HOUSE BILL No. 4606 April 9, 1997, Introduced by Rep. Profit and referred to the Committee on Commerce. A bill to amend 1993 PA 23, entitled "Michigan limited liability company act," by amending sections 102, 103, 201, 202, 203, 204, 206, 207, 213, 301, 302, 303, 304, 305, 307, 308, 401, 402, 403, 404, 405, 501, 502, 503, 506, 509, 701, 702, 703, 704, 705, 706, 801, 808, 901, 902, 903, 909, 910, 1002, and 1101 (MCL 450.4102, 450.4103, 450.4201, 450.4202, 450.4203, 450.4204, 450.4206, 450.4207, 450.4213, 450.4301, 450.4302, 450.4303, 450.4304, 450.4305, 450.4307, 450.4308, 450.4401, 450.4402, 450.4403, 450.4404, 450.4405, 450.4501, 450.4502, 450.4503, 450.4506, 450.4509, 450.4701, 450.4702, 450.4703, 450.4704, 450.4705, 450.4706, 450.4801, 450.4808, 450.4901, 450.4902, 450.4903, 450.4909, 450.4910, 450.5002, and 450.5101), sections 701, 702, 703, 705, and 706 as amended by 1994 PA 410, and by adding sections 515, 705a, and 707. 02703'97 FDD 2 THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 102. (1) Unless the context requires otherwise, the 2 definitionscontainedin this section control the interpreta- 3 tion of this act. 4 (2) As used in this act: 5 (a) "Administrator" means thechief officerDIRECTOR of 6 the department ofcommerceCONSUMER AND INDUSTRY SERVICES or 7 his or her designated representative. 8 (b) "Articles of organization" means the original documents 9 filed to organize a limited liability company, as amended or 10 restated by certificates of correction, amendment, or merger, 11 restated articles, or other instruments filed or issued under any 12 statute. 13 (c)"Constituent company" means each limited liability com-14pany that is a party to a plan of merger."CONSTITUENT" MEANS A 15 PARTY TO A PLAN OF MERGER, INCLUDING THE SURVIVING PARTY. 16 (d) "Contribution" means anything of value that a person 17 contributes to the limited liability company as a prerequisite 18 for, or in connection with, membership, including cash, property, 19 services performed, or a promissory note or other binding obliga- 20 tion to contribute cash or property, or TO perform services. 21 (e) "Corporation" or "domestic corporation" meansa1 OR 22 MORE OF THE FOLLOWING: 23 (i) A corporation formed under the business corporation act, 24Act No. 284 of the Public Acts of 1972, being sections 450.110125to 450.2098 of the Michigan Compiled Laws, or a1972 PA 284, MCL 26 450.1101 TO 450.2098. 02703'97 3 1 (ii) A corporation existing on January 1, 1973 and formed 2 under another statute of this state for a purpose for which a 3 corporation may be formed under the business corporation act, 4 1972 PA 284, MCL 450.1101 TO 450.2098. 5 (iii) A CORPORATION FORMED UNDER THE PROFESSIONAL SERVICE 6 CORPORATION ACT, 1962 PA 192, MCL 450.221 TO 450.235. 7 (f) "Distribution" means a direct or indirect transfer of 8 money or other property or the incurrence of indebtedness by a 9 limited liability company to or for the benefit of its members or 10 assignees of its members in respect of the MEMBERS' membership 11 interests. 12 (g) "Foreign limited liability company" means a limited 13 liability company formed under laws other than the laws of this 14 state. 15 (h) "Foreign limited partnership" means a limited partner- 16 ship formed under laws other than the laws of this state. 17 (i) "Limited liability company" or "domestic limited liabil- 18 ity company" means an entity that is an unincorporated 19association having 2 or more members and isMEMBERSHIP 20 ORGANIZATION formed under this act. 21 (j) "Limited partnership" or "domestic limited partnership" 22 means a limited partnership formed under the Michigan revised 23 uniform limited partnership act,Act No. 213 of the Public Acts24of 1982, being sections 449.1101 to 449.2108 of the Michigan25Compiled Laws1982 PA 213, MCL 449.1101 TO 449.2108. 26 (k) "Manager" or "managers" means a person or persons 27 designated by the members of a limited liability company to 02703'97 4 1 manage the limited liability company as provided in the articles 2 of organization or IN an operating agreement. 3 (l) "Member" means a person with an ownership interest in, 4 AND WHO HAS BEEN ADMITTED TO, a limited liability companywith5 AS PROVIDED IN SECTION 501 AND WHO HAS the rights and obligations 6 specified under this act, OR, IN THE CASE OF A FOREIGN LIMITED 7 LIABILITY COMPANY, A PERSON WHO IS A MEMBER OF THE FOREIGN 8 LIMITED LIABILITY COMPANY IN ACCORDANCE WITH THE LAWS UNDER WHICH 9 THE FOREIGN LIMITED LIABILITY COMPANY IS ORGANIZED. 10 (m) "Membership interest" or "interest" means a member's 11 rights in the limited liability company, including, but not 12 limited to, the right to receive distributions of the limited 13 liability company's assets and any right to vote or participate 14 in management. 15 (n) "Operating agreement" means a valid written agreement of 16 the members OF A LIMITED LIABILITY COMPANY HAVING MORE THAN 1 17 MEMBER as to the affairs ofaTHE limited liability company and 18 the conduct of its business and includes any provision in the 19 articles of organization pertaining to the affairs ofaTHE 20 limited liability company and the conduct of its business. 21 (o) "Person" means an individual, partnership, limited 22 liability company, TRUST, CUSTODIAN, ESTATE, association, corpo- 23 ration, governmental entity, or any other legal entity. 24 (P) "SERVICES IN A LEARNED PROFESSION" MEANS SERVICES 25 RENDERED BY A CERTIFIED OR OTHER PUBLIC ACCOUNTANT, A DENTIST, AN 26 OSTEOPATHIC PHYSICIAN, A PHYSICIAN, A SURGEON, A DOCTOR OF 27 DIVINITY OR OTHER CLERGY, OR AN ATTORNEY-AT-LAW. 02703'97 5 1 (Q)(p)"Surviving company", "SURVIVING ENTITY", OR 2 "SURVIVOR" means the constituentcompanysurviving a merger, as 3 identified in the certificate of merger. 4 (R) "VOTE" MEANS AN AFFIRMATIVE VOTE, APPROVAL, OR CONSENT. 5 Sec. 103. (1) The original articles of organization shall 6 be signedin inkbyat least 2 of the1 OR MORE persons form- 7 ing the limited liability company. The names of the persons 8 signing the document shall be stated beneath or opposite their 9 signatures. 10 (2) Any other document required or permitted to be filed 11 under this act that is also required by this act to be executed 12 on behalf of the domestic limited liability company shall be 13 signedin inkby a manager of the company if management is 14 vested in 1 or more managers or by at least 1 member if manage- 15 mentis reserved toREMAINS IN the members. A document 16 required to be executed on behalf of a foreign limited liability 17 company shall be signedin inkby a person with authority to do 18 so under the laws of the jurisdiction of its organization. The 19 name of the person signing the document and the capacity in which 20 he or she signs shall be stated beneath or opposite his or her 21 signature. 22 (3) A person executing a document under this section may 23 sign the document by an attorney in fact. Powers of attorney 24 relating to the signing of a document by an attorney in fact need 25 not be sworn to, verified,oracknowledged,and need not be26 OR filed with the administrator. 02703'97 6 1 Sec. 201. A limited liability company may be formed under 2 this act for any lawful purpose for which a domestic corporation 3 or a domestic partnership could be formed, except as otherwise 4 providedin article 9 or otherBY law. A LIMITED LIABILITY 5 COMPANY FORMED TO PROVIDE SERVICES IN A LEARNED PROFESSION, OR 6 MORE THAN 1 LEARNED PROFESSION, SHALL COMPLY WITH ARTICLE 9. 7 Sec. 202. (1)TwoONE or moreof thepersons who will 8 be members may form a limited liability company by filing exe- 9 cuted articles of organization. 10 (2) The existence of the limited liability companyshall11beginBEGINS on the effective date of the articles of organiza- 12 tion as provided in section 104. Filing is conclusive evidence 13 that all conditions precedent required to be performed under this 14 acthave beenARE fulfilled and that the companyhas beenIS 15 formed under this act, except in an action or special proceeding 16 by the attorney general. 17 Sec. 203. (1) The articles of organization shall contain 18 all of the following: 19 (a) The name of the limited liability company. 20 (b) The purposes for which the limited liability company is 21 formed. It isasufficientcompliance with this subdivision22 to state substantially, alone or with specifically enumerated 23 purposes, that the limited liability company may engage in any 24 activity for which limited liability companies may be formed 25 under this act. 26 (c) The street address, and the mailing address if different 27 from the street address, of the limited liability company's 02703'97 7 1 initial registered office and the name of its initial resident 2 agent at that address. 3 (d) If the business of the limited liability company is to 4 be managed by managers, a statement that it is to besomanaged 5 BY MANAGERS. 6 (e) The maximum duration of the limited liability company, 7 WHICH MAY BE PERPETUAL. 8 (2) The articles of organization, at the discretion of the 9 organizers or members, may contain any provision not inconsistent 10 with this act or another statute of this state, including any 11 provision thatunder this actis required or permitted to be in 12 an operating agreement UNDER THIS ACT. 13 (3) The articlesorOF organization need not set out the 14 powers of the limited liability company as described in section 15 210. 16 Sec. 204. (1) The name of a domestic limited liability com- 17 pany shall contain the words "limited liability company" or 18containthe abbreviation "L.L.C." or "L.C.", WITH OR WITHOUT 19 PERIODS OR OTHER PUNCTUATION. 20 (2) The name of a domestic or foreign limited liability com- 21 pany formed under or subject to this act shall conform to all of 22 the following: 23 (a) Shall not contain a word or phrase, or abbreviation or 24 derivative of a word or phrase, that indicates or implies that 25 the company is formed for a purpose other than the purpose or 26 purposes permitted by its articles of organization. 02703'97 8 1 (b) Shall not contain the word "corporation" or 2 "incorporated" or the abbreviation "corp." or "inc." 3 (c) Shall distinguish the name upon the records in the 4 office of the administrator from all of the following: 5 (i) The name of a domestic limited liability company or a 6 foreign limited liability company authorized to transact business 7 in this state. 8 (ii) The name of a corporation subject to the business cor- 9 poration act,Act No. 284 of the Public Acts of 1972, being sec-10tions 450.1101 to 450.2098 of the Michigan Compiled Laws1972 PA 11 284, MCL 450.1101 TO 450.2098, or a nonprofit corporation subject 12 to the nonprofit corporation act,Act No. 162 of the Public Acts13of 1982, being sections 450.2101 to 450.3192 of the Michigan14Compiled Laws1982 PA 162, MCL 450.2101 TO 450.3192. 15 (iii) A name reserved, registered, or assumed under this 16 act, underAct No. 284 of the Public Acts of 1972THE BUSINESS 17 CORPORATION ACT, 1972 PA 284, MCL 450.1101 TO 450.2098, or under 18Act No. 162 of the Public Acts of 1982THE NONPROFIT CORPORA- 19 TION ACT, 1982 PA 162, MCL 450.2101 TO 450.3192. 20 (iv) The name of a domestic or foreign limited partnership 21 as filed or registered, reserved, or assumed under the Michigan 22 revised uniform limited partnership act,Act No. 213 of the23Public Acts of 1982, being sections 449.1101 to 449.2108 of the24Michigan Compiled Laws1982 PA 213, MCL 449.1101 TO 449.2108. 25 (d) Shall not contain a word or phrase, an abbreviation, or 26 derivative of a word or phrase, the use of which is prohibited or 27 restricted by any other statute of this state. 02703'97 9 1 (3) If a foreign limited liability company is unable to 2 obtain a certificate of authority to transact business in this 3 state because its name does not comply with subsection (1) or 4 (2), the foreign limited liability company may apply for author- 5 ity to transact business in this state by adding to its name in 6 the application a word, abbreviation, or other distinctive and 7 distinguishing element, or alternatively, adopting for use in 8 this state an assumed name otherwise available for use. If in 9 the judgment of the administrator that name would comply with 10 subsections (1) and (2), those subsections shall notbe abar 11tothe issuance to the foreign limited liability company of a 12 certificate of authority to transact business in this state. The 13 certificate OF AUTHORITY TO TRANSACT BUSINESS IN THIS STATE 14 issued to the foreign limited liability company shall be issued 15 in the name applied for and the foreign limited liability company 16 shall use that name in all its dealings with the administrator 17 and in the transaction of business in this state. 18 Sec. 206. (1) A domestic or foreign limited liability com- 19 pany may transactitsbusiness under an assumed name or names 20 other than its name as set forth in its articles of organization 21 or certificate of authority, if not precluded from use OF THE 22 ASSUMED NAME OR NAMES under section 204(2), by filing a certifi- 23 cate stating the true name of the company and the assumed name OR 24 NAMES under whichthebusiness is to be transacted. 25 (2) The certificateshall beOF ASSUMED NAME IS effective, 26 unlesssoonerterminated bythefilingofa certificate of 27 termination or by the dissolution or withdrawal of the company, 02703'97 10 1 for a period expiring on December 31 of the fifth full calendar 2 year following the year in whichitTHE CERTIFICATE OF ASSUMED 3 NAME was filed.ItTHE CERTIFICATE OF ASSUMED NAME may be 4 extended for additional consecutive periods of 5 full calendar 5 years each by filing A similarcertificatesCERTIFICATE OF 6 ASSUMED NAME not earlier than 90 daysprecedingBEFORE the 7 expiration ofanyTHE INITIAL OR ANY SUBSEQUENT 5-YEAR period. 8 (3) The administrator shall notify the company of the 9 impending expiration of the certificate of assumed name not later 10 than 90 days before the expiration of the initial or ANY subse- 11 quent 5-year period. 12 (4)ThisFILING A CERTIFICATE OF ASSUMED NAME UNDER THIS 13 section does not create substantive rights to the use of a par- 14 ticular assumed name. 15 (5) The same name may be assumed by 2 or more limited 16 liability companies or by 1 or more companies and 1 or more cor- 17 porations, limited partnerships, or other enterprisesin the18case of companies and other enterprisesparticipating together 19 in a partnership or joint venture. Each participating limited 20 liability company shall file a certificate OF ASSUMED NAME under 21 this section. 22 (6) A LIMITED LIABILITY COMPANY PARTICIPATING IN A MERGER, 23 OR ANY OTHER ENTITY PARTICIPATING IN A MERGER UNDER SECTION 706, 24 MAY TRANSFER TO THE SURVIVOR THE USE OF AN ASSUMED NAME FOR WHICH 25 A CERTIFICATE OF ASSUMED NAME IS ON FILE WITH THE ADMINISTRATOR 26 PRIOR TO THE MERGER, IF THE TRANSFER OF THE ASSUMED NAME IS NOTED 27 IN THE CERTIFICATE OF MERGER AS PROVIDED IN SECTION 703(1)(C), 02703'97 11 1 706(6)(C), OR OTHER APPLICABLE STATUTE. THE USE OF AN ASSUMED 2 NAME TRANSFERRED UNDER THIS SUBSECTION MAY CONTINUE FOR THE 3 REMAINING EFFECTIVE PERIOD OF THE CERTIFICATE OF ASSUMED NAME ON 4 FILE PRIOR TO THE MERGER AND THE SURVIVOR MAY TERMINATE OR EXTEND 5 THE CERTIFICATE IN ACCORDANCE WITH SUBSECTION (2). 6 (7) A LIMITED LIABILITY COMPANY SURVIVING A MERGER MAY USE 7 AS AN ASSUMED NAME THE NAME OF A MERGING LIMITED LIABILITY COM- 8 PANY, OR THE NAME OF ANY OTHER ENTITY PARTICIPATING IN THE MERGER 9 UNDER SECTION 706, BY FILING A CERTIFICATE OF ASSUMED NAME UNDER 10 SUBSECTION (1) OR BY PROVIDING FOR THE USE OF THE ASSUMED NAME IN 11 THE CERTIFICATE OF MERGER. THE SURVIVING LIMITED LIABILITY COM- 12 PANY MAY ALSO FILE A CERTIFICATE OF ASSUMED NAME UNDER SUBSECTION 13 (1) OR PROVIDE IN THE CERTIFICATE OF MERGER FOR THE USE OF AN 14 ASSUMED NAME OF A MERGING ENTITY NOT TRANSFERRED PURSUANT TO SUB- 15 SECTION (6). A PROVISION IN THE CERTIFICATE OF MERGER PURSUANT 16 TO THIS SUBSECTION IS TREATED AS A NEW CERTIFICATE OF ASSUMED 17 NAME. 18 Sec. 207. (1) Each domestic limited liability company and 19 foreign limited liability company authorized to transact business 20 in this state shall have and continuously maintain in this state 21 both of the following: 22 (a) A registered office that may, but need not be, the same 23 as its place of business. 24 (b) A resident agent, which agent may be either an individ- 25 ual resident in this state whose business office or residence is 26 identical with the registered office, a domestic corporation,27or a foreign corporation authorized to transact business in this02703'97 12 1state andOR ANY OF THE FOLLOWING having a business office 2 identical with the registered office:.3 (i) A DOMESTIC CORPORATION. 4 (ii) A FOREIGN CORPORATION AUTHORIZED TO TRANSACT BUSINESS 5 IN THIS STATE. 6 (iii) A DOMESTIC LIMITED LIABILITY COMPANY. 7 (iv) A FOREIGN LIMITED LIABILITY COMPANY AUTHORIZED TO 8 TRANSACT BUSINESS IN THIS STATE. 9 (2) The resident agent appointed by a limited liability com- 10 pany is an agent of the company upon whom any process, notice, or 11 demand required or permitted by law to be served upon the company 12 may be served. 13 (3) A person, whether a resident or nonresident of this 14 state, who is a member of a limited liability company or who 15 accepts election, appointment, or employment as a manager of a 16 LIMITED LIABILITY company organized under this act, by the accep- 17 tance, is held to have appointed the resident agent of the com- 18 pany as his or her agent upon whom process may be served while 19 the person is a member or manager OF THE LIMITED LIABILITY 20 COMPANY in any action commenced in a court of general jurisdic- 21 tion in this state arising out of or founded upon any action of 22 the LIMITED LIABILITY company or of a person as a member or man- 23 ager of the LIMITED LIABILITY company. Upon accepting service of 24 process, the resident agent shall promptly forward it to the 25 member or manager OF THE LIMITED LIABILITY COMPANY at his or her 26 last known address. 02703'97 13 1 (4)EachA domestic limited liability company or foreign 2 limited liability company authorized to transact business in this 3 state shall file with the administrator an annual statement exe- 4 cuted as provided in section 103 containing the name of its resi- 5 dent agent and the address of its registered office in this 6 state. The statement shall be filed not later than February 15 7 of each year, EXCEPT THAT A LIMITED LIABILITY COMPANY FORMED 8 AFTER SEPTEMBER 30 OR A FOREIGN LIMITED LIABILITY COMPANY AUTHO- 9 RIZED TO TRANSACT BUSINESS IN THIS STATE AFTER SEPTEMBER 30 NEED 10 NOT FILE A STATEMENT ON THE FEBRUARY 15 IMMEDIATELY SUCCEEDING 11 ITS FORMATION OR AUTHORIZATION. 12 Sec. 213. A limited liability company shall keep at its 13 registered office OR PRINCIPAL PLACE OF BUSINESS IN THIS STATE 14 all of the following: 15 (a) A current list of the full name and last known address 16 of each member and manager. 17 (b) A copy of the articles or restated articles of organiza- 18 tion, together with any amendments to the articles. 19 (c) Copies of the limited liability company's federal, 20 state, and local tax returns and reports, if any, for the 3 most 21 recent years. 22 (d) Copies of any financial statements of the limited 23 liability company for the 3 most recent years. 24 (e) Copies of operating agreements. 25 (f) Copies of records that would enable a member to deter- 26 mine the members' relative shares of the limited liability 02703'97 14 1 company's distributions andtheirTHE MEMBERS' relative voting 2 rights. 3 Sec. 301. (1) The contribution of a member to a limited 4 liability company may consist of any tangible or intangible prop- 5 erty or benefit to the company, including cash, property, serv- 6 ices performed, promissory notes, contracts for services to be 7 performed, or other binding obligation to contribute cash or 8 property or to perform services. 9 (2) A contribution of an obligation to contribute cash or 10 property or TO PERFORM servicesto be performedmay be in 11 exchange for a present membership interest or for a future mem- 12 bership interest, including a future profits interest, as pro- 13 vided in an operating agreement, OR, IN THE CASE OF A 14 SINGLE-MEMBER LIMITED LIABILITY COMPANY, IN A WRITTEN AGREEMENT 15 BETWEEN THE MEMBER AND THE COMPANY. 16 Sec. 302. (1) A promise by a member to contribute to the 17 limited liability company is not enforceable unlessset outTHE 18 PROMISE IS inawriting AND signed by the member. 19 (2) Unless otherwise provided in an operating agreement, a 20 member is obligated to the limited liability company to perform 21 any enforceable promise to contribute cash or property or to per- 22 form services, even if he or she is unable to perform because of 23 death, disability, or other reason. If a member does not make 24 the required contribution of property or services, he or she is 25 obligated, at the option of the limited liability company, to 26 contribute cash equal to that portion of value of the stated 27 contribution thathasIS notbeenmade. 02703'97 15 1 (3) The rights of the LIMITED LIABILITY company underthis2sectionSUBSECTION (2) are in addition to any other rights that 3 the LIMITED LIABILITY company may have under an operating agree- 4 ment or applicable law. 5 (4) Unless otherwise provided in an operating agreement, 6the obligation ofamemberMEMBER'S OBLIGATION to make a con- 7 tribution or TO return money or other property paid or distrib- 8 uted in violation of this act may be compromised onlywithUPON 9 the unanimousconsentVOTE of the OTHER members OF THE LIMITED 10 LIABILITY COMPANY. NotwithstandingtheA compromise OF A 11 MEMBER'S OBLIGATION, a creditor of a limited liability company 12 who extends credit or otherwise acts in reliance onthatTHE 13 MEMBER'S obligation after the member signs a writing that 14 reflects the obligation and before the amendment of the writing 15 to reflect the compromise may enforce the MEMBER'S original 16 obligation. 17 Sec. 303. (1) Distributions of cash or other assets of a 18 limited liability company shall be allocated among the members 19 and among classes of members in the manner provided in an operat- 20 ing agreement. If an operating agreement does not provide for an 21 allocation, distributions shall be allocated AS FOLLOWS: 22 (A) PRIOR TO THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT 23 ADDED SUBSECTION (2), EXCEPT AS OTHERWISE PROVIDED IN 24 SUBSECTION (2), on the basis of the value, as stated in the 25 limited liability company records required to be kept pursuant to 26 section 213 or determined by any other reasonable method, of the 27 contributions made by each member to the extent thattheyTHE 02703'97 16 1 CONTRIBUTIONS have been received by the limited liability company 2 and have not been returned. 3 (B) ON AND AFTER THE EFFECTIVE DATE OF THE AMENDATORY ACT 4 THAT ADDED SUBSECTION (2), IN EQUAL SHARES TO ALL MEMBERS. 5 (2) IF A LIMITED LIABILITY COMPANY IN EXISTENCE BEFORE THE 6 EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SUBSECTION 7 ALLOCATED DISTRIBUTIONS ON THE BASIS OF SUBSECTION (1)(A), THE 8 LIMITED LIABILITY COMPANY MAY CONTINUE TO ALLOCATE DISTRIBUTIONS 9 PURSUANT TO SUBSECTION (1)(A). 10 Sec. 304. Except as otherwise provided in this act, a 11 member is entitled to receive distributions from a limited 12 liability company before the withdrawal of the member from the 13 limited liability company and before the dissolution and winding 14 up of the limited liability company to the extent and at the 15 times or upon the happening of the events specified in an operat- 16 ing agreement, OR, IN THE CASE OF A SINGLE-MEMBER LIMITED LIABIL- 17 ITY COMPANY, AS DETERMINED BY THE MEMBER OR AUTHORIZED BY THE 18 MANAGERS OF THE LIMITED LIABILITY COMPANY. 19 Sec. 305.Except as otherwise provided in this act, on20withdrawal a withdrawing member is entitled to receive any dis-21tribution to which the member is entitled under an operating22agreement. Except as otherwise provided in this act or in an23operating agreement, a withdrawing member alsoUNTIL THE EFFEC- 24 TIVE DATE OF WITHDRAWAL, A WITHDRAWING MEMBER SHALL SHARE IN ANY 25 DISTRIBUTION MADE IN ACCORDANCE WITH SECTION 304. THE ARTICLES 26 OF ORGANIZATION OR AN OPERATING AGREEMENT MAY PROVIDE FOR AN 27 ADDITIONAL DISTRIBUTION TO A WITHDRAWING MEMBER. IF A PROVISION 02703'97 17 1 IN THE ARTICLES OF ORGANIZATION OR AN OPERATING AGREEMENT PERMITS 2 WITHDRAWAL BUT DOES NOT PROVIDE FOR AN ADDITIONAL WITHDRAWAL DIS- 3 TRIBUTION, A MEMBER WITHDRAWING IN ACCORDANCE WITH THE PROVISION 4 IN THE ARTICLES OF ORGANIZATION OR OPERATING AGREEMENT is enti- 5 tled to receive as a distribution, within a reasonable time after 6 withdrawal, the fair value of the member's interest in the 7 limited liability company as of the date of withdrawal based upon 8 the member's right to share in distributions from the limited 9 liability company. 10 Sec. 307. (1)AEXCEPT AS OTHERWISE PROVIDED IN 11 SUBSECTION (5), A distribution shall not be made if, after giving 12itTHE DISTRIBUTION effect,the1 OR MORE OF THE FOLLOWING 13 SITUATIONS WOULD OCCUR: 14 (A) THE limited liability company would not be able to pay 15 its debts as they become due in the usual course of business.or16the17 (B) THE limited liability company's total assets would be 18 less than the sum of its total liabilities plus, unless the oper- 19 ating agreement provides otherwise, the amount that would be 20 needed, if the limited liability company were to be dissolved at 21 the time of the distribution, to satisfy the preferential rights 22 of other members upon dissolution that are superior to the rights 23 of the member or members receiving the distribution. 24 (2) The limited liability company may base a determination 25 that a distribution is not prohibited under subsection (1) 26eitheron financial statements prepared on the basis of 27 accounting practices and principles that are reasonable under the 02703'97 18 1 circumstances,oron a fair valuation, orotherON ANOTHER 2 method that is reasonable under the circumstances. 3 (3) The effect of a distribution under subsection (1) is 4 measured at the following times: 5 (a) Except as provided in subsection (5), in the case of a 6 distribution of the fair value of a withdrawing member's inter- 7 est, as of the earlier of the date money or other property is 8 transferred or debt incurred by the limited liability company, or 9 the date the member ceases to be a member. 10 (b) In the case of any other distribution of indebtedness, 11 as of the date the indebtedness is authorized if distribution 12 occurs within 120 days after the date of authorization, or the 13 date the indebtedness is distributed if it occurs more than 120 14 days after the date of authorization. 15 (c) In all other cases, as of the date the distribution is 16 authorized if the payment occurs within 120 days after the date 17 of authorization, or the date the payment is made if it occurs 18 more than 120 days after the date of authorization. 19 (4)At the timeIF a memberbecomesIS entitled to 20 receive a distribution, the member has the status of, and is 21 entitled to all remedies available to, a creditor of the limited 22 liability company with respect to the distribution. A company's 23 indebtedness to a member incurred by reason of a distribution 24 made in accordance with this section is at parity with the 25 company's indebtedness to its general, unsecured creditors except 26 as otherwise agreed. 02703'97 19 1 (5) If the limited liability company distributes an 2 obligation to make future payments as payment of the fair value 3 of a withdrawing member's interest, and distribution of the obli- 4 gation would otherwise be prohibited under subsection (1) at the 5 time it is made, the company may issue the obligation and the 6 following apply: 7 (A) THE PORTION OF THE OBLIGATION THAT COULD HAVE BEEN DIS- 8 TRIBUTED WITHOUT VIOLATING SUBSECTION (1) IS INDEBTEDNESS TO THE 9 MEMBER AS DESCRIBED IN SUBSECTION (4). 10 (B) ALL OF THE FOLLOWING APPLY TO THE PORTION OF THE OBLIGA- 11 TION THAT EXCEEDS THE AMOUNT OF THE OBLIGATION THAT IS INDEBTED- 12 NESS TO THE MEMBER UNDER SUBDIVISION (A): (i)(a)At any time 13 prior to the due date of the obligation, payments of principal 14 and interest may be made as a distribution to the extent that a 15 distribution may then be made under this section. 16 (ii)(b)At any time on or after the due date, the obliga- 17 tion to pay principal and interest is considered distributed and 18 treated as indebtedness described in subsection (4) to the extent 19 that a distribution may then be made under this section. 20 (c)TheUNLESS OTHERWISE PROVIDED IN AN AGREEMENT WITH THE 21 WITHDRAWING MEMBER, THE obligation isnotconsidered a liabil- 22 ity or debt for purposes ofdeterminations under subsection (1)23except to the extent that it is considered distributed and24treated as indebtedness under this subsectionDETERMINING 25 WHETHER DISTRIBUTIONS OTHER THAN PAYMENTS ON THE OBLIGATION MAY 26 BE MADE UNDER THIS SECTION. 02703'97 20 1 (6) The enforceability of a guaranty or other undertaking by 2 a third party relating to a distribution is not affected by the 3 prohibition of the distribution under subsection (1). 4 (7) IfanyA claim is made to recover a distribution made 5 contrary to subsection (1) or if a violation of subsection (1) is 6 raised as a defense to a claim based upon a distribution, this 7 section does not prevent the person receiving the distribution 8 from asserting a right of rescission or other legal or equitable 9 rights. 10 Sec. 308. (1)MembersA MEMBER ormanagersMANAGER who 11voteVOTES for orassentASSENTS to a distribution in viola- 12 tion of an operating agreement or section 307areIS personally 13 liable, jointly and severally, to the limited liability company 14 for the amount of the distribution that exceeds what could have 15 been distributed without violating THE OPERATING AGREEMENT OR 16 section 307or the operating agreementif it is established 17 that the member or manager did notact in complianceCOMPLY 18 with section 404. 19 (2) For purposes of liability under subsection (1), a member 20 or manager entitled to participate in a decision to make a dis- 21 tribution is presumed to have assented to a distribution unless 22 he or she files a written dissent with the limited liability com- 23 pany either at the meeting at which the distribution decision is 24 made if it is made at a meeting and he or she is present or 25 within a reasonable time after he or she has knowledge of the 26 decision. 02703'97 21 1 (3) A member who accepts or receives a distribution with 2 knowledge of facts indicating it is in violation of an operating 3 agreement or section 307 is liable to the limited liability com- 4 pany for the amount the member accepts or receives THAT EXCEEDS 5 THE MEMBER'S SHARE OF THE AMOUNT THAT COULD HAVE BEEN DISTRIBUTED 6 WITHOUT VIOLATING SECTION 307 OR THE OPERATING AGREEMENT. 7 (4) Each member or manager held liable under subsection (1) 8 for an unlawful distribution is entitled to contribution from 9both of the following: (a) Fromeach other member or manager 10 who could be held liable under subsection (1)for the unlawful11distribution. (b) From each member who could be held liable12under subsection (3) for the amount the member accepted or13received.OR (3). THE CONTRIBUTION OF A PERSON HELD LIABLE 14 UNDER BOTH SUBSECTIONS (1) AND (3) SHALL NOT EXCEED HIS OR HER 15 LIABILITY UNDER EITHER SUBSECTION (1) OR (3), WHICHEVER IS 16 GREATER. 17 (5) A proceeding under this section is barred unless it is 18 commenced within 2 years after the date on which the effect of 19 the distribution is measured under section 307. 20 Sec. 401. Unless the articles of organization state that 21 the business of the limited liability company is to be managed by 22 managers, the business of the limited liability company shall be 23 managed by the members, subject to anyprovisionsPROVISION in 24 an operating agreement restricting or enlarging the management 25 rights and duties of any member or group of members. If manage- 26 ment is vested in the members, both of the following apply: 02703'97 22 1 (a) The membersshall beARE consideredto bemanagers 2 for purposes of applying this act, INCLUDING SECTION 406 3 REGARDING THE AGENCY AUTHORITY OF MANAGERS, unless the context 4 clearly requires otherwise. 5 (b) The members have, and are subject to, all duties and 6 liabilities of managers and to all limitations on liability and 7 indemnification rights of managers. 8 Sec. 402. (1) The articles of organization may provide that 9 the business of the limited liability company shall be managed by 10 or under the authority of 1 or more managers.who may, but need11not be, members.THE DELEGATION OF THE MANAGEMENT OF A LIMITED 12 LIABILITY COMPANY TO MANAGERS IS SUBJECT TO ANY PROVISION IN THE 13 ARTICLES OF ORGANIZATION OR IN AN OPERATING AGREEMENT RESTRICTING 14 OR ENLARGING THE MANAGEMENT RIGHTS AND DUTIES OF ANY MANAGER OR 15 GROUP OF MANAGERS. 16 (2) An operating agreement may prescribe qualifications for 17 managers, INCLUDING A REQUIREMENT THAT THE MANAGERS BE MEMBERS. 18 (3) The number of managers shall be specified in or fixed in 19 accordance with an operating agreement. 20 (4) IF THE ARTICLES OF ORGANIZATION DELEGATE MANAGEMENT OF A 21 LIMITED LIABILITY COMPANY TO MANAGERS, THE ARTICLES OF ORGANIZA- 22 TION CONSTITUTE NOTICE TO THIRD PARTIES THAT MANAGERS, NOT MEM- 23 BERS, HAVE THE AGENCY AUTHORITY DESCRIBED IN SECTION 406. 24 Sec. 403. (1) Unless otherwise provided in an operating 25 agreement, selection of managers to fill initial positions or 26 vacancies shall be by majority vote of the members voting in 27proportion to their shares of distributions of the limited02703'97 23 1liability company, as determined inaccordance with section 2303502(1). 3 (2) The members may remove 1 or more managers with or with- 4 out cause unless an operating agreement provides that managers 5 may be removed only for cause.Removal shall be by majority6vote of the members voting in accordance with section 502(1),7except that an operating agreement may require a higher vote for8removal without cause.9 (3) Removal for cause shall be at a meeting called expressly 10 for that purpose, andtheA manageror managersto be removed 11 for cause shall have reasonable advance notice of the allegations 12 againstthemHIM OR HER and an opportunity to be heard at the 13 meeting. 14 Sec. 404. (1) A manager shall discharge his or her duties 15 as a manager in good faith, with the care an ordinarily prudent 16 person in a like position would exercise under similar circum- 17 stances, and in a manner he or she reasonably believes to be in 18 the best interests of the limited liability company. 19 (2) In discharging his or her duties, a manager may rely on 20 information, opinions, reports, or statements, including, but not 21 limited to, financial statements or other financial data, if pre- 22 pared or presented by any of the following: 23 (a) One or more OTHER MANAGERS OR members or employees of 24 the limited liability company whom the manager reasonably 25 believes to be reliable and competent in the matter presented. 02703'97 24 1 (b) Legal counsel, public accountants, engineers, or other 2 persons as to matters the manager reasonably believes are within 3 the person's professional or expert competence. 4 (c) A committee of managers of which he or she is not a 5 member if the manager reasonably believes the committee merits 6 confidence. 7 (3) A manager is not entitled to rely on the information, 8 OPINIONS, REPORTS, OR STATEMENTS described in subsection (2) if 9 he or she has knowledge concerning the matter in question that 10 makes reliance otherwise permitted by subsection (2) 11 unwarranted. 12 (4) A manager is not liable foranyAN action taken as a 13 manager oranyTHE failure to takeanyAN action if he or she 14 performs the duties of his or her office in compliance with this 15 section. 16 (5) Except as otherwise provided in an operating agreement 17 OR BY VOTE OF THE MEMBERS PURSUANT TO SECTION 502(3) AND (6), a 18 manager shall account to the limited liability company and hold 19 as trustee for it any profit or benefit derivedwithout the20informed consent of the membersby the manager from any transac- 21 tion connected with the conduct or winding up of the limited 22 liability company or from any personal use byhim or herTHE 23 MANAGER of its property. 24 (6) An action against a manager for failure to perform the 25 duties imposed by this act shall be commenced within 3 years 26 after the cause of action has accrued,or within 2 years after 27 thetime when thecause of action is discovered or should 02703'97 25 1 reasonably have been discovered by the complainant, whichever 2 occurs first. 3 Sec. 405. Except as otherwise provided in THIS ACT, THE 4 ARTICLES OF ORGANIZATION, OR an operating agreement,ifVOTING 5 BY MANAGERS SHALL BE AS PROVIDED IN THIS SECTION. IF the limited 6 liability company has more than 1 manager,all decisions of the7managers shall be made by majority vote of the managers.A 8 MAJORITY VOTE IS REQUIRED TO DECIDE OR RESOLVE ANY DIFFERENCE ON 9 ANY MATTER CONNECTED WITH CARRYING ON THE BUSINESS OF THE LIMITED 10 LIABILITY COMPANY THAT IS WITHIN THE SCOPE OF THE MANAGERS' 11 AUTHORITY. IF MANAGEMENT OF THE LIMITED LIABILITY COMPANY IS 12 DELEGATED TO MANAGERS PURSUANT TO SECTION 402, EACH MANAGER HAS 1 13 VOTE. IF MANAGEMENT OF THE LIMITED LIABILITY COMPANY REMAINS IN 14 THE MEMBERS, THE MEMBERS SHALL VOTE IN ACCORDANCE WITH 15 SECTION 502(1). 16 Sec. 501. (1) A personmay becomeIS ADMITTED AS a member 17 of a limited liability companyby making a contribution accepted18by the company or pursuant to section 506. Additional qualifica-19tions or procedures may be prescribed by an operating agreement.20A limited liability company shall have at least 2 members.IN 1 21 OR MORE OF THE FOLLOWING WAYS: 22 (A) UPON THE FORMATION OF THE LIMITED LIABILITY COMPANY, BY 23 EXECUTING AND FILING THE ARTICLES OF ORGANIZATION OR BY SIGNING 24 THE INITIAL OPERATING AGREEMENT. 25 (B) AFTER THE FORMATION OF THE LIMITED LIABILITY COMPANY, IN 26 1 OR MORE OF THE FOLLOWING WAYS: 02703'97 26 1 (i) IN THE CASE OF A PERSON ACQUIRING A MEMBERSHIP INTEREST 2 DIRECTLY FROM THE LIMITED LIABILITY COMPANY, BY COMPLYING WITH 3 THE PROVISIONS OF AN OPERATING AGREEMENT PRESCRIBING THE REQUIRE- 4 MENTS FOR ADMISSION OR, IN THE ABSENCE OF PROVISIONS PRESCRIBING 5 THE REQUIREMENTS FOR ADMISSION IN AN OPERATING AGREEMENT, UPON 6 THE UNANIMOUS VOTE OF THE MEMBERS. 7 (ii) IN THE CASE OF AN ASSIGNEE OF A MEMBERSHIP INTEREST, AS 8 PROVIDED IN SECTION 506. 9 (2) Unless otherwise provided by law or in an operating 10 agreement, a person who is a member or manager, or both, of a 11 limited liability company is not liable for the acts, debts, or 12 obligations of the LIMITED LIABILITY company. 13 Sec. 502. (1) Unless otherwise provided in an operating 14 agreement,the members of a limited liability company shall vote15in proportion to their shares of distributions of the company, as16determined in accordance with section 303EACH MEMBER OF A 17 LIMITED LIABILITY COMPANY HAS 1 VOTE. 18 (2)The members have the right to vote on all of the19following:THE FOLLOWING ACTIONS MAY ONLY BE AUTHORIZED BY MEM- 20 BERS OF A LIMITED LIABILITY COMPANY: 21 (a) The dissolution of the limited liability company pursu- 22 ant to section 801(c). 23 (b) Merger of the limited liability company pursuant to sec- 24 tions 701 through 706. 25 (c)A transaction involving an actual or potential conflict26of interest between a manager and the limited liability company.27(d)An amendment to the articles of organization. 02703'97 27 1 (3) UNLESS AUTHORIZED IN ADVANCE BY AN OPERATING AGREEMENT, 2 A TRANSACTION WITH THE LIMITED LIABILITY COMPANY OR A TRANSACTION 3 CONNECTED WITH THE CONDUCT OR WINDING UP OF THE LIMITED LIABILITY 4 COMPANY IN WHICH A MANAGER OF THE LIMITED LIABILITY COMPANY HAS A 5 DIRECT OR INDIRECT INTEREST OR THE PERSONAL USE OF PROPERTY OF 6 THE LIMITED LIABILITY COMPANY BY A MANAGER MAY BE AUTHORIZED OR 7 RATIFIED ONLY BY A VOTE OF THE MEMBERS OF THE LIMITED LIABILITY 8 COMPANY. A MANAGER SHALL DISCLOSE ALL MATERIAL FACTS REGARDING A 9 TRANSACTION AND THE MANAGER'S INTEREST IN THE TRANSACTION OR ALL 10 MATERIAL FACTS ABOUT THE MANAGER'S PERSONAL USE OF THE LIMITED 11 LIABILITY COMPANY'S PROPERTY BEFORE THE MEMBERS VOTE ON THAT 12 TRANSACTION OR USE. 13 (4)(3)Unless otherwise provided in an operating agree- 14 ment, themembers have the right to vote on thesale, exchange, 15 lease, or other transfer of all or substantially all of the 16 assets oftheA limited liability company, other than in the 17 ordinary course of business, MAY ONLY BE AUTHORIZED BY A VOTE OF 18 THE MEMBERS OF THE LIMITED LIABILITY COMPANY. 19 (5)(4)The articles of organization or an operating 20 agreement may provide forany otherADDITIONAL voting rights of 21 members OF THE LIMITED LIABILITY COMPANY. 22 (6)(5)Unless a greater vote is required by this act, by 23 the articles of organization, or by an operating agreement, a 24majorityvote OF A MAJORITY OF ALL MEMBERS is required to 25 approve any matterother than the selection of managerssubmit- 26 ted for a vote by the members. A VOTE OF A MAJORITY OF THE 02703'97 28 1 DISINTERESTED MEMBERS OF THE LIMITED LIABILITY COMPANY IS 2 REQUIRED TO APPROVE AN ACTION DESCRIBED IN SUBSECTION (3). 3 Sec. 503. (1) Upon written request of a member, a limited 4 liability company shall mail to the member a copy of its most 5 recent annual financial statement andofits most recent feder- 6 al, state, and local income tax returns and reports. Upon rea- 7 sonable request, a member may obtain true and full information 8 regarding the current state of THE LIMITED LIABILITY COMPANY'S 9 business and financial condition.of the company.10 (2) Upon reasonable written request and during ordinary 11 business hours, a member or his or her designated representative 12 may inspect and copy, at the member's expense, any of the records 13 required to be maintained under section 213, AT THE LOCATION 14 WHERE THE RECORDS ARE KEPT. 15 (3) Upon reasonable written request, a member may obtain 16suchother information regarding the LIMITED LIABILITY 17 COMPANY'S affairsof the limited liability companyor MAY 18 inspect, personally or through a representative and during ordi- 19 nary business hours,suchother books and records of the 20 LIMITED LIABILITY company, as is just and reasonable. 21 (4) A member may have a formal accounting of the limited 22 liability company's affairs as provided in an operating agreement 23 or whenever circumstances render it just and reasonable. 24 Sec. 506. (1)Except asUNLESS OTHERWISE provided in an 25 operating agreement,pursuant to subsection (2),an assignee of 26 a membership interest in a limited liability company HAVING MORE 27 THAN 1 MEMBER may become a member only if the other members 02703'97 29 1 unanimously consent. AN ASSIGNEE OF A MEMBERSHIP INTEREST IN A 2 LIMITED LIABILITY COMPANY HAVING 1 MEMBER MAY BECOME A MEMBER IN 3 ACCORDANCE WITH THE TERMS OF THE AGREEMENT BETWEEN THE MEMBER AND 4 THE ASSIGNEE. 5(2) If management of the limited liability company has not6been delegated to managers and the operating agreement does not7provide for continuation of the business other than by majority8consent pursuant to section 801(d), an assignee of a membership9interest may become a member in any manner provided for in the10operating agreement.11 (2)(3)An assignee who becomes a member has, to the 12 extent assigned, the rights and powers, and is subject to the 13 restrictions and liabilities, of a member under the articles of 14 organization, any operating agreement, and this act. An assignee 15 who becomes a member also is liable for any obligations of his or 16 her assignor to make contributions and to return distributions 17 under sections 302 and 308(3).TheAN assignee is not obli- 18 gated for liabilities unknown to the assigneeat the timeWHEN 19 he or she became a member unless the liabilities are shown on the 20 financial records of the limited liability company. 21 Sec. 509. (1) A member may withdraw from a limited liabil- 22 ity company ONLY as provided in THE ARTICLES OF ORGANIZATION OR 23 IN an operating agreement.or by giving written notice to the24company and to the other members at least 90 days in advance of25the date of withdrawal, but if the withdrawal violates an operat-26ing agreement, the withdrawing member is not entitled to the27distributions provided for in section 305 and the company may02703'97 30 1recover from the withdrawing member damages for breach of the2agreement in excess of the amount that would otherwise be distri-3butable to the withdrawing member under section 305.A MEMBER 4 WITHDRAWING PURSUANT TO A PROVISION IN THE ARTICLES OF ORGANIZA- 5 TION OR IN AN OPERATING AGREEMENT IS ENTITLED TO A WITHDRAWAL 6 DISTRIBUTION AS DESCRIBED IN SECTION 305. 7 (2) AN OPERATING AGREEMENT MAY PROVIDE FOR THE EXPULSION OF 8 A MEMBER OR FOR OTHER EVENTS THE OCCURRENCE OF WHICH WILL RESULT 9 IN A PERSON CEASING TO BE A MEMBER OF THE LIMITED LIABILITY 10 COMPANY. 11 SEC. 515. A MEMBER OF A LIMITED LIABILITY COMPANY MAY BRING 12 AN ACTION IN THE CIRCUIT COURT OF THE COUNTY IN WHICH THE LIMITED 13 LIABILITY COMPANY'S PRINCIPAL PLACE OF BUSINESS OR REGISTERED 14 OFFICE IS LOCATED TO ESTABLISH THAT ACTS OF THE MANAGERS OR MEM- 15 BERS IN CONTROL OF THE LIMITED LIABILITY COMPANY ARE ILLEGAL, 16 FRAUDULENT, OR WILLFULLY UNFAIR AND OPPRESSIVE TO THE LIMITED 17 LIABILITY COMPANY OR TO THE MEMBER. IF THE MEMBER ESTABLISHES 18 GROUNDS FOR RELIEF, THE CIRCUIT COURT MAY ISSUE AN ORDER OR GRANT 19 RELIEF AS IT CONSIDERS APPROPRIATE, INCLUDING, BUT NOT LIMITED 20 TO, AN ORDER PROVIDING FOR ANY OF THE FOLLOWING: 21 (A) THE DISSOLUTION AND LIQUIDATION OF THE ASSETS AND BUSI- 22 NESS OF THE LIMITED LIABILITY COMPANY. 23 (B) THE CANCELLATION OR ALTERATION OF A PROVISION IN THE 24 ARTICLES OF ORGANIZATION OR IN AN OPERATING AGREEMENT. 25 (C) THE DIRECTION, ALTERATION, OR PROHIBITION OF AN ACT OF 26 THE LIMITED LIABILITY COMPANY, OR OF MEMBERS, MANAGERS, OR OTHER 27 PERSONS PARTY TO THE ACT. 02703'97 31 1 (D) THE PURCHASE AT FAIR VALUE OF THE MEMBER'S INTEREST IN 2 THE LIMITED LIABILITY COMPANY, EITHER BY THE COMPANY OR BY THE 3 MANAGERS OR OTHER MEMBERS RESPONSIBLE FOR THE WRONGFUL ACTS. 4 (E) AN AWARD OF DAMAGES TO THE LIMITED LIABILITY COMPANY OR 5 TO THE MEMBER. 6 Sec. 701. (1)ATWO OR MORE domestic limited liability 7companyCOMPANIES may mergewith another limited liability8company or any other business entitypursuant to a plan of 9 merger approved as provided in section 702. 10 (2) The plan of merger shall set forth all of the 11 following: 12 (a) The name of each constituent company and the name of the 13 surviving company. 14 (b) The terms and conditions of the proposed merger, includ- 15 ing the manner and basis of converting the membership interests 16 intheEACH limited liability company into membership interests 17 in the surviving company, or into cash or other property, or into 18 a combinationthereofOF CASH OR OTHER PROPERTY. 19 (c) A statement of any amendment to the articles of organi- 20 zation of the surviving company to be effected by the merger or 21 any restatement of the articles OF ORGANIZATION, or a statement 22 that no changes are to be made in the articles OF ORGANIZATION of 23 the surviving company. 24 (d) Other provisions with respect to the proposed merger 25 that the constituent companies consider necessary or desirable. 26 Sec. 702. (1)TheA plan of merger shall be submitted to 27 the members oftheEACH constituent company for approval, and 02703'97 32 1 approval shall be by unanimousconsentVOTE of the members of 2theEACH constituent company, unless an operating agreement of 3theA constituent companyotherwiseprovides OTHERWISE. 4 (2) If an operating agreement oftheA constituent company 5 provides for approval by less than unanimousconsentVOTE and 6 the merger is approved, a dissenting member may withdraw from the 7 limited liability company and receive, WITHIN A REASONABLE TIME, 8 thedistributions provided for in section 305FAIR VALUE OF THE 9 MEMBER'S INTEREST IN THE LIMITED LIABILITY COMPANY, BASED UPON 10 THE MEMBER'S RIGHT TO SHARE IN DISTRIBUTIONS FROM THE LIMITED 11 LIABILITY COMPANY. 12 Sec. 703. (1) After a plan of merger is approved, a certif- 13 icate of merger shall be executed as provided in section 103 and 14 filed on behalf of each constituent company. The certificate 15 shall set forth all of the following: 16 (a) The statements required by section 701(2)(a) and (c). 17 (b) A statement that the plan of merger has been approved by 18 the members of the constituent company in accordance with 19 section 702(1). 20 (c) The effective date of the merger if later than the date 21of filing ofthe certificate of merger IS FILED. 22 (2) The certificate of mergershall becomeIS effective in 23 accordance with section 104. 24 Sec. 704.WhenIF a merger takes effect, all of the fol- 25 lowing apply: 02703'97 33 1 (a) Every other constituent company merges into the 2 surviving company and the separate existence of every constituent 3 company except the surviving company ceases. 4 (b) All property, real, personal, and mixed, all debts due 5 on whatever account, including promises to make contributions, 6 all other choses in action, andall and everyANY other inter- 7 est of or belonging to or due to each constituent company are 8 vested in the surviving company without further act or deed and 9 without reversion or impairment. 10 (c)Upon complying with section 206, theTHE surviving 11 company may use the name and the assumed names of any constituent 12 company, IF THE FILINGS REQUIRED UNDER SECTION 206(6) AND (7) ARE 13 MADE. 14 (d) The surviving company has all OF THE liabilities of each 15 constituent company. 16 (e) A proceeding pending against any constituent company may 17 be continued as if the merger had not occurred or the surviving 18 company may be substituted in the proceeding for the limited 19 liability company whose existence ceased. 20 (f) The articles of organization of the surviving company 21 are amended to the extent provided in the certificate of merger. 22 (g) The membership interests in each constituent company are 23 converted into membership interests in the surviving company, 24and intocash, or other property as provided in the plan of 25 merger. 26 Sec. 705. (1) One or more foreign limited liability 27 companies may merge with 1 or more domestic limited liability 02703'97 34 1 companiesor any other business entityif both of the following 2 are satisfied: 3 (a) The merger is permitted by the law of the jurisdiction 4 under whose law each foreign constituent company is organized and 5 each foreign constituent company complies with that law in 6 effecting the merger. 7 (b) Each domesticlimited liabilityconstituent company 8 complies with the provisions of sections 701 through 703. 9 (2) If the surviving company is to be governed by the laws 10 of a jurisdiction other than this state, it shall comply with the 11 provisions of this act with respect to foreign limited liability 12 companies if it is to transact business in this state. 13 (3) The surviving company is liable for, and is subject to 14 service of process in a proceeding in this state for the enforce- 15 ment of, any obligation of a domesticlimited liabilitycon- 16 stituent company, including any obligation to a member of the 17 domesticlimited liabilityconstituent company who has dis- 18 sented from the merger and withdrawn pursuant to section 702(2). 19 SEC. 705A. (1) AS USED IN THIS SECTION: 20 (A) "BUSINESS ORGANIZATION" MEANS A DOMESTIC OR FOREIGN COR- 21 PORATION, LIMITED PARTNERSHIP, GENERAL PARTNERSHIP, OR ANY OTHER 22 TYPE OF DOMESTIC OR FOREIGN BUSINESS ENTERPRISE, INCORPORATED OR 23 UNINCORPORATED, EXCEPT A DOMESTIC LIMITED LIABILITY COMPANY. 24 (B) "ENTITY" MEANS A BUSINESS ORGANIZATION OR A DOMESTIC 25 LIMITED LIABILITY COMPANY. 26 (C) "OBLIGATED PERSON" MEANS A GENERAL PARTNER OF A LIMITED 27 PARTNERSHIP, A PARTNER OF A GENERAL PARTNERSHIP, OR A PARTICIPANT 02703'97 35 1 IN OR AN OWNER OF AN INTEREST IN ANY OTHER TYPE OF BUSINESS 2 ENTERPRISE WHO, UNDER APPLICABLE LAW, IS GENERALLY LIABLE FOR THE 3 OBLIGATIONS OF THE BUSINESS ENTERPRISE. 4 (2) IF ALL OF THE BUSINESS ORGANIZATIONS IN A MERGER WITH 1 5 OR MORE DOMESTIC LIMITED LIABILITY COMPANIES ARE FOREIGN LIMITED 6 LIABILITY COMPANIES, THE MERGER SHALL COMPLY WITH SECTION 705 AND 7 NOT THIS SECTION. 8 (3) EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (2), 1 OR 9 MORE DOMESTIC LIMITED LIABILITY COMPANIES MAY MERGE WITH 1 OR 10 MORE BUSINESS ORGANIZATIONS IF ALL OF THE FOLLOWING REQUIREMENTS 11 ARE SATISFIED: 12 (A) THE MERGER IS PERMITTED UNDER THE LAW OF THE JURISDIC- 13 TION IN WHICH EACH CONSTITUENT BUSINESS ORGANIZATION IS ORGANIZED 14 AND EACH CONSTITUENT BUSINESS ORGANIZATION COMPLIES WITH THAT LAW 15 IN EFFECTING THE MERGER. 16 (B) EACH FOREIGN CONSTITUENT BUSINESS ORGANIZATION TRANSACT- 17 ING BUSINESS IN THIS STATE COMPLIES WITH THE APPLICABLE LAWS OF 18 THIS STATE. 19 (C) EACH DOMESTIC LIMITED LIABILITY COMPANY COMPLIES WITH 20 THIS SECTION. 21 (4) IF 1 OR MORE DOMESTIC LIMITED LIABILITY COMPANIES PRO- 22 POSE TO MERGE WITH 1 OR MORE BUSINESS ORGANIZATIONS, THE CONSTIT- 23 UENT ENTITIES SHALL PREPARE A PLAN OF MERGER SETTING FORTH ALL OF 24 THE FOLLOWING: 25 (A) THE NAME OF EACH CONSTITUENT ENTITY, THE NAME OF THE 26 SURVIVING ENTITY, THE STREET ADDRESS OF THE SURVIVING ENTITY'S 02703'97 36 1 PRINCIPAL PLACE OF BUSINESS, AND THE TYPE OF ORGANIZATION OF THE 2 SURVIVING ENTITY. 3 (B) THE TERMS AND CONDITIONS OF THE PROPOSED MERGER, INCLUD- 4 ING THE MANNER AND BASIS OF CONVERTING THE SHARES, PARTNERSHIP 5 INTERESTS, MEMBERSHIP INTERESTS, OR OTHER OWNERSHIP INTERESTS OF 6 EACH CONSTITUENT ENTITY INTO OWNERSHIP INTERESTS OR OBLIGATIONS 7 OF THE SURVIVING ENTITY, OR INTO CASH OR OTHER CONSIDERATION, 8 WHICH MAY INCLUDE OWNERSHIP INTERESTS OR OBLIGATIONS OF AN ENTITY 9 NOT A PARTY TO THE MERGER, OR INTO A COMBINATION OF CASH OR OTHER 10 CONSIDERATION. 11 (C) IF THE SURVIVING ENTITY IS TO BE A DOMESTIC LIMITED 12 LIABILITY COMPANY, A STATEMENT OF ANY AMENDMENT TO THE ARTICLES 13 OF ORGANIZATION OF THE SURVIVING COMPANY TO BE EFFECTED BY THE 14 MERGER OR ANY RESTATEMENT OF THE ARTICLES OF ORGANIZATION, OR A 15 STATEMENT THAT NO CHANGES ARE TO BE MADE IN THE ARTICLES OF 16 ORGANIZATION OF THE SURVIVING DOMESTIC LIMITED LIABILITY 17 COMPANY. 18 (D) ANY OTHER PROVISION THAT THE CONSTITUENT ENTITIES CON- 19 SIDER NECESSARY OR DESIRABLE. 20 (5) A PLAN OF MERGER SHALL BE SUBMITTED TO THE MEMBERS OF 21 EACH CONSTITUENT DOMESTIC LIMITED LIABILITY COMPANY FOR 22 APPROVAL. THE MEMBERS OF EACH CONSTITUENT DOMESTIC LIMITED 23 LIABILITY COMPANY MAY APPROVE A PLAN OF MERGER BY UNANIMOUS VOTE, 24 UNLESS AN OPERATING AGREEMENT OF A CONSTITUENT DOMESTIC LIMITED 25 LIABILITY COMPANY PROVIDES OTHERWISE. 26 (6) IF AN OPERATING AGREEMENT OF A CONSTITUENT DOMESTIC 27 LIMITED LIABILITY COMPANY PROVIDES FOR APPROVAL BY LESS THAN 02703'97 37 1 UNANIMOUS VOTE AND THE MERGER IS APPROVED, A DISSENTING MEMBER 2 MAY WITHDRAW FROM THE DOMESTIC LIMITED LIABILITY COMPANY AND 3 RECEIVE, WITHIN A REASONABLE TIME, THE FAIR VALUE OF THE MEMBER'S 4 INTEREST IN THE DOMESTIC LIMITED LIABILITY COMPANY, BASED UPON 5 THE MEMBER'S RIGHT TO SHARE IN DISTRIBUTIONS FROM THE DOMESTIC 6 LIMITED LIABILITY COMPANY. 7 (7) IF A PLAN OF MERGER IS APPROVED, A CERTIFICATE OF MERGER 8 SHALL BE EXECUTED AS PROVIDED IN SECTION 103 AND FILED ON BEHALF 9 OF EACH CONSTITUENT DOMESTIC LIMITED LIABILITY COMPANY. THE CER- 10 TIFICATE OF MERGER SHALL SET FORTH ALL OF THE FOLLOWING: 11 (A) THE INFORMATION REQUIRED UNDER SUBSECTION (3)(A) AND THE 12 STATEMENT REQUIRED UNDER SUBSECTION (3)(C). 13 (B) A STATEMENT THAT THE PLAN OF MERGER WAS APPROVED BY THE 14 MEMBERS OF EACH CONSTITUENT DOMESTIC LIMITED LIABILITY COMPANY IN 15 ACCORDANCE WITH SUBSECTION (4). 16 (C) A STATEMENT OF ANY ASSUMED NAMES OF MERGING ENTITIES 17 TRANSFERRED TO THE SURVIVING ENTITY IN ACCORDANCE WITH SECTION 18 206(6), SPECIFYING EACH TRANSFERRED ASSUMED NAME AND THE NAME OF 19 THE ENTITY FROM WHICH IT IS TRANSFERRED. IF THE SURVIVING ENTITY 20 IS A DOMESTIC LIMITED LIABILITY COMPANY OR A FOREIGN LIMITED 21 LIABILITY COMPANY AUTHORIZED TO TRANSACT BUSINESS IN THIS STATE, 22 THE CERTIFICATE MAY INCLUDE A STATEMENT OF THE NAMES OR ASSUMED 23 NAMES OF MERGING ENTITIES THAT ARE TO BE TREATED AS NEWLY FILED 24 ASSUMED NAMES OF THE SURVIVING COMPANY PURSUANT TO SECTION 25 206(7). 26 (D) THE EFFECTIVE DATE OF THE MERGER IF LATER THAN THE DATE 27 THE CERTIFICATE OF MERGER IS FILED. 02703'97 38 1 (8) A CERTIFICATE OF MERGER IS EFFECTIVE IN ACCORDANCE WITH 2 SECTION 104. 3 (9) IF A MERGER IS EFFECTIVE UNDER THIS SECTION, ALL OF THE 4 FOLLOWING APPLY: 5 (A) EVERY OTHER CONSTITUENT ENTITY MERGES INTO THE SURVIVING 6 ENTITY AND THE SEPARATE EXISTENCE OF EVERY ENTITY EXCEPT THE SUR- 7 VIVING ENTITY CEASES. 8 (B) THE TITLE TO ALL PROPERTY, REAL, PERSONAL, AND MIXED, 9 AND RIGHTS OWNED BY EACH CONSTITUENT ENTITY ARE VESTED IN THE 10 SURVIVING ENTITY WITHOUT REVERSION OR IMPAIRMENT. 11 (C) A SURVIVING COMPANY MAY USE THE NAME AND THE ASSUMED 12 NAMES OF ANY MERGING ENTITY IF SECTION 206(6) OR (7) OR OTHER 13 APPLICABLE STATUTE IS COMPLIED WITH. 14 (D) THE SURVIVING ENTITY HAS ALL OF THE LIABILITIES OF EACH 15 CONSTITUENT ENTITY. THIS SECTION DOES NOT AFFECT THE LIABILITY 16 OF A PERSON WHO WAS AN OBLIGATED PERSON WITH RESPECT TO A MERGING 17 ENTITY FOR ACTS OR OMISSIONS THAT OCCURRED BEFORE THE MERGER. 18 (E) A PROCEEDING PENDING AGAINST ANY CONSTITUENT ENTITY MAY 19 BE CONTINUED AS IF THE MERGER DID NOT OCCUR OR THE SURVIVING 20 ENTITY MAY BE SUBSTITUTED IN THE PROCEEDING FOR THE ENTITY WHOSE 21 EXISTENCE CEASED. 22 (F) THE ARTICLES OF ORGANIZATION OF A SURVIVING DOMESTIC 23 LIMITED LIABILITY COMPANY ARE AMENDED TO THE EXTENT PROVIDED IN 24 THE PLAN OF MERGER. 25 (G) THE OWNERSHIP INTERESTS OF EACH CONSTITUENT ENTITY THAT 26 ARE TO BE CONVERTED INTO OWNERSHIP INTERESTS OR OBLIGATIONS OF 02703'97 39 1 THE SURVIVING ENTITY OR INTO CASH OR OTHER PROPERTY ARE 2 CONVERTED. 3 (10) IF THE SURVIVING ENTITY IS A FOREIGN BUSINESS ORGANIZA- 4 TION, IT IS SUBJECT TO THE LAWS OF THIS STATE PERTAINING TO THE 5 TRANSACTION OF BUSINESS IN THIS STATE BY A FOREIGN BUSINESS 6 ORGANIZATION IF IT TRANSACTS BUSINESS IN THIS STATE. THE SURVIV- 7 ING ENTITY IS LIABLE FOR, AND IS SUBJECT TO SERVICE OF PROCESS IN 8 A PROCEEDING IN THIS STATE FOR THE ENFORCEMENT OF, ANY OBLIGATION 9 OF A CONSTITUENT DOMESTIC LIMITED LIABILITY COMPANY, INCLUDING AN 10 OBLIGATION TO A MEMBER OF THE CONSTITUENT DOMESTIC LIMITED 11 LIABILITY COMPANY WHO HAS DISSENTED FROM THE MERGER AND WITHDRAWN 12 IN ACCORDANCE WITH SUBSECTION (6). 13 Sec. 706. (1) UnlesstheA plan of merger provides other- 14 wise, at any time before the effective date of a certificate of 15 merger, the merger may be abandoned in accordance with the proce- 16 dure set forth in the plan of merger or, ifnoneNO PROCEDURE 17 TO ABANDON THE MERGER is set forth IN THE PLAN OF MERGER, by the 18 unanimousconsentVOTE of the members oftheEACH DOMESTIC 19 limited liability company that is a constituent entity, unless 20theAN operating agreement oftheA DOMESTIC limited liabil- 21 ity company provides otherwise. 22 (2) If a certificate of merger has been filed by a constitu- 23 ent DOMESTIC LIMITED LIABILITY company, it shall file a certifi- 24 cate of abandonment within 10 days after the abandonment but not 25 later than the effective date of the certificate of merger. 02703'97 40 1 SEC. 707. (1) A DOMESTIC PARTNERSHIP OR DOMESTIC LIMITED 2 PARTNERSHIP MAY CONVERT TO A LIMITED LIABILITY COMPANY IN 3 ACCORDANCE WITH THIS SECTION. 4 (2) THE TERMS AND CONDITIONS OF A CONVERSION UNDER THIS SEC- 5 TION SHALL BE APPROVED BY THE PARTNERS IN THE MANNER PROVIDED IN 6 THE PARTNERSHIP AGREEMENT FOR AMENDMENTS TO THE PARTNERSHIP 7 AGREEMENT OR, IF NO PROVISION FOR AMENDMENTS TO THE PARTNERSHIP 8 AGREEMENT IS MADE IN THE PARTNERSHIP AGREEMENT, BY ALL OF THE 9 PARTNERS. 10 (3) IF A CONVERSION UNDER THIS SECTION IS APPROVED, THE CON- 11 VERTING PARTNERSHIP OR LIMITED PARTNERSHIP SHALL FILE BOTH OF THE 12 FOLLOWING: 13 (A) ARTICLES OF ORGANIZATION THAT COMPLY WITH SECTION 203. 14 (B) A CERTIFICATE OF CONVERSION, STATING THE NAME OF THE 15 PARTNERSHIP OR LIMITED PARTNERSHIP AND THE DATE IT WAS FORMED. 16 IN THE CASE OF A LIMITED PARTNERSHIP, THE CERTIFICATE OF CONVER- 17 SION SHALL INCLUDE A STATEMENT THAT THE CERTIFICATE OF LIMITED 18 PARTNERSHIP IS CANCELED AS OF THE EFFECTIVE DATE OF THE ARTICLES 19 OF ORGANIZATION. 20 (4) IF A LIMITED PARTNERSHIP CONVERTS TO A LIMITED LIABILITY 21 COMPANY UNDER THIS SECTION, THE CERTIFICATE OF LIMITED PARTNER- 22 SHIP IS CANCELED AS OF THE EFFECTIVE DATE OF THE ARTICLES OF 23 ORGANIZATION. 24 (5) IF A CONVERSION UNDER THIS SECTION TAKES EFFECT, THE 25 LIMITED LIABILITY COMPANY IS CONSIDERED THE SAME ENTITY THAT 26 EXISTED BEFORE THE CONVERSION. ALL PROPERTY AND RIGHTS OF THE 27 CONVERTING PARTNERSHIP OR LIMITED PARTNERSHIP REMAIN VESTED IN 02703'97 41 1 THE CONVERTED LIMITED LIABILITY COMPANY. ALL LIABILITIES OF THE 2 CONVERTING PARTNERSHIP OR LIMITED PARTNERSHIP CONTINUE AS LIABIL- 3 ITIES OF THE CONVERTED LIMITED LIABILITY COMPANY. AN ACTION OR 4 PROCEEDING PENDING AGAINST THE CONVERTING PARTNERSHIP OR LIMITED 5 PARTNERSHIP MAY BE CONTINUED AS IF THE CONVERSION UNDER THIS SEC- 6 TION HAD NOT OCCURRED. THE LIABILITY OF A GENERAL PARTNER OF THE 7 CONVERTING PARTNERSHIP OR LIMITED PARTNERSHIP FOR ACTS OR OMIS- 8 SIONS THAT OCCURRED BEFORE A CONVERSION UNDER THIS SECTION IS NOT 9 AFFECTED BY A CONVERSION UNDER THIS SECTION. 10 Sec. 801. A limited liability company is dissolved and its 11 affairs shall be wound upupon the happening ofWHEN the first 12to occurof the following OCCURS: 13 (a) At the time specified in the articles of organization or 14 IN an operating agreement. 15 (b) Upon the happening ofeventsAN EVENT specified in the 16 articles of organization or IN an operating agreement, INCLUDING 17 A VOTE OF MEMBERS. 18 (c)ByUPON the unanimousconsentVOTE of all members. 19(d) Upon the death, withdrawal, expulsion, bankruptcy, or20dissolution of a member, or the occurrence of any other event21that terminates the continued membership of a member in the22limited liability company, unless either of the following23applies:24(i) Within 90 days after the termination of membership, a25majority of the remaining members voting in accordance with26section 502(1) consent to continue the business of the limited02703'97 42 1liability company and to the admission of 1 or more members as2necessary.3(ii) Management of the limited liability company has not4been delegated to managers, an operating agreement does not allow5an assignee to become a member other than by unanimous consent of6the other members pursuant to section 506, and the business of7the company is continued as provided for in an operating8agreement.9 (D) IN THE CASE OF A LIMITED LIABILITY COMPANY WITH ONLY 1 10 MEMBER, UPON THE DEATH OF THE MEMBER OR THE OCCURRENCE OF ANY 11 OTHER EVENT THAT TERMINATES THE MEMBERSHIP OF THE MEMBER, UNLESS 12 THE MEMBER MAKES ADVANCE PROVISION IN WRITING FOR THE SUCCESSION 13 OF ANOTHER MEMBER AND THE CONTINUATION OF THE BUSINESS OF THE 14 LIMITED LIABILITY COMPANY. 15 (e) Upon the entry of a decree of judicial dissolution. 16 Sec. 808. (1) Upon the winding up of a limited liability 17 company, the LIMITED LIABILITY COMPANY'S assets shall be distrib- 18 uted in the following order: 19 (a) To creditors, including members who are creditors, to 20 the extent permitted by law, in satisfaction of liabilities of 21 the limited liability company other than liabilities for distri- 22 butions to members under section 304.or 305.Reasonable provi- 23 sion shall be made for debts, liabilities, and obligations that 24 are not liquidated but will not be barred under section 806 or 25 807. 02703'97 43 1 (b) Except as provided in an operating agreement, to members 2 and former members in satisfaction of liabilities for 3 distributions undersectionsSECTION 304.and 305.4 (c) Except as provided in an operating agreement, all 5 remaining assets to members and former members in accordance with 6 their shares of distributions as determined under section 303. 7 (2) Before the assets of a limited liability company are 8 distributed pursuant to subsection (1), the limited liability 9 company shall file tax returns and pay tax obligations as 10 requiredby Act No. 122 of the Public Acts of 1941, being11sections 205.1 to 205.31 of the Michigan Compiled LawsUNDER 12 1941 PA 122, MCL 205.1 TO 205.31. 13 Sec. 901. (1) A limited liability company may be formed 14 under this actfor the purpose of renderingTO RENDER 1 or more 15 professional services, as defined in section 902. 16 (2) A limited liability company formedfor the purpose of17rendering professionalTO RENDER services IN 1 OR MORE LEARNED 18 PROFESSIONS, and its members and managers, are subject tothe19provisions ofthis articlein addition to the other provisions20ofAND this act., and the provisions of thisTHIS article 21shall takeTAKES precedence over any other provision of this 22 act in the event of conflict. 23 Sec. 902. As used in this article: 24 (a) "Licensed person" means an individual who is licensed or 25 otherwise legally authorized to practice a professional service 26 by a court, department, board, commission, or an agency of this 27 state or another jurisdiction, any corporation OR PROFESSIONAL 02703'97 44 1 SERVICES CORPORATION all of whose shareholders are licensed 2 persons, ANY PARTNERSHIP ALL OF WHOSE PARTNERS ARE LICENSED 3 PERSONS, or any limited liability company all of whose members 4 and managers are licensed persons. 5 (b) "Professional service" means a type of personal service 6 to the public that requires as a condition precedent to the 7 rendering of the service the obtaining of a license or other 8 legal authorization. Professional service includes, but is not 9 limited to, services rendered by A certified or other public 10accountants, chiropractors, dentists, optometrists, veterinari-11ans, osteopaths, physicians and surgeons, doctors of medicine,12doctors of dentistry, podiatrists, chiropodists, architects, pro-13fessional engineers, land surveyors, and attorneys-at-law14 ACCOUNTANT, CHIROPRACTOR, DENTIST, OPTOMETRIST, VETERINARIAN, 15 OSTEOPATHIC PHYSICIAN, PHYSICIAN, SURGEON, PODIATRIST, CHIROPO- 16 DIST, ARCHITECT, PROFESSIONAL ENGINEER, LAND SURVEYOR, AND 17 ATTORNEY-AT-LAW. 18 (C) "PROFESSIONAL SERVICES CORPORATION" MEANS A CORPORATION 19 FORMED UNDER THE PROFESSIONAL SERVICE CORPORATION ACT, 1962 PA 20 192, MCL 450.221 TO 450.235. 21 Sec. 903. (1)TwoONE or more licensed persons may orga- 22 nize and become members of a professional limited liability 23 company. 24 (2) The articles of organization oftheA PROFESSIONAL 25 limited liability company shall state, as its purposes, that the 26 company is formed to render specified professional services. 02703'97 45 1 (3) The name of the limited liability company shall contain 2 the words "professional limited liability company" or the 3 abbreviation "P.L.L.C." or "P.L.C." WITH OR WITHOUT PERIODS OR 4 OTHER PUNCTUATION. 5 Sec. 909. (1) A professional limited liability company 6 shall file with the administrator an annual report, together with 7 a $50.00 filing fee, listing the names and addresses of all mem- 8 bers and managers and certifying thatall members and managers9are licensed or otherwise legally authorized to render within10this state the same professional services that the company was11formed to renderEACH MEMBER AND MANAGER IS A LICENSED PERSON IN 12 1 OR MORE OF THE PROFESSIONAL SERVICES RENDERED BY THE COMPANY. 13 THE REPORT SHALL ALSO CERTIFY THAT ANY MEMBER OR MANAGER NOT 14 LICENSED OR OTHERWISE LEGALLY AUTHORIZED TO RENDER PROFESSIONAL 15 SERVICES IN THIS STATE DOES NOT RENDER PROFESSIONAL SERVICES IN 16 THIS STATE. 17 (2) ThereportPROFESSIONAL LIMITED LIABILITY COMPANY 18 shallbe filedFILE THE ANNUAL REPORT not later than February 19 15 of each year, and a penalty of $50.00 shall be added to the 20 fee if the ANNUAL report is not filed or the fee is not paid by 21 February 15, EXCEPT THAT IF A PROFESSIONAL LIMITED LIABILITY COM- 22 PANY IS FORMED AFTER SEPTEMBER 30, IT NEED NOT FILE AN ANNUAL 23 REPORT ON THE FIRST FEBRUARY 15 AFTER ITS FORMATION. 24 Sec. 910. A professional limited liability company may 25 merge only withanotherOTHER limited liabilitycompany26 COMPANIES whose members and managers are licensed persons 27 permitted to be members or managers under this article OR OTHER 02703'97 46 1 ENTITIES THAT ARE LICENSED PERSONS OR WHOSE SHAREHOLDERS, 2 PARTNERS, OR OTHER OWNERS, MEMBERS, OR MANAGERS ARE LICENSED PER- 3 SONS PERMITTED TO BE MEMBERS OR MANAGERS UNDER THIS ARTICLE. 4 Sec. 1002. Before transacting business in this state, a 5 foreign limited liability company shall obtain a certificate of 6 authority from the administrator. To obtain a certificate of 7 authority, a foreign limited liability company shall file with 8 the administrator an application, executed as provided in 9 section 103, setting forth all of the following: 10 (a) The name of the foreign limited liability company and, 11 if different, the name under which it proposes to transact busi- 12 ness in this state. 13 (b) The jurisdiction and date of its organization. 14 (c) Thename andaddress ofaITS resident agent in this 15 state, which agent shall be an individual resident of this16state, a domestic corporation, or a foreign corporation having a17place of business and authorized to do business in this state.18The address of theAND THE NAME OF ITS resident agentshall be19the foreign limited liability company's registered office in this20stateAT THAT ADDRESS IN ACCORDANCE WITH SECTION 207. 21 (d) A statement that includes both of the following: 22 (i) That the department is appointed the agent of the for- 23 eign limited liability company for service of process if no agent 24 has been appointed under subdivision (c), or, if appointed, the 25 agent's authority has been revoked, the agent has resigned, or 26 the agent cannot be found or served through the exercise of 27 reasonable diligence. 02703'97 47 1 (ii) The name and address of a member,ormanager, or 2 other person to whom the administrator is to send copies of any 3 process served on the administrator. 4 (e) The address of the office required to be maintained in 5 the jurisdiction of its organization by the laws of that state 6 or, if notsorequired TO MAINTAIN AN OFFICE BY THE LAWS OF 7 THAT STATE, of the principal office of the foreign limited 8 liability company. 9 (f) Other additional information as may be necessary or 10 appropriate in order to enable the department to determine 11 whether the limited liability company is entitled to transact 12 business in this state. 13 Sec. 1101. (1) The fees to be paid to the administrator 14 when the documents described in this subsection are delivered to 15 him or her for filing are as follows: 16 (a) Certificate of correction, $25.00. 17 (b) Articles of organization, $50.00. 18 (c) Amendment to the articles of organization, $25.00. 19 (d) Restated articles of organization, $50.00. 20 (e) Application for reservation of name, $25.00. 21 (f) Certificate of assumed name or a certificate of termina- 22 tion of assumed name, $25.00. 23 (g) Annual statement of resident agent and registered 24 office, $5.00. 25 (h) Notice of resignation of resident agent, or statement of 26 change of registered office or resident agent, $5.00. 02703'97 48 1 (i) Certificate of merger as provided in article 7, 2 $100.00. 3 (j) Certificate of abandonment, $10.00. 4 (K) CERTIFICATE OF CONVERSION, $25.00. 5 (l)(k)Certificate of dissolution, $10.00. 6 (M)(l)Application of a foreign limited liability company 7 foran issuance ofa certificate of authority to transact busi- 8 ness in this state, $50.00. 9 (N)(m)Certificate correcting statement contained in an 10 application for a certificate of authority to transact business 11 in this state, $25.00. 12 (O)(n)Certificate attesting to the occurrence of a 13 merger of a foreign limited liability company, as provided in 14 section 1005, $10.00. 15 (P)(o)Application for withdrawal and issuance of a cer- 16 tificate of withdrawal of a foreign limited liability company, 17 $10.00. 18 (Q)(p)In addition to the fee required to file a docu- 19 ment, the administrator may charge a fee of $50.00 if the docu- 20 ment is filed by facsimile transmission or the administrator is 21 requested to transmit a document by a facsimile machine. 22 (2) The fees prescribed in subsection (1), no part of which 23 shall be refunded,whenIF collected shall be paid into the 24 treasury of the state and credited to the administrator to be 25 used solely by the corporation and securities bureau in carrying 26 out those duties required by law. 02703'97 49 1 (3) A minimum charge of $1.00 for each certificate and 50 2 cents per folio shall be paid to the administrator for certifying 3 a part of a file or record pertaining to a domestic or foreign 4 limited liability company for which provision for payment is not 5 set forth in subsection (1). The administrator may furnish 6 copies of documents, reports, and papers required or permitted by 7 law to be filed with the administrator, and shall charge for 8 those copies pursuant to a schedule of feeswhichTHAT the 9 administrator shall adopt with the approval of the state adminis- 10 trative board. The administrator shall retain the revenue col- 11 lected under this subsection to be used by the corporation and 12 securities bureau to defray the costs of its copying and certify- 13 ing services. 14 (4) If a domestic or foreign limited liability company pays 15 fees or penalties by check and the check is dishonored, the fee 16shall beIS considered unpaid and the filing of all related 17 documentswill beIS rescinded. 18 (5) The administrator may accept a credit card, instead of 19 cash or check, as payment of a fee under this act. The adminis- 20 trator shall determine which credit cards may be accepted for 21 payment. 02703'97 Final page. FDD