US Laws, Codes, Statutes & Cases

Chapter 63 — Limited Liability Companies

 

2007 EDITION

 

LIMITED LIABILITY COMPANIES

 

CORPORATIONS AND PARTNERSHIPS

 

GENERAL PROVISIONS

 

(Definitions)

 

63.001       Definitions

 

63.002       Inclusion of limited liability companies and managers and members of limited liability companies in definitions

 

(Filing Documents)

 

63.004       Filing requirements

 

63.007       Filing, service, copying and certification fees

 

63.011       Effective time and date of document

 

63.014       Correcting filed document

 

63.016       Forms; rules

 

63.017       Filing duty of Secretary of State

 

63.021       Appeal from Secretary of State’s refusal to file document

 

63.024       Evidentiary effect of copy of filed document

 

63.027       Certificate of existence or authorization

 

(Secretary of State)

 

63.031       Powers

 

(Notice)

 

63.034       Knowledge and notice

 

ORGANIZATION

 

63.044       Formation

 

63.047       Articles of organization

 

63.051       Organization

 

63.054       Liability for preorganization transactions

 

63.057       Operating agreements

 

PURPOSES AND POWERS

 

63.074       Purposes

 

63.077       General powers

 

NAME

 

63.094       Limited liability company name

 

63.097       Reserved name

 

63.101       Registered name

 

OFFICE AND AGENT

 

63.111       Registered office and registered agent

 

63.114       Change of registered office or registered agent

 

63.117       Resignation of registered agent

 

63.121       Service on limited liability company

 

MANAGEMENT AND MANAGEMENT RIGHTS OF MEMBERS

 

63.130       Rights of members and managers; matters requiring consent of all or majority of members

 

63.140       Agency power of managers and members; interest in real property

 

63.155       Duties and standard of conduct

 

63.160       Limitation of liability and indemnification

 

63.165       Liability of members and managers

 

63.170       Liability of limited liability company for acts, omissions or conduct of member or manager

 

FINANCES

 

63.175       Contributions

 

63.180       Liability for contributions

 

63.185       Allocation of profits and losses

 

DISTRIBUTIONS AND WITHDRAWAL

 

63.195       Allocation of interim distributions

 

63.200       Right to interim distributions

 

63.205       Voluntary withdrawal of member

 

63.209       Expulsion of member

 

63.219       Distribution in kind

 

63.225       Right to distribution

 

63.229       Limitations on distribution

 

63.235       Liability for wrongful distribution

 

MEMBERSHIP INTEREST

 

63.239       Nature of membership interest

 

63.245       Admission of members

 

63.249       Assignment of membership interest; effect of assignment

 

63.255       Rights of assignee who becomes member

 

63.259       Rights of judgment creditor against member

 

63.265       Cessation of membership

 

AMENDMENT OF ARTICLES OF ORGANIZATION AND OPERATING AGREEMENT

 

63.431       Operating agreement

 

63.434       Amendment to articles of organization

 

63.437       Restated articles of organization

 

63.441       Amendment by managers

 

63.444       Amendment by members

 

CONVERSIONS AND MERGERS

 

63.467       Definitions for ORS 63.467 to 63.497

 

63.470       Conversion

 

63.473       Action on plan of conversion

 

63.476       Articles of conversion

 

63.479       Effect of conversion; entity existence continues; assumed business name

 

63.481       Merger

 

63.487       Action on plan of merger

 

63.494       Articles of merger

 

63.497       Effect of merger

 

DISSOLUTION

 

(In General)

 

63.621       Dissolution

 

63.625       Distribution of assets upon dissolution

 

63.629       Agency power of members and managers after dissolution

 

63.631       Articles of dissolution

 

63.637       Effect of dissolution; winding up

 

63.641       Known claims against dissolved limited liability company

 

63.644       Unknown claims against dissolved limited liability company

 

63.645       Enforcement of claims against dissolved limited liability company

 

(Administrative Dissolution)

 

63.647       Grounds for administrative dissolution

 

63.651       Procedure; effect of administrative dissolution

 

63.654       Reinstatement following administrative dissolution

 

63.657       Appeal from denial of reinstatement

 

(Judicial Dissolution)

 

63.661       Grounds for judicial dissolution

 

63.664       Procedure for judicial dissolution

 

63.671       Judgment of dissolution

 

(Disposition of Assets)

 

63.674       Deposit with Department of State Lands

 

FOREIGN LIMITED LIABILITY COMPANIES

 

(Authority to Transact Business)

 

63.701       Authority to transact business required

 

63.704       Consequences of transacting business without authority

 

63.707       Application for authority to transact business

 

63.711       Amendment to application for authority

 

63.714       Effect of authority

 

63.717       Name of foreign limited liability company

 

63.721       Registered office and registered agent of foreign limited liability company

 

63.724       Change of registered office or registered agent of foreign limited liability company

 

63.727       Resignation of registered agent of a foreign limited liability company

 

63.731       Service on a foreign limited liability company

 

(Withdrawal)

 

63.734       Withdrawal of foreign limited liability company

 

(Revocation of Authority)

 

63.737       Grounds for revocation

 

63.741       Procedure for and effect of revocation

 

63.744       Appeal from revocation

 

63.747       Reinstatement of authority

 

RECORDS AND REPORTS

 

(Records)

 

63.771       Limited liability company records

 

63.777       Scope of inspection right

 

63.781       Court-ordered inspection

 

(Reports)

 

63.784       Certain expense reports to members

 

63.787       Annual report; rules

 

DERIVATIVE PROCEEDINGS

 

63.801       Derivative proceedings

 

STATE TAXATION

 

63.810       Taxation of limited liability companies and members

 

MISCELLANEOUS

 

63.951       Short title

 

63.955       Interstate application

 

63.960       Applicability of chapter to practice of dentistry

 

63.965       Reservation of power to amend or repeal; effect of amendment or repeal

 

PENALTY

 

63.990       Penalty for signing false document

 

GENERAL PROVISIONS

 

(Definitions)

 

      63.001 Definitions. As used in this chapter:

      (1) “Anniversary” means that day each year exactly one or more years after:

      (a) The date of filing by the Secretary of State of the articles of organization in the case of a domestic limited liability company.

      (b) The date of filing by the Secretary of State of an application for authority to transact business in the case of a foreign limited liability company.

      (2) “Articles of organization” means the document described in ORS 63.047 for the purpose of forming a limited liability company, including articles of organization as they may be amended or restated, articles of conversion and articles of merger.

      (3) “Bankruptcy” means:

      (a) Assignment by a member for the benefit of creditors;

      (b) Commencement of a voluntary bankruptcy case by a member;

      (c) Adjudication of a member as bankrupt or insolvent;

      (d) Filing by a member of a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or rule;

      (e) Filing by a member of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding of this nature;

      (f) Seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of the member’s properties;

      (g) Commencement of an involuntary bankruptcy case against a member that has not been dismissed on or before the 120th day after the commencement of the case;

      (h) Appointment, without the member’s consent, of a trustee, receiver or liquidator either of the member or of all or any substantial part of the member’s properties that is not vacated or stayed on or before the 90th day after appointment; or

      (i) Appointment described in paragraph (h) of this subsection that is not vacated on or before the 90th day after expiration of the stay under paragraph (h) of this subsection.

      (4) “Contribution” means anything of value which a person contributes to the limited liability company as a prerequisite for or in connection with membership including cash, property or services rendered or a promissory note or other binding obligation to contribute cash or property or to perform services.

      (5) “Corporation” or “domestic corporation” means a corporation for profit incorporated under ORS chapter 60.

      (6) “Distribution” means a direct or indirect transfer of money or other property, except of a limited liability company’s own interests, or incurrence of indebtedness by a limited liability company to or for the benefit of its members in respect of any of its member’s interests. A distribution may be in the form of a declaration or payment of profits, a purchase, retirement or other acquisition of interests, a distribution of indebtedness, or otherwise.

      (7) “Domestic nonprofit corporation” means a corporation not for profit incorporated under ORS chapter 65.

      (8) “Domestic professional corporation” means a corporation organized under ORS chapter 58 for the purpose of rendering professional services and for the purposes provided under ORS chapter 58.

      (9) “Entity” includes a domestic or foreign limited liability company, corporation, professional corporation, foreign corporation, domestic or foreign nonprofit corporation, domestic or foreign cooperative corporation, profit or nonprofit unincorporated association, business trust, estate, domestic or foreign general or limited partnership, trust, two or more persons having a joint or common economic interest, any state, the United States or any foreign government.

      (10) “Foreign corporation” means a corporation for profit incorporated under a law other than the law of this state.

      (11) “Foreign limited liability company” means an entity that is an unincorporated association organized under the laws of a state other than this state, under the laws of a federally recognized Indian tribe or under the laws of a foreign country and that is organized under a statute under which an association may be formed that affords to each of its members limited liability with respect to the liabilities of the entity.

      (12) “Foreign limited partnership” means a limited partnership formed under the laws of any jurisdiction other than this state and having as partners one or more general partners and one or more limited partners.

      (13) “Foreign nonprofit corporation” means a corporation not for profit organized under the laws of a state other than this state.

      (14) “Foreign professional corporation” means a professional corporation organized under the laws of a state other than this state.

      (15) “Incompetency” means the entry of a judgment by a court of competent jurisdiction adjudicating the member incompetent to manage the member’s person or estate.

      (16) “Individual” means a natural person.

      (17) “Limited liability company” or “domestic limited liability company” means an entity that is an unincorporated association having one or more members that is organized under this chapter.

      (18) “Limited partnership” or “domestic limited partnership” means a partnership formed by two or more persons under ORS chapter 70 and having one or more general partners and one or more limited partners.

      (19) “Manager” or “managers” means a person or persons, who need not be members, designated by the members of a manager-managed limited liability company to manage the limited liability company’s business and affairs.

      (20) “Manager-managed limited liability company” means a limited liability company that is designated as a manager-managed limited liability company in its articles of organization or whose articles of organization otherwise expressly provide that the limited liability company will be managed by a manager or managers.

      (21) “Member” or “members” means a person or persons with both an ownership interest in a limited liability company and all the rights and obligations of a member specified under this chapter. “Member” does not include an assignee of an ownership interest who has not also acquired the voting and other rights appurtenant to membership.

      (22) “Member-managed limited liability company” means a limited liability company other than a manager-managed limited liability company.

      (23) “Membership interest” or “interest” means a member’s collective rights in a limited liability company, including the member’s share of profits and losses of the limited liability company, the right to receive distributions of the limited liability company’s assets and any right to vote or participate in management.

      (24) “Office,” when used to refer to the administrative unit directed by the Secretary of State, means the office of the Secretary of State.

      (25) “Operating agreement” means any valid agreement, written or oral, of the member or members as to the affairs of a limited liability company and the conduct of its business.

      (26) “Organizer” means one of the signers of the initial articles of organization.

      (27) “Party” includes an individual who was, is or is threatened to be made a named defendant or respondent in a proceeding.

      (28) “Person” means an individual or entity.

      (29) “Proceeding” means any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigatory and whether formal or informal.

      (30) “State,” when referring to a part of the United States, includes a state, commonwealth, territory or insular possession of the United States and its agencies and governmental subdivisions.

      (31) “United States” includes a district, authority, bureau, commission, department or any other agency of the United States. [1993 c.173 §2; 1995 c.93 §1; 1997 c.646 §1; 1999 c.86 §1; 1999 c.362 §28; 2001 c.315 §34; 2005 c.107 §3]

 

      63.002 Inclusion of limited liability companies and managers and members of limited liability companies in definitions. Unless the context otherwise requires, throughout Oregon Revised Statutes:

      (1) Wherever the term “person” is defined to include both a corporation and a partnership, the term “person” shall also include a limited liability company.

      (2) Wherever a section of Oregon Revised Statutes applies to both “partners” and “directors,” the section shall also apply:

      (a) In a limited liability company with one or more managers, to the managers of the limited liability company.

      (b) In a limited liability company without managers, to the members of the limited liability company.

      (3) Wherever a section of Oregon Revised Statutes applies to both “partners” and “shareholders,” the section shall also apply to members of a limited liability company. [1995 c.93 §25]

 

(Filing Documents)

 

      63.004 Filing requirements. (1) A document must satisfy the requirements of this section, as modified by any other provision of this chapter, to be entitled to filing by the Secretary of State.

      (2) This chapter must require or permit filing the document with the office.

      (3) The document shall contain the information required by this chapter. It may contain other information as well.

      (4) The document must be legible.

      (5) The document must be in the English language. The certificate of existence required of foreign limited liability companies under ORS 63.707 need not be in English if accompanied by a reasonably authenticated English translation.

      (6) Unless otherwise specified in this chapter, each document or report required by this chapter to be filed with the office shall be executed in the following manner:

      (a) Articles of organization shall be signed by or on behalf of one or more persons wishing to form the limited liability company.

      (b) Articles of amendment shall be signed by at least one member or manager.

      (c) Each annual report shall be signed by one member or manager.

      (d) If the limited liability company is in the hands of a receiver, trustee or other court-appointed fiduciary, a document or report shall be signed by that receiver, trustee or fiduciary.

      (7) The person executing the document shall state beneath or opposite the signature the name of the person and the capacity in which the person signs. The document may, but is not required to, contain an acknowledgment, verification or proof.

      (8) If the Secretary of State has prescribed a mandatory form for the document under ORS 63.016, the document must be in or on the prescribed form.

      (9) The document must be delivered to the office accompanied by the required fees.

      (10) Delivery of a document to the office is accomplished only when the document is actually received by the office. [1993 c.173 §3]

 

      63.007 Filing, service, copying and certification fees. The Secretary of State shall collect the fees described in ORS 56.140 for each document delivered for filing under this chapter and for process served on the secretary under this chapter. The secretary may collect the fees described in ORS 56.140 for copying any public record under this chapter, certifying the copy or certifying to other facts of record under this chapter. [1993 c.173 §4; 1995 c.93 §2; 1999 c.362 §§29,29a]

 

      63.010 [Repealed by 1959 c.580 §104]

 

      63.011 Effective time and date of document. (1) Except as provided in subsection (2) of this section and ORS 63.014 (3), a document accepted for filing is effective on the date it is filed by the Secretary of State and at the time, if any, specified in the document as its effective time or at 12:01 a.m. on that date if no effective time is specified.

      (2) If a document specifies a delayed effective time and date, the document becomes effective at the time and date specified. If a document specifies a delayed effective date but no time, the document becomes effective at 12:01 a.m. on that date. A delayed effective date for a document may not be later than the 90th day after the date it is filed. [1993 c.173 §5]

 

      63.014 Correcting filed document. (1) A domestic or foreign limited liability company may correct a document filed by the Secretary of State, other than an annual report, if the document contains an incorrect statement or was defectively executed, attested, sealed, verified or acknowledged.

      (2) A domestic or foreign limited liability company shall correct a document by delivering articles of correction to the office. The articles shall include the following:

      (a) A description of the document, including its filing date, or a copy of the document.

      (b) The incorrect statement and the reason it is incorrect, or a description of the manner in which the execution, attestation, seal, verification or acknowledgment is defective.

      (c) A correction of the incorrect statement or defective execution, attestation, seal, verification or acknowledgment.

      (3) Articles of correction are effective on the effective date of the document they correct except as to persons relying on the uncorrected document and adversely affected by the correction. As to those persons, articles of correction are effective when filed. [1993 c.173 §6]

 

      63.016 Forms; rules. Upon request, the Secretary of State may furnish forms for documents required or permitted to be filed by this chapter. The Secretary of State may by rule require the use of the forms. [1993 c.173 §7; 1995 c.215 §10]

 

      63.017 Filing duty of Secretary of State. (1) If a document delivered to the Office of the Secretary of State for filing satisfies the requirements of ORS 63.004, the Secretary of State shall file it.

      (2) The Secretary of State files a document by indicating thereon that it has been filed by the Secretary of State and the date of filing. After filing a document, the Secretary of State shall return an acknowledgment of filing to the domestic or foreign limited liability company or its representative.

      (3) If the Secretary of State refuses to file a document, the Secretary of State shall return it to the domestic or foreign limited liability company or its representative within 10 business days after the document was delivered together with a brief written explanation of the reason for the refusal.

      (4) The Secretary of State’s duty to file documents under this section is ministerial. The Secretary of State is not required to verify or inquire into the legality or truth of any matter included in any document delivered to the office for filing. The Secretary of State’s filing or refusing to file a document does not:

      (a) Affect the validity or invalidity of the document in whole or part; or

      (b) Relate to the correctness or incorrectness of information contained in the document.

      (5) The Secretary of State’s refusal to file a document does not create a presumption that the document is invalid or that information contained in the document is incorrect. [1993 c.173 §8; 1999 c.486 §9]

 

      63.020 [Repealed by 1959 c.580 §104]

 

      63.021 Appeal from Secretary of State’s refusal to file document. If the Secretary of State refuses to file a document delivered to the office for filing, the domestic or foreign limited liability company, in addition to any other legal remedy which may be available, shall have the right to appeal from such order pursuant to the provisions of ORS chapter 183. [1993 c.173 §9]

 

      63.024 Evidentiary effect of copy of filed document. (1) A certificate attached to a copy of a document filed by the Secretary of State, bearing the Secretary of State’s signature, which may be in facsimile, is conclusive evidence that the document or a facsimile thereof is on file with the office.

      (2) The provisions of ORS 56.110 shall apply to all documents filed pursuant to this chapter. [1993 c.173 §10]

 

      63.027 Certificate of existence or authorization. (1) Anyone may apply to the Secretary of State to furnish a certificate of existence for a domestic limited liability company or a certificate of authorization for a foreign limited liability company.

      (2) A certificate of existence or authorization when issued means that:

      (a) The domestic limited liability company’s name or the foreign limited liability company’s name is registered in this state;

      (b) The domestic limited liability company is duly organized under the laws of this state or the foreign limited liability company is authorized to transact business in this state;

      (c) All fees payable to the Secretary of State under this chapter have been paid, if nonpayment affects the existence or authorization of the domestic or foreign limited liability company;

      (d) An annual report required by ORS 63.787 has been filed by the Secretary of State within the preceding 14 months; and

      (e) Articles of dissolution or an application for withdrawal have not been filed by the Secretary of State.

      (3) Subject to any qualification stated in the certificate, a certificate of existence or authorization issued by the Secretary of State may be relied upon as conclusive evidence that the domestic or foreign limited liability company is in existence or is authorized to transact business in this state. [1993 c.173 §11]

 

      63.030 [Repealed by 1959 c.580 §104]

 

(Secretary of State)

 

      63.031 Powers. The Secretary of State has the power reasonably necessary to perform the duties required of the Secretary of State by this chapter. [1993 c.173 §12]

 

(Notice)

 

      63.034 Knowledge and notice. (1) A person knows a fact if the person has actual knowledge of it.

      (2) A person has notice of a fact if the person:

      (a) Knows of it;

      (b) Has received a notification of it; or

      (c) Has reason to know it exists from all the facts known to the person at the time in question.

      (3) A person notifies or gives notification to another by taking steps reasonably required to inform the other person in the ordinary course, whether or not the other person learns of it.

      (4) A person receives a notification when the notification:

      (a) Comes to the person’s attention; or

      (b) Is addressed to the person and is duly delivered at the person’s place of business or at any other place held out by the person as a place for receiving communications.

      (5) A person other than an individual knows, has notice or receives a notification of a fact for purposes of a particular transaction when the individual conducting the transaction knows, has notice or receives a notification of the fact, or in any event when the fact would have been brought to the individual’s attention if the person had exercised reasonable diligence.

      (6) Written notice to a domestic limited liability company or to a foreign limited liability company authorized to transact business in this state may be addressed to its registered agent at its registered office or to the domestic or foreign limited liability company or its manager or managers at its principal office or mailing address as shown in the records of the office. [1993 c.173 §13; 1995 c.79 §17; 1999 c.86 §2]

 

      63.040 [Repealed by 1959 c.580 §104]

 

ORGANIZATION

 

      63.044 Formation. One or more individuals 18 years of age or older or other entities may form a limited liability company by executing and delivering articles of organization to the office for filing. Organizers need not be members of the limited liability company. [1993 c.173 §14]