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

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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 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.

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(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.

(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 party 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.

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(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 effected 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;

(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:

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(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 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.

(F) For purposes of this section, except with respect to subsections (A)(7) and (D), the term `limited liability company' shall include both domestic and foreign limited liability companies.

Section 33-43-1305. Effects of merger.

A merger has the following effects:

(A) The limited liability companies that are parties to the merger agreement shall be a single entity.

(B) Each limited liability company to the merger agreement, except the surviving limited liability company, shall cease to exist.

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(C) All property real, personal, and mixed, and all debts due on whatever account, including promises to make capital contributions, and all other choses in action, and all and every other interest of belonging to or due to each of the constituent limited liability companies shall be vested in the surviving limited liability company without further act or deed.

(D) The title to all real estate and any interest therein, vested in any such constituent limited liability company shall not revert or be in any way impaired by reason of such merger.

(E) The surviving limited liability company shall thenceforth be liable for all liabilities and obligations of each of the constituent limited liability companies so merged and any claim existing or action or proceeding pending by or against any such constituent limited liability company may be prosecuted as if such merger had not taken place, or the surviving limited liability company may be substituted in the action.

(F) Neither the rights of creditors nor any liens on the property of any constituent limited liability company shall be impaired by the merger.

(G) The interests in a limited liability company and the former holders thereof are entitled only to the rights provided in the merger agreement or the rights otherwise provided by law.

For purposes of this section, the term `limited liability company' shall include both domestic and foreign limited liability companies.

Article 14

Miscellaneous Provisions

Section 33-43-1401. Filing, service, and copying fees.

(A) The Secretary of State shall collect the following fees when the following documents described in this subsection are delivered to him for filing:

(1) Articles of organization of a domestic limited liability company: one hundred and ten dollars.

(2) Articles of amendment to the articles of organization of a domestic limited liability company: one hundred and ten dollars.

(3) Articles of merger involving a domestic or foreign limited liability company: one hundred and ten dollars.

(4) Application by a foreign limited liability company for a certificate of authority to do business in South Carolina: one hundred and ten dollars.

(5) Amendment by a foreign limited liability company of its certificate of authority: one hundred and ten dollars.

(6) Restated articles of organization of a limited liability company filed with an amendment to the articles of organization: ten dollars.

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(7) Application for reservation of a limited liability company name: twenty-five dollars.

(8) Notice of transfer of a reserved limited liability company name: ten dollars.

(9) Annual application for registration (or renewal) of a foreign limited liability company name: ten dollars.

(10) Statement of change of registered office or registered agent, or both: Ten dollars.

(11) Articles of dissolution: ten dollars.

(12) Articles of revocation of dissolution: ten dollars.

(13) Application for reinstatement after administrative dissolution: twenty-five dollars.

(14) Application for certificate of withdrawal: ten dollars.

(15) Application for certificate of existence or authorization: ten dollars.

(16) Any other document required or permitted to be filed pursuant to this Chapter 43 of Title 33: two dollars.

(B) The Secretary of State shall collect a fee of ten dollars each time process is served on him under Chapter 43 of this Tile 33. The party to a proceeding causing service of process is entitled to recover this fee as costs if he prevails in the proceeding.

(C) The Secretary of State shall collect the following fees for copying and certifying the copy of any filed document relating to a domestic or foreign limited liability company:

(1) for copying, one dollar for the first page and fifty cents for each additional page; and,

(2) two dollars for each certificate.

Section 33-43-1402. Execution by judicial act.

Any person who is adversely affected by the failure or refusal of any person to execute and file any articles or other documents to be filed under this chapter may petition the court of common pleas in the county where the registered office of the limited liability company is located to direct the execution and filing of the articles or other documents. If the court finds that it is proper for the articles or other documents to be executed and filed and that there has been failure or refusal to execute and file such documents, it shall order the Secretary of State to file the appropriate articles or other documents.

Section 33-43-1403. Notice.

(A) Notice under this chapter must be in writing unless oral notice is reasonable under the circumstances.

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(B) Notice may be communicated in person; by telephone, telegraph, teletype, facsimile transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area, where published; or by radio, television, or other form of public broadcast communication.

(C) Written notice by a domestic or foreign limited liability company to its members, if in a comprehensible form, is effective when mailed, if mailed postpaid and correctly addressed to the member's address shown in the limited liability company's current record of members.

(D) In addition to Section 33-43-303, written notice to a domestic or foreign limited liability company (authorized to transact business in this State) may be addressed to its registered agent at its registered office.

(E) Except as provided in subsection (C), written notice, if in a comprehensible form, is effective at the earliest of the following:

(1) when received;

(2) five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed;

(3) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee.

(F) Oral notice is effective when communicated if communicated in a comprehensible manner.

(G) If Chapter 43 prescribes notice requirements for particular circumstances, those requirements govern. If the articles of organization or the operating agreement prescribe notice requirements, not inconsistent with this section or other provisions of Chapter 43, those requirements govern.

Section 33-43-1404. Rules of construction.

(A) It is the policy of this chapter to give maximum effect to the principle of freedom of contract and to the enforceability of operating agreements.

(B) Unless displaced by particular provisions of this chapter, the principles of law and equity supplement this chapter.

(C) Rules that statutes in derogation of the common law are to be strictly construed shall have no application to this chapter.

Section 33-43-1405. Jurisdiction of the circuit court.

The circuit courts shall have jurisdiction to enforce the provisions of this chapter.

Section 33-43-1406. Severability.

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If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application. To this end, the provisions of this chapter are severable.

Section 33-43-1407. Interstate application.

A limited liability organized and existing under this chapter may conduct its business, carry on its operations, and have and exercise the powers granted by this chapter in any state or foreign country.

Section 33-43-1408. The term `partnership' includes the term `limited liability company'.

Except (1) as otherwise required by the context, (2) as inconsistent with the provisions of this chapter, and (3) for this chapter, Chapters 41 and 42 of Title 33, and Title 12, the term `partnership' or `general partnership', when used in any other statute or in any regulation, includes and also means `limited liability company'.

Section 33-43-1409. The General Assembly of South Carolina has power to provide regulations regarding Chapter 43 of this title and to amend or repeal all or any part of Chapter 43 of Title 33 or its regulations at any time; and all domestic and foreign limited liability companies subject to Chapter 43 of this title are governed by the amendment or repeal."

SECTION 2. The 1976 Code is amended by adding:

"Section 12-2-25. Limited liability companies.

(A) As used in this title and unless otherwise required by the context:

(1) `Partnership' includes a limited liability company taxed for South Carolina income tax purposes as a partnership.

(2) `Partner' includes any member of a limited liability company taxed for South Carolina income tax purposes as a partnership.

(3) `Corporation' includes a limited liability company or professional or other association taxed for South Carolina income tax purposes as a corporation.

(4) `Shareholder' includes any member of a limited liability company taxed for South Carolina income tax purposes as a corporation."

PART II

Registered Limited Liability Partnerships

SECTION 3. Section 33-41-20 of the 1976 Code is amended to read:

"Section 33-41-20. As used in this chapter:

(1) `Court' includes every court and judge having jurisdiction in the case;

(2) `Business' includes every trade, occupation, or profession;

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(3) `Bankrupt' includes a bankrupt under the Federal Bankruptcy Act or an insolvent under any state insolvent act;

(4) `Conveyance' includes every assignment, lease, mortgage, or encumbrance; and

(5) `Real property' includes land and any interest or estate in land.; and

(6) `Registered limited liability partnership' includes a partnership formed pursuant to an agreement governed by the laws of this State, registered under Section 33-41-1110 and complying with Sections 33-41-1120 and 33-41-1130."

SECTION 4. Section 33-41-210 of the 1976 Code is amended to read:

"Section 33-41-210. A `partnership' is an association of two or more persons to carry on as co-owners a business for profit and includes, for all purposes of the laws of this State, a registered limited liability partnership. But However, any association formed under any other statute of this State or any statute adopted by authority, other than the authority of this State, is not a partnership under this chapter unless such the association would have been a partnership in this State prior to before the adoption of this chapter on February 13, 1950.

But this This chapter shall apply to limited partnerships except in so far as the statutes relating to such the partnerships are inconsistent herewith with the provisions of this chapter."

SECTION 5. Section 33-41-370 of the 1976 Code is amended to read:

"Section 33-41-370. (A) Except as provided by subsection (B), All all partners are liable jointly and severally for everything chargeable to the partnership.

(B) Subject to subsections (C) and (D), a partner in a registered limited liability partnership is not liable directly or indirectly, including by way of indemnification, contribution, or otherwise, for debts, obligations, and liabilities chargeable to the partnership arising from negligence, wrongful acts, or misconduct committed while the partnership is a registered limited liability partnership and in the course of the partnership business by another partner or an employee, agent, or representative of the partnership.

(C) Subsection (B) shall not affect the liability of a partner in a registered limited liability partnership for his own negligence, wrongful acts, or misconduct, or that of a person under his direct supervision and control.

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(D) Each individual who renders professional services on behalf of a registered limited liability partnership is liable for a negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered the services as a sole practitioner. A partner of a registered limited liability partnership which renders professional services, as defined in Section 33-19-103(7), is not liable for the negligence, wrongful acts, misconduct, or omissions of other partners, agents, or employees of the registered limited liability partnership unless he is at fault in appointing, supervising, or cooperating with them."

SECTION 6. Section 33-41-510(1) of the 1976 Code is amended to read:

"(1) each partner shall be repaid his contributions, whether by way of capital or advances to the partnership property, and share equally in the profits and surplus remaining after all liabilities, including those to partners, are satisfied. And Except as provided in Section 33-41-370(B), each partner must shall contribute toward the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits;"

SECTION 7. Section 33-41-960 of the 1976 Code is amended to read:

"Section 33-41-960. When the dissolution is caused by the act, death, or bankruptcy of a partner, each partner is liable to his copartners for his share of any liability created by any a partner acting for the partnership as if the partnership had not been dissolved unless:

(1) the dissolution being by act of any a partner, the partner acting for the partnership had knowledge of the dissolution; or

(2) the dissolution being by the death or bankruptcy of a partner, the partner acting for the partnership had knowledge or notice of the death or bankruptcy.; or

(3) the liability is for a debt, obligation, or liability for which the partner is not liable as provided in Section 33-41-370(B)."

SECTION 8. Section 33-41-1010(4) of the 1976 Code is amended to read:

"(4) The individual property of a deceased partner shall must be liable for all those obligations of the partnership incurred while he was a partner and for which he was liable under Section 33-41-370 but subject to the prior payment of his separate debts."

SECTION 9. Section 33-41-1060 of the 1976 Code is amended to read:

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