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HB 2371

Relating to waiver of tuition.

2025 Regular Session Introduced by Bobby Levy

HB 2371 modernizes Kansas LLC law to permit electronic documents/signatures for transactions and clarify series LLCs, filings, and irrevocable subscriptions.

In committee upon adjournment.
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Bill Summary · HB 2371

Summary — HB 2371

Title: Amending the Kansas Revised Limited Liability Company Act, the Business Entity Transactions Act and the Business Entity Standard Treatment Act
Status: Enacted — Approved by Governor April 8, 2025
Introduced: February 3, 2025

Purpose

HB 2371 modernizes and clarifies Kansas law governing limited liability companies (LLCs) — including series LLCs — by (1) expressly authorizing electronic documents and signatures for LLC transactions, (2) clarifying certain filings and certificate requirements across business-entity statutes, (3) confirming when subscriptions are irrevocable, and (4) making related technical and procedural updates.

Key provisions and changes

  • Definitions

    • Adds/clarifies definitions for “document” (includes tangible media and electronic transmission) and “electronic transmission.”
    • Expands “manager,” “member,” and “operating agreement” to expressly include managers/members associated with a series and allows an operating agreement to consist of multiple writings, schedules, supplements.

  • Electronic documentation, signatures, delivery, receipt (new law)

    • Treats electronic transmissions as equivalent to written documents for LLC Act purposes.
    • Permits manual, facsimile, conformed or electronic signatures. Defines “electronic signature.”
    • Establishes delivery/receipt rule: an electronic transmission is delivered when it enters an information processing system designated by the recipient and is retrievable; delivery is effective even if no person is aware of receipt. An electronic acknowledgment proves receipt but not content integrity.
    • Clarifies that these rules do not preclude use of the Uniform Electronic Transactions Act (UETA) and provides that the Kansas LLC Act should control vis-à-vis federal E‑SIGN to the fullest extent permitted.

  • Subscriptions

    • A subscription for an LLC interest (written or electronic) is irrevocable to the extent the subscription’s terms so state.

  • Void/voidable acts; ratification and waiver

    • Allows later ratification of acts or transactions that were void or voidable when taken, including by waiver or by amending the operating agreement as needed.

  • Series LLCs and tax/business treatment

    • Clarifies series-related definitions and procedures; permits a company and its series to elect to consolidate operations as a single taxpayer or be treated as a single business for certain purposes (as provided in the bill).

  • Business-entity filings and Secretary of State

    • Revises required contents and filing rules for certificates (merger, interest exchange, conversion, domestication) under the Business Entity Transactions Act.
    • Adds certain LLC documents (e.g., certificates of amendment to a certificate of designation; certificates of merger/consolidation of series) to documents required or treated under the Business Entity Standard Treatment Act.
    • Clarifies when a change involving a resident agent constitutes a change of name of the person/entity acting as resident agent.
    • Specifies the Secretary of State may charge filing fees up to $150 (removes mandatory $150 fee cap wording to permit regulation).

  • Other

    • Permits operating agreements to impose restrictions, duties and obligations on members.
    • Declares wrongful transfers intended to hinder/delay/defraud creditors void.
    • Makes technical and conforming statutory edits and removes an earlier effective date.

Who is affected

  • Kansas LLCs and their members, managers, and series; entities using series structures
  • Attorneys and transactional parties preparing and executing LLC documents
  • Contract pharmacies, creditors and transferees only to the extent of general ratification/voidable-act rules
  • Secretary of State (administrative filing/fee rules) — fiscal note indicates no operational cost to the office

Fiscal and procedural notes

  • Fiscal note: Secretary of State reports no fiscal effect on agency operations; bill allows limiting LLC filing fees to not exceed $150, which could permit future fee adjustments via regulation.
  • Legislative timeline: Introduced Feb 3, 2025; passed legislature with conference committee approvals March 27, 2025; enrolled April 4, 2025; approved by Governor April 8, 2025.

Practical impact

  • Facilitates modern electronic execution and delivery of LLC documents while preserving some filing/form exceptions (e.g., documents filed with the Secretary of State or courts).
  • Provides predictability about irrevocability of subscriptions and about ratification of defective acts.
  • Clarifies series LLC treatment and filing requirements, reducing ambiguity for practitioners and business filers.

Compiled from official sources — confirm details with the bill’s official record.

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