CSSSHB 420(JUD): "An Act relating to limited liability companies; and providing for an effective date."
00CS FOR SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 420(JUD) 01 "An Act relating to limited liability companies; and providing for an effective 02 date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 10 is amended by adding a new chapter to read: 05 CHAPTER 50. LIMITED LIABILITY COMPANY ACT. 06 ARTICLE 1. PURPOSES AND ACTIVITIES. 07 Sec. 10.50.010. AUTHORIZED PURPOSES. A limited liability company may 08 be organized under this chapter for any lawful purpose. 09 Sec. 10.50.015. COMPLIANCE WITH OTHER LAWS. If an activity of a 10 limited liability company or the purpose for which a limited liability company is 11 organized is subject to another provision of law, the company shall also comply with 12 the other provision of law. 13 ARTICLE 2. NAME; REGISTERED OFFICE AND AGENT; 14 SERVICE OF PROCESS.
01 Sec. 10.50.020. LIMITED LIABILITY COMPANY NAME. (a) The name 02 of a limited liability company stated in the company's articles of organization must 03 contain the words "limited liability company" or the abbreviation "L.L.C.," or "LLC". 04 The word "limited" may be abbreviated as "Ltd.," and the word "company" may be 05 abbreviated as "Co." 06 (b) The name of a city, borough, or village may be used in a limited liability 07 company name; however, the name may not contain the word "city," "borough," or 08 "village" or otherwise imply that the company is a municipality. 09 (c) A person may not adopt a name that contains the words "limited liability 10 company" unless the person is organized under this chapter or is registered as a foreign 11 limited liability company under this chapter. 12 Sec. 10.50.025. DISTINGUISHABLE NAMES. The name of a limited 13 liability company must be distinguishable on the records of the department from 14 (1) the name of a limited liability company, limited partnership, or 15 corporation organized under the laws of this state; 16 (2) the name of a foreign limited liability company that is registered 17 under this chapter; 18 (3) the name of a foreign corporation that is authorized to transact 19 business in this state; 20 (4) a name reserved or registered under AS 10.06.110 - 10.06.145 or 21 this chapter; or 22 (5) a name reserved under AS 10.35. 23 Sec. 10.50.030. RIGHT TO RESERVE NAME. The exclusive right to use a 24 name may be reserved by a 25 (1) person intending to organize a limited liability company and to 26 adopt the name; 27 (2) person intending to organize a foreign limited liability company and 28 to register under this chapter; 29 (3) limited liability company, or a foreign limited liability company 30 registered under this chapter, that intends to change its name; or 31 (4) foreign limited liability company that intends to register under this
01 chapter and to adopt the name. 02 Sec. 10.50.035. APPLICATION TO RESERVE COMPANY NAME. 03 Reservation of a name under AS 10.50.030 is made by filing an application with the 04 department. If the department finds that the name is available for use by a limited 05 liability company, and is not a reserved or registered business name under AS 10.35 06 or this chapter, the department shall reserve it for the exclusive use of the applicant 07 for a period of 120 days. 08 Sec. 10.50.038. TRANSFER OF RESERVED NAME. The holder of a name 09 reserved under AS 10.50.030 may transfer the right to the exclusive use of the name 10 to another person by filing a notice of transfer with the department, signed by the 11 holder of the name, and specifying the name and address of the transferee. 12 Sec. 10.50.040. REGISTRATION OF COMPANY NAME. A limited liability 13 company or a foreign limited liability company may register its name if the name is 14 distinguishable on the records of the department from the names identified under 15 AS 10.50.025. 16 Sec. 10.50.043. USE OF NONDISTINGUISHABLE NAME. Organization or 17 registration under this chapter, or registration of a name under this chapter, gives the 18 person who has organized, reserved, or registered a name under this chapter exclusive 19 right to the use of the name. The person may enjoin the use of a name that is not 20 distinguishable from the name to which the person has the exclusive right and the 21 person has a cause of action for damages against a person who uses a name that is not 22 distinguishable from the name to which the person has the exclusive right. 23 Sec. 10.50.048. PROCEDURE FOR REGISTRATION OF COMPANY 24 NAME. Registration of a name under AS 10.50.040 is made by filing with the 25 department 26 (1) a signed application for registration setting out the name of the 27 company, the state or territory under the laws of which it is organized, the date of 28 organization, a statement that it is conducting affairs, and a brief statement of its 29 principal activities; and 30 (2) a certificate from an official of the state or territory where the 31 company is organized who has custody of the records pertaining to limited liability
01 companies stating that the company is in good standing under the laws of that state or 02 territory, if the company is a foreign limited liability company. 03 Sec. 10.50.050. DURATION OF REGISTERED NAME. The registration of 04 a name under AS 10.50.040 is effective until the close of the calendar year in which 05 the application for registration is filed. 06 Sec. 10.50.053. RENEWAL OF REGISTERED NAME. (a) The registration 07 of a name under AS 10.50.040 may be renewed each year by 08 (1) filing an application for renewal setting out the facts required in an 09 original application for registration; 10 (2) filing a certificate of good standing required for an original 11 registration; and 12 (3) paying a fee established by the department. 13 (b) An application for renewal shall be filed between October 1 and December 14 31 in each year. The renewal extends the registration for the following calendar year. 15 Sec. 10.50.055. REGISTERED OFFICE AND REGISTERED AGENT. A 16 limited liability company shall continuously maintain in this state a registered agent 17 and a registered office. The registered office may be the same as the office of the 18 company. The registered agent may be either an individual resident of this state whose 19 business office is the same as the registered office, or a domestic or foreign 20 corporation authorized to transact business in this state whose business office is the 21 same as the registered office. 22 Sec. 10.50.058. FILING LIST OF COMPANIES AND REGISTERED 23 AGENTS WITH SUPERIOR COURT; UPDATING AND PUBLISHING. The 24 department shall file with the superior court of each judicial district a list of the names 25 of each limited liability company and each foreign limited liability company registered 26 under this chapter, and the name and address of the registered agents of the companies. 27 The department shall provide a weekly update of the list indicating additions, deletions, 28 and changes by mechanical or electronic means that can be reduced to legible written 29 copy. Upon request, the department shall make available a copy of the list and weekly 30 updates for a fee established by the department by regulation. The department shall 31 publish an updated compilation of the entire list at least once each year.
01 Sec. 10.50.060. CHANGE OF REGISTERED OFFICE OR AGENT. (a) A 02 limited liability company may change its registered office, agent, or both, by filing 03 with the department a verified signed statement that includes 04 (1) the name of the company; 05 (2) the address of its registered office; 06 (3) the address of its new registered office if the registered office is to 07 be changed; 08 (4) the name of its registered agent; 09 (5) the name of its new registered agent, if the registered agent is to 10 be changed; and 11 (6) a statement that the change is authorized by the company's 12 manager, or, if the company is not managed by a manager, by the members. 13 (b) If the department finds that the verified statement complies with this 14 chapter, the department shall file it in the department's office. The change becomes 15 effective when the statement is filed. 16 Sec. 10.50.063. CHANGE OR RESIGNATION OF REGISTERED AGENT. 17 (a) A registered agent of a limited liability company may change the location of the 18 agent's office from one address to another in this state. The agent may change the 19 registered office for each company for which the person is acting as registered agent 20 by filing in the department a statement setting out the name of the agent, the address 21 of the agent's office before change, the address to which the office is changed, and a 22 list of companies for which the person is the registered agent. The statement shall be 23 executed by the registered agent in the individual name of the agent or, if the agent 24 is a corporation, it shall be executed and verified by its president or a vice-president. 25 The statement shall be delivered to the department and if the department finds that the 26 statement complies with this chapter, the department shall file it. The change becomes 27 effective when the statement is filed. 28 (b) A registered agent may resign by filing a written notice and an exact copy 29 of the notice with the department. The written notice of resignation must set out the 30 latest address of the principal office of the company and the name, address, and title 31 of the manager, or, if the company is managed by its members, the names and
01 addresses of the members of the company known by the agent. The department shall 02 immediately mail a copy of the notice to the company at its principal office. The 03 resignation becomes effective 30 days after the filing of the written notice, unless the 04 company sooner appoints a successor registered agent, as provided in AS 10.50.060. 05 Sec. 10.50.065. SERVICE OF PROCESS ON COMPANY. (a) The registered 06 agent of a limited liability company is an agent upon whom process, notice, or demand 07 required or permitted by law to be served upon the company may be served. 08 (b) If a limited liability company fails to appoint or maintain a registered agent 09 in this state, or if its registered agent cannot, with reasonable diligence, be found at the 10 registered office, the commissioner is an agent of the company upon whom the 11 process, notice, or demand may be served. A person may serve the commissioner 12 under this subsection by 13 (1) serving on the commissioner or the designee of the commissioner 14 a copy of the process, notice, or demand, with any papers required by law to be 15 delivered in connection with the service, and a fee established by the department by 16 regulation; 17 (2) sending to the company being served by certified mail a notice that 18 service has been made on the commissioner under this subsection and a copy of the 19 process, notice, or demand and accompanying papers; notice to the company shall be 20 sent to 21 (A) the address of the last registered office of the company as 22 shown by the records on file in the department; and 23 (B) the address, the use of which the person initiating the 24 proceedings knows or, on the basis of reasonable inquiry, has reason to believe 25 is most likely to result in actual notice; and 26 (3) filing with the appropriate court or other body, as part of the return 27 of service, the return receipt of mailing and an affidavit of the person initiating the 28 proceedings that this section has been complied with. 29 (c) The commissioner shall keep a record of processes, notices, and demands 30 served upon the commissioner under this section. 31 (d) This section does not affect the right to serve process, notice, or demand
01 required or permitted by law to be served upon a company in any other manner 02 permitted. 03 ARTICLE 3. ORGANIZATION AND DURATION. 04 Sec. 10.50.070. ORGANIZERS. Two or more persons may organize a limited 05 liability company by signing articles of organization and delivering the signed articles 06 to the department for filing. A person who organizes a limited liability company may 07 be a person who is not a member of the company when the company is organized or 08 after the company is organized. 09 Sec. 10.50.075. CONTENTS OF ARTICLES OF ORGANIZATION. The 10 articles of organization of a limited liability company must state 11 (1) the name of the company; 12 (2) the purpose for which the company is organized, which may be 13 stated to be, or to include, the transaction of any or all lawful business for which a 14 limited liability company may be organized under this chapter; 15 (3) the mailing address of the company's registered office and the name 16 and business, residence, or mailing address of the company's registered agent; 17 (4) if an election has been made that the existence of the company will 18 continue until a certain date or event, a statement of the election and the date or event; 19 (5) if applicable, that the company will be managed by a manager; 20 (6) the limits or increases, including limits or increases placed on a 21 class of members or on an individual member, of the members' management rights, 22 if the company is managed by the members and if the members' management rights 23 or duties are limited or increased; and 24 (7) any other provision for the regulation of the internal affairs of the 25 company that is consistent with this chapter and the laws of this state if the persons 26 organizing the company elect to include the provision in the articles of organization. 27 Sec. 10.50.080. EFFECTIVE DATE OF ORGANIZATION. A limited liability 28 company is organized when the articles of organization for the company that conforms 29 to the filing requirements of this chapter are delivered to the department for filing 30 under AS 10.50.820 even if the department is not able at the time of delivery to make 31 the determination required under AS 10.50.820(a) for filing.
01 Sec. 10.50.085. ELECTION OF DURATION. (a) If an election to continue 02 the existence of a limited liability company until a certain date or event is made and 03 stated in the articles of organization, the company's existence continues until the date 04 or event unless the company is dissolved under AS 10.50.400 for a reason that can 05 cause dissolution while the election is in effect. 06 (b) An election under (a) of this section may not be revoked unless the 07 election is revoked by the persons, if any, who are identified in the election at the time 08 the election is made as having the power to revoke the election. 09 (c) An election under (a) of this section may expressly limit the membership 10 terminations that can cause dissolution under AS 10.50.400(3). 11 Sec. 10.50.090. CONCLUSIVE EVIDENCE OF COMPLIANCE. A copy of 12 the articles of organization that is stamped "filed" and marked with the filing date is 13 conclusive evidence that the organizers of the limited liability company have complied 14 with all conditions precedent required to be performed by the organizers and that the 15 company has been organized under this chapter. 16 Sec. 10.50.095. OPERATING AGREEMENT. The members of a limited 17 liability company may adopt an operating agreement for the company and may amend 18 and repeal the agreement. The articles of organization may restrict or eliminate the 19 power of the members to adopt, amend, or repeal an operating agreement. 20 ARTICLE 4. AMENDMENT OF ARTICLES. 21 Sec. 10.50.100. AMENDMENT OF ARTICLES. (a) A limited liability 22 company may amend its articles of organization in any respect if the articles as 23 amended contain only the provisions that are required or permitted by this chapter to 24 be included in the original articles of organization at the time of the amendment. 25 (b) A limited liability company may amend its articles of organization by filing 26 articles of amendment with the department. The articles of amendment must state the 27 (1) name of the company; 28 (2) date the articles of organization were filed; and 29 (3) amendment adopted by the company. 30 Sec. 10.50.105. RESTATEMENT OF ARTICLES. A limited liability 31 company may restate its articles of organization at any time. The company shall file
01 its restated articles with the department. The restated articles of organization must be 02 specifically designated as restated articles in the title to the restated articles and must 03 state, either in the title or in an introductory paragraph, the 04 (1) company's present and, if the name is changed, all of the 05 company's former names; and 06 (2) date of the filing of the company's original articles of organization. 07 ARTICLE 5. MANAGEMENT. 08 Sec. 10.50.110. MANAGEMENT GENERALLY. (a) Except as otherwise 09 provided by the company's articles of organization, the members of a limited liability 10 company manage the affairs and make the decisions of the company. 11 (b) If a limited liability company is managed by a manager, the manager has 12 the exclusive power to manage the affairs of the company to the extent authorized by 13 the operating agreement. 14 Sec. 10.50.115. APPOINTMENT, REMOVAL, AND REPLACEMENT OF 15 MANAGERS. Except as otherwise provided in an operating agreement of a limited 16 liability company, a manager of the company may not be appointed, removed, or 17 replaced, unless more than one-half of all of the members of the company authorize 18 the appointment, removal, or replacement. 19 Sec. 10.50.120. MANAGER ELIGIBILITY. Unless otherwise provided in an 20 operating agreement of the company, a manager of a limited liability company may 21 be a person who is not an individual or a member of the company. A company may 22 have more than one manager. 23 Sec. 10.50.125. TENURE OF MANAGER. (a) Unless otherwise provided in 24 an operating agreement of the company, a manager of a limited liability company 25 holds office until the manager's successor is elected and qualified, unless the manager 26 resigns or is removed earlier. 27 (b) A manager of a limited liability company may resign by giving written 28 notice to the other managers, or, if there is only one manager for the company, to the 29 members of the company. The resignation is effective when the notice is given, unless 30 the notice specifies a later time for the effectiveness of the resignation. If the 31 resignation is effective at a future time, a successor may be selected to take office
01 when the resignation becomes effective. 02 Sec. 10.50.130. LIMITATION OF MEMBER FIDUCIARY DUTY. Unless 03 otherwise provided in an operating agreement of the company, if a person is a member 04 of a limited liability company that is managed by a manager and if the person is not 05 a manager, the person does not have the fiduciary duty of a manager to the company 06 or to the other members of the company when the person acts solely in the capacity 07 of a member. 08 Sec. 10.50.135. DUTY OF CARE. (a) A person who is a manager or a 09 managing member of a limited liability company shall perform the duties of 10 management in good faith, in a manner the person reasonably believes to be in the best 11 interests of the company, and with the care, including reasonable inquiry, that an 12 ordinarily prudent person in a like position would use under similar circumstances. 13 Except as provided in (b) of this section, the person is entitled to rely on information, 14 opinions, reports, or statements, including financial statements and other financial data, 15 in each case prepared or presented by 16 (1) an employee of the company whom the director reasonably believes 17 to be reliable and competent in the matters presented; or 18 (2) counsel, public accountants, or other professionals or experts as to 19 matters that the person reasonably believes to be within the professional's or expert's 20 competence. 21 (b) A person is not acting in good faith under (a) of this section if the person 22 has knowledge concerning the matter in question that makes reliance otherwise 23 permitted by (a) of this section unwarranted. 24 Sec. 10.50.140. CONFLICTS OF INTEREST. (a) A contract or other 25 transaction between a limited liability company and a manager or managing member 26 of a limited liability company, or between a limited liability company and a limited 27 liability company, foreign limited liability company, corporation, firm, or association 28 in which a manager or managing member of the company has a material financial 29 interest, is not void or voidable because the manager or managing member or the other 30 company, firm, or association are parties or because the manager or managing member 31 is present at the meeting that authorizes, approves, or ratifies the contract or
01 transaction, if the material facts as to the transaction and as to the interest of the 02 manager or managing member are fully disclosed or known to the members and the 03 contract or transaction is approved by the members in good faith, with the interested 04 manager or managing member not being entitled to vote. 05 (b) The fact that a manager or managing member of a limited liability 06 company is a manager or managing member of another entity involved in the 07 transaction does not alone constitute a material financial interest within the meaning 08 of this section. A manager or managing member is not interested within the meaning 09 of this section in a decision fixing the compensation of another manager or managing 10 member as a manager or managing member of the company, notwithstanding the fact 11 that the first manager or managing member is also receiving compensation from the 12 company. 13 (c) A contract or other transaction between a manager or managing member 14 and a limited liability company or association of which one or more managers or 15 managing members of the company are managers or managing members is not void 16 or voidable because the managers or managing members are present at the meeting that 17 authorizes, approves, or ratifies the contract or transaction, if the material facts of the 18 transaction and the manager's or managing member's other management position are 19 fully disclosed or known to the members and the members authorize, approve, or ratify 20 the contract or transaction in good faith by a sufficient vote without counting the vote 21 of the common manager or managing member or the contract or transaction is 22 approved by the members in good faith. This subsection does not apply to contracts 23 or transactions covered by (a) of this section. 24 (d) Interested or common managers or managing members may be counted in 25 determining the presence of a quorum at a meeting that authorizes, approves, or ratifies 26 a contract or transaction. 27 (e) Nothing in this section affects the prohibitions or restraints imposed by 28 AS 45.50.562 - 45.50.596. 29 Sec. 10.50.145. LOANS TO MANAGERS, MANAGING MEMBERS, AND 30 EMPLOYEES. (a) A loan may not be extended by a limited liability company to an 31 employee without authorization by the company's members. A loan may not be
01 extended to a manager or a managing member of a limited liability company without 02 the approval of two-thirds of the company's members. An employee who is also a 03 manager or managing member is considered a manager or managing member for 04 purposes of this section. A member is not disqualified from voting on a loan to a 05 member as a manager or managing member because of personal interest. 06 (b) A loan to a manager, managing member, or employee and a loan secured 07 by the limited liability company interests of the company may not be made unless the 08 loan would be permissible as a distribution under AS 10.50.290 - 10.50.345. A loan 09 under this subsection impairs the retained earnings or paid-in capital accounts to the 10 extent of the loan. 11 (c) For purposes of this section, a loan may consist of cash, securities, or 12 personal or real property. 13 (d) If a limited liability company acts as a guarantor on a loan to a manager, 14 managing member, or employee, the guarantee is treated as a loan under this section. 15 (e) A manager, managing member, or employee of an affiliated limited liability 16 company is a manager, managing member, or employee of the lending company for 17 purposes of this section. 18 (f) A loan is to be judged by the duties of managers and managing members 19 to act in good faith in a manner reasonably believed to be in the best interests of the 20 company and with the care, including reasonable inquiry, that an ordinarily prudent 21 person in a like position would use under similar circumstances. 22 Sec. 10.50.148. INDEMNIFICATION OF MANAGERS, MANAGING 23 MEMBERS, EMPLOYEES, AND AGENTS; INSURANCE. (a) A limited liability 24 company may indemnify a person who was, is, or is threatened to be made a party to 25 a completed, pending, or threatened action or proceeding, whether civil, criminal, 26 administrative, or investigative, other than an action by or in the right of the company, 27 by reason of the fact that the person is or was a manager, managing member, 28 employee, or agent of the company, or is or was serving at the request of the company 29 as a manager, managing member, employee, or agent of another limited liability 30 company, partnership, joint venture, trust, or other enterprise. Indemnification may 31 include reimbursement of expenses, attorney fees, judgments, fines, and amounts paid
01 in settlement actually and reasonably incurred by the person in connection with the 02 action or proceeding if the person acted in good faith and in a manner the person 03 reasonably believed to be in or not opposed to the best interests of the company, and, 04 with respect to a criminal action or proceeding, the person had no reasonable cause to 05 believe the conduct was unlawful. The termination of an action or proceeding by 06 judgment, order, settlement, conviction, or upon a plea of nolo contendere or its 07 equivalent, does not create a presumption that the person did not act in good faith and 08 in a manner which the person reasonably believed to be in or not opposed to the best 09 interests of the company, and, with respect to a criminal action or proceeding, the 10 person had reasonable cause to believe that the conduct was unlawful. 11 (b) A limited liability company may indemnify a person who was, is, or is 12 threatened to be made a party to a completed, pending, or threatened action by or in 13 the right of the company to procure a judgment in its favor by reason of the fact that 14 the person is or was a manager, managing member, employee, or agent of the 15 company, or is or was serving at the request of the company as a manager, managing 16 member, employee, or agent of another limited liability company, partnership, joint 17 venture, trust, or other enterprise. Indemnification may include reimbursement for 18 expenses and attorney fees actually and reasonably incurred by the person in 19 connection with the defense or settlement of the action if the person acted in good 20 faith and in a manner the person reasonably believed to be in or not opposed to the 21 best interests of the company. Indemnification may not be made in respect of any 22 claim, issue, or matter as to which the person has been adjudged to be liable for 23 negligence or misconduct in the performance of the person's duty to the company 24 except to the extent that the court in which the action was brought determines upon 25 application that, despite the adjudication of liability, in view of all the circumstances 26 of the case, the person is fairly and reasonably entitled to indemnity for expenses that 27 the court considers proper. 28 (c) To the extent that a manager, managing member, employee, or agent of a 29 limited liability company has been successful on the merits or otherwise in defense of 30 an action or proceeding referred to in (a) or (b) of this section, or in defense of a 31 claim, issue, or matter in the action or proceeding, the manager, managing member,
01 employee, or agent shall be indemnified against expenses and attorney fees actually 02 and reasonably incurred in connection with the defense. 03 (d) Unless otherwise ordered by a court, indemnification under (a) or (b) of 04 this section may only be made by a company upon a determination that 05 indemnification of the manager, managing member, employee, or agent is proper in 06 the circumstances because the manager, managing member, employee, or agent has 07 met the applicable standard of conduct set out in (a) and (b) of this section. The 08 determination shall be made by 09 (1) the members by a majority vote of a quorum consisting of members 10 who were not parties to the action or proceeding; or 11 (2) independent legal counsel in a written opinion if a quorum under 12 (1) of this subsection is 13 (A) not obtainable; or 14 (B) obtainable but a majority of disinterested members so 15 directs. 16 (e) The company may pay or reimburse the reasonable expenses incurred in 17 defending a civil or criminal action or proceeding in advance of the final disposition 18 in the manner provided in (d) of this section if 19 (1) in the case of a manager or managing member, the manager or 20 managing member furnishes the company with a written affirmation of a good faith 21 belief that the standard of conduct described in AS 10.50.135(a) has been met; 22 (2) the manager, managing member, employee, or agent furnishes the 23 company a written unlimited general undertaking, executed personally or on behalf of 24 the individual, to repay the advance if it is ultimately determined that an applicable 25 standard of conduct was not met; and 26 (3) a determination is made that the facts then known to those making 27 the determination would not preclude indemnification under this chapter. 28 (f) The indemnification provided by this section is not exclusive of any other 29 rights to which a person seeking indemnification may be entitled under a bylaw, 30 agreement, vote of members or disinterested managers or managing members, or 31 otherwise, both as to action in the official capacity of the person and as to action in
01 another capacity while holding the office. The right to indemnification continues as 02 to a person who has ceased to be a manager, managing member, employee, or agent, 03 and inures to the benefit of the heirs, executors, and administrators of the person. 04 (g) A limited liability company may purchase and maintain insurance on behalf 05 of a person who is or was a manager, managing member, employee, or agent of the 06 company, or is or was serving at the request of the company as a manager, managing 07 member, employee, or agent of another limited liability company, partnership, joint 08 venture, trust, or other enterprise against any liability asserted against the person and 09 incurred by the person in that capacity, or arising out of that status, whether or not the 10 company has the power to indemnify the person against the liability under the 11 provisions of this section. 12 Sec. 10.50.150. AUTHORIZATION OF COMPANY AFFAIRS. (a) Unless 13 otherwise provided in an operating agreement of the company, the company's articles 14 of organization, or by this chapter, if the company is not managed by a manager, the 15 consent of more than one-half of all of the members of a limited liability company is 16 required to decide the affairs of the company. 17 (b) Unless otherwise provided in an operating agreement of the company or 18 by this chapter, if an operating agreement of the company names more than one 19 manager for the company, the consent of more than one-half of the number of 20 managers of a limited liability company is required to decide the affairs of the 21 company. 22 (c) Notwithstanding (a) and (b) of this section, and unless another level of 23 member consent is required in an operating agreement of the company, the consent of 24 two-thirds of the members of a limited liability company is required to 25 (1) amend the articles of organization; 26 (2) amend an operating agreement of the company; or 27 (3) authorize a manager or member to perform an act on behalf of the 28 company that contravenes an operating agreement of the company, including an act 29 that contravenes a provision of the operating agreement that expressly limits the 30 purposes, affairs, or conduct of the affairs of the company. 31 (d) For the purposes of (c) of this section, the required level of consent
01 established by an operating agreement may not be less than a majority of the members. 02 ARTICLE 6. ADMISSION AND WITHDRAWAL OF MEMBERS. 03 Sec. 10.50.155. ADMISSION OF MEMBERS. A person may become a 04 member in a limited liability company if the person acquires a limited liability 05 company interest 06 (1) directly from the limited liability company 07 (A) in compliance with an operating agreement of the company; 08 or 09 (B) with the written consent of all of the members of the 10 company if an operating agreement of the company does not provide for 11 acquiring an interest directly from the company; or 12 (2) by assignment of the interest by a company member in compliance 13 with AS 10.50.165. 14 Sec. 10.50.160. EFFECTIVE DATE OF ADMISSION. The effective date of 15 the admission of a member to a limited liability company is the later of the date 16 (1) when the company is organized; 17 (2) established in an operating agreement of the company; or 18 (3) when the person's admission is reflected in the records of the 19 company if an operating agreement of the company does not establish an effective 20 date. 21 Sec. 10.50.165. AUTHORIZATION FOR ASSIGNEE TO BECOME 22 MEMBER. (a) Unless otherwise provided in an operating agreement of the company, 23 an assignee of a limited liability company interest may not become a member unless 24 all other members consent. 25 (b) An operating agreement of the company may specify the manner for 26 evidencing the consent required by (a) of this section. If an operating agreement does 27 not specify the manner for evidencing the consent, the consent is evidenced by a 28 written instrument that is dated and signed by the members. 29 Sec. 10.50.170. RIGHTS, POWERS, AND LIABILITIES OF ASSIGNEE 30 WHO BECOMES A MEMBER. (a) An assignee who becomes a member has, to the 31 extent assigned, the rights and powers of a member under the articles of organization,
01 an operating agreement, and this chapter, and is subject to the restrictions and 02 liabilities of a member under the articles of organization, an operating agreement, and 03 this chapter. 04 (b) In addition to the liabilities imposed under (a) of this section, an assignee 05 of a limited liability company interest who becomes a member of the company is liable 06 for an obligation of the assignor to make a contribution under AS 10.50.280 that is not 07 imposed by the articles of organization, an operating agreement, or otherwise by this 08 chapter. 09 (c) Notwithstanding (a) and (b) of this section, an assignee who becomes a 10 member is not liable for liabilities that are unknown to the assignee when the assignee 11 becomes a member and that cannot be determined from the written records of the 12 company maintained under AS 10.50.860. 13 Sec. 10.50.180. RIGHTS OF ASSIGNOR WHEN ASSIGNEE BECOMES A 14 MEMBER. Unless otherwise provided in an operating agreement of the company, 15 when an assignee of a member's limited liability company interest becomes a member 16 of the company with respect to the assignor's entire interest, the assignor ceases to be 17 a member or to have the power to exercise the rights of a member. 18 Sec. 10.50.185. VOLUNTARY TERMINATION OF MEMBERSHIP. (a) A 19 person's membership in a limited liability company terminates if the person withdraws 20 voluntarily from the company. 21 (b) Unless an operating agreement of the company provides that a member 22 may not withdraw voluntarily from the company, a member of a limited liability 23 company may withdraw as a member voluntarily at any time by giving 30 days' 24 written notice to the other members, or by giving other notice that is established by 25 an operating agreement of the company. 26 Sec. 10.50.190. WITHDRAWAL BEFORE END OF TERM OR 27 UNDERTAKING. Unless otherwise provided in an operating agreement of the 28 company, if a limited liability company has a definite term or particular undertaking, 29 the withdrawal of a member of the company before the end of the term or the 30 accomplishment of the undertaking is a breach of the operating agreement. 31 Sec. 10.50.195. REMEDIES FOR WRONGFUL WITHDRAWAL. (a) If the
01 voluntary withdrawal of a member with the power to withdraw from the company 02 breaches an operating agreement of the company, or if the withdrawal occurs as a 03 result of otherwise wrongful conduct of the member, a limited liability company may 04 recover from the withdrawing member damages that are for the breach of the operating 05 agreement or that result from the wrongful conduct, including the reasonable costs of 06 obtaining replacement of any services the withdrawn member was obligated to 07 perform. 08 (b) A limited liability company may offset the damages authorized under (a) 09 of this section against the amount that is otherwise distributable to the withdrawing 10 member, and may pursue other remedies allowed in an operating agreement of the 11 company or otherwise available under applicable law. 12 Sec. 10.50.205. REMOVAL OF MEMBER. (a) A person's membership in 13 a limited liability company may not be terminated except as provided by (b) or (c) of 14 this section. 15 (b) Except as provided in (c) of this section, a person's membership in a 16 limited liability company terminates if the person assigns all of the person's interest 17 in the company and if a majority of the members who have not assigned their interests 18 in the company authorize the removal of the person as a member. 19 (c) If an operating agreement of the company provides for the removal of a 20 member with or without cause, a person's membership in a limited liability company 21 terminates if the person is removed as a member in the manner and under the 22 circumstances provided in the agreement. 23 Sec. 10.50.210. EFFECT OF DEATH OR INCOMPETENCY ON 24 MEMBERSHIP. Unless otherwise provided in an operating agreement or by the 25 written consent of all of the members at the time, the membership of a member of a 26 limited liability company who is an individual terminates if the member dies, or if a 27 court of competent jurisdiction enters an order adjudicating the member incompetent 28 to manage the member's person or property. 29 Sec. 10.50.215. TERMINATION OF TRUST OR DISTRIBUTION OF 30 INTEREST BY ESTATE MEMBERSHIP. (a) Unless otherwise provided in an 31 operating agreement of the company or by the written consent of all of the members
01 of the company at the time, the limited liability company membership held by a trust 02 or trustee terminates when the trust terminates. In this subsection, "terminates" does 03 not include the substitution of a new trustee. 04 (b) Unless otherwise provided in an operating agreement of the company or 05 by the written consent of all of the members of the company at the time, the limited 06 liability company membership held by an estate terminates when the estate's entire 07 limited liability company interest is distributed by the fiduciary of the estate. 08 Sec. 10.50.220. TERMINATION ON DISSOLUTION OF MEMBER. (a) 09 Unless otherwise provided in an operating agreement of the company or by the written 10 consent of all of the members of the company at the time, a limited liability company 11 membership of a member that is a separate limited liability company terminates when 12 the member dissolves and begins to wind up its affairs. 13 (b) Unless otherwise provided in an operating agreement of the company or 14 by the written consent of all of the members of the company at the time, a limited 15 liability company membership of a member that is a corporation terminates when the 16 corporation is dissolved and 90 days lapse without reinstatement. 17 Sec. 10.50.240. EFFECT OF ELECTION. If an election to continue a limited 18 liability company until a certain date or event is made under AS 10.50.085(a), 19 10.50.185 - 10.50.220 do not apply to the termination of the membership of a member 20 unless the member is also a manager of the company. 21 ARTICLE 7. RELATIONSHIP TO THIRD PARTIES. 22 Sec. 10.50.250. AGENCY POWER OF MEMBERS AND MANAGERS. (a) 23 Except as provided in (b) and (c) of this section, a member of a limited liability 24 company is an agent of the company for the purpose of conducting the company's 25 affairs. A member's act, including the execution of an instrument in the name of the 26 company, that appears to be performed in the usual and customary way of conducting 27 business, binds the company, unless the member does not in fact have the authority to 28 act for the company in the particular matter and the person with whom the member 29 is dealing knows that the member does not have the authority to act for the company 30 in the particular matter. 31 (b) If a limited liability company is managed by a manager, a member is not,
01 solely by reason of being a member, an agent of the company. 02 (c) If a limited liability company is managed by a manager, a manager is an 03 agent of a limited liability company for the purpose of conducting its affairs, and a 04 manager's act, including the execution of an instrument in the name of the company, 05 that appears to be performed in the usual and customary way of conducting business 06 binds the company, unless the manager does not in fact have the authority to act for 07 the company in the particular matter and the person with whom the manager is dealing 08 knows that the manager does not have the authority to act for the company in the 09 particular matter. 10 (d) A limited liability company manager's or member's act that does not 11 appear to be performed in the usual and customary way of conducting business does 12 not bind the company, unless the act is authorized by an operating agreement of the 13 company when the act is performed or at another time. 14 (e) A limited liability company manager's or member's act that contravenes 15 a restriction on the manager's or member's authority does not bind the company with 16 regard to persons who know about the restriction. 17 Sec. 10.50.255. ADMISSIONS OF MEMBERS AND MANAGERS. (a) 18 Except as provided in (b) of this section, an admission or representation made by a 19 member of a limited liability company about the affairs of the company is evidence 20 against the company if the admission or representation is within the scope of the 21 member's authority under this chapter. 22 (b) If a limited liability company is managed by a manager, an admission or 23 representation made by a 24 (1) manager about the affairs of the company is evidence against the 25 company if the admission or representation is within the scope of the manager's 26 authority under this chapter; and 27 (2) member, acting solely in the capacity of a member, is not evidence 28 against the company. 29 Sec. 10.50.260. LIMITED LIABILITY COMPANY CHARGED WITH 30 KNOWLEDGE OF OR NOTICE TO MEMBER OR MANAGER. (a) Except as 31 provided in (b) and (c) of this section, and except for a fraud on the company
01 committed by or with the consent of the member who has the knowledge or receives 02 the notice, the following operate as notice to or knowledge of a limited liability 03 company: 04 (1) notice given to a company member of a matter relating to the 05 affairs of the company; 06 (2) the knowledge of a company member acting in the particular matter, 07 whether acquired while a member or known at the time of becoming a member; and 08 (3) the knowledge of a company member who reasonably could and 09 should have communicated the knowledge to a member acting in the particular matter. 10 (b) If the company is managed by a manager, the following operate as notice 11 to or knowledge of a limited liability company, except for a fraud on the company 12 committed by or with the consent of the manager who has the knowledge or receives 13 the notice: 14 (1) notice given to a manager of a matter relating to the business or 15 affairs of the limited liability company; 16 (2) the knowledge of the manager acting in the particular matter, 17 acquired while a manager or known at the time of becoming a manager; and 18 (3) the knowledge of a company manager who reasonably could and 19 should have communicated the knowledge to the manager acting in the particular 20 matter. 21 (c) If the company is managed by a manager, notice to, or the knowledge of, 22 a member of a limited liability company while the member is acting solely in the 23 capacity of a member does not operate as notice to or knowledge of the company. 24 Sec. 10.50.265. LIABILITY OF MEMBERS TO THIRD PARTIES. A person 25 who is a member of a limited liability company is not liable, solely by reason of being 26 a member, under a judgment, decree, or order of a court, or in another manner, for a 27 liability of the company, whether the liability arises in contract, tort, or another form, 28 or for the acts or omissions of another member, manager, agent, or employee of the 29 company. 30 ARTICLE 8. CONTRIBUTIONS. 31 Sec. 10.50.275. CONSIDERATION FOR COMPANY INTERESTS. (a)
01 Except as provided in (b) of this section, an interest in a limited liability company may 02 be issued for money, other tangible or intangible property, or labor or services actually 03 performed for the company. 04 (b) An interest in a limited liability company may not be issued for a 05 promissory note or future services. 06 Sec. 10.50.280. LIABILITY FOR CONTRIBUTIONS. (a) Notwithstanding 07 AS 09.25.010 - 09.25.020, a promise by a member of a limited liability company to 08 contribute property or services to the company is not enforceable unless the promise 09 is stated in a writing signed by the member. 10 (b) Unless otherwise provided in an operating agreement of the company, a 11 member of a limited liability company is liable for performing an enforceable promise 12 made to the company to contribute property or services, even if the member is unable 13 to perform because of death, disability, or another reason. 14 (c) If a member of a limited liability company does not make the member's 15 required contribution of property or services, the member shall, at the option of the 16 company, contribute cash equal to that portion of value of the required contribution 17 that has not been made. 18 (d) Unless otherwise provided in an operating agreement of the company, an 19 assignor of a limited liability company interest is not released from the assignor's 20 liability to the company under this section, even if the assignee becomes a member 21 with respect to the assigned interest. 22 Sec. 10.50.285. COMPROMISE OF CONTRIBUTION. Unless otherwise 23 provided in an operating agreement of the company, the obligation of a member to 24 make a contribution to a limited liability company may not be compromised, unless 25 all of the other members consent to the compromise. 26 ARTICLE 9. DISTRIBUTIONS. 27 Sec. 10.50.290. SHARING OF PROFITS. Subject to AS 10.50.305 - 28 10.50.325, and unless otherwise provided in an operating agreement of the company, 29 a member of a limited liability company shall be repaid the member's contribution to 30 capital and shares equally in the profits and other assets of the company remaining 31 after all liabilities, including liabilities to members, are satisfied.
01 Sec. 10.50.295. INTERIM DISTRIBUTIONS UNDER OPERATING 02 AGREEMENT. Subject to AS 10.50.305 - 10.50.325, if a limited liability company 03 makes an interim distribution of its assets to its members, the company shall make the 04 distribution to the members in the manner provided in an operating agreement of the 05 company. The operating agreement of the company may authorize different interim 06 distributions for different classes of members. 07 Sec. 10.50.300. INTERIM DISTRIBUTIONS WITHOUT OPERATING 08 AGREEMENT. Subject to AS 10.50.305 - 10.50.325, if an operating agreement of the 09 company does not provide for the interim distribution of the assets of the company, 10 when a limited liability company makes an interim distribution of its assets, the interim 11 distributions to each member of the company shall be equal. 12 Sec. 10.50.305. DISTRIBUTIONS: CONDITIONS. (a) A limited liability 13 company may not make a distribution to the company's members unless 14 (1) the amount of the retained earnings of the company immediately 15 before the distribution equals or exceeds the amount of the proposed distribution; or 16 (2) immediately after giving effect to the distribution the 17 (A) sum of the assets of the company, exclusive of goodwill, 18 capitalized research and development expenses, evidences of debts owing from 19 a manager or managing member of the company or secured by the company's 20 own limited liability company interests, and deferred charges, would be at least 21 equal to one and one-fourth times its liabilities, not including deferred taxes, 22 deferred income, and other deferred credits; and 23 (B) current assets of the company would be at least equal to its 24 current liabilities or, if the average of the earnings of the company before taxes 25 on income and before interest expense for the two preceding fiscal years was 26 less than the average of the interest expense of the company for those fiscal 27 years, at least equal to one and one-fourth its current liabilities. 28 (b) For the purposes of this section, 29 (1) in determining the amount of the assets of the company, profits 30 derived from an exchange of assets may not be included unless the assets received are 31 currently realizable in cash;
01 (2) "current assets" may include net amounts determined in good faith 02 by the manager, or by the members, if the company is not managed by a manager, that 03 may reasonably be expected to be received from customers during the 12-month period 04 used in calculating current liabilities under existing contractual relationships obligating 05 the customers to make fixed or periodic payments during the term of the contracts after 06 in each case giving effect to future costs not then included in current liabilities but 07 reasonably expected to be incurred by the company in performing the contracts. 08 (c) For the purposes of this section, the amount of a distribution payable in 09 property shall be determined on the basis of the value at which the property is carried 10 on the company's financial statements in accordance with this section. 11 (d) Only a company that classifies its assets as current assets and fixed assets 12 in accordance with this section is governed by (a)(2)(B) of this section. 13 (e) For the purposes of this section, a determination that a distribution is not 14 prohibited may be based either on financial statements prepared in accordance with 15 generally accepted accounting principles or on the basis of accounting practices and 16 principles that are fair and reasonable in the circumstances. 17 (f) Financial statements and determinations prepared or arrived at in 18 accordance with generally accepted accounting principles are fair and reasonable. The 19 fair and reasonable quality of statements and determinations prepared under other 20 practices and principles shall be proved by the company. 21 Sec. 10.50.308. PROHIBITED DISTRIBUTION: INABILITY TO MEET 22 MATURING DEBTS AND LIABILITIES. A limited liability company may not make 23 a distribution to the company's members if the company is, or as a result of the 24 distribution would be, likely to be unable to meet its liabilities as they mature. 25 Sec. 10.50.310. PROHIBITED DISTRIBUTION ON JUNIOR INTERESTS; 26 LIQUIDATION PREFERENCE. A limited liability company may not make a 27 distribution to the company's members on any limited liability company interests of 28 a class or series that are junior to outstanding limited liability company interests of 29 another class or series with respect to distribution of assets on liquidation if, after 30 giving effect to the distribution, the excess of its assets, exclusive of goodwill, 31 capitalized research, and development expenses, evidences of debts owing from a
01 manager or managing member or secured by the company's own limited liability 02 company interests, and deferred charges, over its liabilities, not including deferred 03 taxes, deferred income and other deferred credits, would be less than the liquidation 04 preference of all limited liability company interests having a preference on liquidation 05 over the class or series to which the distribution is made. 06 Sec. 10.50.315. ADDITIONAL RESTRICTIONS IN ARTICLES OR 07 OPERATING AGREEMENT. Nothing in this chapter prohibits additional restrictions 08 upon the purchase or redemption of a company's own limited liability company 09 interests by provision in the articles of organization or operating agreement of the 10 limited liability company or in another agreement entered into by the company. 11 Sec. 10.50.320. LIABILITY OF MEMBERS RECEIVING PROHIBITED 12 DISTRIBUTIONS; SUIT AGAINST MEMBERS. (a) A member of a limited liability 13 company who receives a distribution prohibited by this chapter with knowledge of 14 facts indicating the impropriety of the distribution is liable to the company for the 15 benefit of all of the creditors or members entitled to institute an action under (b) of 16 this section for the amount received by the member with interest at the legal rate on 17 judgments until paid. The liability of the member under this subsection may not 18 exceed the liabilities of the company owed to nonconsenting creditors at the time of 19 the violation and the injury suffered by nonconsenting members. 20 (b) Suit may be brought in the name of the company to enforce the liability 21 to 22 (1) creditors arising under (a) of this section for a violation of 23 AS 10.50.305 or 10.50.308 against any or all members liable by any one or more 24 creditors of the corporation whose debts or claims arose before the time of the 25 distribution to members and who have not consented to the distribution, whether or not 26 they have reduced their claims to judgment; or 27 (2) members arising under (a) of this section for a violation of 28 AS 10.50.305 against any or all members liable by any one or more members holding 29 preferred limited liability company interests outstanding at the time of the distribution 30 who have not consented to the distribution, without regard to the provisions of 31 AS 10.50.735.
01 (c) A member sued under this section may compel contribution from all other 02 members liable under this section. 03 (d) This section does not affect the liability that a member may have under 04 other applicable law. 05 Sec. 10.50.325. IDENTIFICATION OF DISTRIBUTION IN NOTICE TO 06 MEMBERS. A distribution other than one chargeable to retained earnings shall be 07 identified in a notice to members as being made from a source other than retained 08 earnings, and shall include a statement of the accounting treatment of the distribution. 09 The notice must accompany the distribution or shall be given within three months after 10 the end of the fiscal year in which the distribution is paid. 11 Sec. 10.50.330. TIME FOR INTERIM DISTRIBUTIONS. A member of a 12 limited liability company is entitled to receive interim distributions under AS 10.50.295 13 - 10.50.300 at the times or upon the happening of the events specified in an operating 14 agreement of the company, or at the times determined by the members or managers 15 under AS 10.50.150. 16 Sec. 10.50.335. DISTRIBUTIONS WHEN A PERSON CEASES TO BE A 17 MEMBER. (a) Except for termination under AS 10.50.205, when the limited liability 18 company membership of a person terminates and the termination does not cause 19 dissolution of the company, the company shall distribute to the person any distribution 20 that the person was entitled to receive before the person's membership terminated. 21 (b) In addition to a distribution made under (a) of this section, a limited 22 liability company shall distribute to a terminating member the amount of the member's 23 limited liability company interest. If an operating agreement of the company does not 24 provide the amount of the distribution or a method for determining the amount of the 25 distribution, the company shall make the distribution within a reasonable time after 26 termination and the amount of the distribution is the fair value of the member's limited 27 liability company interest as of the date of termination based on the member's right 28 to share in distributions from the company. 29 (c) If an election to continue a limited liability company until a certain date 30 or event is in effect under AS 10.50.085, then (a) and (b) of this section do not apply 31 to the termination of the membership of a member unless the member is also a
01 manager of the company. 02 Sec. 10.50.340. DISTRIBUTION IN KIND. (a) Unless otherwise provided 03 in an operating agreement of the company, a member, regardless of the nature of the 04 member's contribution, may not demand and receive a distribution from a limited 05 liability company in a form other than cash. 06 (b) Unless otherwise provided in an operating agreement of the company, a 07 limited liability company may not compel a member of the company to accept from 08 the company a distribution of a company asset in a form other than cash to the extent 09 that the percentage of the asset distributed to the member exceeds the percentage that 10 the member would have shared in a cash distribution equal to the value of the asset 11 at the time of distribution. 12 Sec. 10.50.345. RIGHT TO DISTRIBUTION. When a member of a limited 13 liability company is entitled to receive a distribution from the company, the member 14 is a creditor of the company with respect to the distribution, and is entitled to all 15 remedies available to a creditor of the company. 16 Sec. 10.50.348. INAPPLICABILITY TO WINDING UP AND 17 INVOLUNTARY OR VOLUNTARY DISSOLUTION. AS 10.50.290 - 10.50.340 do 18 not apply in a proceeding for winding up and dissolution of a limited liability 19 company. 20 ARTICLE 10. OWNERSHIP AND TRANSFER OF PROPERTY. 21 Sec. 10.50.350. OWNERSHIP OF COMPANY PROPERTY. (a) Property 22 transferred to or otherwise acquired by a limited liability company is the property of 23 the company and is not the property of the members individually. 24 (b) A limited liability company may acquire, hold, and convey property, 25 including real property, in the name of the company. If a limited liability company 26 acquires an interest in property, the company shall acquire the interest in the name of 27 the company. If a limited liability company acquires an interest in property, the 28 company holds the title to the interest and not the members individually. 29 Sec. 10.50.355. TRANSFER OF PROPERTY. (a) Except as provided in (b) 30 of this section, a limited liability company may transfer the property of the company 31 if the company uses an instrument of transfer signed by a member of the company in
01 the name of the company. 02 (b) If the company is managed by a manager, 03 (1) title to limited liability company property may be transferred by an 04 instrument of transfer signed by a manager of the company in the name of the 05 company; and 06 (2) a member, solely by reason of being a member, does not have the 07 authority to transfer the property of the company. 08 Sec. 10.50.360. RECOVERY OF PROPERTY. A limited liability company 09 may recover property transferred under AS 10.50.355 if the company proves that the 10 execution of the instrument of transfer did not bind the company under AS 10.50.250, 11 unless the property has been transferred by the initial transferee, or by a person 12 claiming through the initial transferee, to a subsequent transferee who gives value 13 without having notice that the person who signed the instrument of initial transfer 14 lacked authority to bind the company. 15 Sec. 10.50.370. NATURE OF INTEREST IN COMPANY. A limited liability 16 company interest is personal property. 17 Sec. 10.50.375. ASSIGNMENT OF INTEREST IN COMPANY. (a) A 18 person may assign a limited liability company interest in whole or in part. 19 (b) The assignment of a limited liability company interest entitles the assignee 20 to receive, to the extent assigned, only the distributions to which the assignor is 21 entitled. 22 (c) The assignment of a limited liability company interest does not dissolve 23 the company or entitle the assignee to participate in the management and affairs of the 24 company, to become a member, or to exercise the rights of a member. Unless the 25 assignee of the interest becomes a member with respect to the interest, the assignor 26 continues to be a member and may exercise the rights of a member, subject to the 27 members' right to remove the assignor under AS 10.50.205. 28 (d) Unless the assignee becomes a member, an assignee of a limited liability 29 company interest is not liable as a member solely as a result of the assignment. 30 (e) The assignor of a limited liability company interest is not released, solely 31 as a result of the assignment, from the assignor's liability as a member.
01 (f) An operating agreement may establish terms different from those in (a) - 02 (e) of this section. 03 (g) Unless otherwise provided in an operating agreement of the company, the 04 pledge of, or granting of a security interest, lien, or other encumbrance in or against, 05 a part or all of a member's limited liability company interest is not an assignment 06 under this section and does not terminate the membership or the rights and powers of 07 the member. 08 Sec. 10.50.380. RIGHTS OF JUDGMENT CREDITORS. (a) If a judgment 09 creditor of a limited liability company member applies to a court of competent 10 jurisdiction, the court may charge the member's limited liability company interest for 11 payment of the unsatisfied amount of the judgment. 12 (b) To the extent a limited liability company interest is charged under (a) of 13 this section, the judgment creditor has only the rights of an assignee of the member's 14 interest. 15 Sec. 10.50.385. POWERS OF ESTATE OF A DECEASED OR 16 INCOMPETENT MEMBER. If a member who is an individual dies or if a court of 17 competent jurisdiction determines the member to be incompetent to manage the 18 member's person or property, the member's executor, administrator, guardian, 19 conservator, or other legal representative has the rights of an assignee of the member's 20 interest. 21 Sec. 10.50.390. POWERS OF DISSOLVED OR TERMINATED ENTITY. 22 If a member who is not an individual terminates or is dissolved, the member's legal 23 representative or successor has the rights of an assignee of the member's interest. 24 ARTICLE 11. DISSOLUTION. 25 Sec. 10.50.400. DISSOLUTION. A limited liability company is dissolved and 26 its affairs shall be wound up if 27 (1) an event occurs that is identified in the articles of organization or 28 an operating agreement as causing dissolution; if an election under AS 10.50.085(a) 29 is in effect, the event does not cause dissolution unless the event is identified in the 30 articles or operating agreement before or at the same time the election is stated in the 31 articles;
01 (2) all of the members of the company consent in writing unless an 02 election under AS 10.50.085(a) is in effect; 03 (3) a person's membership in the company terminates, unless 04 (A) the business of the company is continued by the consent of 05 all of the remaining members on or before the 90th day following the 06 termination of the membership; 07 (B) an operating agreement provides otherwise; or 08 (C) an election under AS 10.50.085(a) is in effect and 09 (i) the election provides that the termination does not 10 cause the company to dissolve; or 11 (ii) the person whose membership terminates is not a 12 manager of the company; or 13 (4) the superior court enters a decree for judicial dissolution of the 14 company under AS 10.50.405. 15 Sec. 10.50.405. DISSOLUTION BY COURT. On application by or for a 16 member of a limited liability company, the superior court may order the company 17 dissolved if the court determines that it is not reasonably practicable for the company 18 to conduct its affairs in conformity with an operating agreement of the company. 19 Sec. 10.50.410. AUTHORITY TO WIND UP. Unless otherwise provided in 20 an operating agreement, the affairs of a limited liability company may be wound up 21 by the 22 (1) members or managers who have authority under AS 10.50.110 to 23 manage the company before dissolution; or 24 (2) superior court on the application of a member of the company or 25 the member's legal representative or assignee if 26 (A) a member or manager identified in (1) of this subsection 27 has engaged in wrongful conduct; or 28 (B) other cause is shown. 29 Sec. 10.50.415. ACTS OF WINDING UP. Unless otherwise provided in an 30 operating agreement of the company, a person winding up the affairs of a limited 31 liability company may, in the name of, and for and on behalf of, the company,
01 (1) prosecute and defend court actions; 02 (2) settle and close the affairs of the company; 03 (3) dispose of and transfer the property of the company; 04 (4) discharge the liabilities of the company; and 05 (5) distribute to the members the assets of the company. 06 Sec. 10.50.420. AGENCY POWER OF MANAGER OR MEMBER AFTER 07 DISSOLUTION. (a) Except as provided in (b) - (d) of this section, after dissolution 08 of a limited liability company, a member having authority to wind up the company's 09 affairs can bind the company by an act that 10 (1) is appropriate for winding up the company's affairs or completing 11 transactions unfinished at dissolution; or 12 (2) would have bound the company if the company had not been 13 dissolved, if the other party to the transaction does not have notice of the dissolution; 14 in this paragraph, filing the articles of dissolution is presumed to constitute notice of 15 the dissolution. 16 (b) A member's act that is not binding on the limited liability company under 17 (a) of this section binds the company if the act is otherwise authorized by the 18 company. 19 (c) A member's act that violates a restriction on the member's authority does 20 not bind the member's limited liability company with regard to a person who knows 21 about the restriction, even if the member's act would otherwise be binding under (a) 22 of this section or is otherwise authorized. 23 (d) If the company is managed by a manager, a member does not have the 24 authority to bind the company if the member is acting solely in the capacity of a 25 member, and a manager of the company can bind the company by an act that 26 (1) is appropriate for winding up the company's affairs or completing 27 transactions unfinished at dissolution; or 28 (2) would have bound the company if the company had not been 29 dissolved if the other party to the transaction does not have notice of the dissolution; 30 in this paragraph, filing the articles of dissolution is presumed to constitute notice of 31 the dissolution.
01 Sec. 10.50.425. DISTRIBUTION OF ASSETS. Upon the winding up of a 02 limited liability company, the assets of the company shall be distributed in the 03 following manner and order of priority: 04 (1) payment, or adequate provision for payment, to creditors, including, 05 to the extent permitted by law, members who are creditors and not covered by (2) of 06 this section, in satisfaction of the liabilities of the company; 07 (2) unless otherwise provided in an operating agreement of the 08 company, payment to members or former members in satisfaction of the company's 09 liabilities for distributions under AS 10.50.295 - 10.50.335; 10 (3) unless otherwise provided in an operating agreement of the 11 company, to members and former members in the following order of priority: 12 (A) for the return of their contributions; and 13 (B) in proportion to the members' respective rights to share in 14 distributions from the company before dissolution. 15 Sec. 10.50.430. ARTICLES OF DISSOLUTION. After the dissolution of a 16 limited liability company under AS 10.50.400, the limited liability company may file 17 articles of dissolution with the department. The articles must state 18 (1) the name of the company; 19 (2) the date of filing of the company's articles of organization and of 20 any amendments to the articles of organization; 21 (3) the reason for filing the articles of dissolution; 22 (4) the effective date, which must be a specific date, of the articles of 23 dissolution if the articles of dissolution are not to be effective when filed; and 24 (5) other information determined appropriate by the members or 25 managers filing the articles. 26 Sec. 10.50.435. KNOWN CLAIMS AGAINST DISSOLVED LIMITED 27 LIABILITY COMPANY. (a) Upon dissolution, a limited liability company may 28 dispose of the known claims against it by filing articles of dissolution under 29 AS 10.50.430 and following the procedures described in this section. 30 (b) A dissolved limited liability company shall notify its known claimants in 31 writing of the dissolution at any time after the effective date of dissolution. The
01 written notice must 02 (1) describe the information that must be included in the claim; 03 (2) provide a mailing address where the claim may be sent; 04 (3) state the deadline, which may not be fewer than 120 days after the 05 later of the date of the written notice or the filing of articles of dissolution under 06 AS 10.50.430, for the company to receive the claim; and 07 (4) state that the claim is barred if it is not received by the company 08 by the deadline. 09 (c) A claim against a limited liability company is barred if a claimant 10 (1) who was given written notice under (b) of this section does not 11 deliver the claim to the company by the deadline; or 12 (2) whose claim is rejected by the company does not begin a 13 proceeding to enforce the claim within 90 days after the date of the rejection notice. 14 (d) In this section, "claim" does not include a contingent liability or a claim 15 based on an event occurring after the effective date of dissolution. 16 Sec. 10.50.440. UNKNOWN CLAIMS AGAINST DISSOLVED LIMITED 17 LIABILITY COMPANY. (a) If a limited liability company publishes a newspaper 18 notice in accordance with (b) of this section and files articles of dissolution under 19 AS 10.50.430, the following claims are barred unless the claimant commences a 20 proceeding to enforce the claim against the company within three years after the later 21 of the publication date of the newspaper notice or the filing of the articles of 22 dissolution: 23 (1) a claim by a claimant who did not receive written notice under 24 AS 10.50.435; 25 (2) a claim sent within the time allowed if the company does not act 26 on the claim; 27 (3) a claim that is contingent or based on an event occurring after the 28 effective date of dissolution. 29 (b) The notice published under (a) of this section shall be published once in 30 a newspaper of general circulation in the judicial district where the company's 31 principal office, or its registered office if it does not have a principal office in this
01 state, is located in this state, and must 02 (1) describe the information that must be included in a claim; 03 (2) provide a mailing address where the claim may be sent; 04 (3) state that a claim against the company is barred unless a proceeding 05 to enforce the claim is begun within three years after the publication of the notice; and 06 (4) request that persons with claims against the company present them 07 in writing to the company as provided in the notice. 08 (c) A claim may be enforced under this section 09 (1) against the company to the extent of the company's undistributed 10 assets; or 11 (2) if the company's assets have been distributed in liquidation, against 12 a member of the company to the extent of the member's pro rata share of the claim 13 or of the assets of the company distributed to the member in liquidation, whichever is 14 less; a member's total liability for all claims under this section may not exceed the 15 total amount of assets of the company that are distributed to the member. 16 ARTICLE 12. MERGER AND CONSOLIDATION. 17 Sec. 10.50.500. AUTHORITY FOR MERGER OR CONSOLIDATION. 18 Unless otherwise provided in an operating agreement of the company, and subject to 19 the law applicable to the other limited liability company, a limited liability company 20 may merge or consolidate with or into a limited liability company or a foreign limited 21 liability company. 22 Sec. 10.50.505. CONVERSION OF RIGHTS AND INTERESTS. The rights 23 of or interests in a limited liability company that is a party to a merger or 24 consolidation may be exchanged for or converted into cash, property, obligations, 25 rights or interests in the surviving or resulting limited liability company. 26 Sec. 10.50.510. APPROVAL OF MERGER OR CONSOLIDATION. (a) 27 Unless otherwise provided in an operating agreement of the company, a limited 28 liability company may not approve a proposed merger or consolidation unless the 29 merger or consolidation is approved by all of the members of the company. 30 (b) A foreign limited liability company that is a party to a proposed merger 31 or consolidation may not approve the merger or consolidation unless the merger or
01 consolidation is approved in the manner and by the vote required by the law applicable 02 to the foreign limited liability company. 03 (c) A party to a merger or consolidation under this chapter may abandon the 04 merger or consolidation as provided in the merger or consolidation agreement. 05 Sec. 10.50.515. DELIVERY OF ARTICLES OF MERGER OR 06 CONSOLIDATION. The limited liability company that survives or results from a 07 merger or consolidation under this chapter shall file with the department articles of 08 merger or consolidation signed by each limited liability company that is a party to the 09 merger or consolidation. 10 Sec. 10.50.520. CONTENTS OF ARTICLES OF MERGER OR 11 CONSOLIDATION. The articles of merger or consolidation required by AS 10.50.515 12 must state 13 (1) the name of each limited liability company that is a party to the 14 merger or consolidation; 15 (2) the jurisdiction where each limited liability company that is a party 16 to the merger or consolidation was organized; 17 (3) that an agreement of merger or consolidation has been approved and 18 signed by each limited liability company that is a party to the merger or consolidation; 19 (4) the name of the surviving or resulting limited liability company; 20 (5) the future effective date, which must be a specific date, of the 21 merger or consolidation if the merger or consolidation is not effective when the articles 22 are filed; 23 (6) that the agreement of merger or consolidation is on file at a place 24 of business of the surviving or resulting limited liability company and the address of 25 its place of business; 26 (7) that a copy of the agreement of merger or consolidation will be 27 furnished by the surviving or resulting limited liability company on request and 28 without cost to a person holding an interest in a limited liability company that is a 29 party to the merger or consolidation; 30 (8) if the surviving or resulting limited liability company is not 31 organized under the laws of this state, a statement that the surviving or resulting
01 limited liability company 02 (A) agrees that it may be served with process in this state in a 03 proceeding to enforce an obligation of a company that is a party to the merger 04 or consolidation and that was organized under the laws of this state, and to 05 enforce an obligation of the surviving or resulting company; 06 (B) appoints the department as its agent for service of process 07 in an enforcement proceeding under (A) of this paragraph; and 08 (C) the address to which a copy of the process may be mailed 09 to the surviving or resulting company by the department. 10 Sec. 10.50.525. EXECUTION OF ARTICLES OF MERGER OR 11 CONSOLIDATION. Articles of merger or consolidation shall be signed by a limited 12 liability company that is a party to the merger or consolidation. 13 Sec. 10.50.530. EQUIVALENT TO ARTICLES OF DISSOLUTION. Articles 14 of merger or consolidation constitute articles of dissolution for a limited liability 15 company that is not the surviving or resulting limited liability company in the merger 16 or consolidation. 17 Sec. 10.50.535. EFFECTIVE DATE OF MERGER OR CONSOLIDATION. 18 A merger or consolidation under AS 10.50.500 - 10.50.565 takes effect upon the later 19 of the effective date of the filing of the articles of merger or consolidation or an 20 effective date stated in the articles of merger or consolidation. 21 Sec. 10.50.540. USE OF MERGER OR CONSOLIDATION AGREEMENT 22 TO AMEND OR ADOPT OPERATING AGREEMENT. (a) An agreement of merger 23 or consolidation approved under AS 10.50.510 may amend an operating agreement of 24 a limited liability company or adopt a new operating agreement for the company if the 25 company is the surviving or resulting limited liability company in the merger or 26 consolidation. 27 (b) An approved agreement of merger or consolidation may provide that the 28 operating agreement of a limited liability company that is a party to the merger or 29 consolidation, including a limited liability company organized for the purpose of 30 consummating a merger or consolidation, is the operating agreement of a limited 31 liability company that is the surviving or resulting limited liability company.
01 (c) An amendment to an operating agreement or the adoption of a new 02 operating agreement under this section is effective when the merger or consolidation 03 is effective. 04 (d) This subsection is not intended to limit the accomplishment of a merger 05 or of a matter referred to in this section by other means provided for in an operating 06 agreement or in another agreement or as otherwise permitted by law. 07 Sec. 10.50.545. GENERAL EFFECTS OF MERGER OR CONSOLIDATION. 08 (a) When a merger or consolidation becomes effective, the limited liability companies 09 that are parties to a merger or consolidation agreement become a single limited 10 liability company that, in the case of a merger, is the limited liability company named 11 in the plan of merger as the surviving limited liability company, and, in the case of a 12 consolidation, is the limited liability company named in the plan of consolidation as 13 the resulting limited liability company. 14 (b) When a merger or consolidation becomes effective, a limited liability 15 company that is a party to the merger or consolidation agreement and that is not the 16 surviving or resulting limited liability company ceases to exist. 17 (c) The surviving limited liability company of a merger or the limited liability 18 company resulting from a consolidation possesses all the rights, privileges, immunities, 19 and powers of each limited liability company that is a party to the merger or 20 consolidation agreement and is subject to all the restrictions, disabilities, and duties of 21 each limited liability company that is a party to the merger or consolidation to the 22 extent the rights, privileges, immunities, powers, franchises, restrictions, disabilities, 23 and duties apply to the type of limited liability company that is the surviving limited 24 liability company or the resulting limited liability company. 25 Sec. 10.50.550. EFFECT OF MERGER OR CONSOLIDATION ON 26 PROPERTY OF COMPANIES. The real and personal property, the debts due, 27 including promises to make capital contributions and subscriptions for shares, other 28 choses in action, and the other interests of the limited liability companies that are 29 parties to a merger or consolidation belong to the surviving or resulting limited 30 liability company without further action by the companies. 31 Sec. 10.50.555. EFFECT OF MERGER OR CONSOLIDATION ON
01 LIABILITIES. (a) The surviving or resulting limited liability company in a merger 02 or consolidation is liable for the liabilities of the limited liability companies that are 03 parties to the merger or consolidation. 04 (b) A claim, action, or other proceeding that exists at the time of the merger 05 or consolidation and that is pending by or against a limited liability company that is 06 a party to a merger or consolidation may be pursued as if the merger or consolidation 07 had not taken place, or the surviving or resulting limited liability company may be 08 substituted in the claim, action, or other proceeding. 09 Sec. 10.50.560. RIGHTS OF CREDITORS. The rights of creditors and liens 10 on the property of a limited liability company that is a party to a merger or 11 consolidation are not impaired by the merger or consolidation. 12 Sec. 10.50.565. CONVERSION AT MERGER OR CONSOLIDATION. (a) 13 Upon a merger or consolidation, the limited liability company interests that are to be 14 converted or exchanged into interests, cash, obligations, or other property under the 15 terms of a merger or consolidation agreement are converted as provided by the merger 16 or consolidation agreement. 17 (b) Upon a merger or consolidation, the former holders of interests converted 18 under (a) of this section have the rights provided in the merger or consolidation 19 agreement or otherwise provided by law. 20 Sec. 10.50.590. DEFINITION. In AS 10.50.500 - 10.50.590, "limited liability 21 company" means a limited liability company organized under this chapter or a foreign 22 limited liability company. 23 ARTICLE 13. FOREIGN LIMITED LIABILITY COMPANIES. 24 Sec. 10.50.600. GOVERNING LAW. (a) Subject to the constitution of this 25 state, the law of the state or other jurisdiction under which a foreign limited liability 26 company is organized governs the organization and internal affairs of the company. 27 (b) The department may not deny registration to a foreign limited liability 28 company because of differences between the law of this state and the law of the state 29 or other jurisdiction under which the foreign limited liability company is organized. 30 Sec. 10.50.605. REGISTRATION REQUIRED. Before conducting affairs in 31 this state, a foreign limited liability company shall register with the department. To
01 register, the company shall deliver to the department an application for registration as 02 a foreign limited liability company. 03 Sec. 10.50.610. EXECUTION OF REGISTRATION APPLICATION. An 04 application for registration filed by a foreign limited liability company under 05 AS 10.50.605 shall be signed by a person who is authorized by the law of the state or 06 other jurisdiction where the company was organized to sign the application. 07 Sec. 10.50.615. CONTENTS OF REGISTRATION APPLICATION. (a) An 08 application for the registration of a foreign limited liability company must state 09 (1) the name of the foreign limited liability company and, if different, 10 the name the company proposes to use in this state; 11 (2) the state or other jurisdiction where the company was organized, 12 and date of its organization; 13 (3) the name and address of the company's registered agent; 14 (4) that the department is appointed the agent of the company for 15 service of process if the foreign limited liability company fails to appoint or maintain 16 a registered agent under AS 10.50.635; 17 (5) the address of the office required by the state or other jurisdiction 18 of the company's organization to be maintained in that state or other jurisdiction, or, 19 if the state or other jurisdiction does not require an office to be maintained in that state 20 or other jurisdiction, the principal office of the company; 21 (6) the purpose the company proposes to pursue in the conduct of its 22 affairs in this state and the codes from the identification code established under 23 AS 10.06.870 that most closely describe the activities in which the company will 24 engage in this state; 25 (7) the names and addresses of the managers of the company, or, if the 26 company is not managed by a manager, the names and addresses of the members of 27 the company; 28 (8) the name and address of each person owning at least a five percent 29 interest in the company and the percentage of interest owned by that person in the 30 company; and 31 (9) that the company is a foreign limited liability company.
01 (b) In addition to the information required by (a) of this section, an application 02 must include a certificate from the jurisdiction where the company was organized that 03 indicates that the company is in good standing in that jurisdiction. 04 Sec. 10.50.620. NAME. The department may not file the application for 05 registration of a foreign limited liability company unless the name of the company 06 satisfies the requirements of AS 10.50.020 - 10.50.025. If the name under which a 07 foreign limited liability is organized in the state or other jurisdiction of its organization 08 does not satisfy the requirements of AS 10.50.020 - 10.50.025, the company may 09 register under AS 10.50.605 if the company uses an assumed name that is available 10 to the company under this chapter and that satisfies the requirements of AS 10.50.020 - 10.50.025. 11 Sec. 10.50.623. CHANGE OF NAME. If a foreign limited liability company 12 that is registered under this chapter changes its name to one under which it may not 13 register under this chapter, the registration of the company is suspended and the 14 company may not conduct affairs in this state until it has changed its name to a name 15 available to it under the laws of this state. 16 Sec. 10.50.625. AMENDMENT OF REGISTRATION. A foreign limited 17 liability company may amend its registration by filing articles of amendment with the 18 department that are signed by a person who has the authority to sign them under the 19 law of the state or other jurisdiction of the company's organization. 20 Sec. 10.50.630. CONTENTS OF ARTICLES OF AMENDMENT. (a) The 21 articles of amendment filed by a foreign limited liability company must state the 22 (1) name of the company; 23 (2) date the original application for registration was filed; and 24 (3) amendment. 25 (b) The application for registration may be amended in any way if the 26 application for registration as amended contains only provisions that this chapter allows 27 to be contained in an application for registration at the time of amendment. 28 Sec. 10.50.635. REGISTERED OFFICE AND REGISTERED AGENT OF 29 FOREIGN COMPANY. A foreign limited liability company registered under this 30 chapter shall have and continuously maintain in the state a registered 31 (1) office that may be, but need not be, the same as its place of
01 business in this state; and 02 (2) agent, who may be either an individual resident in this state whose 03 business office is identical to the registered office, a corporation organized under 04 AS 10.06, or a foreign corporation authorized to transact business in this state, that has 05 a business office identical to the registered office. 06 Sec. 10.50.637. CHANGE OF REGISTERED OFFICE OR REGISTERED 07 AGENT OF FOREIGN COMPANY. A foreign limited liability company registered 08 under this chapter may change its registered office or change its registered agent, or 09 both, upon filing with the department a signed statement setting out 10 (1) the name of the company; 11 (2) the address of its registered office; 12 (3) the address of the new registered office if the address of its 13 registered office is to be changed; 14 (4) the name of its registered agent; 15 (5) the name of its new registered agent if its registered agent is to be 16 changed; 17 (6) that the address of its registered office and the address of the 18 business office of its registered agent, as changed, will be identical; and 19 (7) that the change is authorized by the company. 20 Sec. 10.50.638. FILING OF STATEMENT OF CHANGE. If the department 21 finds that the statement conforms to the provisions of this chapter, the department shall 22 file the statement, and upon the filing, the change of address of the registered office, 23 or the appointment of a new registered agent, or both, as the case may be, becomes 24 effective. 25 Sec. 10.50.640. SERVICE OF PROCESS ON FOREIGN COMPANY. The 26 registered agent appointed by a foreign limited liability company registered under this 27 chapter shall be an agent of the company upon whom process, notice, or demand 28 required or permitted by law to be served upon the company may be served. 29 Sec. 10.50.645. SERVICE ON COMMISSIONER. When a foreign limited 30 liability company that is registered under this chapter, or that conducts affairs in this 31 state without being registered under this chapter, fails to appoint or maintain a
01 registered agent in this state, when a registered agent cannot with reasonable diligence 02 be found at the registered office, or when the registration of a foreign company is 03 suspended or revoked, the commissioner is an agent upon whom process, notice, or 04 demand may be served. Service is made upon the commissioner as provided in 05 AS 10.50.065(b). 06 Sec. 10.50.655. AUTHORITY TO CANCEL REGISTRATION. A foreign 07 limited liability company registered in this state may cancel its registration by filing 08 an application for cancellation with the department. 09 Sec. 10.50.660. CONTENTS OF APPLICATION FOR CANCELLATION. 10 An application for cancellation filed by a foreign limited liability company must state 11 (1) the name of the company and the state or other jurisdiction where 12 the company was organized; 13 (2) that the company is not conducting affairs in this state; 14 (3) that the company cancels its registration in this state; 15 (4) that the company revokes the authority of its registered agent for 16 service of process in this state and consents that service of process may subsequently 17 be made on the company by service on the commissioner for a cause of action arising 18 in this state during the time the company was registered in this state; and 19 (5) an address for mailing a copy of a process to the company. 20 Sec. 10.50.665. FORM, MANNER, AND EXECUTION OF APPLICATION 21 FOR CANCELLATION. The application for cancellation must be in the form and 22 manner designated by the department and shall be signed on behalf of the foreign 23 limited liability company by 24 (1) a person with authority to sign the application under the law of the 25 state or other jurisdiction of its organization; or 26 (2) if the company is controlled by a receiver, trustee, or other 27 court-appointed fiduciary, by the receiver, trustee, or other fiduciary. 28 Sec. 10.50.670. EFFECT OF CANCELLATION OF REGISTRATION. The 29 cancellation of a registration under this chapter does not terminate the authority of the 30 commissioner to accept service of process on the foreign limited liability company 31 with respect to causes of action arising out of the company's conduct of affairs in this
01 state. 02 Sec. 10.50.675. CONDUCTING AFFAIRS WITHOUT REGISTRATION. (a) 03 A foreign limited liability company conducting affairs in this state may not maintain 04 an action or other proceeding in a court of this state until it has registered in this state. 05 (b) The failure of a foreign limited liability company to register in this state 06 does not 07 (1) impair the validity of a contract or act of the company; 08 (2) affect the right of another party to a contract of the company to 09 maintain an action or proceeding on the contract; or 10 (3) prevent the company from defending an action or other proceeding 11 in a court of this state. 12 Sec. 10.50.690. LIABILITY FOR FEES AND PENALTIES. A foreign limited 13 liability company that conducts affairs in this state without registration is liable to the 14 department for the following fees and penalties for the full or partial years when it 15 conducts affairs in this state without registration: 16 (1) the fees that would have been imposed by this chapter on the 17 company if the company had been registered under this chapter; or 18 (2) the penalties imposed by this chapter. 19 Sec. 10.50.700. CIVIL PENALTY. (a) A foreign limited liability company 20 that conducts affairs in this state without registration is subject to a civil penalty 21 payable to the state not to exceed $10,000 for each calendar year, including a partial 22 year, the company conducts affairs in this state without being registered under this 23 chapter. 24 (b) The civil penalty imposed in (a) of this section may be recovered in an 25 action brought in the superior court by the attorney general. 26 Sec. 10.50.710. INJUNCTIVE RELIEF. (a) Upon application to the court, 27 if a court finds that a foreign limited liability company has conducted affairs in this 28 state in violation of this chapter, the court may issue, in addition to imposing a civil 29 penalty, an injunction restraining the company from conducting further affairs in this 30 state and from further exercising the company's rights and privileges in this state. 31 (b) An injunction issued under (a) of this section may continue until the civil
01 penalties, interest, and court costs assessed by the court have been paid and until the 02 foreign limited liability company otherwise complies with this chapter. 03 Sec. 10.50.715. NONLIABILITY OF MEMBER OR MANAGER. A member 04 or manager of a foreign limited liability company is not liable for the debts and 05 obligations of the company solely because the company conducts affairs in this state 06 without registration. 07 Sec. 10.50.720. TRANSACTIONS NOT CONSTITUTING CONDUCTING 08 AFFAIRS. The activities of a foreign limited liability company that are not considered 09 to be conducting affairs in this state for the purposes of AS 10.50.600 - 10.50.720 10 include 11 (1) maintaining, defending, or settling a court action or other 12 proceeding or a claim; 13 (2) holding meetings of the members or managers of the company; 14 (3) maintaining bank accounts; 15 (4) selling through independent contractors; 16 (5) soliciting or procuring orders by mail, through employees, agents, 17 or otherwise, if the orders require acceptance outside the state before becoming binding 18 contracts; 19 (6) creating as borrower or lender, or acquiring, indebtedness or 20 mortgages or other security interests in real or personal property; 21 (7) securing or collecting debts, or enforcing rights in property securing 22 debts; 23 (8) conducting an isolated transaction that is completed within 30 days 24 and that is not part of a course of repeated transactions of a similar nature; or 25 (9) conducting affairs in interstate commerce. 26 ARTICLE 14. SUITS BY AND AGAINST LIMITED 27 LIABILITY COMPANIES. 28 Sec. 10.50.730. ACTIONS AGAINST COMPANIES. A court action may be 29 brought by or against a limited liability company. The court action may be brought 30 in the name of the company. 31 Sec. 10.50.735. AUTHORITY TO SUE ON BEHALF OF COMPANY. (a)
01 Except as provided in AS 10.50.320, and unless otherwise provided in an operating 02 agreement of the company, a person may not bring a court action on behalf of a 03 limited liability company in the name of the company unless the person is authorized 04 under (b) or (c) or this section to bring the action. 05 (b) Whether or not the company is managed by a manager, a member of a 06 limited liability company may bring a court action on behalf of the company in the 07 name of the company if the member is authorized to bring the action by more than 08 one-half of all of the members of the company who are eligible to consent to the 09 authorization, unless a larger number of the members are required under 10 AS 10.50.145(c) for the authorization. When determining whether the required number 11 of members consents under AS 10.50.145, the total number of all members does not 12 include a member who has an interest in the outcome of the action that is adverse to 13 the interest of the company and the member with the adverse interest is excluded from 14 determining the authorization. 15 (c) A manager of a limited liability company may bring a court action on 16 behalf of the company in the name of the company if the manager is authorized to 17 bring the action by the consent required under AS 10.50.145 of the members eligible 18 to consent to the authorization. When determining the number of managers required 19 to consent under AS 10.50.145, the number does not include a manager who has an 20 interest in the outcome of the action that is adverse to the interest of the company and 21 the manager with the adverse interest is excluded from determining the authorization. 22 ARTICLE 15. BIENNIAL REPORT. 23 Sec. 10.50.750. BIENNIAL REPORT REQUIRED. A limited liability 24 company and a foreign limited liability company conducting affairs in this state shall 25 file a biennial report within the time established by this chapter. 26 Sec. 10.50.755. CONTENTS OF BIENNIAL REPORT. A biennial report 27 must set out 28 (1) the name of the company and the state or country where it is 29 organized; 30 (2) the address of the registered office of the company in this state, and 31 the name of its registered agent in this state at that address, and, in the case of a
01 foreign limited liability company, the address of its principal office in the state or 02 country where it is organized; 03 (3) the names and addresses of the managers of the company, or, if the 04 company is not managed by a manager, the names and addresses of the members of 05 the company. 06 Sec. 10.50.760. FILING OF BIENNIAL REPORT. (a) A biennial report 07 required by AS 10.50.750 shall be filed with the department and is due before 08 January 2 of the filing year. A limited liability company filing articles of organization 09 and a foreign limited liability company registering during an even-numbered year shall 10 file the biennial report each even-numbered year. A limited liability company filing 11 articles of organization and a foreign limited liability company registering during an 12 odd-numbered year shall file the biennial report each odd-numbered year. The biennial 13 report is delinquent if not filed before February 1 of each odd- or even-numbered year 14 as provided in this section. 15 (b) Proof to the satisfaction of the department that on or before February 1 the 16 report was deposited in the United States mail in a sealed envelope, properly addressed 17 with postage prepaid, is compliance with (a) of this section. 18 (c) The department shall file the report if it conforms to the requirements of 19 this chapter. If the department finds that the report does not conform to the 20 requirements of this chapter, the report shall promptly be returned to the company for 21 necessary corrections. 22 (d) Upon receipt of a form from the department, a limited liability company 23 or a foreign limited liability company shall file a biennial report within six months 24 after original incorporation or authorization to transact business in this state. 25 Sec. 10.50.765. FILING NOTICE OF CHANGE OF MANAGERS OR 26 MANAGING MEMBERS. (a) In the event of a change of the manager of a limited 27 liability company or of a foreign limited liability company registered under this 28 chapter, or of a member of the company, if the members manage the company, during 29 the first year of the biennial reporting period, the company shall file a notice of change 30 amending the biennial report of the company before the following January 2. 31 (b) The notice shall be filed with the department and shall state the name and
01 current mailing address of the manager or member not included in the company's last 02 filed biennial report, and the name of the person replaced and the office held. 03 ARTICLE 16. MISCELLANEOUS PROVISIONS. 04 Sec. 10.50.800. COMPANY CERTIFICATES. An operating agreement of a 05 limited liability company may authorize the company to issue a certificate as evidence 06 of a limited liability company interest. An operating agreement may also authorize 07 and provide for the assignment or transfer of the interest represented by the certificate. 08 Sec. 10.50.810. SUBMISSION OF DOCUMENTS TO DEPARTMENT. 09 When a document is required or allowed to be delivered to or filed with the 10 department under this chapter, the person delivering the document shall deliver to the 11 department the required fee, the original signed document, and an exact copy of the 12 document. 13 Sec. 10.50.820. FILING OF DOCUMENTS BY DEPARTMENT. (a) If the 14 department determines that a document filed under this chapter conforms to the filing 15 requirements of this chapter, the department shall 16 (1) mark on the original signed document and on the exact copy the 17 word "filed" and the date and time of the document's acceptance for filing; 18 (2) retain the original signed document in the department's files; and 19 (3) return the exact copy to the person who filed the document or to 20 the person's representative. 21 (b) The department may not file a document if the requirements of this section 22 are not met. 23 Sec. 10.50.830. DISAPPROVAL OF WRITING BY DEPARTMENT; 24 APPEAL. If the department fails to approve articles of organization, amendment, 25 merger, consolidation, or dissolution, or any other document required by this chapter 26 to be approved by the department, the department shall, within 10 days after the 27 delivery of the document to the department, give written notice of disapproval to the 28 person, limited liability company, or foreign limited liability company, delivering the 29 document, and specifying the reasons for disapproval. The person or company may 30 appeal the disapproval to the superior court. 31 Sec. 10.50.840. EXECUTION OF DOCUMENTS. (a) Unless otherwise
01 provided in this chapter, a document required by this chapter to be filed with the 02 department by or for a limited liability company shall be signed by 03 (1) a manager of the company if the company is managed by a 04 manager; 05 (2) a member of the company if the articles of organization do not 06 provide that the company is managed by a manager; 07 (3) a person organizing the company if the company is not organized; 08 (4) the fiduciary if the company is controlled by a receiver, trustee, or 09 other court-appointed fiduciary. 10 (b) A person signing a document filed with the department under this chapter 11 shall state beneath or opposite the signature the person's name and the capacity in 12 which the person signs. 13 (c) A person signing a document filed with the department under this chapter 14 may sign as an attorney-in-fact, but is not required to provide or file with the 15 department a document authorizing the person to act as attorney-in-fact for the signing 16 of a document. 17 Sec. 10.50.850. FILING AND OTHER FEES. The department shall charge 18 fees established by the department by regulation adopted under AS 44.62 19 (Administrative Procedure Act) for 20 (1) filing the original articles of organization; 21 (2) filing articles of amendment; 22 (3) filing articles of merger or consolidation; 23 (4) filing articles of dissolution; 24 (5) issuing a document not otherwise covered by this section; 25 (6) furnishing a copy of a document; 26 (7) accepting an application for reservation of a name, or filing a notice 27 of the transfer or cancellation of a name reservation; 28 (8) filing a statement of change of address for a registered office or 29 registered agent; 30 (9) accepting service of a notice, demand, or process upon the 31 department;
01 (10) filing the application for registration of a foreign limited liability 02 company; 03 (11) registering a name, reserving a name, or renewing a name 04 registration under this chapter; or 05 (12) filing another document allowed or required under this chapter. 06 Sec. 10.50.860. MAINTENANCE OF RECORDS. Unless otherwise provided 07 in an operating agreement, a limited liability company shall keep at its principal place 08 of business 09 (1) current and past lists that state in alphabetical order the full name 10 and last known mailing address of every member and manager of the company; 11 (2) a copy of the company's articles of organization and amendments 12 to the articles, including a signed copy of a power of attorney used by a person who 13 signed articles of amendment for the company; 14 (3) a copy of the company's federal, state, and local income tax returns 15 and financial statements, if any, for the three most recent years or, if the returns and 16 statements are not prepared, a copy of the information and statements provided to, or 17 that should have been provided to, the members to enable the members to prepare their 18 federal, state, and local tax returns for the three-year period; 19 (4) a copy of any effective operating agreement of the company, 20 amendments to the agreement, and former operating agreements; 21 (5) unless contained in an operating agreement, 22 (A) a document stating the amount of cash contributed by a 23 member of the company, the agreed value of other property or services 24 contributed by a member, and when a member is to make additional 25 contributions; 26 (B) a document stating the events, if any, that cause the 27 company to be dissolved and its affairs wound up; and 28 (C) other documents that an operating agreement requires the 29 company to prepare. 30 Sec. 10.50.870. INSPECTION OF RECORDS. (a) A limited liability 31 company shall make its books and records of account, or certified copies of them,
01 reasonably available for inspection and copying at the registered office, principal 02 office, or principal place of business in the state by a member of the company. 03 Member inspection shall be upon written demand stating with reasonable particularity 04 the purpose of the inspection. The inspection may be in person or by agent or 05 attorney, at a reasonable time and for a proper purpose. Only books and records of 06 account, minutes, and the record of members directly connected to the stated purpose 07 of the inspection may be inspected or copied. 08 (b) A manager, or, if the company is not managed by a manager, a member, 09 who, or a limited liability company that, refuses to allow a member, or the agent or 10 attorney of the member, to examine and make copies from its books and records of 11 account, minutes, and record of members, for a proper purpose, is liable to the member 12 for a penalty in the amount of 10 percent of the value of the limited liability company 13 interests owned by the member or $5,000, whichever is greater, in addition to other 14 damages or remedy given the member by law. It is a defense to an action for 15 penalties under this section that the person suing has within two years sold or offered 16 for sale a list of members of the company or any other limited liability company or 17 has aided or abetted a person in procuring a list of members for this purpose, or has 18 improperly used information secured through a prior examination of the books and 19 records of account, minutes, or record of members of the company or any other limited 20 liability company, or was not acting in good faith or for a proper purpose in making 21 the person's demand. 22 (c) Nothing in this chapter impairs the power of a court, upon proof by a 23 member of a demand properly made and for a proper purpose, to compel the 24 production for examination by the member of the books and records of account, 25 minutes, and record of members of a limited liability company. 26 Sec. 10.50.880. DISCLOSURE OF INFORMATION. The members of a 27 limited liability company, if the articles of organization do not provide that the 28 company is managed by a manager, or the manager of the company, if the articles of 29 organization provide that the company is managed by a manager, shall provide, to the 30 extent just and reasonable under the circumstances, true and full information of all 31 matters that affect the members of a company to a member or to the legal
01 representative of a deceased member or a member under a legal disability. 02 Sec. 10.50.890. WAIVER OF NOTICE. If notice is required to be given to 03 a member or manager of a limited liability company under the provisions of this 04 chapter or under the provisions of the articles of organization or an operating 05 agreement of the company, a waiver of the notice in writing signed by the person 06 entitled to notice, whether before or after the time stated for notice, is equivalent to 07 the giving of notice. 08 ARTICLE 17. GENERAL PROVISIONS. 09 Sec. 10.50.900. REGULATIONS. In addition to the regulations the 10 department is required to adopt under this chapter, the department may adopt other 11 regulations under AS 44.62 (Administrative Procedure Act) to implement this chapter. 12 Sec. 10.50.910. INTERSTATE APPLICATION. A limited liability company 13 that is organized and existing under this chapter may conduct its affairs and exercise 14 the powers granted by this chapter in another jurisdiction, subject to the laws of that 15 jurisdiction. 16 Sec. 10.50.990. DEFINITIONS. In this chapter, unless the context indicates 17 otherwise, 18 (1) "articles of organization" means the articles of organization filed 19 under AS 10.50.070 and the articles as amended or restated; 20 (2) "commissioner" means the commissioner of commerce and 21 economic development; 22 (3) "corporation" means a corporation organized under the laws of this 23 or another state, or of this or another country; 24 (4) "department" means the Department of Commerce and Economic 25 Development; 26 (5) "filed," unless expressly provided otherwise, means filed with the 27 department; 28 (6) "foreign limited liability company" means an organization that is 29 (A) not incorporated; 30 (B) organized under the law of a state other than this state, or 31 under the law of a foreign country;
01 (C) organized under a statute that affords to each of its 02 members limited liability regarding the liabilities of the organization; and 03 (D) not required to be registered under a statute of this state 04 other than this chapter; 05 (7) "interim distribution" means a distribution of the assets of a limited 06 liability company to the company's members, except as provided under AS 10.50.335 07 and 10.50.425; 08 (8) "know" means to have actual knowledge or to know other facts that 09 demonstrate bad faith in the circumstances; this definition applies also to the 10 derivatives of "know," including "known," "unknown," and "knowledge"; 11 (9) "limited liability company" or "domestic limited liability company" 12 means an organization organized under this chapter; 13 (10) "limited liability company interest" means an interest in a limited 14 liability company issued under AS 10.50.275; 15 (11) "limited partnership" means a limited partnership organized under 16 AS 32.11 or under the law of another state or a foreign country; 17 (12) "manager" means a person who manages a limited liability 18 company, if the articles of organization provide that the company is managed by a 19 manager; 20 (13) "managing member" means a member of a limited liability 21 company if the company's articles of organization do not provide that the company is 22 managed by a manager; 23 (14) "member" means a person who has been admitted to membership 24 in a limited liability company under AS 10.50.155 - 10.50.160 and whose membership 25 has not terminated under AS 10.50.180 - 10.50.185 or 10.50.205 - 10.50.220; 26 (15) "operating agreement" means a written agreement among all of the 27 members of a limited liability company about conducting the affairs of the company; 28 (16) "property" includes cash; 29 (17) "state" means a state, territory, or possession of the United States, 30 and includes the District of Columbia, the Commonwealth of Puerto Rico, the Northern 31 Mariana Islands, Guam, the Virgin Islands, American Samoa, and the Trust Territory
01 of the Pacific Islands. 02 Sec. 10.50.995. SHORT TITLE. This chapter may be cited as the Alaska 03 Limited Liability Act. 04 * Sec. 2. AS 10.06.105(c) is amended to read: 05 (c) A person may not adopt a name that contains the word "corporation", 06 "incorporated", or "limited", or an abbreviation of one of these words, unless the 07 person has been issued a certificate of incorporation, or, in the case of a foreign 08 corporation, a certificate of authority, by the commissioner. This subsection does not 09 prohibit a limited liability company or a limited partnership from using the word 10 "limited" or an abbreviation of "limited" in its name. 11 * Sec. 3. AS 45.55.130(12) is amended to read: 12 (12) "security" means a note; stock; treasury stock; bond; debenture; 13 evidence of indebtedness; certificate of interest or participation in any profit-sharing 14 agreement; a limited liability company interest under AS 10.50; collateral-trust 15 certificates; preorganization certificate or subscription; transferable share; investment 16 contract; voting-trust certificate; certificate of deposit for a security; a certificate of 17 interest or participation in an oil, gas, or mining title or lease or in payments out of 18 production under the title or lease or in any sale of or indenture or bond or contract 19 for the conveyance of land or any interest in land; an option on a contract for the 20 future delivery of agricultural or mineral commodities or any other commodity offered 21 or sold to the public and not regulated by the Commodity Futures Trading 22 Commission; however, the contract or option is not subject to the provisions of 23 AS 45.55.070 if it is sold or purchased on the floor of a bona fide exchange or board 24 of trade and offered or sold to the public by a broker-dealer or agent registered under 25 this chapter; investment of money or money's worth including goods furnished or 26 services performed in the risk capital of a venture with the expectation of some benefit 27 to the investor where the investor has no direct control over the investment or policy 28 decision of the venture; or, in general, any interest or instrument commonly known as 29 a "security," or any certificate of interest or participation in, temporary or interim 30 certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, 31 any of the foregoing; "security" does not include an insurance or endowment policy
01 or annuity contract under which an insurance company promises to pay a fixed or 02 variable sum of money either in a lump sum or periodically for life or for some other 03 specified period; 04 * Sec. 4. This Act takes effect January 1, 1995.