Journal of the House of Representatives
of the Second Session of the 110th General Assembly
of the State of South Carolina
being the Regular Session Beginning Tuesday, January 11, 1994

Page Finder Index

| Printed Page 2270, Feb. 22 | Printed Page 2290, Feb. 22 |

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Section 33-43-1002.Application for certificate of authority.

(A) A foreign limited liability company may apply for a certificate of authority to transact business in this State by delivering an application to the Secretary of State for filing. The application must set forth:

(1) the name of the foreign limited liability company that satisfies the requirements of Section 33-43-1004;

(2) the name of the state or country under which it is organized;

(3) its date of organization and the latest date upon which the limited liability company is to dissolve;

(4) the street address of its proposed registered office in this State and the name of its proposed registered agent at that office;

(5) if management of the limited liability company is vested in a manager or managers, a statement to that effect.

(B) The foreign limited liability company shall deliver with the completed application a certificate of existence (or a document of similar import) duly authenticated by the Secretary of State or other official having custody of limited liability company records in the state or country under which law it is organized.

(C) If the foreign limited liability company renders `professional services' as defined in Section 33-43-102(N), a statement that all of its members are licensed in one or more states to render the professional services which the foreign limited liability company practices and that one or more of its members is licensed in South Carolina to render such professional services.

Section 33-43-1003.Issuance of registration.

(A) If the Secretary of State finds that an application for registration conforms to the provisions of this article and all requisite fees have been paid, the Secretary shall:
(1) endorse on each signed original and duplicate copy the word `filed' and the date and time of its acceptance for filing;

(2) retain the signed original in the Secretary of State's files; and

(3) return the duplicate copy to the person who filed it or the person's representative.

(B) If the Secretary of State is unable to make the determination required for filing by subsection (A) at the time any documents are


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delivered for filing, the documents are deemed to have been filed at the time of delivery if the Secretary of State subsequently determines that:

(1) the documents as delivered conform to the filing provisions of this act; or

(2) within twenty days after notification of nonconformance is given by the Secretary of State to the person who delivered the documents for filing for the person's representative, the documents are brought into conformance.

(C) If the filing and determination requirements of this act are not satisfied within the time prescribed in subsection (B)(2), the documents shall not be filed.

Section 33-43-1004.Name.

No certificate of registration shall be issued to a foreign limited liability company unless the name of such company satisfies the requirements of Section 33-43-103. If the name under which a foreign limited liability is registered in the jurisdiction of its formation does not satisfy the requirements of Section 33-43-103, to obtain or maintain a certificate of registration the foreign limited liability company may use a designated name that is available, and which satisfies the requirements of Section 33-43-103.

Section 33-43-1005.Amendments.

(A) The application for registration of a foreign limited liability company is amended by filing articles of amendment with the Secretary of State signed by a person with authority to do so under the laws of the State or other jurisdiction of its formation. The articles of amendment shall set forth:

(1) the name of the foreign limited liability company;

(2) the date the original application for registration was filed; and

(3) the amendment to the application for registration.

(B) the application for registration may be amended in any way, provided that the application for registration, as amended, contains only provisions that may be lawfully contained in an application for registration at the time of the amendment.

(C) A foreign limited liability company authorized to transact business in South Carolina must obtain an amended certificate of authority from the Secretary of State if it changes:

(1) its limited liability company name;

(2) the period of its duration;

(3) the state or country of its organization;

(4) from a member managed limited liability company to a limited liability company managed by managers;


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(5) from a limited liability company managed by managers to a limited liability company managed by its members;

An amended certificate of authorization must also be obtained if:

(6) there is a false or erroneous statement in the original filed application for a certificate of authority.

Section 33-43-1006.Cancellation of registration.

(A) A foreign limited liability company authorized to transact business in this State may cancel its registration upon procuring from the Secretary of State a certificate of cancellation. In order to procure such certificate, the foreign limited liability company shall deliver to the Secretary of State an application for cancellation, which shall set forth:

(1) the name of the foreign limited liability company and the state or other jurisdiction under the laws of which it is formed;

(2) that the foreign limited liability company is not transacting business in this State;

(3) that the foreign limited liability company surrenders its certificate of registration to transact business in this State;

(4) that the foreign limited liability company revokes the authority of its registered agent for service of process in this State and consents that service of process in any action, suit, or proceeding based upon any cause of action arising in this State may thereafter be made on such foreign limited liability company by service thereof upon the Secretary of State; and

(5) an address to which a person may mail a copy of any process against the foreign limited liability company.

(B) The application for cancellation shall be in the form and manner designated by the Secretary of State and shall be executed on behalf of the foreign limited liability company by a person with authority to do so under the laws of the State or other jurisdiction of its formation, or, if the foreign limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary by that fiduciary.

(C) A cancellation does not terminate the authority of the Secretary of State to accept service of process on the foreign limited liability company with respect to causes of action arising out of the doing of business in this State.

Section 33-43-1007.Transaction of business without registration.

(A) A foreign limited liability company transacting business in this State may not maintain an action, suit, or proceeding in a court of this State until it has registered in this State.


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(B) The failure of a foreign limited liability company to register in this State does not:

(1) impair the validity of any contract or act of the foreign limited liability company;

(2) affect the right of any other party to the contract to maintain any action, suit, or proceeding on the contract; or

(3) prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this State.

(C) A foreign limited liability company, by transacting business in this State without registration, appoints the Secretary of State as its agent for service of process with respect to a cause of action arising out of the transaction of business in this State.

(D) A foreign limited liability company which transacts business in this State without registration shall be liable to the State for the years or parts thereof during which it transacted business in this State without registration in an amount equal to all fees which would have been imposed by this chapter upon that foreign limited liability company had it duly registered, and all penalties imposed by this chapter, the Attorney General may bring proceedings to recover all amounts due this State under the provisions of this section.

(E) A foreign limited liability company which transacts business in this State without registration shall be subject to a civil penalty, payable to the State of ten dollars per day, not to exceed one thousand dollars per year.

(F) The civil penalty set forth in subsection (E) may be recovered in an action brought within a court by the Attorney General. Upon a finding by the court that a foreign limited liability company has transacted business in this State in violation of this chapter, the court shall issue, in addition to the imposition of a civil penalty, an injunction restraining further transactions of the business of the foreign limited liability company and the further exercise of any limited liability company's rights and privileges in this State. The foreign limited liability company shall be enjoined from transacting business in this State until all civil penalties plus any interest and court costs which the court may assess have been paid and until the foreign limited liability company has otherwise complied with the provisions of this article.

(G) A member or manager of a foreign limited liability company is not liable for the debts and obligations of the limited liability company solely because the limited liability company transacted business in this State without registration.


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Section 33-43-1008. Authority to transact business required.

(A) A foreign limited liability company may not transact business in this State until it obtains a certificate of authority from the Secretary of State.

(B) The following activities, among others, do not constitute transacting business within the meaning of subsection (A):

(1) maintaining, defending, or settling any proceeding;

(2) holding meetings of the members or managers or carrying on other activities concerning internal affairs;

(3) maintaining bank accounts;

(4) selling through independent contractors;

(5) soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts;

(6) creating or acquiring any indebtedness, mortgages, and security interests in real or personal property;

(7) securing or collecting any debts or enforcing mortgages, security interests, or any other rights in property securing debts;

(8) owning, without more, real or personal property;

(9) conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of like nature;

(10) transacting business in interstate commerce;

(11) is a member or manager of a limited liability company or foreign limited liability company that is transacting business within this State.

(C) A foreign limited liability company which renders a professional service is not required to obtain a certificate of authority to transact business in this State unless it maintains or intends to maintain an office in this State for the conduct of business or professional practice.

(D) The list of activities in subsection (B) is not exhaustive.

Article 11

Professional Services Limited Liability Companies

Section 33-43-1101.Rendering professional services.

(A) A domestic or foreign limited liability company may render professional services in this State only through individuals licensed or otherwise authorized in this State to render the services.

(B) Subsection (A) does not:

(1) require an individual employed by a limited liability company to be licensed to perform services for the limited liability company if a license is not required otherwise;


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(2) prohibit a licensed individual from rendering professional services in his individual capacity although he is a member or manager of a domestic or foreign limited liability company which also renders professional services; or,

(3) prohibit an individual licensed in another state from rendering professional services for a domestic or foreign limited liability company in this State if not prohibited by the licensing authority.

Section 33-43-1102.Confidential relationships.

(A) The relationship between an individual rendering professional services as a member, manager, agent, or employee of a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), and his client or patient, is the same as if the individual were rendering the services as a sole practitioner.

(B) The relationship between a domestic or foreign limited liability company which renders professional services, as defined in Section 33-43-102(N), and the client or patient for whom its employees, members, managers, or agents are rendering professional services is the same as that between the client or patient and the person providing the service.

Section 33-43-1103.Privileged communications.

A privilege applicable to communications between an individual rendering professional services and the person receiving the services recognized under the statute or common law of this State is not affected by this chapter. The privilege applies to a domestic or foreign professional limited liability company which renders professional services, as defined in Section 33-43-102(N), and to its employees, members, managers, and agents in all situations in which it applies to communications between an individual rendering professional services on behalf of the limited liability company (which renders professional services) and the person receiving the services.

Section 33-43-1104.Purposes.

(A) Except to the extent authorized by subsection (B), a South Carolina limited liability company whose purpose is to render professional services, may only: (i) render professional services within a single profession, and (ii) render services ancillary to the professional services. It may not engage in other business activities except as authorized by subsection (B).

(B) A limited liability company may render professional services in two or more professions and engage in any lawful business authorized by Section 33-43-106, to the extent the combination of professional purposes or of professional and business purposes is authorized by the licensing law of this State applicable to each profession in the combination. A limited liability company whose purpose is to render professional services may


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invest its funds in real estate, mortgages, securities, or any other type of investment.

Section 33-43-1105.Judicial dissolution.

The Attorney General may commence a proceeding to dissolve a limited liability company which renders professional services if:

(1) the Secretary of State or a licensing authority with jurisdiction over the limited liability company which renders professional services serves written notice on the limited liability company that it has violated or is violating a provision of this chapter (other than the provisions specified in Section 33-43- 901.1, a violation of which gives the Secretary of State authority to administratively dissolve the limited liability company);

(2) the limited liability company does not correct each alleged violation, or demonstrate to the reasonable satisfaction of the Secretary of State or licensing authority that this did not occur, within sixty days after service of the notice is perfected; and

(3) the Secretary of State or licensing authority certifies to the Attorney General a description of the violation, that it notified the limited liability company of the violation, and that the limited liability company did not correct it, or demonstrate that it did not occur, within sixty days after service of notice.

Article 12

Suits By and Against the Limited

Liability Company

Section 33-43-1201.Actions by and against the limited liability company.

(A) A limited liability company may sue and be sued in the name of the limited liability company.

(B) A member or a manager of a limited liability company is not a proper party to a proceeding by or against a limited liability company except when:

(1) the object of the proceeding is to determine or enforce a member or manager's right against, or liability to, the limited liability company as provided in Section 33-43-1203; or

(2) the proceeding involves a claim of personal liability or responsibility of that member or manager and that claim has some basis other than the member or manager's status as a member or manager.

Section 33-43-1202.Service of process.

(A) The registered agent appointed by a limited liability company or a foreign limited liability company shall be an agent of a limited liability company or foreign limited liability company upon whom any process, notice, or demand required or permitted by law to be served upon the


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limited liability company or foreign limited liability company may be served.

(B) If a limited liability company or foreign limited liability company fails to appoint or maintain a registered agent in this State or its registered agent cannot with reasonable diligence be found at the registered office, the Secretary of State shall be an agent of such limited liability company or foreign limited liability company upon whom any such process, notice, or demand may be served. Service on the Secretary of State of any process, notice, or demand shall be made by delivering to and leaving with the Secretary of State duplicate copies of the process, notice, or demand. If the process, notice, or demand is served on the Secretary of State, the Secretary of State shall immediately forward one of the copies by registered mail to the limited liability company or foreign limited liability company at its registered office. Service on the Secretary of State shall be returnable in not less than thirty days.

(C) The Secretary of State shall keep a record of all process, notices, and demands, served pursuant to this section and record the time and the action taken regarding the services.

(D) This section shall not limit or affect the right to serve any process, notice, or demand required or permitted by law to be served upon a limited liability company or foreign limited liability company in any other manner permitted by law.

Section 33-43-1203.Remedies of the limited liability company and members.

(A) A limited liability company, may maintain an action against a member or manager for a breach of the operating agreement, or for the violation of a duty to the limited liability company causing harm to the limited liability company.

(B) A member may maintain an action against the limited liability company, a manager, or a member for legal or equitable relief, including an accounting as to limited liability company business, for any breach of the operating agreement, or for the violation of a duty to the member or limited liability company causing harm to the member or limited liability company.

Article 13

Merger-Domestic or Foreign

Section 33-43-1301.Merger.

(A) Unless otherwise provided in writing in an operating agreement, one or more limited liability companies may merge with another domestic or foreign limited liability company as the merger agreement shall provide.


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(B) Interests in a domestic or foreign limited liability company that is a party to the merger may be exchanged for or converted into cash, property, obligations, rights, or interests in the surviving domestic or foreign limited liability company.

Section 33-43-1302.Approval of merger.

(A) Unless otherwise provided in writing in an operating agreement, each domestic or foreign limited liability company that is a part to a proposed merger shall approve the merger agreement by the consent of all the members. In no event shall the agreement be approved by less than fifty-one percent of the members of each domestic and foreign limited liability company.

(B) Each domestic and foreign limited liability company that is a party to the merger shall have such rights to abandon the merger as are provided for in the merger agreement or in the laws applicable to each domestic and foreign limited liability company.

Section 33-43-1303.Plan of merger.

(A) Each domestic and foreign limited liability company shall enter into a written plan of merger, which shall be approved in accordance with Section 33-43-1302.

(B) The plan of merger shall set forth:

(1) the name of each limited liability company that is a party to the merger and the name of the surviving limited liability company into which each limited liability company proposes to merge;

(2) the terms and conditions of the proposed merger;

(3) the manner and basis of converting the interests in each limited liability company into interests of the surviving limited liability company, in whole or part, or into cash or other property;

(4) such amendments to the articles of organization of the surviving limited liability company as are desired to be affected by the merger, or that no such changes are desired;

(5) such other provisions relating to the proposed merger as are considered necessary or desirable.

(C) For purposes of Section 33-43-1303, the term `limited liability company' shall include both domestic and foreign limited liability companies.

Section 33-43-1304.Articles of merger.

(A) The surviving limited liability company shall deliver to the Secretary of State articles of merger executed by each constituent limited liability company setting forth:

(1) the name and jurisdiction of formation or organization of each limited liability company which is to merge;


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(2) that an agreement of merger has been approved and executed by each limited liability company which is a party to the merger;

(3) the name of the surviving or resulting limited liability company;

(4) the future effective date of the merger (which shall be a date or time certain) if it is not to be effective upon the filing of the articles of merger;

(5) that the agreement of merger is on file at a place of business of the surviving limited liability company, and the address of that place of business;

(6) that a copy of the agreement of merger will be furnished by the surviving limited liability company, on request and without cost, to any person holding an interest in any limited liability company which is to merge; and

(7) if the surviving or resulting limited liability company is not a limited liability company organized under the laws of this State, a statement that such surviving limited liability company:

(a) agrees that it may be served with process in this State in any proceeding for enforcement of any obligation of any limited liability company party to the merger that was organized under the laws of this State, as well as for enforcement of any obligation of the surviving limited liability company or the new limited liability company arising from the merger; and

(b) appoints the Secretary of State as its agent for service of process in any such proceeding, and the surviving limited liability company or the new limited liability company shall specify the address to which a copy of the process shall be mailed to it by the Secretary of State.

(B) A merger takes effect upon the later of the effective date of the filing of the articles of merger or the date set forth in the articles of merger.

(C) The articles of merger shall be executed by a limited liability company that is a party to the merger in the manner provided for in Section 33-43-204 and shall be filed with the Secretary of State in the manner provided for in Section 33-43-205.

(D) Articles of merger shall constitute articles of dissolution for a limited liability company which is not the surviving limited liability company in the merger.

(E) An agreement of merger approved in accordance with Sections 33-43-1302 and 33-43-1303 may affect any amendment to an operating agreement or affect the adoption of a new operating agreement for a limited liability company if it is the surviving limited liability company in the merger. An approved agreement of merger may also provide that the


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operating agreement of any constituent limited liability company to the merger (including a limited liability company formed for the purpose of consummating a merger) shall be the operating agreement of the surviving or resulting limited liability company. Any amendment to an operating agreement or adoption of a new operating agreement made pursuant to this subsection (E) shall be effective at the effective time or date of the merger.


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