Judiciary Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-7311

Title:

AN ACT CONCERNING LIMITED LIABILITY COMPANIES AND BUSINESS CORPORATIONS.

Vote Date:

4/4/2017

Vote Action:

Joint Favorable Substitute

PH Date:

3/27/2017

File No.:

SPONSORS OF BILL:

Judiciary Committee

REASONS FOR BILL:

CBA and Rep. Cummings requested

SUBSTITUTE LANGUAGE:

Amendment changes the effective dates

RESPONSE FROM ADMINISTRATION/AGENCY:

Office of the Secretary of the State, Deputy Secretary Scott Bates: This bill would require careful scrutiny and it would be in the best interest of the state and its businesses to delay this legislation. The Uniform Law Commission will release its model legislation this summer, with understanding that model will improve the existing laws. At this time only a limited number of states allow LLCs to be formed. There would be a significant amount of resources required to reprogram the office computer systems and costs of more than $375,000. Their recommendation would be to remove the new type of business entity called a “series LLC” sections from the bill and reconsider in 2018, but they do support the minor revisions to clarify last year's law stated in the bill.

NATURE AND SOURCES OF SUPPORT:

House Republican Office, House Republican Caucus: This bill is important to House Republicans and will allow CT to be on the same level as other states that already have protected series laws.

Connecticut Bar Association, John H. Lawrence Jr.: Proposed the concept for the bill and asks for support to permit the formation of series limited liability companies. They are requesting an amendment to the bill to provide October 1, 2018 effective date for certain sections so that the Business Law Section would be able to submit proposed amendments in the next session that reflect any significant changes in the final version of the Limited Liability Company Protected Series Act (LCPSA) and other sections of the CBA, such as Standing Committee on Standards of Title and Commercial Law and Bankruptcy and Real Property sections would have an opportunity to provide their input on the final version of the Limited LCPSA.

Fanol Bojka: CT would be wise to enact this business friendly bill, allowing more time to be devoted and grow businesses, rather than spend unnecessary time with accounting errors and multiple tax filings.

NATURE AND SOURCES OF OPPOSITION:

None Submitted

Reported by: Staci M. Roy

Date: 4/13/2017