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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.

(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.

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.

(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.

(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.

(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.

(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.

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 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.

(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."

SECTION 3. This act takes effect upon approval by the Governor./

Amend title to read:

/TO AMEND TITLE 33, CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 43 RELATING TO CORPORATIONS SO AS TO ENACT THE "SOUTH CAROLINA LIMITED LIABILITY COMPANY ACT" WHICH PERMITS A LIMITED LIABILITY COMPANY (LLC) FORMED PURSUANT TO THIS ACT TO BE TREATED AS A PARTNERSHIP FOR TAX PURPOSES TOGETHER WITH THE ABSENCE OF INDIVIDUAL LIABILITY OF THE MEMBERS OF THE LIMITED LIABILITY COMPANY FOR ITS OBLIGATIONS, WHICH PROVIDES FOR THE MANNER IN WHICH LIMITED LIABILITY COMPANIES ARE FORMED, FOR RELATIONS BETWEEN MEMBERS AND MANAGERS TO PERSONS DEALING WITH THE LIMITED LIABILITY COMPANIES, FOR THE RIGHTS AND DUTIES OF MEMBERS AND MANAGERS, FOR FINANCE MATTERS, FOR DISTRIBUTIONS AND WITHDRAWALS, FOR THE OWNERSHIP AND TRANSFER OF PROPERTY, FOR ADMISSION AND WITHDRAWAL OF MEMBERS, FOR DISSOLUTION, FOR THE MANNER IN WHICH FOREIGN LIMITED LIABILITY COMPANIES MAY OPERATE AND ARE GOVERNED, FOR PROFESSIONAL SERVICES LIMITED LIABILITY COMPANIES, FOR SUITS BY AND AGAINST THE LIMITED LIABILITY COMPANIES, FOR THE MERGER OF DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANIES, AND FOR MISCELLANEOUS PROVISIONS AFFECTING THE LIMITED LIABILITY COMPANIES INCLUDING FILING AND OTHER FEES; AND TO AMEND THE 1976 CODE BY ADDING SECTION 12-2-25 SO AS TO PROVIDE FOR CERTAIN DEFINITIONS FOR TAXATION PURPOSES INCORPORATING REFERENCES TO LIMITED LIABILITY COMPANIES./

Rep. HODGES explained the amendment.

The amendment was then adopted.

Amend the report of the Committee on Judiciary, as and if amended, by adding immediately before SECTION 1, beginning on line 29, page 4283-1:

Amend the report further, by striking SECTION 3, beginning on line 41, page 4283-62, and inserting:

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;

(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 33-41-1140."

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 33-41-370.(1)Except as provided by item (2) of this section, All all partners are liable jointly and severally for everything chargeable to the partnership.

(2) Subject to item (3) of this section, 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.

(3) Item (2) of this section 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."

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(2), 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(2)."

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

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

"Section 33-41-1060.In settling accounts between the partners after dissolution the following rules shall must be observed, subject to any agreement to the contrary:

(1) the assets of the partnership are:

(a) the partnership property and

(b) the contributions of the partners necessary for the payment of all the liabilities specified in item (2) (4) of this section;

(2) the liabilities of the partnership shall rank in order of payment, as follows:

(a) those owing to creditors other than partners,

(b) those owing to partners other than for capital and profits,

(c) those owing to partners in respect of capital, and

(d) those owing to partners in respect of profits;

(3) the assets shall must be applied in the order of their declaration in item (1) of this section to the satisfaction of the liabilities;

(4) except as provided in Section 33-41-370(2):

(a) the partners shall contribute, as provided by Section 33-41-510, the amount necessary to satisfy the liabilities; but if and

(b) if any, but not all, of the partners are insolvent or, not being subject to process, refuse to contribute, the other partners shall contribute their share of the liabilities and, in the relative proportions in which they share the profits, the additional amount necessary to pay the liabilities;

(5) an assignee for the benefit of creditors or any person appointed by the court shall have the right to enforce the contributions specified in item (4) of this section;

(6) any partner or his legal representative shall have the right to enforce the contributions specified in item (4) of this section to the extent of the amount which he has paid in excess of his share of the liability;

(7) the individual property of a deceased partner shall must be liable for the contributions specified in item (4) of this section;

(8) when partnership property and the individual properties of the partners are in possession of a court for distribution, partnership creditors shall have priority on partnership property and separate creditors on individual property, saving the rights of lien or secured creditors as heretofore provided by law; and

(9) when a partner has become bankrupt or his estate is insolvent the claims against his separate property shall must rank in the following order: (a) those owing to separate creditors,

(c) those owing to partners by way of contribution."

SECTION 10. Title 33, Chapter 41 of the 1976 Code is amended by adding:

"Section 33-41-1110.(1)To become and to continue as a registered limited liability partnership, a partnership shall file with the Secretary of State an application or a renewal application, as the case may be, stating the name of the partnership; the address of its principal office, if the partnership's principal office is not located in this State; the address of a registered office, and the name and address of a registered agent for service of process in this State, which the partnership will be required to maintain; the number of partners; a brief statement of the business in which the partnership engages, and that the partnership applies for status or renewal of its status, as the case may be, as a registered limited liability partnership.

(2) The application or renewal application must be executed by a majority in interest of the partners or by one or more partners authorized to execute an application or renewal application.

(3) The application or renewal application must be accompanied by a fee of one hundred dollars.

(4) The Secretary of State shall register as a registered limited liability partnership, and shall renew the registration of any registered limited liability partnership, any partnership that submits a completed application or renewal application with the required fee.

(5) Registration is effective for one year after the date an application is filed, unless voluntarily withdrawn by filing with the Secretary of State a written withdrawal notice executed by a majority in interest of the partners or by one or more partners authorized to execute a withdrawal notice. Registration, whether pursuant to an original application or a renewal application, as a registered limited liability partnership is renewed if, during the sixty-day period preceding the date the application or renewal application otherwise would have expired, the partnership files with the Secretary of State a renewal application. A renewal application expires one year after the date an original application would have expired if the last renewal of the application had not occurred.

(6) The status of a partnership as a registered limited liability partnership may not be affected by changes after the filing of an application or a renewal application in the information stated in the application or renewal application.

(7) The Secretary of State may provide forms for application for or for renewal of registration.

Section 33-41-1130.(1)A partnership, including a registered limited liability partnership, formed 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, territory, district, or possession of the United States or in any foreign country.

(2) It is the intent of the General Assembly that the legal existence of registered limited liability partnerships formed and existing under this chapter be recognized outside the boundaries of this State and that the laws of this State governing such registered limited liability partnerships be granted the protection of full faith and credit under the Constitution of the United States.

(3) It is the policy of this State that the internal affairs of partnerships, including registered limited liability partnerships, formed and existing under this chapter, including the liability of partners for debts, obligations, and liabilities chargeable to partnerships, shall be subject to and governed by the laws of this State.

(4) It is also the policy of this State that the internal affairs of partnerships, including registered limited liability partnerships, formed and existing under the laws of another jurisdiction, including the liability of partners for debts, obligations, and liabilities chargeable to partnerships, shall be subject to and governed by the laws of such other jurisdiction.

(5) Subject to any provisions of law for the regulation and control of specific types of businesses, registered limited liability partnerships formed and existing under the laws of another jurisdiction may do business in this State and are not required to register with the Secretary of State under this chapter."

SECTION 11. This act takes effect upon approval by the Governor./

Amend title to conform.

Rep. HODGES explained the amendment.

The amendment was then adopted.

The Bill, as amended, was read the second time and ordered to third reading.

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