2012 -- H 7067 SUBSTITUTE A

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LC00456/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED LIABILITY COMPANY ACT

     Introduced By: Representatives Petrarca, Ucci, Keable, and Corvese

     Date Introduced: January 11, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 7-16-8, 7-16-41, 7-16-42, 7-16-43 and 7-16-50 of the General

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Laws in Chapter 7-16 entitled "The Rhode Island Limited Liability Company Act" are hereby

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amended to read as follows:

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     7-16-8. Filing. -- (a) The secretary of state may not accept for filing any document under

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this chapter which does not conform with law.

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      (b) The secretary of state may not accept for filing any organizational document,

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qualification, registration, change of resident agent report, service of process, notice or other

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document until all required filing and other fees have been paid to the secretary of state.

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      (c) The secretary of state may not accept for filing any article of dissolution, cancellation

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of registration, article of merger, unless the surviving entity is a domestic entity of record with the

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office of the secretary of state, or the reinstatement of a limited liability company's certificate of

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organization or registration until all required filing and other fees have been paid to the secretary

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of state and all fees and franchise taxes have been paid.

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      (d) The secretary of state may not accept for filing a certificate of conversion to a non-

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Rhode Island entity until all required filing and other fees have been paid to the secretary of state

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and all fees and franchise taxes have been paid.

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      (e) When the secretary of state accepts the articles of organization or a certificate of

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registration or any other document filed under this chapter, the secretary of state shall:

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      (1) Endorse on the document the date and time of its acceptance for filing;

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      (2) Promptly file the document; and

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      (3) Issue a certificate or other evidence which establishes:

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      (i) That the document was accepted for filing by the secretary of state; and

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      (ii) The date and time of the acceptance for filing.

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      (f) The document becomes effective upon the issuance of the certificate or other

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evidence or at any later date that is set forth within the document, not more than thirty (30) days

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after the filing of such document.

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     7-16-41. Revocation of certificate of organization Revocation of certificate of

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organization or certificate of registration. -- (a) The certificate of organization or certificate of

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registration of a limited liability company may be revoked by the secretary of state on the

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conditions prescribed in this section when it is established that:

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      (1) The limited liability company procured its articles of organization through fraud;

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      (2) The limited liability company has continued to exceed or abuse the authority

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conferred upon it by law;

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      (3) The limited liability company has failed to file its annual report within the time

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required by this chapter, or has failed to pay any fees or taxes due this state, when they have

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become due and payable;

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      (4) The limited liability company has failed for thirty (30) days to appoint and maintain a

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resident agent in this state as required by this chapter;

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      (5) The limited liability company has failed, after change of its resident agent, to file in

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the office of the secretary of state a statement of the change as required by this chapter;

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      (6) The limited liability company has failed to file in the office of the secretary of state

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any amendment to its articles of organization or certificate of registration or any articles of

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dissolution, cancellation of registration, merger or consolidation as prescribed by this chapter; or

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      (7) A misrepresentation has been made of any material matter in any application, report,

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affidavit, or other document submitted by the limited liability company pursuant to this chapter.

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      (b) No certificate of organization or certificate of registration of a limited liability

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company shall be revoked by the secretary of state unless:

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      (1) The secretary of state shall have given the limited liability company not less than

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sixty (60) days notice thereof by regular mail addressed to the resident agent in this state on file

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with the secretary of state's office; provided, however, that if a prior mailing addressed to the

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address of the resident agent of the limited liability company in this state currently on file with

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the secretary of state's office has been returned to the secretary of state as undeliverable by the

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United States Postal Service for any reason, or if the revocation notice is returned as

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undeliverable to the secretary of state's office by the United States Postal Service for any reason,

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the secretary of state shall give notice as follows:

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      (i) To the limited liability company, domestic or foreign, at its principal office of record

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as shown in its most recent annual report, and no further notice shall be required; or

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      (ii) In the case of a limited liability company which has not yet filed an annual report,

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then to the domestic limited liability company at the principal office in the articles of organization

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or to the authorized person listed on the articles of organization, or to the foreign limited liability

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company at the office required to be maintained by the limited liability company in its state of

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organization, and no further notice shall be required; and

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      (2) The limited liability company fails prior to revocation to file the annual report, pay

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the fees or taxes, file the required statement of change of resident agent, file the articles of

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amendment or amendment to its registration or articles of dissolution, cancellation of registration,

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merger or consolidation, or correct the misrepresentation.

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     7-16-42. Issuance of certificates of revocation. -- (a) Upon revoking any such certificate

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of organization or certificate of registration of the limited liability company, the secretary of state

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shall:

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      (1) Issue a certificate of revocation in duplicate;

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      (2) File one of the certificate in the secretary of state's office;

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      (3) Send to the limited liability company by regular mail a certificate of revocation,

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addressed to the resident agent of the limited liability company in this state on file with the

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secretary of state's office; provided, however, that if a prior mailing addressed to the address of

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the resident agent of the limited liability company in this state currently on file with the secretary

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of state's office has been returned to the secretary of state as undeliverable by the United States

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Postal Service for any reason, or if the revocation certificate is returned as undeliverable to the

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secretary of state's office by the United States Postal Service for any reason, the secretary of state

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shall give notice as follows:

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      (i) To the limited liability company, domestic or foreign, at its principal office of record

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as shown in its most recent annual report, and no further notice shall be required; or

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      (ii) In the case of a limited liability company which has not yet filed an annual report,

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then to the domestic limited liability company at the principal office in the articles of organization

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or to the authorized person listed on the articles of organization, or to the foreign limited liability

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company at the office required to be maintained by the limited liability company in its state of

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organization, and no further notice shall be required.

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      (b) Upon the issuance of the certificate of revocation, the authority of the limited liability

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company to transact business in this state ceases.

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     7-16-43. Withdrawal of certificate of revocation. -- (a) Within ten (10) years after

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issuing a certificate of revocation as provided in section 7-16-42, the secretary of state may

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withdraw the certificate of revocation and retroactively reinstate the limited liability company in

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good standing as if its certificate of organization or certificate of registration had not been

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revoked except as subsequently provided:

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      (1) On the filing by the limited liability company of the documents it had previously

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failed to file as set forth in subdivisions (3) -- (6) of section 7-16-41(a);

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      (2) On the payment by the limited liability company of a penalty in the amount of fifty

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dollars ($50.00) and an additional fifty dollars ($50.00) for each year or part of year that has

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elapsed since the issuance of the certificate of revocation less the fifty dollars ($50.00) paid under

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the immediately preceding clause; and

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      (3) Upon the filing by the limited liability company of a certificate of good standing

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from the Rhode Island division of taxation.

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      (b) If, as permitted by the provisions of this chapter or chapters 1.2, 6, or 12, or 13 of this

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title, another limited liability company, business or nonprofit corporation, registered limited

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liability partnership or a limited partnership, or in each case domestic or foreign, authorized and

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qualified to transact business in this state, bears or has filed a fictitious business name statement

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as to or reserved or registered a name which is the same as, the name of the limited liability

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company with respect to which the certificate of revocation is proposed to be withdrawn, then the

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secretary of state shall condition the withdrawal of the certificate of revocation on the reinstated

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limited liability company's amending its articles of organization or certificate of registration so as

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to designate a name which is not the same as its former name.

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     7-16-50. Issuance of registration of foreign limited liability company. -- If the

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secretary of state accepts the application for filing under section 7-16-8, the secretary of state

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shall issue a certificate of registration to the foreign limited liability company. Upon the issuance

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of a certificate of registration by the secretary of state, the company is authorized to transact

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business in this state, subject, however, to the right of this state to suspend or revoke the authority

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as provided in this chapter.

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     SECTION 2. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited

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Liability Company Act" is hereby amended by adding thereto the following section:

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     7-16-52.1. Foreign application for transfer of authority. – (a) A duly authorized

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foreign limited liability company in the state of Rhode Island that converts into any other form of

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foreign entity subject to the provisions of title 7 and the resulting entity is required to file for

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authority to transact business in this state may apply for a transfer of authority in the office of the

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secretary of state by filing:

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     (1) An application of transfer of authority that has been executed and filed in accordance

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with section 7-16-8;

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     (2) An application for authority to transact business in the state of Rhode Island for the

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resulting entity type; and

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     (3) A certificate of legal existence or good standing issued by the proper officer of the

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state or country under the laws of which the resulting entity has been formed.

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     (b) The application for transfer of authority shall state:

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     (1) The name of the limited liability company;

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     (2) The type of other entity into which it has been converted; and

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     (3) The jurisdiction whose laws govern its internal affairs.

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     (c) Upon the effective time and date of the application for transfer of authority, the

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authority of the limited liability company authorized to transact business under this chapter shall

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be transferred without interruption to the other entity which shall thereafter hold such authority

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subject to the provisions of the Rhode Island general laws which apply to that type of resulting

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entity.

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     SECTION 3. This act shall take effect upon passage.

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LC00456/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO CORPORATIONS, ASSOCIATIONS AND PARTNERSHIPS -- THE RHODE

ISLAND LIMITED LIABILITY COMPANY ACT

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     This act would amend certain provisions relative to the secretary of state filing

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procedures for documents received pursuant to this chapter dealing with corporations,

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associations and partnerships.

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     This act would take effect upon passage.

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LC00456/SUB A

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