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Massachusetts Introduces Inter-Entity Mergers and Conversion, and Makes
Other Important Changes to Its Limited Liability Company Law
Posted:4/22/03
Massachusetts Senate Bill No. 1949, which makes major changes and some clarifications to Massachusetts's Limited Liability Company Law, was signed by the Governor of Massachusetts on March 5, 2003, and became effective immediately. The following are the highlights of the new law as it affects LLCs:
- Permits domestic, single-member limited liability companies (LLCs).
- Simplifies Massachusetts's tax treatment for single-member LLCs organized under Massachusetts law.
- Provides that members and managers of LLCs cannot be held personally liable for any debt, obligation or liability of the LLC solely by reason of being a member or manager of the LLC.
- Permits member-managed LLCs. If an LLC has at least one manager, then unless otherwise stated in the operating agreement, the LLC will be managed by its managers or manager and each manager may execute documents and act for the LLC (members may not). If the LLC has no manager(s), then unless otherwise provided in the operating agreement, the members may manage the LLC and each member may execute documents and act for the LLC.
- Allows corporations to consolidate or merge with or into domestic or foreign LLCs and limited liability partnerships by filing Articles of Consolidation or Merger.
- Permits Massachusetts trusts with transferable shares and both domestic and foreign partnerships, limited partnerships and limited liability partnerships to convert to Massachusetts LLCs by filing both a Certificate of Conversion and Certificate of Organization of a LLC.
The Certificate of Organization form that is available in the Forms Library at www.incspot.com can be used to form single-member LLCs. That form will be updated immediately in the event that the Massachusetts Secretary of the Commonwealth, Corporations Division, determines that additional information is necessary for filing purposes as a result of the above changes. A Certificate of Conversion will soon be available in the Forms Library.
Please contact your CSC Account Manager or Customer Service Representative if you have any questions or for further information.
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