HB20-1096 Summary

• Enacts the "Uniform Protected Series Act" (UPSA) effective January 1, 2021, allowing Colorado limited liability companies to establish protected series with internal liability shields

• Creates two types of liability protection: vertical shields (protecting equity holders/managers from organizational obligations) and horizontal shields (protecting one protected series from liabilities of the company or other series)

• Requires detailed record-keeping of associated assets, members, and transferable interests to qualify for liability protection; assets must be specifically identified and distinguishable from other series assets

• Permits series LLCs to merge only with other LLCs (not creating new entities) and restricts protected series from participating in mergers, conversions, or other entity transactions

• Establishes procedures for protected series dissolution, winding up, and foreign protected series registration; applies to series LLCs formed after January 1, 2021, and existing companies that elect to adopt the act