The bill proposes to replace the existing Rhode Island Limited Liability Company Act with a new and updated model act, known as the Uniform Limited Liability Company Act. Key provisions of the bill include:

1. **Formation and Governance**: The new act establishes clear guidelines for the formation, management, and dissolution of limited liability companies (LLCs). It allows for the creation of both member-managed and manager-managed LLCs, with specific provisions regarding the rights and duties of members and managers.

2. **Liability Insurance Requirements**: Registered limited liability partnerships that provide professional services are required to carry liability insurance if reasonably available. The insurance must cover negligence, wrongful acts, or misconduct, with coverage amounts ranging from $100,000 to $500,000, depending on the number of professional employees.

3. **Compliance and Legal Proceedings**: The act outlines the conditions under which compliance with the insurance requirements can be challenged in court. It specifies that information regarding compliance with these insurance requirements cannot be presented to a jury when determining liability.

4. **Conversion and Domestication**: The new act includes provisions for the conversion of LLCs into different types of entities and for the domestication of foreign LLCs into Rhode Island.

5. **Rights and Responsibilities**: It clarifies the rights and responsibilities of members and managers, including fiduciary duties and the process for mergers and consolidations involving both domestic and foreign entities.

6. **Filing and Correction Processes**: The act streamlines the filing and correction processes with the Secretary of State, ensuring that all documents required for LLCs are filed in a timely and efficient manner.

7. **Repeal of Existing Law**: The existing Rhode Island Limited Liability Company Act will be repealed, and the new act will take effect in stages, with certain sections becoming effective upon passage and others on January 1, 2027.

Overall, the legislation aims to modernize the framework governing LLCs in Rhode Island, enhancing clarity and operational flexibility while ensuring compliance with state regulations.