S 1466 Session 109 (1991-1992)
S 1466 General Bill, By Bryan, Holland, M.F. Mullinax, M.T. Rose, J.V. Smith,
H.S. Stilwell, Thomas and Wilson
A Bill to amend Title 33, Code of Laws of South Carolina, 1976, relating to
corporations, by adding Chapter 21 so as to enact the "South Carolina Limited
Liability Company Act".
04/14/92 Senate Introduced and read first time SJ-3
04/14/92 Senate Referred to Committee on Judiciary SJ-3
A BILL
TO AMEND TITLE 33, CODE OF LAWS OF SOUTH CAROLINA,
1976, RELATING TO CORPORATIONS, BY ADDING CHAPTER 21
SO AS TO ENACT THE "SOUTH CAROLINA LIMITED
LIABILITY COMPANY ACT".
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 33 of the 1976 Code is amended by adding:
"CHAPTER 21
South Carolina Limited Liability Company Act
Section 33-21-101. Short title
This chapter may be cited as the `South Carolina Limited Liability
Company Act.'
Section 33-21-102. Definitions
(A) As used in this chapter:
(1) `Bankrupt' means bankrupt under the Federal
Bankruptcy laws;
(2) `Court' includes every court and judge having
jurisdiction in the case;
(3) `Limited liability company' or `company' means a limited
liability company organized and existing under this chapter;
(4) `Person' includes individuals, general partnerships,
limited partnerships, limited liability companies, corporations, trusts,
business trusts, real estate investment trusts, estates and other
associations;
(5) `This Chapter' means the South Carolina Code Limited
Liability Company Act.
(6) `Professional service' means a service that may be
rendered lawfully only by a person licensed or otherwise authorized by
a licensing authority in this State to render the service and that may not
be lawfully rendered by a corporation under Chapters 1 through 21 of
this title.
Section 33-21-103. Purpose
(A) Each limited liability company organized and existing under
this chapter may:
(1) sue and be sued, complain and defend, in its name;
(2) purchase, take, receive, lease or otherwise acquire,
own, hold, improve, use and otherwise deal in and with real or personal
property, or an interest in it, wherever situated;
(3) sell, convey, mortgage, pledge, lease, exchange, transfer
and otherwise dispose of all or any part of its property and assets;
(4) lend money to and otherwise assist its members;
(5) purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge or
otherwise dispose of, and otherwise use and deal in and with shares or
other interests in or obligations of other limited liability companies,
domestic or foreign corporations, associations, general or limited
partnerships or individuals, or direct or indirect obligations of the United
States or of any government, state, territory, governmental district or
municipality or of any instrumentality of it;
(6) make contracts and guarantees and incur liabilities,
borrow money at such rates of interest as the limited liability company
may determine, issue its notes, bonds, and other obligations and secure
any of its obligations by mortgage or pledge or any part of its property,
franchises and income;
(7) lend money for any lawful purpose, invest and reinvest its
funds, and take and hold real property and personal property for the
payment of funds so loaned or invested;
(8) conduct its business, carry on its operations and have and
exercise the powers granted by this chapter , within or without this State;
(9) elect or appoint managers and agents of the limited
liability company, and define their duties and fix their compensation;
(10) make and alter operating agreements, not inconsistent with
its articles of organization or with the laws of this State, for the
administration and regulation of the affairs of the limited liability
company;
(11) indemnify a member or manager or former member or
manager or employee or former employee or agent or former agent of
the limited liability company as provided in 33-21-137;
(12) cease its activities and surrender its certificate of
organization;
(13) have and exercise all powers necessary or convenient to
effect any or all of the purposes for which the limited liability company
is organized;
(14) pay pensions and establish pension plans, profit sharing
plans, and other incentive plans for any or all of its managers and
employees;
(15) be a promoter, incorporator, general partner, limited
partner, member, associate or manager of any corporation, partnership,
limited partnership, limited liability company, joint venture, trust or
other enterprise;
(16) make donations for the public welfare or for charitable,
scientific, religious or educational purposes;
(17) transact any lawful business which the members or
managers find to be in aid of governmental policy;
(18) render professional services, if each member of a limited
liability company who renders professional services in South Carolina
is licensed or registered to render those professional services pursuant
to applicable South Carolina law.
(B) A limited liability company organized to render professional
services under this chapter may render only one specific type of
professional services, and services ancillary to them, and may not
engage in any business other than rendering the professional services
which it was organized to render, and services ancillary to them.
(C) A limited liability company organized to render professional
services:
(1) may include members, managers, and employees
authorized under the laws of the jurisdiction where they reside to
provide similar services;
(2) may render professional services in South Carolina only
through its members, managers, and employees who are licensed or
registered by the State of South Carolina to render those professional
services; and
(3) shall have all of the other powers provided under this section.
Section 33-21-104. Reserved
Section 33-21-105. Limited liability company name
(A) The words `limited company' or their abbreviation `L.C.' must
be the last words of the name of every limited liability company formed
under the provisions of this chapter; and, in addition, the limited liability
company name may not be the same as, or deceptively similar to, the
name of a limited liability company, or a foreign limited liability
company, authorized to transact business in this State, or a name the
exclusive right to which is, at the time, reserved in the manner provided
under the laws of this State.
(B) Omission of the words `limited company', or their
abbreviation `L.C.', in the use of the name of the limited liability
company shall render any person who participates in the omission, or
knowingly acquiesces in it, liable for any indebtedness, damage, or
liability occasioned by the omission.
Section 33-21-106. Formation
Two or more persons may form a limited liability company by
signing, certifying, and delivering in duplicate to the Secretary of State
articles of organization for such limited liability company.
Section 33-21-107. Articles of organization
(A) The articles of organization shall set forth:
(1) The name of the limited liability company;
(2) The period of its duration, which may not exceed thirty
years from the date of filing with the Secretary of State;
(3) The purpose for which the limited liability company is
organized;
(4) The address of its principal place of business in the State
and the name and address of its registered agent in the State;
(5) The total amount of cash and a description and agreed
value of property other than cash contributed;
(6) The total additional contributions, if any, agreed to be
made by all members and the times at which or events upon the
happening of which they must be made;
(7) The right, if given, of the members to admit additional
members, and the terms and conditions of the admission;
(8) The right, if given, of the remaining members of the limited
liability company to continue the business on the death, retirement,
resignation, expulsion, bankruptcy or dissolution of a member or
occurrence of any other event which terminates the continued
membership of a member in the limited liability company;
(9) If the limited liability company is to be managed by a
manager or managers, the articles of organization shall so State and shall
set out the names and addresses of such manager or managers who are
to serve as managers until the first annual meeting of members or until
their successors are elected and qualify. If the management of a limited
liability company is reserved to the members, the names and addresses
of the members must be set out in the articles of organization;
(10) Any other provision, not inconsistent with law, which the
members elect to set out in the articles of organization for the regulation
of the internal affairs of the limited liability company, including any
provisions which under this chapter are required or permitted to be set
out in the operating agreement of the limited liability company.
(B) It is not necessary to set out in the articles of organization any
of the powers enumerated in this chapter.
Section 33-21-108. Amendment of articles of organization
(A) A limited liability company may amend its articles of
organization at any time to add or change a provision that is required or
permitted in the articles or to delete a provision not required in the
articles.
(B) For an amendment to the articles of organization of a limited
liability company to be adopted, the amendment must be approved,
unless the articles of organization require a greater vote, by a majority
vote of the members entitled to vote thereon.
(C) To amend its article of organization, a limited liability
company shall file with the Secretary of State articles of amendment
setting forth:
(1) the name of the limited liability company;
(2) the text of each amendment adopted;
(3) the date of each amendment's adoption; and
(4) a statement that the amendment was adopted by a vote of
the members in accordance with this chapter.
If the Secretary of State finds that the articles of amendment comply
with the requirements of law and that all required fees have been paid,
it shall issue a certificate of amendment.
(D) An amendment to articles of organization does not affect a
cause of action existing against or in favor of the limited liability
company, a proceeding to which the limited liability company is a party,
or the existing rights of persons other than members of the limited
liability company. An amendment changing a limited liability
company's name does not abate a proceeding brought by or against the
limited liability company in its former name.
(E) A member of a limited liability company does not have a
vested property right resulting from any provision of the articles of
organization.
Section 33-21-109. Filing of articles of organization
(A) Duplicate originals of the articles of organization must be
delivered to the Secretary of State. If the Secretary of State finds that the
articles of organization conform to law, he shall, when all fees have been
paid, as in this chapter prescribed:
(1) endorse on each of the duplicate originals the word `Filed'
and the month, day, and year of the filing thereof;
(2) file one of the duplicate originals in his office;
(3) issue a certificate of organization to which he shall affix
the other duplicate original.
(B) The certificate of organization, together with a duplicate
original of the articles of organization affixed to it by the Secretary of
State, must be returned to the principal office of the limited liability
company, or to its representative.
(C) Upon the filing with the Secretary of State, the articles of
organization must be amended as set forth in the certificate of
amendment, and upon the effective date of a certificate of dissolution or
of a judicial decree of cancellation, the articles of organization must be
canceled.
Section 33-21-110. Effect of issuance of certificate of
organization
(A) Upon the issuance of the certificate of organization, the
limited liability company must be considered organized, and such
certificate of organization must be conclusive evidence that all
conditions precedent required to be performed by the members have
been complied with and that the limited liability company has been
legally organized under this chapter, except as against this State in a
proceeding to cancel or revoke the certificate of organization or for
involuntary dissolution of the limited liability company.
(B) A limited liability company shall not transact business or incur
indebtedness, except that which is incidental to its organization or to
obtaining subscriptions for or payment of contributions, until the
Secretary of State has issued a certificate of organization.
(C) The date when the existence of the company shall commence
must be the date of the filing of the articles of organization by the
Secretary of State, except that the date of commencement of corporate
existence may be specified in the articles of organization:
(1) when the date specified in the articles of organization is
the date of subscription and acknowledgement and the articles of
organization are filed by the Secretary of State within five days,
exclusive of legal holidays, after such date;
(2) when the date specified in the articles of organization is
subsequent to, and not later than ninety days after, the date of filing of
the articles of organization by the Secretary of State.
Section 33-21-111. Registered office and registered agent to
be maintained
Each limited liability company shall have and continuously maintain
in this State:
(1) a registered office which may be, but need not be, the same
as its place of business;
(2) a registered agent, which agent may be either an individual
resident in this State whose business office is identical with such
registered office, or a domestic corporation, or a foreign corporation
authorized to transact business in this State, having a business office
identical with such registered office.
Section 33-21-112. Change of registered office or registered
agent
(A) A limited liability company may change its registered office
or agent, or both, upon filing in the office of the Secretary of State a
statement setting forth:
(1) the name of the limited liability company;
(2) the address of its then registered office;
(3) if the address of its registered office be changed, the
address to which the registered office is to be changed;
(4) the name of its then registered agent;
(5) if its registered agent be changed, the name of its successor
registered agent;
(6) that the address of its registered office and the address of
the business office of its registered agent, as changed, will be identical;
(7) that the change was authorized by affirmative vote of a
majority of the members of the limited liability company.
(B) The statement must be verified and delivered to the secretary
of State. If the Secretary of State finds that the statement conforms to the
provisions of this chapter, he shall file the Statement in his office, and
upon filing the change of address of the registered office or the
appointment of a new registered agent or both, as the case may be, is
effective.
(C) Any registered agent of a limited liability company may resign
as agent upon filing a written notice thereof, executed in duplicate, with
the Secretary of State, who shall forthwith mail a copy to the limited
liability company at its registered office. The appointment of the agent
shall terminate upon the expiration of thirty days after receipt of notice
by the Secretary of State.
Section 33-21-113. Failure to maintain registered agent or
registered office or pay annual fee
If any limited liability company has failed for thirty days to appoint
and maintain a registered agent in this State, or has failed for thirty days
after change of its registered office or registered agent to file in the
office of the Secretary of State a statement of the change, or has failed
to pay the fee required by Section 33-21-132 it must be deemed to be
transacting business within this State without authority and to have
forfeited any franchises, rights, or privileges acquired under the laws
thereof and the forfeiture must be made effective in the following
manner. The Secretary of State shall mail by certified mail a notice of its
failure to comply with aforesaid provisions. Unless compliance is made
within thirty days of the delivery of notice, the limited liability company
must be deemed defunct and to have forfeited its certificate of
organization acquired under the laws of this State. Provided, that any
defunct limited liability company may at any time within one year from
the forfeiture of its certificate, in the manner herein provided, be revived
and reinstated, by filing the necessary statement under this chapter and
paying the prescribed fee, together with a penalty of one hundred
dollars.
Section 33-21-114. Liability of members and managers
(A) Neither the members of a limited liability company, nor the
managers of a limited liability company managed by a manager or
managers, are liable under a judgment, decree, or order of a court, or in
any other manner, for a debt, obligation, or liability of the limited
liability company.
(B) This chapter does not alter any law applicable to the
relationship between a person rendering professional services and a
person receiving those services, including liability arising out of those
professional services.
(C) All persons rendering professional services shall remain
personally liable for any results of that person's acts or omissions. No
member, manager, or employee of a limited liability company is
personally liable for the acts or omissions of any other member,
manager, or employee of the limited liability company.
Section 33-21-115. Service of process
(A) The registered agent so appointed by a limited liability
company must be an agent of the company upon whom any process,
notice or demand required or permitted by law to be served upon the
company may be served.
(B) Whenever a limited liability company shall fail to appoint or
maintain a registered agent in this State, or whenever its registered agent
cannot with reasonable diligence be found at the registered office, then
the Secretary of State must be an agent of the company upon whom any
process, notice or demand must be made by delivering to and leaving
with him, or with any clerk of his office, duplicate copies of such
process, notice, or demand. In the event any such process, notice, or
demand is served on the Secretary of State, he shall immediately cause
one of the copies to be forwarded by registered mail addressed to the
limited liability company at its registered office. Any such service on the
Secretary of State must be returnable in not less than thirty days.
(C) The Secretary of State shall keep a record of all processes,
notices, and demands served upon him under this section and shall
record therein the time of such service and his action with reference
thereto.
(D) Nothing herein contained shall 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 in any other manner now or hereafter
permitted by law.
Section 33-21-116. Contributions to capital
The contributions to capital by a member to the limited liability
company may consist of any tangible or intangible property or benefit
to the limited liability company, including cash, promissory notes,
services performed, written contracts for services performed, written
contracts for services to be performed, or other securities of the limited
liability company.
Section 33-21-117. Contracting debts
Except as otherwise provided in this chapter, no debt must be
contracted or liability incurred by or on behalf of a limited liability
company, except by one or more of its managers, if management of the
limited liability company has been vested by the members in a manager
or managers, or by any member, if management of the limited liability
company has been retained by the members.
Section 33-21-118. Property
Real and personal property owned or purchased by a limited liability
company must be held and owned, and conveyance made, in the limited
liability company name. Instruments and documents providing for the
acquisition, mortgage or disposition of property of the limited liability
company must be valid and binding upon the limited liability company
if executed by one or more managers of a limited liability company
having a manager or managers or one or more members of a limited
liability company in which management has been retained in the
members.
Section 33-21-119. Division of profits; impairment of capital
The limited liability company may, from time to time, divide the
profits of its business and distribute the same to the members of the
limited liability company upon the basis stipulated in the operating
agreement; provided, that after distribution is made, the assets of the
limited liability company are in excess of all liabilities of the limited
liability company except liabilities to members on account of their
contributions.
Section 33-21-120. Withdrawal or reduction of members'
contributions to capital
(A) A member shall not receive out of limited liability company
property any part of his or its contribution to capital until all liabilities
of the limited liability company, except liabilities to members on
account of their contributions to capital, have been paid or there remains
property of the limited liability company sufficient to pay them, and
either:
(1) The consent of all members is had, unless the return of the
contribution to capital may be rightfully demanded as provided in this
chapter; or
(2) The articles of organization are canceled or so amended as to
set out the withdrawal or reduction.
(B) Subject to the provisions of subsection (A), a member may
rightfully demand the return of his or its contribution:
(1) On the dissolution of the limited liability company; or
(2) After the member has given all other members of the
limited liability company six months prior notice in writing, if no time
is specified in the articles of organization for the dissolution of the
limited liability company.
(C) In the absence of a statement in the articles of organization to
the contrary or the written consent of all members of the limited liability
company, a member, irrespective of the nature of his or its contribution,
has only the right to demand and receive cash in return for his or its
contribution to capital.
(D) A member of a limited liability company may have the limited
liability company dissolved and its affairs wound up when:
(1) The member rightfully but unsuccessfully has demanded
the return of his or its contribution; or
(2) The other liabilities of the limited liability company have
not been paid, or the limited liability company property is insufficient
for their payment, and the member would otherwise be entitled to the
return of his or its contribution.
Section 33-21-121. Liability of member to company
(A) A member is liable to the limited liability company:
(1) for the difference between his or its contributions to capital
as actually made and that stated in the articles of organization as having
been made; and
(2) for any unpaid contribution to capital which he or it agreed
in the articles of organization to make in the future at the time and on the
conditions stated in the articles of organization.
(B) A member holds as trustee for the limited liability company:
(1) specific property stated in the articles of organization as
contributed by such member, but which was not contributed or which
has been wrongfully or erroneously returned; and
(2) money or other property wrongfully paid or conveyed to
such member on account of his or its contribution.
(C) The liabilities of a member as set out in this section can be
waived or compromised only by the consent of all members, but a
waiver or compromise may not affect the right of a creditor of the
limited liability company who extended credit or whose claim arose after
the filing, and before a cancellation or amendment of the articles of
organization, to enforce the liabilities.
(D) When a contributor has rightfully received the return in whole
or in part of the capital of his or its contribution, the contributor is
nevertheless liable to the limited liability company for any sum, not in
excess of the return with interest calculated at the legal rate, necessary
to discharge its liability of such contribution to all creditors of the
limited liability company who extended credit or whose claims arose
before the return.
Section 33-21-122. Interest in company; transferability of
interest
An interest of a member in a limited liability company is personal
property and constitutes an intangible, and may be transferred or
assigned as provided in the operating agreement. However, if all of the
other members of the limited liability company other than the member
proposing to dispose of his or its interest do not approve of the proposed
transfer or assignment by unanimous written consent, the transferee of
the member's interest shall have no right to participate in the
management of the business and affairs of the limited liability company
or to become a member. The transferee is only entitled to receive the
share of profits or other compensation by way of income and the return
of contributions, to which that member would otherwise be entitled.
Section 33-21-123. Dissolution
(A) A limited liability company organized under this chapter must
be dissolved upon the occurrence of any of the following events:
(1) when the period fixed for the duration of the limited
liability company expires;
(2) by the unanimous written agreement of all members; or
(3) upon the death, retirement, resignation, expulsion,
bankruptcy, or dissolution of a member, or occurrence of any other event
which terminates the continued membership of a member in the limited
liability company, unless the business of the limited liability company
is continued by the consent of all the remaining members under a right
to do so stated in the articles of organization of the limited liability
company.
(B) As soon as possible following the occurrence of any of the
events specified in this section effecting the dissolution of the limited
liability company, the limited liability company shall execute a
statement of intent to dissolve in such form as must be prescribed by the
Secretary of State.
Section 33-21-124. Filing of statement of intent to dissolve
Duplicate originals of the statement of intent to dissolve must be
delivered to the Secretary of State. If the Secretary of State finds that the
statement conforms to law, he shall, when all fees and license taxes have
been paid as are by law prescribed:
(1) endorse on each of such duplicate originals the word
`Filed' and the month, day and year of the filing;
(2) file one of the duplicate originals in his office;
(3) return the other duplicate original to the limited liability
company or its representative.
Section 33-21-125. Effect of filing of dissolving statement
Upon the filing by the Secretary of State of a statement of intent to
dissolve, the limited liability company shall cease to carry on its
business, except insofar as may be necessary for the winding up of its
business, but its separate existence shall continue until a certificate of
dissolution has been issued by the Secretary of State or until a decree
dissolving the limited liability company has been entered by a court of
competent jurisdiction.
Section 33-21-126. Distribution of assets upon dissolution
In settling accounts after dissolution, the liabilities of the limited
liability company must be entitled to payment in the following order:
(1) those to creditors, in the order of priority as provided by
law, except those to members of the limited liability company on
account of their contributions;
(2) those to members of the limited liability company in
respect of their share of the profits and other compensation by way of
income on their contributions; and
(3) those to members of the limited liability company in
respect of their contributions to capital.
Section 33-21-127. Articles of dissolution
When all debts, liabilities and obligations have been paid and
discharged or adequate provision has been made therefor and all of the
remaining property and assets have been distributed to the members,
articles of dissolution must be executed in duplicate and verified by the
person signing the statement, which statement must set forth:
(1) the name of the limited liability company;
(2) that the Secretary of State has theretofore filed a statement
of intent to dissolve the company and the date on which such statement
was filed;
(3) that all debts, obligations and liabilities have been paid and
discharged or that adequate provision has been made for them;
(4) that all the remaining property and assets have been
distributed among its members in accordance with their respective rights
and interests;
(5) that there are no suits pending against the company in any
court or that adequate provision has been made for the satisfaction of
any judgment, order, or decree which may be entered against it in any
pending suit.
Section 33-21-128. Filing of articles of dissolution
(A) Duplicate originals of the articles of dissolution must be
delivered to the Secretary of State. If the Secretary of State finds that the
articles of dissolution conform to law, he shall when all fees and license
taxes have been paid as are by law prescribed:
(1) endorse on each of such duplicate originals the word
`Filed' and the month, day and year of the filing thereof;
(2) file one of the duplicate originals in his office;
(3) issue a certificate of dissolution to which he shall affix the
other duplicate original.
(B) The certificate of dissolution, together with the duplicate
original of the articles of dissolution affixed thereto by the Secretary of
State, must be returned to the representative of the dissolved limited
liability company. Upon the issuance of such certificate of dissolution,
the existence of the company shall cease, except for the purpose of suits,
other proceedings, and appropriate action as provided in this chapter.
The manager or managers in office at the time of dissolution, or the
survivors of them, shall thereafter be trustees for the members and
creditors of the dissolved limited liability company and as such have
authority to distribute any company property discovered after
dissolution, convey real estate, and take such other action as may be
necessary on behalf of and in the name of such dissolved limited liability
company.
Section 33-21-129. Cancellation of certificate of organization;
amendment of articles of organization
(A) The certificate of organization must be canceled by the
Secretary of State upon issuance of the certificate of dissolution.
(B) The articles of organization must be amended when:
(1) There is a change in the name of the limited liability
company or in the amount or the character of the contributions to
capital;
(2) There is a change in the character of the business of the
limited liability company;
(3) There is a false or erroneous statement in the articles of
organization;
(4) There is a change in the time as stated in the articles of
organization for the dissolution of the limited liability company;
(5) A time is fixed for the dissolution of the limited liability
company if no time is specified in the articles of organization; or
(6) The members desire to make a change in any other
statement in the articles of organization in order that it shall accurately
represent the agreement between them.
(C) The form for evidencing an amendment to the articles of
organization of a limited liability company must be promulgated by the
Secretary of State and shall contain such terms and provisions,
consistent with this chapter as must be determined by the Secretary of
State. The amendment must be signed and sworn to by all members and
an amendment adding a new member must be signed also by the member
to be added and thereafter, duplicate originals of the amendment must
be forwarded to the Secretary of State for filing, accompanied by the
requisite filing fee.
Section 33-21-130. Parties to actions
A member of a limited liability company is not a proper party to
proceedings by or against a limited liability company, except where the
object is to enforce a member's right against, or liability to, the limited
liability company.
Section 33-21-131. Waiver of notice
When, under the provisions of this chapter or under the provisions of
the articles of organization or operating agreement of a limited liability
company, notice is required to be given to a member or to a manager of
a limited liability company having a manager or managers, a waiver in
writing signed by the person or persons entitled to the notice, whether
before or after the time stated in it, is equivalent to the giving of notice.
Section 33-21-132. Fees; annual tax
The Secretary of State shall charge and collect for:
(1) filing the original articles of organization and issuing
certificates of organization, if the capital of the limited liability company
is:
CAPITAL FILING FEE
Not in excess of $50,000.00 $ 50.00
$50,001 to $100,000.00 $100.00
In excess of $100,000.00 $100.00 for
first
$100,000.00
plus $.50 for
each additional
$1,000.00
provided the
fee in no
event shall
exceed
$25,000.00
(2) for amending the articles of organization, a filing fee of
five dollars, together with the appropriate fee set out in subsection (1) of
this section if the amendment is to increase the amount of capital;
(3) for filing a statement of intent to dissolve, five dollars;
(4) for filing articles of dissolution, issuing a certificate of
dissolution and canceling the certificate of organization, seven dollars
and fifty cents;
(5) for filing a statement of change of address of registered
office or change of registered agent, or both, five dollars;
(6) an annual tax of fifty dollars, due and payable January 1
of each year. This tax is delinquent if not paid by February first and an
addition to the tax shall then be due of fifty dollars.
Section 33-21-133. Unauthorized assumption of powers
All persons who assume to act as a limited liability company without
authority to do so must be jointly and severally liable for all debts and
liabilities.
Section 33-21-134. Charge for service of process
The Secretary of State shall charge and collect at the time of any
service of process on him as resident agent of a limited liability
company, five dollars which may be recovered as taxable costs by the
party to the suit or action causing the service to be made if the party
prevails in the suit or action.
Section 33-21-135. Applicability of provisions to foreign and
interstate commerce
The provisions of this chapter shall apply to commerce with foreign
nations and among the several States only as permitted by law.
Section 33-21-136. Conflicting laws; existing rights and
liabilities; severability
(A) This chapter takes precedence in the event of a conflict with
the provisions of the South Carolina Business Corporation Act or other
laws of this State. This chapter does not affect a right accrued or
established or any liability or penalty incurred, prior to the effective date
of this chapter.
(B) If any provision of this chapter or its application to any person
or circumstance is held invalid, the invalidity does not affect other
provisions or applications of the chapter which can be given effect
without the invalid provision or application. To this end, the provisions
of this chapter are severable.
Section 33-21-137. Indemnification of managers, employees,
or agents
(A) As used in this section:
(1) `Expenses' includes attorney fees.
(2) `Liability' means the obligation to pay a judgment,
settlement, penalty, fine, including an excise tax assessed with respect
to a proceeding.
(3) `Official capacity', when used with respect to a manager,
means the office of manager in the limited liability company and, when
used with respect to a person other than a manager, means the
employment or agency relationship undertaken by the employee or agent
on behalf of the limited liability company. Official capacity does not
include service for any other foreign or domestic limited liability
company or for any corporation, partnership, joint venture, trusts, other
enterprise, or employee benefit plan.
(4) `Party' includes an individual who was, is, or is threatened
to be made a named defendant or respondent in a proceeding.
(5) `Proceeding' means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative or whether formal or informal.
(B) (1) Except as provided in item (4) of this subsection (B),
a limited liability company may indemnify against liability incurred in
any proceeding an individual made a party to the proceeding because he
is or was a manager if:
(a) he conducted himself in good faith;
(b) he reasonably believed:
(i) in the case of conduct in his official capacity, that
his conduct was in the limited liability company's best interests; or
(ii) in all other cases, that his conduct was at least not
opposed to the limited liability company's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(2) The termination of any proceeding by judgment, order,
settlement, or conviction, or upon a plea of nolo contendere or its
equivalent, is not of itself determinative that the individual did not meet
the standard of conduct set forth in item (1) of this subsection (B).
(3) A limited liability company may not indemnify a manager
under this subsection (B) either:
(a) in connection with a proceeding by or in the right of the
limited liability company in which the manager was adjudged liable to
the limited liability company; or
(b) in connection with any proceeding charging improper
personal benefit to the manager, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis that
personal benefit was improperly received by him.
(4) Indemnification permitted under this subsection (B) in
connection with a proceeding by or in the right of a limited liability
company is limited to reasonable expenses incurred in connection with
the proceeding.
(C) Unless limited by the articles of organization, a limited
liability company must be required to indemnify a manager of the
limited liability company who was wholly successful, on the merits or
otherwise, in defense of any proceeding to which he was a party, against
reasonable expenses incurred by him in connection with the proceeding.
(D) Unless limited by the articles of organization, a manager who
is or was party to a proceeding may apply for indemnification to the
court conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court, after giving any
notice the court considers necessary, may order indemnification in the
following manner:
(1) If it determines the manager is entitled to mandatory
indemnification under subsection (C) of this section, the court shall
order indemnification, in which case the court shall also order the
limited liability company to pay the manager's reasonable expenses
incurred to obtain court-ordered indemnification.
(2) If it determines that the manager is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not he met the standard of conduct set forth in item (1) of
subsection (B) or was adjudged liable in the circumstances described in
item (3) of subsection (B), the court may order such indemnification as
the court deems proper; except that the indemnification with respect to
any proceedings in which liability shall have been adjudged in the
circumstances described in item (3) of subsection (B) is limited to
reasonable expenses incurred.
(E) (1) A limited liability company may not indemnify a
manager under subsection (B) unless authorized in the specific case after
a determination has been made that indemnification of the manager is
permissible in the circumstances because he has met the standard of
conduct set forth in item (1) of subsection (B).
(2) The determination required to be made by item (1) of this
subsection (E) must be made by the members by a majority vote; except
that such vote may not include members who are parties or plaintiffs to
the proceedings.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible.
(F) (1) A limited liability company may pay for or
reimburse the reasonable expenses incurred by a manager who is a party
to a proceeding in advance of the final disposition of the proceeding if:
(a) The manager furnishes the limited liability company a
written affirmation of his good faith belief that he has met the standard
of conduct described in item (1) of subsection (B);
(b) The manager furnishes the limited liability company a
written undertaking, executed personally or on his behalf, to repay the
advance if it is determined that he did not meet such standard of
conduct; and
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this
subsection (F).
(2) The undertaking required by subitem (b), item (1) of this
subsection (F) must be an unlimited general obligation of the manager
but need not be secured and may be accepted without reference to
financial ability to make repayment.
(3) Determinations and authorizations of payments under this
subsection (F) must be made in the manner specified in subsection (E).
(G)(1) A provision concerning a limited liability company's
indemnification of or advance for expenses to managers contained in its
articles of organization, its operating agreement, or in a contract, except
for insurance policies, must be valid only if and to the extent the
provision is consistent with this section and, if indemnification is limited
by the articles of organization, is consistent with such articles.
(2) This subsection (G) shall not limit a limited liability
company's power to pay or reimburse expenses incurred by a manager
in connection with his appearance as a witness in a proceeding at a time
when he has not been made a named defendant or respondent in the
proceeding.
(H) Unless limited by the articles of organization:
(1) A limited liability company may indemnify and advance
expenses pursuant to subsection (F) of this section to an employee,
agent, or member of the limited liability company who is not a manager
to the same extent as a manager; and
(2) A limited liability company may indemnify and advance
expenses to an employee, agent, or member of the limited liability
company who is not a manager to a greater extent if consistent with law
and if provided for by its articles of organization, its operating
agreement, or in a contract.
(I) A limited liability company may purchase and maintain insurance
on behalf of a person who is or was a manager, member, employee,
fiduciary,or agent of the limited liability company or who, while a
manager, employee, fiduciary, or agent of the limited liability company,
is or was serving at the request of the limited liability company as
manager, officer, partner, trustee, employee, fiduciary, member, or agent
of any other foreign or domestic limited liability company or any
corporation, partnership, joint venture, trust, other enterprise, or
employer benefit plan against any liability asserted against or incurred
by him in any such capacity or arising out of his status as such, whether
or not the limited liability company would have the power to indemnify
him against such liability under the provisions of this section. Any such
insurance may be procured from any insurance company designated by
the members of the limited liability company, whether such insurance
company is formed under the laws of this State or any other jurisdiction
of the United States or elsewhere.
(J) Any indemnification of or advance of expenses to a manager in
accordance with this section, if arising out of a proceeding by or on
behalf of the limited liability company, must be reported in writing to
the members with or before the notice of the next members' meeting.
Section 33-21-138. Legislative intent.
The State of South Carolina intends by the enactment of this chapter
that the legal existence of limited liability companies formed under this
chapter be recognized beyond the limits of this State and that, subject to
any reasonable registration requirements, any such limited liability
company transacting business outside this State be granted the protection
of full faith and credit under Section 1 of Article IV of the Constitution
of the United States.
Section 33-21-139. Reserved.
Section 33-21-140. Regulating board authority; prohibitions
on individuals apply
(A) Nothing in this chapter restricts or limits in any manner the
authority and duty of the regulating board to license individual persons
rendering professional services or the practice of the profession that is
within the jurisdiction of the regulating board, notwithstanding that the
person is a member, manager, or employee of a limited liability
company and rendering the professional services or engaging in the
practice of the profession through the limited liability company.
(B) No limited liability company may do anything that is
prohibited to be done by individual persons licensed to practice the
profession that the limited liability company is organized to render.
Section 33-21-141. Records
(A) Each limited liability company shall keep at its principal place
of business the following:
(1) a current list in alphabetical order of the full name and last
known business street address of each member;
(2) a copy of the stamped articles of organization and all
certificates of amendment to them, collectively referred to as the
`certificate of organization', together with executed copies of any powers
of attorney pursuant to which any certificate of amendment has been
executed;
(3) copies of the limited liability company's federal, state, and
local income tax returns and reports, if any, for the three most recent
years;
(4) copies of any financial statements of the limited liability
company, if any, for the three most recent years; and
(5) unless otherwise set forth in the articles of organization, a
written statement setting forth:
(a) the amount of cash and a description and statement of the
agreed value of the other property or services contributed by each
member and which each member has agreed to contribute;
(b) the times at which, or events on the happening of
which, any additional contributions agreed to be made by each member
are to be made;
(c) any right of a member to receive distributions which
include a return of all or any of the member's contributions; and
(d) any event upon the happening of which the limited
liability company is to be dissolved and its affairs wound up.
(B) Records kept under this section are subject to inspection and
copying at the reasonable request and at the expense of any member
during ordinary business hours.
Section 33-21-142. Annual report.
(A) Each limited liability company and each foreign limited
liability company authorized to transact business in this State shall file
with the Secretary of State, during the month of the anniversary date of
its formation, in the case of domestic limited liability companies, or
during the month of the anniversary date of being granted authority to
transact business in this State, in the case of foreign limited liability
companies authorized to transact business in this State, an annual report
setting forth:
(1) the name of the limited liability company and the state or
country under the laws of which it is formed;
(2) the name and street address of the agent for service of
process required to be maintained under Section 33-21-111;
(3) if there is a change of the registered agent required to be
maintained by Section 33-21-111;
(B) The annual report must be made on forms prescribed and
furnished by the Secretary of State, and the information contained on the
annual report must be given as of the date of execution of the report.
The annual report forms must include a statement notifying the limited
liability company that failure to file the annual report will result in the
suspension and eventual cancellation of its certificate of organization,
in the case of a domestic limited liability company, or of its registration,
in the case of a foreign limited liability company authorized to transact
business in this State.
(C) The annual report must be signed by any member under
penalty of perjury. If the registered agent has changed since the last
annual report, the annual report also must be signed by the new
registered agent.
(D) If the report conforms to the requirements of this chapter, the
Secretary of State shall file the report. If the report does not conform,
the Secretary of State shall mail the report first class postage prepaid to
the limited liability company at the street address set forth for its agent
for service of process in the certificate of organization or most recent
report, for any necessary corrections. If a report is returned, the
penalties for failure to file the report within the time prescribed in this
section do not apply, as long as the report is corrected and returned to
the Secretary of State within thirty days from the date the
nonconforming report was mailed to the limited liability company.
Section 33-21-143. When amendments required
The articles of organization of a limited liability company must be
amended when:
(1) there is a change in the name of the limited liability company;
(2) there is a change in the character of the business of the limited
liability company specified in the articles of organization;
(3) there is a false or erroneous statement in the articles of
organization;
(4) there is a change in the time, as stated in the articles of
organization, for the dissolution of the limited liability company;
(5) there is a change in the names and street addresses of the
managers of the limited liability company, or if the limited liability
company is managed by its members, the names and street addresses of
the members;
(6) the members determine to fix a time, not previously specified
in the articles of organization, for the dissolution of the limited liability
company; or
(7) the members desire to make a change in any other statement
in the articles of organization in order for the articles to accurately
represent the agreement among them.
Section 33-21-144. Restated articles of organization
(A) A limited liability company may integrate into a single
instrument all of the provisions of its articles of organization and
amendments to them, and it may at the same time also further amend its
articles of organization by adopting restated articles of organization.
(B) If the restated articles of organization merely restate and
integrate but do not further amend the initial articles of organization, as
previously amended or supplemented by any certificate or instrument
that was executed and file pursuant to this chapter, they must be
specifically designated in their heading as `Restated Articles of
Organization', together with other words that the company considers
appropriate, and must be executed and filed with the Secretary of State.
(C) If the restated articles restate and integrate and also further
amend in any respect the articles of organization, as previously amended
or supplemented, they must be specifically designated in their heading
as `Amended and Restated Articles of Organization', together with other
words that the company considers appropriate, and must be executed and
filed with the Secretary of State.
(D)(1) Restated articles of organization shall state, either in their
heading or in an introductory paragraph, the company's present name,
and, if it has been changed, the name under which it was originally filed
and the date of filing of its original articles of organization with the
Secretary of State. Restated articles shall also state that they were duly
executed and filed in accordance with this section.
(2) If the restated articles only restate and integrate and do not
further amend the provisions of the articles of organization as previously
amended or supplemented, and there is no discrepancy between those
provisions and the provisions of the restated articles, they shall so state.
(E) Upon the filing of the restated articles of organization with the
Secretary of State, the initial articles, as previously amended or
supplemented, must be superseded. Thereafter, the restated articles of
organization, including any further amendment or changes made by the
restated articles, must be the articles of organization, but the original
effective date of formation shall remain unchanged.
(F) Any amendment or change made in connection with the
restatement and integration of the articles of organization must be
subject to any other provision of this chapter, not inconsistent with this
section, that would apply if a separate certificate of amendment were
filed to make the amendment or change.
Section 33-21-145. Merger and consolidation
(A) Pursuant to any agreement, a domestic limited liability
company may merge or consolidate with or into one or more limited
liability companies formed under the laws of this State or any other
state. The successor limited liability company must be as provided in
the agreement.
(B) A domestic limited liability company that is not the successor
limited liability company in the merger or consolidation shall file articles
of dissolution, which shall have an effective date not later than the
effective date of the merger or consolidation.
(C) If, following a merger or consolidation of one or more
domestic limited liability companies or one or more limited liability
companies formed under the laws of any other state, the successor
limited liability company is not a domestic limited liability company,
there must be attached to the articles of dissolution for each such
domestic limited liability company a copy of the articles of merger or
consolidation executed by the successor limited liability company:
(1) stating that the successor limited liability company may be
served with process in the State of South Carolina in any action, suit, or
proceeding for the enforcement of any obligation of the domestic limited
liability company;
(2) irrevocably appointing the Secretary of State as the
successor limited liability company's agent to accept service of process
in any action, suit, or proceeding; and
(3) specifying the address to which a copy of process must be
mailed to the successor limited liability company by the Secretary of
State.
(D) When the articles of dissolution required by subsection (B)
have become effective, the following must be vested in and enforced
against the successor limited liability company as they were in each of
the limited liability companies that have merged or consolidated:
(1) all of the rights, privileges, and powers of each of the
limited liability companies that have merged or consolidated;
(2) all property, real, personal, and mixed;
(3) all debts due to any of the limited liability companies; and
(4) all other things and causes of action belonging to each of
the limited liability companies.
Section 33-21-146. Correction of technical errors in
instruments
(A) If any instrument filed under this chapter contains, as of the
date of the action referred to in the instrument, a typographical error,
misspelling, or other technical error or defect, the instrument may be
corrected by filing, in accordance with this section, a statement of
correction.
(B) The statement of corrections shall set forth:
(1) the name of the limited liability company and the state or
country under whose laws it is organized;
(2) the title of the instrument being corrected and the date it
was filed with the division; and
(3) the error, misspelling, or defect to be corrected and the
portion of the instrument being corrected in corrected form.
(C) A statement of corrections must be executed in the same
manner in which the instrument being corrected was required to be
executed.
(D) The corrected instrument is effective as of the date the original
instrument was filed.
Section 33-21-147. Application of corporation case law to set
aside limited liability
In any case in which a party seeks to hold the members of a limited
liability company personally responsible for the alleged improper actions
of the limited liability company, the court shall apply the case law which
interprets the conditions and circumstances under which the corporate
veil of a corporation may be pierced under laws of this State.
Section 33-21-148. Management of limited liability company
(A) Unless the articles of organization or an operating agreement
provides for management of a limited liability company by a manager
or managers, management of a limited liability company must be vested
in its members.
(B) Unless otherwise provided in the articles of organization or an
operating agreement, the members of a limited liability company shall
vote in proportion to their contributions to the limited liability company,
as adjusted from time to time to reflect any additional contributions or
withdrawals.
Section 33-21-149. Operating agreement
(A) The members of a limited liability company may enter into
any operating agreement to regulate or establish the affairs of the limited
liability company, the conduct of its business and the relations of its
members. An operating agreement may contain any provisions
regarding the affairs of a limited liability company and the conduct of its
business to the extent that such provisions are not inconsistent with the
laws of this State or the articles of organization.
(B)(1) An operating agreement must initially be agreed to by all
of the members. Unless the articles of organization specifically require
otherwise, an operating agreement need not be in writing.
(2) If an operating agreement does not provide for the method
by which an operating agreement may be amended, then all of the
members must agree to any amendment of an operating agreement.
(C)(1) A court of equity may enforce an operating agreement by
injunction or by such other relief that the court in its discretion
determines to be fair and appropriate in the circumstances.
(2) As an alternative to injunctive or other equitable relief, the
court may order dissolution of the limited liability company where
appropriate.
Section 33-21-150. Management of a limited liability
company by a manager or managers
(A) The articles of organization or an operating agreement of a
limited liability company may apportion responsibility for managing a
limited liability company among one or more managers.
(B) Managers must be natural persons eighteen years of age or
older but need not be residents of this State or members of the limited
liability company unless the articles of organization or an operating
agreement requires. The articles of organization or an operating
agreement may prescribe other qualifications for managers.
(C) The number of managers must be fixed by or in the manner
provided in the articles of organization or an operating agreement. The
number of managers may be increased or decreased by amendment to,
or in the manner provided in, the articles of organization or an operating
agreement.
(D) Unless otherwise provided in the articles of organization or an
operating agreement, managers must be elected by a majority of the
members.
(E) Unless otherwise provided in the articles of organization or an
operating agreement, any vacancy occurring in the office of manager
must be filled by a majority vote of the members.
(F) All managers or any lesser number may be removed in the
manner provided in the articles of organization or an operating
agreement. If the articles of organization or an operating agreement
does not provide for the removal of managers, then all managers or any
lesser number may be removed with or without cause by a majority vote
of the members.
(G)(1) A manager shall discharge his duties as a manager in
accordance with his good faith business judgment of the best interests
of the limited liability company.
(2) Unless he has knowledge or information concerning the
matter in question that makes reliance unwarranted, a manager is entitled
to rely on information, opinions, reports or statements, including
financial statements and other financial data, if prepared or presented by:
(a) one or more managers or employees of the limited liability
company whom the manager believes, in good faith, to be reliable and
competent in the matters presented;
(b) legal counsel, public accountants, or other persons as
to matters the manager believes, in good faith, are within the person's
professional or expert competence; or
(c) a committee of the managers of which he is not a member
if the manager believes, in good faith, that the committee merits
confidence.
(3) A person alleging a violation of this subsection (G) has the
burden of proving the violation.
Section 33-21-151. Limitation of liability of members and
managers; exception
(A) In any proceeding brought by or in the right of a limited
liability company or brought by or on behalf of members of the limited
liability company, the damages assessed against a manager or member
arising out of a single transaction, occurrence, or course of conduct shall
not exceed the lesser of:
(1) the monetary amount, including the elimination of liability,
specified in the articles of organization or an operating agreement as a
limitation on or elimination of the liability of the manager or member;
or
(2) the greater of one hundred thousand dollars or the amount
of cash compensation received by the manager or member from the
limited liability company during the twelve months immediately
preceding the act or omission for which liability was imposed.
(B) The liability of a manager or member is not limited as
provided in this section if the manager or member engaged in wilful
misconduct or a knowing violation of the criminal law.
(C) No limitation on or elimination of liability adopted pursuant
to this section may be effected by any amendment of the articles of
organization or operating agreement with respect to any act or omission
occurring before such amendment.
Section 33-21-152. Business transactions of members or
managers with the limited liability company
Except as provided in the articles of organization or an operating
agreement, a member or manager may lend money to and transact other
business with the limited liability company and, subject to other
applicable law, has the same rights and obligations with respect thereto
as a person who is not a member or manager.
Section 33-21-153. Law governing foreign limited liability
companies
Subject to the constitution of this State, the laws of the jurisdiction
under which a foreign limited liability company is organized shall
govern its organization and internal affairs and the liability of its
members, and a foreign limited liability company may not be denied a
certificate of authority to transact business in this State by reason of any
difference between those laws and the laws of this State.
Section 33-21-154. Name
A foreign limited liability company may apply for a certificate of
authority under any name that would be available to a domestic limited
liability company, whether or not such name is the name under which it
is authorized in its jurisdiction of organization.
Section 33-21-155. Registered name; limitation; procedure
(A) Any limited liability company organized and existing under
the laws other than the laws of this State may register its company name
pursuant to the provisions of this chapter, if the name would be available
to a domestic limited liability company pursuant to Section 33-21-105.
(B) The registration must be made by delivering to the Secretary
of State an application for registration executed by an officer of the
limited liability company, setting forth:
(1) the name of the limited liability company;
(2) the jurisdiction under the laws of which it is organized;
(3) the date of its organization;
(4) a statement that it is carrying on or doing business and a
brief statement of the business in which it is engaged; and
(5) a certificate stating that the corporation is in good standing
under the laws of the jurisdiction wherein it is organized, executed by
the Secretary of State of such jurisdiction or by such other official as
may have custody of the records pertaining to limited liability
companies.
(C) The applicant shall also pay to the Secretary of State a
registration fee in the amount of one dollar for each month, or fraction
of a month, between the date of filing the application and
December thirty-first of the calendar year in which the application is
filed.
(D) The registration is effective until the close of the calendar year
in which the application for registration is filed.
Section 33-21-156. Certificate of authority; application
Before transacting business in this State, a foreign limited liability
company shall obtain a certificate of authority. An applicant for a
certificate shall pay a filing fee in an amount determined by the
Secretary of State and shall submit to the Secretary of State, in duplicate,
an application executed by a manager, member, or other authorized
agent and setting forth:
(1) the name of the foreign limited liability company and, if
different, the name under which it proposes to transact business in this
State;
(2) the jurisdiction and date of its formation;
(3) the name and business address of the proposed registered
agent in this State, who must be an individual resident of this State, a
domestic corporation, or a foreign corporation having a place of business
in, and authorized to do business in, this State;
(4) the address of the office required to be maintained in the
jurisdiction of its organization by the laws of that jurisdiction or, if not
so required, of the principal place of business of the foreign limited
liability company;
(5) additional information as may be necessary or appropriate
in order to enable the Secretary of State to determine whether the limited
liability company is entitled to transact business in this State.
Section 33-21-157. Filing; issuance of certificate of authority
If the Secretary of State finds that an application or amended
application for a certificate of authority conforms to law and all requisite
fees have been paid, he shall:
(1) endorse on the application or the amended application the
word `Filed' and the date of the filing thereof;
(2) file in his office one duplicate original of the application
or the amended application; and
(3) return the other duplicate original of the application or the
amended application to the person who filed it or to his representative
with a certificate of authority issued by the Secretary of State.
Section 33-21-158. Changes and amendments
If any statement in the application for a certificate of authority by a
foreign limited liability company was false when made or any
arrangements or other facts described have changed, making the
application inaccurate in any respect, including, but not limited to, a
change in the name or address of the registered agent required to be
maintained by Section 33-21-159, the foreign limited liability company
shall promptly submit to the office of the Secretary of State, in duplicate,
an amended application for a certificate of authority, executed by a
manager, member, or other authorized agent correcting the statement.
Section 33-21-159. Requirement for registered agent and
certain reports
A foreign limited liability company authorized to transact business
in this State shall:
(1) appoint and continuously maintain a registered agent in the
same manner as provided in Section 33-21-111;
(2) file a report upon any change in the name or business
address of its registered agent in the same manner as provided in Section
33-21-112;
(3) pay the annual fee as provided in Section 33-21-132.
Section 33-21-160. Revocation of certificate of authority
(A) The certificate of authority of a foreign limited liability
company to transact business in this State may be revoked by the
Secretary of State upon the occurrence of any of these events:
(1) The foreign limited liability company has failed to:
(a) appoint and maintain a registered agent as required by this
chapter or pay any fee or penalties as prescribed by this chapter;
(b) file a report upon any change in the name or business
address of the registered agent;
(c) file in the office of the Secretary of State any amendment
to this application for a certificate of authority as specified in Section
33-21-158.
(2) A misrepresentation has been made of any material matter
in any application, report, affidavit, or other document submitted by
such foreign limited liability company pursuant to this chapter.
(B) No certificate of authority of a foreign limited liability
company may be revoked by the Secretary of State unless:
(1) He has given the foreign limited liability company not less
than sixty days notice by mail addressed to its registered office in this
State or, if the foreign limited liability company fails to appoint and
maintain a registered agent in this State, addressed to the office required
to be maintained pursuant to Section 33-21-156(4); and
(2) During such sixty day period, the foreign limited liability
company has failed to pay the fees or penalties, to file the report of
change regarding the registered agent, to file any amendment, or to
correct the misrepresentation.
(C) Upon the expiration of sixty days after the mailing of the
notice, the authority of the foreign limited liability company to transact
business in this State shall cease.
Section 33-21-161. Certificate of withdrawal
(A) A foreign limited liability company authorized to transact
business in this State may withdraw from this State upon procuring from
the Secretary of State a certificate of withdrawal. In order to procure
such certificate, the foreign limited liability company shall deliver to the
Secretary of State an application for withdrawal, which must set forth:
(1) the name of the limited liability company and the State or
country under the laws of which it is incorporated;
(2) that the limited liability company is not transacting
business in this State;
(3) that the limited liability company surrenders its authority
to transact business in this State;
(4) that the limited liability company revokes the authority of
its registered agent in this State to accept service of process and consents
that service of process in any action, suit, or proceeding based upon any
cause of action arising in this State during the time the limited liability
company was authorized to transact business in this State may thereafter
be made on the limited liability company by service upon the Secretary
of State;
(5) a post office address to which a person may mail a copy of
any process against the limited liability company;
(6) additional information as is necessary or appropriate in
order to enable the Secretary of State to determine and assess any unpaid
fees payable by the limited liability company as prescribed in this
chapter.
(B) The application for withdrawal must be in the form and
manner designated by the Secretary of State and must be executed by the
limited liability company by one of its managers, or, if the limited
liability company does not have a manager, by an authorized agent, or,
if the limited liability company is in the hands of a receiver or trustee,
by such receiver or trustee on behalf of the limited liability company.
This report must be accompanied by a written declaration that it is made
under the penalties of perjury.
Section 33-21-162. Transaction of business without certificate
of authority
(A) A foreign limited liability company transacting business in
this State may not maintain any action, suit, or proceeding in any court
in this State until it possesses a certificate of authority.
(B) The failure of a foreign limited liability company to obtain a
certificate of authority does not impair the validity of any contract or act
of the foreign limited liability company or 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 a certificate of authority, appoints the Secretary of
State as its agent upon whom any notice, process, or demand may be
served.
(D) A foreign limited liability company which transacts business
in this State without a valid certificate of authority must be liable to the
State for the years or parts thereof during which it transacted business in
this State without such certificate in an amount equal to all fees which
would have been imposed by this article upon that limited liability
company had it duly obtained such certificate, filed all reports required
by this article, and paid all penalties imposed by this article. The
attorney general shall 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 a valid certificate of authority must be subject to a
civil penalty, payable to the State, not to exceed five thousand dollars.
Each manager, or, in the absence of managers, each member or agent
who authorizes, directs, or participates in the transaction of business in
this State on behalf of a foreign limited liability company which does
not have such certificate must be subject to a civil penalty, payable to
the State, not to exceed one thousand dollars.
(F) The civil penalties set forth in subsection (E) may be
recovered in an action brought within the court in and for the City of
Columbia, and County of Richland by the attorney general. Upon a
finding by the court that a foreign limited liability company or any of its
members, managers, or agents have transacted business in this State in
violation of this article, the court shall issue, in addition to the
imposition of a civil penalty, an injunction restraining the further
transaction 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 must 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 of a foreign limited liability company is not liable
for the debts and obligations of the limited liability company solely by
reason of such company's having transacted business in this State
without a valid certificate of authority.
Section 33-21-163. Action to restrain from transaction of
business
The attorney general may bring an action to restrain a foreign limited
liability company from transacting business in this State in violation of
this chapter.
Section 33-21-164. Process; service on a foreign limited
liability company
Service of process on a foreign limited liability company must be as
provided in Section 33-21-115.
Section 33-21-165. Execution of application or certificate
The execution of an application constitutes an affirmation under the
penalties of perjury that the facts stated therein are true."
SECTION 2. The analysis lines in or after each code section of
Chapter 21 of Title 33 of the 1976 Code, as contained in Section 1 of
this act, are for informational purposes only and are not deemed to be
part of the code sections themselves.
SECTION 3. This act takes effect upon approval by the Governor.
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