The bill proposes comprehensive amendments to the Rhode Island Limited Liability Company Act, introducing a new legal framework for limited liability companies (LLCs) and foreign LLCs. Key provisions include the establishment of a new section mandating that registered limited liability partnerships (LLPs) and LLCs providing professional services must carry liability insurance with coverage ranging from $100,000 to $500,000, based on the number of professional employees. The bill also repeals the existing Rhode Island Limited Liability Company Act, removing outdated definitions and provisions while introducing new sections that clarify the formation, operation, and governance of LLCs, including the rights and responsibilities of members and managers. Notably, it streamlines the processes for mergers, conversions, and domestications of LLCs, ensuring that entities retain their rights and obligations throughout these transitions.

Additionally, the bill outlines the procedures for the registration and management of foreign LLCs, specifying the requirements for conducting business in Rhode Island and the conditions under which the Secretary of State may revoke a foreign LLC's registration. It introduces new definitions and clarifications regarding various business entities, enhancing the legal language surrounding their governance. The bill aims to modernize the legal framework for LLCs, improve compliance with tax obligations, and ensure clarity in the operational responsibilities of both domestic and foreign entities. Overall, these amendments seek to enhance the accountability, transparency, and operational flexibility of LLCs in Rhode Island.