Uniform Limited Liability Company Act of 2006

In 2006, the National Conference of Commissioners on Uniform State Laws (NCCUSL) recommended that the states enact legislation that would bring uniformity to various state laws dealing with the formation of a limited liability company (LLC). Individual states have the option to adopt these suggested provisions in their own laws. The NCCUSL report recommended uniformity in such areas as process service, annual reports, member liability and the dissolution of the company.

Process Service

Because a limited liability company is a legal entity in its own right, it may be subject to legal processes, including lawsuits that it may bring or may be brought against it. The 2006 Act recommends that you must appoint an agent and supply his business address at a location in the state where you are forming your LLC. All legal process papers, including official notices, may be served upon your agent there. Section 116 of the Act states that if you do not have a currently appointed agent, or if your agent cannot be located at the address you gave, then process papers are served upon the state's secretary of state, who will then send by registered mail a copy of the process papers to your LLC's designated business address.

Annual Report

According to section 209 of the Act, every LLC must deliver an an annual report to the secretary of state's office where it is registered. The report must include the street and mailing addresses of the LLC's process service agent, and the street and mailing address of its designated business office. A foreign LLC is one registered with another state or territory within the United States, or country or territory outside the United States. Foreign LLCs that maintain operations in a state covered by the Act must register as such in the states where they maintain business operations.

Liability Of Members

Limited liability companies are independent legal entities. Section 304 of the Act states that just because you are member of an LLC, or a manager appointed to administer an LLC, you are not automatically responsible for any debts or obligations of the LLC. However, this section of the Act does not excuse a member or manager for liability under certain circumstances. For example, a member or manager cannot, while acting on behalf of the LLC, defame a third party and claim that the third party may only have redress against the LLC. In this case, the member or manager is personally responsible for the defamation, and the third party can file a claim against him.

Dissolution

Section 708 of the Act states that in the event of a dissolution, the assets of an LLC must be distributed to any creditors and to meet any remaining obligations of the LLC. If any assets remain following this distribution, these assets are distributed to the members. In the first instance, contributions made by each member must be returned, and if any surplus remains, each member receives an equal share, paid as a monetary distribution, according to section 708 (d).

References

• University Of Pennsylvania Law School: Uniform Limited Liability Company Act
• Uniform Limited Liability Company Act: Service Of Process
• Uniform Limited Liability Company Act: Annual Report
• Uniform Limited Liability Company Act: Liability Of Members And Managers
• Uniform Limited Liability Company Act: Distribution Of Assets In Winding Up

Resources

• The National Conference of Commissioners on Uniform State Laws: Uniform Law Commission