House Bill 1398 enact new LLC and LP laws in Pennsylvania Business Entities Code.
Effective Date: February 21, 2017
Pennsylvania House Bill1398, Laws of 2016, effective February 21, 2017, has enacted new LLC and LP laws as well as conforming and other amendments to the Business Entities Code (Title 15, Pa.C.S.A.) The new LLC and LP laws respectively govern LLCs and LPs as follows: before April 1, 2017, the new laws govern LLCs and LPs formed on and after the effective date and any preexisting LLCs and LPs electing to be governed by the applicable new law; after April 1, 2017, the new laws govern all LLCs and LPs. The Bill has also enacted a new General Partnership law.
The following are notable changes affecting our services and Precedent materials:
NEW LLC LAW
· Adds a domestic amendment trigger: when a managing member or manager knows that any information set forth in the Certificate is inaccurate, an amendment, or if appropriate, a correction must be filed.
· Revises requirements for the execution of documents to be filed: default is now a person authorized by the company (formerly by an authorized member or manager).
o Requires filing of a Statement of Termination instead of a Certificate of Dissolution after all debts have been paid, discharged or provided for and all assets have been distributed; this terminates the LLC on the State’s records.
o Authorizes a voluntary interim filing of a Certificate of Dissolution while a dissolved LLC’s affairs are being wound up; the LLC will remain active on the State’s records; no tax clearance required for this filing.
o Authorizes delayed effective dates for Statements of Termination.
o Provides for voluntary disposition of claims by notice or publication after dissolution.
· Authorizes Benefit Companies with purposes including the creation of a public or specific benefit as defined in the Bill.
· Imposes certain obligations on organizers which will render inappropriate our furnishing of organizers.
NEW LP LAW
· Authorizes formation of LLLPs.
· Revises requirements for the execution of documents to be filed.
o Requires filing of a Statement of Termination instead of a Certificate of Dissolution after all debts have been paid, discharged or provided for and all assets have been distributed; this terminates the LP on the State’s records..
o Authorizes a voluntary interim filing of a Certificate of Dissolution while a dissolved LP’s affairs are being wound up; the LP will remain active on the State’s records; no tax clearance required for this filing.
· Repeals the requirement to file a directors’ resolution in order to qualify on conflict of name.
· Deletes reference to “registered” LLPs; now only refers to LLPs.
· Authorizes administrative termination of LLP status for annual registration delinquency after five years.
· Imposes the Annual Registration requirement on LLLPs.
· Adds exceptions to the tax clearance requirement on dissolution based on a dissolving entity never having transacted business nor held assets other than money for share subscriptions or analogous contributions. Formerly, an administrative exception was afforded to business corporations never having commenced business.
· New LLCs and LPs must use the revised formation forms on and after February 21.
· Existing LLCs and LPs may use either the current or revised version of the other forms (e.g. amendment, dissolution etc.) until March 30. On and after April 1, only revised forms will be acceptable.
· The State advised that the revised forms will become available on its website on Friday, February 17. We will work to have revised versions available in our systems as expeditiously as possible. In the interim, the forms may be accessed on the State’s website.
The Bill may be accessed at http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2015&sessInd=0&billBody=H&billTyp=B&billNbr=1398&pn=4062
For more information regarding your business entities in PA, contact the CLASCORP team today at 800-737-8012.