Bulletin: CT2017004

Date:
June 29, 2017
To:
All Connecticut Issuing Offices
RE:
LEGISLATIVE UPDATE - Connecticut Uniform Limited Liability Act

Dear Associates:

A Quick Note Regarding the Connecticut Uniform Limited Liability Act 
(Effective July 1, 2017)

Connecticut's new Uniform Limited Liability Company Act (Public Act 16-97; C.G.S. §34-243, et. seq.) brings broad changes to our state's laws regarding limited liability companies (see the link below for the summary and analysis by the Office of Legislative Research). The changes range from the definitional (e.g. "Articles of Organization" are now "Certificates of Organization") to those affecting the most basic aspects of the Members' relationships to the Company (e.g. a Member is no longer an agent for an LLC solely because he/she is a Member; an LLC is deemed "Member-Managed" unless the Operating Agreement provides otherwise; new default voting provisions require a vote of two-thirds "in interest" of the Members for all actions outside the ordinary course of business). However, from the perspective of the real estate practitioner representing the Seller/Buyer of LLC property, underwriting requirements under the new Act remain the same. Practitioners should continue to:

  1. Confirm the status of the LLC via Certificate of Legal Existence or other means acceptable to Stewart Title; and  
  2. Confirm the authority of the individual(s) signing on behalf of the LLC via examination of the Operating Agreement and (when warranted) procurement of a Resolution evidencing that the requisite voting threshold has been satisfied. Under certain circumstances, Stewart Title will also accept an Opinion Letter from an attorney on this issue.

As always, feel free to contact your partners at Stewart Title with any questions you might have.  

C.G.S.§34-243 - https://www.cga.ct.gov/current/pub/chap_613a.htm

OLR Analysis - https://www.cga.ct.gov/2016/BA/2016HB-05259-R000525-BA.htm

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
11.22 Limited Liability Companies
Exceptions Manual:
Limited Liability Companies
Forms:
None