their capacities as such, may be continued by or against the limited liability company without the need for substituting a new party to such proceeding as a result of a change of the state of organization authorized under this Section. The certificate of conversion issued by the secretary of state shall be conclusive evidence of the fact that the limited liability company has been duly organized under the laws of this state, except that in any proceeding brought by the state to annul, forfeit, or vacate a company's franchise, the certificate of conversion shall be only prima facie evidence of due organization. G. In addition to the other requirements of this Section, a domestic limited liability company converting its state of organization from this state to another state shall also file with the secretary of

14 state a certified copy of the certificate of organization or other official certificate obtained by it from the other state evidencing the company's organization under the laws of such state. Such certified copy shall be filed with the secretary of state not later than thirty days after issuance of the official certificate evidencing the company's organization under the laws of the other state Amendment of articles of organization A. The articles of organization shall be amended when any of the following occurs: (1) There is a change in the name of the limited liability company. (2) There is a false or erroneous statement in the articles of organization. (3) The members desire to make a change in any other statement in the articles of organization in order to accurately represent their agreement. (4) In accordance with R.S. 12:1302(C)(2), the company ceases to be a low-profit limited liability company. B. After an amendment has been adopted as provided by this Chapter, articles of amendment setting forth the amendment, the date, and manner of adoption thereof shall be executed in the limited liability company's name by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member of the limited liability company, if management of the limited liability company is reserved to the members. The articles of amendment shall be acknowledged by at least one of the persons who signed them or may be executed by authentic act. C. The articles of amendment shall be filed with the secretary of state. Articles of amendment may be delivered to the secretary of state for filing as of any specified date, and if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. When all taxes, fees, and charges have been paid as required by law, the secretary of state shall record the articles of amendment in his office and endorse thereon the date and, if requested, the hour of the filing thereof with him. Thereupon, the amendment shall be effective as of the date and, if endorsed on the articles of amendment, the hour of filing. However, if the articles of amendment were so filed within five days, exclusive of legal holidays, after acknowledgment thereof or execution thereof as an authentic act, the amendment shall be effective as of the time of the acknowledgment or execution Certificates of correction A. If any instrument filed with the secretary of state under this Chapter contains an inaccurate record of the action therein referred to or has been defectively executed, the instrument may be corrected by the filing of a certificate of correction. B. A certificate of correction shall set forth the following: (1) The title of the instrument being corrected. (2) The name of each party to the instrument being corrected. (3) The date that the instrument being corrected was filed

15 (4) The provision in the instrument as previously filed and as corrected and, if execution of the instrument was defective, the manner in which it was defective. C. A certificate of correction shall not make any other change or amendment that would not have complied in all respects with the requirements of this Chapter at the time the instrument being corrected was filed. D. Repealed by Acts 1995, No. 847, 5, eff. June 27, E. A certificate of correction shall not: (1) Change the effective date of the instrument being corrected. (2) Affect any right or liability accrued or incurred before its filing, except that any right or liability accrued or incurred by reason of the error or defect being corrected shall be extinguished by the filing if the person having the right has not detrimentally relied on the original instrument. F. The certificate of correction shall be executed by a manager of the limited liability company, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by at least one member, if management of the limited liability company is reserved to the members. The certificate of correction shall be acknowledged by at least one of the persons who signed it or may be in the form of an authentic act. The certificate of correction shall be filed with the secretary of state, who, after all taxes, fees, and charges have been paid as required by law, shall record the certificate of correction in his office and endorse thereon the date and, if requested, the hour of the filing thereof with him. G. A multiple original of the certificate of correction, or a copy certified by the secretary of state, shall be filed for record in each office of the recorder of conveyances, if any, in which the instrument corrected thereby was required to be filed by this Chapter. In the case of a certificate of correction to an agreement or certificate of merger or consolidation authorized under this Chapter, a copy of the certificate of correction shall, within twenty days after filing thereof with the secretary of state, be mailed to each member or former member of any party to the merger or consolidation whose property rights are affected by the correction made therein Retroactivity of company's existence; acquisition of immovable property prior to limited liability company's existence Whenever any immovable property is acquired by one or more persons acting in any capacity for and in the name of any limited liability company which has not been issued a certificate of organization as provided by law, and the limited liability company is subsequently issued a certificate of organization in accordance with the provisions of R.S. 12:1304, the limited liability company's existence shall be retroactive to the date of acquisition of an interest in such immovable property, but such retroactive effect shall be without prejudice to rights validly acquired by third persons in the interim between the date of acquisition and the date that the limited liability company was issued the certificate of organization

16 PART III. MANAGEMENT AND MANAGEMENT RIGHTS OF MEMBERS Management by members Except as otherwise provided in the articles of organization, the business of the limited liability company shall be managed by the members, subject to any provision in a written operating agreement restricting or enlarging the management rights and duties of any member or group or class of members Managers A. The articles of organization may provide that the business of the limited liability company shall be managed by or under the authority of one or more managers who may, but need not, be members. B. The articles of organization or an operating agreement may prescribe qualifications for managers. C. The number of managers shall be specified in or fixed in accordance with the articles of organization or an operating agreement. D. If a manager is listed in the articles of organization, an amendment thereto, or a supplemental report, a municipal address, which shall not be a post office box only, shall be indicated for each such manager Election and removal of managers If management is vested in one or more managers pursuant to R.S. 12:1312, then, unless otherwise provided in the articles of organization or an operating agreement: (1) Election of managers to fill initial positions or vacancies shall be by plurality vote of the members. (2) Any or all managers may be removed by a vote of a majority of the members, with or without cause, at a meeting called expressly for that purpose Duties of members and managers A. Subject to the provisions of R.S. 12:1315, a member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312: (1) Shall be deemed to stand in a fiduciary relationship to the limited liability company and its members and shall discharge his duties in good faith, with the diligence, care, judgment, and skill which an ordinary prudent person in a like position would exercise under similar circumstances. Nothing contained in this Section shall derogate from any indemnification authorized by R.S. 12:1315. (2) In discharging his duties, shall be fully protected in relying in good faith upon the records of the limited liability company and upon such information, opinions, reports, or statements presented to the

17 limited liability company, the members, managers, or any committee thereof by any of the limited liability company's members, managers, employees, or by any committee of the members or managers, or by any legal counsel, appraiser, engineer, including a petroleum reservoir engineer, or independent or certified public accountant selected with reasonable care by the members, managers, any committee thereof, any agent having the authority to make such selection, or by any other person as to matters the member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, reasonably believes are within such other person's professional or expert competence and which person is selected with reasonable care by the members, managers, any committee thereof, or any agent having the authority to make such selection. (3) Is not protected by Paragraph (2) of this Subsection if he has knowledge concerning the matter in question that makes reliance otherwise permitted by Paragraph (2) of this Subsection unwarranted. (4) Shall not be liable for any action taken on behalf of the limited liability company or any failure to take any action if he performed the duties of his office in compliance with this Section. (5) Shall account to the limited liability company and hold as trustee for it any profit or benefit derived by him, without the informed consent of a majority of the uninterested members in accordance with R.S. 12:1318(C), from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by him of its property unless he proves under strict judicial scrutiny the fairness of the transaction to the limited liability company. B. Notwithstanding the provisions of Subsection A of this Section, a member or manager shall not be personally liable to the limited liability company or the members thereof for monetary damages unless the member or manager acted in a grossly negligent manner as defined in Subsection C of this Section, or engaged in conduct which demonstrates a greater disregard of the duty of care than gross negligence, including but not limited to intentional tortious conduct or intentional breach of his duty of loyalty. C. As used in this Section, "gross negligence" shall be defined as a reckless disregard of or a carelessness amounting to indifference to the best interests of the limited liability company or the members thereof. D. A member or manager who makes a business judgment in good faith fulfills the duty of diligence, care, judgment, and skill under Subsection A of this Section if the member or manager: (1) Does not have a conflict of interest with respect to the subject of the business judgment. (2) Is informed with respect to the subject of the business judgment to the extent the member or manager reasonably believes to be appropriate under the circumstances. (3) Rationally believes that the business judgment is in the best interests of the limited liability company and its members. E. A person alleging a breach of the duty of diligence, care, judgment, and skill owed by a member or manager under Subsection A has the burden of proving the alleged breach of duty, including the inapplicability of the provisions as to the fulfillment of the duty under Paragraph A(2) and Subsection D, and, in a damage action, the burden of proving that the breach was the legal cause of damage suffered by the limited liability company

18 1315. Limitation of liability and indemnification of members and managers A. Subject to Subsection B of this Section, the articles of organization or a written operating agreement may: (1) Eliminate or limit the personal liability of a member or members, if management is reserved to the members, or a manager or managers, if management is vested in one or more managers pursuant to R.S. 12:1312, for monetary damages for breach of any duty provided for in R.S. 12:1314. (2) Provide for indemnification of a member or members, or a manager or managers, for judgments, settlements, penalties, fines, or expenses incurred because he is or was a member or manager. B. No provision permitted under Subsection A shall limit or eliminate the liability of a member or manager for the amount of a financial benefit received by a member or manager to which he is not entitled or for an intentional violation of a criminal law Voting by managers Except as otherwise provided in the articles of organization or an operating agreement, if the limited liability company has more than one manager, each manager shall be entitled to a single vote on all matters properly brought before the managers, and all decisions of the managers shall be made by majority vote of the managers Agency power of managers or members A. Each member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, is a mandatary of the limited liability company for all matters in the ordinary course of its business other than the alienation, lease, or encumbrance of its immovables, unless such mandate is restricted or enlarged in the articles of organization or unless such member or manager lacks the authority to act for the limited liability company and the person with whom he is dealing has knowledge of the fact that he lacks such authority. B. Persons dealing with a member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, of the limited liability company shall be deemed to have knowledge of restrictions on the authority of such a member or manager contained in a written operating agreement if the articles of organization of the limited liability company contain a statement that such restrictions exist. C. Persons dealing with a limited liability company may rely upon a certificate of any person named in the statement provided for in R.S. 12:1305(C)(5), or, if no such person or persons are so named, upon a certificate of one or more managers or members, to establish the membership of any member, the authenticity of any records of the limited liability company, or the authority of any person to act on behalf of the limited liability company, including but not limited to the authority to take actions referred to in R.S. 12:1318(B)

19 Company representation; state entities Any representative of a limited liability company having five or fewer members shall have the consent of a majority interest of the members and evidence of such consent by authentic act in order to represent the company interest to any state agency, board, or commission or to represent the company interest at any hearing or proceeding held by any state agency, board, or commission Voting rights of members A. Unless otherwise provided in the articles of organization or a written operating agreement, each member of a limited liability company shall be entitled to cast a single vote on all matters properly brought before the members, and all decisions of the members shall be made by majority vote of the members. B. Unless otherwise provided in the articles of organization or a written operating agreement, a majority vote of the members shall be required to approve the following matters, whether or not management is vested in one or more managers pursuant to R.S. 12:1312: (1) The dissolution and winding up of the limited liability company. (2) The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company. (3) The merger or consolidation of the limited liability company. (4) The incurrence of indebtedness by the limited liability company other than in the ordinary course of its business. (5) The alienation, lease, or encumbrance of any immovables of the limited liability company. (6) An amendment to the articles of organization or an operating agreement. C. No contract or transaction between a limited liability company and one or more of its members, if management is reserved to the members, or managers, if management is vested in one or more managers pursuant to R.S. 12:1312, or a person in which such a member or manager has a financial interest, shall be void or voidable solely for this reason, solely because the interested member or manager was present at or participated in the meeting which authorized the contract or transaction, or solely because his or their votes were counted for such purpose, if the material facts as to his interest and to the contract or transaction was disclosed or known to the members and the contract or transaction was approved by a majority vote of the members without counting the vote of the interested member, or if the contract or transaction was fair to the limited liability company as of the time it was authorized, approved, or ratified by the members. Interested members may be counted in determining the presence of a quorum at a meeting which authorized the contract or transaction. D. The articles of organization or a written operating agreement may provide for any other voting rights of members not inconsistent with Subsection C of this Section

20 1319. Records and information A. Each limited liability company shall keep at its registered office the following: (1) A current list of the full name and last known business address of each member and manager, if management is vested in one or more managers pursuant to R.S. 12:1312. (2) Copies of records which would enable a member to determine the relative voting rights of the members. (3) A copy of the articles of organization, together with any amendments thereto. (4) Copies of the limited liability company's federal and state income tax returns and reports, if any, for the three most recent years. (5) A copy of any operating agreement which is in writing. (6) Copies of any financial statements of the limited liability company for the three most recent years. B. Unless otherwise provided in the articles of organization or an operating agreement, a member may do any of the following: (1) At the member's own expense, inspect and copy any limited liability company record upon reasonable request during ordinary business hours. (2) Obtain from time to time upon reasonable demand the following: (a) True and complete information regarding the state of the business and financial condition of the limited liability company. (b) Promptly after becoming available, a copy of the limited liability company's federal and state income tax returns for each year. (c) Other information regarding the affairs of the limited liability company as is just and reasonable. (3) Demand a formal accounting of the limited liability company's affairs whenever circumstances render it just and reasonable. C. Failure of the limited liability company to keep or maintain any of the records or information required pursuant to this Section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company. D. Except as otherwise provided in the articles of organization or an operating agreement, a limited liability company and its members, managers, and agents may recognize and treat a person registered on its records as a member, as such for all purposes, and as the person exclusively entitled to have and to exercise all rights and privileges incident to the ownership of such membership interests. Rights under this Section shall not be affected by any actual or constructive notice which the limited liability company or any of its managers, members, or agents may have to the contrary Liability to third parties of members and managers A. The liability of members, managers, employees, or agents, as such, of a limited liability company organized and existing under this Chapter shall at all times be determined solely and exclusively by the provisions of this Chapter

21 B. Except as otherwise specifically set forth in this Chapter, no member, manager, employee, or agent of a limited liability company is liable in such capacity for a debt, obligation, or liability of the limited liability company. C. A member, manager, employee, or agent of a limited liability company is not a proper party to a proceeding by or against a limited liability company, except when the object is to enforce such a person's rights against or liability to the limited liability company. D. Nothing in this Chapter shall be construed as being in derogation of any rights which any person may by law have against a member, manager, employee, or agent of a limited liability company because of any fraud practiced upon him, because of any breach of professional duty or other negligent or wrongful act by such person, or in derogation of any right which the limited liability company may have against any such person because of any fraud practiced upon it by him Contributions to capital The contribution of a member to a limited liability company may take the form of cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services Liability for contribution A. A promise by a member to contribute to the limited liability company shall not be enforceable unless set forth in a writing signed by the member. B. Except as provided in a written operating agreement, a member's obligation to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services shall not be discharged if he is unable to perform because of death, disability, or other reason. If a member does not make the required contribution of property or services, he or his personal representative is obligated, at his or his personal representative's option, to either contribute cash equal to that portion of value of the stated contribution which has not been made or forfeit his entire membership interest, or, in the case of a personal representative, forfeit all rights in such membership interest to which he may otherwise be entitled. However, a creditor of a limited liability company who extends credit after a member signs a writing which reflects the obligation and before any such election to forfeit the membership interests is made may enforce the original obligation to the extent that the limited liability company refuses or is unable to honor the extension of credit. C. Unless otherwise provided in a written operating agreement, the obligation of a member to make a contribution or return money or other property paid or distributed in violation of this Chapter may be compromised only with the unanimous consent of the members. Notwithstanding such a compromise, a creditor of a limited liability company who extends credit or otherwise acts in reliance on that obligation, after a member signs a writing which reflects the obligation and before the amendment or compromise, may enforce the original obligation to the extent that the limited liability company refuses or is unable to honor the extension of credit

22 1323. Sharing of profits and losses The profits and losses of a limited liability company shall be allocated among the members and among classes of members in the manner provided in a written operating agreement. To the extent the operating agreement does not so provide in writing, profits and losses shall be allocated equally among the members. The provisions of this Section regarding the allocation of losses shall not affect the limitations on the liability of members and managers set forth in R.S. 12:1320. PART V. DISTRIBUTIONS Interim distributions A. Except as provided in this Chapter, a member is entitled to receive distributions from a limited liability company before the withdrawal of the member from the limited liability company and before the dissolution and winding up of the limited liability company to the extent and at the times or upon the occurrence of the events provided in an operating agreement or as authorized by the members. B. Interim distribution of cash or other assets of a limited liability company shall be allocated among the members and among classes of members in the manner provided in a written operating agreement. To the extent such operating agreement does not so provide in writing, distributions shall be made equally to the members Distributions upon withdrawal A. If a limited liability company has been constituted for a term, a member may withdraw without the consent of the other members prior to the expiration of the term, provided he has just cause arising out of the failure of another member to perform an obligation. B. A member of a limited liability company not entered into for a term may withdraw or resign from a limited liability company at the time or upon the happening of an event specified in a written operating agreement and in accordance with the written operating agreement. If a written operating agreement does not specify the time or the events upon the happening of which a member may withdraw or resign, a member of a limited liability company not entered into for a term may resign or withdraw upon not less than thirty days prior written notice to the limited liability company at its registered office as filed of record with the secretary of state and to each member and manager at each member's and manager's address as set forth on the records of the limited liability company. C. Except as otherwise provided in this Chapter, on withdrawal or resignation, a withdrawing or resigning member is entitled to receive such distribution, if any, to which the member is entitled under a written operating agreement and, if not otherwise provided in a written operating agreement, within a reasonable time after withdrawal or resignation, the fair market value of the member's interest as of the date of the member's withdrawal or resignation

23 1326. Distribution in kind Except as provided in a written operating agreement, a member, regardless of the nature of the member's contribution, shall have no right to demand and receive any distribution from a limited liability company in any form other than cash. No member shall be compelled to accept from a limited liability company a distribution of any asset in kind to the extent that the percentage of the asset distributed to the member exceeds the percentage in which the member shares in distributions from the limited liability company Restrictions on making distributions A. No distribution shall be made if, after giving effect to the distribution: (1) The limited liability company would not be able to pay its debts as they become due in the usual course of business. (2) The limited liability company's total assets would be less than the sum of its total liabilities plus, unless the articles of organization or a written operating agreement provides otherwise, the amount that would be needed if the limited liability company were to be dissolved at the time of the distribution to satisfy the preferential rights of other members upon dissolution which are superior to the rights of the member receiving the distribution. (3) The authorization or payment thereof would be contrary to any restrictions contained in the articles of organization or a written operating agreement. B.(1) The limited liability company may base a determination that a distribution is not prohibited under Subsection A of this Section either on financial statements prepared on the basis of accounting practices and principles that are reasonable under the circumstances or a fair valuation or other method that is reasonable under the circumstances. For purposes of this Section, generally accepted accounting principles are deemed to be reasonable. (2) Unless the articles of organization provide otherwise, a limited liability company, including a limited liability company engaged in extractive or oil and gas activities, which owns wasting assets, including oil and gas properties, intended for sale in the ordinary or usual course of business or which owns property having a limited life, such as a lease for a term of years or patents, need make no allowance for depletion or amortization of the cost of such assets in computing total assets. (3) In computing amounts available for distribution, proper allowance shall, except as provided in Paragraph (2) of this Subsection, be made for depreciation and depletion sustained, and ascertained or known losses of every character. Deferred assets and prepaid expenses shall be considered as assets only to the extent of amounts thereof not used or amortized. (4) Without limitation of other items that may be properly included therein, limited liability companies engaged in the business of extraction and sale of oil and gas may include in the calculation of depletion for such purposes their aggregate intangible drilling costs of drilling oil and gas wells. Such costs may include any item of expense or cost not recoverable from a well after it becomes uneconomical other than casing, such as seismic costs, drilling costs, stimulation costs, secondary and tertiary recovery costs, completion costs, work over costs, well site preparation expenses, and other similar expenses or costs, aggregate leasehold costs, and any item of expense or cost relating to the acquisition of a lease other than rental, such as title verification, other title review expenses, and lease bonuses

24 (5) If terms of indebtedness provide that payment of principal and interest is to be made only if and to the extent that payment of a distribution to members could then be made under this Section, indebtedness of a limited liability company, including indebtedness issued as a distribution, shall not be a liability for purposes of determinations made under this Subsection. C. The effect of a distribution under Subsection A of this Section shall be measured as of the date upon which the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization, or the date upon which payment is made if it occurs more than one hundred twenty days after the date of authorization Liability upon wrongful distribution A. Each member, if management is reserved to the members, or manager, if management is vested in one or more managers pursuant to R.S. 12:1312, who knowingly, or without the exercise of reasonable care and inquiry, votes for or assents to a distribution in violation of the articles of organization, an operating agreement, or R.S. 12:1327 shall be jointly and severally liable to the limited liability company for the amount of the distribution that exceeds the amount that could have been distributed without violating R.S. 12:1327, the articles of organization, or an operating agreement. Each member shall be liable to the limited liability company for the amount which the member received in violation of this Section. B. Each member or manager liable under Subsection A of this Section for an unlawful distribution shall be entitled to a contribution from each other member or manager who could be held liable under such Subsection. C. An action to enforce liability under this Section must be brought within two years from the date of which the effect of the distribution is measured under R.S. 12:1327, except that a member or manager held liable under Subsection A of this Section solely because of having voted for or assented to an unlawful distribution may bring an action to enforce his right of contribution under this Section within two years from the date of payment by the member or manager on account of such liability. These time limits shall not be subject to suspension on any ground, nor to interruption except by timely suit. PART VI. ASSIGNMENT OF MEMBERSHIP INTERESTS Nature of membership interest A membership interest shall be an incorporeal movable. A member shall have no interest in limited liability company property

25 1330. Assignment of membership interest A. Unless otherwise provided in the articles of organization or an operating agreement, a membership interest shall be assignable in whole or in part. An assignment of a membership interest shall not entitle the assignee to become or to exercise any rights or powers of a member until such time as he is admitted in accordance with the provisions of this Chapter. An assignment shall entitle the assignee only to receive such distribution or distributions, to share in such profits and losses, and to receive such allocation of income, gain, loss, deduction, credit, or similar item to which the assignor was entitled to the extent assigned. B. Unless otherwise provided in the articles of organization or an operating agreement, the pledge of or granting of a security interest, lien, or other encumbrance in or against any or all of the membership interest of a member shall not cause the member to cease to be a member or to have the power to exercise any rights or powers of a member. C. Unless otherwise provided in a written operating agreement and except to the extent assigned by agreement, until an assignee of a membership interest becomes a member, the assignee shall have no liability as a member solely as a result of such assignment Rights of judgment creditor On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the membership interest of the member with payment of the unsatisfied amount of judgment with interest. To the extent so charged, the judgment creditor shall have only the rights of an assignee of the membership interest. This Chapter shall not deprive any member of the benefit of any exemption laws applicable to his membership interest Right of assignee to become a member A. Except as otherwise provided in the articles of organization or a written operating agreement: (1) An assignee of an interest in a limited liability company shall not become a member or participate in the management of the limited liability company unless the other members unanimously consent in writing. (2) Until the assignee of an interest in a limited liability company becomes a member, the assignor shall continue to be a member. B. An assignee who becomes a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and liabilities, of a member under the articles of organization, any operating agreement, and this Chapter. Except as otherwise provided in the articles of organization or a written operating agreement, an assignee who becomes a member also shall be liable for any obligations of his assignor to make contributions under R.S. 12:1322 and to return under R.S. 12:1328(A) distributions received in violation of R.S. 12:1327. However, the assignee shall not be obligated for liabilities unknown to the assignee at the time that he became a member. C. Whether or not an assignee of a membership interest becomes a member, the assignor shall not be released from his liability to the limited liability company under R.S. 12:1322 and

26 1333. Powers of estate of a deceased or incompetent member If a member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the member's membership ceases and the member's executor, administrator, guardian, conservator, or other legal representative shall be treated as an assignee of such member's interest in the limited liability company. If a member is a corporation, trust, or other entity and is dissolved or terminated, the member's membership ceases and the member's legal representative or successor shall be treated as an assignee of such member's interest in the limited liability company. PART VII. DISSOLUTION Dissolution Except as provided in the articles of organization or a written operating agreement, a limited liability company is dissolved and its affairs shall be wound up upon the first to occur of the following: (1) The occurrence of events specified in writing in the articles of organization or operating agreement. (2) The consent of its members in accordance with R.S. 12:1318. (3) Repealed by Acts 1997, No. 717, 2, eff. July 8, (4) Entry of a decree of judicial dissolution under R.S. 12: Judicial dissolution On application by or for a member, any court of competent jurisdiction may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement Dissolution by affidavit A. In addition to all other methods of dissolution, if a limited liability company is no longer doing business and owes no debts, it may be dissolved by filing an affidavit with the secretary of state executed by the members or by the organizer, if no membership interests have been issued, attesting to such facts and requesting that the limited liability company be dissolved. Thereafter, the members, or the organizer if no membership interests have been issued, shall be personally liable for any debts or other claims against the limited liability company in proportion to their ownership interest in the company

27 B. The secretary of state shall reinstate a limited liability company that has been dissolved pursuant to this Section only upon receipt of an order issued by a court of competent jurisdiction directing him to do so Winding up A. Except as otherwise provided in the articles of organization or a written operating agreement, upon dissolution the members shall wind up the limited liability company's affairs. The windup of the limited liability company's affairs may be conducted by appointment of one or more liquidators to conduct the windup and liquidation. However, such appointment shall not be operative until both of the following occur: (1) Notice of authorization of the dissolution, stating that the limited liability company is to be liquidated out of court and giving the name and post office address of each liquidator, has been published at least once in a newspaper of general circulation in the parish in which the limited liability company's registered office is located, and a copy of such notice, with the affidavit of the publisher of the newspaper to the fact of such publication attached, has been filed with the secretary of state. (2) Articles of dissolution have been filed with the secretary of state in accordance with R.S. 12:1339. B. However, any court of competent jurisdiction may wind up the limited liability company's affairs on application of any member or his legal representative or assignee or of any liquidator Distribution of assets A. Upon the winding up of a limited liability company, any assets remaining after paying or adequately providing for the payment of all debts and liabilities of the limited liability company, including all costs and expenses of the liquidation and any and all contingent liabilities of which the members or liquidator has knowledge, shall be distributed as follows: (1) Except as provided in the articles of organization or a written operating agreement, to members or former members in satisfaction of liabilities for distributions under R.S. 12:1324 or (2) Except as provided in the articles of organization or a written operating agreement, to members and former members, first, for the return of their capital contributions, and secondly, respecting their membership interests, in the proportions in which the members share in distributions. B. In the event that there are contingent liabilities for which provision has been made as above, the members conducting the dissolution or liquidator shall not be dismissed until the contingent liabilities and debts have been paid or settled in full Claims against limited liability company in liquidation; peremption A. A limited liability company may have the benefit of Subsections C, D, and E of this Section by following the procedure set forth in Subsection B of this Section. B.(1) After the proceeding for dissolution has taken effect, notice thereof shall be:

28 (a) Given by registered or certified mail to all known creditors of, to all persons believed to have valid and subsisting claims, excluding prescribed and time-barred claims, against, and to all persons having unfulfilled contracts with, the limited liability company. (b) Published once a week for two successive weeks in a newspaper of general circulation in the parish in which the limited liability company's registered office is located. (2) Such notice shall call on the addressees to present their claims in writing and in detail, at a specified place and by a specified date not less than six months after the notice was mailed. The giving and publication of such notice shall not be deemed an acknowledgment of the validity of any claim against the limited liability company, waiver of any defense or setoff to any such claim, interruption of prescription on or tolling of any statute of limitation applicable to any such claim, or revival of any claim which has been barred by any prescription, peremption, or statute of limitations. C. If any addressee of such notice shall not present his claim or claims as prescribed in the notice, such of his claims as would be enforceable against the limited liability company except for the provisions of this Subsection shall, unless suit has been entered thereon in a court of competent jurisdiction before the final date prescribed in the notice for presentation thereof, be perpetually and peremptorily barred, except to the extent, if any, that the court may allow them against any remaining undistributed assets of the limited liability company on a finding that the claimant had some valid excuse for his failure so to present his claim. D. All claims which would be enforceable by suit against the limited liability company except for the provisions of this Subsection, on which suit has not been filed in a court of competent jurisdiction before the expiration of three years after the proceeding for dissolution takes effect, or, if the notice prescribed in Subsection B of this Section was not given and publication thereof commenced within one month after the proceeding takes effect, before the expiration of three years after the giving or completion of publication of the notice, whichever is later, shall be barred perpetually and peremptorily. E. The time limits provided in Subsections C and D of this Section shall not be subject to suspension on any ground or to interruption except by timely presentation of the claim as to Subsection C or timely suit as to Subsection D. F. The provisions of Subsections C and D of this Section shall not preclude the enforcement at any time, without regard to whether a claim has been presented or a suit filed timely as prescribed in said Subsections, of any valid and subsisting lien securing any claim against, or indebtedness of, the limited liability company Articles of dissolution A. Upon dissolution and the commencement of winding up of the limited liability company: (1) Articles of dissolution shall be filed in the office of the secretary of state and set forth the following: (a) The name of the limited liability company. (b) The date of filing of its articles of organization and all amendments thereto. (c) The reason for filing the articles of dissolution

29 (d) The effective date, which shall be a date certain, of the articles of dissolution if they are not to be effective upon filing. (e) Any other information which the members or managers filing the certificate determine. (2) If the notice provided for by R.S. 12:1336(A)(1) has not been published, a notice of authorization of the dissolution, stating that the limited liability company is to be liquidated out of court, shall be published at least once in a newspaper of general circulation in the parish in which the limited liability company's registered office is located. A copy of such notice, with the affidavit of the publisher of the newspaper attesting to the fact of such publication attached, shall be filed with the secretary of state. B. The articles of dissolution shall be signed by one or more managers, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or one or more members, if management of the limited liability company is reserved to the members, acknowledged by one of the persons executing the articles and filed with the secretary of state, who, after all fees and charges have been paid as required by law, shall record the same in his office and endorse thereon the date of filing thereof with him Certificate of dissolution; assets omitted from liquidation; postdissolution proceedings A. When a limited liability company has been liquidated completely: (1) One or more members or the liquidator shall sign and acknowledge a certificate stating that the limited liability company has been liquidated and is dissolved. (2) If the proceeding is subject to the supervision of the court, the court shall make an order declaring the limited liability company to be dissolved. B. The certificate of the members or liquidator or the order shall be filed with the secretary of state who, after all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law, shall record the same in his office and shall issue a certificate of dissolution of the limited liability company effective as of the date, which shall be stated therein, of filing of the certificate of the members or liquidator or the order. C. Upon issuance of the certificate of dissolution, the separate existence shall cease as of the effective date stated in the certificate, except for the sole purpose of any action or suit commenced theretofore by, or commenced timely against, the limited liability company. D. Any movable or immovable property inadvertently or otherwise omitted from the liquidation shall vest in the members conducting the liquidation or liquidator, for the benefit of the persons entitled thereto, and be distributed accordingly. E. Following cessation of the separate existence, the members conducting the liquidation or liquidator shall still have power to take all action required to preserve the interests of the limited liability company, its creditors, and members. The court shall have power, on application by any interested party, to appoint, ex parte or on such notice as the court may order, a liquidator or new liquidator for any proper purpose in case of the death, disability, or unwillingness to serve of the last previous liquidator or last member

30 1341. Liability of members of dissolved limited liability companies A. A member of a dissolved limited liability company, which has followed the procedures set forth in R.S. 12:1338, shall not be liable for any claim against the limited liability company in an amount in excess of such member's pro rata share of the claim or the amount so distributed to him, whichever is less. B. A member of a dissolved limited liability company, which has followed the procedures set forth in R.S. 12:1338, shall not be liable for any claim against the limited liability company on which an action, suit, or proceeding has not begun prior to the expiration of the periods described in R.S. 12:1338(C) and (D). C. The aggregate liability of any member of a dissolved limited liability company for claims against the dissolved limited liability company shall not exceed the amount distributed to him in dissolution. PART VIII. FOREIGN LIMITED LIABILITY COMPANIES Admission of foreign limited liability company No foreign limited liability company shall have the right to transact business in this state until it shall have procured a certificate of authority to do so from the secretary of state. A foreign limited liability company shall not be denied a certificate of authority because the laws of the state or other jurisdiction under which such limited liability company is organized differ from the laws of this state. However, no foreign limited liability company shall be entitled to procure a certificate of authority to transact in this state any business that a limited liability company organized under this Chapter is not permitted to transact. The laws of the state or other jurisdiction under which a foreign limited liability company is organized shall govern its organization, its internal affairs, and the liability of its managers and members that arise solely out of their positions as managers and members Transactions not constituting transacting business Without excluding other activities that may not constitute transacting business in this state, a foreign limited liability company shall not be considered to be transacting business in this state for the purpose of being required to procure a certificate of authority pursuant to this Chapter by conducting any one or more of the following activities: (1) Maintaining, defending, or settling any proceeding. (2) Holding meetings of its managers or members or carrying on any other activities concerning its internal affairs. (3) Maintaining bank accounts

31 (4) Maintaining offices or agencies for the transfer, exchange, and registration of the foreign limited liability company's own membership interests, or appointing or maintaining trustees or depositories with respect to those membership interests. (5) Soliciting or procuring orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this state before they become contracts, including all preliminary incidents thereto. (6) Creating evidences of debt, mortgages, or liens. (7) Securing or collecting debts or enforcing any rights in property securing the debts. (8) Transacting any business in interstate or foreign commerce. (9) Conducting an isolated transaction completed within thirty days, and not in the course of repeated transactions of like nature. (10) Acquiring or disposing of property or a property interest, not as a part of any regular business activity Name of authorized foreign limited company No certificate of authority shall be issued to a foreign limited liability company unless the name of such company satisfies the requirements of R.S. 12:1306. If the name of a foreign limited liability company does not satisfy the requirements of R.S. 12:1306(A)(1), to obtain or maintain a certificate of authority, the foreign limited liability company may add the words "limited liability company" or the abbreviation "L.L.C." or "L.C." to its name for use in this state. If its real name is unavailable, the foreign limited liability company may add a distinguishing term to its name for use in this state Application for certificate of authority A. Application by a foreign limited liability company to procure a certificate of authority shall be made to the secretary of state and shall set forth the following: (1) The name of the limited liability company and the state or other jurisdiction under the laws of which it is organized. (2) If the name of the limited liability company does not conform with the requirements of R.S. 12:1344, then the name of the limited liability company with the word, abbreviation, or distinguishing term that it elects to add thereto for use in this state. (3) The date of organization and the period of duration, if any, of the limited liability company. (4) The address of the registered office of the limited liability company in the state or other jurisdiction under the laws of which it is organized and the address or intended address of its principal business office outside of this state. (5) The address of the principal business establishment in this state, the address of the registered office in this state, and the name and address of its registered agent in this state. If the company does not

32 have a principal place of business establishment in this state, the address of its registered agent in this state shall be deemed to be the address of its principal place of business establishment in this state. (6) The nature of the business that the limited liability company proposes to transact in this state and a statement that it is empowered to transact such business under the laws under which it is organized. (7) Such additional information as may be prescribed by the secretary of state as necessary or appropriate in order to enable the secretary of state to determine whether such limited liability company is entitled to a certificate of authority to transact business in this state, and to determine and assess the fees and taxes prescribed by the laws of this state. B. The application shall be made on a form prescribed and furnished by the secretary of state and shall be executed in duplicate in the limited liability company's name by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company. The application shall be acknowledged by the person who signed it or may be executed by authentic act. C. Duplicate applications for a certificate of authority shall be delivered to the secretary of state, together with a certificate of existence or a certificate of good standing, not a certified copy of the articles of organization or certificate of organization of the limited liability company, from an authorized official of the jurisdiction of its organization bearing an original signature and dated within ninety days of its submission for a certificate of authority and a notarized affidavit of acknowledgment and acceptance signed by each registered agent. The failure to attach a notarized affidavit of acknowledgment and acceptance as required by this Section shall not be a defense to proper service of process on the limited liability company Issuance of certificate of authority If the secretary of state finds that the application for the certificate of authority conforms to law, that the nature of the business is lawful for a limited liability company in this state, and that all requisite fees have been paid, he shall do the following: (1) Endorse on the application the word "Filed" and the date of the filing. (2) File in his office an application. (3) Issue a certificate of authority to transact business in this state to which he shall affix the other application, which shall be returned to the limited liability company or its representative Effect of certificate of authority A foreign limited liability company which receives a certificate of authority shall, until a certificate of revocation or a withdrawal shall have been issued as provided in this Chapter: (1) Be authorized to transact business in this state, subject to such limitations as may be recited in the certificate of authority

33 (2) Enjoy the same, but no greater, rights and privileges as a limited liability company organized under the laws of this state to transact the business that such foreign limited liability company is authorized to transact in this state. (3) Except as otherwise provided in this Chapter, be subject to the same duties, restrictions, penalties, and liabilities as are imposed upon limited liability companies organized under the laws of this state Amended certificate of authority A. A foreign limited liability company authorized to transact business in this state shall, by making application therefor to the secretary of state, procure an amended certificate of authority if thereafter it changes its name or proposes to transact business in this state other than that set forth in its prior application. The provisions in respect to the form and contents of such application, the manner of its execution and filing, and the issuance of an amended certificate of authority and the effect thereof shall be the same as in the case of an original application for a certificate of authority. B. If a foreign limited liability company changes its name, it shall include, with its application for an amended certificate of authority, a certificate evidencing such change, not a certified copy of the amendment to the articles of organization, issued by the authorized official of the jurisdiction of organization of such limited liability company Certificate of correction by a foreign limited liability company Whenever the original application for a certificate of authority or an application for an amended certificate of authority filed with the secretary of state under any provision of this Chapter is an inaccurate record of the action therein referred to, or is defectively or erroneously executed or acknowledged, such instrument may be corrected by filing with the secretary of state a certificate of correction. The certificate of correction shall specify the inaccuracy or defect to be corrected and shall set forth that portion of the instrument in corrected form. A certificate of correction shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company Registered agent; registered office and principal business establishment; keeping of records by foreign limited liability company A. Each foreign limited liability company authorized to transact business in this state shall have and continuously maintain in this state: (1) At least one registered agent, which agent shall be one of the following: (a) An individual resident in this state whose business office is identical to the limited liability company's registered office

34 (b) An individual attorney or a partnership which is authorized to practice law in this state with an office in this state. (c) A domestic corporation or a foreign corporation authorized to transact business in this state, which is authorized by its articles or certificate of incorporation to act as an agent of a limited liability company for service of process and which has on file with the secretary of state a certificate setting forth the names of at least two individuals at its address in this state, each of whom is authorized to receive any process served on it as such agent. (2) A registered office which may, but need not, be the same as its business office in this state. B.(1) A foreign limited liability company authorized to transact business in this state may change its registered office or its registered agent upon filing in the office of the secretary of state a statement setting forth the following: (a) The name of the limited liability company. (b) If the address of its registered office is to be changed, the address to which the registered office is to be changed. (c) If its registered agent is to be changed, the name of its successor registered agent. Attached thereto shall be a notarized affidavit of acknowledgment and acceptance signed by the successor registered agent. (d) If the address of its principal business establishment is to be changed, the address to which the principal business establishment is to be changed. (2) If its registered agent is an individual or a corporation, the address of its principal office and the address of the business office of its registered agent, as changed, shall be identical. (3) The statement shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company, by authentic act or acknowledged by him and delivered to the secretary of state. If only the address of the registered office is changed, the statement need only be executed by the registered agent. If the secretary of state finds that the statement conforms to the provisions of this Chapter, he shall file the statement in his office and, upon such filing, the change of address of the registered office or the appointment of a new registered agent, as the case may be, shall become effective. C. A similar statement executed by the registered agent shall be filed in like manner within thirty days after any change in the name of a corporation or partnership which is the registered agent. D. Any registered agent of a foreign limited liability company may resign as such agent upon filing a written notice of his resignation, executed in duplicate, with the secretary of state, who shall forthwith mail a copy thereof to the limited liability company at its principal business office address. The appointment of such agent shall terminate upon the expiration of thirty days after receipt of such notice by the secretary of state. If the registered agent resigns, or if for any other reason the limited liability company ceases to maintain a registered agent, a successor agent shall be appointed under the procedure set forth in Subsection B of this Section within thirty days after termination of the tenure of the former agent. E. If the limited liability company's registered office should be vacated, a new office shall be designated under the procedure set forth in Subsection B of this Section within thirty days. If such

35 designation is not made, the office of the secretary of state may thereafter be treated as the registered office of the limited liability company by any person other than the limited liability company itself. F. Each limited liability company shall keep at its principal place of business, in or outside the state, records in written form, or in any other form capable of being converted into written form within a reasonable time, showing correct accounts of its properties and business transactions in this state. These records shall include accounts of its assets and liabilities, receipts and disbursements, and gains and losses and, if the limited liability company is engaged in this state in a business that will subject it to liability for state severance taxes, a complete account of all severance produced from its operations in this state Annual report A. On or before the anniversary date of its qualification, each foreign limited liability company authorized to transact business in this state shall file an annual report each year with the secretary of state, signed by a member or manager, stating: (1) The address of the registered office in the jurisdiction of organization and the address of its principal business office outside of this state. (2) The address of the principal business establishment in this state, the address of the registered office in this state, and the name and address of its registered agent in this state. B. The provisions of this Section shall apply to any foreign limited liability company qualified on or after July 7, Withdrawal A. A foreign limited liability company authorized to transact business in this state may withdraw from this state upon procuring from the secretary of state a certificate of withdrawal. In order to procure such certificate, the limited liability company shall deliver to the secretary of state an application for withdrawal which shall set forth the following: (1) The name of the limited liability company and the state or other jurisdiction under the laws of which it is organized. (2) That the limited liability company is not transacting business in this state. (3) That the limited liability company surrenders its authority to transact business in this state. (4) That the limited liability company revokes the authority of its registered agent in this state to accept service of process and consents that the service of process in any action or proceeding based on any cause of action arising out of, resulting from, or connected with any business transacted by it in this state during the time the limited liability company was authorized to transact business in this state, shall be made on the limited liability company by service thereof on the secretary of state or on a person in his office designated to receive service of process on limited liability companies. (5) An address to which the secretary of state may mail a copy of any process that may be so served on the limited liability company

36 (6) Such additional information as may be prescribed by the secretary of state as necessary or appropriate to the determination and assessment of any unpaid fees or taxes payable by the limited liability company as prescribed in this Chapter. B. The application of withdrawal shall be made on a form prescribed and furnished by the secretary of state and shall be executed in the name of the limited liability company by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members of the limited liability company. The application shall be acknowledged by the person who signed it or may be executed by authentic act. C. Duplicate applications for withdrawal shall be delivered to the secretary of state. If the secretary of state finds that such application conforms to the provisions of this Chapter, he shall, when all fees, charges, taxes, unemployment compensation contributions, penalties, and interest have been paid as required by law and evidenced by certificates of the secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law, do the following: (1) Endorse on each application the word "Filed" and the date of the filing thereof. (2) File an application in his office. (3) Issue a certificate of withdrawal to which he shall affix the other application. D. The certificate of withdrawal, together with an application for withdrawal affixed thereto by the secretary of state, shall be returned to the limited liability company or its representative. Upon the issuance of such certificate of withdrawal, the authority of the limited liability company to transact business in this state shall cease Termination of withdrawal proceedings At any time before the certificate of withdrawal is issued by the secretary of state pursuant to R.S. 12:1351, withdrawal proceedings may be terminated by delivering to the secretary of state a request that withdrawal proceedings be terminated. The request shall be signed by a manager, if management of the limited liability company is vested in one or more managers, or a member, if management is reserved to the members. After all fees and charges have been paid as required by law, the secretary of state shall place the request to terminate withdrawal proceedings on file in his office and shall acknowledge receipt of the request by returning the application for withdrawal forms to the limited liability company or its representative. The secretary of the Department of Revenue and the administrator of Louisiana Employment Security Law shall be notified by the secretary of state of the termination of withdrawal proceedings Revocation or suspension of certificate of authority; limitation on authority to do business with the state A. The certificate of authority of a foreign limited liability company to transact business in this state may be revoked by the secretary of state when any of the following occur: (1) The limited liability company has failed to pay any fees, taxes, or penalties prescribed by law when they have become due and payable

37 (2) The limited liability company has failed to maintain a registered agent or a registered office in this state or to maintain records as required by this Chapter. (3) The limited liability company has failed, after change of its registered office or registered agent or of the name of a corporate or partnership agent, to file in the office of the secretary of state a statement of such change as required by this Chapter. (4) The limited liability company has failed to file in the office of the secretary of state any certificate of name change or any amendment of its certificate of authority under R.S. 12:1348. (5) A misrepresentation has been made of any material matter in any application, report, or other document filed by the limited liability company pursuant to this Chapter. (6) The limited liability company has exercised in this state authority not conferred upon it by the laws of this state or has abused authority conferred upon it. (7) The limited liability company has done or omitted any act that amounts to a surrender of its right to do business. (8) The limited liability company has been dissolved. (9) The limited liability company is delinquent in filing the annual report required by R.S. 12: B. No certificate of authority of a foreign limited liability company shall be revoked by the secretary of state unless both of the following have occurred: (1) The secretary of state shall have given the limited liability company not less than sixty days' notice in writing of the grounds on which such proposed revocation is based. (2) The limited liability company has failed, neglected, or refused to correct the same within such sixty-day period. C. Upon revocation, the authority of the limited liability company to transact business in this state shall cease, but the authority of its registered agent in this state to accept service of process shall continue. D.(1) The certificate of authority of a foreign limited liability company to transact business in this state may be suspended by the secretary of state when, according to the records of his office, such foreign limited liability company is not in compliance with a requirement of this Chapter or other relevant law as stated in Paragraphs (1) through (4) of Subsection A of this Section. The secretary of state is authorized to revoke the suspension when any such failure to comply has been remedied by compliance. (2) Before the certificate of authority of a foreign limited liability company is suspended under the provisions of this Subsection, any limited liability company having failed to comply with any such requirement, according to the records of the office of the secretary of state, shall be notified in writing at its last known address of such noncompliance, and the notice shall afford any such limited liability company fifteen days from the receipt of the written notice to comply with any such requirement or to show cause why the written notice should not have been given. The secretary of state is authorized to hold hearings and take evidence when the limited liability company undertakes to show cause why its certificate of authority should not be suspended and to make an order suspending the certificate of authority in the light of such evidence when the order is justified. The order shall be recorded in the archives of the secretary of state

38 (3) When notice of noncompliance has been furnished as provided in this Subsection and no showing or reply has been made within the fifteen-day period allowed, it shall be presumed that the limited liability company has failed to comply with a requirement of this Chapter or other relevant law as stated in Paragraphs (1) through (4) of Subsection A of this Section and the secretary of state may suspend the certificate of authority of any such limited liability company. In the event any such limited liability company thereafter complies with any such requirement, or shows that it was already in compliance with same, the secretary of state is authorized to revoke any suspension issued by him in respect to such limited liability company, to restore same to good standing, and to record same in the archives of his office. Where any order of suspension is made under this Subsection, the secretary of state shall forward a certified copy of the order to the limited liability company's last known address by certified mail, return receipt requested. Similar notice shall be furnished in the event of revocation of such suspension. E.(1) As used in this Subsection, the term "not in good standing" means that a foreign limited liability company is delinquent in filing its annual report. (2) Each foreign limited liability company which is not in good standing shall be prohibited from engaging in commercial business operations with the state or its boards, agencies, departments, or commissions. Any contract between the state or its boards, agencies, departments, or commissions and a foreign limited liability company which is not in good standing may be declared null and void by the board, agency, department, commission, or the division of administration Transacting business without authority A. No foreign limited liability company transacting business in this state shall be permitted to present any judicial demand before any court of this state unless it has been authorized to transact such business, if required by and as provided in, this Chapter. The burden of proof shall rest upon the limited liability company to establish that it has been so authorized, and the only legal evidence thereof shall be the certificate of the secretary of state or a duly authenticated copy thereof. B. The failure of a foreign limited liability company to obtain a certificate of authority to transact business in this state shall not cause the members or managers of the foreign limited liability company to become liable for the obligations of the foreign limited liability company, shall not impair the validity of any contract or act of such limited liability company, and shall not prevent such limited liability company from defending any action, suit, or proceeding in any court of this state. C. A foreign limited liability company that transacts business in this state without a certificate of authority shall be liable to this state, for the years or parts thereof during which it transacted business in this state without a certificate of authority, in an amount equal to all fees and taxes that would have been imposed by law upon such limited liability company had it duly applied for and received a certificate of authority to transact business in this state, as required by this Chapter, and had thereafter filed all reports required by this Chapter, plus all penalties imposed by this Chapter for failure to pay such fees. The attorney general shall bring proceedings to recover all amounts due this state under this Section

39 1355. Authority to investigate; penalty A. The secretary of state may investigate any foreign limited liability company transacting business in this state which does not have a certificate of authority to transact business in this state. B. The secretary of state may impose a penalty of not more than one thousand dollars per violation against any foreign limited liability company transacting business in this state without a valid certificate of authority. C. The secretary of state shall adopt a schedule of penalties to be imposed under the provisions of this Section in accordance with the provisions of the Administrative Procedure Act. D. If a penalty imposed under the provisions of this Section is not timely paid by a foreign limited liability company, the attorney general shall institute proceedings against the foreign limited liability company to collect such penalty Penalties Any foreign limited liability company that fails or refuses to maintain offices, records, or a registered agent or to file any other documents, as required by this Chapter, or to pay any taxes prescribed by the laws of this state, shall be fined not less than twenty-five nor more than five hundred dollars and, in addition, fined fifty dollars for each day it shall so fail, up to a maximum of one thousand dollars. PART IX. MERGER Merger or consolidation Any one or more domestic limited liability companies may merge or consolidate with or into a domestic limited liability company, partnership in commendam, partnership, or business or nonprofit corporation. Any one or more domestic limited liability companies, partnerships in commendam, partnerships, or business or nonprofit corporations may merge or consolidate with or into a domestic limited liability company Agreement of merger or consolidation A. Each constituent entity shall enter into a written agreement of merger or consolidation, which shall be approved in accordance with R.S. 12:1359. B. The agreement of merger or consolidation shall set forth the following: (1) The name and state or country of organization of each limited liability company, corporation, partnership, or partnership in commendam which is a constituent entity in the merger or consolidation

40 and the name of the surviving entity into which each other constituent entity proposes to merge or the new entity into which each constituent entity proposes to consolidate. (2) The terms and conditions of the proposed merger or consolidation. (3) The manner and basis of converting the membership interests in each limited liability company, the shares of stock or other interests in each corporation, and the interests in each partnership in commendam or partnership which is a constituent entity in the merger or consolidation into membership interests, shares, interests, or other securities or obligations, as the case may be, of the surviving entity or the new entity, or of any other limited liability company, corporation, partnership, partnership in commendam, or other entity, or, in whole or in part, into cash or other property, including obligations or securities of any other person. (4) In the case of a merger, such amendments to the articles of organization, articles of incorporation, or articles or agreement of partnership or partnership in commendam, as the case may be, of the surviving entity, as are desired to be effected by the merger, or that no such changes are desired. (5) In the case of a consolidation, all of the statements required to be set forth in articles of organization, articles of incorporation, or articles or agreement of partnership or partnership in commendam, as the case may be, of the new entity. (6) Such other provisions relating to the proposed merger or consolidation as are deemed necessary or desirable Approval of merger or consolidation A. A proposed agreement of merger or consolidation complying with the requirements of R.S. 12:1358 shall be authorized and approved in the manner provided by this Section: (1) A domestic limited liability company party to a proposed merger or consolidation shall have the agreement of merger or consolidation authorized and approved by the vote of the members in accordance with R.S. 12:1318. (2) A domestic corporation party to a proposed merger or consolidation shall have the agreement of merger or consolidation approved, adopted, and certified in the manner and by the vote of the shareholders or members in accordance with Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of (3) A domestic partnership or partnership in commendam party to a proposed merger or consolidation shall have the agreement of merger or consolidation authorized and approved in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of (4) Each constituent entity formed under the laws of a jurisdiction other than this state shall have the agreement of merger or consolidation approved in accordance with the laws of such other jurisdiction. B. The fact that the agreement has been authorized and approved in accordance with this Section shall be certified in the agreement on behalf of each constituent entity: (1) In the case of a domestic limited liability company, by any member, if management is reserved to the members, or by any manager, if management is vested in one or more managers pursuant to R.S. 12:

41 (2) In the case of a domestic corporation, in the manner provided in Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of (3) In the case of a domestic partnership or partnership in commendam, in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of (4) In the case of any constituent entity formed under the laws of any jurisdiction other than this state, in accordance with the laws of such other jurisdiction. C. After a merger or consolidation is authorized and approved, unless the agreement of merger or consolidation provides otherwise, and at any time before an agreement or certificate of merger or consolidation, as provided for in R.S. 12:1360 is filed, the agreement of merger or consolidation may be abandoned, subject to any contractual rights, in accordance with the procedure set forth in the agreement of merger or consolidation or, if none is set forth, as follows: (1) By the majority vote of the members of each domestic limited liability company that is a constituent entity, unless the articles of organization of any such limited liability company provide otherwise. (2) By each domestic corporation that is a constituent entity in the manner provided in Chapter 1 or 2 of Title 12 of the Louisiana Revised Statutes of (3) By each domestic partnership or partnership in commendam that is a constituent entity in the manner provided in Chapter 4 of Code Title XI of Code Book III of Title 9 of the Louisiana Revised Statutes of (4) By each constituent entity formed under the laws of any jurisdiction other than this state in accordance with the laws of such other jurisdiction Certificate of merger or consolidation A. After an agreement of merger or consolidation is authorized, approved, and certified as provided in R.S. 12:1359, the surviving entity or new entity shall file the agreement with the secretary of state or, in lieu thereof, may file a certificate of merger or consolidation duly executed, setting forth the following: (1) The name and state or country of organization of each constituent entity. (2) The effective date, and time if desired, of the merger or consolidation if later than the date of filing of the certificate of merger or consolidation. (3) The name of the surviving entity or new entity. (4) A statement that the agreement of merger was duly authorized and approved by each constituent entity in accordance with R.S. 12:1359. (5) In the case of a merger, such amendments to the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity as are desired to be effected by the merger. If no such amendments are desired, a statement that the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity shall be its articles of organization, certificate or

42 articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be. (6) In the case of a consolidation, that the articles of organization, certificate or articles of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the new entity shall be as set forth in an attachment to the certificate. (7) That the executed agreement of merger or consolidation is on file at the principal place of business of the surviving or new entity, stating the address thereof. (8) That a copy of the agreement of merger or consolidation will be furnished by the new or surviving entity, on request and without cost, to any member, shareholder, or partner, as the case may be, of any constituent entity. B.(1) The secretary of state, after all taxes, fees, and charges have been paid as required by law, shall record the agreement, or certificate in lieu thereof, in his office, endorse thereon the date and, if requested the hour of filing thereof with him, and issue a certificate of merger or consolidation, which shall recite the names of all of the merging and consolidating constituent entities, the name of the state or country under the laws of which each was formed, whether a merger or consolidation is involved, the name of the surviving or new entity, the name of the state or country under the laws of which the new entity is formed, the date, and, if endorsed on the agreement or certificate, the hour of filing of the agreement or certificate with him, and the effective date, and time, of the merger or consolidation, if stated in the agreement or certificate. (2) The agreement or certificate may be delivered to the secretary of state in advance for filing as of any specified date and, if specified upon such delivery, as of any given time on such date, within thirty days after the date of delivery. A duplicate original of the certificate of merger or consolidation issued by the secretary of state shall, within thirty days after issuance of the certificate, be filed for record in the conveyance records of each parish in this state in which any of the constituent entities has immovable property, title to which will be transferred as a result of the merger or consolidation. C. A merger or consolidation shall be effective when the agreement or certificate of merger or consolidation has been recorded by the secretary of state and when the requirements for effectiveness of the laws under which any constituent entity was formed have been met, as of the time of filing of the agreement or certificate with the secretary of state. However, if the certificate was filed within five days, exclusive of legal holidays, after acknowledgment thereof, the merger or consolidation shall be effective as of the time of such acknowledgment, and the merger or consolidation may be made effective as of any later effective date, and time if desired, not later than thirty days after the date of such filing, stated in the agreement or certificate of merger or consolidation Effects of merger or consolidation A. Consummation of a merger or consolidation has the effects provided in this Section: (1) The constituent entities party to the agreement of merger or consolidation shall be a single entity which, in the case of a merger, shall be the entity designated in the agreement of merger as the surviving entity and, in the case of a consolidation, shall be the new entity provided for in the agreement of consolidation

43 (2) The separate existence of each constituent entity, except the surviving entity or the new entity, shall cease. (3) The surviving entity or the new entity shall thereupon and thereafter possess all the rights, privileges, immunities, powers, and franchises of each constituent entity and shall be subject to all the restrictions, disabilities, and duties of each of such constituent entities to the extent such rights, privileges, immunities, powers, franchises, restrictions, disabilities, and duties are applicable to the form of existence of the surviving entity or the new entity. (4) All property, movable, immovable, and mixed, and all debts due on whatever account, including promises to make capital contributions, subscriptions for shares, and all other choses in action, and all and every other interest of or belonging to or due to each of the constituent entities shall be vested in the surviving entity or the new entity without further act or deed. (5) The title to all immovables and any interest therein vested in any such constituent entity shall not revert or be in any way impaired by reason of such merger or consolidation. (6) The surviving entity or the new entity shall thenceforth be responsible and liable for all liabilities and obligations of each of the constituent entities so merged or consolidated. Any claim existing or action or proceeding pending by or against any such constituent entity may be prosecuted as if such merger or consolidation had not taken place, or the surviving entity or the new entity may be substituted in the action. (7) Neither the rights of creditors nor any liens on the property of any constituent entity shall be impaired by the merger or consolidation. (8) In the case of a merger, the articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the surviving entity shall be amended to the extent provided in the certificate of merger. (9) In the case of a consolidation, the statements set forth in the certificate of consolidation and which are required or permitted to be set forth in the articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership, as the case may be, of the new entity shall be deemed to be the original articles of organization, articles or certificate of incorporation, or certificate, articles or agreement of partnership, partnership in commendam, or limited partnership of the new entity. (10) The membership interests in a limited liability company, shares or other interests in a corporation, or interests in a partnership, limited partnership, or partnership in commendam that is a constituent entity, as the case may be, which are to be converted or exchanged into interests, shares, other securities, cash, obligations, or other property under the terms of the agreement of merger or consolidation shall be so converted. The former holders thereof shall be entitled only to the rights provided in the agreement of merger or consolidation or the rights otherwise provided by law. B. Nothing in this Chapter shall abridge or impair any dissenter's or appraisal rights that may otherwise be available to the members, shareholders, or other holders of an interest in any constituent entity

44 1362. Merger or consolidation with foreign entity A. Any one or more domestic limited liability companies may merge or consolidate with or into a foreign limited liability company, foreign corporation, foreign partnership, or foreign limited partnership, and any one or more foreign limited liability companies, foreign corporations, foreign partnerships, or foreign limited partnerships may merge or consolidate with or into a domestic limited liability company, if: (1) The merger or consolidation is permitted by the law of the state or country under whose laws each foreign constituent entity is organized or formed and each foreign constituent entity complies with that law in effecting the merger or consolidation. (2) The foreign constituent entity complies with R.S. 12:1360 if it is the surviving entity or the new entity. (3) Each domestic limited liability company complies with the applicable provisions of R.S. 12:1358 and 1359 and, if it is the surviving entity or the new entity, with R.S. 12:1360. B. If the surviving entity or new entity is to be governed by the laws of any state other than this state or of a foreign country, then upon the effectiveness of a merger or consolidation the surviving entity or new entity shall be subject to service of process in this state in any proceeding for enforcement of any obligation of any constituent entity party to the merger or consolidation that was organized under the laws of this state and for enforcement of any obligation of the surviving entity or new entity arising from the merger or consolidation. C. The effect of such merger or consolidation shall be as provided in R.S. 12:1361, if the surviving entity or new entity is to be governed by the laws of this state. If the surviving entity or new entity is to be governed by the laws of any jurisdiction other than this state, the effect of such merger or consolidation shall be the same as provided in R.S. 12:1361, except insofar as the laws of such other jurisdiction provide otherwise. PART X. MISCELLANEOUS Revocation and reinstatement of articles; limitation on authority to do business within the state A. If a limited liability company has failed to designate and maintain a registered office or to designate and maintain a registered agent pursuant to the provisions of R.S. 12:1308 for a period of ninety consecutive days, the secretary of state may revoke the articles of organization of such limited liability company. B. Nothing contained in this Section shall be construed to prevent the state, through the office of the attorney general, from asserting a cause of action to revoke the articles of organization of a limited liability company on any of the following grounds: (1) The limited liability company's articles of organization were procured through fraud practiced upon the state

45 (2) The limited liability company has continued to abuse authority conferred upon it. (3) The limited liability company should not have been formed under this Chapter or has been formed hereunder without substantial compliance with the conditions precedent to organization prescribed by this Chapter. C. If the secretary of state revokes the articles of organization of a limited liability company, as authorized in Subsection A of this Section, the secretary of state shall cause notice of such revocation to be published in the official journal of the state of Louisiana. The revocation shall become effective thirty days after publication, unless the limited liability company designates and maintains a registered office and registered agent prior to that date. D. At least thirty days prior to revoking the articles of organization, as authorized by Subsection A of this Section, the secretary of state shall give notice to the affected limited liability company of his intention to revoke the articles of organization by directing notice of such intention to the last designated registered agent of such limited liability company, as shown on the records of his office. Such notice shall be in writing and sent to said registered agent by certified United States mail at said agent's last known address. If there is no registered agent of record, the notice shall be directed to the limited liability company at its registered office. E.(1) The articles of organization shall be reinstated provided that: (a) A suit for liquidation or receivership of the limited liability company has not been filed at the time reinstatement is applied for. (b) If a suit for liquidation or receivership of the limited liability company has been so filed, a unanimous written consent to the reinstatement by the members is filed with the secretary of state with the application for reinstatement. (c) An application for reinstatement signed and acknowledged by a manager, if management of the limited liability company is vested in one or more managers pursuant to R.S. 12:1312, or by a member, if management of the limited liability company is reserved to the members, and the reinstatement fee are filed with the secretary of state within three years from the effective date of the revocation. (2) The secretary of state shall furnish a certificate of reinstatement upon payment of the reinstatement fee, and filing the unanimous written consent of the members so certified if a suit for liquidation or receivership has been filed, the certificate of reinstatement and articles of organization shall be retroactive, and the certificate and articles of organization shall continue in existence as though the revocation had never occurred. F. Any revocation of a limited liability company's articles of organization under the provisions of this Section shall not affect any cause of action against such limited liability company or the right to proceed against any property owned by the limited liability company, nor shall such revocation prohibit a limited liability company from selling property belonging to it in the same manner as if the revocation had not occurred Filing, service, and copying fees A. The secretary of state shall be paid fees as provided in R.S. 49:222 in advance for the following, for the use and benefit of the state, by every domestic limited liability company:

46 (1) For filing and recording articles of organization, amended articles of organization, articles of dissolution, reinstatement proceedings, merger proceedings for domestic limited liability companies, and certificates of correction. (2) For additional certified copies, additional certificates, and issuing and sealing any other certificate required or permitted by this Chapter. (3) For supplemental initial reports, certified copies with amendments, copies with amendments, agent resignation, appointment of registered agent, appointment of new agent, change of agent or address, or reservation of limited liability company name. (4) For filing an annual report. B. The secretary of state shall be paid fees as provided in R.S. 49:222 in advance for the following, for the use and benefit of the state, by every foreign limited liability company: (1) For filing and recording certificates of authority, amended certificates, withdrawal proceedings, termination of withdrawal proceedings, reinstatement proceedings, certificates of correction, and merger proceedings for foreign corporations. (2) For additional certified copies, additional certificates, and issuing and sealing any other certificate required or permitted by this Chapter. (3) For certified copies with amendments, agent resignations, appointments of registered agents, changes of domicile, appointments of new agents, or changes of agent or address. (4) For filing an annual report Derivative actions A limited liability company shall be treated as an unincorporated association under Chapter 5 of Title II of Book I of the Louisiana Code of Civil Procedure Applicability of provisions to foreign and interstate commerce A. Whenever a conflict arises between the law of this state and the laws of any other state with regard to the liability of members of a limited liability company organized and existing under this Chapter for the debts, obligations, and liabilities of the limited liability company, or for the acts or omissions of other members, managers, employees, or agents of the limited liability company, the laws of this state shall be deemed to govern in determining such liability. B. It is the intention of the legislature by the enactment of this Chapter that the legal existence of limited liability companies formed under this Chapter be recognized beyond the limits of this state and that, subject to any reasonable registration requirements, any such limited liability company transacting business outside this state be granted the protection of full faith and credit under Article IV of the Constitution of the United States

47 1367. Rules of construction A. The rules that statutes in derogation of the common law are to be strictly construed shall have no application to this Chapter. B. It is the policy of this Chapter to give maximum effect to the principle of freedom of contract. C. Neither this Chapter nor any amendment shall be construed so as to impair the obligations of any contract existing when this Chapter or any amendment goes into effect, nor to affect any action or proceedings begun or right accrued before this Chapter or any amendment takes effect Taxation A limited liability company created under this Chapter or entering the state pursuant to this Chapter shall pay such taxes as are imposed by the laws of this state or any political subdivision thereof on domestic and foreign limited partnerships on an identical basis therewith. However, for state income tax purposes, a limited liability company shall be treated and taxed in the same manner that it is treated and taxed for federal income tax purposes Short title This Chapter shall be known and may be cited as the "Limited Liability Company Law"