SB 2223 Summary

• Creates new section 10-32.1-30.1 requiring profits and losses of LLCs created after July 31, 2017 to be allocated among members in proportion to the value of their contributions, unless otherwise provided in articles of organization or operating agreement.

• Amends LLC distribution rules to require distributions be in equal shares among members for existing LLCs, but proportional to contribution value for LLCs created after July 31, 2017, subject to transfer and charging orders.

• Modifies member-managed LLC governance for entities created after July 31, 2017 to give each member voting power proportional to their distribution interest, with ordinary course decisions made by majority of voting power and extraordinary decisions requiring unanimous consent.

• Revises charging order provisions for both LLCs and partnerships to clarify that charging orders constitute the exclusive remedy for judgment creditors, prohibiting foreclosure and other remedies against partnership or company property.

• Updates partnership transferable interest and charging order statutes (sections 45-10.2-64 and 45-17-04) to align language and procedures with the LLC charging order amendments.