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Amend the bill, as and if amended, by striking all after the enacting words and inserting therein the following:

SECTION 1. Title 33 of the 1976 Code is amended by adding:

Section 33-43-101. Short Title.

This chapter shall be known and may be cited as the South Carolina Limited Liability Company Act.

The provisions for the South Carolina Limited Liability Company Act have been derived in part from:

(a) The November 19, 1992, draft version of the "prototype" Limited Liability Company Act drafted by the Working Group on the Prototype Limited Liability Company Act Subcommittee on Limited Liability Companies, Committee on Partnerships and Unincorporated Business Organizations, Section of Business Law, American Bar Association. Versions of this "prototype" statute, with explanatory commentary have been published in Larry E. Ribstein & Robert R. Keatinge, Ribstein & Keatinge on Limited Liability Companies, (Shepard's/McGraw-Hill, Inc. 1992); and

(b) The July 30, 1993, draft Limited Liability Company Act considered by the National Conference of Commissioners On Uniform State Laws. Subsequent versions of this act, with explanatory commentary, may be obtained from the National Conference of Commissioners on Uniform State Laws, 676 North St. Clair Street, Suite 1700, Chicago, Illinois, 60611. (312) 915-0195.

Both of these draft statutes contain valuable commentary which may be of assistance in interpreting and understanding the meaning of some of the sections of this South Carolina Limited Liability Company Act.

Section 33-43-102. Definitions.

As used in this chapter, unless the context otherwise requires:

(A) `Articles of organization' means articles filed under Section 33-43-201, and those articles as amended or restated.

(B) `Corporation' means a corporation formed under the laws of any state or foreign country.

(C) `Court' includes every court having jurisdiction in the case.

(D) `Deliver' includes mail.

(E) `Event of dissociation' means an event that causes a person to cease to be a member as provided in Section 33-43-802.

(F) `Foreign limited liability company' means an organization that is:

(1) an unincorporated association;

(2) organized under laws of a state other than the laws of this State, or under the laws of any foreign country;

(3) organized under a statute pursuant to which an association may be formed that affords to each of its members limited liability with respect to the liabilities of the entity; and

(4) not required to be registered or organized under any statute of this State other than this chapter.

(H) `Limited liability company interest' or `interest in the limited liability company' means the member's right to share in profits and losses, and right to share in distributions.

(I) `Limited partnership' means a limited partnership formed under the laws of any state or foreign country.

(J) `Manager' or `managers' means, with respect to a limited liability company that has set forth in its articles of organization that it is to be managed by managers, the person or persons designated in accordance with Section 33-43-401.

(K) `Member' or `members' means a person or persons who have been admitted to membership in a limited liability company as provided in Section 33-43-801 and who have not ceased to be members as provided in Section 33-43-802.

(L) `Operating agreement' means any written agreement, originally unanimously adopted by all the members of the limited liability company, as to the conduct of the business and affairs of the limited liability company. Provided, however, the failure of any limited liability company to adopt an operating agreement shall not effect the legal existence of such limited liability company.

(M) `Person' means an individual, a general partnership, a limited partnership, a domestic or foreign limited liability company, a trust, an estate, an association, a corporation, or any other legal entity.

(N) `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 business corporation under Chapters 1 through 17 of Title 33.

(O) `State' means a state, territory, or possession of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.

Section 33-43-103. Name.

(A) The name of each limited liability company must contain the words `limited liability company' or `limited company' or the abbreviation `L.L.C.', `L.C.', `LLC', `LC'. The word `limited' may be abbreviated as `LTD.' and the word `company' may be abbreviated as `CO.'

(B) A limited liability company name may not be the same as or deceptively similar to:

(1) the name filed with the Secretary of State of any limited liability company, limited partnership, professional corporation, or corporation existing under the laws of this State or foreign limited liability company,

(2) any name reserved or registered under Section 33-43-104, or any reserved name for a corporation or professional corporation existing under the laws of this State, or any registered name of either a foreign corporation or foreign professional corporation authorized to transact business in this State.

(C) The provisions of subsection (B) shall not apply if the applicant files with the Secretary of State either of the following:

(1) the written consent of the holder of a reserved or registered name or filed name to use a deceptively similar name if one or more words are added, altered, or deleted to make the name distinguishable from the reserved or registered or filed name; or

(2) a certified copy of a final decree of a court of competent jurisdiction establishing the prior right of the applicant to the use of the name of this State.

Section 33-43-104. Reservation and Registration of Name.

(A) A person may reserve the exclusive use of a `limited liability company' name, including a designated name provided for in Section 33-43-1004 for a foreign limited liability company whose name is not available, by delivering an application to the Secretary of State for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the Secretary of State finds that the limited liability company name applied for is available, he shall reserve the name for the applicant's exclusive use for a nonrenewable one hundred twenty-day period.

(B) The owner of a reserved limited liability company name may transfer the reservation to another person by delivering to the Secretary of State a signed notice of the transfer that states the name and address of the transferee.

(C) A foreign limited liability company may register its name that satisfies the requirements of Section 33-43-103.

(D) A foreign limited liability company registers its name or a designated name as provided in Section 33-43-1004 by delivering to the Secretary of State for filing an application:

(1) setting forth its limited liability company name or a designated name as provided in Section 33-43-1004, the state or country and date of its organization, and a brief description of the nature of the business in which it is engaged; and

(2) accompanied by a certificate of existence (or a document of similar import) from the state or country of organization.

(F) A foreign limited liability company whose registration is effective may renew it for successive years by delivering to the Secretary of State for filing a renewal application, which complies with the requirements of subsection (D), between October first and December thirty-first of the preceding year. The renewal application, when filed, renews the registration for the following calendar year.

(G) A foreign limited liability company whose registration is effective may qualify thereafter as a foreign limited liability company under the registered name or consent in writing to the use of that name by a limited liability company thereafter incorporated under this chapter or by another foreign limited liability company thereafter authorized to transact business in this State. The registration terminates when the domestic limited liability company is incorporated or the foreign limited liability company qualifies or consents to the qualification of another foreign limited liability company under the registered name.

Section 33-43-105. Registered office and registered agent.

(A) A limited liability company and a foreign limited liability company authorized to do business in South Carolina shall continuously maintain in this State:

(1) a registered office that may, but need not, be the same as its place of business; and

(2) a registered agent for service or process on the limited liability company that is an individual resident of this State, a limited liability company, a foreign limited liability company authorized to transact business in this State, or a corporation formed under the laws of or authorized to transact business in this State having a business office identical with the registered office.

(B) A limited liability company or a foreign limited liability company may change its registered office or registered agent by delivering to the Secretary of State for filing a statement of change that sets forth:

(1) the name of the limited liability company;

(2) the street address of its current registered office;

(3) if the current registered office is to be changed, the street address of the new registered office;

(4) the name of its current registered agent;

(5) if the current registered agent is to be changed, the name of the new registered agent and the new agent's written consent (either on the statement or attached to it) to the appointment; and

(C) If a registered agent changes the street address of his business office, he may change the street address of the registered office of any limited liability company or foreign limited liability company for which he is the registered agent by notifying the domestic or foreign limited liability company in writing of the change and signing (either manually or in facsimile) and delivering to the Secretary of State for filing a statement that complies with the requirements of subsection (A) and recites that the domestic or foreign limited liability company has been notified of the change.

(D) A registered agent may resign his agency appointment by signing and delivering to the Secretary of State for filing the signed original and two exact or conformed copies of a statement or resignation. The statement may include a statement that the registered office is also discontinued.

(1) After filing the statement, the Secretary of State shall mail one copy to the registered office (if not discontinued) and the other copy to the domestic or foreign limited liability company at its principal office.

(2) The agency appointment is terminated, and the registered office discontinued if so provided, on the thirty-first day after the date on which the statement was filed.

Section 33-43-106. Nature of business.

A limited liability company may be organized under this chapter for any lawful purpose. If the purpose for which a limited liability company is organized or its activities make it subject to a special provision of law, the limited liability company shall also comply with that provision.

A limited liability company shall possess and may exercise all the powers and privileges as an individual that are either necessary or convenient including, but not limited to, those granted by this Chapter 43, any other law, the articles of organization, and its operating agreement.

Section 33-43-201. Formation.

Two or more persons may form a limited liability company by signing articles of organization and delivering the signed articles to the Secretary of State for filing. The persons who form a limited liability company must be members of the limited liability company at the time of formation.

A copy of the articles of organization which is filed with the Secretary of State and which is stamped `filed' and marked with the filing date is

Section 33-43-202. Articles of organization.

(A) The articles of organization shall set forth:

(1) a name for the limited liability company that satisfies the requirements of Section 33-43-103;

(2) the street address of the initial registered office and the name of the initial registered agent at that office as required by Section 33-43-105;

(3) the latest date upon which the limited liability company is to dissolve;

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

(5) the name and signature of each person who is forming the limited liability company and who will be an initial member.

(B) The articles of organization may set forth any other provision the organizers determine to include, including any provisions that are required or permitted to be set forth in the operating agreement.

(C) All provisions of the articles of organization shall be binding upon the limited liability company, its members, and managers. Provided, however, as among (or between) the members, the managers, and among the members and managers, if an optional provision of the articles of organization as permitted under subsection (B) of this section is inconsistent with the operating agreement for the limited liability company, the operating agreement shall control.

Section 33-43-203. Amendment of articles of organization; restatement.

(A) The articles of organization of a limited liability company may be amended by filing articles of amendment with the Secretary of State. The articles of amendment shall set forth:

(1) the name of the limited liability company;

(2) the date the articles of organization were filed; and

(3) the amendment to the articles of organization.

(B) The articles of organization may be amended so long as the articles, as amended, contain only provisions that may be lawfully contained in articles of organization at the time of making the amendment.

(C) 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 false or erroneous statement in the articles of organization;

(4) a limited liability company which is authorized to be managed by managers is no longer managed by managers;

(5) a limited liability company managed by members elects to be managed by managers; and

(6) 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.

(D) Articles of organization may be restated at any time. Restated articles of organization shall be filed with the Secretary of State and shall be specifically designated as such in the heading and shall state either in the heading or in an introductory paragraph the limited liability company's present name, and, if it has been changed, all of its former names and the date of the filing of its articles of organization.

Section 33-43-204. Execution of documents.

(A) Unless otherwise provided in any other section of this chapter, any document required by this chapter to be filed with the Secretary of State shall be executed:

(1) if management of the limited liability company is vested in one or more managers by any manager;

(2) if management of the limited liability company is reserved to the members by any member;

(3) if the limited liability company has not been formed by the persons forming the limited liability company; or

(4) if the limited liability company is in the hands of a receiver, trustee, or other court-appointed fiduciary by that fiduciary.

(B) The person executing the document shall sign it and state beneath or opposite his signature the person's name and the capacity in which he signs.

(C) The person executing the document may do so as an attorney-in-fact. Powers of attorney relating to the execution of the document need not be filed with the Secretary of State, but shall be retained by the limited liability company.

Section 33-43-205. Filing with the Secretary of State.

Articles of incorporation or any other document to be filed pursuant to this chapter shall be delivered to the office of the Secretary of State, duly executed and accompanied by one exact or conformed copy. Should the Secretary of State determine that a document conforms to the filing provisions of this chapter, including the payment of all required fees, the Secretary of State shall:

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

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

Section 33-43-206. Effect of delivery or filing of articles of organization.

(A) A limited liability company is formed when the articles of organization are filed by the Secretary of State.

(B) Each copy of the articles of organization stamped `filed' and marked with the filing date is conclusive proof that all conditions precedent required to be performed by the organizers have been complied with and that the limited liability company has been legally organized and formed under this chapter.

Section 33-43-301. Agency power of members and managers.

(A) Except as provided in subsection (B), every member is an agent of the limited liability company for the purpose of its business or affairs, and the act of any member including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the limited liability company business or businesses of the kind carried on by the limited liability company binds the limited liability company, unless the member so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the member is dealing has knowledge of the fact that the member has no such authority.

(B) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) no member, solely by reason of being a member, is an agent of the limited liability company; and

(2) every manager is an agent of the limited liability company for the purpose of its business or affairs, and the act of any manager including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the usual way the limited liability company business or businesses of the kind carried on by the limited liability company binds the limited liability company, unless the manager so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with

(C) An act of a manager or a member which is not apparently for the carrying on in the usual way the limited liability company business or business of the kind carried on by the limited liability company does not bind the limited liability company unless authorized in accordance with an operating agreement or the articles of organization.

Section 33-43-303. Limited liability company charged with knowledge of or notice to member or manager.

(A) Except as provided in subsection (B), notice to any member of any matter relating to the business or affairs of the limited liability company, and the knowledge of the member acting in the particular matter, acquired while a member or known at the time of becoming a member, and the knowledge of any other member who reasonably could and should have communicated the knowledge to the acting member, operate as notice to or knowledge of the limited liability company. However, (1) if any member has knowledge of a matter and acts fraudulently toward the limited liability company in respect to such information, the knowledge of the member shall not be imputed to the limited liability company; and (2) if notice is given to any member who is acting adversely to the limited liability company and the notifier has knowledge of such adversity, such information shall not be imputed to the limited liability company.

(B) If the articles of organization provide that management of the limited liability company is vested in a manager or managers:

(1) notice to any manger of any matter relating to the business or affairs of the limited liability company, and the knowledge of the manager acting in the particular matter acquired while a manager known at the time of becoming a manager, and the knowledge of any other manager who reasonably could and should have communicated the knowledge to the acting manager, operate as notice to or knowledge of the limited liability company. However, (a) if any manager has knowledge of a matter and acts fraudulently toward the limited liability company in respect to such information, the knowledge of the manager shall not be imputed to the limited liability company; and (b) if notice is given to any manager who is acting adversely to the limited liability company and the notifier has knowledge of such adversity, such information shall not be imputed to the limited liability company; and

(2) notice to or knowledge of any member of a limited liability company while the member is acting solely in the capacity of a member is not notice to or knowledge of the limited liability company.

Section 33-43-304. Liability of members and managers to third parties.

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