Esta ley enmienda la Ley General de Corporaciones de Puerto Rico para añadir capítulos que regulan la creación, operación, disolución y otros aspectos relacionados con las Compañías de Responsabilidad Limitada (LLC), tanto domésticas como extranjeras. Establece definiciones, requisitos de formación, gestión, contribuciones, distribuciones, cesión de intereses, disolución, acciones derivadas y las tarifas y responsabilidades contributivas aplicables a las LLC.
(Senate Substitute for H. B. 4257) (No. 487) (Approved September 23, 2004)
To amend Act No. 144 of August 10, 1995, as amended, known as the "General Corporations Act", for the purpose of adding new Chapters XIX, XX and XXI which shall provide for the creation and norms applicable to "limited liability companies"; and other related aspects.
We are part of a global economic system in which rigorous competition compels us to modernize our business laws and adopt those laws that grant the citizens of the Commonwealth of Puerto Rico as well as to foreign investors, the greatest flexibility to raise capital and to be able to remain competitive worldwide. The formation of local capital and the attraction to foreign investors are functions proper of entrepreneurial organization, such as corporations and partnerships. However, the dynamics of an entrepreneurial entity change through time. The evolution of corporations and partnerships, including limited liability partnerships, are the product of economic and social development and of the need to maximize resources. The most recent of these entities is the limited liability company. By adopting this Act, which authorizes the creation of limited liability companies, the creation of new companies is facilitated and the Commonwealth shall become a more attractive place to establish businesses, which shall help to promote our economic development.
Limited liability companies enjoy world support due to its organizational advantages. A limited liability company is an entity adopted by many enterprises worldwide and recognized in several countries. The fifty states of the Union, as well as the Virgin Islands, have passed legislation adopting limited liability companies in order to boost their respective economies. By authorizing the creation of this type of entity in the Commonwealth of Puerto Rico, an attraction, in addition to those existing, is provided for those persons or enterprises that have an interest in doing business in Puerto Rico. It is yet another alternative to do business in our Island. The flexibility of the entity reduces administrative expenses and makes the enterprise that uses this alternative more competitive.
For all the stated above, this Legislature deems that this legislation shall make it possible for the Commonwealth to be at a better competitive level with respect to the states of the Union, as well as with the different world economies. This measure shall also place the Commonwealth at the forefront of business laws, promote foreign investment in Puerto Rico, grant Puerto Rican enterprises greater flexibility in their organization, and thus propitiate the industrial and economic development of the Commonwealth of Puerto Rico.
Section 1.- A new Chapter XIX is hereby added to Act No. 144 of August 10, 1995, as amended, to read as follows: "CHAPTER XIX. LIMITED LIABILITY COMPANIES Section 19.01.- Definitions. For the purposes of this Chapter, the following terms and phrases shall have the meaning stated hereinafter, unless another meaning arises from the context:
(a) "Manager " - Means a person who is appointed manager of a limited liability company or designated as manager of a limited liability company under a limited liability company agreement or other similar document under which the limited liability company is formed.
(b) "Contribution" - Means any cash, property, services rendered, note or other obligation to contribute cash or property or to render a service that a person contributes to a limited liability company in his/her capacity as member.
(c) "Certificate of Formation" - means the certificate through which a limited liability company is formed, as provided in Section 19. 12 of this Act, as the same may be amended.
(d) "Limited Liability Company" or "LLC" and "domestic limited liability company" or "DLLC" - Means a limited liability company created by one (1) or more persons under the laws of Puerto Rico.
(e) "Foreign Limited Liability Company" or "FLLC" - Means a limited liability company created under the laws of any state of the United States or of any other foreign country or jurisdiction and denominated as such under the laws of said state, country or foreign jurisdiction.
(f) "Limited Liability Company Agreement" or "LLCA" - Means that agreement, document (whether called limited liability company agreement, operating agreement or otherwise) adopted by the members of a limited liability company to govern the internal affairs and administration of a limited liability company. A limited liability company agreement shall be valid even when
the limited liability company has only one member. A written limited liability company agreement, written agreement or any other written document: i. May provide that a person be admitted as member of a limited liability company, or become an assignee of an interest or other rights or powers of a member of a limited liability company as provided in said agreement, and shall be obliged by the limited liability company agreement if
(i) said person (or representative authorized orally, in writing or otherwise, such as through the payment for an interest in the limited liability company) signs the limited liability company agreement or any other written evidence of the intent of the person to become a member or assignee; or (ii) without the need of signing a document, if that person (or representative authorized orally, in writing or otherwise, such as through the payment for an interest in the limited liability company) complies with the conditions to become a member or assignee as provided in the limited liability company agreement or in any other written document; and ii. Shall be valid even if it has not been signed by the person who is being admitted as member or becoming an assignee as provided in the preceding subsection 1, or because it has been signed by a representative, as provided in this Act.
(g) "Department of State" - Means the Department of State of the Commonwealth of Puerto Rico.
(h) "State" - Means the District of Columbia or any state, territory or possession or other jurisdiction of the United States of North America, other than the Commonwealth of Puerto Rico.
(i) "Interest in a limited liability company" - Means the participation of a member in the profits or losses in a limited liability company and the rights of a member to receive distribution of the assets of a limited liability company.
(j) "Member" - Means a person who has been admitted as member to a limited liability company as provided in Section 19.18 of this Act, or in the case of foreign limited liability companies, in accordance with the laws of the state, foreign country or jurisdiction under which the foreign limited liability company was organized.
(k) "Person" - Means an natural person, partnership (whether general or of limited liability) trust, estate, association, corporation or any other individual or entity in its own or any representative capacity, as the case may be, whether domestic or foreign, and a limited liability company or a foreign limited liability company.
(l) "Puerto Rico" - Means the Commonwealth of Puerto Rico.
(m) "Secretary of State" - means the Secretary of State of the Commonwealth of Puerto Rico as provided in Section VI of Article IV of the Constitution of the Commonwealth of Puerto Rico.
(n) "Court of First Instance" or "Court" - Means any Part of the Court of First Instance that has competence over the matter pursuant to
the provisions of the Judiciary Act of 1994, as amended, as well as to Section 5.001 of Act No. 201 of August 22, 2003, Judiciary Act of the Commonwealth of Puerto Rico of 2003, which became effective November 20, 2003.
Section 19.02.- Name as set forth in the certificate. The name of every limited liability company as it arises from its certificate of formation: (1) Shall contain the terms "Limited Liability Company" or "Compañía de Responsabilidad Limitada" or the abbreviation "L.L.C." or "C.R.L.", or the designation "LLC" or "CRL"; (2) May contain the name of the member or manager; (3) Must be such as to distinguish it in the records of the Department of State from the name in said records of any corporation or limited liability company reserved, registered, formed or organized under the laws of Puerto Rico or authorized to do business or registered as foreign corporation or a foreign limited liability company in Puerto Rico; provided, however, that a company may be registered under any name which is not such as to distinguish it in the records of the Department of State from the name in said records of any corporation, domestic or foreign limited liability company reserved, formed or organized under the laws of Puerto Rico with the written consent of the other corporation or limited liability company, and that said consent is registered before the Secretary of State; and (4) May contain the following terms: "Company", "Association", "Club", "Foundation," "Fund," "Institute," "Partnership,"
"Union," "Syndicate," "Limited," or "Trust" (or analogous abbreviations). (5) It is hereby provided that the acronyms required in the preceding subsection (1) shall be compulsory in all certificates of incorporation, however, the terms provided in subsection (4) shall be considered optional at the time of their inclusion in said certificate. (6) It shall be understood that the name of the LLC shall be distinguished in the registries of the Department of State from the names of any other juridical entity organized, reserved or registered in the Department of State of Puerto Rico.
Section 19.03 - Reservation of name. The name of a limited liability company may be reserved pursuant to the provisions of Section 1.02 of this Act.
Section 19.04. - Registered Office and Resident Agent. Every limited liability company shall have and maintain a registered office and a resident agent in Puerto Rico pursuant to the provisions of Chapter III of this Act.
Section 19.05. - Service of process The service of process to a limited liability company shall be carried out pursuant to the provisions of Chapter XII of this Act.
Section 19.06.- Nature of businesses allowed; powers A limited liability company may be established under this Act to carry out or promote any lawful business or purpose, except those proscribed by the Constitution and the laws of the Commonwealth. Likewise, a limited liability company and its members may exercise the powers listed in Chapter II of this Act. A limited liability company and its members shall also have
and may exercise all the powers and privileges granted by this Act or by the limited liability company agreement, in addition to those other powers incidental to them, provided that said powers and privileges are necessary and convenient to carry out or promote the businesses or purposes set forth in the certificate of incorporation.
Section 19.07. - Loans to a member or manager from a limited liability company.
A limited liability company may grant loans to any member, guarantee his/her obligations or otherwise assist him/her, when the board of directors deems that it can be reasonably expected that said loan, guarantee or help shall benefit the corporation. The loan, guarantee or assistance may not accrue interest, lack collateral or be guaranteed in the manner approved by the board of directors, including, without limitations, the pledging of the stock of the company.
Section 19.08. -Indemnification. Subject to the provisions of Section 4.08 of this Act and to the norms and restrictions, if any, established in the limited liability company agreement, a limited liability company may, and shall have the authority to indemnify and hold harmless a member or manager or other person from and against all and any type of claim and suit.
Section 19.09. -Service of process to managers and trustees. A manager and trustee shall be served with process pursuant to the provisions of Chapter XII of this Act.
Section 19.10. - Contested matters regarding managers; contested votes.
(a) Through a petition from a member or manager, the Court of First Instance may hear and determine the validity of an admission,
election, appointment, removal or resignation of an manager of a limited liability company, and the right of a person to become or continue to be an manager of a limited liability company, and in the case that more than one person claims the right to serve as manager, it may determine the person or persons entitled to serve as managers; and to such effects, it may issue an order or decree in any such case, as may be just and appropriate, with the power to enforce the production of those books, papers and records of the limited liability company germane to the issue for its consideration. In any petition to such effect, the limited liability company shall be included as a party, and the summons served to the resident agent of the limited liability company with a copy of the petition shall be considered as a summons to the limited liability company and to the person or persons whose right to serve as manager is contested and to the person or persons, if any, who claim to be a manager or who claim the right to be manager; and the resident agent shall immediately forward a copy of the petition to the limited liability company and to the person or persons whose right to serve as manager is contested and to the person or persons, if any, who claim to be manager or who claim the right to be an manager in a sealed envelope, registered and with prepaid postage to the last mailing addresses known to the resident agent or furnished to the resident agent by the petitioning member or manager. The Court may issue those additional orders or other notices of said petition that it deems proper under those circumstances.
(b) Through a petition from a member or manager, the Court of First Instance may hear and determine the result of any voting by the members or managers on matters in which the members or managers of a limited liability company, or any class or group of members or managers, are entitled to vote pursuant to the limited liability company agreement or other agreement or this Act (other than the admission, election, appointment, removal or resignation of managers). In any petition to such effects, the limited liability company shall be included as a party, and the summons served to the resident agent of the limited liability company with a copy of the petition shall be considered as a summons served to the limited liability company, and it shall not be necessary to summon other parties in order for the Court to adjudicate the result of the voting. The Court may issue those additional orders or other notices regarding said petition as it deems proper under those circumstances.
(c) Nothing of the herein provided limits nor affects the right to serve process in any other form as provided by law, at present or in the future. This Section is an extension and not a limitation of the right otherwise existing of service of legal process to nonresidents.
Section 19.11. - Interpretation and enforcement of the limited liability company agreement.
Any action to construe, apply or enforce the provisions of a limited liability company agreement, or the duties, obligations or liabilities of a limited liability company on members or managers of the limited liability company, or the managers, duties, obligations or liabilities among the
members or managers and of the members or managers of a limited liability company or the rights or powers of, or restrictions on the limited liability company, the members or managers may be filed before the Court of First Instance.
Section 19.12.- Certificate of formation.
In order to form a limited liability company, one or more authorized persons shall execute a certificate of formation.
The execution, certification filing and registration of the certificate of formation, as well as the amendment, cancellation, reaffirmation and revival of the juridical personality of a limited liability company shall be conducted in accordance with the terms and requirements established in this Act for corporations.
Section 19.13.- Merger or consolidation.
The merger or consolidation of limited liability companies with another domestic or foreign business entity shall be conducted pursuant to the procedure provided for corporations in Chapter X of this Act.
Section 19.14.- Domestication of non-United States entities.
(a) As used in this Section, "non-United States entity" means a foreign limited liability company (other than one formed under the laws of a state) or a corporation, a business trust or association, a real estate investment trust, a common-law trust or any other unincorporated business, including a partnership (be it general, including a limited liability partnership) or
limited (including a limited liability limited partnership)) formed, incorporated, created or that otherwise came into being under the laws of any foreign country or other foreign jurisdiction (other than any state).
(b) Any non-United States entity may become domesticated as a limited liability company in Puerto Rico by complying with subsection
(g) of this Section and filing in the office of the Secretary of State in accordance with the provisions of Chapter XIII of this Act for foreign corporations: (1) A certificate of limited liability company domestication that has been executed by one or more authorized persons in accordance with Chapter 1 of this Act for certificates of incorporation; and (2) A certificate of formation that complies with Section 19.12 of this Act and has been executed by one or more authorized persons in accordance Chapter 1 of this Act for incorporators.
(c) The certificate of limited liability company domestication shall state: (1) The date on which and jurisdiction where the non-United States entity was first formed, incorporated, created or otherwise came into being;
(2) The name of the non-United States entity immediately prior to the filing of the certificate of limited liability company domestication; (3) The name of the limited liability company as set forth in the certificate of formation filed in accordance with subsection
(b) of this Section; (4) The future effective date or time (which shall be a date or time certain) of the domestication as a limited liability company if it is not to be effective upon the filing of the certificate of limited liability company domestication and the certificate of formation; and (5) The jurisdiction that constituted the seat, principal place of business or central administration of the non-United States entity, or any other equivalent thereto under applicable law, immediately prior to the filing of the certificate of limited liability company domestication.
(d) Upon the filing in the office of the Secretary of State of the certificate of limited liability company domestication and the certificate of formation or upon the future effective date or time of the certificate of limited liability company domestication and the certificate of formation, the non-United States entity shall be domesticated as a limited liability company in Puerto Rico and the limited liability company shall thereafter be subject to all of the provisions of this chapter, except that notwithstanding the provisions
of Section 19.12 of this Act, the existence of the limited liability company shall be deemed to have commenced on the date the nonUnited States entity commenced its existence in the jurisdiction in which the non-United States entity was first formed, incorporated, created or otherwise came into being.
(e) The domestication of any non-United States entity as a limited liability company in Puerto Rico shall not be deemed to affect any obligations or liabilities of the non-United States entity incurred prior to its domestication as a limited liability company in Puerto Rico, or the personal liability of any person therefor.
(f) The filing of a certificate of limited liability company domestication shall not affect the choice of law applicable to the nonUnited States entity, except that from the effective date or time of the domestication, the law of Puerto Rico, including the provisions of this chapter, shall apply to the non-United States entity to the same extent as if the non-United States entity had been formed as a limited liability company on that date.
(g) Prior to filing a certificate of limited liability company domestication with the Office of the Secretary of State, the domestication shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the non-United States entity and the conduct of its business or by applicable non Puerto Rico law, as appropriate, and a limited liability company agreement shall be
approved by the same authorization required to approve the domestication.
(h) When any domestication shall have become effective under this section, for all purposes of the laws of Puerto Rico, all of the rights, privileges and powers of the non-United States entity that has been domesticated, and all property, real, personal and mixed, and all debts due to such non-United States entity, as well as all other things and causes of action belonging to such non-United States entity, shall remain vested in the domestic limited liability company to which such non-United States entity has been domesticated and shall be the property of such domestic limited liability company, and the title to any real property vested by deed or otherwise in such non-United States entity shall not revert or be in any way impaired by reason of this Act; but all rights of creditors and all liens upon any property of such non-United States entity shall be preserved unimpaired, and all debts, liabilities and duties of the non-United States entity that has been domesticated shall remain attached to the domestic limited liability company to which such non-United States entity has been domesticated, and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as a domestic limited liability company. The rights, privileges, powers and interests in property of the non-United States entity, as well as the debts, liabilities and duties of the non-United States entity, shall not be deemed, as a consequence of the domestication, to have been transferred to the domestic limited
liability company to which such non-United States entity has domesticated for any purpose of the laws of Puerto Rico.
(i) When a non-United States entity has become domesticated as a limited liability company pursuant to this Section, the limited liability company shall, for all purposes of the laws of Puerto Rico, be deemed to be the same entity as the domesticating non-United States entity. Unless otherwise agreed, for all purposes of the laws of Puerto Rico, the domesticating non-United States entity shall not be required to liquidate its affairs or pay its liabilities and distribute its assets, the domestication shall not be deemed to constitute a dissolution of such non-United States entity, and the domestication shall constitute a continuation of the existence of the domesticating non-United States entity in the form of a domestic limited liability company. If, following domestication, a non-United States entity that has become domesticated as a limited liability company continues its existence in the foreign country or other foreign jurisdiction in which it was existing immediately prior to domestication, the limited liability company and such non-United States entity shall, for all purposes of the laws of Puerto Rico, constitute a single entity formed, incorporated, created or otherwise having come into being, as applicable, and existing under the laws of Puerto Rico and the laws of such foreign country or other foreign jurisdiction.
(j) In connection with a domestication hereunder, rights or securities of, or interests in, the non-United States entity that is to be domesticated as a domestic limited liability company may be exchanged for or converted into cash, property, rights or securities of,
or interests in, such domestic limited liability company or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of, or interests in, another domestic limited liability company or other entity .
Section 19.15.- Transfer or continuance of domestic limited liability companies.
(a) Upon compliance with this Section, any limited liability company may transfer to or domesticate in any jurisdiction, other than any state, that allows the transfer or domestication in said jurisdiction of a limited liability company and, in connection therewith, may elect to continue its existence as a limited liability company in Puerto Rico.
(b) Unless otherwise provided in the limited liability company agreement, the transfer or domestication or continuance described in subsection
(a) of this Section shall be approved in writing by all managers and all members. If all managers and members of the limited liability company, or such other vote that could appear in the limited liability company agreement approve the transfer or domestication described in subsection
(a) of this Section, a certificate of transfer shall be filed in the office of the Secretary of State if the existence of the limited liability company as a limited liability company of Puerto Rico is to cease, or a certificate of transfer and continuance if the limited liability company's existence as a limited liability company in Puerto Rico is to continue, executed in accordance with the provisions of Chapter 1 of this Act. The certificate of transfer or the certificate of transfer and continuance shall state:
(1) The name of the limited liability company and, if it has been changed, the name under which its certificate of formation was originally filed; (2) The date of the filing of its original certificate of formation with the Secretary of State; (3) The jurisdiction to which the limited liability company shall be transferred or in which it shall be domesticated; (4) The future effective date or time (which shall be a date or time certain) of the transfer or domestication to the jurisdiction specified in subsection
(b) (3) of this section if it is not to be effective upon the filing of the certificate of transfer or the certificate of transfer and continuance; (5) That the transfer or domestication or continuance of the limited liability company has been approved in accordance with this section; (6) In the case of a certificate of transfer,
(i) that the existence of the limited liability company as a limited liability company of Puerto Rico shall cease when the certificate of transfer becomes effective, and (ii) the agreement of the limited liability company that it may be served with process in Puerto Rico in any action, suit or proceeding for enforcement of any obligation of the limited liability company arising while it was a limited liability company of Puerto Rico, and that it irrevocably
appoints the Secretary of State as its agent to accept service of process in any such action, suit or proceeding; (7) The address to which a copy of the process referred to in clause (6) of subsection
(b) of this Section shall be mailed to it by the Secretary of State. In the event of service hereunder upon the Secretary of State, the procedures set forth in subsection
(c) of Section 20.08 of this Act shall be applicable, except that the plaintiff in any such action, suit or proceeding shall furnish the Secretary of State with the address specified in this subsection and any other address that the plaintiff may elect to furnish, together with copies of such process as required by the Secretary of State, and the Secretary of State shall notify the limited liability company that has transferred or domesticated out of Puerto Rico at all such addresses furnished by the plaintiff in accordance with the procedures set forth in Section 20.08 of this Act; and (8) In the case of a certificate of transfer and continuance, that the limited liability company will continue to exist as a limited liability company of Puerto Rico after the certificate of transfer and continuance becomes effective.
(c) Upon the filing in the office of the Secretary of State of the certificate of transfer or upon the future effective date or time of the certificate of transfer and payment to the Secretary of State of all fees prescribed in this chapter, the Secretary of State shall certify that the
limited liability company has filed all documents and paid all fees required by this chapter, and thereupon the limited liability company shall cease to exist as a limited liability company of Puerto Rico. Such certificate of the Secretary of State shall be prima facie evidence of the transfer or domestication by such limited liability company out of Puerto Rico.
(d) The transfer or domestication of a limited liability company out of Puerto Rico in accordance with this section and the resulting cessation of its existence as a limited liability company of Puerto Rico pursuant to a certificate of transfer shall not be deemed to affect any obligations or liabilities of the limited liability company incurred prior to such transfer or domestication or the personal liability of any person incurred prior to such transfer or domestication, nor shall it be deemed to affect the choice of law applicable to the limited liability company with respect to matters arising prior to such transfer or domestication. Unless otherwise agreed, the transfer or domestication of a limited liability company out of Puerto Rico in accordance with this section shall not require such limited liability company to liquidate its affairs or pay its liabilities and distribute its assets pursuant to the provisions of this Act.
(e) If a limited liability company files a certificate of transfer and continuance, after the time the certificate of transfer and continuance becomes effective, the limited liability company shall continue to exist as a limited liability company of Puerto Rico, and the laws of Puerto Rico, including this chapter, shall apply to the limited liability company to the same extent as prior to such time. As
long as a limited liability company continues to exist as a limited liability company of Puerto Rico following the filing of a certificate of transfer and continuance, the continuing domestic limited liability company and the entity formed, incorporated, created or that otherwise came into being as a consequence of the transfer of the limited liability company to, or its domestication in, a foreign country or other foreign jurisdiction shall, for all purposes of the laws of Puerto Rico, constitute a single entity formed, incorporated, created or otherwise having come into being, as applicable, and existing under the laws of the State and the laws of such foreign country or other foreign jurisdiction.
(f) In connection with a transfer or domestication of a domestic limited liability company to or in another jurisdiction pursuant to subsection
(a) of this section, rights or securities of, or interests in, such limited liability company may be exchanged for or converted into cash, property, rights or securities of, or interests in, the business form in which the limited liability company will exist in such other jurisdiction as a consequence of the transfer or domestication or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, rights or securities of, or interests in, another business form.
Section 19.16.- Conversion of certain entities to a limited liability company.
(a) As used in this section, the term "other entity" means a corporation, statutory trust, business trust or association, a real estate
investment trust, a common-law trust or any other unincorporated business, including a partnership (whether general including a limited liability partnership) or limited (including a limited liability limited partnership) or a foreign limited liability company.
(b) Any other entity may convert to a domestic limited liability company by complying with subsection
(h) of this Section and filing in the office of the Secretary of State: (1) A certificate of conversion to limited liability company that has been executed by 1 or more authorized persons; and (2) A certificate of formation that complies with the applicable provisions of this Act.
(c) The certificate of conversion to limited liability company shall state: (1) The date on which and jurisdiction where the other entity was first created, incorporated, formed or otherwise came into being and, if it has changed, its jurisdiction immediately prior to its conversion to a domestic limited liability company; (2) The name of the other entity immediately prior to the filing of the certificate of conversion to limited liability company; (3) The name of the limited liability company as set forth in its certificate of formation filed in accordance with subsection
(b) of this Section; and
(4) The future effective date or time (which shall be a certain date or time) of the conversion to a limited liability company if it is not to be effective upon the filing of the certificate of conversion to limited liability company and the certificate of formation.
(d) Upon the filing in the office of the Secretary of State of the certificate of conversion to limited liability company and the certificate of formation or upon the future effective date or time of the certificate of conversion to limited liability company and the certificate of formation, the other entity shall be converted into a domestic limited liability company and the limited liability company shall thereafter be subject to all of the provisions of this Act, except that notwithstanding the provisions of Section 19.12 of this Act, the existence of the limited liability company shall be deemed to have commenced on the date the other entity commenced its existence in the jurisdiction in which the other entity was first created, formed, incorporated or otherwise came into being.
(e) The conversion of any other entity into a domestic limited liability company shall not be deemed to affect any obligations or liabilities of the other entity incurred prior to its conversion to a domestic limited liability company or the personal liability of any person incurred prior to such conversion.
(f) When any conversion shall have become effective under this section, for all purposes of the laws of Puerto Rico, all of the rights, privileges and powers of the other entity that has converted,
and all property, real, personal and mixed, and all debts due to such other entity, as well as all other things and causes of action belonging to such other entity, shall remain vested in the domestic limited liability company to which such other entity has converted and shall be the property of such domestic limited liability company, and the title to any real property vested by deed or otherwise in such other entity shall not revert or be in any way impaired by reason of this chapter; but all rights of creditors and all liens upon any property of such other entity shall be preserved unimpaired, and all debts, liabilities and duties of the other entity that has converted shall remain attached to the domestic limited liability company to which such other entity has converted, and may be enforced against it to the same extent as if said debts, liabilities and duties had originally been incurred or contracted by it in its capacity as a domestic limited liability company. The rights, privileges, powers and interests in property of the other entity, as well as the debts, liabilities and duties of the other entity, shall not be deemed, as a consequence of the conversion, to have been transferred to the domestic limited liability company to which such other entity has converted for any purpose of the laws of Puerto Rico.
(g) Unless otherwise agreed, for all purposes of the laws of Puerto Rico, the converting other entity shall not be required to wind up its affairs or pay its liabilities and distribute its assets, the conversion shall not be deemed to constitute a dissolution of such other entity, and the conversion shall constitute a continuation of the existence of the converting other entity in the form of a domestic
limited liability company. When an other entity has been converted to a limited liability company pursuant to this section, the limited liability company shall, for all purposes of the laws of Puerto Rico, be deemed to be the same entity as the converting other entity.
(h) Prior to filing a certificate of conversion to limited liability company with the office of the Secretary of State, the conversion shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the other entity and the conduct of its business or by applicable law, as appropriate and a limited liability company agreement shall be approved by the same authorization required to approve the conversion.
(i) In connection with a conversion hereunder, rights or securities of or interests in the other entity which is to be converted to a domestic limited liability company may be exchanged for or converted into cash, property, or rights or securities of or interests in such domestic limited liability company or, in addition to or in lieu thereof, may be exchanged for or converted into cash, property, or rights or securities of or interests in another domestic limited liability company or other entity or may be cancelled.
(j) The provisions of this section shall not be construed to limit the accomplishment of a change in the law governing, or the domicile of another entity to Puerto Rico by any other means provided for in a limited liability company agreement or other agreement or as
otherwise permitted by law, including by the amendment of a limited liability company agreement or other agreement.
Section 19.17.- Series of members, managers or limited liability company interests.
(a) A limited liability company agreement may establish or provide for the establishment of a series of members, managers or limited liability company interests having separate rights, powers or duties with respect to specified property or obligations of the limited liability company or profits and losses associated with specified property or obligations, and any such series may have a separate business purpose or investment objective.
(b) Notwithstanding anything to the contrary set forth in this chapter or under other applicable law, in the event that a limited liability company agreement establishes or provides for the establishment of one or more series, and if separate and distinct records are maintained for any such series and the assets associated with any such series are held in such separate and distinct records (directly or indirectly, including through a nominee or otherwise) and accounted for in such separate and distinct records separately from the other assets of the limited liability company, or any other series thereof, and if the limited liability company agreement so provides, and if notice of the limitation on liabilities of a series as referenced in this subsection is set forth in the certificate of formation of the limited liability company, then the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect
to a particular series shall be enforceable against the assets of such series only, and not against the assets of the limited liability company generally or any other series thereof, and, unless otherwise provided in the limited liability company agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the limited liability company generally or any other series thereof shall be enforceable against the assets of such series. Notice in a certificate of formation of the limitation on liabilities of a series as referenced in this subsection shall be sufficient for all purposes of this subsection whether or not the limited liability company has established any series when such notice is included in the certificate of formation, and there shall be no requirement that any specific series of the limited liability company be referenced in such notice. The fact that a certificate of formation that contains the foregoing notice of the limitation on liabilities of a series is on file in the office of the Secretary of State shall constitute notice of such limitation on liabilities of a series.
(c) Notwithstanding the provisions in subsection
(a) of Section 19.19 of this Act, under a limited liability company agreement or under another agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations and liabilities of one or more series.
(d) a limited liability company agreement may provide for classes or groups of members or managers associated with a series having such relative rights, powers and duties as the limited liability company agreement may provide, and may make provision for the
future creation in the manner provided in the limited liability company agreement of additional classes or groups of members or managers associated with the series having such relative rights, powers and duties as may from time to time be established, including rights, powers and duties senior to existing classes and groups of members or managers associated with the series. A limited liability company agreement may provide for the taking of an action, including the amendment of the limited liability company agreement, without the vote or approval of any member or manager or class or group of members or managers, including an action to create under the provisions of the limited liability company agreement a class or group of the series of limited liability company interests that was not previously outstanding. A limited liability company agreement may provide that any member or class or group of members associated with a series shall have no voting rights.
(e) A limited liability company agreement may grant to all or certain identified members or managers or a specified class or group of the members or managers associated with a series the right to vote separately or with all or any class or group of the members or managers associated with the series, on any matter. Voting by members or managers associated with a series may be on a per capita, number, financial interest, class, group or any other basis.
(f) Unless otherwise provided in a limited liability company agreement, the management of a series shall be vested in the members associated with such series in proportion to the then current percentage or other interest of members in the profits of the series
owned by all of the members associated with such series, the decision of members owning more than 50 percent of the said percentage or other interest in the profits controlling; provided, however, that if a limited liability company agreement provides for the management of the series, in whole or in part, by a manager, the management of the series, to the extent so provided, shall be vested in the manager who shall be chosen in the manner provided in the limited liability company agreement. The manager of the series shall also hold the offices and have the responsibilities accorded to the manager as set forth in a limited liability company agreement. A series may have more than one manager. Subject to the provisions of Section 19.35 of this Act, a manager shall cease to be a manager with respect to a series as provided in a limited liability company agreement. Except as otherwise provided in a limited liability company agreement, any event under this chapter or in a limited liability company agreement that causes a manager to cease to be a manager with respect to a series shall not, in itself, cause such manager to cease to be a manager of the limited liability company or with respect to any other series thereof.
(g) Notwithstanding the provisions of Section 19.19 of this Act, but subject to subsections
(h) and
(k) of this section, and unless otherwise provided in a limited liability company agreement, at the time a member associated with a series that has been established in accordance with subsection
(b) of this section becomes entitled to receive a distribution with respect to such series, the member has the status of, and is entitled to all remedies available to, a creditor of the
series, with respect to the distribution. A limited liability company agreement may provide for the establishment of a record date with respect to allocations and distributions with respect to a series.
(h) Notwithstanding the provisions of subsection
(a) of Section 19.40 of this Act, a limited liability company may make a distribution with respect to a series that has been established in accordance with subsection
(b) of this section. A limited liability company shall not make a distribution with respect to a series that has been established in accordance with subsection
(b) of this section to a member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of such series, other than liabilities to members on account of their limited liability company interests with respect to such series and liabilities for which the recourse of creditors is limited to specified property of such series, exceed the fair value of the assets associated with such series, except that the fair value of property of the series that is subject to a liability for which the recourse of creditors is limited shall be included in the assets associated with such series only to the extent that the fair value of that property exceeds that liability. For purposes of the immediately preceding sentence, the term "distribution" shall not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other benefits program. A member who receives a distribution in violation of this subsection, and who knew at the time of the distribution that the distribution violated this subsection, shall be liable to a series for the amount of
the distribution. A member who receives a distribution in violation of this subsection, and who did not know at the time of the distribution that the distribution violated this subsection, shall not be liable for the amount of the distribution. Subject to the provisions of subsection
(c) of Section 19.40 of this Act, which shall apply to any distribution made with respect to a series under this subsection, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.
(i) Unless otherwise provided in the limited liability company agreement, a member shall cease to be associated with a series and to have the power to exercise any rights or powers of a member with respect to such series upon the assignment of all of the member's limited liability company interest with respect to such series. Except as otherwise provided in a limited liability company agreement, any event under this chapter or a limited liability company agreement that causes a member to cease to be associated with a series shall not, in itself, cause such member to cease to be associated with any other series or terminate the continued membership of a member in the limited liability company or cause the termination of the series, regardless of whether such member was the last remaining member associated with such series.
(j) Subject to the provisions of Section 19.46 of this Act, except to the extent otherwise provided in the limited liability company agreement, a series may be terminated and its affairs wound up without causing the dissolution of the limited liability company. The termination of a series established in accordance with subsection
(b) of this Section shall not affect the limitation on liabilities of such series provided by subsection
(b) of this Section. A series is terminated and its affairs shall be wound up upon the dissolution of the limited liability company under Section 19.46 of this Act or otherwise upon the first to occur of the following: (1) At the time specified in the limited liability company agreement; (2) Upon the happening of events specified in the limited liability company agreement; (3) Unless otherwise provided in the limited liability company agreement, upon the affirmative vote or written consent of the members of the limited liability company associated with such series or, if there is more than one class or group of members associated with such series, then by each class or group of members associated with such series, in either case, by members associated with such series who own more than two-thirds of the thencurrent percentage or other interest in the profits of the series of the limited liability company owned by all of the members associated with such series or by the members in each class or group of such series, as appropriate; or (4) The termination of such series under subsection
(l) of this section.
(k) Notwithstanding the provisions of this Act with respect to winding up, unless otherwise provided in the limited liability company agreement, a manager associated with a series who has not wrongfully terminated the series or, if none, the members associated with the series or a person approved by the members associated with the series or, if there is more than one class or group of members associated with the series, then by each class or group of members associated with the series, in either case, by members who own more than 50 percent of the then current percentage or other interest in the profits of the series owned by all of the members associated with the series or by the members in each class or group associated with the series, as appropriate, may wind up the affairs of the series; but, if the series has been established in accordance with subsection
(b) of this section, the Court of First Instance, upon cause shown, may wind up the affairs of the series upon application of any member associated with the series, the member's personal representative or assignee, and in connection therewith, may appoint a liquidating trustee. (1) On application by or for a member or manager associated with a series established in accordance with subsection
(b) of this Section, the Court of First Instance may decree termination of such series whenever it is not reasonably practicable to carry on the business of the series in conformity with a limited liability company agreement.
(m) If a foreign limited liability company that is registering to do business in Puerto Rico in accordance with the provisions of Section 20.02 governed by a limited liability company agreement that
establishes or provides for the establishment of designated series of members, managers or limited liability company interests having separate rights, powers or duties with respect to specified property or obligations of the foreign limited liability company or profits and losses associated with specified property or obligations, that fact shall be so stated on the application for registration as a foreign limited liability company. In addition, the foreign limited liability company shall state on such application whether the debts, liabilities and obligations incurred, contracted for or otherwise existing with respect to a particular series, if any, shall be enforceable against the assets of such series only, and not against the assets of the foreign limited liability company generally or any other series thereof, and, unless otherwise provided in the limited liability company agreement, none of the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the foreign limited liability company generally or any other series thereof shall be enforceable against the assets of such series.
Section 19.18.- Admission of members.
(a) In connection with the formation of a LLC, a person is admitted as a member of the LLC upon the later to occur of: (1) The formation of the LLC; or
(2) The time provided in and upon compliance with the LLCA or, if the LLCA does not so provide, when the person's admission is reflected in the records of the LLC.
(b) After the formation of a LLC, a person is admitted as a member of the LLC: (1) In the case of a person who is not an assignee of a LLC interest, including a person acquiring a LLC interest directly from the LLC and a person to be admitted as a member of the LLC without acquiring a LLC interest in the LLC at the time provided in and upon compliance with the LLCA or, if the LLCA does not so provide, upon the consent of all members and when the person's admission is reflected in the records of the LLC; (2) In the case of an assignee of a LLC interest, as provided in subsection
(a) of Section 19.44 of this Act, and at the date provided in and upon compliance with the LLCA or, if the LLCA does not so provide, when any such person's permitted admission is reflected in the records of the LLC; or (3) Unless otherwise provided in a merger or consolidation contract, in the case of a person acquiring an LLC interest in a LLC surviving or resulting from a merger or consolidation approved pursuant to the provisions of this Act, on the date provided and in compliance with the LLCA of the surviving or resulting LLC.
(c) In connection with the domestication process of a nonUnited States entity as a LLC in Puerto Rico, or the conversion of another entity into a DLLC pursuant to the provisions of this Act, a person shall be admitted as a member of the LLC on the date provided and upon compliance with the LLCA.
(d) A person may be admitted to a LLC as a member and may receive a LLC interest in the limited liability company without making a contribution or being obligated to make a contribution to the LLC. Unless otherwise provided in a LLCA, a person may be admitted to a LLC as a member of the limited liability company without acquiring a LLC interest in the LLC. Unless otherwise provided in a LLCA, a person may be admitted as the sole member of a LLC without making a contribution or being obligated to make a contribution to the LLC or without acquiring a LLC interest in the LLC.
(e) Unless otherwise provided in a LLCA or another agreement, a member shall have no preemptive right to subscribe to any additional issue of LLC interests or another interest in a LLC.
Section 19.18.- Classes and voting.
(a) A LLCA may provide for classes or groups of members having such rights, powers and duties as the LLCA may provide, and may contain provisions for the future creation of additional classes or groups of members having such rights, powers and duties as may from time to time be established, including rights, powers and duties
senior to existing classes and groups of members. A LLCA may provide for the taking of an action, including amendments to the LLCA, without the need of vote or approval of any member or class or group of members, including an action to create under the provisions of the LLCA, a class or group of interests in the LLC that did not exist before. A LLCA may provide that any member or class or group of members shall have no voting rights.
(b) A LLCA may grant all or specific group of members or a specific class or group of members the right to vote separately or with all or any class or group of the members or managers on any matter. Voting by members may be on a per capita, number, financial interest, class, group or any other basis.
(c) A LLCA may set forth provisions relating to notice of the time, place or purpose of any meeting at which any matter is to be voted on by any members, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
(d) Unless otherwise provided in the LLCA, on any matter that the members shall vote on, consent to or approve, the members may take such action without a meeting, without prior notice and without a vote if a consent or consents in writing is adopted, setting forth the action so taken, signed by the members having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all members entitled to vote
thereon were present and voted. Unless otherwise provided in a LLCA, on any matter that is to be voted on by members, the members may vote in person or by proxy, and such proxy may be granted in writing, by means of electronic transmission or as otherwise permitted by applicable law. Unless otherwise provided in a LLCA, a consent transmitted by electronic transmission by a member or by a person or persons authorized to act for a member shall be deemed to be written and signed for purposes of this subsection. For purposes of this subsection, the term "electronic transmission" means any means of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 19.19.- Liability to third parties.
(a) Except as otherwise provided in this Act, the debts, obligations and liabilities of a LLC, whether arising from a contract, damages or otherwise, shall be solely the debts, obligations and liabilities of the LLC, and no member or manager of a LLC shall be obligated personally for any such debt, obligation or liability of the LLC solely by reason of being a member or acting as a manager of the LLC.
(b) Notwithstanding the provisions of subsection
(a) of this Section, under a LLCA or under another agreement, a member or
manager may agree to be obligated personally for any or all of the debts, obligations and liabilities of the LLC.
Section 19.20.- Access to confidential information; records.
(a) Every member of a LLC has the right, subject to such reasonable standards (including standards governing what information and documents are to be furnished at what time and location and at whose expense) as may be set forth in a LLCA or otherwise established by the manager or, if there is no manager, then by the members, to obtain from the LLC from time to time upon reasonable demand for any purpose reasonably related to the member's interest as a member of the LLC: (1) True and full information regarding the status of the business and financial condition of the LLC; (2) Promptly after becoming available, a copy of the federal, state and local income tax returns for each year; (3) A current list of the name and last known business, residence or mailing address of each member and manager; (4) A copy of any written LLCA and certificate of formation and all amendments thereto, together with executed copies of any written powers of attorney pursuant to which the LLCA and any certificate and all amendments thereto have been executed;
(5) True and full information regarding the amount of cash and a description and statement of the agreed value of any other property or services contributed by each member and which each member has agreed to contribute in the future, and the date on which each became a member; and (6) Other information regarding the affairs of the LLC as is just and reasonable.
(b) Each manager shall have the right to examine all of the information described in subsection
(a) of this Section for a purpose reasonably related to the position of manager.
(c) The manager of a LLC shall have the right to keep confidential from the members, for such period of time as the manager deems reasonable, any information which the manager reasonably believes to be in the nature of trade secrets or other information the disclosure of which the manager in good faith believes is not in the best interest of the LLC or could damage the LLC or its business or which the LLC is required by law or by agreement with a 3rd party to keep confidential.
(d) A LLC may maintain its records in other than a written form if such method is capable of conversion into written form within a reasonable time.
(e) Any demand by a member under this Section shall be in writing and shall state the purpose of such demand.
(f) Any action to enforce any right arising under this Section shall be brought in the Court of First Instance. If the LLC refuses to permit a member to obtain or a manager to examine the information described in subsection
(a) (3) of this Section or does not reply to the demand that has been made within 5 business days after the demand has been made, the demanding member or manager may apply to the Court of First Instance for an order to compel such disclosure. The Court of First Instance is hereby vested with exclusive jurisdiction to determine whether or not the person seeking such information is entitled to the information sought. The Court of First Instance may summarily order the LLC to permit the demanding member to obtain or manager to examine the information described in subsection
(a) (3) of Section
(a) of this Act and to make copies or abstracts therefrom, or the Court of First Instance may summarily order the LLC to furnish to the demanding member or manager the information described in subclause (3) of subsection
(a) on the condition that the demanding member or manager first pay to the LLC the reasonable cost of obtaining and furnishing such information and under such other conditions as the Court of First Instance deems appropriate. When a demanding member or a manager seeks to examine the information described in subclause (3) of subsection
(a) , the demanding member or manager shall first establish: (1) that the demanding member or manager has complied with the provisions of this Section respecting the form and manner of making demand for obtaining or examining of such information, and (2) that the information the demanding member or manager is demanding is reasonably related to the member's position as a member or the
manager's position as a manager, as the case may be. The Court of First Instance may, in its discretion, prescribe any limitations or conditions with reference to the obtaining or examining of information, or award such other or further relief as the Court may deem just and proper. The Court of First Instance may order books, documents and records, pertinent extracts therefrom, or duly authenticated copies thereof, to be brought to and kept in Puerto Rico upon such terms and conditions as the order may prescribe.
(g) The rights of a member or manager to obtain information as provided in this section may be restricted in the original LLCA or in any subsequent amendment approved or adopted by all of the members and in compliance with any applicable requirements of the LLCA. The provisions of this subsection shall not be construed to limit the ability to impose restrictions on the rights of a member or manager to obtain information by any other means permitted under this section.
Section 19.21.- Remedies for breach of LLCA by member.
A LLCA may provide that: (1) A member who fails to perform in accordance with, or to comply with the terms and conditions of, the LLCA shall be subject to specific penalties or consequences; and (2) At the time of the occurrence of the events specified in the LLCA, a member shall be subject to specified penalties or consequences. Such specified penalties or consequences may
include and take the form of any penalty or consequence set forth in subsection
(c) of Section 19.30 of this Act.
Section 19.22.- Admission of managers.
Any person may be named or designated as manager of a LLC pursuant to the provisions of subsection
(a) of Section 19.01 of this Act.
Section 19.23.- Management of LLC
Unless otherwise provided in a LLCA, the management of a LLC shall be the responsibility of its members in proportion to their percentage or other interest as members in the profits of the LLC owned by all of the members. Decision shall be made by members owning more than $50 %$ of the said proportion or other interest in the profits; provided however, that if a LLCA provides for the management, in whole or in part, of a LLC by a manager, the management of the LLC, to the extent so provided, shall the responsibility of the manager who shall be chosen in the manner provided in the LLCA. The manager shall also hold the office and have the responsibilities accorded to the manager in the LLCA. Subject to the provisions in Section 19.35 of this Act, a manager shall cease his/her functions as provided in LLCA.
Section 19.24.- Contributions by a manager
A manager of a LLC may make contributions to the LLC and share in the profits and losses, and in distributions from the LLC as a member. A person who is a member and manager has the rights and
powers, and is subject to the restrictions and obligations of a manager and, except as otherwise provided in the LLCA, also has the rights and powers, and is subject to the restrictions and obligations of a member to the extent of his/her participation in the LLC as a member.
Section 19.25.- Classes and voting
(a) A LLCA may provide for classes or groups of managers who shall have the rights, powers and duties as the LLCA provides, and may contain provision for the creation in a future date of additional classes or groups of managers who shall have the rights, powers and duties that may be established from time to time, including rights, powers and duties senior to existing classes and groups of managers. A LLCA may provide for the taking of actions, including amendments of the LLCA, without need for the vote or approval of a manager or class or group of managers, including the creation, pursuant to the provisions of the LLCA, of a class or group of LLC interests which was not previously authorized.
(b) A LLCA may grant to all or to a group of managers or to a class or group of the managers the right to vote, separately or with all or any class or group of managers or members, on any matter. Voting by managers may be on a per capita, number, financial interest, class, group or any other basis.
(c) A LLCA may contain provisions regarding to notice of the date, place or purpose of any meeting at which any matter is to be voted on by any manager or class or group of managers, waiver of
any such notice, decisions by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
(d) Unless otherwise provided in a LLCA, on any matter that is to be voted on, consented to or approved by managers, the managers may take such action without the need to meet, without prior notice and without a vote if there is a written consent or consents, setting forth the action so taken, shall be signed by the managers representing not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all managers entitled to vote thereon were present and voted. Unless otherwise provided in a LLCA, on any matter that is to be voted on by managers, the managers may vote in person or by proxy, and such proxy may be granted in writing, by means of electronic transmission or as otherwise permitted by law. Unless otherwise provided in a LLCA, a consent transmitted by electronic transmission by a manager or by a person or persons authorized to represent a manager shall be deemed to be written and signed for purposes of this subsection. For purposes of this subsection, the term "electronic transmission" means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof and that may be directly reproduced in paper form by the recipient through an automated process.
Section 19.26.- Remedies for breach of the provisions of an LLCA by manager.
A LLCA may provide that: (1) A manager who fails to perform in accordance with, or to comply with the terms and conditions of the LLCA shall be subject to the penalties and consequences established therein; and (2) At the time or upon the occurrence of the events specified in the LLCA, a manager shall be subject to the penalties or consequences established therein.
Section 19.26.- Remedies for failure to comply with the provisions of a LLCA by a manager.
A LLCA may provide that: (1) A manager who fails to perform in accordance with, or to comply with the terms and conditions of the limited liability company agreement shall be subject to the penalties and consequences provided therein; and (2) At the time or upon the happening of events specified in the limited liability company agreement, a manager shall be subject to the penalties and consequences provided therein.
Section 19.27.- Actins of members and managers.
The members and managers shall be as loyal to the limited liability company and liable for their acts and omissions in the exercise of their duties as the directors, officers and stockholders with regard to corporate matters pursuant to the provisions of Chapter 4 of this Act.
Section 19.28.- Delegation of rights and powers to manage.
Unless otherwise provided in the LLCA, a member or manager of a LLC has the power and authority to delegate on one or more other persons his/her powers as member or manager, as applicable, as well as rights and powers to manage and control the business and affairs of the LLC, including to delegate on agents, officers and employees of a member or manager of the LLC, and to delegate through a management agreement or another agreement with, or otherwise on other persons. Unless otherwise provided in the LLCA, such delegation by a member or manager of a LLC shall not cause the member or manager to cease to be a member or manager, as the case may be, of the LLC or cause the person to whom any such rights and powers have been delegated to become a member or manager, as the case may be, of the LLC.
Section 19.29.- Form of contribution.
The contribution of a member to a LLC may be in cash, property or services rendered, or a promissory note or other obligation to contribute cash or property or to perform services.
Section 19.30.- Liability for contribution.
(a) Except as provided in a LLCA, a member is obligated to a LLC to comply with any promise to contribute cash or property or to render services, even if the member is unable to perform because of death, disability or any other reason. If a member does not make the required contribution of property or services, the member is obligated at the option of the LLC to contribute cash equal to that portion of the agreed value (as stated in the records of the LLC) of the contribution that has not been made. The foregoing option shall be in addition to, and not in lieu of, any other rights, including the right to specific performance that the LLC may have against such member under the LLCA or applicable law.
(b) Unless otherwise provided in a LLCA, the obligation of a member to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by consent of all the members. Notwithstanding the compromise, a creditor of a LLC who extends credit, after the entering into of a LLCA or an amendment thereto which, in either case, reflects the obligation, and before the amendment thereof to reflect the compromise, may enforce the original obligation to the extent that, in extending credit, the creditor reasonably relied on the obligation of a member to make a contribution or return. A conditional obligation of a member to make a contribution or return money or other property to a LLC may not be enforced unless the conditions of the obligation have been satisfied or waived as to or by such member. Conditional obligations include contributions payable upon a discretionary call of a LLC prior to the time the call occurs.
(c) A LLCA may provide that the interest of any member who fails to make any contribution that he/she is obligated to make shall be subject to specified penalties for, or specified consequences of, such failure. Such penalty or consequence may take the form of reducing or eliminating the defaulting member's proportionate interest in a LLC, subordinating the member's LLC interest to that of non-defaulting members, a forced sale of that LLC interest, forfeiture of his/her LLC interest, the lending by other members of the amount necessary to meet the defaulting member's commitment, a fixing of the value of his or her LLC interest by appraisal or by formula and redemption or sale of the LLC interest at such value, or other penalty or consequence.
Section 19.31. Allocation of profits and losses.
The profits and losses of a LLC shall be allocated among the members, and among classes or groups of members in the manner provided in a LLCA. If the LLCA does not so provide, profits and losses shall be allocated on the basis of the agreed value (as stated in the records of the LLC) of the contributions made by each member to the extent they have been received by the LLC and have not been returned.
Section 19.32.- Allocation of distributions.
Distributions of cash or other assets of a LLC shall be allocated among the members, and among classes or groups of members in the manner provided in a LLCA. If the LLCA does not so provide, distributions shall be made on the basis of the agreed value (as stated in
the records of the LLC) of the contributions made by each member to the extent they have been received by the LLC and have not been returned.
Section 19.33.- Defense of usury not available.
The availability of the defense of usury in any action shall be governed in accordance to the provisions of Section 12.09 of this Act for Corporations.
Section 19.34.- Interim distributions. Except as provided in this Chapter, a member is entitled to receive distributions from a LLC in the amount and on the dates provided upon the occurrence of the events set forth in the LLCA, provided the member has not resigned and that it is before the dissolution and liquidation thereof.
Section 19.35.- Resignation of manager.
The Manager may resign as a manager of a LLC at the time or upon the happening of events specified, and in accordance with the LLCA. A LLCA may provide that a manager cannot resign as a manager of a LLC. Notwithstanding that a LLCA provides that a manager cannot resign, a manager may resign at any time by giving written notice to the members and other managers. If the resignation of a manager violates a LLCA, in addition to any remedies otherwise available under law, a LLC may recover from the resigning manager damages for breach of the
LLCA and may offset the damages against the amount otherwise distributable to the resigning manager.
Section 19.36.- Resignation of member.
A member may resign from a LLC only at the time or upon the occurrence of events specified in a LLCA and in accordance with the LLCA. Notwithstanding anything to the contrary under applicable law, unless a LLCA provides otherwise, a member may not resign from a LLC prior to the dissolution and liquidation of the LLC.
Section 19.37.- Distribution upon resignation.
Except as provided in this Chapter, upon resignation, the resigning member is entitled to receive any distribution to which such member is entitled under a LLCA and, if not otherwise provided in a LLCA, such member is entitled to receive, within a reasonable period of time after resignation, the fair market value of such member's interest in the LLC as of the date of resignation based upon such member's right to receive distributions from the LLC.
Section 19.38.- Distribution in kind.
Except as provided in a LLCA, a member, regardless of the nature of his/her contribution, has no right to demand and receive any distribution from a LLC in any form other than cash. Except as provided in a LLCA, a member may not be compelled to accept a distribution of any asset in kind from a LLC to the extent that the percentage of the asset distributed exceeds a percentage of the assets which is equal to the
percentage in which the member shares in distributions from the LLC. Except as provided in the LLCA, a member may be compelled to accept a distribution of assets in kind from a LLC to the extent that the percentage of the assets distributed is equal to a percentage of the asset which is equal to the percentage in which the member shares in distributions from the LLC.
Section 19.39.- Right to distribution.
Subject to the provisions of Section 9.40, and unless otherwise provided in a LLCA, at the time a member becomes entitled to receive a distribution, the member has the status of, and is entitled to all remedies available to a creditor of a LLC with respect to the distribution. A LLCA may provide for the establishment of a record date with respect to allocations and distributions by a LLC.
Section 19.40.- Limitations on distribution.
(a) A LLC shall not make a distribution to a member to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the LLC, other than liabilities to members on account of their LLC interests and liabilities for which the recourse of creditors is limited to specified property of the LLC, exceed the fair value of the assets of the LLC, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the LLC only to the extent that the fair value of that property exceeds that liability. For purposes of this subsection
(a) , the term "distribution" shall not
include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business pursuant to a bona fide retirement plan or other bona fide benefits program.
(b) A member who receives a distribution in violation of the provisions of subsection
(a) of this Section, and who knew at the time of the distribution that the distribution violated subsection
(a) of this Section, shall be liable to a LLC for the amount of the distribution. A member who receives a distribution in violation of subsection
(a) of this Section, and who did not know at the time of the distribution that the distribution violated subsection
(a) of this Section, shall not be liable for the amount of the distribution. Subject to the provisions of subsection
(c) of this Section, this subsection shall not affect any obligation or liability of a member under an agreement or other applicable law for the amount of a distribution.
(c) Unless otherwise agreed, a member who receives a distribution from a LLC shall have no liability under this Act or other law for the amount of the distribution after the expiration of three (3) years from the date of the distribution unless an action to recover the distribution from such member is commenced prior to the expiration of the said three (3) year period and an adjudication of liability against such member is made in the said action.
Section 19.41.- Nature of interest in a LLC. An interest in a limited liability company shall be considered personal property. A member shall have no interest in specific property of the LLC.
Section 19.42.- Assignment of a LLC interest.
(a) An interest in a LLC interest is assignable in whole or in part unless otherwise provided in a LLCA. The assignee of a member's LLC interest shall have no right to participate in the management of the business and affairs of a LLC except as provided in a LLCA and subject to: (1) The approval of all of the members of the LLC other than the member assigning the LLC interest; or (2) Compliance with any procedure provided for in the LLCA.
(b) Unless otherwise provided in a LLCA: (1) An assignment of a LLC interest does not entitle the assignee to become or to exercise any rights or powers of a member; (2) An assignment of a LLC interest entitles the assignee to share in profits and losses, to receive such distribution or distributions, and to receive such allocation of income,
gain, loss, deduction, or credit or similar item to which the assignor was entitled, to the extent assigned; and (3) A member of a LLC shall cease to be considered as a member of such LLC upon assignment of all of the member's interest in said entity.
(c) Unless otherwise provided in a LLCA, a member's interest in a LLC may be evidenced by a certificate of LLC interest issued by the LLC.
A LLCA may provide for the assignment or transfer of any LLC interest represented by such a certificate and set forth other provisions with respect to such certificates.
(d) Unless otherwise provided in a LLCA and except to the extent assumed by agreement, until an assignee of a LLC interest becomes a member, the assignee shall have no liability as a member solely as a result of the assignment.
(e) Unless otherwise provided in the LLCA, a LLC may acquire, by purchase, redemption or otherwise, any interest in the LLC or other interest of a member or manager in the LLC. Unless otherwise provided in the LLCA, any such interest so acquired by the LLC shall be deemed canceled.
Section 19.43.- Member's interest in a limited liability company subject to orders.
(a) On application by a judgment creditor of a member or of a member's assignee, a court having jurisdiction may charge against the LLC interest of the member subject to judgment to satisfy the same. The Court may appoint a trustee for the portion of the distributions payable or that shall become payable under the judgment against the member with respect to the LLC, whose trustee shall have the rights of the assignee, and the court may issue those orders, instructions, accounts and questions that the member subject to the judgment could have or that the circumstances of the case may require.
(b) A charging order constitutes a lien on the LLC interest of the member subject to judgment. The Court may, at any time, order the execution of the interest in the LLC subject to the charging order. The buyer in the sale due to execution shall only have the rights of an assignee.
(c) Unless otherwise in a LLCA, at any time prior to execution, an interest in a LLC subject to a charging order may be redeemed:
(d) This Act does not limit the rights of a member under exemption laws with respect to his/her interest in the LLC.
(e) The Section provides the exclusive remedy by which a judgment creditor of a member or of a member's assignee may satisfy a judgment out of the LLC interest of the member.
(e) No creditor of a member shall have any right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to the property of the LLC.
Section 19.44.- Right of assignee to become member.
(a) An assignee of a LLC interest may become a member as provided in a LLCA and upon: (1) The approval of all members of the LLC other than the member assigning LLC interest; or (2) Compliance with the procedure established for said purpose in the LLCA.
(b) An assignee who has become a member has, to the extent assigned, the rights and powers, and is subject to the restrictions and obligations of a member under a LLCA and this Act. Notwithstanding the foregoing, unless otherwise provided in a LLCA, an assignee who becomes a member is liable for the obligations of the assignor to make contributions as provided in Section 19.30 of this Act, but shall not be liable for the obligations of the assignor under Chapter VI of this Act. However, the assignee is
not obligated for liabilities, including the obligations of the assignor to make contributions as provided in Section 19.30 of this Act, unknown to the assignee at the time the assignee became a member and which could not be identified from a LLCA.
(c) Whether or not an assignee of a LLC interest becomes a member, the assignor is not released from liability to a LLC under Chapters V and VI of this Act.
Section 19.45.- Powers of estate of a deceased or disabled member.
If a member who is an individual dies or a court of competent jurisdiction declares the member to be disabled to manage his/her person or property, the member's personal representative may exercise all of the rights of the member for the purpose of settling the member's estate or managing the member's property, including any power under a LLCA of an assignee to become a member. If the member is a corporation, trust or other entity and is dissolved or terminated, the powers of that member may be exercised by its personal representative.
Section 19.46.- Dissolution, liquidation and distribution of assets in the event of liquidation.
A LLC shall be dissolved, its affairs liquidated and its assets distributed pursuant to the provisions of Chapter IX of this Act for dissolution of corporations. En all cases, the members shall have the same
rights and obligation recognized or imposed on stockholders for said procedures.
Section 19.47.- Judicial dissolution.
Upon petition of a member or manager, the Court of First Instance may order the dissolution of a LLC provided it is not reasonably possible to carry on the business in accordance with the LLCA.
Section 19.48.- Right to file derivative action. A member or an assignee of a LLC interest may file an action in the Court of First Instance recover a judgment in its favor if the managers or members with authority to do so have refused to file the action or if an effort to cause said managers or members to file the action is not likely to succeed.
Section 19.49.- Plaintiff.
In a derivative action, the plaintiff shall be a member or an assignee of a LLC interest at the time of filing the action and: (1) At the time of the transaction from which the complaint of the plaintiff arises; or (2) The status of the plaintiff as a member or an assignee of a LLC interest has devolved by operation of law or pursuant to the terms of a LLCA from a person who was a member or an assignee of a LLC interest at the time of the transaction.
Section 19.50.- Complaint.
In a derivative action, the complaint shall detail the efforts, if any, of the plaintiff to cause initiation of the action by the manager or member or the reasons for not making such efforts.
Section 19.51.- Expenses
In the event that a derivative action is resolved favorably, in whole or in part, through judgment, compromise or settlement, the Court may award the plaintiff compensation for reasonable expenses, including reasonable attorney's fees, from any recovery in any such action or from a LLC."
Section 20.01.- Applicable Law
(a) Subject to the provisions of the Constitution of Puerto Rico: (1) The laws of the state, territory, possession, or other jurisdiction or country under which a FLLC is organized shall govern the organization and internal affairs of the FLLC and that of its members and managers; and (2) A FLLC may not be denied authorization to do business by reason of differences between said laws and the laws of Puerto Rico.
(b) A FLLC shall be subject to Section 19.06 of this Act.
Section 20.02.- Authorization to do business; application.
A foreign limited liability company shall not do business in Puerto Rico until it receives authorization to do so in accordance to the procedures provided in Chapter XIII of this Act for foreign corporations.
Section 20.03.- Name; registered office; resident agent.
(a) A FLLC may register to do business with the Secretary of State under any name (whether or not it is the name under which it is registered in the jurisdiction of its formation) that includes the words "Compañía de Responsabilidad Limitada" or "Limited Liability Company" or the abbreviation "C.R.L." or "L.L.C." or the designation "CRL" or "LLC" and that could be used by a DLLC; provided however, that the FLLC may be authorized to do business under any name which is not such as to distinguish it upon the records in the office of the Secretary of State from the name in such records of any corporation, domestic or foreign limited liability company reserved, registered, formed or organized under the laws of Puerto Rico, with the written consent of the other limited liability corporation or company, which written consent shall be filed with the Secretary of State.
(b) Every corporation admitted to do business in the Commonwealth of Puerto Rico shall keep a permanent office and a resident agent in the Commonwealth of Puerto Rico in compliance with the provisions of Section 13.10 of this Act regarding foreign corporations.
Section 20.04.- Cancellation of authorization to do business.
A FLLC may cancel its authorization to do business by filing with the Secretary of State a certificate of cancellation, signed by an authorized person, together with the fee set forth in clause (6) of subsection
(b) of Section 21.01 of this Act. The cancellation does not terminate the authority of the Secretary of State to receive service of process on the FLLC with respect to causes of action arising from the activities of the FLLC in Puerto Rico.
Section 20.05.- Doing business without authorization
(a) A FLLC doing business in Puerto Rico shall not initiate any action, suit or proceeding in Puerto Rico until it has been authorized to do business and has paid in Puerto Rico all fees, taxes and penalties for the period during which it did business in Puerto Rico without having been authorized.
(b) The failure to obtain authorization in Puerto Rico shall not affect: (1) The validity of any contract or act of the FLLC; (2) The right of any other party that contracted with the FLLC to file an action, suit or proceeding based on the contract; or (3) The capacity of the FLLC to defend itself from any action, complaint or proceeding in any court or administrative procedure in Puerto Rico.
(c) A member or a manager of a FLLC shall not be liable for the obligations of the FLLC solely by reason of having done business in Puerto Rico without authorization.
(d) A FLLC doing business in Puerto Rico without having first obtained authorization to do business, and in spite of having enjoyed the grace period provided in this Act, which establishes fair and reasonable time for its formation pursuant to this statute or other provisions of existing laws, shall pay to the Secretary of State a penalty of $200.00 for each year or part thereof during which it was not authorized to do business in Puerto Rico.
Section 20.06.- Foreign limited liability companies doing business without having been authorized to do so; Injunction.
The Court of First Instance shall have jurisdiction to enjoin any FLLC, or any agent thereof from doing any business in Puerto Rico if said FLLC has failed to comply with the requirement of authorization to do business in Puerto Rico under this Chapter or if said FLLC has obtained a certificate authorizing it to do business from the Secretary of State on the basis of false or misleading representations. Upon petition of the Secretary of Justice or upon petition of any person with legal standing, the Secretary of Justice shall proceed pursuant to the herein provided by filing the corresponding action before the Court of First Instance.
Section 20.07.- Service of process on foreign limited liability companies.
Service of legal process upon any FLLC shall be made pursuant to the provisions of Section 13.12 of this Act for foreign corporations.
Section 20.08.- Service of process on foreign limited liability companies not authorized to do business.
Service of legal process on a FLLC doing business in Puerto Rico without having obtained authorization pursuant to the provisions of this Act, shall be as established in Section 13.14 of this Act for foreign corporations.
Section 3.- A new Chapter XXI is hereby added to Act No. 144 of August 10, 1995, as amended, to read as follows:
Section 21.01.- Fees.
(a) No document or certificate held or to be filed under the provisions of this Act shall be effective until the fees established in this Section are paid. The Secretary of State shall collect the following fees for the filing of the following documents: (1) $75.00 for filing an application for reservation of name, or renewal or cancellation of thereof.
(2) $50.00 for filing a certificate to designate resident agent; $50.00 and $2.00 for each LLC affected by the filing of a certificate of resignation with or without the designation of successor. (3) $50.00 for the filing of: a. a certificate of LLC domestication; b. a certificate of transfer or a certificate of transfer and continuance; c. a certificate of formation; d. a certificate of amendment; e. a certificate of cancellation; f. a certificate of merger or consolidation; g. a certificate of organization; h. a certificate of amendment of a certificate with a future effective date or time; i. a certificate of termination of certificate with a future effective date or time; j. a certificate of correction; k. a certificate of revival; and
a certification of a copy under paragraph (4) of this subsection; and $100.00 for issuing any certificate of the Secretary of State that lists all filings of a LLC with the Secretary of State. (11) $25.00 for receiving and filing or registering any certificate, affidavit, agreement or any other paper provided for by this Act, for which no fee is established.
(b) In addition to the fees established in subsection
(a) of this Section, there shall be collected by and paid to the Secretary of State the following: (1) $500.00 for any of the services established in subsection
(a) of this Section that are required to be completed within a 2 hour period on the same day of the request; (2) $200.00 for any of the services established in subsection
(a) of this Section that are required to be completed on the same day of the request; (3) $100.00 for all services established in subsection
(a) of this Section that are required to be completed within a 24hour period from the time of the request.
(c) Two years after the approval of this Act, all documents filed after the effectiveness of this Act shall be available through the Internet and no fees whatsoever shall be charged neither for access to them, nor for the self-reproduction of the images accessed through the Internet.
It is hereby provided that the amount collected from the fees established in this Section shall be covered into a special fund created for such purpose in the Department of the Treasury to defray the operating expenses of the registry herein established, which were not defrayed by appropriations from the General Fund or other budget appropriations.
It is further provided that twenty-five percent (25%) of the amount collected shall be used for the operating expenses of the registry, and seventy-five percent ( $75 %$ ) shall be destined to the General Fund. The remainder of funds that at the closing of each fiscal year has not been used for the purposes of the registry shall revert to the General Fund.
Section 21.02.- Cancellation of Certificate of Formation for failure to pay annual fees.
(a) A certificate of organization of a DLLC shall be deemed to be cancelled in the case that the DLLC fails to comply with its obligation to pay the fees established in Section 21.03 of this Act for a period of three consecutive years, as of the date that the first of said payments became due.
Section 21.03.- Tax Liability of a LLC
(a) For purposes of any tax imposed by the Commonwealth of Puerto Rico or any of its instrumentalities, agencies or political subdivisions, a LLC formed under this Act or a FLLC authorized to do business in Puerto Rico shall be considered a corporation as provided in Section 1411
(a) (2) of Act No. 120 of October 31, 1994, as amended, known as the "Puerto Rico Internal Revenue Code of 1994", and may
avail itself of the benefits granted to special partnerships in Sub-chapter K of said Code. Eligible LLC shall be allowed to choose pursuant to the provisions of Sub-chapter N of said Code which regulates the operations of Corporations of Individuals.
(b) Every DLLC and every FLLC authorized to do business in Puerto Rico shall pay a $100.00 annual fee to the Secretary of State, which shall be used by the latter for the implementation of this Act.
(c) The annual fees established in the preceding subsection shall be payable on April 15 following the close of the calendar year or upon the cancellation of a certificate of formation. If the annual fees are not paid on the due date, said fees shall bear interest at the rate of 1 and onehalf percent $(11 / 2 %)$ for each month until fully paid.
(d) At least 60 days prior to the due date, the Secretary of State shall cause to be mailed to the resident agent of each DLLC and FLLC,a statement indicating the amount of the fees to be paid in accordance with the herein provided.
(e) In the event that a DLLC or FLLC refuses or fails to pay the annual fees as provided in this Section, it shall pay a penalty of $100 in addition to the fees that have become due, which amount shall be subject to interest and payable as provided in this Section.
(f) In case a DLLC or FLLC has failed to comply with its obligation to the fees established in this Section, or if its resident agent dies, resigns, refuses to act as such, is not present in Puerto Rico or cannot with due diligence be found, it shall be lawful while default
continues to serve process against such DLLC or FLLC through the Secretary of State as provided and shall be effective as specified in Section 19.05 of this Act in the case of a DLLC and in Section 20.07 in the case of a FLLC and shall be governed in all respects by said Sections.
(g) The annual fees and any other penalty set forth in this Section may be demanded in the courts as payment of debt of a LLC. It shall also be deemed a preferred debt in the case of insolvency of the LLC.
(h) A DLLC or FLLC that neglects, refuses or fails to pay the annual fee shall cease to be in good standing and authorized to do business, as the case may be, in Puerto Rico.
(i) A DLLC or a FLLC that has ceased to be in good standing or that has ceased to be authorized to do business by reason of the failure to pay an annual fees as provided in this Section, shall be restored to and have the status of a DLLC or FLLC in good standing or that is authorized to do business upon the payment of the annual fee and all penalties and interest thereon for each year or portion thereof for which it failed to comply with its obligation to pay said annual fees. At the time of said restoring, the fees provided in clause (3) of subsection
(a) of Section 21.01 of this Act shall be paid.
(j) In the case that the fees established in this Act are not paid for three consecutive years, the Secretary of Justice shall file muto propio or upon request of the Secretary of State, a motion to the Court of First Instance for it to order the DLLC or FLLC that has not paid the fees to restrain from conducting any act or transaction in Puerto Rico or any
other place until the fees, fines and penalties accumulated under this Section have been paid as well as the costs of said action, which shall be determined by the Court. This order shall be served to the affected party in the manner provided by the Court within 5 of filing the motion, once the Court finds that it is proper. Once the Court grant the injunction, the LLC shall not do business or transactions until the Courts removes the injunction.
(k) A DLLC that has ceased to be in good standing by reason of its failure to pay the annual fees shall remain a DLLC formed under this Act. The Secretary of State shall not accept the filing any certificate (except a certificate of resignation of a resident agent when a successor resident agent has not been appointed) that could be filed under this Act, nor shall issue a certificate of good standing with respect to said DLLC or FLLC, which has lost its good standing or its authorization to do business for failure to pay the annual fees under this Act, until said DLLC or FLLC has been restored its good standing or is authorized to do business in Puerto Rico upon payment of the fees, penalties and interests in arrears pursuant to the provisions of this Section. (1) A DLLC that has ceased to be in good standing or a FLLC that has ceased to be authorized to do business in Puerto Rico for its failure to pay the annual fees as provided in this Section, shall not maintain any action, suit or proceeding in any court of Puerto Rico until said DLLC has been restored to the status of good standing or a FLLC authorized to do business in Puerto Rico. An action, suit or proceeding may not be maintained in any court of Puerto Rico by any successor or assignee or by the person who has acquired all or substantially all the assets of the
entity, of said LLC, that arises from any transaction of said entity after it has ceased to be in good standing or authorized to do business, until all fees, penalties and interest thereon
(m) The failure to pay the annual fees of a DLLC or FLLC shall not impair the validity of contracts, deeds, mortgages, security interests, liens or act of DLLC or FLLC or prevent said DLLC or FLLC from defending any action, suit or proceeding before any court in Puerto Rico
(n) A member or manager of a DLLC or FLLC is not liable for the debts or obligations of a DLLC or FLLC solely by reason of refusal or failure to pay the annual fees established in this Act, or because said DLLC or FLLC ceases to be in good standing or authorized to de business in Puerto Rico.
Section 21.04.- Violations and Penalties; revocation
(a) The Secretary of State shall impose on a DLLC or FLLC that violates the provisions of this Act, a fine of not less than two hundred dollars ($200) nor greater than five hundred dollars ($500) for each violation.
(b) The Secretary of State may file a proceeding under Section 21.03 of this Act to revoke the certificate of authorization of a FLLC authorized to do business in Puerto Rico if:
Section 4.- Chapter XIX of Act No. 144 of August 10, 1995, as amended is hereby renumbered as Chapter XXII.
Section 5.- Any reference to the term "corporation" in the laws and regulations of the Commonwealth of Puerto Rico, shall be construed to include the term "limited liability company" provided said inclusion is not in conflict with the ends and purposes of said laws and regulations or with the provisions of this Act. This provision shall not be construed to affect the powers of any government entity with respect to the activities of any person or entity governed by the same.
Section 6.- Existing companies
All Foreign Limited Liability Companies that on the effective date of this Act are doing business in the Commonwealth of Puerto Rico may, within the 90 days following the effective date of this Act, process authorization to do business in the Commonwealth of Puerto Rico, as provided in this Act.
Section 7.- Effectiveness
This Act shall take effect ninety (90) days after its approval.
I hereby certify to the Secretary of State that the following Act No. 487 (Senate Substitute for H. B. 4257) of the $7^{ ext {th }}$ Session of the $14^{ ext {th }}$ Legislature of Puerto Rico:
AN ACT to amend Act No. 144 of August 10, 1995, as amended, known as the "General Corporations Act", for the purpose of adding new Chapters XIX, XX and XXI which shall provide for the creation and norms applicable to "limited liability companies"; and other related aspects, has been translated from Spanish to English and that the English version is correct.
In San Juan, Puerto Rico, today $5^{ ext {th }}$ of October of 2005.
Francisco J. Domenech Director