SESSION OF 2019
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2105
As Recommended by House Committee on
Judiciary

Brief*
HB 2105 would create and amend law related to limited
liability companies (LLCs) in the Kansas Revised Limited
Liability Company Act (RLLCA), Business Entity Standard
Treatment Act (BEST Act), and other statutes, as follows.

Series LLCs
The bill would create and amend law related to series
LLCs, as follows. (Note: Series LLCs were originally
implemented in the RLLCA by 2012 Sub. for HB 2207.)
Merger or Consolidation of Series LLCs [Sec. 3]
The bill would create law effective July 1, 2020, allowing
merger or consolidation by one or more series with or into
one or more other series of the same LLC with such series as
the agreement would provide being the surviving or resulting
series.
Unless otherwise provided by the operating agreement,
merger or consolidation would be required to be approved by
the vote of the members of each series that is to merge or
consolidate who own more than 50 percent of the then-
current percentage or other interest in the profits of such
series owned by all the members of the series.

____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org
 The bill would allow exchange or conversion of rights or
securities of or interests in the constituent series, or would
allow them to be canceled or remain outstanding. An
agreement of merger or consolidation could be terminated or
amended pursuant to a provision for such in the agreement.
The surviving or resulting series would be required to file
with the Secretary of State a certificate of merger or
consolidation executed by authorized persons, which would
be required to include:
● The name of the series to be merged or
consolidated and the name of the LLC that formed
the series;
● That a merger or consolidation agreement has
been approved by each series that is to merge or
consolidate;
● The name of the surviving or resulting series;
● Any amendment to the certificate of designation of
the surviving or resulting series to change the
name of the surviving series through the merger;
● The future effective date or time certain, if not
effective upon filing;
● That the agreement is on file at a place of business
of the surviving or resulting series or the LLC
company that formed the series, with the address;
and
● That a copy of the agreement will be furnished
upon request and without cost to any member of
any merging or consolidating series.
Unless otherwise provided in the certificate, the merger
or consolidation would be effective upon the filing of the
certificate with the Secretary of State.

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 A certificate of merger or consolidation would act as a
certificate of cancellation of the certificate of designation of
the series that is not the surviving or resulting series, and a
certificate amending the name of the surviving or resulting
series would be deemed to be an amendment to the
certificate of designation of the surviving or resulting series,
with no further action required for such amendment. Any
requirement in this section that a certificate of merger or
consolidation be filed would be seemed satisfied by the filing
of a merger or consolidation agreement containing the
information required in a certificate of merger or
consolidation.
A merger or consolidation agreement could amend the
operating agreement of the constituent series, and any
amendment relating solely to such series would be effective
at the effective time or date of the merger or consolidation.
Such amendment or adoption would be effective
notwithstanding any provision in the operating agreement
regarding amendment, other than such a provision applicable
in connection with a merger or consolidation. These
provisions could not be construed to limit the accomplishment
of a merger or of any of the referenced matters by any other
means provided by an operating agreement, other
agreement, or otherwise by law.
The bill would provide for various items upon a merger
or consolidation becoming effective, including vesting of
rights, privileges, powers, property, and debts and attachment
and enforcement of rights of creditors, liens upon property,
debts, liabilities, and duties.
Unless otherwise agreed, a merger or consolidation of a
series that is not the surviving or resulting series would not
require such series to wind up its affairs or pay its liabilities
and distribute its assets, and the merger or consolidation
would not constitute a dissolution of such series.
An operating agreement could provide that a series of
the LLC shall not have the power to merge or consolidate.
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Series Reinstatement [Sec. 4]
The bill would create law effective July 1, 2020, allowing
a series whose certificate of designation has been canceled
to be reinstated by filing with the Secretary of State a
certificate of reinstatement, accompanied by payment of the
required fee, annual report fee, and all penalties and interest
due at the time of the cancellation. The certificate would be
required to contain the name of the LLC at the time of
cancellation and at the time of reinstatement, if changed; the
name of the series at the time of cancellation and the name
under which the series is to be reinstated, if the original name
is not available; a statement that the certificate is filed by
persons authorized to do so; and any other matters such
persons include.
The certificate of reinstatement would be deemed to be
an amendment to the certificate of designation, and upon its
filing, the series would be reinstated with the same force and
effect as if the certificate of designation had not been
canceled. The bill would set forth the effect of reinstatement
on contracts; acts; matters and things made, done, and
performed by the series, its members, managers, employees,
and agents during cancellation; real and personal property; all
rights and interests; and liability for all contracts, acts,
matters, and things made, done, or performed in its name
prior to reinstatement.
Restated Certificate of Designation [Sec. 21]
Effective July 1, 2020, the bill would amend the RLLCA
statute governing restated articles of organization to add
provisions regarding restated certificates of designation.
These provisions would allow an LLC series to integrate into
a single instrument all the provisions of its certificate of
designation that are then in effect and operative as a result of
certificates or other instruments previously filed with the
Secretary of State. The series could, at the same time, further

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amend its certificate of designation by adopting a restated
certificate of designation.
A restated certificate of designation that restates and
integrates, but does not further amend, would be specifically
designated a “restated certificate of designation” and would
be executed by an authorized person and filed with the
Secretary of State as provided in the BEST Act. A restated
certificate of designation that restates and integrates, and
also further amends, would be specifically designated an
“amended and restated certificate of designation” and would
be executed and filed in the same manner as described
above.
The bill would require a restated certificate of
designation to state the name of the LLC, the present name
of the series, the name under which the series was originally
filed (if different), and the future effective date or time certain
of the restated certificate (if not effective upon filing). It also
would be required to state it was duly executed and is being
filed in accordance with this section. If the restated certificate
only restates and integrates, without further amendment, and
there is no discrepancy in provisions, the bill would require
the certificate also state this fact.
Upon filing of the restated certificate (or upon the future
effective date or time, if provided), the initial certificate of
designation would be superseded, and the restated certificate
would be the certificate of designation of the series, but the
original effective date of formation of the series would remain
unchanged.
Any amendment or change effected in connection with
the restatement and integration of a certificate of designation
would be subject to any other provision of the RLLCA, not
inconsistent with these provisions, which would apply if a
separate certificate of amendment were filed to effect such
amendment or change.

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Restructuring and Amendment of Series LLC Requirements
[Sec. 39]
Effective July 1, 2020, the main statute governing series
LLCs would be extensively amended, restructured, and
expanded, as follows.
The bill would remove much of the current law regarding
names, formation, limits on liability, certificates of designation,
dissolution, standing, resident agents, management,
applicability of law, and foreign LLCs.
Some provisions within the removed law would be
moved or reworded (without substantive changes) within the
statute, including provisions regarding:
● Formation by filing of a certificate of designation
with the Secretary of State;
● Notice of limitation on liabilities provided by the
articles of organization on file with the Secretary of
State;
● Providing for classes or groups of members or
managers and voting in an operating agreement;
● Effect of events on a member or manager of a
series with regard to any other series or the LLC;
and
● Dissolution of a series without dissolving the LLC
or affecting the limitation on liabilities.
The bill would add numerous provisions, as follows.
The bill would state a series may be formed by
complying with this statute if an operating agreement
provides for the establishment or formation of one or more
series. A series would be prohibited from merging, converting,
or consolidating pursuant to any section of the RLLCA, the

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BEST Act, or any other statute, other than pursuant to the
provisions included elsewhere in the bill.
The bill would require notice of the limitation on liabilities
of a series be set forth in the articles of organization of the
LLC, which would be sufficient whether or not the LLC has
formed any series when such notice is included in the articles
of organization, without any specific series of the LLC being
referenced in the notice.
The bill would add language stating that current and
amended language regarding limitation on liability would not
restrict a series or LLC from agreeing that debts, liabilities,
obligations, and expenses of the LLC may be enforceable
against the assets of the series, or vice versa. The bill would
add additional provisions regarding holding of assets
associated with a series, accounting for the assets of a
series, and references to assets, members, or managers of or
associated with a series.
The bill would provide a series may carry on any lawful
business, purpose, or activity, whether or not for profit, except
for granting insurance policies, assuming insurance risks, or
banking. The bill would state a series shall have the power
and capacity to contract, hold title to assets, grant liens and
security interests, and sue and be sued.
No member or manager of a series would be obligated
personally for any debt, obligation, or liability of the series,
unless the member or manager otherwise agrees or as
otherwise provided in the RLLCA.
The bill would set forth various voting provisions that
may be included in an operating agreement and would state
voting may be on any basis, including several specifically
listed.
Unless otherwise provided in an operating agreement,
the bill would vest management of a series in the members
associated with such series in proportion to the then-current
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percentage or other interest of members in the profits of such
series owned by all of the members associated with such
series, with the decision of members owning more than 50
percent of such percentage controlling. However, if an
operating agreement provides for management by a
manager, management would be vested in the manager
accordingly, and the bill would give effect to other operating
agreement provisions regarding managers. A series could
have more than one manager.
The bill would add provisions regarding distributions with
respect to a series, including status and remedies of a
member entitled to a distribution, establishment of a record
date by an operating agreement, limitations on distributions
related to certain liabilities and the fair market value of the
series assets, liability of a member for a distribution in certain
circumstances, and the effect of these provisions on certain
obligations or liabilities of members.
Unless otherwise provided in the operating agreement, a
member would cease to be associated with a series and to
have the rights and powers of a member of the series upon
the assignment of all the members’ LLC interest in the series.
The bill would state a series is dissolved and its affairs
shall be wound up upon dissolution of the LLC or upon the
first of the following: at the time specified in the operating
agreement; upon the happening of events specified in the
operating agreement; unless otherwise provided by the
operating agreement, upon the vote of series members who
own two-thirds or more of the then-current percentage or
other interest in the profits of such series of the LLC owned
by all the members of the series; or the dissolution of the
series under this statute.
Unless otherwise provided in the operating agreement, a
series manager who has not wrongfully dissolved the series,
or the series members or a person consented to or approved
by the series members, by a vote of the members who own
more than 50 percent of the then-current percentage or other
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interest in the profits of such series owned by all of the series
members, may wind up the affairs of the series. The district
court, upon cause shown, may wind up the affairs of a series
and appoint a liquidating trustee upon application by certain
persons. The bill would set forth the authority and
requirements of the persons winding up the affairs of the
series, which would not affect the liability of members or
impose liability on a liquidating trustee. On application by or
for a member or manager associated with a series, the district
court could decree dissolution of the series whenever it is not
reasonably practicable to carry on the business of the series
in conformity with an operating agreement. A series would be
an association for all purposes of Kansas law, regardless of
the number of members or managers.
The bill would set forth required contents of a certificate
of designation filed to form an LLC series, but a certificate of
designation properly filed with the Secretary of State prior to
July 1, 2020, would be deemed to comply with these
requirements. The bill would require the certificate of
designation be executed and filed in accordance with the
BEST Act and would state a certificate of designation is not
an amendment to the articles of organization of the LLC.
The bill would permit amendment of a certificate of
designation pursuant to requirements set forth in the bill for a
certificate of amendment, but a certificate of designation
properly filed with the Secretary of State prior to July 1, 2020,
changing a previously filed certificate of designation, would
be deemed to be a certificate of amendment.
The bill would require a manager or member of a series
who becomes aware that any statement in a certificate of
designation was false when made, or that any matter has
changed making the certificate false in any material respect,
to promptly amend the certificate of designation. A certificate
of designation could be amended at any time for any other
proper purpose.

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 Unless otherwise provided in the RLLCA or unless a
later effective date or time certain is provided in the certificate
of amendment, the certificate shall be effective at the time of
filing.
The bill would set forth the circumstances under which a
certificate of designation shall be canceled, including by the
filing of a certificate of cancellation pursuant to requirements
set forth by the bill. A certificate of designation properly filed
before July 1, 2020, dissolving a series would be deemed a
certificate of cancellation. The bill would provide for correction
of a certificate of cancellation and would prohibit the
Secretary of State from issuing a certificate of good standing
for a series if the certificate of designation is canceled or if the
LLC has ceased to be in good standing.
The bill would specify requirements for the name of the
series to be set forth in the certificate of designation.
The bill would modify the required statements related to
series to be included in an application for registration as a
foreign LLC.
Other Series LLC Amendments in RLLCA
The bill would amend the RLLCA definitions statute to
define “series” as a designated series of members,
managers, LLC interests, or assets est