CHAPTER 119
HOUSE BILL No. 2276
(Amends Chapter 41)
An Act enacting the Kansas revised limited liability company
act; amending K.S.A. 17-
7701 and 17-7705 and K.S.A. 1998 Supp. 17-2708, 17-5903 and 58-3062
and repealing
the existing sections; also repealing K.S.A. 17-7601, 17-7602,
17-7603, 17-7606, 17-7609,
17-7610, 17-7611, 17-7612, 17-7613, 17-7614, 17-7615, 17-7617,
17-7618, 17-7619, 17-
7620, 17-7621, 17-7623, 17-7624, 17-7625, 17-7626, 17-7627,
17-7628, 17-7629, 17-
7630, 17-7631, 17-7632, 17-7633, 17-7635, 17-7636, 17-7637,
17-7638, 17-7639, 17-
7640, 17-7641, 17-7642, 17-7643, 17-7644, 17-7645, 17-7646,
17-7649, 17-7650,
17-7652, 17-7652, as amended by section 7 of 1999 House Bill No.
2161, 17-7653, 17-
7655 and 17-7656 and K.S.A. 1998 Supp. 17-7604, 17-7605, 17-7607,
17-7608, 17-7616,
17-7622, 17-7634, 17-7634, as amended by section 13 of 1999 House
Bill No. 2161, 17-
7647, 17-7648 and 17-7654.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. This act shall be
known and may be cited as the
Kansas revised limited liability company act.
New Sec. 2. As used in this act
unless the context otherwise requires:
(a) ``Articles of organization'' means
the articles of organization re-
ferred to in section 12, and amendments thereto, and the articles
as
amended.
(b) ``Bankruptcy'' means an event that
causes a person to cease to be
a member as provided in section 28, and amendments thereto.
(c) ``Contribution'' means any cash,
property, services rendered or a
promissory note or other obligation to contribute cash or property
or to
perform services, which a person contributes to a limited liability
com-
pany in such person's capacity as a member.
(d) ``Foreign limited liability company''
means a limited liability com-
pany formed under the laws of any state or under the laws of any
foreign
country or other foreign jurisdiction and denominated as such under
the
laws of such state or foreign country or other foreign
jurisdiction.
(e) ``Knowledge'' means a person's actual
knowledge of a fact, rather
than the person's constructive knowledge of the fact.
(f) ``Limited liability company'' and
``domestic limited liability com-
pany'' means a limited liability company formed under the laws of
the
state of Kansas and having one or more members.
(g) ``Operating agreement'' means any
agreement, written or oral, of
the member or members as to the affairs of a limited liability
company
and the conduct of its business. A written operating agreement or
another
written agreement or writing:
(1) May provide that a person shall be
admitted as a member of a
limited liability company, or shall become an assignee of a limited
liability
company interest or other rights or powers of a member to the
extent
assigned, and shall become bound by the operating agreement:
(A) If such person (or a representative
authorized by such person
orally, in writing or by other action such as payment for a limited
liability
company interest) executes the operating agreement or any other
writing
evidencing the intent of such person to become a member or
assignee;
or
(B) without such execution, if such
person (or a representative au-
thorized by such person orally, in writing or by other action such
as pay-
ment for a limited liability company interest) complies with the
conditions
for becoming a member or assignee as set forth in the operating
agree-
ment or any other writing and requests (orally, in writing or by
other
action such as payment for a limited liability company interest)
that the
records of the limited liability company reflect such admission or
assign-
ment; and
(2) shall not be unenforceable by reason
of its not having been signed
by a person being admitted as a member or becoming an assignee
as
provided in subparagraph (a) of this paragraph, or by reason of its
having
been signed by a representative as provided in this act.
(h) ``Limited liability company
interest'' means a member's share of
the profits and losses of a limited liability company and a
member's right
to receive distributions of the limited liability company's
assets.
(i) ``Liquidating trustee'' means a
person carrying out the winding up
of a limited liability company.
(j) ``Majority in interest'' means the
affirmative vote or consent of the
members who own more than 50% of the then current percentage or
other interest in the profits of the limited liability company
owned by all
members entitled to vote thereon or the members in each class or
group
entitled to vote thereon as appropriate.
(k) ``Manager'' means a person who is
named as a manager of a lim-
ited liability company in, or designated as a manager of, a limited
liability
company pursuant to an operating agreement or similar instrument
under
which the limited liability company is formed.
(l) ``Member'' means a person who has
been admitted to a limited
liability company as a member as provided in section 25, and
amendments
thereto, or, in the case of a foreign limited liability company, in
accord-
ance with the laws of the state or foreign country or other foreign
juris-
diction under which the foreign limited liability company is
organized.
(m) ``Person'' means a natural person,
partnership (whether general
or limited and whether domestic or foreign), limited liability
company,
foreign limited liability company, trust, estate, association,
corporation,
custodian, nominee or any other individual or entity in its own or
any
representative capacity.
(n) ``Personal representative'' means, as
to a natural person, the ex-
ecutor, administrator, guardian, conservator or other legal
representative
thereof and, as to a person other than a natural person, the legal
repre-
sentative or successor thereof.
(o) ``State'' means the District of
Columbia or the commonwealth of
Puerto Rico or any state, territory, possession or other
jurisdiction of the
United States other than the state of Kansas.
New Sec. 3. The name of each
limited liability company as set forth
in its articles of organization:
(a) Shall contain the words ``limited
liability company'' or ``limited
company'', or the abbreviation ``LLC,'' ``LC'' or the designation
``LLC''
or ``LC'';
(b) may contain the name of a member or
manager;
(c) Must be such as to distinguish it
upon the records with the sec-
retary of state from the name of any corporation, limited
partnership,
business trust, registered limited liability partnership or limited
liability
company reserved, registered, formed or organized under the laws of
the
state of Kansas or qualified to do business or registered as a
foreign cor-
poration, foreign limited partnership or foreign limited liability
company
in the state of Kansas; provided however, that a limited liability
company
may register under any name which is not such as to distinguish it
upon
the records with the secretary of state from the name of any
domestic or
foreign corporation, limited partnership, business trust,
registered limited
liability partnership or limited liability company reserved,
registered,
formed or organized under the laws of the state of Kansas with the
written
consent of the other corporation, limited partnership, business
trust, reg-
istered limited liability partnership or limited liability company,
which
written consent shall be filed with the secretary of state; and
(d) May contain the following words:
``company,'' ``association,''
``club,'' ``foundation,'' ``fund,'' ``institute,'' ``society,''
``union,'' ``syndicate,''
``limited'' or ``trust'' (or abbreviations of like import).
New Sec. 4. The exclusive right to
the use of a name may be reserved
in the same manner as corporation names are reserved as set forth
in
K.S.A. 17-7402, and amendments thereto. A fee of $20 shall be paid
at
the time of the reservation of any name.
New Sec. 5. (a) Each limited
liability company shall have and main-
tain in the state of Kansas:
(1) A registered office, which may but
need not be a place of its
business in the state of Kansas; and
(2) A resident agent for service of
process on the limited liability
company, which agent may be either an individual resident of the
state
of Kansas whose business office is identical with the limited
liability com-
pany's registered office, or a domestic corporation, or a domestic
limited
partnership, or a domestic limited liability company, or a domestic
busi-
ness trust or a foreign corporation, or a foreign limited
partnership, or a
foreign limited liability company authorized to do business in the
state of
Kansas having a business office identical with such registered
office,
which is generally open during normal business hours to accept
service
of process and otherwise perform the functions of a resident agent,
or
the limited liability company itself.
(b) A resident agent may change the
address of the registered office
of the limited liability company or companies for which such
resident
agent is resident agent to another address in the state of Kansas
by paying
a fee as set forth in section 75, and amendments thereto, and
filing with
the secretary of state a certificate, executed by such resident
agent, setting
forth the names of all the limited liability companies represented
by such
resident agent, and the address at which such resident agent has
main-
tained the registered office for each of such limited liability
companies,
and further certifying to the new address to which each such
registered
office will be changed on a given day, and at which new address
such
resident agent will thereafter maintain the registered office for
each of
the limited liability companies recited in the certificate. Upon
the filing
of such certificate, the secretary of state shall furnish to the
resident agent
a certified copy of the same under the secretary's hand and seal of
office,
and thereafter, or until further change of address, as authorized
by law,
the registered office in the state of Kansas of each of the limited
liability
companies recited in the certificate shall be located at the new
address
of the resident agent thereof as given in the certificate. In the
event of a
change of name of any person acting as a resident agent of a
limited
liability company, such resident agent shall file with the
secretary of state
a certificate, executed by such resident agent, setting forth the
new name
of such resident agent, the name of such resident agent before it
was
changed, the names of all the limited liability companies
represented by
such resident agent, and the address at which such resident agent
has
maintained the registered office for each of such limited liability
com-
panies, and shall pay a fee as set forth in section 75, and
amendments
thereto. Upon the filing of such certificate, the secretary of
state shall
furnish to the resident agent a certified copy of the certificate
under hand
and seal of office. Filing a certificate under this section shall
be deemed
to be an amendment of the articles of organization of each limited
liability
company affected thereby and each such limited liability company
shall
not be required to take any further action with respect thereto, to
amend
its articles of organization under section 75, and amendments
thereto.
Any resident agent filing a certificate under this section shall
promptly,
upon such filing, deliver a copy of any such certificate to each
limited
liability company affected thereby.
(c) The resident agent of one or more
limited liability companies may
resign and appoint a successor resident agent by paying a fee as
set forth
in section 75, and amendments thereto, and filing a certificate
with the
secretary of state, stating that the resident agent resigns and the
name
and address of the successor resident agent. There shall be
attached to
such certificate a statement executed by each affected limited
liability
company ratifying and approving such change of resident agent.
Upon
such filing, the successor resident agent shall become the resident
agent
of such limited liability companies as have ratified and approved
such
substitution and the successor resident agent's address, as stated
in such
certificate, shall become the address of each such limited
liability com-
pany's registered office in the state of Kansas. The secretary of
state shall
furnish to the successor resident agent a certified copy of the
certificate
of resignation. Filing of such certificate of resignation shall be
deemed to
be an amendment of the articles of organization of each limited
liability
company affected thereby and each such limited liability company
shall
not be required to take any further action with respect thereto, to
amend
its articles of organization under section 75, and amendments
thereto.
(d) The resident agent of a limited
liability company may resign with-
out appointing a successor resident agent by paying a fee as set
forth in
section 75, and amendments thereto, and filing a certificate with
the sec-
retary of state stating that the resident agent resigns as resident
agent for
the limited liability company identified in the certificate, but
such resig-
nation shall not become effective until 60 days after the
certificate is filed.
There shall be attached to said certificate an affidavit of such
resident
agent, if an individual, or the president, a vice-president or the
secretary
thereof if a corporation, that at least 30 days prior to and on or
about the
date of the filing of such certificate, notices were sent by
certified or
registered mail to the limited liability company for which such
resident
agent is resigning as resident agent, at the principal office
thereof within
or outside the state of Kansas, if known to such resident agent or,
if not,
to the last known address of the attorney or other individual at
whose
request such resident agent was appointed for such limited
liability com-
pany, of the resignation of such resident agent. After receipt of
the notice
of the resignation of its resident agent, the limited liability
company for
which such resident agent was acting shall obtain and designate a
new
resident agent, to take the place of the resident agent so
resigning. If such
limited liability company fails to obtain and designate a new
resident agent
as aforesaid prior to the expiration of the period of 60 days after
the filing
by the resident agent of the certificate of resignation, the
articles of or-
ganization of such limited liability company shall be deemed to be
can-
celed. After the resignation of the resident agent shall have
become ef-
fective as provided in this section and if no new resident agent
shall have
been obtained and designated in the time and manner aforesaid,
service
of legal process against the limited liability company for which
the re-
signed resident agent had been acting shall thereafter be upon the
sec-
retary of state in accordance with section 75, and amendments
thereto.
(e) If a domestic limited liability
company's resident agent dies or
moves from the registered office, the limited liability company
shall des-
ignate and certify to the secretary of state the name of another
resident
agent within 30 days of the death or move. If no new resident agent
is
designated, the service of legal process on the limited liability
company
may be made as prescribed in K.S.A. 60-304, and amendments
thereto.
If any domestic limited liability company fails to designate a new
resident
agent as required by this subsection, the secretary of state, after
giving
30 days' notice of the intended action, may declare the articles of
organ-
ization canceled.
New Sec. 6. (a) Process against a
limited liability company may be
served:
(1) In accordance with K.S.A. 60-304 and
60-306, and amendments
thereto, as if the company were a partnership; or
(2) upon the resident agent at the
business address of the resident
agent.
(b) Any notice to or demand on a company
organized pursuant to
this act may be made:
(1) By delivery to a manager of the
company, if the management is
vested in a manager, or delivery to any member, if the management
is
vested in the members; or
(2) by writing, which notice or demand in
writing shall be mailed to
the registered office of the company in this state or to another
address in
this state which is the principal office of the company.
(c) Nothing contained in this section
shall limit or affect the right to
serve, in any other manner now or hereafter permitted by law, any
pro-
cess, notice or demand required or permitted by law to be served
upon
a limited liability company.
New Sec. 7. (a) Unless otherwise
specifically prohibited by law, a
limited liability company may carry on any lawful business, purpose
or
activity, whether or not for profit with the exception of the
business of
granting policies of insurance, or assuming insurance risks or
banking as
defined in K.S.A. 9-702, and amendments thereto.
(b) A limited liability company shall
possess and may exercise all the
powers and privileges granted by this act or by any other law or by
its
operating agreement, together with any powers incidental thereto,
so far
as such powers and privileges are necessary or convenient to the
conduct,
promotion or attainment of the business, purposes or activities of
the
limited liability company.
(c) A limited liability company organized
and existing under the Kan-
sas limited liability company act or otherwise qualified to do
business in
Kansas may have and exercise all powers which may be exercised by
a
Kansas professional association or professional corporation under
the pro-
fessional corporation law of Kansas, including employment of
profession-
als to practice a profession, which shall be limited to the
practice of one
profession, except as provided in K.S.A. 17-2710, and
amendments
thereto.
(d) Only a qualified person may be a
member of a limited liability
company organized to exercise powers of a professional association
or
professional corporation. No membership may be transferred to
another
person until there is presented to such limited liability company a
certif-
icate by the licensing body, as defined in K.S.A. 1998 Supp.
74-146, and
amendments thereto, stating that the person to whom the transfer is
made
or the membership issued is duly licensed to render the same type
of
professional services as that for which the limited liability
company was
organized.
(e) As used in the section, ``qualified
person'' means:
(1) Any natural person licensed to practice
the same type of profession
which any professional corporation is authorized to practice;
(2) the trustee of a trust which is a
qualified trust under subsection
(a) of section 401 of the federal internal revenue code of 1986, as
in effect,
on July 1, 1999, or of a contribution plan which is a qualified
employee
stock ownership plan under subsection (a) of section 409A of the
federal
internal revenue code of 1986, as in effect, on July 1, 1999;
(3) the trustee of a revocable living
trust established by a natural
person who is licensed to practice the type of profession which any
pro-
fessional corporation is authorized to practice, if the terms of
such trust
provide that such natural person is the principal beneficiary and
sole
trustee of such trust and such trust does not continue to hold
title to
membership in the limited liability company following such natural
per-
son's death for more than a reasonable period of time necessary to
dispose
of such membership; or
(4) a Kansas professional corporation or
foreign professional corpo-
ration in which at least one member or shareholder is authorized by
a
licensing body, as defined in K.S.A. 1998 Supp. 74-146, and
amendments
thereto, to render in this state a professional service permitted
by the
articles of organization; or
(5) a general partnership or limited
liability company, if all partners
or members thereof are authorized to render the professional
services
permitted by the articles of organization of the issuing limited
liability
company formed pursuant to this section and in which at least one
partner
or member is authorized by a licensing authority of this state to
render
in this state the professional services permitted by the articles
of organ-
ization of the limited liability company.
(f) Nothing in this act shall restrict or
limit in any manner the au-
thority and duty of any licensing body, as defined in K.S.A. 1998
Supp.
74-146, and amendments thereto, for the licensing of individual
persons
rendering a professional service or the practice of the profession
which
is within the jurisdiction of the licensing body, notwithstanding
that the
person is an officer, manager, member or employee of a limited
liability
company organized to exercise powers of a professional association
or
corporation. Each licensing body may adopt rules and regulations
gov-
erning the practice of each profession as are necessary to enforce
and
comply with this act and the law applicable to each profession.
(g) A licensing body, as defined in
K.S.A. 1998 Supp. 74-146, and
amendments thereto, the attorney general or district or county
attorney
may bring an action in the name of the state of Kansas in quo
warranto
or injunction against a limited liability company engaging in the
practice
of a profession with complying with the provisions of this act.
(h) A limited liability company organized
to exercise powers of a pro-
fessional association or professional corporation under the Kansas
limited
liability company act prior to July 1, 1999, shall file with the
secretary of
state at the time of making an annual report for the calendar year
1999
a certificate by the licensing body, as defined in K.S.A. 1998
Supp. 74-
146, and amendments thereto, of the profession involved that each
of the
members is duly licensed to practice that profession, and that the
pro-
posed company name has been approved.
New Sec. 8. Except as provided in
an operating agreement, a mem-
ber or manager may lend money to, borrow money from, act as a
surety,
guarantor or endorser for, guarantee or assume one or more
obligations
of, provide collateral for, and transact other business with, a
limited lia-
bility company and, subject to other applicable law, has the same
rights
and obligations with respect to any such matter as a person who is
not a
member or manager.
New Sec. 9. (a) Subject to such
standards and restrictions, if any, as
are set forth in its operating agreement, a limited liability
company may,
and shall have the power to, indemnify and hold harmless any
member
or manager or other person from and against any and all claims and
de-
mands whatsoever.
(b) To the extent that a member, manager,
officer, employee or agent
has been successful on the merits or otherwise or the defenses of
any
action, suits or proceeding, or in defense of any issue or matter
therein,
such director, officer, employee or agent shall be indemnified
against
expenses actually and reasonably incurred by such person in
connection
therewith, including attorney fees.
New Sec. 10. (a) Upon application
of any member or manager, the
district court may hear and determine the validity of any
admission, elec-
tion, appointment, removal or resignation of a manager of a limited
lia-
bility company, and the right of any person to become or continue
to be
a manager of a limited liability company, and, in case the right to
serve
as a manager is claimed by more than one person, may determine
the
person or persons entitled to serve as managers; and to that end
make
such order or decree in any such case as may be just and proper,
with
power to enforce the production of any books, papers and records of
the
limited liability company relating to the issue. In any such
application,
the limited liability company shall be named as a party, and
service of
copies of the application upon the resident agent of the limited
liability
company shall be deemed to be service upon the limited liability
company
and upon the person or persons whose right to serve as a manager
is
contested and upon the person or persons, if any, claiming to be a
man-
ager or claiming the right to be a manager; and the resident agent
shall
forward immediately a copy of the application to the limited
liability com-
pany and to the person or persons whose right to serve as a manager
is
contested and to the person or persons, if any, claiming to be a
manager
or the right to be a manager, in a postpaid, sealed, registered
letter ad-
dressed to such limited liability company and such person or
persons at
their post-office addresses last known to the resident agent or
furnished
to the resident agent by the applicant member or manager. The
court
may make such order respecting further or other notice of such
appli-
cation as it deems proper under these circumstances.
(b) Upon application of any member or
manager, the district court
may hear and determine the result of any vote of members or
managers
upon matters as to which the members or managers of the limited
liability
company, or any class or group of members or managers, have the
right
to vote pursuant to the operating agreement or other agreement or
this
act (other than the admission, election, appointment, removal or
resig-
nation of managers). In any such application, the limited liability
company
shall be named as a party, and service of the application upon the
resident
agent of the limited liability company shall be deemed to be
service upon
the limited liability company, and no other party need be joined in
order
for the court to adjudicate the result of the vote. The court may
make
such order respecting further or other notice of such application
as it
deems proper under these circumstances.
(c) Nothing herein contained limits or
affects the right to serve pro-
cess in any other manner now or hereafter provided by law. This
section
is an extension of and not a limitation upon the right otherwise
existing
of service of legal process upon nonresidents.
New Sec. 11. Any action to
interpret, apply or enforce the provisions
of an operating agreement, or the duties, obligations or
liabilities of a
limited liability company to the members or managers of the limited
li-
ability company, or the duties, obligations or liabilities among
members
or managers and of members or managers to the limited liability
com-
pany, or the rights or powers of, or restrictions on, the limited
liability
company, members or managers, may be brought in the district
court.
New Sec. 12. (a) In order to form a
limited liability company, articles
of organization shall be filed with the secretary of state and set
forth:
(1) The name of the limited liability
company;
(2) the address of the registered office
and the name and address of
the resident agent for service of process required to be maintained
by
section 5, and amendments thereto;
(3) any other matters the members
determine to include therein; and
(4) if the limited liability company is
organized to exercise the powers
of a professional association or corporation, each such profession
shall be
stated.
(b) A limited liability company is formed
at the time of the filing of
the initial articles of organization with the secretary of state or
at any later
date or time specified in the articles of organization which is not
later
than 90 days after the date of filing, if, in either case, there
has been
substantial compliance with the requirements of this section. A
limited
liability company formed under this act shall be a separate legal
entity,
the existence of which as a separate legal entity shall continue
until can-
cellation of the limited liability company's articles of
organization.
(c) An operating agreement may be entered
into either before, after
or at the time of the filing of the articles of organization and,
whether
entered into before, after or at the time of such filing, may be
made
effective as of the formation of the limited liability company or
at such
other time or date as provided in the operating agreement.
New Sec. 13. (a) Articles of
organization are amended by filing a
certificate of amendment thereto with the secretary of state. The
certif-
icate of amendment shall set forth:
(1) The name of the limited liability
company; and
(2) the amendment to the articles of
organization.
(b) A manager or, if there is no manager,
then any member who
becomes aware that any statement in the articles of organization
was false
when made, or that any matter described has changed making the
articles
of organization false in any material respect, shall promptly amend
the
articles of organization.
(c) Articles of organization may be
amended at any time for any other
proper purpose.
(d) Unless otherwise provided in this act
or unless a later effective
date or time (which shall be a date or time certain within 90 days
of the
date of filing) is provided for in the certificate of amendment, a
certificate
of amendment shall be effective at the time of its filing with the
secretary
of state.
New Sec. 14. Articles of
organization shall be canceled upon the dis-
solution and the completion of winding up of a limited liability
company,
or as provided in subsection (d) of section 5, and amendments
thereto,
or section 78, and amendments thereto, or upon the filing of a
certificate
of merger or consolidation if the limited liability company is not
the sur-
viving or resulting entity in a merger or consolidation, or upon
the con-
version of a domestic limited liability company approved in
accordance
with section 24, and amendments thereto, by filing a certificate of
can-
cellation with the secretary of state to accomplish the
cancellation of ar-
ticles of organization upon the dissolution and the completion of
winding
up of a limited liability company or upon the conversion of a
domestic
limited liability company approved in accordance with section 24,
and
amendments thereto, and which shall set forth:
(a) The name of the limited liability
company;
(b) the reason for filing the certificate
of cancellation;
(c) the future effective date or time
(which shall be a date or time
certain not later than 90 days after the date of filing) of
cancellation if it
is not to be effective upon the filing of the certificate;
(d) Any other information the person
filing the certificate of cancel-
lation determines.
New Sec. 15. (a) Each of the
articles or any certificate required by
this act to be filed with the secretary of state shall be executed
by one or
more authorized persons.
(b) Unless otherwise provided in an
operating agreement, any person
may sign the articles, any certificate, any amendment thereof, or
enter
into an operating agreement or amendment thereof by an agent,
including
an attorney-in-fact. An authorization, including a power of
attorney, to
sign any articles, certificate or any amendments thereof, or to
enter into
an operating agreement or amendment thereof need not be in
writing,
need not be sworn to, verified or acknowledged, and need not be
filed
with the secretary of state, but if in writing, must be retained by
the
limited liability company.
(c) The execution of articles or a
certificate by an authorized person
constitutes an oath or affirmation, under the penalties of perjury
that, to
the best of the authorized person's knowledge and belief, the facts
stated
therein are true.
New Sec. 16. (a) If a person
required to execute a certificate re-
quired by this act fails or refuses to do so, any other person who
is ad-
versely affected by the failure or refusal may petition the
district court to
direct the execution of the certificate. If the court finds that
the execution
of the certificate is proper and that any person so designated has
failed
or refused to execute the certificate, it shall order the secretary
of state
to record an appropriate certificate.
(b) If a person required to execute an
operating agreement or amend-
ment thereof fails or refuses to do so, any other person who is
adversely
affected by the failure or refusal may petition the district court
to direct
the execution of the operating agreement or amendment thereof. If
the
court finds that the operating agreement or amendment thereof
should
be executed and that any person required to execute the operating
agree-
ment or amendment thereof has failed or refused to do so, it shall
enter
an order granting appropriate relief.
New Sec. 17. (a) The original
signed copy, together with a duplicate
copy which may be either a signed or conformed copy, of articles
of
organization or any certificate to be filed pursuant to this act,
shall be
filed with the secretary of state. A person who executes a
certificate,
statement or articles as an agent or fiduciary shall not be
required to
exhibit evidence of the person's authority as a prerequisite to
filing. Any
signature on any articles or certificate authorized to be filed
with the
secretary of state under any provision of this act may be a
facsimile, a
conformed signature or an electronically transmitted signature.
Unless
the secretary of state finds that any filing does not conform to
law, upon
receipt of all filing fees required by law, the secretary of state
shall:
(1) Certify that such document has been
filed in the secretary of
state's office by endorsing upon the original filing the word
``filed'' and
the date and hour of the filing; in the absence of actual fraud,
this en-
dorsement is conclusive of the date and time of its filing;
(2) file and index the endorsed document;
and
(3) return the duplicate copy, similarly
certified, to the person who
filed it or such person's representative.
(b) The articles of organization shall be
amended as provided in a
certificate of amendment (or judicial decree of amendment) upon
the
filing of the certificate of amendment (or judicial decree of
amendment)
with the secretary of state or upon the future effective date
specified in
the certificate of amendment. An inaccuracy in the articles of
organization
may be corrected by filing a certificate of correction with the
secretary
of state as provided in section 22, and amendments thereto. The
articles
of organization are canceled upon the issuance of a certificate of
cancel-
lation (or certificate of merger or consolidation where the limited
liability
company is not the surviving or resulting entity) by the secretary
of state.
(c) The fee required by this act shall be
paid at the time of the filing
of any articles of organization or any certificate to be filed
pursuant to
this act.
(d) The fee required by this act shall be
paid for a certified copy of
any paper on file pursuant to this act and the fee fixed pursuant
to this
act shall be paid for each page copied.
(e) The secretary of state may prescribe
a telefacsimile communica-
tion fee in addition to any filing fees to cover the cost of such
services.
This fee must be paid prior to acceptance of a telefacsimile
communi-
cation and shall be deposited into the information and copy service
fee
fund.
(f) Upon filing the articles of
organization of a limited liability com-
pany organized to exercise powers of a professional association or
pro-
fessional corporation, the limited liability company shall file
with the sec-
retary of state a certificate by the licensing body, as defined in
K.S.A.
1998 Supp. 74-146, and amendments thereto, of the profession
involved
that each of the members is duly licensed to practice that
profession, and
that the proposed company name has been approved.
New Sec. 18. The fact that articles
of organization, or amendments
thereto, of a limited liability company are on file with the
secretary of
state is notice that the entity formed in connection with the
filing of the
articles of organization is a limited liability company formed
under the
laws of the state of Kansas and is notice for all purposes with
respect to
all matters required to be set forth therein.
New Sec. 19. (a) A limited
liability company, whenever desired, may
integrate into a single instrument all of the provisions of its
articles of
organization which are then in effect and operative as a result of
there
having previously been filed with the secretary of state one or
more cer-
tificates or other instruments pursuant to this act, 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
ex-
ecuted and filed pursuant to this act, they shall be specifically
designated
in their heading as ``restated articles of organization'' together
with such
other words as the company may deem appropriate and shall be
executed
and filed with the secretary of state. If the restated articles
restate and
integrate and also further amend in any respect the articles of
organiza-
tion, as previously amended or supplemented, they shall be
specifically
designated in their heading as ``amended and restated articles of
organi-
zation'' together with such other words as the company may deem
ap-
propriate and shall be executed and filed with the secretary of
state.
(c) Restated articles of organization
shall be specifically designated as
such in the heading. They shall state, either in their heading or
in an
introductory paragraph, the company's present name; if it has
been
changed, the name under which it was originally filed; the date of
filing
of its original articles of organization with the secretary of
state; and the
future effective date of the restated articles of organization if
they are not
to be effective upon the filing of the restated articles of
organization with
the secretary of state (such future effective date must be within
90 days
of the date of filing such restated articles of organization with
the secre-
tary of state). Restated articles also shall state that they were
duly executed
and filed in accordance with the provisions of this section. 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 state that fact as well.
(d) Upon the filing of the restated
articles of organization with the
secretary of state, or upon the future effective date of restated
articles of
organization as provided for therein, the initial articles, as
previously
amended or supplemented, shall be superseded. Thereafter the
restated
articles of organization, including any further amendment or
changes
made by the restated articles, shall be the articles of
organization, but the
original effective date of formation shall remain unchanged.
(e) Any amendment or change made in
connection with the restate-
ment and integration of the articles of organization shall be
subject to any
other provision of this act, not inconsistent with this section,
which would
apply if a separate certificate of amendment were filed to make
the
amendment or change.
New Sec. 20. (a) Pursuant to an
agreement of merger or consolida-
tion, 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, with such limited liability company
as the
agreement shall provide being the surviving or resulting limited
liability
company. Unless otherwise provided in the limited liability company
op-
erating agreement, a merger or consolidation shall be approved by
each
domestic limited liability company which is to merge or consolidate
by
the members, or if there is more than one class or group of
members,
then by each class or group of members, in either case, by the
affirmative
vote or consent of not less than a majority in interest of the
remaining
members. In connection with a merger or consolidation hereunder,
rights
or securities of, or interests in, a domestic limited liability
company which
is a constituent party to the merger or consolidation may be
exchanged
for or converted into cash, property, rights or securities of, or
interests
in, the surviving or resulting limited liability company or, in
addition to
or in lieu thereof, may be exchanged for or converted into cash,
property,
rights or securities of, or interests in, a limited liability
company which is
not the surviving or resulting limited liability company in the
merger or
consolidation. Notwithstanding prior approval, an agreement of
merger
or consolidation may be terminated or amended pursuant to a
provision
for such termination or amendment contained in the agreement of
merger or consolidation.
(b) The limited liability company
surviving or resulting in or from the
merger or consolidation shall file a certificate of merger or
consolidation
with the secretary of state. The certificate of merger or
consolidation shall
state:
(1) The name and jurisdiction of
formation or organization of each
of the limited liability companies which is to merge or
consolidate;
(2) that an agreement of merger or
consolidation has been approved
and executed by each of the limited liability companies which is to
merge
or consolidate;
(3) the name of the surviving or
resulting limited liability company;
(4) the future effective date or time of
the merger or consolidation
if it is not to be effective upon the filing of the certificate of
merger or
consolidation, which date shall, in no event, exceed 90 days after
the date
the certificate is filed in the secretary of state's office;
(5) that the agreement of merger or
consolidation is on file at a place
of business of the surviving or resulting limited liability
company, and
shall state the address thereof;
(6) that a copy of the agreement of
merger or consolidation will be
furnished by the surviving or resulting limited liability company,
on re-
quest and without cost, to any member of any limited liability
company
which is to merge or consolidate; and
(7) if the surviving or resulting entity
is not a domestic limited liability
company, a statement that such surviving entity agrees that it may
be
served with process in the state of Kansas in any action, suit or
proceeding
for the enforcement of any obligation of any domestic limited
liability
company which is to merge or consolidate, irrevocably appointing
the
secretary of state as its agent to accept service of process in any
such
action, suit or proceeding and specifying the address to which a
copy of
such process shall be mailed to it by the secretary of state.
(c) Unless a future effective date or
time is provided in a certificate
of merger or consolidation, in which event a merger or
consolidation shall
be effective at any such future effective date or time, a merger or
con-
solidation shall be effective upon the filing with the secretary of
state of
a certificate of merger or consolidation. If a certificate of
merger or con-
solidation provides for a future effective date or time and if an
agreement
of merger or consolidation is amended to change the future
effective date
or time, or to change any other matter described in the certificate
of
merger or consolidation so as to make the certificate of merger or
con-
solidation false in any material respect, as permitted by
subsection (b) of
this section prior to the future effective date or time, the
certificate of
merger or consolidation shall be amended by the filing of a
certificate of
amendment of a certificate of merger or consolidation which shall
identify
the certificate of merger or consolidation and the agreement of
merger
or consolidation which has been amended and shall state that the
agree-
ment of merger or consolidation has been amended and shall set
forth
the amendment to the certificate of merger or consolidation. If a
certif-
icate of merger or consolidation provides for a future effective
date or
time and if an agreement of merger or consolidation is terminated
as
permitted by subsection (a) of this section prior to the future
effective
date or time, the certificate of merger or consolidation shall be
terminated
by the filing of a certificate of termination of a merger or
consolidation
which shall identify the certificate of merger or consolidation and
the
agreement of merger or consolidation which has been terminated
and
shall state that the agreement of merger or consolidation has been
ter-
minated.
(d) A certificate of merger or
consolidation shall act as a certificate
of cancellation for a domestic limited liability company which is
not the
surviving or resulting entity in the merger or consolidation.
(e) An agreement of merger or
consolidation approved in accordance
with subsection (a) of this section may:
(1) Effect any amendment to the operating
agreement; or
(2) effect the adoption of a new
operating agreement.
Any amendment to an operating agreement or
adoption of a new op-
erating agreement made pursuant to the foregoing provision shall be
ef-
fective at the effective time or date of the merger or
consolidation. The
provisions of this subsection shall not be construed to limit the
accom-
plishment of a merger or of any of the matters referred to herein
by any
other means provided for in an operating agreement or other
agreement
or as otherwise permitted by law, including that the operating
agreement
of any constituent limited liability company to the merger or
consolidation
(including a limited liability company formed for the purpose of
consum-
mating a merger or consolidation) shall be the operating agreement
of
the surviving or resulting limited liability company.
(f) When any merger or consolidation
shall have become effective
under this section, for all purposes of the laws of the state of
Kansas, all
of the rights, privileges and powers of each of the limited
liability com-
panies that have merged or consolidated, and all property, real,
personal
and mixed, and all debts due to any of the limited liability
companies, as
well as all other things and causes of action belonging to each of
such
limited liability companies, shall be vested in the surviving or
resulting
limited liability company, and shall thereafter be the property of
the sur-
viving or resulting limited liability company as they were of each
of the
limited liability companies that have merged or consolidated, and
the title
to any real property vested by deed or otherwise, under the laws of
the
state of Kansas, in any of such limited liability companies, shall
not revert
or be in any way impaired by reason of this section, but all rights
of
creditors and all liens upon any property of any of the limited
liability
companies shall be preserved unimpaired, and all debts, liabilities
and
duties of each of the limited liability companies that have merged
or
consolidated shall thenceforth attach to the surviving or resulting
limited
liability company and may be enforced against it to the same extent
as if
the debts, liabilities and duties had been incurred or contracted
by it.
Unless otherwise agreed, a merger or consolidation of a limited
liability
company, including a limited liability company which is not the
surviving
or resulting entity in the merger or consolidation, shall not
require such
limited liability company to wind up its affairs under section 57,
and
amendments thereto or pay its liabilities and distribute its assets
under
Section 58, and amendments thereto.
(g) A limited liability company may merge
or consolidate with or into
one or more corporations, business trusts or associations, real
estate in-
vestment trusts, common-law trusts, or any other unincorporated
busi-
ness, including a partnership (whether general, limited or a
registered
limited liability partnership), in accordance with the provisions
of K.S.A.
17-7701, and amendments thereto.
New Sec. 21. An operating agreement
or an agreement of merger or
consolidation may provide that contractual appraisal rights with
respect
to a limited liability company interest or another interest in a
limited
liability company shall be available for members or limited
liability com-
pany interests in connection with any amendment of the operating
agree-
ment, any merger or consolidation in which the limited liability
company
is a constituent party to the merger or consolidation, or the sale
of all or
substantially all of the limited liability company's assets. The
district court
shall have jurisdiction to hear and determine any matter relating
to any
such appraisal rights.
New Sec. 22. (a) Whenever any
articles or certificate authorized to
be filed with the secretary of state under any provision of this
act has
been so filed and is inaccurate in any respect or was defectively
or erro-
neously executed, such articles or certificate may be corrected by
filing
with the secretary of state a certificate of correction of such
articles or
certificate. The certificate of correction shall specify the
inaccuracy or
defect to be corrected, shall set forth the portion of the articles
or cer-
tificate in corrected form and shall be executed and filed as
required by
this act. The certificate of correction shall be effective as of
the date the
original articles or certificate was filed, except as to those
persons who
are substantially and adversely affected by the correction, and as
to those
persons the certificate of correction shall be effective from the
filing date.
(b) In lieu of filing a certificate of
correction, articles or a certificate
may be corrected by filing with the secretary of state a corrected
certif-
icate which shall be executed and filed as if the corrected
certificate were
the articles or certificate being corrected, and a fee equal to the
fee pay-
able to the secretary of state if the articles or certificate being
corrected
were then being filed shall be paid and collected by the secretary
of state
for the use of the state of Kansas in connection with the filing of
the
corrected certificate. The corrected certificate shall be
specifically des-
ignated as such in its heading, shall specify the inaccuracy or
defect to be
corrected, and shall set forth the entire articles or certificate
in corrected
form. Articles or a certificate corrected in accordance with this
section
shall be effective as of the date the original articles or
certificate was filed,
except as to those persons who are substantially and adversely
affected
by the correction and as to those persons the articles or
certificate as
corrected shall be effective from the filing date.
(c) The secretary of state may correct
the secretary's own errors on
the secretary's own motion.
New Sec. 23. (a) As used in this
section, the term ``other entity''
means a business trust or association, a real estate investment
trust, a
common-law trust or any other unincorporated business, including a
part-
nership, whether general (including a registered limited liability
partner-
ship) or limited (including a registered limited liability limited
partner-
ship) or a foreign limited liability company.
(b) Any other entity may convert to a
domestic limited liability com-
pany by complying with subsection (h) of this section and filing
with the
secretary of state in accordance with section 17, and amendments
thereto:
(1) A certificate of conversion to
limited liability company that has
been executed by one or more authorized persons in accordance
with
section 15, and amendments thereto; and
(2) articles of organization that comply
with section 12, and amend-
ments thereto, and have been executed by one or more authorized
per-
sons in accordance with section 15, and amendments thereto.
(c) The certificate of conversion to
limited liability company shall
state:
(1) the date on which and jurisdiction
where the other entity was first
created, formed or otherwise came into being and, if it has
changed, its
jurisdiction immediately prior to its conversion to a domestic
limited li-
ability company;
(2) the name of the other entity
immediately prior to the filing of the
certificate of conversion to limited liability company;
(3) the name of the limited liability
company as set forth in its articles
of organization filed in accordance with subsection (b) of this
section; and
(4) the future effective date or time
(which shall be a date or time
certain not later than 90 days after the date of filing) of the
conversion
to a limited liability company if it is not to be effective upon
the filing of
the certificate of conversion to limited liability company and the
articles
of organization.
(d) Upon the filing with the secretary of
state of the certificate of
conversion to limited liability company and the articles of
organization or
upon the future effective date or time of the certificate of
conversion to
limited liability company and the articles of organization, the
other entity
shall be converted into a domestic limited liability company and
the lim-
ited liability company shall thereafter be subject to all of the
provisions
of this act, except that notwithstanding section 12, and
amendments
thereto, the existence of the limited liability company shall be
deemed to
have commenced on the date the other entity commenced its
existence
in the jurisdiction in which the other entity was first created,
formed,
incorporated or otherwise came into being.
(e) The conversion of any other entity
into a domestic limited liability
company shall not be deemed to affect any obligations or
liabilities of the
other entity incurred prior to its conversion to a domestic limited
liability
company or the personal liability of any person incurred prior to
such
conversion.
(f) When any conversion shall have become
effective under this sec-
tion, for all purposes of the laws of the state of Kansas, all of
the rights,
privileges and powers of the other entity that has converted, and
all prop-
erty, real, personal and mixed, and all debts due to such other
entity, as
well as all other things and causes of action belonging to such
other entity,
shall be vested in the domestic limited liability company and shall
there-
after be the property of the domestic limited liability company as
they
were of the other entity that has converted, and the title to any
real
property vested by deed or otherwise in such other entity shall not
revert
or be in any way impaired by reason of this act, but all rights of
creditors
and all liens upon any property of such other entity shall be
preserved
unimpaired, and all debts, liabilities and duties of the other
entity that
has converted shall thenceforth attach to the domestic limited
liability
company and may be enforced against it to the same extent as if
such
debts, liabilities and duties had been incurred or contracted by
it.
(g) Unless otherwise agreed, or as
required under applicable non-
Kansas law, the converting other entity shall not be required to
wind up
its affairs or pay its liabilities and distribute its assets, and
the conversion
shall not be deemed to constitute a dissolution of such other
entity and
shall constitute a continuation of the existence of the converting
other
entity in the form of a domestic limited liability company.
(h) Prior to filing a certificate of
conversion to limited liability com-
pany with the secretary of state, the conversion shall be approved
in the
manner provided for by the document, instrument, agreement or
other
writing, as the case may be, governing the internal affairs of the
other
entity and the conduct of its business or by applicable law, as
appropriate.
(i) The provisions of this section shall
not be construed to limit the
accomplishment of a change in the law governing, or the domicile
of, any
other entity to the state of Kansas by any other means provided for
in an
operating agreement or other agreement or as otherwise permitted
by
law, including by the amendment of an operating agreement or
other
agreement.
New Sec. 24. A domestic limited
liability company may convert to a
business trust or association, a real estate investment trust, a
common-
law trust, a general partnership (including a registered limited
liability
partnership) a limited partnership or a limited liability
partnership, or-
ganized, formed or created under the laws of the state of Kansas,
upon
the authorization of such conversion in accordance with this
section. If
the operating agreement specifies the manner of authorizing a
conversion
of the limited liability company, the conversion shall be
authorized as
specified in the operating agreement. If the operating agreement
does
not specify the manner of authorizing a conversion of the limited
liability
company and does not prohibit a conversion of the limited liability
com-
pany, the conversion shall be authorized in the same manner as is
spec-
ified in the operating agreement for authorizing a merger or
consolidation
that involves the limited liability company as a constituent party
to the
merger or consolidation. If the operating agreement does not
specify the
manner of authorizing a conversion of the limited liability company
or a
merger or consolidation that involves the limited liability company
as a
constituent party and does not prohibit a conversion of the limited
liability
company, the conversion shall be authorized by the approval by
majority
in interest of the members.
New Sec. 25. (a) In connection with
the formation of a limited lia-
bility company, a person is admitted as a member of the limited
liability
company upon the later to occur of:
(1) The formation of the limited
liability company; or
(2) the time provided in and upon
compliance with the operating
agreement or, if the operating agreement does not so provide, when
the
person's admission is reflected in the records of the limited
liability com-
pany.
(b) After the formation of a limited
liability company, a person is
admitted as a member of the limited liability company:
(1) In the case of a person who is not an
assignee of a limited liability
company interest, including a person acquiring a limited liability
company
interest directly from the limited liability company and a person
to be
admitted as a member of the limited liability company without
acquiring
a limited liability company interest in the limited liability
company at the
time provided in and upon compliance with the operating agreement
or,
if the operating agreement does not so provide, upon the consent of
all
members and when the person's admission is reflected in the records
of
the limited liability company;
(2) in the case of an assignee of a
limited liability company interest,
as provided in subsection (a) of section 53, and amendments
thereto, and
at the time provided in and upon compliance with the operating
agree-
ment or, if the operating agreement does not so provide, when any
such
person's permitted admission is reflected in the records of the
limited
liability company; or
(3) unless otherwise provided in an
agreement of merger or consol-
idation, in the case of a person acquiring a limited liability
company in-
terest in a surviving or resulting limited liability company
pursuant to a
merger or consolidation approved in accordance with subsection (b)
of
section 20, and amendments thereto, at the time provided in and
upon
compliance with the operating agreement of the surviving or
resulting
limited liability company.
(c) A person may be admitted to a limited
liability company as a
member of the limited liability company and may receive a limited
liability
company interest in the limited liability company without making a
con-
tribution or being obligated to make a contribution to the limited
liability
company. Unless otherwise provided in an operating agreement, a
person
may be admitted to a limited liability company as a member of the
limited
liability company without acquiring a limited liability company
interest in
the limited liability company. Unless otherwise provided in a
operating
agreement, a person may be admitted as the sole member of a
limited
liability company without making a contribution or being obligated
to
make a contribution to the limited liability company or without
acquiring
a limited liability company interest in the limited liability
company.
New Sec. 26. (a) An operating
agreement may provide for classes or
groups of members having such relative rights, powers and duties as
the
operating agreement may provide, and may make provision for the
future
creation in the manner provided in the operating agreement of
additional
classes or groups of members having such relative rights, powers
and
duties as may from time to time be established, including rights,
powers
and duties senior to existing classes and groups of members. An
operating
agreement may provide for the taking of an action, including the
amend-
ment of the operating agreement, without the vote or approval of
any
member or class or group of members, including an action to create
under
the provisions of the operating agreement a class or group of
limited
liability company interests that was not previously outstanding. An
oper-
ating agreement may provide that any member or class or group of
mem-
bers shall have no voting rights.
(b) An operating agreement may grant to
all or certain identified
members or a specified class or group of the members the right to
vote
separately or with all or any class or group of the members or
managers,
on any matter. Voting by members may be on a per capita,
number,
financial interest, class, group or any other basis.
(c) An operating agreement which grants a
right to vote may set forth
provisions relating to notice of the time, place or purpose of any
meeting
at which any matter is to be voted on by any members, waiver of any
such
notice, action by consent without a meeting, the establishment of a
record
date, quorum requirements, voting in person or by proxy, or any
other
matter with respect to the exercise of any such right to vote.
(d) Unless otherwise provided in an
operating agreement, on any
matter that is to be voted on by members, the members may take
such
action without a meeting, without prior notice and without a vote,
if a
consent or consents in writing, setting forth the action so taken,
shall be
signed by the members having not less than the minimum number
of
votes that would be necessary to authorize or take such action at a
meeting
which unless otherwise provided in the operating agreement or this
act
shall be a majority in interest of each class entitled to vote
thereon. Unless
otherwise provided in an operating agreement, on any matter that is
to
be voted on by members, the members may vote in person or by
proxy.
(e) Unless otherwise provided in the
operating agreement or in this
act every member holding interest in profits shall be entitled to
vote.
(f) When, under the provisions of this
act 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 of a limited
liability
company a waiver in writing signed by the person or persons
entitled to
the notice, whether made before or after the time for notice to be
given,
is equivalent to the giving of notice.
New Sec. 27. (a) Except as
otherwise provided by this act, the debts,
obligations and liabilities of a limited liability company, whether
arising
in contract, tort or otherwise, shall be solely the debts,
obligations and
liabilities of the limited liability company, and no member or
manager of
a limited liability company shall be obligated personally for any
such debt,
obligation or liability of the limited liability company solely by
reason of
being a member or acting as a manager of the limited liability
company.
(b) Notwithstanding the provisions of
subsection (a) of this section,
under an operating agreement or under another agreement, a
member
or manager may agree to be obligated personally for any or all of
the
debts, obligations and liabilities of the limited liability
company.
(c) A member or manager of a limited
liability company is not a
proper party to proceedings by or against a limited liability
company,
except when the object is to enforce a member's or manager's
right
against, or liability to, the limited liability company.
New Sec. 28. A person ceases to be
a member of a limited liability
company and shall become an assignee upon the happening of any of
the
following events:
(a) Unless otherwise provided in an
operating agreement, or with the
written consent of all members, a member:
(1) Makes an assignment for the benefit
of creditors;
(2) files a voluntary petition in
bankruptcy;
(3) is adjudged a bankrupt or insolvent,
or has entered against the
member an order for relief, in any bankruptcy or insolvency
proceeding;
(4) files a petition or answer seeking
for the member's own self any
reorganization, arrangement, composition, readjustment,
liquidation, dis-
solution or similar relief under any statute, law or
regulation;
(5) files an answer or other pleading
admitting or failing to contest
the material allegations of a petition filed against the member in
any
proceeding of this nature;
(6) seeks, consents to or acquiesces in
the appointment of a trustee,
receiver or liquidator of the member or of all or any substantial
part of
the member's properties; or
(b) Unless otherwise provided in an
operating agreement, or with the
written consent of all members, 120 days after the commencement of
any
proceeding against the member seeking reorganization,
arrangement,
composition, readjustment, liquidation, dissolution or similar
relief under
any statute, law or regulation, if the proceeding has not been
dismissed,
or if within 90 days after the appointment without the member's
consent
or acquiescence of a trustee, receiver or liquidator of the member
or of
all or any substantial part of the member's properties, the
appointment
is not vacated or stayed, or within 90 days after the expiration of
any such
stay, the appointment is not vacated.
New Sec. 29. (a) Each member of a
limited liability company has the
right, subject to such reasonable standards (including standards
governing
what information and documents are to be furnished at what time
and
location and at whose expense) as may be set forth in an operating
agree-
ment or otherwise established by the manager or, if there is no
manager,
then by the members, to obtain from the limited liability company
from
time to time upon reasonable demand for any purpose reasonably
related
to the member's interest as a member of the limited liability
company:
(1) True and full information regarding
the status of the business and
financial condition of the limited liability company;
(2) promptly after becoming available, a
copy of the limited liability
company's federal, state and local income tax returns for each
year;
(3) a current list of the name and last
known business, residence or
mailing address of each member and manager;
(4) a copy of any written operating
agreement and articles of organ-
ization and all amendments thereto, together with executed copies
of any
written powers of attorney pursuant to which the operating
agreement
and any certificate and all amendments thereto have been
executed;
(5) true and full information regarding
the amount of cash and a
description and statement of the agreed value of any other property
or
services contributed by each member and which each member has
agreed
to contribute in the future, and the date on which each became a
member;
and
(6) other information regarding the
affairs of the limited liability com-
pany as is just and reasonable.
(b) Each manager shall have the right to
examine all of the infor-
mation described in subsection (a) of this section for a purpose
reasonably
related to the manager's position as a manager.
(c) The manager of a limited liability
company shall have the right to
keep confidential from the members, for such period of time as the
man-
ager deems reasonable, any information which the manager
reasonably
believes to be in the nature of trade secrets or other information
the
disclosure of which the manager in good faith believes is not in
the best
interest of the limited liability company or could damage the
limited li-
ability company or its business or which the limited liability
company is
required by law or by agreement with a third party to keep
confidential.
(d) A limited liability company may
maintain its records in other than
a written form if such form is capable of conversion into written
form
within a reasonable time.
(e) Any demand by a member under this
section shall be in writing
and shall state the purpose of such demand.
(f) Any action to enforce any right
arising under this section shall be
brought in the district court. If the limited liability company
refuses to
permit a member to obtain or a manager to examine the
information
described in subsection (a)(3) of this section or does not reply to
the
demand that has been made within five business days after the
demand
has been made, the demanding member or manager may apply to the
district court for an order to compel such disclosure. The district
court
may summarily order the limited liability company to permit the
de-
manding member to obtain or manager to examine the information
de-
scribed in subsection (a)(3) of this section and to make copies or
abstracts
therefrom, or the district court may summarily order the limited
liability
company to furnish to the demanding member or manager the
infor-
mation described in subsection (a)(3) of this section on the
condition that
the demanding member or manager first pay to the limited liability
com-
pany the reasonable cost of obtaining and furnishing such
information
and on such other conditions as the district court deems
appropriate.
When a demanding member seeks to obtain or a manager seeks to
ex-
amine the information described in subsection (a)(3) of this
section, the
demanding member or manager shall first establish (1) that the
demand-
ing member or manager has complied with the provisions of this
section
respecting the form and manner of making demand for obtaining or
ex-
amining of such information, and (2) that the information the
demanding
member or manager seeks is reasonably related to the member's
interest
as a member or the manager's position as a manager, as the case may
be.
The district court may, in its discretion, prescribe any
limitations or con-
ditions with reference to the obtaining or examining of
information, or
award such other or further relief as the district court may deem
just and
proper. The district court may order books, documents and records,
per-
tinent extracts therefrom, or duly authenticated copies thereof, to
be
brought within the state of Kansas and kept in the state of Kansas
upon
such terms and conditions as the order may prescribe.
(g) Failure to maintain books and records
shall not be grounds for
personal liability of any member or manager.
New Sec. 30. An operating agreement
may provide that:
(a) A member who fails to perform in
accordance with, or to comply
with the terms and conditions of, the operating agreement shall be
subject
to specified penalties or specified consequences; and
(b) at the time or upon the happening of
events specified in the op-
erating agreement, a member shall be subject to specified penalties
or
specified consequences.
New Sec. 31. A person may be named
or designated as a manager
of the limited liability company as provided in section 2, and
amendments
thereto.
New Sec. 32. (a) Unless otherwise
provided in an operating agree-
ment, the management of a limited liability company shall be vested
in
its members in proportion to the then current percentage or other
inter-
est of members in the profits of the limited liability company
owned by
all of the members, the decision of members owning more than 50%
of
the percentage or other interest in the profits controlling;
provided how-
ever, that if an operating agreement provides for the management,
in
whole or in part, of a limited liability company by a manager, the
man-
agement of the limited liability company, to the extent so
provided, shall
be vested in the manager who shall be chosen by the members in
the
manner provided in the operating agreement. The manager shall also
hold
the offices and have the responsibilities accorded to the manager
by the
members and set forth in an operating agreement. Subject to section
44,
and amendments thereto, a manager shall cease to be a manager as
pro-
vided in an operating agreement. A limited liability company may
have
more than one manager. Unless otherwise provided in an operating
agree-
ment, each member in a member managed LLC has the authority to
bind
the limited liability company, and each manager, in a manager
managed
LLC has the authority to bind the LLC.
(b) If the articles of organization
provide that management of the
limited liability company is vested in one or more managers: (1) No
mem-
ber acting solely in the member's capacity as 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 and
affairs, and
the act of any manager for apparently carrying on the usual way of
the
business or affairs of the limited liability of which the manager
is a man-
ager binds the limited liability company, unless the manager so
acting has,
in fact, no authority to act for the limited liability company in
the partic-
ular matter, and the person with whom the manager is dealing has
knowl-
edge of the fact that the manager has no such authority.
(c) An act of a member or manager which
apparently is not for car-
rying on the usual way of the business or affairs of the limited
liability
company does not bind the limited liability company unless
authorized in
accordance with the terms of the articles of organization or
operating
agreement, at the time of the transaction or at any other time.
Unless
otherwise provided in the articles of organization or operating
agreement,
a transaction not in the ordinary course of the business or affairs
of the
limited liability company must be approved by a majority, by
number, of
the members of the limited liability company.
New Sec. 33. A manager of a limited
liability company may make
contributions to the limited liability company and share in the
profits and
losses of, and in distributions from, the limited liability company
as a
member. A person who is both a manager and a member has the
rights
and powers, and is subject to the restrictions and liabilities, of
a manager
and, except as provided in an operating agreement, also has the
rights
and powers, and is subject to the restrictions and liabilities, of
a member
to the extent of the manager's participation in the limited
liability com-
pany as a member.
New Sec. 34. (a) An operating
agreement may provide for classes or
groups of managers having such relative rights, powers and duties
as the
operating agreement may provide, and may make provision for the
future
creation in the manner provided in the operating agreement of
additional
classes or groups of managers having such relative rights, powers
and
duties as may from time to time be established, including rights,
powers
and duties senior to existing classes and groups of managers. An
operating
agreement may provide for the taking of an action, including the
amend-
ment of the operating agreement, without the vote or approval of
any
manager or class or group of managers, including an action to
create
under the provisions of the operating agreement a class or group of
lim-
ited liability company interests that was not previously
outstanding.
(b) An operating agreement may grant to
all or certain identified
managers or a specified class or group of the managers the right to
vote,
separately or with all or any class or group of managers or
members, on
any matter. Voting by managers may be on a per capita, number,
financial
interest, class, group or any other basis. Unless otherwise
provided in the
operating agreement, if more than one manager is appointed, all
man-
agers shall have an equal vote per capita.
(c) An operating agreement which grants a
right to vote may set forth
provisions relating to notice of the time, place or purpose of any
meeting
at which any matter is to be voted on by any manager or class or
group
of managers, waiver of any such notice, action by consent without a
meet-
ing, the establishment of a record date, quorum requirements,
voting in
person or by proxy, or any other matter with respect to the
exercise of
any such right to vote.
(d) Unless otherwise provided in an
operating agreement, on any
matter that is to be voted on by managers, the managers may take
such
action without a meeting, without prior notice and without a vote,
if a
consent or consents in writing, setting forth the action so taken,
shall be
signed by the managers having not less than the minimum number
of
votes that would be necessary to authorize or take such action at a
meet-
ing. Unless otherwise provided in an operating agreement, on any
matter
that is to be voted on by managers, the managers may vote in person
or
by proxy.
(e) When, under the provisions of the
Kansas revised limited liability
company act 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 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 made before or after the time for notice to be
given,
is equivalent to the giving of notice.
New Sec. 35. An operating agreement
may provide that:
(a) A manager who fails to perform in
accordance with, or to comply
with the terms and conditions of, the operating agreement shall be
subject
to specified penalties or specified consequences; and
(b) at the time or upon the happening of
events specified in the op-
erating agreement, a manager shall be subject to specified
penalties or
specified consequences.
New Sec. 36. A member or manager of
a limited liability company
shall be fully protected in relying in good faith upon the records
of the
limited liability company and upon such information, opinions,
reports or
statements presented to the limited liability company by any of its
other
managers, members, officers, employees or committees of the
limited
liability company, or by any other person, as to matters the member
or
manager reasonably believes are within such other person's
professional
or expert competence and who has been selected with reasonable
care
by or on behalf of the limited liability company, including
information,
opinions, reports or statements as to the value and amount of the
assets,
liabilities, profits or losses of the limited liability company or
any other
facts pertinent to the existence and amount of assets from which
distri-
butions to members might properly be paid.
New Sec. 37. Unless otherwise
provided in the operating agreement,
a member or manager of a limited liability company has the power
and
authority to delegate to one or more other persons the member's or
man-
ager's, as the case may be, rights and powers to manage and control
the
business and affairs of the limited liability company, including to
delegate
to agents, officers and employees of a member or manager or the
limited
liability company, and to delegate by a management agreement or
another
agreement with, or otherwise to, other persons. Unless otherwise
pro-
vided in the operating agreement, such delegation by a member or
man-
ager of a limited liability company shall not cause the member or
manager
to cease to be a member or manager, as the case may be, of the
limited
liability company.
New Sec. 38. The contribution of a
member to a limited liability
company may be in cash, property or services rendered, or a
promissory
note or other obligation to contribute cash or property or to
perform
services.
New Sec. 39. (a) Except as provided
in an operating agreement, a
member is obligated to a limited liability company to perform any
promise
to contribute cash or property or to perform services, even if the
member
is unable to perform because of death, disability or any other
reason. If
a member does not make the required contribution of property or
serv-
ices, the member is obligated at the option of the limited
liability company
to contribute cash equal to that portion of the agreed value (as
stated in
the records of the limited liability company) of the contribution
that has
not been made. The foregoing option shall be in addition to, and
not in
lieu of, any other rights, including the right to specific
performance, that
the limited liability company may have against such member under
the
operating agreement or applicable law.
(b) Unless otherwise provided in an
operating agreement, the obli-
gation of a member to make a contribution or return money or
other
property paid or distributed in violation of this act may be
compromised
only by consent of all the members. Notwithstanding the compromise,
a
creditor of a limited liability company who extends credit, after
the en-
tering into of an operating agreement or an amendment thereto
which,
in either case, reflects the obligation, and before the amendment
thereof
to reflect the compromise, may enforce the original obligation to
the
extent that, in extending credit, the creditor reasonably relied on
the
obligation of a member to make a contribution or return. A
conditional
obligation of a member to make a contribution or return money or
other
property to a limited liability company may not be enforced unless
the
conditions of the obligation have been satisfied or waived as to or
by such
member. Conditional obligations include contributions payable upon
a
discretionary call of a limited liability company prior to the time
the call
occurs.
(c) An operating agreement may provide
that the interest of any
member who fails to make any contribution that the member is
obligated
to make shall be subject to specified penalties for, or specified
conse-
quences of, such failure. Such penalty or consequence may take the
form
of reducing or eliminating the defaulting member's proportionate
interest
in a limited liability company, subordinating the member's limited
liability
company interest to that of nondefaulting members, a forced sale of
the
member's limited liability company interest, forfeiture of the
member's
limited liability company interest, the lending by other members of
the
amount necessary to meet the member's commitment, a fixing of
the
value of the member's limited liability company interest by
appraisal or
by formula and redemption or sale of the member's limited liability
com-
pany interest at such value, or other penalty or consequence.
New Sec. 40. The profits and losses
of a limited liability company
shall be allocated among the members, and among classes or groups
of
members, in the manner provided in an operating agreement. If the
op-
erating agreement does not so provide, profits and losses shall be
allocated
on the basis of the agreed value (as stated in the records of the
limited
liability company) of the contributions made by each member to the
ex-
tent they have been received by the limited liability company and
have
not been returned.
New Sec. 41. Distributions of cash
or other assets of a limited lia-
bility company shall be allocated among the members, and among
classes
or groups of members, in the manner provided in an operating
agree-
ment. If the operating agreement does not so provide, distributions
shall
be made on the basis of the agreed value (as stated in the records
of the
limited liability company) of the contributions made by each member
to
the extent they have been received by the limited liability company
and
have not been returned.
New Sec. 42. No obligation of a
member or manager of a limited
liability company to the limited liability company arising under
the op-
erating agreement or a separate agreement or writing, and no note,
in-
strument or other writing evidencing any such obligation of a
member or
manager, shall be subject to the defense of usury, and no member
or
manager shall interpose the defense of usury with respect to any
such
obligation in any action.
New Sec. 43. Except as provided in
this act, to the extent and at the
times or upon the happening of the events specified in an operating
agree-
ment, a member is entitled to receive from a limited liability
company
distributions before the member's resignation from the limited
liability
company and before the dissolution and winding up thereof.
New Sec. 44. A manager may resign
as a manager of a limited liability
company at the time or upon the happening of events specified in
agree-
ment and in accordance with the limited liability company
agreement. An
operating agreement may provide that a manager shall not have the
right
to resign as a manager of a limited liability company.
Notwithstanding
that an operating agreement provides that a manager does not have
the
right to resign as a manager of a limited liability company, a
manager may
resign as a manager of a limited liability company at any time by
giving
written notice to the members and other managers. If the
resignation of
a manager violates an operating agreement, in addition to any
remedies
otherwise available under applicable law, a limited liability
company may
recover from the resigning manager damages for breach of the
operating
agreement and offset the damages against the amount otherwise
distri-
butable to the resigning manager.
New Sec. 45. A member may resign
from a limited liability company
only at the time or upon the happening of events specified in
agreement
and in accordance with the operating agreement. Notwithstanding
any-
thing to the contrary under applicable law, unless the operating
agree-
ment provides otherwise, a member may resign from a limited
liability
company prior to the dissolution and winding up of the limited
liability
company. Upon resignation the member shall be deemed to be an
as-
signee and shall have only the rights of an assignee. The resigned
member
is not released from the member's liability, if any, to a limited
liability
company. Notwithstanding anything to the contrary under applicable
law,
the operating agreement may provide that a limited liability
company
interest may not be assigned prior to the dissolution and winding
up of
the limited liability company.
New Sec. 46. Except as provided in
this act, upon resignation any
resigning member is entitled to receive any distribution to which
the
member is entitled under the operating agreement. If not otherwise
pro-
vided in the operating agreement, the resigning member is not
entitled
to receive the fair value of the member's limited liability company
interest
until the dissolution and winding up of the limited liability
company. All
distributions to a resigned member shall be subject to the
provisions of
sections 47, 48 and 49, and amendments thereto.
New Sec. 47. Except as provided in
an operating agreement, a mem-
ber, regardless of the nature of the member's contribution, has no
right
to demand and receive any distribution from a limited liability
company
in any form other than cash. Except as provided in an operating
agree-
ment, a member may not be compelled to accept a distribution of
any
asset in kind from a limited liability company to the extent that
the per-
centage of the asset distributed exceeds a percentage of that asset
which
is equal to the percentage in which the member shares in
distributions
from the limited liability company. Except as provided in the
operating
agreement, a member may be compelled to accept a distribution of
any
asset in kind from a limited liability company to the extent that
the per-
centage of the asset distributed is equal to a percentage of that
asset which
is equal to the percentage in which the member shares in
distributions
from the limited liability company.
New Sec. 48. Subject to sections 49
and 58, and amendments
thereto, and unless otherwise provided in an operating agreement,
at the
time a member becomes entitled to receive a distribution, the
member
has the status of, and is entitled to all remedies available to, a
creditor of
a limited liability company with respect to the distribution. An
operating
agreement may provide for the establishment of a record date with
re-
spect to allocations and distributions by a limited liability
company.
New Sec. 49. (a) A limited
liability company shall not make a distri-
bution to a member to the extent that at the time of the
distribution,
after giving effect to the distribution, all liabilities of the
limited liability
company, other than liabilities to members on account of their
limited
liability company interests and liabilities for which the recourse
of cred-
itors is limited to specified property of the limited liability
company, ex-
ceed the fair value of the assets of the limited liability company,
except
that the fair value of property that is subject to a liability for
which the
recourse of creditors is limited shall be included in the assets of
the lim-
ited liability company only to the extent that the fair value of
that property
exceeds that liability.
(b) A member who receives a distribution
in violation of subsection
(a) of this section, and who knew at the time of the distribution
that the
distribution violates subsection (a) of this section, shall be
liable to a lim-
ited liability company for the amount of the distribution. A member
who
receives a distribution in violation of subsection (a) of this
section, and
who did not know at the time of the distribution that the
distribution
violated subsection (a) of this section, shall not be liable for
the amount
of the distribution. Subject to subsection (c) of this section,
this subsection
shall not affect any obligation or liability of a member under an
agreement
or other applicable law for the amount of distribution.
(c) Unless otherwise agreed, a member who
receives a distribution
from a limited liability company shall have no liability under this
act or
other applicable law for the amount of the distribution after the
expiration
of three years from the date of the distribution unless an action
to recover
the distribution from such member is commenced prior to the
expiration
of such three-year period and an adjudication of liability against
such
member is made in the action.
New Sec. 50. A limited liability
company interest is personal prop-
erty. A member has no interest in specific limited liability
company prop-
erty.
New Sec. 51. (a) A limited
liability company interest is assignable in
whole or in part except as provided in an operating agreement. The
as-
signee of a member's limited liability company interest shall have
no right
to participate in the management of the business and affairs of a
limited
liability company except as provided in an operating agreement and
upon:
(1) The approval of all of the members of
the limited liability com-
pany other than the member assigning the member's limited liability
com-
pany interest; or
(2) compliance with any procedure
provided for in the operating
agreement.
(b) Unless otherwise provided in an
operating agreement:
(1) An assignment of a limited liability
company interest does not
entitle the assignee to become or to exercise any rights or powers
of a
member;
(2) an assignment of a limited liability
company interest entitles the
assignee to share in such profits and losses, to receive such
distribution
or distributions, and to receive such allocation of income, gain,
loss, de-
duction, or credit or similar item to which the assignor was
entitled, to
the extent assigned; and
(3) a member ceases to be a member and to
have the power to ex-
ercise any rights or powers of a member upon assignment of all of
the
member's limited liability company interest. Unless otherwise
provided
in an operating agreement, the pledge of, or granting of a security
interest,
lien or other encumbrance in or against, any or all of the limited
liability
company interest of a member shall not cause the member to cease
to
be a member or to have the power to exercise any rights or powers
of a
member.
(c) An operating agreement may provide
that a member's interest in
a limited liability company may be evidenced by a certificate of
limited
liability company interest issued by the limited liability
company.
(d) Unless otherwise provided in an
operating agreement and except
to the extent assumed by agreement, until an assignee of a limited
liability
company interest becomes a member, the assignee shall have no
liability
as a member solely as a result of the assignment.
(e) Unless otherwise provided in the
operating agreement, a limited
liability company may acquire, by purchase, redemption or
otherwise, any
limited liability company interest or other interest of a member or
man-
ager in the limited liability company. Unless otherwise provided in
the
operating agreement, any such interest so acquired by the limited
liability
company shall be deemed canceled.
(f) If the assignor of a limited
liability company interest is the only
member of the limited liability company at the time of the
assignment,
the assignee shall have the right to participate in the management
of the
business and affairs of the limited liability company as a
member.
New Sec. 52. On application to a
court of competent jurisdiction by
any judgment creditor of a member, the court may charge the
limited
liability company interest of the member with payment of the
unsatisfied
amount of the judgment with interest. To the extent so charged,
the
judgment creditor has only the rights of an assignee of the limited
liability
company interest. This act does not deprive any member of the
benefit
of any exemption laws applicable to the member's limited liability
com-
pany interest. The rights provided by this section to the judgment
creditor
shall be the sole and exclusive remedy of a judgment creditor with
respect
to the member's limited liability company interest.
New Sec. 53. (a) An assignee of a
limited liability company interest
may become a member as provided in an operating agreement and
upon:
(1) The approval of all of the members of
the limited liability com-
pany other than the member assigning the member's limited liability
com-
pany interest; or
(2) compliance with any procedure
provided for in the operating
agreement.
(b) An assignee who has become a member
has, to the extent as-
signed, the rights and powers, and is subject to the restrictions
and lia-
bilities, of a member under an operating agreement and this act.
Not-
withstanding the foregoing, unless otherwise provided in an
operating
agreement, an assignee who becomes a member is liable for the
obliga-
tions of the assignee's assignor to make contributions as provided
in sec-
tion 39, and amendments thereto, but shall not be liable for the
obliga-
tions of the assignee's assignor under any other provision of this
act.
However, the assignee is not obligated for liabilities, including
the obli-
gations of the assignee's assignor to make contributions as
provided in
section 39, and amendments thereto, unknown to the assignee at the
time
the assignee became a member and which could not be ascertained
from
an operating agreement.
(c) Whether or not an assignee of a
limited liability company interest
becomes a member, the assignor is not released from the assignor's
lia-
bility to a limited liability company under any other provision of
this act.
New Sec. 54. If a member who is an
individual dies or a court of
competent jurisdiction adjudges the member to be incompetent to
man-
age the member's person or property, the member's personal
represen-
tative shall have all of the rights of an assignee of the member's
interest,
unless the deceased or incompetent member is the only member of
the
limited liability company, in which case the member's personal
represen-
tative shall have the right to participate in the management of the
business
and the affairs of the limited liability company as a member.
New Sec. 55. (a) A limited
liability company is dissolved and its af-
fairs shall be wound up upon the first to occur of the
following:
(1) At the time specified in an operating
agreement, but if no such
time is set forth in the operating agreement, then the limited
liability
company shall have a perpetual existence;
(2) upon the happening of events
specified in an operating agree-
ment;
(3) unless otherwise provided in an
operating agreement, upon the
written consent of the members of the limited liability company;
or, if
there is more than one class or group of members, then by each
class or
group of members, in either case, by members who own more than
50%
of the then-current percentage or other interest in the profits of
the
limited liability company owned by all of the members or by the
members
in each class or group, as appropriate;
(4) at any time there are no members,
provided that, unless otherwise
provided in an operating agreement, the limited liability company
is not
dissolved and is not required to be wound up if, within 90 days or
such
other period as is provided for in the operating agreement after
the oc-
currence of the event that terminated the continued membership of
the
last remaining member, the personal representative of the last
remaining
member agrees in writing to continue the limited liability company
and
to the admission of the personal representative of such member or
the
personal representative's nominee or designee to the limited
liability com-
pany as a member, effective as of the occurrence of the event that
ter-
minated the continued membership of the last remaining member;
or
(5) the entry of a decree of judicial
dissolution under section 56, and
amendments thereto.
(b) Unless otherwise provided in an
operating agreement, the death,
retirement, expulsion, bankruptcy or dissolution of any member or
the
occurrence of any other event that terminates the continued
membership
of any member shall not cause the limited liability company to be
dis-
solved or its affairs to be wound up, and upon the occurrence of
any such
event, the limited liability company shall be continued without
dissolu-
tion, unless within 90 days following the occurrence of any such
event,
the remaining members of the limited liability company or, if there
is
more than one class or group of members, then the remaining
members
in each class or group of members, in either case, by members who
own
more than 50% of the then-current percentage or other interest in
the
profits of the limited liability company owned by all of the
members or
by the members in each class or group, as appropriate, agree in
writing
to dissolve the limited liability company.
New Sec. 56. (a) A limited
liability company may be dissolved invol-
untarily by order of the district court for the county in which the
regis-
tered office of the limited liability company is located in an
action filed
by the attorney general when it is established that the limited
liability
company:
(1) Has procured its articles of
organization through fraud;
(2) has exceeded the authority conferred
upon it by law;
(3) has committed a violation of any
provision of law whereby it has
forfeited its articles of organization;
(4) has carried on, conducted or
transacted its business in a persist-
ently fraudulent or illegal manner; or
(5) by the abuse of its powers contrary
to the public policy of the
state, has become liable to be dissolved.
(b) If the business of the limited
liability company is suffering or is
threatened with irreparable injury because the members of a limited
li-
ability company, or the managers of a limited liability company
having
more than one manager, are so deadlocked respecting the
management
of the affairs of the limited liability company that the requisite
vote for
action cannot be obtained and the members are unable to terminate
such
deadlock, then any member or members in the aggregate owning at
least
25% of the outstanding interests in either capital or profits and
losses in
the limited liability company may file with the district court a
petition
stating that such member or members desire to dissolve the limited
lia-
bility company and to dispose of the assets thereof in accordance
with a
plan to be agreed upon by the members or as determined by the
district
court in the absence of such agreement. Such petition shall have
attached
thereto a copy of a proposed plan of dissolution and distribution
and a
certificate stating that copies of such petition and plan have been
trans-
mitted in writing to all of the other members of the limited
liability com-
pany at least 30 days before the filing of the petition and that
the members
having the requisite vote required to cause dissolution under the
oper-
ating agreement have failed or refused to consent to such plan.
Unless a
majority in interest of the members (or such other number of
members
having the requisite vote to cause dissolution as the operating
agreement
may provide) file with the district court within the time period
for the
answer date of the petition, an answer and a certificate stating
that they
have agreed on either the petitioner's plan, or a modification or
alternative
thereof, then the district court shall order that such limited
liability com-
pany be dissolved, if the district court determines that such
irreparable
injury and deadlock exists. In any proceeding under this section,
the court
may appoint one or more trustees or receivers with all the powers
and
title of a trustee or receiver appointed under K.S.A. 17-6808, and
amend-
ments thereto, to administer and wind up the limited liability
company's
affairs and may grant such other relief as the court deems
equitable.
New Sec. 57. (a) Unless otherwise
provided in the operating agree-
ment, a manager who has not wrongfully dissolved a limited
liability com-
pany or, if none, the members or a person approved by the members
or,
if there is more than one class or group of members, then by each
class
or group of members, in either case, by members who own more
than
50% of the then current percentage or other interest in the profits
of the
limited liability company owned by all of the members or by the
members
in each class or group, as appropriate, may wind up the limited
liability
company's affairs; but the district court upon cause shown, may
wind up
the limited liability company's affairs upon application of any
member or
manager, personal representative or assignee, and in connection
there-
with, may appoint a liquidating trustee.
(b) Upon dissolution of a limited
liability company and until the filing
of a certificate of dissolution as provided in section 14, and
amendments
thereto, the persons winding up the limited liability company's
affairs
may, in the name of, and for and on behalf of, the limited
liability com-
pany, prosecute and defend suits, whether civil, criminal or
administra-
tive, gradually settle and close the limited liability company's
business,
dispose of and convey the limited liability company's property,
discharge
or make reasonable provision for the limited liability company's
liabilities,
and distribute to the members any remaining assets of the limited
liability
company, all without affecting the liability of member and managers
with-
out imposing liability on a liquidating trustee.
New Sec. 58. (a) Upon the winding
up of a limited liability company,
the assets shall be distributed as follows:
(1) To creditors, including members and
managers who are creditors,
to the extent otherwise permitted by law, in satisfaction of
liabilities of
the limited liability company (whether by payment or the making of
rea-
sonable provision for payment thereof) other than liabilities for
which
reasonable provision for payment has been made and liabilities for
dis-
tributions to members and former members under section 43 or 46,
and
amendments thereto;
(2) unless otherwise provided in an
operating agreement, to members
and former members in satisfaction of liabilities for distributions
under
section 46, and amendments thereto;
(3) unless otherwise provided in an
operating agreement, to members
first for the return of their contributions and second respecting
their
limited liability company interests, in the proportions in which
the mem-
bers share in distributions.
(b) A limited liability company which has
dissolved shall pay or make
reasonable provision to pay all claims and obligations, including
all con-
tingent, conditional or unmatured claims and obligations, known to
the
limited liability company and all claims and obligations which are
known
to the limited liability company but for which the identity of the
claimant
is unknown. If there are sufficient assets, such claims and
obligations shall
be paid in full and any such provision for payment made shall be
made
in full. If there are insufficient assets, such claims and
obligations shall
be paid or provided for according to their priority and, among
claims and
obligations of equal priority, ratably to the extent of assets
available there-
for. Unless otherwise provided in an operating agreement, any
remaining
assets shall be distributed as provided in this act. Any
liquidating trustee
winding up a limited liability company's affairs who has complied
with
this section shall not be personally liable to the claimants of the
dissolved
limited liability company by reasons of such person's actions in
winding
up the limited liability company.
New Sec. 59. (a) Subject to the
constitution of the state of Kansas:
(1) The laws of the state, territory,
possession, or other jurisdiction
or country under which a foreign limited liability company is
organized
to govern its organization and internal affairs and the liability
of its mem-
bers and managers; and
(2) A foreign limited liability company
may not be denied registration
by reason of any difference between those laws and the laws of the
state
of Kansas.
(b) A foreign limited liability company
shall be subject to section 7,
and amendments thereto.
New Sec. 60. Before doing business
in the state of Kansas, a foreign
limited liability company shall register with the secretary of
state. In order
to register, a foreign limited liability company shall submit to
the secretary
of state, together with payment of the fee required by this act, an
original
copy executed by a member or manager, together with a duplicate
copy,
of an application for registration as a foreign limited liability
company,
setting forth:
(a) The name of the foreign limited
liability company;
(b) the state or other jurisdiction or
country where organized, the
date of its organization and a statement issued by an appropriate
authority
in that jurisdiction that the foreign limited liability company
exists in good
standing under the laws of the jurisdiction of its
organization;
(c) the nature of the business or
purposes to be conducted or pro-
moted in the state of Kansas;
(d) the address of the registered office
and the name and address of
the resident agent for service of process required to be maintained
by
this act;
(e) an irrevocable written consent of the
foreign limited liability com-
pany that actions may be commenced against it in the proper court
of
any county where there is proper venue by the service of process on
the
secretary of state as provided for in K.S.A. 60-304, and
amendments
thereto, and stipulating and agreeing that such service shall be
taken and
held, in all courts, to be as valid and binding as if due service
had been
made upon the general partners of the foreign limited liability
company;
(f) the name and business, residence or
mailing address of each of
the members or, if managed by managers, the name and business,
resi-
dence or mailing address of each of the managers; and
(g) the date on which the foreign limited
liability company first did,
or intends to do, business in the state of Kansas.
A person shall not be deemed to be doing
business in the state of
Kansas solely by reason of being a member or manager of a
domestic
limited liability company or a foreign limited liability
company.
New Sec. 61. (a) If the secretary
of state finds that an application for
registration conforms to law and all requisite fees have been paid,
the
secretary of state shall:
(1) Certify that the application has been
filed in the secretary of
state's office by endorsing upon the original application the word
``filed''
and the date and hour of the filing, and the endorsement is
conclusive of
the date and time of its filing in the absence of actual fraud;
and
(2) file and index the endorsed
application.
(b) The duplicate of the application,
similarly certified, shall be re-
turned to the person who filed the application or that person's
represen-
tative.
New Sec. 62. (a) The secretary of
state shall not issue a registration
to a foreign limited liability company unless the name of such
limited
liability company is such as to distinguish it upon the records of
the office
of the secretary of state from the names of other limited liability
com-
panies, corporations or limited partnerships organized under the
laws of
this state or reserved or registered as a foreign limited liability
company,
foreign corporation or foreign limited partnership under the laws
of this
state, except that a foreign limited liability company may register
under
a name which is not such as to distinguish it upon the records of
the office
of the secretary of state from the name of other limited liability
compa-
nies, corporations or limited partnerships organized under the laws
of this
state or reserved or registered as a foreign limited liability
company, for-
eign corporation or foreign limited partnership under the laws of
this state
if:
(1) Written consent is obtained from the
other limited liability com-
pany, corporation or limited partnership and filed with the
secretary of
state; or
(2) it indicates as a means of
identification and in its advertising within
this state, the state in which the limited liability company was
formed,
and the application sets forth this condition.
(b) Each foreign limited liability
company shall have and maintain in
the state of Kansas:
(1) A registered office which may but
need not be its place of business
in the state of Kansas; and
(2) a resident agent for service of
process on the limited liability com-
pany, which agent may be either an individual resident of the state
of
Kansas whose business office is identical with the limited
liability com-
pany's registered office or a domestic corporation.
(c) A resident agent may change the
address of the registered office
of the foreign limited liability companies for which the resident
agent is
resident agent to another address in the state of Kansas by (1)
paying the
fee required by this act; (2) filing with the secretary of state a
certificate
in duplicate, executed by the resident agent, setting forth the
names of
all the foreign limited liability companies represented by the
resident
agent and the address at which the resident agent has maintained
the
registered office for each of such foreign limited liability
companies; and
(3) certifying to the new address to which each such registered
office will
be changed on a given day and at which the resident agent will
thereafter
maintain the registered office for each of the foreign limited
liability com-
panies recited in the certificate. Upon the filing of the
certificate, the
Secretary of state shall furnish to the resident agent a certified
copy of
such certificate. Thereafter, or until further change of address,
as au-
thorized by law, the registered office in the state of Kansas of
each of the
foreign limited liability companies recited in the certificate
shall be lo-
cated at the new address of the resident agent of the company given
in
the certificate. Filing of the certificate shall be considered an
amendment
of the application of each foreign limited liability company
affected by
the certificate, and the foreign limited liability company shall
not be re-
quired to take any further action with respect thereto, to amend
its ap-
plication. Any resident agent filing a certificate under this
section, upon
such filing, shall deliver promptly a copy of such certificate to
each foreign
limited liability company affected thereby. The resident agent
shall fur-
nish the secretary of state one additional copy of the certificate
for each
limited liability company affected.
(d) The resident agent of one or more
foreign limited liability com-
panies may resign and appoint a successor resident agent by paying
the
fee required by this act and filing a certificate in duplicate with
the sec-
retary of state, stating that the resident agent resigns as
resident agent
for the foreign limited liability company identified in the
certificate and
giving the name and address of the successor resident agent. There
shall
be attached to the certificate a statement executed by each
affected for-
eign limited liability company ratifying and approving the change
of res-
ident agent. Upon the filing, the successor resident agent shall
become
the resident agent of those foreign limited liability companies
that have
ratified and approved the substitution and the successor resident
agent's
address, as stated in the certificate, shall become the address of
each such
foreign limited liability company's registered office in the state
of Kansas.
Filing of the certificate of resignation shall be deemed to be an
amend-
ment of the application of each foreign limited liability company
affected
by the certificate, and the foreign limited liability company shall
not be
required to take any further action with respect thereto, to amend
its
application. The resident agent shall furnish the secretary of
state one
additional copy of the certificate for each limited liability
company af-
fected.
(e) The resident agent of one or more
foreign limited liability com-
panies may resign without appointing a successor resident agent by
paying
the fee required by this act and filing a certificate in duplicate
with the
secretary of state stating that the resident agent resigns as
resident agent
for the foreign limited liability companies identified in the
certificate, but
the resignation shall not become effective until 60 days after the
certifi-
cate is filed. There shall be attached to the certificate an
affidavit that, at
least 30 days prior to the date of the filing of the certificate,
notice that
the resignation of the resident agent was sent by certified or
registered
mail to each foreign limited liability company for which the
resident agent
is resigning as resident agent. The affidavit shall be sworn to by
the res-
ident agent, if an individual, or the president, a vice-president
or the
secretary of the resident agent, if a corporation. The affidavit
shall state
that the notice was sent to the principal office of each of the
foreign
limited liability companies within or outside the state of Kansas,
if known
to the resident agent or, if not, to the last known address of the
attorney
or other individual at whose request the resident agent was
appointed for
the foreign limited liability company. After receipt of the notice
of the
resignation of its resident agent, the foreign limited liability
company for
which the resident agent was acting shall obtain and designate a
new
resident agent, to take the place of the resident agent resigning.
If a
foreign limited liability company fails to obtain and designate a
new res-
ident agent within 60 days after the filing by the resident agent
of the
certificate of resignation, that foreign limited liability company
shall not
be permitted to do business in the state of Kansas and its
registration
shall be considered canceled.
New Sec. 63. If any statement in
the application for registration of
a foreign limited liability company was false when made or any
arrange-
ments or other facts described have changed, making the application
in-
accurate in any respect, the foreign limited liability company
shall file
promptly with the secretary of state a certificate, executed by an
author-
ized person, correcting the statement, together with the fee
required by
this act.
New Sec. 64. A foreign limited
liability company may cancel its reg-
istration by filing with the secretary of state a certificate of
cancellation
executed by the members, together with the fee required by this act
and
the annual report and franchise tax for any tax period which has
ended.
A cancellation does not terminate the authority of the secretary of
state
to accept service of process on the foreign limited liability
company with
respect to causes of action arising out of the doing of business in
the state
of Kansas.
New Sec. 65. (a) A foreign limited
liability company doing business
in the state of Kansas may not maintain any action, suit or
proceeding in
the state of Kansas until it has registered in this state and has
paid to the
state all fees and penalties for the years, or parts thereof,
during which it
did business in the state without having registered.
(b) The failure of a foreign limited
liability company to register in the
state of Kansas does not:
(1) Impair the validity of any contract
or act of the foreign limited
liability company;
(2) impair the right of any other party
to the contract to maintain any
action, suit or proceeding on the contract; or
(3) prevent the foreign limited liability
company from defending any
action, suit or proceeding in any court of the state of Kansas.
(c) A member of a foreign limited
liability company is not personally
liable for the foreign limited liability company solely by reason
of the
limited liability company's having done business in the state of
Kansas
without registration.
New Sec. 66. The district court
shall have jurisdiction to enjoin any
foreign limited liability company, or any agent of a foreign
limited liability
company, from doing any business in the state of Kansas if the
foreign
limited liability company has failed to register under this act.
The attorney
general, upon the attorney general's own motion or upon the
relation of
proper parties, shall proceed for this purpose by petition in any
county
in which the foreign limited liability company is doing or has done
busi-
ness.
New Sec. 67. Subsection (c) of
section 15, and amendments thereto,
shall be applicable to foreign limited liability companies as if
they were
domestic limited liability companies.
New Sec. 68. Service of process in
any action against any foreign
limited liability company, whether or not that limited liability
company is
qualified to do business in this state, shall be made in the manner
pre-
scribed by K.S.A. 60- 304, and amendments thereto. Any person who
has
a cause of action against any foreign limited liability company,
whether
or not the limited liability company is qualified to do business in
this state
may file suit against the limited liability company in the district
court of
a county in which there is proper venue if the cause of action
arose in
Kansas out of the limited liability company's doing business in
Kansas or
while the limited liability company was doing business in
Kansas.
New Sec. 69. A member may bring an
action in the district court in
the right of a limited liability company to recover a judgment in
its favor
if managers or members with authority to do so have refused to
bring the
action or if an effort to cause those managers or members to bring
the
action is not likely to succeed.
New Sec. 70. In a derivative
action, the plaintiff must be a member
at the time of bringing the action and:
(a) At the time of the transaction of
which the member complains;
or
(b) the member's status as a member had
devolved upon the member
by operation of law or pursuant to the terms of an operating
agreement
from a person who was a member at the time of the transaction.
New Sec. 71. In a derivative
action, the petition shall set forth with
particularity the effort, if any, of the plaintiff to secure
initiation of the
action by a manager or member or the reasons for not making the
effort.
New Sec. 72. If a derivative action
is successful, in whole or in part,
as a result of a judgment, compromise or settlement of any such
action,
the district court may award the plaintiff reasonable expenses,
including
reasonable attorney fees, from any recovery in any such action or
from a
limited liability company.
New Sec. 73. (a) The rule that
statutes in derogation of the common
law are to be strictly construed shall have no application to this
act.
(b) It is the policy of this act to give
the maximum effect to the prin-
ciple of freedom of contract and to the enforceability of operating
agree-
ments.
(c) To the extent that, at law or in
equity, a member or manager or
other person has duties (including fiduciary duties) and
liabilities relating
thereto to a limited liability company or to another member or
manager:
(1) Any such member or manager or other
person acting under an
operating agreement shall not be liable to the limited liability
company
or to any such other member or manager for the member's or
manager's
or other person's good faith reliance on the provisions of the
operating
agreement; and
(2) The member's or manager's or other
person's duties and liabilities
may be expanded or restricted by provisions in an operating
agreement.
New Sec. 74. In any case not
provided for in this act, the rules of
law and equity, including the law merchant, shall govern.
New Sec. 75. (a) The secretary of
state shall charge each domestic
and foreign limited liability company the following fees:
(1) A fee of $20 for issuing or filing
and indexing any of the following
documents:
(A) A certificate of amendment of
articles of organization;
(B) a restated articles of
organization;
(C) a certificate of cancellation;
(D) a certificate of change of location
of registered office or resident
agent;
(E) a certificate of merger,
consolidation or conversion; and
(F) any certificate, affidavit, agreement
or any other paper provided
for in this act, for which no different fee is specifically
prescribed;
(2) a fee of $7.50 for each certified
copy plus a fee per page, if the
secretary of state supplies the copies, in an amount fixed by the
secretary
of state and approved by the director of accounts and reports for
copies
of corporate documents under K.S.A. 45-204, and amendments
thereto;
(3) a fee of $7.50 for each certificate
of good standing and certificate
of fact issued by the secretary of state;
(4) a fee of $5 for a report of record
search, but furnishing the fol-
lowing information shall not be considered a record search and no
charge
shall be made therefor: Name of the limited liability company and
the
address of its registered office; name and address of the resident
agent;
the state of the limited liability company's formation; the date of
filing of
its articles of organization or annual report; and date of
expiration; and
(5) for photocopies of instruments on
file or prepared by the secretary
of state's office and which are not certified, a fee per page in an
amount
fixed by the secretary of state and approved by the director of
accounts
and reports for copies of corporate documents under K.S.A. 45-204,
and
amendments thereto.
(b) Every limited liability company
hereafter formed in this state shall
pay to the secretary of state, at the time of filing its articles
of organization,
an application and recording fee of $150.
(c) At the time of filing its application
to do business, every foreign
limited liability company shall pay to the secretary of state an
application
and recording fee of $150.
New Sec. 76. All provisions of this
act may be amended from time
to time or repealed and all rights of members and managers are
subject
to this reservation.
New Sec. 77. For purposes of any
tax imposed by the state of Kansas
or any instrumentality, agency or political subdivision of the
state of Kan-
sas, a limited liability company formed under this act or qualified
to do
business in the state of Kansas as a foreign limited liability
company shall
be classified as a partnership unless classified otherwise for
federal in-
come tax purposes, in which case the limited liability company
shall be
classified in the same manner as it is classified for federal
income tax
purposes. For purposes of any tax imposed by the state of Kansas or
any
instrumentality, agency or political subdivision of the state of
Kansas, a
member or an assignee of a member of a limited liability company
formed
under this act or qualified to do business in the state of Kansas
as a foreign
limited liability company shall be treated as either a resident or
nonresi-
dent partner unless classified otherwise for federal income tax
purposes,
in which case the member or assignee of a member shall have the
same
status as such member or assignee of a member has for federal
income
tax purposes.
New Sec. 78. (a) Every limited
liability company organized under the
laws of this state shall make an annual report in writing to the
secretary
of state, stating the prescribed information concerning the limited
liability
company at the close of business on the last day of its tax period
next
preceding the date of filing. If the limited liability company's
tax period
is other than the calendar year, it shall give notice of its
different tax
period in writing to the secretary of state prior to December 31 of
the
year it commences the different tax period. The annual report shall
be
filed at the time prescribed by law for filing the limited
liability company's
annual Kansas income tax return. If the limited liability company
applies
for an extension of time for filing its annual income tax return
under the
internal revenue code, the limited liability company shall also
apply, not
more than 90 days after the due date of its annual report, to the
secretary
of state for an extension of the time for filing its report and an
extension
shall be granted for a period of time corresponding to that granted
under
the internal revenue code. The application shall include a copy of
the
application to income tax authorities. The annual report shall be
made on
a form prescribed by the secretary of state. The report shall
contain the
following information:
(1) The name of the limited liability
company;
(2) a reconciliation of the capital
accounts for the preceding taxable
year as required to be reported on the federal partnership return
of in-
come or for a one-member LLC taxed as a sole proprietorship, the
net
book value of the LLC as calculated on an income tax basis; and
(3) a list of the members owning at least
5% of the capital of the
company, with the post office address of each.
(b) Every foreign limited liability
company shall make an annual re-
port in writing to the secretary of state, stating the prescribed
information
concerning the limited liability company at the close of business
on the
last day of its tax period next preceding the date of filing. If
the limited
liability company's tax period is other than the calendar year, it
shall give
notice in writing of its different tax period to the secretary of
state prior
to December 31 of the year it commences the different tax period.
The
annual report shall be filed at the time prescribed by law for
filing the
limited liability company's annual Kansas income tax return. If the
limited
liability company applies for an extension of time for filing its
annual
income tax return under the internal revenue code, the limited
liability
company also shall apply, not more than 90 days after the due date
of its
annual report, to the secretary of state for an extension of the
time for
filing its report and an extension shall be granted for a period of
time
corresponding to that granted under the internal revenue code. The
ap-
plication shall include a copy of the application to income tax
authorities.
The annual report shall be made on a form prescribed by the
secretary
of state. The report shall contain the following information:
(1) The name of the limited liability
company;
(2) a reconciliation of the capital
accounts for the preceding taxable
year as required to be reported on the federal partnership return
of in-
come or for a one-member LLC taxed as a sole proprietorship, the
net
book value of the LLC as calculated on an income tax basis.
(c) The annual report required by this
section shall be signed by a
member of the limited liability company and forwarded to the
secretary
of state. At the time of filing the report, the limited liability
company shall
pay to the secretary of state an annual franchise tax in an amount
equal
to $1 for each $1,000 of the net capital accounts located in or
used in this
state at the end of the preceding taxable year as required to be
reported
on the federal partnership return of income, or for a one-member
LLC
taxed as a sole proprietorship, $1 for each $1,000 of net book
value of the
LLC as calculated on an income tax basis located in or used in this
state
at the end of the preceding taxable year, except that no annual tax
shall
be less than $20 or more than $2,500.
(d) The provisions of K.S.A. 17-7509, and
amendments thereto, re-
lating to penalties for failure of a corporation to file an annual
report or
pay the required franchise tax, and the provisions of subsection
(a) of
K.S.A. 17-7510 and amendments thereto, relating to penalties for
failure
of a corporation to file an annual report or pay the required
franchise tax,
shall be applicable to the articles of organization of any domestic
limited
liability company or to the authority of any foreign limited
liability com-
pany which fails to file its annual report or pay the franchise tax
within
90 days of the time prescribed in this section for filing and
paying the
same. Whenever the articles of organization of a domestic limited
liability
company or the authority of any foreign limited liability company
are
forfeited for failure to file an annual report or to pay the
required fran-
chise tax, the domestic limited liability company or the authority
of a
foreign limited liability company may be reinstated by filing a
certificate
of reinstatement, in the manner and form to be prescribed by the
sec-
retary of state and paying to the secretary of state all fees and
taxes,
including any penalties thereon, due to the state. The fee for
filing a
certificate of reinstatement shall be the same as that prescribed
by K.S.A.
17-7506, and amendments thereto, for filing a certificate of
extension,
restoration, renewal or revival of a corporation's articles of
incorporation.
(e) When reinstatement is effective, it
relates back to and takes effect
as of the effective date of the forfeiture and the company may
resume its
business as if the forfeiture had never occurred.
(f) No limited liability company shall be
required to file its first annual
report under this act, or pay any annual franchise tax required to
accom-
pany such report, unless such limited liability company has filed
its articles
of organization or application for authority at least six months
prior to the
last day of its tax period. If any limited liability company files
with the
secretary of state a notice of change in its tax period and the
next annual
report filed by such limited liability company subsequent to such
notice
is based on a tax period of less than 12 months, the annual tax
liability
shall be determined by multiplying the annual franchise tax
liability for
such year by a fraction, the numerator of which is the number of
months
or any portion thereof covered by the annual report and the
denominator
of which is 12, except that the tax shall not be less than $20.
New Sec. 79. From and after January
1, 2000, this act shall be ap-
plicable to all limited liability companies formed in Kansas,
whether
formed before or after such date.
New Sec. 80. If any provision of
this act or its application to any
person or circumstance is held invalid, the invalidity does not
affect other
provisions or applications of the act which can be given effect
without
the invalid provision or application. To this end, the provisions
of this act
are severable.
New Sec. 81. (a) Any instrument
filed in accordance with the Kansas
revised limited liability company act, and amendments thereto, may
be
filed by telefacsimile communication. If such telefacsimile
communica-
tion is accompanied with the appropriate fees, and meets the
statutory
requirements, it shall be effective upon its filing date. The
secretary of
state shall prescribe a telefacsimile communication fee in addition
to any
filing fees to cover the cost of the services. The fee must be paid
prior to
acceptance of a telefacsimile communication under this section. The
te-
lefacsimile communication fee shall be deposited into the
information
and copy service fee fund.
(b) As used in this section,
telefacsimile communication means the
use of electronic equipment to send or transfer a document.
Sec. 82. K.S.A. 1998 Supp. 17-2708
is hereby amended to read as
follows: 17-2708. Except as otherwise provided, the Kansas general
cor-
poration code contained in K.S.A. 17-6001 et seq., and
amendments
thereto, shall apply to a professional corporation organized
pursuant to
this chapter. Any provisions of the professional corporation law of
Kansas
shall take precedence over any provision of the Kansas general
corpora-
tion code which conflicts with it. The provisions of the
professional cor-
poration law of Kansas shall take precedence over any law which
prohibits
a corporation from rendering any type of professional service. Any
person
authorized to form a professional corporation under K.S.A. 17-2701
et
seq. and amendments thereto also may incorporate under the
Kansas
general corporation code contained in K.S.A. 17-6001 et
seq., and amend-
ments thereto, or organize under the Kansas limited liability
company act
contained in K.S.A. 17-7601 section 1 et
seq., and amendments thereto,
or organize as a limited liability partnership as defined in K.S.A.
1998
Supp. 56a-101 and amendments thereto.
Sec. 83. K.S.A. 1998 Supp. 17-5903
is hereby amended to read as
follows: 17-5903. As used in this act:
(a) ``Corporation'' means a domestic or
foreign corporation organized
for profit or nonprofit purposes.
(b) ``Nonprofit corporation'' means a
corporation organized not for
profit and which qualifies under section 501(c)(3) of the federal
internal
revenue code of 1986 as amended.
(c) ``Limited partnership'' has the
meaning provided by K.S.A. 56-
1a01, and amendments thereto.
(d) ``Limited agricultural partnership''
means a limited partnership
founded for the purpose of farming and ownership of agricultural
land in
which:
(1) The partners do not exceed 10 in
number;
(2) the partners are all natural persons,
persons acting in a fiduciary
capacity for the benefit of natural persons or nonprofit
corporations, or
general partnerships other than corporate partnerships formed under
the
laws of the state of Kansas; and
(3) at least one of the general partners
is a person residing on the
farm or actively engaged in the labor or management of the
farming
operation. If only one partner is meeting the requirement of this
provision
and such partner dies, the requirement of this provision does not
apply
for the period of time that the partner's estate is being
administered in
any district court in Kansas.
(e) ``Corporate partnership'' means a
partnership, as defined in
K.S.A. 1998 Supp. 56a-101, and amendments thereto, which has
within
the association one or more corporations or one or more limited
liability
companies.
(f) ``Feedlot'' means a lot, yard,
corral, or other area in which livestock
fed for slaughter are confined. The term includes within its
meaning
agricultural land in such acreage as is necessary for the operation
of the
feedlot.
(g) ``Agricultural land'' means land
suitable for use in farming.
(h) ``Farming'' means the cultivation of
land for the production of
agricultural crops, the raising of poultry, the production of eggs,
the pro-
duction of milk, the production of fruit or other horticultural
crops, graz-
ing or the production of livestock. Farming does not include the
produc-
tion of timber, forest products, nursery products or sod, and
farming does
not include a contract to provide spraying, harvesting or other
farm serv-
ices.
(i) ``Fiduciary capacity'' means an
undertaking to act as executor, ad-
ministrator, guardian, conservator, trustee for a family trust,
authorized
trust or testamentary trust or receiver or trustee in
bankruptcy.
(j) ``Family farm corporation'' means a
corporation:
(1) Founded for the purpose of farming
and the ownership of agri-
cultural land in which the majority of the voting stock is held by
and the
majority of the stockholders are persons related to each other, all
of whom
have a common ancestor within the third degree of relationship, by
blood
or by adoption, or the spouses or the stepchildren of any such
persons,
or persons acting in a fiduciary capacity for persons so
related;
(2) all of its stockholders are natural
persons or persons acting in a
fiduciary capacity for the benefit of natural persons; and
(3) at least one of the stockholders is a
person residing on the farm
or actively engaged in the labor or management of the farming
operation.
A stockholder who is an officer of any corporation referred to in
this
subsection and who is one of the related stockholders holding a
majority
of the voting stock shall be deemed to be actively engaged in the
man-
agement of the farming corporation. If only one stockholder is
meeting
the requirement of this provision and such stockholder dies, the
require-
ment of this provision does not apply for the period of time that
the
stockholder's estate is being administered in any district court in
Kansas.
(k) ``Authorized farm corporation'' means
a Kansas corporation, other
than a family farm corporation, all of the incorporators of which
are Kan-
sas residents, family farm corporations or family farm limited
liability
agricultural companies or any combination thereof, and which is
founded
for the purpose of farming and the ownership of agricultural land
in
which:
(1) The stockholders do not exceed 15 in
number; and
(2) the stockholders are all natural
persons, family farm corporations,
family farm limited liability agricultural companies or persons
acting in a
fiduciary capacity for the benefit of natural persons, family farm
corpo-
rations, family farm limited liability agricultural companies or
nonprofit
corporations; and
(3) if all of the stockholders are
natural persons, at least one stock-
holder must be a person residing on the farm or actively engaged in
labor
or management of the farming operation. If only one stockholder is
meet-
ing the requirement of this provision and such stockholder dies,
the re-
quirement of this provision does not apply for the period of time
that the
stockholder's estate is being administered in any district court in
Kansas.
(l) ``Trust'' means a fiduciary
relationship with respect to property,
subjecting the person by whom the property is held to equitable
duties
to deal with the property for the benefit of another person, which
arises
as a result of a manifestation of an intention to create it. A
trust includes
a legal entity holding property as trustee, agent, escrow agent,
attorney-
in-fact and in any similar capacity.
(m) ``Family trust'' means a trust in
which:
(1) A majority of the equitable interest
in the trust is held by and the
majority of the beneficiaries are persons related to each other,
all of whom
have a common ancestor within the third degree of relationship, by
blood
or by adoption, or the spouses or stepchildren of any such persons,
or
persons acting in a fiduciary capacity for persons so related;
and
(2) all the beneficiaries are natural
persons, are persons acting in a
fiduciary capacity, other than as trustee for a trust, or are
nonprofit cor-
porations.
(n) ``Authorized trust'' means a trust
other than a family trust in
which:
(1) The beneficiaries do not exceed 15 in
number;
(2) the beneficiaries are all natural
persons, are persons acting in a
fiduciary capacity, other than as trustee for a trust, or are
nonprofit cor-
porations; and
(3) the gross income thereof is not
exempt from taxation under the
laws of either the United States or the state of Kansas.
For the purposes of this definition, if one of
the beneficiaries dies, and
more than one person succeeds, by bequest, to the deceased
beneficiary's
interest in the trust, all of such persons, collectively, shall be
deemed to
be one beneficiary, and a husband and wife, and their estates,
collectively,
shall be deemed to be one beneficiary.
(o) ``Testamentary trust'' means a trust
created by devising or be-
queathing property in trust in a will as such terms are used in the
Kansas
probate code.
(p) ``Poultry confinement facility''
means the structures and related
equipment used for housing, breeding, laying of eggs or feeding of
poultry
in a restricted environment. The term includes within its meaning
only
such agricultural land as is necessary for proper disposal of
liquid and
solid wastes and for isolation of the facility to reasonably
protect the con-
fined poultry from exposure to disease. As used in this subsection,
``poul-
try'' means chickens, turkeys, ducks, geese or other fowl.
(q) ``Rabbit confinement facility'' means
the structures and related
equipment used for housing, breeding, raising, feeding or
processing of
rabbits in a restricted environment. The term includes within its
meaning
only such agricultural land as is necessary for proper disposal of
liquid
and solid wastes and for isolation of the facility to reasonably
protect the
confined rabbits from exposure to disease.
(r) ``Swine marketing pool'' means an
association whose membership
includes three or more business entities or individuals formed for
the sale
of hogs to buyers but shall not include any trust, corporation,
limited
partnership or corporate partnership, or limited liability company
other
than a family farm corporation, authorized farm corporation,
limited lia-
bility agricultural company, limited agricultural partnership,
family trust,
authorized trust or testamentary trust.
(s) ``Swine production facility'' means
the land, structures and related
equipment owned or leased by a corporation or limited liability
company
and used for housing, breeding, farrowing or feeding of swine. The
term
includes within its meaning only such agricultural land as is
necessary for
proper disposal of liquid and solid wastes in environmentally
sound
amounts for crop production and to avoid nitrate buildup and for
isolation
of the facility to reasonably protect the confined animals from
exposure
to disease.
(t) ``Limited liability company'' has the
meaning provided by K.S.A.
17-7602 section 2, and amendments
thereto.
(u) ``Limited liability agricultural
company'' means a limited liability
company founded for the purpose of farming and ownership of
agricul-
tural land in which:
(1) The members do not exceed 10 in
number; and
(2) the members are all natural persons,
family farm corporations,
family farm limited liability agriculture companies, persons acting
in a
fiduciary capacity for the benefit of natural persons, family farm
corpo-
rations, family farm limited liability agricultural companies or
nonprofit
corporations, or general partnerships other than corporate
partnerships
formed under the laws of the state of Kansas; and
(3) if all of the members are natural
persons, at least one member
must be a person residing on the farm or actively engaged in labor
or
management of the farming operation. If only one member is
meeting
the requirement of this provision and such member dies, the
requirement
of this provision does not apply for the period of time that the
member's
estate is being administered in any district court in Kansas.
(v) ``Dairy production facility'' means
the land, structures and related
equipment used for housing, breeding, raising, feeding or milking
dairy
cows. The term includes within its meaning only such agricultural
land
as is necessary for proper disposal of liquid and solid wastes and
for iso-
lation of the facility to reasonably protect the confined cows from
expo-
sure to disease.
(w) ``Family farm limited liability
agricultural company'' means a lim-
ited liability company founded for the purpose of farming and
ownership
of agricultural land in which:
(1) The majority of the members are
persons related to each other,
all of whom have a common ancestor within the third degree of
relation-
ship, by blood or by adoption, or the spouses or the stepchildren
of any
such persons, or persons acting in a fiduciary capacity for persons
so
related;
(2) the members are natural persons or
persons acting in a fiduciary
capacity for the benefit of natural persons; and
(3) at least one of the members is a
person residing on the farm or
actively engaged in the labor or management of the farming
operation.
If only one member is meeting the requirement of this provision
and
such member dies, the requirement of this provision does not apply
for
the period of time that the member's estate is being administered
in any
district court in Kansas.
(x) ``Hydroponics'' means the growing of
vegetables, flowers, herbs,
or plants used for medicinal purposes, in a growing medium other
than
soil.
Sec. 84. K.S.A. 17-7701 is hereby
amended to read as follows: 17-
7701. (a) A merger or consolidation solely between any two or
more
domestic corporations or one more domestic corporations and one
or
more foreign corporations shall be governed by and subject to
K.S.A. 17-
6701 et seq. and amendments thereto, as is applicable.
(b) A merger or consolidation solely
between any two or more do-
mestic limited partnerships or one or more domestic limited
partnerships
and one or more foreign limited partnerships shall be governed by
and
subject to K.S.A. 56-1a609 and amendments thereto.
(c) A merger or consolidation solely
between any two or more do-
mestic limited liability companies or one or more domestic limited
lia-
bility companies and one or more foreign limited liability
companies shall
be governed by K.S.A. 17-7650 section 20
and amendments thereto.
(d) Subject to the provisions of this
section, any merger or consoli-
dation between one or more domestic corporations and any one or
more
constituent entities at least one of which is not a corporation,
one or more
domestic limited partnerships and any one or more constituent
entities
at least one of which is not a limited partnership, or one or more
domestic
limited liability companies and any one or more constituent
entities at
least one of which is not a limited liability company shall be
governed by
and subject to the provisions of K.S.A. 17-7701 through 17-7708,
and
amendments thereto.
Sec. 85. K.S.A. 17-7705 is hereby
amended to read as follows: 17-
7705. (a) The agreement of merger or consolidation required by
K.S.A.
17-7704 shall be authorized and approved in the following
manner:
(1) A constituent entity that is a
domestic general partnership shall
have the agreement of merger or consolidation authorized and
approved
by all of the partners, unless otherwise provided in the articles
or agree-
ment of partnership;
(2) a constituent entity that is a
domestic limited partnership shall
have the agreement of merger or consolidation approved by all
general
partners and by all of the limited partners unless otherwise
provided in
the certificate or agreement of limited partnership;
(3) a constituent entity that is a
domestic corporation shall have the
agreement of merger or consolidation approved in the manner
applicable
to a merger of two or more domestic corporations as provided in
K.S.A.
17-6001 et seq. and amendments thereto;
(4) a constituent entity that is a
domestic limited liability company
shall have the agreement of merger or consolidation approved in
the
manner provided in K.S.A. 17-7650 section
20 and amendments thereto;
and
(5) each constituent entity formed under
the laws of a jurisdiction
other than this state shall have the agreement of merger or
consolidation
approved in accordance with the laws of such other
jurisdiction.
(b) The fact that the agreement of merger
or consolidation has been
authorized and approved in accordance with this section shall be
certified
on the agreement of merger or consolidation on behalf of each
constituent
entity:
(1) In the case of any domestic general
or limited partnership, by any
general partner;
(2) in the case of any domestic
corporation, by its president or a vice
president, and by its secretary or an assistant secretary;
(3) in the case of any domestic limited
liability company, by any mem-
ber or manager; and
(4) in the case of any constituent entity
formed under the laws of any
jurisdiction other than this state, in accordance with the laws of
such other
jurisdiction.
(c) After the agreement of merger or
consolidation is authorized and
approved, unless the agreement of merger or consolidation provides
oth-
erwise, and at any time before the agreement of merger or
consolidation
or certificate of merger or consolidation is effective as provided
for in
K.S.A. 17-7706, the agreement of merger or consolidation may be
aban-
doned. Subject to any contractual rights, in accordance with the
proce-
dure set forth in the agreement of merger or consolidation or, if
none is
set forth, with the approval of those persons or individuals
entitled to
approve the merger or consolidation as provided in subsection
(a).
Sec. 86. K.S.A. 1998 Supp. 58-3062
is hereby amended to read as
follows: 58-3062. (a) No licensee, whether acting as an agent or a
prin-
cipal, shall:
(1) Intentionally use advertising that is
misleading or inaccurate in
any material particular or that in any way misrepresents any
property,
terms, values, policies or services of the business conducted, or
uses the
trade name, collective membership mark, service mark or logo of
any
organization owning such name, mark or logo without being
authorized
to do so.
(2) Fail to account for and remit any
money which comes into the
licensee's possession and which belongs to others.
(3) Misappropriate moneys required to be
deposited in a trust ac-
count pursuant to K.S.A. 58-3061 and amendments thereto, convert
such
moneys to the licensee's personal use or commingle the money or
other
property of the licensee's principals with the licensee's own money
or
property, except that nothing herein shall prohibit a broker from
having
funds in an amount not to exceed $100 in the broker's trust account
to
pay expenses for the use and maintenance of such account.
(4) Accept, give or charge any rebate or
undisclosed commission.
(5) Pay a referral fee to a person who is
properly licensed as a broker
or salesperson in another jurisdiction or who holds a corporate
real estate
license in another jurisdiction if the licensee knows that the
payment of
the referral fee will result in the payment of a rebate by the
out-of-state
licensee.
(6) Represent or attempt to represent a
broker without the broker's
express knowledge and consent.
(7) Guarantee or authorize any person to
guarantee future profits that
may result from the resale of real property.
(8) Place a sign on any property offering
it for sale or lease without
the written consent of the owner or the owner's authorized
agent.
(9) Offer real estate for sale or lease
without the knowledge and con-
sent of the owner or the owner's authorized agent or on terms other
than
those authorized by the owner or the owner's authorized agent.
(10) Induce any party to break any
contract of sale or lease.
(11) Offer or give prizes, gifts or
gratuities which are contingent upon
an agency agreement or the sale, purchase or lease of real
estate.
(12) Fail to see that financial
obligations and commitments between
the parties to an agreement to sell, exchange or lease real estate
are in
writing, expressing the exact agreement of the parties or to
provide, within
a reasonable time, copies thereof to all parties involved.
(13) Procure a signature to a purchase
contract which has no definite
purchase price, method of payment, description of property or
method
of determining the closing date.
(14) Engage in fraud or make any
substantial misrepresentation.
(15) Represent to any lender,
guaranteeing agency or any other in-
terested party, either verbally or through the preparation of false
docu-
ments, an amount in excess of the true and actual sale price of the
real
estate or terms differing from those actually agreed upon.
(16) Fail to make known to any purchaser
or lessee any interest the
licensee has in the real estate the licensee is selling or leasing
or to make
known to any seller or lessor any interest the licensee will have
in the real
estate the licensee is purchasing or leasing.
(17) Fail to inform both the buyer, at
the time an offer is made, and
the seller, at the time an offer is presented, that certain closing
costs must
be paid and the approximate amount of such costs.
(18) Fail without just cause to surrender
any document or instrument
to the rightful owner.
(19) Accept anything other than cash as
earnest money unless that
fact is communicated to the owner prior to the owner's acceptance
of the
offer to purchase, and such fact is shown in the purchase
agreement.
(20) Fail to deposit any check or cash
received as an earnest money
deposit or as a deposit on the purchase of a lot within five
business days
after the purchase agreement or lot reservation agreement is signed
by
all parties, unless otherwise specifically provided by written
agreement of
all parties to the purchase agreement or lot reservation agreement,
in
which case the licensee shall deposit the check or cash received on
the
date provided by such written agreement.
(21) Fail in response to a request by the
commission or the director
to produce any document, book or record in the licensee's
possession or
under the licensee's control that concerns, directly or indirectly,
any real
estate transaction or the licensee's real estate business.
(22) Refuse to appear or testify under
oath at any hearing held by
the commission.
(23) Demonstrate incompetency to act as a
broker, associate broker
or salesperson.
(24) Knowingly receive or accept,
directly or indirectly, any rebate,
reduction or abatement of any charge, or any special favor or
advantage
or any monetary consideration or inducement, involving the issuance
of
a title insurance policy or contract concerning which the licensee
is di-
rectly or indirectly connected, from a title insurance company or
title
insurance agent, or any officer, employee, attorney, agent or
solicitor
thereof.
(25) Engage in the purchase of one-,
two-, three- or four-family
dwellings, including condominiums and cooperatives, or the
acquisition
of any right, title or interest therein, including any equity or
redemption
interests, if:
(A) (i) At the time of such
purchase, the dwellings are subject to a
right of redemption pursuant to foreclosure of a mortgage on such
dwell-
ings; (ii) the licensee fails to give written notice of the
purchase, within
20 days thereafter, to the mortgage holder or judgment creditor who
held
such mortgage; and (iii) the licensee, unless otherwise required by
law or
court order, fails to apply any rent proceeds from the dwellings to
the
judgment lien arising from the foreclosure of such mortgage, as
payments
become due under the loan, regardless of whether the licensee is
obli-
gated to do so;
(B) (i) the dwellings are subject
to a loan which is secured by a mort-
gage and which is in default at the time of such purchase or in
default
within one year after such purchase; (ii) the licensee fails to
give written
notice of the purchase, within 20 days thereafter, to the mortgage
holder;
and (iii) the licensee, unless otherwise required by law or court
order,
fails to apply any rent proceeds from the dwellings to the mortgage
as the
payments come due, regardless of whether the licensee is obligated
on
the loan; or
(C) the licensee fails to notify, at the
time of rental, any person rent-
ing any such dwelling of the extent and nature of the licensee's
interest
in such dwelling and the probable time until possession will be
taken by
the mortgage holder or judgment creditor.
(26) Commit forgery or, unless authorized
to do so by a duly executed
power of attorney, sign or initial any contractual agreement on
behalf of
another person in a real estate transaction.
(b) No salesperson or associate broker
shall:
(1) Except as provided in paragraph (A)
or (B), accept a commission
or other valuable consideration from anyone other than the broker
by
whom the licensee is employed or with whom the licensee is
associated
as an independent contractor.
(A) A salesperson or associate broker may
accept a commission or
other valuable consideration from a licensee who employs the
salesperson
or associate broker as a personal assistant provided that: (i) the
licensee
and the salesperson or associate broker who is employed as a
personal
assistant are licensed under the supervision of the same broker,
and (ii)
the supervising broker agrees in writing that the personal
assistant may
be paid by the licensee.
(B) If a salesperson or associate broker
has (i) organized as a profes-
sional corporation pursuant to K.S.A. 17-2706 et seq., and
amendments
thereto, (ii) incorporated under the Kansas general corporation
code con-
tained in K.S.A. 17-6001 et seq., and amendments thereto,
(iii) organized
under the Kansas limited liability company act contained in
K.S.A. 17-
7601 section 1 et seq., and
amendments thereto, or (iv) has organized as
a limited liability partnership as defined in K.S.A. 1998 Supp.
56a-101
and amendments thereto, the commission or other valuable
consideration
may be paid by the licensee's broker to such professional
corporation,
corporation, limited liability company or limited liability
partnership. This
provision shall not alter any other provisions of this act.
(2) Fail to place, as soon after receipt
as practicable, any deposit
money or other funds entrusted to the salesperson or associate
broker in
the custody of the broker whom the salesperson or associate broker
rep-
resents.
(c) No broker shall:
(1) Pay a commission or compensation to
any person for performing
the services of an associate broker or salesperson unless such
person is
licensed under this act and employed by or associated with the
broker.
(2) Fail to deliver to the seller in
every real estate transaction, at the
time the transaction is closed, a complete, detailed closing
statement
showing all of the receipts and disbursements handled by the broker
for
the seller, or fail to deliver to the buyer a complete statement
showing
all money received in the transaction from such buyer and how and
for
what the same was disbursed, or fail to retain true copies of such
state-
ments in the broker's files, except that the furnishing of such
statements
to the seller and buyer by an escrow agent shall relieve the
broker's re-
sponsibility to the seller and the buyer.
(3) Fail to properly supervise the
activities of an associated or em-
ployed salesperson or associate broker.
(4) Lend the broker's license to a
salesperson, or permit a salesperson
to operate as a broker.
(5) Fail to provide to the principal a
written report every 30 days,
along with a final report, itemizing disbursements made by the
broker
from advance listing fees.
(d) (1) If a purchase agreement
provides that the earnest money be
held by an escrow agent other than a real estate broker, no listing
broker
shall:
(A) Fail to deliver the purchase
agreement and earnest money de-
posit to the escrow agent named in the purchase agreement within
five
business days after the purchase agreement is signed by all parties
unless
otherwise specifically provided by written agreement of all parties
to the
purchase agreement, in which case the broker shall deliver the
purchase
agreement and earnest money deposit to the escrow agent named in
the
purchase agreement on the date provided by such written agreement;
or
(B) fail to obtain and keep in the
transaction file a receipt from the
escrow agent showing date of delivery of the purchase agreement
and
earnest money deposit.
(2) If a purchase agreement provides that
the earnest money be held
by an escrow agent other than a real estate broker and the property
was
not listed with a broker, no broker for the buyer shall:
(A) Fail to deliver the purchase
agreement and earnest money de-
posit to the escrow agent named in the purchase agreement within
five
business days after the purchase agreement is signed by all parties
unless
otherwise specifically provided by written agreement of all parties
to the
purchase agreement, in which case the broker shall deliver the
purchase
agreement and earnest money deposit to the escrow agent named in
the
purchase agreement on the date provided by such written agreement;
or
(B) fail to obtain and keep in the
transaction file a receipt from the
escrow agent showing date of delivery of the purchase agreement
and
earnest money deposit.
(3) If a purchase agreement provides that
the earnest money be held
by an escrow agent other than a real estate broker and neither the
seller
nor buyer is represented by a broker, no transaction broker
shall:
(A) Fail to deliver the purchase
agreement and earnest money de-
posit to the escrow agent named in the purchase agreement within
five
business days after the purchase agreement is signed by all parties
unless
otherwise specifically provided by written agreement of all parties
to the
purchase agreement, in which case the broker shall deliver the
purchase
agreement and earnest money deposit to the escrow agent named in
the
purchase agreement on the date provided by such written agreement;
or
(B) fail to obtain and keep in the
transaction file a receipt from the
escrow agent showing date of delivery of the purchase agreement
and
earnest money deposit.
The commission may adopt rules and regulations
to require that such
purchase agreement which provides that the earnest money be held
by
an escrow agent other than a real estate broker include: (1)
notification
of whether or not the escrow agent named in the purchase
agreement
maintains a surety bond, and (2) notification that statutes
governing the
disbursement of earnest money held in trust accounts of real estate
bro-
kers do not apply to earnest money deposited with the escrow
agent
named in the purchase agreement.
(e) Nothing in this section shall be
construed to grant any person a
private right of action for damages or to eliminate any right of
action
pursuant to other statutes or common law.
Sec. 87. K.S.A. 17-7601, 17-7602, 17-7603,
17-7606, 17-7609, 17-
7610, 17-7611, 17-7612, 17-7613, 17-7614, 17-7615, 17-7617,
17-7618,
17-7619, 17-7620, 17-7621, 17-7623, 17-7624, 17-7625, 17-7626,
17-
7627, 17-7628, 17-7629, 17-7630, 17-7631, 17-7632, 17-7633,
17-7635,
17-7636, 17-7637, 17-7638, 17-7639, 17-7640, 17-7641, 17-7642,
17-
7643, 17-7644, 17-7645, 17-7646, 17-7649, 17-7650, 17-7652,
17-7652,
as amended by section 7 of 1999 House Bill No. 2161, 17-7653,
17-7655,
17-7656, 17-7701 and 17-7705 and K.S.A. 1998 Supp. 17-2708,
17-5903,
17-7604, 17-7605, 17-7607, 17-7608, 17-7616, 17-7622, 17-7634,
17-
7634, as amended by section 13 of 1999 House Bill No.2161,
17-7647,
17-7648, 17-7654 and 58-3062 are hereby repealed.
Sec. 88. This act shall take effect and be in
force from and after
January 1, 2000, and its publication in the statute book.
Approved April 16, 1999.
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