00 HOUSE BILL NO. 266 01 "An Act relating to limited liability companies and limited partnerships; and 02 providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 10.50.070 is amended to read: 05  Sec. 10.50.070. Organizers. One [TWO] or more persons may organize a 06 limited liability company by signing articles of organization and delivering the signed 07 articles to the department for filing. A person who organizes a limited liability 08 company may be a person who is not a member of the company when the company 09 is organized or after the company is organized. 10 * Sec. 2. AS 10.50.125(b) is repealed and reenacted to read: 11  (b) A manager may not resign as manager of a limited liability company 12 except at the time or upon the happening of events specified in the operating 13 agreement of the company. An operating agreement may provide that a manager does 14 not have the right to resign as a manager of a limited liability company. 01 Notwithstanding that an operating agreement provides that a manager does not have 02 the right to resign as a manager of a limited liability company, a manager may resign 03 as a manager of a limited liability company at any time by giving notice to the 04 members and any other managers. If the resignation of a manager violates the 05 operating agreement of the company, in addition to any remedy otherwise available 06 under applicable law, a limited liability company may recover from the resigning 07 manager damages for breach of the operating agreement and may offset the damages 08 against the amount otherwise distributable to the resigning manager. If the manager 09 was the sole manager and if, within 90 days after the resignation, the members fail to 10 agree on the appointment of a new manager, then each member shall have a say in the 11 management of the company that is equal to the proportion of the member's capital 12 account in the company. 13 * Sec. 3. AS 10.50.150(c) is amended to read: 14  (c) Notwithstanding (a) and (b) of this section, and unless another level of 15 member consent is required in an operating agreement of the company, the written 16 consent of all [TWO-THIRDS] of the members of a limited liability company is 17 required to 18  (1) amend the articles of organization; 19  (2) amend an operating agreement of the company; or 20  (3) authorize a manager or member to perform an act on behalf of the 21 company that contravenes an operating agreement of the company, including an act 22 that contravenes a provision of the operating agreement that expressly limits the 23 purposes, affairs, or conduct of the affairs of the company. 24 * Sec. 4. AS 10.50.155 is amended by adding a new subsection to read: 25  (b) A limited liability company must have one or more members. 26 * Sec. 5. AS 10.50.185 is repealed and reenacted to read: 27  Sec. 10.50.185. Resignation of member. (a) A member may not resign from 28 a limited liability company except at the time or upon the happening of events 29 specified in the operating agreement of the company and in accordance with the 30 operating agreement of the company. 31  (b) Notwithstanding anything to the contrary under applicable law, unless an 01 operating agreement of the company provides otherwise, a member may not resign 02 from a limited liability company before the dissolution and winding up of the limited 03 liability company. 04  (c) If the resignation of a member violates an operating agreement of the 05 company, in addition to any remedy otherwise available under applicable law, a limited 06 liability company may recover from the resigning member damages for breach of the 07 operating agreement and may offset the damages against the amount otherwise 08 distributable to the resigning member. 09  (d) Unless otherwise provided in an operating agreement of the company and 10 except for termination under AS 10.50.205, after a member resigns from a limited 11 liability company, the rights of the former member are those of an assignee. 12 * Sec. 6. AS 10.50.265 is amended to read: 13  Sec. 10.50.265. Liability of members to third parties. A person who is a 14 member of a limited liability company or a foreign limited liability company is not 15 liable, solely by reason of being a member, under a judgment, decree, or order of a 16 court, or in another manner, for a liability of the company  to a third party , whether 17 the liability arises in contract, tort, or another form, or for the acts or omissions of 18 another member, manager, agent, or employee of the company  to a third party . 19 * Sec. 7. AS 10.50.400 is amended to read: 20  Sec. 10.50.400. Dissolution. A limited liability company is dissolved and its 21 affairs shall be wound up when the first of the following occurs: [IF] 22  (1) at the time or on the happening of events specified for 23 dissolution in an operating agreement of the company [AN EVENT OCCURS 24 THAT IS IDENTIFIED IN THE ARTICLES OF ORGANIZATION OR AN 25 OPERATING AGREEMENT AS CAUSING DISSOLUTION; IF AN ELECTION 26 UNDER AS 10.50.085(a) IS IN EFFECT, THE EVENT DOES NOT CAUSE 27 DISSOLUTION UNLESS THE EVENT IS IDENTIFIED IN THE ARTICLES OR 28 OPERATING AGREEMENT BEFORE OR AT THE SAME TIME THE ELECTION 29 IS STATED IN THE ARTICLES]; 30  (2) all of the members of the company consent in writing [UNLESS 31 AN ELECTION UNDER AS 10.50.085(a) IS IN EFFECT]; or 01  (3) [A PERSON'S MEMBERSHIP IN THE COMPANY 02 TERMINATES, UNLESS 03  (A) THE AFFAIRS OF THE COMPANY ARE CONTINUED 04 BY THE CONSENT OF ALL OF THE REMAINING MEMBERS ON OR 05 BEFORE THE 90TH DAY FOLLOWING THE TERMINATION OF THE 06 MEMBERSHIP; 07  (B) AN OPERATING AGREEMENT PROVIDES 08 OTHERWISE; OR 09  (C) AN ELECTION UNDER AS 10.50.085(a) IS IN EFFECT 10 AND 11  (i) THE ELECTION PROVIDES THAT THE 12 TERMINATION DOES NOT CAUSE THE COMPANY TO 13 DISSOLVE; OR 14  (ii) THE PERSON WHOSE MEMBERSHIP 15 TERMINATES IS NOT A MANAGER OF THE COMPANY; OR 16  (4)] the superior court enters a decree for judicial dissolution of the 17 company under AS 10.50.405. 18 * Sec. 8. AS 10.50.405 is amended to read: 19  Sec. 10.50.405. Dissolution by court. On application by or for a member of 20 a limited liability company, the superior court may order the company dissolved if the 21 court determines that it is  impossible  [NOT REASONABLY PRACTICABLE] for the 22 company to  carry on the purposes  [CONDUCT ITS AFFAIRS IN CONFORMITY 23 WITH AN OPERATING AGREEMENT] of the company. 24 * Sec. 9. AS 10.50.425 is amended to read: 25  Sec. 10.50.425. Distribution of assets. Upon the winding up of a limited 26 liability company, the assets of the company shall be distributed in the following 27 manner and order of priority: 28  (1) payment, or adequate provision for payment, to creditors, including, 29 to the extent permitted by law, members who are creditors and not covered by (2) of 30 this section, in satisfaction of the liabilities of the company; 31  (2) unless otherwise provided in an operating agreement of the 01 company, payment to members or former members in satisfaction of the company's 02 liabilities for distributions under  AS 10.50.295 - 10.50.330  [AS 10.50.295 - 10.50.335]; 03  (3) unless otherwise provided in an operating agreement of the 04 company, to members and former members in the following order of priority: 05  (A) for the return of their contributions; and 06  (B) in proportion to the members' respective rights to share in 07 distributions from the company before dissolution. 08 * Sec. 10. AS 10.50 is amended by adding a new section to read: 09  Sec. 10.50.570. Conversion to limited liability company. (a) Any other 10 entity may convert to a limited liability company by filing with the department 11  (1) a certificate of conversion to a limited liability company that has 12 been executed under (b) of this section by one or more persons organizing the 13 conversion; and 14  (2) articles of organization that comply with AS 10.50.075 and that 15 have been signed by one or more persons organizing the conversion. 16  (b) The certificate of conversion to a limited liability company must state 17  (1) the date on which and the jurisdiction where the other entity was 18 first created, formed, or incorporated, or otherwise came into being, and, if the other 19 entity has changed its jurisdiction, its jurisdiction immediately before its conversion 20 to a limited liability company; 21  (2) the name of the other entity immediately before the filing of the 22 certificate of conversion to a limited liability company; 23  (3) the name of the limited liability company as stated in its articles of 24 organization filed under (a) of this section; and 25  (4) the future effective date or time, which must be a certain date or 26 a certain time, of the conversion to a limited liability company if the conversion is not 27 to be effective on the filing of the certificate of conversion to a limited liability 28 company and the articles of organization. 29  (c) On the filing with the department of the certificate of conversion to a 30 limited liability company and the articles of organization, or upon the future effective 31 date or time of the certificate of conversion to a limited liability company and the 01 articles of organization, the other entity is converted to a limited liability company and, 02 after the conversion, is subject to all of the provisions of this chapter, except that, 03 notwithstanding AS 10.50.080, the existence of the limited liability company is 04 considered to have commenced on the date the other entity commenced its existence 05 in the jurisdiction in which the other entity was first created, formed, or incorporated, 06 or otherwise came into being. 07  (d) The conversion of any other entity to a limited liability company does not 08 affect any obligation or liability of the other entity incurred before the conversion, or 09 the personal liability of any person that is incurred before the conversion. 10  (e) When a conversion of any other entity to a limited liability company 11 becomes effective under this section, for all purposes of the laws of this state, 12  (1) all rights, privileges, and powers of the other entity, all real, 13 personal, and mixed property, all debts due to the other entity, and all other things and 14 causes of action belonging to the other entity, are vested in the limited liability 15 company and are after the conversion, the property of the limited liability company as 16 they were of the other entity; 17  (2) the title to any real property vested by deed, or otherwise vested, 18 in the other entity does not revert and is not in any way impaired by reason of this 19 chapter; 20  (3) all rights of creditors and all liens on property of the other entity 21 attach to the limited liability company; and 22  (4) all debts, liabilities, and duties of the other entity attach to the 23 limited liability company, and may be enforced against it to the same extent as if the 24 debts, liabilities, and duties had been incurred or contracted by the limited liability 25 company. 26  (f) Unless otherwise agreed, or as required under the applicable law of another 27 state, any other entity that converts to a limited liability company under this section 28 is not required to wind up its affairs or to pay its liabilities and distribute its assets, 29 and the conversion does not constitute a dissolution of the other entity. 30  (g) Before filing a certificate of conversion to a limited liability company with 31 the department, a limited liability company agreement must be approved in the manner 01 provided for by the document, instrument, agreement, or other writing governing the 02 internal affairs of the other entity and the conduct of its business, or by applicable law, 03 as appropriate. 04  (h) The provisions of this section may not be construed to limit the 05 accomplishment of a change in the law governing, or of the domicile of, any other 06 entity to this state by any other means provided for in a limited liability company 07 agreement or other agreement, or, as otherwise permitted by law, including by the 08 amendment of a limited liability company agreement or other agreement. 09  (i) In this section, "other entity" means a business trust, an association, a real 10 estate investment trust, a common law trust, or any other unincorporated business, 11 including a general partnership, a registered limited liability partnership, a limited 12 partnership, a limited liability limited partnership, and a foreign limited liability 13 company. 14 * Sec. 11. AS 10.50.990(1) is amended to read: 15  (1) "articles of organization" means the articles of organization filed 16 under AS 10.50.070 or 10.50.570 and the articles as amended or restated; 17 * Sec. 12. AS 10.50.990(7) is amended to read: 18  (7) "interim distribution" means a distribution of the assets of a limited 19 liability company to the company's members, except as provided under AS 10.50.425 20 [AS 10.50.335 AND 10.50.425]; 21 * Sec. 13. AS 10.50.990(14) is amended to read: 22  (14) "member" means a person who has been admitted to membership 23 in a limited liability company under AS 10.50.155 - 10.50.160 and whose membership 24 has not ended [TERMINATED] under AS 10.50.180 - 10.50.185 or 10.50.205 - 25 10.50.225; 26 * Sec. 14. AS 10.50.995 is amended to read: 27  Sec. 10.50.995. Short title. This chapter may be cited as the Alaska Revised 28 Limited Liability Act. 29 * Sec. 15. AS 32.11.010(a) is amended to read: 30  (a) In order to form a limited partnership, a certificate of limited partnership 31 shall be executed and filed with the Department of Commerce and Economic 01 Development. The certificate must set out 02  (1) the name of the limited partnership; 03  (2) the address of the office and the name and address of the agent for 04 service of process required to be maintained by AS 32.11.830; 05  (3) the name and business address of each general partner; and 06  (4) [THE LATEST DATE UPON WHICH THE LIMITED 07 PARTNERSHIP IS TO DISSOLVE; AND 08  (5)] other matters the general partners determine to include. 09 * Sec. 16. AS 32.11 is amended by adding a new section to article 1 to read: 10  Sec. 32.11.095. Conversion of certain entities to a limited partnership. (a) 11 Any other entity may convert to a limited partnership by filing with the department 12  (1) a certificate of conversion to a limited partnership that has been 13 executed under (b) of this section by one or more persons organizing the conversion; 14 and 15  (2) a certificate of limited partnership that complies with AS 32.11.010 16 and that has been signed by one or more persons organizing the conversion. 17  (b) The certificate of conversion to a limited partnership must state 18  (1) the date on which and jurisdiction where the other entity was first 19 created, formed, or incorporated, or otherwise came into being and, if the other entity 20 has changed its jurisdiction, its jurisdiction immediately before its conversion to a 21 limited partnership; 22  (2) the name of the other entity immediately before the filing of the 23 certificate of conversion to a limited partnership; 24  (3) the name of the limited partnership as stated in its certificate of 25 limited partnership filed under (a) of this section; and 26  (4) the future effective date or time, which must be a certain date or 27 certain time, of the conversion to a limited partnership if the conversion is not to be 28 effective upon the filing of the certificate of conversion to a limited partnership and 29 the certificate of limited partnership. 30  (c) On the filing with the department of the certificate of conversion to a 31 limited partnership and the certificate of limited partnership, or on the future effective 01 date or time of the certificate of conversion to a limited partnership and the certificate 02 of limited partnership, the other entity is converted to a limited partnership, and, after 03 the conversion, is subject to all of the provisions of this chapter, except that, 04 notwithstanding AS 32.11.060(b), the existence of the limited partnership is considered 05 to have commenced on the date the other entity commenced its existence in the 06 jurisdiction in which the other entity was first created, formed, or incorporated, or 07 otherwise came into being. 08  (d) The conversion of any other entity to a limited partnership does not affect 09 any obligation or liability of the other entity incurred before the conversion to a limited 10 partnership, or the personal liability of any person that is incurred before the 11 conversion. 12  (e) When a conversion of any other entity to a limited liability partnership 13 becomes effective under this section, for all purposes of the laws of this state 14  (1) all of the rights, privileges, and powers of the other entity, all real, 15 personal, and mixed property, all debts due to the other entity, and all other things and 16 causes of action belonging to the other entity are vested in the limited partnership and 17 are, after the conversion, the property of the limited partnership as they were of the 18 other entity; 19  (2) the title to any real property vested by deed, or otherwise vested, 20 in the other entity does not revert and is not in any way impaired by reason of this 21 chapter; 22  (3) all rights of creditors and all liens on any property of the other 23 entity attach to the limited partnership; and 24  (4) all debts, liabilities, and duties of the other entity attach to the 25 limited partnership, and may be enforced against it to the same extent as if the debts, 26 liabilities, and duties had been incurred or contracted by it. 27  (f) Unless otherwise agreed, or as required under the applicable law of another 28 state, any other entity that converts to a limited partnership under this section is not 29 required to wind up its affairs or to pay its liabilities and distribute its assets, and the 30 conversion does not constitute a dissolution of the other entity. 31  (g) Before filing a certificate of conversion to a limited partnership with the 01 department, a partnership agreement must be approved in the manner provided for by 02 the document, instrument, agreement, or other writing governing the internal affairs of 03 the other entity and the conduct of its business, or by applicable law, as appropriate, 04 except that, in any event, the approval must include the approval of any person who, 05 on the effective date or time of the conversion, will be a general partner of the limited 06 partnership. 07  (h) The provisions of this section may not be construed to limit the 08 accomplishment of a change in the law governing, or of the domicile of, any other 09 entity, to this state by any other means provided for in a partnership agreement or 10 other agreement, or as otherwise permitted by law, including by the amendment of a 11 partnership agreement or other agreement. 12  (i) In this section, "other entity" means a business trust, an association, a real 13 estate investment trust, a common law trust, or any other unincorporated business, 14 including a general partnership, a limited liability partnership, a foreign limited 15 partnership, a foreign limited liability partnership, and a limited liability company. 16 * Sec. 17. AS 32.11.260 is amended to read: 17  Sec. 32.11.260. Withdrawal of limited partner. A limited partner may not 18 withdraw from a limited partnership except at the time or upon the happening of 19 events specified in [WRITING IN] the partnership agreement. Notwithstanding 20 anything to the contrary under applicable law, unless the partnership agreement 21 provides otherwise, a limited partner may not withdraw from a limited 22 partnership before the dissolution and winding up of the limited partnership [IF 23 THE AGREEMENT DOES NOT SPECIFY IN WRITING THE TIME OR THE 24 EVENTS UPON THE HAPPENING OF WHICH A LIMITED PARTNER MAY 25 WITHDRAW OR A DEFINITE TIME FOR THE DISSOLUTION AND WINDING 26 UP OF THE LIMITED PARTNERSHIP, A LIMITED PARTNER MAY WITHDRAW 27 UPON NOT LESS THAN SIX MONTHS' PRIOR WRITTEN NOTICE TO EACH 28 GENERAL PARTNER AT THE GENERAL PARTNER'S ADDRESS ON THE 29 BOOKS OF THE LIMITED PARTNERSHIP AT ITS OFFICE IN THIS STATE]. 30 * Sec. 18. AS 32.11.370 is amended to read: 31  Sec. 32.11.370. Dissolution. A limited partnership is dissolved and its affairs 01 shall be wound up upon the happening of the first to occur of the following: 02  (1) at the time or [SPECIFIED IN THE CERTIFICATE OF LIMITED 03 PARTNERSHIP; 04  (2)] upon the happening of events specified in writing in the partnership 05 agreement; 06  (2) [(3)] written consent of all partners; 07  (3) [(4)] an event of withdrawal of a general partner if there is no 08 other general partner, and a majority in interest of the remaining [UNLESS AT 09 THE TIME THERE IS AT LEAST ONE OTHER GENERAL PARTNER AND THE 10 WRITTEN PROVISIONS OF THE PARTNERSHIP AGREEMENT PERMIT THE 11 BUSINESS OF THE LIMITED PARTNERSHIP TO BE CARRIED ON BY THE 12 REMAINING GENERAL PARTNER AND THAT PARTNER DOES SO, BUT THE 13 LIMITED PARTNERSHIP IS NOT DISSOLVED AND IS NOT REQUIRED TO BE 14 WOUND UP BY REASON OF AN EVENT OF WITHDRAWAL IF, WITHIN 90 15 DAYS AFTER THE WITHDRAWAL, ALL] partners fail to agree in writing within 16 90 days after the withdrawal to continue the business of the limited partnership and 17 to the appointment , effective as of the date of withdrawal, of one or more additional 18 general partners [IF NECESSARY OR DESIRED]; or 19  (4) [(5)] entry of a decree of judicial dissolution under AS 32.11.380. 20 * Sec. 19. AS 32.11.380 is amended to read: 21  Sec. 32.11.380. Judicial dissolution. On application by or for a partner , the 22 superior court may decree dissolution of a limited partnership whenever it is 23 impossible [NOT REASONABLY PRACTICABLE] to carry on the business in 24 conformity with the partnership agreement. 25 * Sec. 20. AS 32.11.800 is amended to read: 26  Sec. 32.11.800. Construction and application. This chapter shall be so 27 applied and construed to effectuate its general purpose to make uniform the law with 28 respect to the subject of this chapter among states enacting it , except to the extent 29 that certain provisions of this chapter have been revised and are not identical to 30 the Uniform Limited Partnership Act . 31 * Sec. 21. AS 32.11 is amended by adding a new section to read: 01  Sec. 32.11.835. Amendment of partnership agreement. Unless the 02 partnership agreement provides otherwise, a partnership agreement may not be 03 amended except with the unanimous consent of all partners. 04 * Sec. 22. AS 32.11.990 is amended to read: 05  Sec. 32.11.990. Short title. This chapter may be cited as the Alaska Revised 06 [UNIFORM] Limited Partnership Act. 07 * Sec. 23. AS 10.50.075(4), 10.50.085, 10.50.190, 10.50.195, 10.50.240, 10.50.335; and 08 AS 32.11.010(a)(4) are repealed. 09 * Sec. 24. APPLICABILITY. (a) A limited liability company whose original articles of 10 organization were filed with the department on or after July 1, 1997, is governed by AS 10.50, 11 as amended by this Act. A limited liability company whose original articles of organization 12 were filed with the department before July 1, 1997, is governed by AS 10.50, as amended by 13 of this Act, if its articles of organization are amended on or after July 1, 1997, to state that 14 the company is to be governed by AS 10.50, as amended by this Act. 15 (b) A limited partnership whose original certificate of limited partnership was filed 16 with the department on or after July 1, 1997, is governed by AS 32.11, as amended by this 17 Act. A limited partnership whose original certificate of limited partnership was filed with the 18 department before July 1, 1997, is governed by AS 32.11, as amended by this Act, if its 19 certificate of limited partnership is amended on or after July 1, 1997, and states that the 20 limited partnership is governed by AS 32.11, as amended by this Act. 21 (c) In this section, 22 (1) "articles of organization" has the meaning given in AS 10.50.990; 23 (2) "certificate of limited partnership" has the meaning given in AS 32.11.900; 24 (3) "department" means the Department of Commerce and Economic 25 Development; 26 (4) "limited liability company" has the meaning given in AS 10.50.990; 27 (5) "limited partnership" has the meaning given in AS 32.11.900. 28 * Sec. 25. This Act takes effect July 1, 1997.