Uniform LLC Act as introduced in Hawaii HB2093, 1995 Session, Part 3 of 4 Article 5 through article 8, pages 45 through 72 of the Bill Source FYI Hawaii, telnet: fyi.uhcc.hawaii.edu ------------------------------------------------------------------------- 8 ARTICLE 5. 9 TRANSFEREES AND CREDITORS OF MEMBER 10 § -501 Member's company interest. (a) A member is not a 11 co-owner of, and has no transferable interest in, property of a 12 limited liability company. 13 (b) A company interest in a limited liability company is 14 personal property and, subject to sections -502 and -503, 15 may be transferred in whole or in part. 16 (c) An operating agreement may provide that a company 17 interest may be evidenced by a certificate of company interest 18 issued by the limited liability company and, subject to section 19 -503, may also provide for the transfer of any company 20 interest represented by the certificate. 21 § -502 Transfer of company interest. A transfer of a 22 company interest does not entitle the transferee to become or to a Page 45 2093 H.B. NO. 1 exercise any rights of a member. A transfer entitles the 2 transferee to receive, to the extent transferred, only the 3 distributions to which the transferor would be entitled. A 4 member ceases to be a member upon transfer of all of the member's 5 company interest, other than a transfer for security purposes, or 6 a court order charging the member's company interest, which has 7 not been foreclosed. 8 § -503 Rights of transferee. (a) A transferee of a 9 company interest may become a member if and to the extent that 10 the transferor gives the transferee the right in accordance with 11 authority described in the operating agreement or all other 12 members consent. 13 (b) A transferee who has become a member, to the extent 14 transferred, has the rights and powers, and is subject to the 15 restrictions and liabilities, of a member under the operating 16 agreement and this chapter. A transferee who becomes a member 17 also is liable for the transferor member's obligations to make 18 contributions under section -402 and for obligations under 19 section -407 to return unlawful distributions, but the 20 transferee is not obligated for the transferor member's 21 liabilities unknown to the transferee at the time the transferee 22 becomes a member and is not personally liable for any limited a Page 46 2093 H.B. NO. 1 liability company obligation incurred before the transferee's 2 admission as a member. 3 (c) Whether or not a transferee of a company interest 4 becomes a member under subsection (a), the transferor is not 5 released from liability to the limited liability company under 6 the operating agreement or this chapter. 7 (d) A transferee who does not become a member is not 8 entitled to participate in the management or conduct of the 9 limited liability company business, require access to information 10 concerning company transactions, or inspect or copy any of the 11 company's books and records. 12 (e) A transferee who does not become a member is entitled 13 to: 14 (1) Receive, upon dissolution and winding up of the limited 15 liability company business, a statement of account only 16 from the date of the latest statement of account agreed 17 to by all the members; 18 (2) Seek a judicial determination that under section 19 -701(a)(2) it is equitable to wind up the company 20 business if the company was a term company at the time 21 of the transfer or entry of the charging order that 22 gave rise to the transfer and the stated duration in a Page 47 2093 H.B. NO. 1 the articles of organization has expired. 2 (f) A limited liability company need not give effect to a 3 transfer until it has notice of the transfer. 4 § -504 Rights of creditor. (a) On application by a 5 judgment creditor of a member of a limited liability company or 6 of a member's transferee, a court having jurisdiction may charge 7 the company interest of the judgment debtor to satisfy the 8 judgment. The court may appoint a receiver of the share of the 9 distributions due or to become due to the judgment debtor and 10 make all other orders, directions, accounts, and inquiries the 11 judgment debtor might have made or which the circumstances may 12 require to give effect to the charging order. 13 (b) A charging order constitutes a lien on the judgment 14 debtor's company interest. The court may order a foreclosure of 15 a lien on a company interest subject to the charging order at any 16 time. A purchaser at the foreclosure sale has the rights of a 17 transferee. 18 (c) At any time before foreclosure, a company interest 19 charged may be redeemed: 20 (1) By the judgment debtor; 21 (2) With property other than limited liability company 22 property, by one or more of the other members; or a Page 48 2093 H.B. NO. 1 (3) With limited liability company property, but only if 2 permitted by the operating agreement. 3 (d) This chapter does not affect a member's right under 4 exemption laws with respect to the member's company interest in 5 the limited liability company. 6 (e) This section provides the exclusive remedy by which a 7 judgment creditor of a member or a transferee may satisfy a 8 judgment out of the judgment debtor's company interest in a 9 limited liability company. 10 ARTICLE 6. 11 MEMBER'S DISSOCIATION 12 § -601 Events causing member's dissociation. A member is 13 dissociated from a limited liability company upon the occurrence 14 of any of the following events: 15 (1) The company's having notice of the member's express 16 will to withdraw upon the date of notice or on a later 17 date specified by the member; 18 (2) An event agreed to in the operating agreement as 19 causing the member's dissociation; 20 (3) The member's expulsion pursuant to the operating 21 agreement; 22 (4) The member's expulsion by the unanimous vote of the a Page 49 2093 H.B. NO. 1 other members if: 2 (i) It is unlawful to carry on the company business 3 with the member; 4 (ii) There has been a transfer of substantially all of 5 the member's company interest, other than a 6 transfer for security purposes, or a court order 7 charging the member's company interest, which has 8 not been foreclosed; 9 (iii) Ninety days after the company notifies a corporate 10 member that it will be expelled because it has 11 filed a certificate of dissolution or the 12 equivalent, its charter has been revoked, or its 13 right to conduct business has been suspended by 14 the jurisdiction of its incorporation, unless a 15 member obtains a revocation of the certificate of 16 dissolution or no reinstatement of its charter or 17 its right to conduct business; or 18 (iv) A partnership or a limited liability company that 19 is a member has been dissolved and its business is 20 being wound up; 21 (5) On application by the company or another member, the 22 member's expulsion by judicial determination because a Page 50 2093 H.B. NO. 1 the member: 2 (i) Engaged in wrongful conduct that adversely and 3 materially affected the company business; 4 (ii) Wilfully or persistently committed a material 5 breach of the operating agreement or of a duty 6 owed to the company or the other members under 7 section -409; or 8 (iii) Engaged in conduct relating to the company 9 business which makes it not reasonably practicable 10 to carry on the business with the member; 11 (6) The member's: 12 (i) Becoming a debtor in bankruptcy; 13 (ii) Executing an assignment for the benefit of 14 creditors; 15 (iii) Seeking, consenting to, or acquiescing in the 16 appointment of a trustee, receiver, or liquidator 17 of the member or of all or substantially all of 18 the member's property; or 19 (iv) Failing, within ninety days after the appointment, 20 to have vacated or stayed the appointment of a 21 trustee, receiver, or liquidator of the member or 22 of all or substantially all of the member's a Page 51 2093 H.B. NO. 1 property obtained without the member's consent or 2 acquiescence, or failing within ninety days after 3 the expiration of a stay to have the appointment 4 vacated; 5 (7) In the case of a member who is an individual: 6 (i) The member's death; 7 (ii) The appointment of a guardian or general 8 conservator for the member; or 9 (iii) A judicial determination that the member has 10 otherwise become incapable of performing the 11 member's duties under the operating agreement; 12 (8) In the case of a member that is a trust or is acting as 13 a member by virtue of being a trustee of a trust, 14 distribution of the trust's entire rights to receive 15 distributions from the company, but not merely by 16 reason of the substitution of a successor trustee; 17 (9) In the case of a member that is an estate or is acting 18 as a member by virtue of being a personal 19 representative of an estate, distribution of the 20 estate's entire rights to receive distributions from 21 the company, but not merely the substitution of a 22 successor personal representative; or a Page 52 2093 H.B. NO. 1 (10) Termination of the existence of a member if the member 2 is not an individual, estate, or trust other than a 3 business trust. 4 § -602 Member's power to dissociate; wrongful 5 dissociation. (a) A member has the power to dissociate at any 6 time, rightfully or wrongfully, by express will pursuant to 7 section -601(1). 8 (b) A member's dissociation is wrongful only if: 9 (1) It is in breach of an express provision of the 10 operating agreement; or 11 (2) Before the expiration of the duration stated in the 12 articles of organization of a term company: 13 (i) The member withdraws by express will; 14 (ii) The member is expelled by judicial determination 15 under section -601(5); 16 (iii) The member is dissociated by becoming a debtor in 17 bankruptcy; or 18 (iv) In the case of a member who is not an individual, 19 trust other than a business trust, or estate, the 20 member is expelled or otherwise dissociated 21 because it wilfully dissolved or terminated. 22 (c) A member who wrongfully dissociates is liable to the a Page 53 2093 H.B. NO. 1 limited liability company and to the other members for damages 2 caused by the dissociation. The liability is in addition to any 3 other obligation of the member to the company or to the other 4 members. 5 (d) In a term company that does not dissolve and wind up 6 its business as a result of a member's wrongful dissociation, 7 damages for wrongful dissociation under subsection (b) from the 8 dissociated member to the company must be offset against 9 distributions otherwise due the dissociated member after the 10 dissociation. 11 § -603 Effect of member's dissociation. (a) If under 12 section -801 a member's dissociation from a limited liability 13 company results in a dissolution and winding up of the company's 14 business, article 8 applies. If a member's dissociation from a 15 company does not result in a dissolution and winding up of the 16 company's business under section -801: 17 (1) In an at-will company, the company must cause the 18 dissociated member's company interest to be purchased 19 under article 7; and 20 (2) In a term company: 21 (i) If the company dissolves and winds up its business 22 on or before the expiration of its stated a Page 54 2093 H.B. NO. 1 duration, article 8 applies to determine the 2 dissociated member's rights to distributions; and 3 (ii) If the company does not dissolve and wind up its 4 business on or before the expiration of its stated 5 duration, the company must cause the dissociated 6 member's company interest to be purchased under 7 article 7 on the date of the expiration of the 8 stated duration which existed at the time of the 9 member's dissociation. 10 (b) Upon a member's dissociation: 11 (1) The member's right to participate in the management and 12 conduct of a limited liability company's business 13 terminates, except as provided in section -803 and 14 the member ceases to be a member and is treated the 15 same as a transferee of a member under section -502; 16 (2) The member's duty of loyalty under section 17 -409(b)(3) terminates; and 18 (3) The member's duty of loyalty under section 19 -409(b)(1) and (2) and duty of care under section 20 -409(c) continue only with regard to matters arising 21 and events occurring before the member's dissociation, 22 unless the member participates in winding up the a Page 55 2093 H.B. NO. 1 company's business pursuant to section -803. 2 ARTICLE 7. 3 MEMBER'S DISSOCIATION WHEN 4 BUSINESS NOT WOUND UP 5 § -701 Exercise of purchase right. (a) A limited 6 liability company shall cause a company interest to be purchased: 7 (1) If a member is dissociated from an at-will limited 8 liability company without resulting in a dissolution 9 and winding up of the company business under section 10 -801, for its fair value determined as of the date 11 of the member's dissociation; or 12 (2) If the company was a term company at the time of the 13 transfer or entry of the charging order that gave rise 14 to the transfer and the stated duration in the articles 15 of organization has expired, on application by an owner 16 of a company interest, for its fair value determined as 17 of the date of the expiration of the stated duration. 18 (b) A limited liability company must deliver a purchase 19 offer to the member whose company interest is entitled to be 20 purchased not later than thirty days after the effective date of 21 the member's dissociation under subsection (a)(1) or after the 22 application made under subsection (a)(2). The purchase offer a Page 56 2093 H.B. NO. 1 must be accompanied by: 2 (1) A statement of the company's assets and liabilities as 3 of the determination date specified in subsection (a); 4 (2) The latest available balance sheet and income 5 statement, if any; and 6 (3) An explanation of how the estimated amount of the 7 payment was calculated. 8 (c) If the price and other terms of a purchase of a 9 dissociated member's company interest are fixed or are to be 10 determined by the operating agreement, the price and terms so 11 fixed or determined govern the purchase unless the purchaser 12 defaults, in which event the dissociated member is entitled to 13 commence a proceeding to have the company dissolved under section 14 -801(5)(iv). 15 (d) If an agreement to purchase the company interest is not 16 made within one hundred twenty days after dissociation or 17 application, the dissociated member or owner of a company 18 interest may, within another one hundred twenty days, commence a 19 proceeding against the limited liability company to compel the 20 purchase. The company at its expense shall notify in writing all 21 of the remaining members, and any other person the court directs, 22 of the commencement of the proceeding. The jurisdiction of the a Page 57 2093 H.B. NO. 1 court in which the proceeding is commenced under this subsection 2 is plenary and exclusive. 3 (e) The court shall determine the fair value of the company 4 interest in accordance with the standards set forth in section 5 -702 together with the terms for the purchase. Upon making 6 these determinations, the court shall order the limited liability 7 company to purchase or cause the purchase of the company 8 interest. 9 (f) Damages for wrongful dissociation under section 10 -602(b), and all other amounts owing, whether or not currently 11 due, from the dissociated member to a limited liability company, 12 must be offset against the purchase price. 13 § -702 Court action to determine fair value of company 14 interest. (a) In an action brought to determine the fair value 15 of a company interest in a limited liability company, the court 16 shall: 17 (1) Determine the fair value of the company interest, 18 considering among other relevant evidence the going 19 concern value of the company, any agreement among some 20 or all of the members fixing the price or specifying a 21 formula for determining value of company interests for 22 any purpose, the recommendations of any appraiser a Page 58 2093 H.B. NO. 1 appointed by the court, and any legal constraints on 2 the company's ability to purchase the interest; 3 (2) Specify the terms of the purchase, including, if 4 appropriate, terms for installment payments, 5 subordination of the purchase obligation to the rights 6 of the company's other creditors, security for a 7 deferred purchase price, and a covenant not to compete 8 or other restriction on a dissociated member; 9 (3) Require the dissociated member or owner of the company 10 interest to deliver an assignment of the company 11 interest to the purchaser upon receipt of the purchase 12 price or the first installment of the purchase price; 13 (4) Provide that after the dissociated member or owner of 14 the company interest delivers the assignment that 15 person has no further claim against the company, its 16 members, officers, or managers, if any, other than a 17 claim to any unpaid balance of the purchase price and a 18 claim under any agreement with the company or the 19 remaining members that is not terminated by the court; 20 and 21 (5) Provide that if the purchase is not completed in 22 accordance with the specified terms, the company is to a Page 59 2093 H.B. NO. 1 be dissolved upon application under section 2 -801(5)(iv). 3 (b) After an order to purchase is entered, a party may 4 petition the court to modify the terms of the purchase and the 5 court may do so if it finds that changes in the financial or 6 legal ability of the limited liability company or other purchaser 7 to complete the purchase justify a modification. 8 (c) If a limited liability company is dissolved because the 9 purchase was not completed in accordance with the court's order, 10 the dissociated member or owner of the company interest has the 11 same rights and priorities in the company's assets as if the sale 12 had not been ordered. 13 (d) If the court finds that a party to the proceeding acted 14 arbitrarily, vexatiously, or not in good faith, it may award one 15 or more other parties their reasonable expenses, including 16 attorney's fees and the expenses of appraisers or other experts, 17 incurred in the proceeding. The finding may be based on the 18 company's failure to make an offer to pay or to comply with 19 section -701(b). 20 (e) Interest must be paid on the amount awarded from the 21 date of dissociation or expiration of the stated duration to the 22 date of payment. a Page 60 2093 H.B. NO. 1 § -703 Dissociated member's power to bind limited 2 liability company. For two years after a member dissociates 3 without resulting in a dissolution and winding up of a limited 4 liability company's business, the company, including a surviving 5 company under article 9, is bound by an act of the dissociated 6 member which would have bound the company under section -301 7 before dissociation only if at the time of entering into the 8 transaction the other party: 9 (1) Reasonably believed that the dissociated member was 10 then a member; 11 (2) Did not have notice of the member's dissociation; and 12 (3) Is not deemed to have had notice under section -704. 13 § -704 Statement of dissociation. (a) A dissociated 14 member or a limited liability company may file in the office of 15 the director of commerce and consumer affairs a statement of 16 dissociation stating the name of the company and that the member 17 is dissociated from the company. 18 (b) For the purposes of sections -301 and -703, a 19 person not a member is deemed to have notice of the dissociation 20 ninety days after the statement of dissociation is filed. 21 ARTICLE 8. 22 WINDING UP COMPANY BUSINESS a Page 61 2093 H.B. NO. 1 § -801 Events causing dissolution and winding up of 2 company business. A limited liability company is dissolved, and 3 its business must be wound up, upon the occurrence of any of the 4 following events: 5 (1) An event specified in the operating agreement; 6 (2) Consent of the number or percentage of members 7 specified in the operating agreement; 8 (3) Dissociation of a member of an at-will company, and 9 dissociation of a member of a term company but only if 10 the dissociation was for a reason provided in section 11 -601(6) through (10) and occurred before the 12 expiration of the stated duration in the articles of 13 organization, but the company is not dissolved and 14 required to be wound up by reason of the dissociation: 15 (i) If, within ninety days after the dissociation, a 16 majority in interest of the remaining members 17 agree to continue the business of the company; or 18 (ii) The business of the company is continued under a 19 right to continue stated in the operating 20 agreement; 21 (4) An event that makes it unlawful for all or 22 substantially all of the business of the company to be a Page 62 2093 H.B. NO. 1 continued, but any cure of illegality within ninety 2 days after notice to the company of the event is 3 effective retroactively to the date of the event for 4 purposes of this section; 5 (5) On application by a member, upon entry of a judicial 6 decree that: 7 (i) The economic purpose of the company is likely to 8 be unreasonably frustrated; 9 (ii) Another member has engaged in conduct relating to 10 the company business that makes it not reasonably 11 practicable to carry on the business in the 12 company with that member; 13 (iii) It is not otherwise reasonably practicable to 14 carry on the company business in conformity with 15 the articles of organization and operating 16 agreement; 17 (iv) A dissociated member has the right to have the 18 company dissolved and its business wound up for 19 failure to cause the member's company interest to 20 be purchased pursuant to sections -701 and 21 -702; or 22 (v) The managers or members in control of the company a Page 63 2093 H.B. NO. 1 have acted, are acting, or will act in a manner 2 that is illegal, oppressive, fraudulent, or 3 unfairly prejudicial to the petitioning member. 4 § -802 Limited liability company continues after 5 dissolution. (a) Subject to subsection (b), a limited liability 6 company continues after dissolution only for the purpose of 7 winding up its business. 8 (b) At any time after the dissolution of a limited 9 liability company and before the winding up of its business is 10 completed, the members, including a dissociating member whose 11 dissociation caused the dissolution, may unanimously waive the 12 right to have the company's business wound up and the company 13 terminated. In that case: 14 (1) The limited liability company resumes carrying on its 15 business as if dissolution had never occurred and any 16 liability incurred by the company or a member after the 17 dissolution and before the waiver is determined as if 18 the dissolution had never occurred; and 19 (2) The rights of a third party accruing under section 20 -804(a) or arising out of conduct in reliance on the 21 dissolution before the third party knew or received a 22 notification of the waiver are not adversely affected. a Page 64 2093 H.B. NO. 1 § -803 Right to wind up limited liability company's 2 business. (a) After dissolution, a member who has not 3 wrongfully dissociated may participate in winding up a limited 4 liability company's business, but on application of any member, 5 member's legal representative, or transferee, the circuit court, 6 for good cause shown, may order judicial supervision of the 7 winding up. 8 (b) A legal representative of the last surviving member may 9 wind up a limited liability company's business. 10 (c) A person winding up a limited liability company's 11 business may preserve the company's business or property as a 12 going concern for a reasonable time, prosecute and defend actions 13 and proceedings, whether civil, criminal, or administrative, 14 settle and close the company's business, dispose of and transfer 15 the company's property, discharge the company's liabilities, 16 distribute the assets of the company pursuant to section -806, 17 settle disputes by mediation or arbitration, and perform other 18 necessary acts. 19 § -804 Member's or manager's agency power and liability 20 after dissolution. (a) A limited liability company is bound by 21 a member's or manager's act after dissolution that: 22 (1) Is appropriate for winding up the company business; or a Page 65 2093 H.B. NO. 1 (2) Would have bound the company under section -301 2 before dissolution, if the other party to the 3 transaction did not have notice of the dissolution. 4 (b) A member or manager who, with knowledge of the 5 dissolution, incurs a limited liability company liability by an 6 act that is not appropriate for winding up the company's business 7 is liable to the company for any damage caused to the company 8 arising from the liability. 9 § -805 Articles of termination. (a) At any time after 10 dissolution and winding up, a limited liability company may 11 terminate its existence by filing with the director articles of 12 termination stating: 13 (1) The name of the company; 14 (2) The date of the dissolution; and 15 (3) That the company's business has been wound up and the 16 legal existence of the company has been terminated. 17 (b) A limited liability company is terminated upon the 18 filing of the articles of termination or upon a later effective 19 date, if specified in the articles of termination. 20 § -806 Distribution of assets in winding up limited 21 liability company business. (a) In winding up a limited 22 liability company business, the assets of the company must be a Page 66 2093 H.B. NO. 1 applied to discharge its obligations to creditors, including 2 members who are creditors. Any surplus must be applied to pay in 3 money the net amount distributable to members in accordance with 4 their right to distributions under subsection (b). 5 (b) Each member is entitled to a distribution upon the 6 winding up of the limited liability company business consisting 7 of a return of all contributions which have not previously been 8 returned and a distribution of any remainder in equal shares. 9 § -807 Known claims against dissolved limited liability 10 company. (a) A dissolved limited liability company may dispose 11 of the known claims against it by following the procedure 12 described in this section. 13 (b) A dissolved limited liability company shall notify its 14 known claimants in writing of the dissolution. The notice must: 15 (1) Specify the information required to be included in a 16 claim; 17 (2) Provide a mailing address where the claim is to be 18 sent; 19 (3) State the deadline for receipt of the claim, which may 20 not be less than one hundred twenty days after the date 21 of the written notice is received by the claimant; and 22 (4) State that the claim will be barred if not received by a Page 67 2093 H.B. NO. 1 the deadline. 2 (c) A claim against a dissolved limited liability company 3 is barred if the requirements of subsection (b) are met, and: 4 (1) The claim is not received by the specified deadline; or 5 (2) In the case of a claim that is timely received but 6 rejected by the dissolved company, the claimant does 7 not commence a proceeding to enforce the claim within 8 ninety days after the receipt of the rejection notice. 9 (d) For purposes of this section, "claim" does not include 10 a contingent liability or a claim based on an event occurring 11 after the effective date of dissolution. 12 § -808 Other claims against dissolved limited liability 13 company. (a) A dissolved limited liability company may also 14 publish notice of its dissolution and request persons having 15 claims against the company to present them in accordance with the 16 notice. 17 (b) The notice must: 18 (1) Be published once in a newspaper of general circulation 19 in the county in which the dissolved limited liability 20 company's principal office is located or, if none in 21 this State, in which its designated office is or was 22 last located; a Page 68 2093 H.B. NO. 1 (2) Describe the information required to be included for a 2 claim and provide a mailing address where the claim is 3 to be sent; and 4 (3) State that a claim against the limited liability 5 company is barred unless a proceeding to enforce the 6 claim is commenced within five years after the 7 publication of the notice. 8 (c) If a dissolved limited liability company publishes a 9 notice in accordance with subsection (b), the claim of each of 10 the following claimants is barred unless the claimant commences a 11 proceeding to enforce the claim against the dissolved company 12 within five years after the publication date of the notice: 13 (1) A claimant who did not receive written notice under 14 section -807; 15 (2) A claimant whose claim was timely sent to the dissolved 16 company but not acted on; and 17 (3) A claimant whose claim is contingent or based on an 18 event occurring after the effective date of 19 dissolution. 20 (d) A claim may be enforced under this section: 21 (1) Against the dissolved limited liability company, to the 22 extent of its undistributed assets; or a Page 69 2093 H.B. NO. 1 (2) If the assets have been distributed in liquidation, 2 against a member of the dissolved company to the extent 3 of the member's proportionate share of the claim or the 4 company assets distributed to the member in 5 liquidation, whichever is less, but a member's total 6 liability for all claims under this section may not 7 exceed the total amount of assets distributed to the 8 member. 9 § -809 Grounds for administrative dissolution. The 10 director may commence a proceeding to administratively dissolve a 11 limited liability company if the company does not: 12 (1) Pay within sixty days after they are due any franchise 13 taxes or penalties imposed by this chapter or other 14 law; or 15 (2) Deliver its annual report to the director within sixty 16 days after it is due. 17 § -810 Procedure for and effect of administrative 18 dissolution. (a) If the director determines that one or more 19 grounds exist under section -809 for dissolving a limited 20 liability company, the director shall serve the company with a 21 record of the determination under section -111. 22 (b) If the company does not correct each ground for a Page 70 2093 H.B. NO. 1 dissolution or demonstrate to the reasonable satisfaction of the 2 director that each ground determined by the director does not 3 exist within sixty days after service of the notice is perfected, 4 the director shall administratively dissolve the company by 5 signing a certification of the dissolution that recites the 6 ground or grounds for dissolution and its effective date. The 7 director shall file the original of the certificate and serve a 8 copy on the company under section -111. 9 (c) A company administratively dissolved continues its 10 existence but may not carry on any business except that necessary 11 to wind up and liquidate its business and affairs under section 12 -802 and notify claimants under sections -807 and -808. 13 (d) The administrative dissolution of a company does not 14 terminate the authority of its agent for service of process. 15 § -811 Reinstatement following administrative 16 dissolution. (a) A limited liability company administratively 17 dissolved under section -810 may apply to the director for 18 reinstatement within two years after the effective date of 19 dissolution. The application must: 20 (1) Recite the name of the company and the effective date 21 of its administrative dissolution; 22 (2) State that the ground or grounds for dissolution either a Page 71 2093 H.B. NO. 1 did not exist or have been eliminated; 2 (3) State that the company's name satisfies the 3 requirements of section -105; and 4 (4) Contain a certificate from the director of taxation 5 reciting that all taxes owed by the company have been 6 paid. 7 (b) If the director determines that the application 8 contains the information required by subsection (a) and that the 9 information is correct, the director shall cancel the certificate 10 of dissolution and prepare a certificate of reinstatement that 11 recites this determination and the effective date of 12 reinstatement, file the original of the certificate, and serve a 13 copy on the company under section -111. 14 (c) When reinstatement is effective, it relates back to and 15 takes effect as of the effective date of the administrative 16 dissolution and the company resumes carrying on its business as 17 if the administrative dissolution had never occurred. 18 § -812 Appeal from denial of reinstatement. (a) If the 19 director denies a limited liability company's application for 20 reinstatement following administrative dissolution, the director 21 shall serve the company under section -111 with a record that 22 explains the reason or reasons for denial. a Page 72 2093 H.B. NO. 1 (b) The company may appeal the denial of reinstatement to 2 the circuit court within thirty days after service of the notice 3 of denial is perfected. The company appeals by petitioning the 4 court to set aside the dissolution and attaching to the petition 5 copies of the director's certificate of dissolution, the 6 company's application for reinstatement, and the director's 7 notice of denial. 8 (c) The court may summarily order the director to reinstate 9 the dissolved company or may take other action the court 10 considers appropriate. 11 (d) The court's final decision may be appealed as in other 12 civil proceedings. -- John DeBruyn, Denver, Colorado, The Mile High City, USA (jdebruyn@usa.net)