Senate Bill 0704er

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  1

  2         An act relating to business entities; amending

  3         s. 607.0730, F.S.; removing 10-year limit on

  4         voting trusts; creating holding company

  5         formation by merger by certain corporations;

  6         amending s. 608.407, F.S.; reducing minimum

  7         number of members necessary to form a limited

  8         liability company; creating ss. 607.1108,

  9         607.1109, 607.11101, F.S.; providing for

10         mergers of domestic corporations and other

11         business entities under certain circumstances;

12         requiring a plan of merger; providing criteria;

13         providing for articles of merger; providing for

14         effect of merger; creating ss. 608.438,

15         608.4381, 608.4382, 608.4383, 608.4384, F.S.;

16         providing for mergers of limited liability

17         companies under certain circumstances;

18         requiring a plan of merger; providing criteria;

19         providing for action on a plan of merger;

20         providing procedures; providing for articles of

21         merger; providing for effect of merger;

22         providing for rights of dissenting members;

23         providing procedures; creating ss. 620.201,

24         620.202, 620.203, 620.204, 620.205, F.S.;

25         providing for mergers of domestic limited

26         partnerships under certain circumstances;

27         requiring a plan of merger; providing criteria;

28         providing for action on a plan of merger;

29         providing procedures; providing for articles of

30         merger; providing for effect of merger;

31         providing for rights of dissenting partners;


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  1         providing procedures; amending s. 220.02, F.S.;

  2         revising legislative intent; providing

  3         application; amending s. 220.02, F.S.;

  4         providing legislative intent regarding taxation

  5         of a "qualified subchapter S subsidiary";

  6         amending s. 220.22, F.S.; requiring certain

  7         returns by such subsidiaries; providing

  8         retroactive application; amending s. 220.03,

  9         F.S.; revising a definition; amending s.

10         220.13, F.S.; redefining the term "taxable

11         income" as applied to limited liability

12         companies to exclude income of certain limited

13         liability companies; amending s. 608.406, F.S.;

14         revising criteria for limited liability company

15         names; amending ss. 608.405 and 608.407, F.S.;

16         reducing minimum number of members necessary to

17         form a limited liability company; amending s.

18         608.471, F.S.; exempting certain limited

19         liability companies from the corporate income

20         tax; providing for classifying certain limited

21         liability companies or members or assignees of

22         a member of a limited liability company for

23         certain taxation purposes; repealing ss.

24         607.0122(2) and (3), 607.0402, 607.1506(2)(b),

25         608.4061, 617.0122(2) and (3), 617.0402,

26         617.1506(2)(a), 620.104, 620.182(7), and

27         620.784(2), F.S., relating to corporation and

28         partnership name reservation; conforming

29         statutory provisions to the elimination of the

30         name reservation program provided in the

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  1         1997-1998 General Appropriations Act; providing

  2         an effective date.

  3

  4  Be It Enacted by the Legislature of the State of Florida:

  5

  6         Section 1.  Subsections (2) and (3) of section

  7  607.0730, Florida Statutes, are amended to read:

  8         607.0730  Voting trusts.--

  9         (2)  A voting trust becomes effective on the date the

10  first shares subject to the trust are registered in the

11  trustee's name.  A voting trust is valid for not more than 10

12  years after its effective date unless extended under

13  subsection (3).  The validity of any voting trust otherwise

14  lawful shall not be affected during a period of 10 years from

15  the date when it was created or last extended by the fact that

16  under its terms it will or may last beyond the 10-year period.

17         (3)  All or some of the parties to a voting trust may

18  extend it for additional terms of not more than 10 years each

19  by signing an extension agreement and obtaining the voting

20  trustee's written consent to the extension. An extension is

21  valid for the period set forth therein, up to 10 years, from

22  the date the first shareholder signs the extension agreement.

23  The voting trustee must deliver copies of the extension

24  agreement and list of beneficial owners to the corporation's

25  principal office.  An extension agreement binds only those

26  parties signing it.

27         Section 2.  Holding company formation by merger by

28  certain corporations.--

29         (1)  This section applies only to a corporation that

30  has shares of any class or series which are either registered

31  on a national securities exchange or designated as a national


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  1  market system security on an interdealer quotation system by

  2  the National Association of Securities Dealers, Inc., or held

  3  of record by not fewer than 2,000 shareholders.

  4         (2)  As used in this section, the term:

  5         (a)  "Constituent corporation" means a corporation that

  6  is a party to a merger governed by this section.

  7         (b)  "Holding company" means a corporation that, from

  8  the date it first issued shares until consummation of a merger

  9  governed by this section, was at all times a wholly owned

10  subsidiary of a constituent corporation, and whose shares are

11  issued in such merger.

12         (c)  "Wholly owned subsidiary" means, as to a

13  corporation, any other corporation of which it owns, directly

14  or indirectly through one or more subsidiaries, all of the

15  issued and outstanding shares.

16         (3)  Notwithstanding the requirements of section

17  607.1103, Florida Statutes, unless expressly required by its

18  articles of incorporation, no vote of shareholders of a

19  corporation is necessary to authorize a merger of the

20  corporation with or into a wholly owned subsidiary of such

21  corporation if:

22         (a)  Such corporation and wholly owned subsidiary are

23  the only constituent corporations to the merger;

24         (b)  Each share or fraction of a share of the

25  constituent corporation whose shares are being converted

26  pursuant to the merger into a share or equal fraction of share

27  of a holding company having the same designations, rights,

28  powers and preferences, and qualifications, limitations and

29  restrictions thereof as the share of the constituent

30  corporation being converted in the merger;

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  1         (c)  The holding company and each of the constituent

  2  corporations to the merger are domestic corporations;

  3         (d)  The articles of incorporation and by-laws of the

  4  holding company immediately following the effective time of

  5  the merger contain provisions identical to the articles of

  6  incorporation and by-laws of the constituent corporation whose

  7  shares are being converted pursuant to the merger immediately

  8  prior to the effective time of the merger, except provisions

  9  regarding the incorporators, the corporate name, the

10  registered office and agent, the initial board of directors,

11  the initial subscribers for shares and matters solely of

12  historical significance, and such provisions contained in any

13  amendment to the articles of incorporation as were necessary

14  to effect a change, exchange, reclassification, or

15  cancellation of shares, if such change, exchange,

16  reclassification, or cancellation has become effective;

17         (e)  As a result of the merger, the constituent

18  corporation whose shares are being converted pursuant to the

19  merger or its successor corporation becomes or remains a

20  direct or indirect wholly-owned subsidiary of the holding

21  company;

22         (f)  The directors of the constituent corporation

23  become or remain the directors of the holding company upon the

24  effective date of the merger;

25         (g)  The articles of incorporation of the surviving

26  corporation immediately following the effective time of the

27  merger are identical to the articles of incorporation of the

28  constituent corporation whose shares are being converted

29  pursuant to the merger immediately prior to the effective time

30  of the merger, except provisions regarding the incorporators,

31  the corporate name, the registered office and agent, the


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  1  initial board of directors, the initial subscribers for shares

  2  and matters solely of historical significance, and such

  3  provisions contained in any amendment to the articles of

  4  incorporation as were necessary to effect a change, exchange,

  5  reclassification, or cancellation of shares, if such change,

  6  exchange, reclassification, or cancellation has become

  7  effective. The articles of incorporation of the surviving

  8  corporation must be amended in the merger to contain a

  9  provision requiring, by specific reference to this section,

10  that any act or transaction by or involving the surviving

11  corporation which requires for its adoption under this act or

12  its articles of incorporation the approval of the shareholders

13  of the surviving corporation also be approved by the

14  shareholders of the holding company, or any successor by

15  merger, by the same vote as is required by this act or the

16  articles of incorporation of the surviving corporation. The

17  articles of incorporation of the surviving corporation may be

18  amended in the merger to reduce the number of classes and

19  shares which the surviving corporation is authorized to issue;

20         (h)  The board of directors of the constituent

21  corporation determines that the shareholders of the

22  constituent corporation will not recognize gain or loss for

23  United States federal income tax purposes; and

24         (i)  The board of directors of such corporation adopts

25  a plan of merger that sets forth:

26         1.  The names of the constituent corporations;

27         2.  The manner and basis of converting the shares of

28  the corporation into shares of the holding company and the

29  manner and basis of converting rights to acquire shares of

30  such corporation into rights to acquire shares of the holding

31  company; and


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  1         3.  A provision for the pro rata issuance of shares of

  2  the holding company to the holders of shares of the

  3  corporation upon surrender of any certificates therefor.

  4         (4)  From and after the effective time of a merger

  5  adopted by a constituent corporation by action of its board of

  6  directors and without any vote of shareholders pursuant to

  7  this section:

  8         (a)  To the extent the restrictions of sections

  9  607.0901 and 607.0902, Florida Statutes, applied to the

10  constituent corporation and its shareholders at the effective

11  time of the merger, such restrictions also apply to the

12  holding company and its shareholders immediately after the

13  effective time of the merger as though it were the constituent

14  corporation, and all shares of the holding company acquired in

15  the merger shall, for purposes of sections 607.0901 and

16  607.0902, Florida Statutes, be deemed to have been acquired at

17  the time that the shares of the constituent corporation

18  converted in the merger were acquired, and provided further

19  that any shareholder who immediately prior to the effective

20  time of the merger was not an interested shareholder within

21  the meaning of section 607.0901, Florida Statutes, shall not,

22  solely by reason of the merger, become an interested

23  shareholder of the holding company; and

24         (b)  If the corporate name of the holding company

25  immediately following the effective time of the merger is the

26  same as the corporate name of the constituent corporation

27  immediately prior to the effective time of the merger, the

28  shares of the holding company into which the shares of the

29  constituent corporation are converted in the merger shall be

30  represented by the share certificates that previously

31  represented shares of the constituent corporation.


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  1         (5)  If a plan of merger is adopted by a constituent

  2  corporation by selection of its board of directors without any

  3  vote of shareholders pursuant to this section, the secretary

  4  or assistant secretary of the constituent corporation shall

  5  certify in the articles of merger that the plan of merger has

  6  been adopted pursuant to this section and that the conditions

  7  specified in the first sentence of this section have been

  8  satisfied. The articles of merger so certified shall then be

  9  filed and become effective in accordance with section

10  607.1106, Florida Statutes.

11         Section 3.  Subsection (2) of section 608.407, Florida

12  Statutes, is amended to read:

13         608.407  Articles of organization.--

14         (2)  An affidavit declaring that the limited liability

15  company has at least one member two members and setting forth

16  the amount of the cash and a description and agreed value of

17  property other than cash contributed by the members and the

18  amount anticipated to be contributed by the members shall

19  accompany the articles of organization of a limited liability

20  company.

21         Section 4.  Sections 607.1108, 607.1109, and 607.11101,

22  Florida Statutes, are created to read:

23         607.1108  Merger of domestic corporation and other

24  business entity.--

25         (1)  As used in this section and ss. 607.1109 and

26  607.11101, the term "other business entity" means a limited

27  liability company, a foreign corporation, a not-for-profit

28  corporation, a business trust or association, a real estate

29  investment trust, a common law trust, an unincorporated

30  business, a general partnership, a limited partnership, or any

31  other entity that is formed pursuant to the requirements of


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  1  applicable law. Notwithstanding the provisions of chapter 617,

  2  a domestic not-for-profit corporation acting under a plan of

  3  merger approved pursuant to s. 617.1103 shall be governed by

  4  the provisions of ss. 607.1108, 607.1109, and 607.11101.

  5         (2)  Pursuant to a plan of merger complying and

  6  approved in accordance with this section, one or more domestic

  7  corporations may merge with or into one or more other business

  8  entities formed, organized, or incorporated under the laws of

  9  this state or any other state, the United States, foreign

10  country, or other foreign jurisdiction, if:

11         (a)  Each domestic corporation which is a party to the

12  merger complies with the applicable provisions of this

13  chapter.

14         (b)  Each domestic partnership that is a party to the

15  merger complies with the applicable provisions of chapter 620.

16         (c)  Each domestic limited liability company that is a

17  party to the merger complies with the applicable provisions of

18  chapter 608.

19         (d)  The merger is permitted by the laws of the state,

20  country, or jurisdiction under which each other business

21  entity that is a party to the merger is formed, organized, or

22  incorporated and each such other business entity complies with

23  such laws in effecting the merger.

24         (3)  The plan of merger shall set forth:

25         (a)  The name of each domestic corporation and the name

26  and jurisdiction of formation, organization, or incorporation

27  of each other business entity planning to merge, and the name

28  of the surviving or resulting domestic corporation or other

29  business entity into which each other domestic corporation or

30  other business entity plans to merge, which is hereinafter and

31


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  1  in ss. 607.1109 and 607.11101 designated as the surviving

  2  entity.

  3         (b)  The terms and conditions of the merger.

  4         (c)  The manner and basis of converting the shares of

  5  each domestic corporation that is a party to the merger and

  6  the partnership interests, interests, shares, obligations or

  7  other securities of each other business entity that is a party

  8  to the merger into partnership interests, interests, shares,

  9  obligations or other securities of the surviving entity or any

10  other domestic corporation or other business entity or, in

11  whole or in part, into cash or other property, and the manner

12  and basis of converting rights to acquire the shares of each

13  domestic corporation that is a party to the merger and rights

14  to acquire partnership interests, interests, shares,

15  obligations or other securities of each other business entity

16  that is a party to the merger into rights to acquire

17  partnership interests, interests, shares, obligations or other

18  securities of the surviving entity or any other domestic

19  corporation or other business entity or, in whole or in part,

20  into cash or other property.

21         (d)  If a partnership is to be the surviving entity,

22  the names and business addresses of the general partners of

23  the surviving entity.

24         (e)  If a limited liability company is to be the

25  surviving entity and management thereof is vested in one or

26  more managers, the names and business addresses of such

27  managers.

28         (f)  All statements required to be set forth in the

29  plan of merger by the laws under which each other business

30  entity that is a party to the merger is formed, organized, or

31  incorporated.


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  1         (4)  The plan of merger may set forth:

  2         (a)  If a domestic corporation is to be the surviving

  3  entity, any amendments to, or a restatement of, the articles

  4  of incorporation of the surviving entity, and such amendments

  5  or restatement shall be effective at the effective date of the

  6  merger.

  7         (b)  The effective date of the merger, which may be on

  8  or after the date of filing the certificate of merger.

  9         (c)  Any other provisions relating to the merger.

10         (5)  The plan of merger required by subsection (3)

11  shall be adopted and approved by each domestic corporation

12  that is a party to the merger in the same manner as is

13  provided in s. 607.1103. Notwithstanding the foregoing, if the

14  surviving entity is a partnership, no shareholder of a

15  domestic corporation that is a party to the merger shall, as a

16  result of the merger, become a general partner of the

17  surviving entity, unless such shareholder specifically

18  consents in writing to becoming a general partner of the

19  surviving entity, and unless such written consent is obtained

20  from each such shareholder who, as a result of the merger,

21  would become a general partner of the surviving entity, such

22  merger shall not become effective under s. 607.11101.  Any

23  shareholder providing such consent in writing shall be deemed

24  to have voted in favor of the plan of merger for purposes of

25  s. 607.1103.

26         (6)  Sections 607.1103 and 607.1301-607.1320 shall,

27  insofar as they are applicable, apply to mergers of one or

28  more domestic corporations with or into one or more other

29  business entities.

30         (7)  Notwithstanding any provision of this section or

31  ss. 607.1109 and 607.11101, any merger consisting solely of


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  1  the merger of one or more domestic corporations with or into

  2  one or more foreign corporations shall be consummated solely

  3  in accordance with the requirements of s. 607.1107.

  4         607.1109  Articles of merger.--

  5         (1)  After a plan of merger is approved by each

  6  domestic corporation and other business entity that is a party

  7  to the merger, the surviving entity shall deliver to the

  8  Department of State for filing articles of merger, which shall

  9  be executed by each domestic corporation as required by s.

10  607.0120 and by each other business entity as required by

11  applicable law, and which shall set forth:

12         (a)  The plan of merger.

13         (b)  A statement that the plan of merger was approved

14  by each domestic corporation that is a party to the merger in

15  accordance with the applicable provisions of this chapter,

16  and, if applicable, a statement that the written consent of

17  each shareholder of such domestic corporation who, as a result

18  of the merger, becomes a general partner of the surviving

19  entity has been obtained pursuant to s. 607.1108(5).

20         (c)  A statement that the plan of merger was approved

21  by each domestic partnership that is a party to the merger in

22  accordance with the applicable provisions of chapter 620.

23         (d)  A statement that the plan of merger was approved

24  by each domestic limited liability company that is a party to

25  the merger in accordance with the applicable provisions of

26  chapter 608.

27         (e)  A statement that the plan of merger was approved

28  by each other business entity that is a party to the merger,

29  other than domestic corporations, limited liability companies,

30  and partnerships formed, organized, or incorporated under the

31  laws of this state, in accordance with the applicable laws of


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  1  the state, country, or jurisdiction under which such other

  2  business entity is formed, organized, or incorporated.

  3         (f)  The effective date of the merger, which may be on

  4  or after the date of filing the articles of merger, provided,

  5  if the articles of merger do not provide for an effective date

  6  of the merger, the effective date shall be the date on which

  7  the articles of merger are filed.

  8         (g)  If the surviving entity is another business entity

  9  formed, organized, or incorporated under the laws of any

10  state, country, or jurisdiction other than this state:

11         1.  The address, including street and number, if any,

12  of its principal office under the laws of the state, country,

13  or jurisdiction in which it was formed, organized, or

14  incorporated.

15         2.  A statement that the surviving entity is deemed to

16  have appointed the Secretary of State as its agent for service

17  of process in a proceeding to enforce any obligation or the

18  rights of dissenting shareholders of each domestic corporation

19  that is a party to the merger.

20         3.  A statement that the surviving entity has agreed to

21  promptly pay to the dissenting shareholders of each domestic

22  corporation that is a party to the merger the amount, if any,

23  to which they are entitled under s. 607.1302.

24         (2)  A copy of the articles of merger, certified by the

25  Department of State, may be filed in the office of the

26  official who is the recording officer of each county in this

27  state in which real property of a party to the merger other

28  than the surviving entity is situated.

29         607.11101  Effect of merger of domestic corporation and

30  other business entity.--When a merger becomes effective:

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  1         (1)  Every domestic corporation and other business

  2  entity that is a party to the merger merges into the surviving

  3  entity and the separate existence of every domestic

  4  corporation and other business entity that is a party to the

  5  merger except the surviving entity ceases.

  6         (2)  The title to all property other than real property

  7  or any interest therein, owned by each domestic corporation

  8  and other business entity that is a party to the merger is

  9  vested in the surviving entity without reversion or

10  impairment. Title to real property or any interest therein

11  shall be conveyed by the recordation of a deed with payment of

12  applicable taxes thereon.

13         (3)  The surviving entity shall thereafter be

14  responsible and liable for all the liabilities and obligations

15  of each domestic corporation and other business entity that is

16  a party to the merger, including liabilities arising out of

17  the rights of dissenters with respect to such merger under

18  applicable law.

19         (4)  Any claim existing or action or proceeding pending

20  by or against any domestic corporation or other business

21  entity that is a party to the merger may be continued as if

22  the merger did not occur or the surviving entity may be

23  substituted in the proceeding for the domestic corporation or

24  other business entity which ceased existence.

25         (5)  Neither the rights of creditors nor any liens upon

26  the property of any domestic corporation or other business

27  entity shall be impaired by such merger.

28         (6)  If a domestic corporation is the surviving entity,

29  the articles of incorporation of such corporation in effect

30  immediately prior to the time the merger becomes effective

31  shall be the articles of incorporation of the surviving


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  1  entity, except as amended or restated to the extent provided

  2  in the plan of merger.

  3         (7)  The shares, partnership interests, interests,

  4  obligations, or other securities, and the rights to acquire

  5  shares, partnership interests, interests, obligations, or

  6  other securities, of each domestic corporation and other

  7  business entity that is a party to the merger shall be

  8  converted into shares, partnership interests, interests,

  9  obligations, or other securities, or rights to such

10  securities, of the surviving entity or any other domestic

11  corporation or other business entity or, in whole or in part,

12  into cash or other property as provided in the plan of merger,

13  and the former holders of shares, partnership interests,

14  interests, obligations, or other securities, or rights to such

15  securities, shall be entitled only to the rights provided in

16  the plan of merger and to their rights as dissenters, if any,

17  under ss. 607.1301-607.1320, s. 608.4384, s. 620.205, or other

18  applicable law.

19         Section 5.  Sections 608.438, 608.4381, 608.4382,

20  608.4383, and 608.4384, Florida Statutes, are created to read:

21         608.438  Merger of limited liability company.--

22         (1)  As used in this section and ss. 608.4381-608.4384,

23  the term "other business entity" includes a corporation, a

24  business trust or association, a real estate investment trust,

25  a common law trust, an unincorporated business, a general

26  partnership, a limited partnership, a limited liability

27  company other than a limited liability company organized under

28  the laws of this chapter, or any other entity that is formed

29  pursuant to the requirements of applicable law.

30         (2)  Unless otherwise provided in the articles of

31  organization or the regulations of a limited liability


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  1  company, pursuant to a plan of merger, a limited liability

  2  company may merge with or into one or more limited liability

  3  companies or other business entities formed, organized, or

  4  incorporated under the laws of this state or any other state,

  5  the United States, foreign country, or other foreign

  6  jurisdiction, if:

  7         (a)  Each limited liability company that is a party to

  8  the merger complies with the applicable provisions of this

  9  chapter and complies with the terms of its articles of

10  organization and regulations.

11         (b)  Each domestic partnership that is a party to the

12  merger complies with the applicable provisions of chapter 620.

13         (c)  Each domestic corporation that is a party to the

14  merger complies with the applicable provisions of chapter 607.

15         (d)  The merger is permitted by the laws of the state,

16  country, or jurisdiction under which each other business

17  entity that is a party to the merger is formed, organized, or

18  incorporated, and each such other business entity complies

19  with such laws in effecting the merger.

20         (3)  The plan of merger shall set forth:

21         (a)  The name of each limited liability company and the

22  name and jurisdiction of formation, organization, or

23  incorporation of each other business entity planning to merge,

24  and the name of the surviving or resulting limited liability

25  company or other business entity into which each other limited

26  liability company or other business entity plans to merge,

27  which is, in this section and in ss. 608.4381-608.4384,

28  designated as the surviving entity.

29         (b)  The terms and conditions of the merger.

30         (c)  The manner and basis of converting the interests

31  of the members of each limited liability company that is a


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  1  party to the merger and the interests, partnership interests,

  2  shares, obligations, or other securities of each other

  3  business entity that is a party to the merger into interests,

  4  partnership interests, shares, obligations, or other

  5  securities of the surviving entity or any other limited

  6  liability company or other business entity or, in whole or in

  7  part, into cash or other property, and the manner and basis of

  8  converting rights to acquire interests of each limited

  9  liability company that is a party to the merger and rights to

10  acquire interests, partnership interests, shares, obligations,

11  or other securities of each other business entity that is a

12  party to the merger into rights to acquire interests,

13  partnership interests, shares, obligations, or other

14  securities of the surviving entity or any other limited

15  liability company or other business entity or, in whole or in

16  part, into cash or other property.

17         (d)  If a partnership is to be the surviving entity,

18  the names and business addresses of the general partners of

19  the surviving entity.

20         (e)  If a limited liability company is to be the

21  surviving entity, and management thereof is vested in one or

22  more managers, the names and business addresses of such

23  managers.

24         (f)  All statements required to be set forth in the

25  plan of merger by the laws under which each other business

26  entity that is a party to merger is formed, organized, or

27  incorporated.

28         (4)  The plan of merger may set forth:

29         (a)  If a limited liability company is to be the

30  surviving entity, any amendments to, or a restatement of, the

31  articles of organization or the regulations of the surviving


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  1  entity, and such amendments or restatement shall be effective

  2  at the effective date of the merger.

  3         (b)  The effective date of the merger, which may be on

  4  or after the date of filing the certificate of merger.

  5         (c)  A provision authorizing one or more of the limited

  6  liability companies that are parties to the merger to abandon

  7  the proposed merger pursuant to s. 608.4381(7).

  8         (d)  A statement of, or a statement of the method of

  9  determining, the "fair value," as defined in s.

10  608.4384(1)(b), of an interest in any limited liability

11  company that is a party to the merger.

12         (e)  Other provisions relating to the merger.

13         608.4381  Action on plan of merger.--

14         (1)  Unless the articles of organization or the

15  regulations of a limited liability company require a

16  greater-than-majority vote, the plan of merger shall be

17  approved in writing by a majority of the managers of a limited

18  liability company that is a party to the merger in which

19  management is not reserved to its members. Unless the articles

20  of organization or the regulations of a limited liability

21  company require a greater-than-majority vote or provide for

22  another method of determining the voting rights of each of its

23  members, and whether or not management is reserved to its

24  members, the plan of merger shall be approved in writing by a

25  majority of the members of a limited liability company that is

26  a party to the merger, and, if applicable, the vote of each

27  member shall be weighted in accordance with s. 608.4231(1)(b),

28  provided, unless the articles of organization or the

29  regulations of the limited liability company require a

30  greater-than-majority vote or provide for another method of

31  determining the voting rights of each of its members, if there


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  1  is more than one class or group of members, the merger shall

  2  be approved by a majority of the members of each such class or

  3  group, and, if applicable, the vote of each member shall be

  4  weighted in accordance with s. 608.4231(1)(b).

  5         (2)  In addition to the approval required by subsection

  6  (1), if the surviving entity is a partnership, no member of a

  7  limited liability company that is a party to the merger shall,

  8  as a result of the merger, become a general partner of the

  9  surviving entity unless such member specifically consents in

10  writing to becoming a general partner of the surviving entity

11  and unless such written consent is obtained from each such

12  member who, as a result of the merger, would become a general

13  partner of the surviving entity, such merger shall not become

14  effective under s. 608.4383.  Any member providing such

15  consent in writing shall be deemed to have voted in favor of

16  the plan of merger for purposes of s. 608.4384.

17         (3)  All members of each limited liability company that

18  is a party to the merger shall be given written notice of any

19  meeting or other action with respect to the approval of a plan

20  of merger as provided in subsection (4), not fewer than 30 or

21  more than 60 days before the date of the meeting at which the

22  plan of merger shall be submitted for approval by the members

23  of such limited liability company, provided, if the plan of

24  merger is submitted to the members of the limited liability

25  company for their written approval or other action without a

26  meeting, such notification shall be given to each member not

27  fewer than 30 or more than 60 days before the effective date

28  of the merger.  Pursuant to s. 608.455, the notification

29  required by this subsection may be waived in writing by the

30  person or persons entitled to such notification.

31


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  1         (4)  The notification required by subsection (3) shall

  2  be in writing and shall include:

  3         (a)  The date, time, and place of the meeting, if any,

  4  at which the plan of merger is to be submitted for approval by

  5  the members of the limited liability company, or, if the plan

  6  of merger is to be submitted for written approval or by other

  7  action without a meeting, a statement to that effect.

  8         (b)  A copy or summary of the plan of merger.

  9         (c)  A clear and concise statement that, if the plan of

10  merger is effected, members dissenting therefrom may be

11  entitled, if they comply with the provisions of s. 608.4384

12  regarding the rights of dissenting members, to be paid the

13  fair value of their interests, which shall be accompanied by a

14  copy of s. 608.4384.

15         (d)  A statement of, or a statement of the method of

16  determining, the "fair value," as defined in s.

17  608.4384(1)(b), of an interest in the limited liability

18  company, in the case of a limited liability company in which

19  management is not reserved to its members, as determined by

20  the managers of such limited liability company, which

21  statement may consist of a reference to the applicable

22  provisions of such limited liability company's articles of

23  organization or regulations that determine the fair value of

24  an interest in the limited liability company for such

25  purposes, and which shall constitute an offer by the limited

26  liability company to purchase at such fair value any interests

27  of a "dissenter," as defined in s. 608.4384(1)(a), unless and

28  until such dissenter's right to receive the fair value of his

29  interests in the limited liability company is terminated

30  pursuant to s. 608.4384(8).

31


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  1         (e)  The date on which such notification was mailed or

  2  delivered to the members.

  3         (f)  Any other information concerning the plan of

  4  merger.

  5         (5)  The notification required by subsection (3) shall

  6  be deemed to be given at the earliest date of:

  7         (a)  The date such notification is received;

  8         (b)  Five days after the date such notification is

  9  deposited in the United States mail addressed to the member at

10  his address as it appears in the books and records of the

11  limited liability company, with postage thereon prepaid;

12         (c)  The date shown on the return receipt, if sent by

13  registered or certified mail, return receipt requested, and

14  the receipt is signed by or on behalf of the addressee; or

15         (d)  The date such notification is given in accordance

16  with the provisions of the articles of organization or the

17  regulations of the limited liability company.

18         (6)  A plan of merger may provide for the manner, if

19  any, in which the plan of merger may be amended at any time

20  before the effective date of the merger, except after the

21  approval of the plan of merger by the members of a limited

22  liability company that is a party to the merger, the plan of

23  merger may not be amended to:

24         (a)  Change the amount or kind of interests,

25  partnership interests, shares, obligations, other securities,

26  cash, rights, or any other property to be received by the

27  members of such limited liability company in exchange for or

28  on conversion of their interests;

29         (b)  If the surviving entity is a limited liability

30  company, change any term of the articles of organization or

31  the regulations of the surviving entity, except for changes


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  1  that otherwise could be adopted without the approval of the

  2  members of the surviving entity;

  3         (c)  If the surviving entity is not a limited liability

  4  company, change any term of the articles of incorporation or

  5  comparable governing document of the surviving entity, except

  6  for changes that otherwise could be adopted by the board of

  7  directors or comparable representatives of the surviving

  8  entity; or

  9         (d)  Change any of the terms and conditions of the plan

10  of merger if any such change, alone or in the aggregate, would

11  materially and adversely affect the members, or any class or

12  group of members, of such limited liability company.

13

14  If an amendment to a plan of merger is made in accordance the

15  plan and articles of merger have been filed with the

16  Department of State, amended articles of merger executed by

17  each limited liability company and other business entity that

18  is a party to the merger shall be filed with the Department of

19  State prior to the effective date of the merger.

20         (7)  Unless the limited liability company's articles of

21  organization or regulations or the plan of merger provide

22  otherwise, notwithstanding the prior approval of the plan of

23  merger by any limited liability company that is a party to the

24  merger in which management is not reserved to its members, and

25  at any time prior to the filing of articles of merger with the

26  Department of State, the planned merger may be abandoned,

27  subject to any contractual rights, by any such limited

28  liability company by the affirmative vote of a majority of its

29  managers without further action by its members, in accordance

30  with the procedure set forth in the plan of merger or if none

31


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  1  is set forth, in the manner determined by the managers of such

  2  limited liability company.

  3         608.4382  Articles of merger.--

  4         (1)  After a plan of merger is approved by each limited

  5  liability company and other business entity that is a party to

  6  the merger, the surviving entity shall deliver to the

  7  Department of State for filing articles of merger, which shall

  8  be executed by each limited liability company and by each

  9  other business entity as required by applicable law, and which

10  shall set forth:

11         (a)  The plan of merger.

12         (b)  A statement that the plan of merger was approved

13  by each limited liability company that is a party to the

14  merger in accordance with the applicable provisions of this

15  chapter, and, if applicable, a statement that the written

16  consent of each member of such limited liability company who,

17  as a result of the merger, becomes a general partner of the

18  surviving entity has been obtained pursuant to s. 608.4381(2).

19         (c)  A statement that the plan of merger was approved

20  by each domestic partnership that is a party to the merger in

21  accordance with the applicable provisions of chapter 620.

22         (d)  A statement that the plan of merger was approved

23  by each domestic corporation that is a party to the merger in

24  accordance with the applicable provisions of chapter 607.

25         (e)  A statement that the plan of merger was approved

26  by each other business entity that is a party to the merger,

27  other than limited liability companies, partnerships, and

28  corporations formed, organized, or incorporated under the laws

29  of this state, in accordance with the applicable laws of the

30  state, country, or jurisdiction under which such other

31  business entity is formed, organized, or incorporated.


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  1         (f)  The effective date of the merger, which may be on

  2  or after the date of filing the articles of merger, provided,

  3  if the articles of merger do not provide for an effective date

  4  of the merger, the effective date shall be the date on which

  5  the articles of merger are filed.

  6         (g)  If the surviving entity is another business entity

  7  formed, organized, or incorporated under the laws of any

  8  state, country, or jurisdiction other than this state:

  9         1.  The address, including street and number, if any,

10  of its principal office under the laws of the state, country,

11  or jurisdiction in which it was formed, organized, or

12  incorporated.

13         2.  A statement that the surviving entity is deemed to

14  have appointed the Secretary of State as its agent for service

15  of process in a proceeding to enforce any obligation or the

16  rights of dissenting members of each limited liability company

17  that is a party to the merger.

18         3.  A statement that the surviving entity has agreed to

19  promptly pay to the dissenting members of each limited

20  liability company that is a party to the merger the amount, if

21  any, to which such dissenting members are entitled under s.

22  608.4384.

23         (2)  A copy of the articles of merger, certified by the

24  Department of State, may be filed in the office of the

25  official who is the recording officer of each county in this

26  state in which real property of a party to the merger other

27  than the surviving entity is situated.

28         608.4383  Effect of merger.--When a merger becomes

29  effective:

30         (1)  Every limited liability company and other business

31  entity that is a party to the merger merges into the surviving


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  1  entity and the separate existence of every limited liability

  2  company and other business entity that is a party to the

  3  merger, except the surviving entity, ceases.

  4         (2)  The title to all property other than real property

  5  or any interest therein, owned by each domestic corporation

  6  and other business entity that is a party to the merger is

  7  vested in the surviving entity without reversion or

  8  impairment. Title to real property or any interest therein

  9  shall be conveyed by the recordation of a deed with payment of

10  applicable taxes thereon.

11         (3)  The surviving entity shall thereafter be

12  responsible and liable for all the liabilities and obligations

13  of each limited liability company and other business entity

14  that is a party to the merger, including liabilities arising

15  out of the rights of dissenters with respect to such merger

16  under applicable law.

17         (4)  Any claim existing or action or proceeding pending

18  by or against any limited liability company or other business

19  entity that is a party to the merger may be continued as if

20  the merger did not occur or the surviving entity may be

21  substituted in the proceeding for the limited liability

22  company or other business entity which ceased existence.

23         (5)  Neither the rights of creditors nor any liens upon

24  the property of any limited liability company or other

25  business entity shall be impaired by such merger.

26         (6)  If a limited liability company is the surviving

27  entity, the articles of organization and the regulations of

28  such limited liability company in effect immediately prior to

29  the time the merger becomes effective shall be the articles of

30  organization and the regulations of the surviving entity,

31


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  1  except as amended or restated to the extent provided in the

  2  plan of merger.

  3         (7)  The interests, partnership interests, shares,

  4  obligations, or other securities, and the rights to acquire

  5  interests, partnership interests, shares, obligations, or

  6  other securities, of each limited liability company and other

  7  business entity that is a party to the merger shall be

  8  converted into interests, partnership interests, shares,

  9  obligations, or other securities, or rights to such

10  securities, of the surviving entity or any other limited

11  liability company or other business entity or, in whole or in

12  part, into cash or other property as provided in the plan of

13  merger, and the former holders of interests, partnership

14  interests, shares, obligations, or other securities, or rights

15  to such securities, shall be entitled only to the rights

16  provided in the plan of merger and to their rights as

17  dissenters, if any, under s. 608.4384, ss. 607.1301-607.1320,

18  s. 620.205, or other applicable law.

19         608.4384  Rights of dissenting members.--

20         (1)  For purposes of this section, the term:

21         (a)  "Dissenter" means a member of a limited liability

22  company who is a recordholder of the interests to which he

23  seeks relief as of the date fixed for the determination of

24  members entitled to notice of a plan of merger, who does not

25  vote such interests in favor of the plan of merger, and who

26  exercises the right to dissent from the plan of merger when

27  and in the manner required by this section.

28         (b)  "Fair value," with respect to a dissenter's

29  interests, means the value of the interests in the limited

30  liability company that is a party to a plan of merger as of

31  the close of business of the day prior to the effective date


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  1  of the merger to which the dissenter objects, excluding any

  2  appreciation or depreciation in anticipation of the merger,

  3  unless such exclusion would be inequitable.

  4         (2)  Each member of a limited liability company that is

  5  a party to a merger shall have the right to be paid the fair

  6  value of his interests as a dissenter only as provided in this

  7  section.

  8         (3)  Not later than 20 days after the date on which the

  9  notification required by s. 608.4381(3) is given to the

10  members, or if such notification is waived in writing by the

11  dissenter, not later than 20 days after the date of such

12  written waiver, the dissenter shall deliver to the limited

13  liability company a written demand for payment to him of the

14  fair value of the interests as to which he seeks relief that

15  states his address, the number and class, if any, of those

16  interests, and, at the election of the dissenter, the amount

17  claimed by him as the fair value of the interests.  The

18  statement of fair market value by the dissenter, if any, shall

19  constitute an offer by the dissenter to sell the interests to

20  the limited liability company at such amount. A dissenter may

21  dissent as to less than all the interests registered in his

22  name.  In such event, the dissenter's rights shall be

23  determined as if the interests as to which he has dissented

24  and his remaining interests were registered in the names of

25  different members.  If the interests as to which a dissenter

26  seeks relief are represented by certificates, the dissenter

27  shall deposit such certificates with the limited liability

28  company simultaneously with the delivery of the written demand

29  for payment.  Upon receiving a demand for payment from a

30  dissenter who is a recordholder of uncertificated interests,

31  the limited liability company shall make an appropriate


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  1  notation of the demand for payment in its records. The limited

  2  liability company may restrict the transfer of uncertificated

  3  interests from the date the dissenter's written demand for

  4  payment is delivered.  A written demand for payment served on

  5  the limited liability company in which the dissenter is a

  6  member shall constitute service on the surviving entity.

  7         (4)  The written demand for payment required by

  8  subsection (3) shall be deemed to be delivered to the limited

  9  liability company at the earliest of:

10         (a)  The date such written demand is received;

11         (b)  Five days after the date such written demand is

12  deposited in the United States mail addressed to the principal

13  business office of the limited liability company, with postage

14  thereon prepaid;

15         (c)  The date shown on the return receipt, if such

16  written demand is sent by registered or certified mail, return

17  receipt requested, and the receipt is signed by or on behalf

18  of the addressee; or

19         (d)  The date such written demand is given in

20  accordance with the provisions of the limited liability

21  company's articles of organization or regulations.

22         (5)  Unless the articles of organization or regulations

23  of the limited liability company in which the dissenter is a

24  member provides a basis or method for determining and paying

25  the fair value of the interests as to which the dissenter

26  seeks relief, or unless the limited liability company or the

27  surviving entity and the dissenter have agreed in writing as

28  to the fair value of the interests as to which the dissenter

29  seeks relief, the dissenter, the limited liability company, or

30  the surviving entity, within 90 days after the dissenter

31  delivers the written demand for payment to the limited


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  1  liability company, may file an action in any court of

  2  competent jurisdiction in the county in this state where the

  3  registered office of the limited liability company is located

  4  or was located when the plan of merger was approved by its

  5  members, or in the county in this state in which the principal

  6  office of the limited liability company that issued the

  7  interests is located or was located when the plan of merger

  8  was approved by its partners, requesting that the fair value

  9  of the dissenter's interests be determined.  The court shall

10  also determine whether each dissenter that is a party to such

11  proceeding, as to whom the limited liability company or the

12  surviving entity requests the court to make such

13  determination, is entitled to receive payment of the fair

14  value for his interests.  Other dissenters, within the 90-day

15  period after a dissenter delivers a written demand to the

16  limited liability company, may join such proceeding as

17  plaintiffs or may be joined in any such proceeding as

18  defendants, and any two or more such proceedings may be

19  consolidated.  If the limited liability company or surviving

20  entity commences such a proceeding, all dissenters, whether or

21  not residents of this state, other than dissenters who have

22  agreed in writing with the limited liability company or the

23  surviving entity as to the fair value of the interests as to

24  which such dissenters seek relief, shall be made parties to

25  such action as an action against their interests.  The limited

26  liability company or the surviving entity shall serve a copy

27  of the initial pleading in such proceeding upon each dissenter

28  who is a party to such proceeding and who is a resident of

29  this state in the manner provided by law for the service of a

30  summons and complaint and upon each such dissenter who is not

31  a resident of this state either by registered or certified


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  1  mail and publication or in such matter as is permitted by law.

  2  The jurisdiction of the court in such a proceeding shall be

  3  plenary and exclusive.  All dissenters who are proper parties

  4  to the proceeding are entitled to judgment against the limited

  5  liability company or the surviving entity for the amount of

  6  the fair value of their interests as to which payment is

  7  sought hereunder.  The court may, if it so elects, appoint one

  8  or more persons as appraisers to receive evidence and

  9  recommend a decision on the question of fair value.  The

10  appraisers shall have such power and authority as is specified

11  in the order of their appointment or an amendment thereof.

12  The limited liability company shall pay each dissenter the

13  amount found to be due him within 10 days after final

14  determination of the proceedings.  Upon payment of the

15  judgment, the dissenter shall cease to have any interest in

16  the interests as to which payment is sought hereunder.

17         (6)  The judgment may, at the discretion of the court,

18  include a fair rate of interest, to be determined by the

19  court.

20         (7)  The costs and expenses of any such proceeding

21  shall be determined by the court and shall be assessed against

22  the limited liability company or the surviving entity, but all

23  or any part of such costs and expenses may be apportioned and

24  assessed as the court deems equitable against any or all of

25  the dissenters who are parties to the proceeding, to whom the

26  limited liability company or the surviving entity has made an

27  offer to pay for the interests, if the court finds that the

28  action of such dissenters in failing to accept such offer was

29  arbitrary, vexatious or not in good faith. Such expenses shall

30  include reasonable compensation for, and reasonable expenses

31  of, the appraisers, but shall exclude the fees and expenses of


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  1  counsel for, and experts employed by, any party. If the fair

  2  value of the interests, as determined, materially exceeds the

  3  amount which the limited liability company or the surviving

  4  entity offered to pay therefor, the court in its discretion

  5  may award to any dissenter who is a party to the proceeding

  6  such amount as the court determines to be reasonable

  7  compensation to any attorney or expert employed by the

  8  dissenter in the proceeding.

  9         (8)  The right of a dissenter to receive fair value for

10  and the obligation to sell such interests as to which he seeks

11  relief, and the right of the limited liability company or the

12  surviving entity to purchase such interests and the obligation

13  to pay the fair value of such interests, shall terminate if:

14         (a)  The dissenter has not complied with this section,

15  unless the limited liability company or the surviving entity

16  waives, in writing, such noncompliance;

17         (b)  The limited liability company abandons the merger

18  or is finally enjoined or prevented from carrying it out, or

19  the members rescind their adoption or approval of the merger;

20         (c)  The dissenter withdraws his demand, with the

21  consent of the limited liability company or the surviving

22  entity; or

23         (d)1.  The articles of organization or the regulations

24  of the limited liability company in which the dissenter was a

25  member does not provide a basis or method for determining and

26  paying the dissenter the fair value of his interests.

27         2.  The limited liability company or the surviving

28  entity and the dissenter have not agreed upon the fair value

29  of the dissenter's interests.

30         3.  Neither the dissenter, the limited liability

31  company, nor the surviving entity has filed or is joined in a


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  1  complaint under subsection (5) within the 90-day period

  2  provided in subsection (5).

  3         (9)  Unless otherwise provided in the articles of

  4  organization or the regulations of the limited liability

  5  company in which the dissenter was a member, after the date

  6  the dissenter delivers the written demand for payment in

  7  accordance with subsection (3) until either the termination of

  8  the rights and obligations arising under subsection (3) or the

  9  purchase of the dissenter's interests by the limited liability

10  company or the surviving entity, the dissenter shall be

11  entitled only to payment as provided in this section and shall

12  not be entitled to any other rights accruing from such

13  interests, including voting or distribution rights.  If the

14  right to receive fair value is terminated other than by the

15  purchase of the dissenter's interests by the limited liability

16  company or the surviving entity, all rights of the dissenter

17  as a member of the limited liability company shall be

18  reinstated effective as of the date the dissenter delivered

19  the written demand for payment, including the right to receive

20  any intervening payment or other distribution with respect to

21  the dissenter's interests in the limited liability company,

22  or, if any such rights have expired or any such distribution

23  other than a cash payment has been completed, in lieu thereof

24  at the election of the surviving entity, the fair value

25  thereof in cash as determined by the surviving entity as of

26  the time of such expiration or completion, but without

27  prejudice otherwise to any action or proceeding of the limited

28  liability company that may have been taken by the limited

29  liability company on or after the date the dissenter delivered

30  the written demand for payment.

31


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  1         (10)  A member who is entitled under this section to

  2  demand payment for his interests shall not have any right at

  3  law or in equity to challenge the validity of any merger that

  4  creates his entitlement to demand payment hereunder, or to

  5  have the merger set aside or rescinded, except with respect to

  6  compliance with the provisions of the limited liability

  7  company's articles of organization or regulations or if the

  8  merger is unlawful or fraudulent with respect to such member.

  9         (11)  Unless otherwise provided in the articles of

10  organization or the regulations of the limited liability

11  company in which the dissenter was a member, this section does

12  not apply with respect to a plan of merger if, as of the date

13  fixed for the determination of members entitled to notice of a

14  plan of merger:

15         (a)  The interests of the limited liability company

16  were held of record by not fewer than 500 members; or

17         (b)  The interests were registered on a national

18  securities exchange or quoted on the National Association of

19  Securities Dealers Automated Quotation System.

20         Section 6.  Sections 620.201, 620.202, 620.203,

21  620.204, and 620.205, Florida Statutes, are created to read:

22         620.201  Merger of domestic limited partnership.

23         (1)  As used in this section and ss. 620.202-620.205,

24  the term "other business entity" includes a corporation, a

25  limited liability company, a business trust or association, a

26  real estate investment trust, a common law trust, an

27  unincorporated business, a general partnership or a limited

28  partnership but excluding a domestic limited partnership, or

29  any other entity that is formed pursuant to the requirements

30  of applicable law.

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  1         (2)  Unless otherwise provided in the partnership

  2  agreement of a domestic limited partnership, pursuant to a

  3  plan of merger, a domestic limited partnership may merge with

  4  or into one or more domestic limited partnerships or other

  5  business entities formed, organized, or incorporated under the

  6  laws of this state or any other state, the United States,

  7  foreign country, or other foreign jurisdiction, if:

  8         (a)  Each domestic partnership that is a party to the

  9  merger complies with the applicable provisions of this chapter

10  and complies with the terms of its partnership agreement.

11         (b)  Each domestic limited liability company that is a

12  party to the merger complies with the applicable provisions of

13  chapter 608.

14         (c)  Each domestic corporation that is a party to the

15  merger complies with the applicable provisions of chapter 607.

16         (d)  The merger is permitted by the laws of the state,

17  country, or jurisdiction under which each other business

18  entity that is a party to the merger is formed, organized, or

19  incorporated, and each such other business entity complies

20  with such laws in effecting the merger.

21         (3)  The plan of merger shall set forth:

22         (a)  The name of each domestic limited partnership and

23  the name and jurisdiction of formation, organization, or

24  incorporation of each other business entity planning to merge,

25  and the name of the surviving or resulting domestic limited

26  partnership or other business entity into which each other

27  domestic limited partnership or other business entity plans to

28  merge, which is hereinafter and in ss. 620.202-620.205

29  designated as the surviving entity.

30         (b)  The terms and conditions of the merger.

31


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  1         (c)  The manner and basis of converting the partnership

  2  interests of each domestic limited partnership that is a party

  3  to the merger and the partnership interests, interests,

  4  shares, obligations, or other securities of each other

  5  business entity that is a party to the merger into partnership

  6  interests, interests, shares, obligations, or other securities

  7  of the surviving entity or any other domestic limited

  8  partnership or other business entity or, in whole or in part,

  9  into cash or other property, and the manner and basis of

10  converting rights to acquire the partnership interests of each

11  domestic limited partnership that is a party to the merger and

12  rights to acquire partnership interests, interests, shares,

13  obligations, or other securities of each other business entity

14  that is a party to the merger into rights to acquire

15  partnership interests, interests, shares, obligations, or

16  other securities of the surviving entity or any other domestic

17  limited partnership or other business entity or, in whole or

18  in part, into cash or other property.

19         (d)  If a partnership is to be the surviving entity,

20  the names and business addresses of the general partners of

21  the surviving entity.

22         (e)  If a limited liability company is to be the

23  surviving entity, and management thereof is vested in one or

24  more managers, the names and business addresses of such

25  managers.

26         (f)  All statements required to be set forth in the

27  plan of merger by the laws under which each other business

28  entity that is a party to merger is formed, organized, or

29  incorporated.

30         (4)  The plan of merger may set forth:

31


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  1         (a)  If a domestic limited partnership is to be the

  2  surviving entity, any amendments to, or a restatement of, the

  3  certificate of limited partnership or partnership agreement of

  4  the surviving entity, and such amendments or restatement shall

  5  be effective on the effective date of the merger.

  6         (b)  The effective date of the merger, which may be on

  7  or after the date of filing the certificate of merger.

  8         (c)  A provision authorizing one or more of the

  9  domestic limited partnerships that are parties to the merger

10  to abandon the proposed merger pursuant to s. 620.202(7).

11         (d)  A statement of, or a statement of the method of

12  determining, the "fair value," as defined in s. 620.205(1)(b),

13  of a partnership interest in any domestic limited partnership

14  that is a party to the merger.

15         (e)  Any other provisions relating to the merger.

16         620.202  Action on plan of merger.--

17         (1)  Unless otherwise provided in the partnership

18  agreement of a domestic limited partnership, the plan of

19  merger shall be approved in writing by all of the general

20  partners of a domestic limited partnership that is a party to

21  the merger. Unless the partnership agreement of a domestic

22  limited partnership requires a greater vote, the plan of

23  merger shall also be approved in writing by those limited

24  partners who own more than a majority of the then current

25  percentage or other interests in the profits of the domestic

26  limited partnership owned by all of the limited partners,

27  provided, unless the partnership agreement of the domestic

28  limited partnership requires a greater vote, if there is more

29  than one class or group of limited partners, the plan of

30  merger shall be approved by those limited partners who own

31  more than a majority of the then current percentage or other


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  1  interests in the profits of the domestic limited partnership

  2  owned by the limited partners in each class or group.

  3         (2)  In addition to the approval required by subsection

  4  (1):

  5         (a)  If a domestic limited partnership is to be the

  6  surviving entity, no person shall, as a result of the merger,

  7  continue to be or become a general partner of the surviving

  8  entity, unless such person specifically consents in writing to

  9  continuing to be or to becoming, as the case may be, a general

10  partner of the surviving entity, and unless such written

11  consent is obtained from each such person who, as a result of

12  the merger, would become a general partner of the surviving

13  entity, such merger shall not become effective under s.

14  620.204.

15         (b)  If a partnership other than a domestic limited

16  partnership is to be the surviving entity, no partner of a

17  domestic limited partnership that is a party to the merger

18  shall, as a result of the merger, become a general partner of

19  the surviving entity unless such partner specifically consents

20  in writing to becoming a general partner of the surviving

21  entity, and unless such written consent is obtained from each

22  person who, as a result of the merger, would become a general

23  partner of the surviving entity, such merger shall not become

24  effective under s. 620.204.  Any person providing such consent

25  in writing shall be deemed to have voted in favor of the plan

26  of merger for purposes of s. 620.205.

27         (3)  All partners of each domestic limited partnership

28  that is a party to the merger shall be given written notice of

29  any meeting or other action with respect to the approval of a

30  plan of merger as provided in subsection (4), not fewer than

31  30 or more than 60 days before the date of the meeting at


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  1  which the plan of merger shall be submitted for approval by

  2  the partners of such limited partnership.  However, if the

  3  plan of merger is submitted to the partners of the limited

  4  partnership for their written approval or other action without

  5  a meeting, such notification shall be given to each partner

  6  not fewer than 30 or more than 60 days before the effective

  7  date of the merger. Notwithstanding the foregoing, the

  8  notification required by this subsection may be waived in

  9  writing by the person or persons entitled to such

10  notification.

11         (4)  The notification required by subsection (3) shall

12  be in writing and shall include:

13         (a)  The date, time, and place of the meeting, if any,

14  at which the plan of merger shall be submitted for approval by

15  the partners of the domestic limited partnership, or, if the

16  plan of merger will be submitted for written approval or by

17  other action without a meeting, a statement to that effect.

18         (b)  A copy or summary of the plan of merger.

19         (c)  A clear and concise statement that, if the plan of

20  merger is effected, partners dissenting therefrom may be

21  entitled, if they comply with the provisions of s. 620.205

22  regarding the rights of dissenting partners, to be paid the

23  fair value of their partnership interests, which shall be

24  accompanied by a copy of s. 620.205.

25         (d)  A statement of, or a statement of the method of

26  determining, the "fair value," as defined in s. 620.205(1)(b),

27  of an interest in the limited partnership as determined by the

28  general partners of the limited partnership, which statement

29  may consist of a reference to the applicable provisions of

30  such limited partnership's partnership agreement that

31  determine the fair value of an interest in the limited


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  1  partnership for these purposes, and which shall constitute an

  2  offer by the limited partnership to purchase at such fair

  3  value any partnership interests of a "dissenter," as defined

  4  in s. 620.205(1)(a), unless and until such a dissenter's right

  5  to receive the fair value of his interests in the limited

  6  partnership are is terminated pursuant to s. 620.205(8).

  7         (e)  The date on which such notification was mailed or

  8  delivered to the partners.

  9         (f)  Any other information concerning the plan of

10  merger.

11         (5)  The notification required by subsection (3) shall

12  be deemed to be given at the earliest of:

13         (a)  The date such notification is received;

14         (b)  Five days after the date such notification is

15  deposited in the United States mail addressed to the partner

16  at his address as it appears in the books and records of the

17  limited partnership, with postage thereon prepaid;

18         (c)  The date shown on the return receipt, if sent by

19  registered or certified mail, return receipt requested, and

20  the receipt is signed by or on behalf of the addressee; or

21         (d)  The date such notification is given in accordance

22  with the provisions of the limited partnership's partnership

23  agreement.

24         (6)  A plan of merger may provide for the manner, if

25  any, in which the plan of merger may be amended at any time

26  before the effective date of the merger, except, after the

27  approval of the plan of merger by the limited partners of a

28  domestic limited partnership that is a party to the merger,

29  the general partners of such domestic limited partnership

30  shall not be authorized to amend the plan of merger to:

31


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  1         (a)  Change the amount or kind of partnership

  2  interests, interests, shares, obligations, other securities,

  3  cash, rights, or any other property to be received by the

  4  limited partners of such domestic limited partnership in

  5  exchange for or on conversion of their partnership interests;

  6         (b)  If the surviving entity is a partnership, change

  7  any term of the partnership agreement of the surviving entity,

  8  except for changes that otherwise could be adopted by the

  9  general partners of the surviving entity;

10         (c)  If the surviving entity is not a partnership,

11  change any term of the articles of incorporation or comparable

12  governing document of the surviving entity, except for changes

13  that otherwise could be adopted by the board of directors or

14  comparable representatives of the surviving entity; or

15         (d)  Change any of the terms and conditions of the plan

16  of merger if any such change, alone or in the aggregate, would

17  materially and adversely affect the limited partners, or any

18  class or group of limited partners, of such domestic limited

19  partnership.

20

21  If an amendment to a plan of merger is made in accordance with

22  such plan and articles of merger have been filed with the

23  Department of State, amended articles of merger executed by

24  the general partners of each domestic limited partnership and

25  other business entity that is a party to the merger shall be

26  filed with the Department of State prior to the effective date

27  of the merger.

28         (7)  Unless the domestic limited partnership's

29  partnership agreement or the plan of merger provides

30  otherwise, notwithstanding the prior approval of the plan of

31  merger by any domestic limited partnership that is a party to


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  1  the merger and at any time prior to the filing of articles of

  2  merger with the Department of State, the planned merger may be

  3  abandoned, subject to any contractual rights, by any such

  4  domestic limited partnership by the affirmative vote of all of

  5  its general partners, without further action by its limited

  6  partners, in accordance with the procedure set forth in the

  7  plan of merger or if none is set forth, in the manner

  8  determined by the general partners of such domestic limited

  9  partnership.

10         620.203  Articles of merger.--

11         (1)  After a plan of merger is approved by each

12  domestic limited partnership and other business entity that is

13  a party to the merger, the surviving entity shall deliver

14  articles of merger to the Department of State for filing,

15  which articles shall be executed by the general partners of

16  each domestic limited partnership and by each other business

17  entity as required by applicable law, and which shall set

18  forth:

19         (a)  The plan of merger.

20         (b)  A statement that the plan of merger was approved

21  by each domestic partnership that is a party to the merger in

22  accordance with the applicable provisions of this chapter,

23  and, if applicable, a statement that the written consent of

24  each person who, as a result of the merger, becomes a general

25  partner of the surviving entity has been obtained pursuant to

26  s. 620.202(2).

27         (c)  A statement that the plan of merger was approved

28  by each domestic corporation that is a party to the merger in

29  accordance with the applicable provisions of chapter 607.

30         (d)  A statement that the plan of merger was approved

31  by each domestic limited liability company that is a party to


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  1  the merger in accordance with the applicable provisions of

  2  chapter 608.

  3         (e)  A statement that the plan of merger was approved

  4  by each other business entity that is a party to the merger,

  5  other than partnerships, limited liability companies, and

  6  corporations formed, organized, or incorporated under the laws

  7  of this state, in accordance with the applicable laws of the

  8  state, country, or jurisdiction under which such other

  9  business entity is formed, organized, or incorporated.

10         (f)  The effective date of the merger, which may be on

11  or after the date of filing the articles of merger, provided,

12  if the articles of merger do not provide for an effective date

13  of the merger, the effective date shall be the date on which

14  the articles of merger are filed.

15         (g)  If the surviving entity is another business entity

16  formed, organized, or incorporated under the laws of any

17  state, country, or jurisdiction other than this state:

18         1.  The address, including street and number, if any,

19  of its principal office under the laws of the state, country,

20  or jurisdiction in which it was formed, organized or

21  incorporated.

22         2.  A statement that the surviving entity is deemed to

23  have appointed the Secretary of State as its agent for service

24  of process in a proceeding to enforce any obligation or the

25  rights of dissenting partners of each domestic limited

26  partnership that is a party to the merger.

27         3.  A statement that the surviving entity has agreed to

28  promptly pay to the dissenting partners of each domestic

29  limited partnership that is a party to the merger the amount,

30  if any, to which they are entitled under s. 620.205.

31


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  1         (2)  A copy of the articles of merger, certified by the

  2  Department of State, may be filed in the office of the

  3  official who is the recording officer of each county in this

  4  state in which real property of a party to the merger other

  5  than the surviving entity is situated.

  6         (3)  Articles of merger shall act as a certificate of

  7  cancellation for purposes of s. 620.113 for a domestic limited

  8  partnership that is a party to the merger that is not the

  9  surviving entity and such partnership's certificate of limited

10  partnership shall be canceled upon the effective date of the

11  merger.

12         620.204  Effect of merger.--

13         (1)  When a merger becomes effective:

14         (a)  Every domestic limited partnership and other

15  business entity that is a party to the merger merges into the

16  surviving entity and the separate existence of every domestic

17  limited partnership and other business entity that is a party

18  to the merger except the surviving entity ceases.

19         (b)  The title to all property other than real property

20  or any interest therein, owned by each domestic corporation

21  and other business entity that is a party to the merger is

22  vested in the surviving entity without reversion or

23  impairment. Title to real property or any interest therein

24  shall be conveyed by the recordation of a deed with payment of

25  applicable taxes thereon.

26         (c)  The surviving entity shall thereafter be

27  responsible and liable for all the liabilities and obligations

28  of each domestic limited partnership and other business entity

29  that is a party to the merger, including liabilities arising

30  out of the rights of dissenters with respect to such merger

31  under applicable law.


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  1         (d)  Any claim existing or action or proceeding pending

  2  by or against any domestic limited partnership or other

  3  business entity that is a party to the merger may be continued

  4  as if the merger did not occur or the surviving entity may be

  5  substituted in the proceeding for the domestic limited

  6  partnership or other business entity which ceased existence.

  7         (e)  Neither the rights of creditors nor any liens upon

  8  the property of any domestic limited partnership or other

  9  business entity shall be impaired by such merger.

10         (f)  If a general partner of a partnership formed or

11  organized under the laws of this state or any other state,

12  country, or jurisdiction that is a party to the merger is not

13  a general partner of the surviving entity, the former general

14  partner shall have no liability for obligations arising out of

15  the rights of dissenters with respect to such merger under

16  applicable law or for any obligation incurred after the

17  effective date of the merger, except to the extent that a

18  former creditor of the partnership in which the former general

19  partner was a general partner extends credit to the surviving

20  entity reasonably believing that the former general partner

21  continued as a general partner of the surviving entity.

22         (g)  If a domestic limited partnership is the surviving

23  entity, the certificate of limited partnership and partnership

24  agreement of such partnership in effect immediately prior to

25  the time the merger becomes effective shall be the certificate

26  of limited partnership and partnership agreement of the

27  surviving entity, except as amended or restated to the extent

28  provided in the plan of merger.

29         (h)  The partnership interests, interests, shares,

30  obligations, or other securities, and the rights to acquire

31  partnership interests, membership interests, shares,


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  1  obligations, or other securities, of each domestic limited

  2  partnership and other business entity that is a party to the

  3  merger shall be converted into partnership interests,

  4  interests, shares, obligations, or other securities, or rights

  5  to such securities, of the surviving entity or any other

  6  domestic limited partnership or other business entity or, in

  7  whole or in part, into cash or other property as provided in

  8  the plan of merger, and the former holders of partnership

  9  interests, interests, shares, obligations, or other

10  securities, or rights to such securities, shall be entitled

11  only to the rights provided in the plan of merger and to their

12  rights as dissenters, if any, under s. 620.205, ss.

13  607.1301-607.1320, s. 608.4384, or other applicable law.

14         (2)  Unless otherwise provided in the plan of merger, a

15  merger of a domestic limited partnership, including a domestic

16  limited partnership that is not the surviving entity, shall

17  not require such domestic limited partnership to wind up its

18  affairs under s. 620.159 or pay its liabilities and distribute

19  its assets under s. 620.162.

20         620.205  Rights of dissenting partners.--

21         (1)  For purposes of this section, the term:

22         (a)  "Dissenter" means a partner of a domestic limited

23  partnership who is a recordholder of the partnership interests

24  to which he seeks relief as of the date fixed for the

25  determination of partners entitled to notice of a plan of

26  merger, who does not vote such interests in favor of the plan

27  of merger, and who exercises the right to dissent from the

28  plan of merger when and in the manner required by this

29  section.

30         (b)  "Fair value," with respect to a dissenter's

31  partnership interests, means the value of the partnership


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  1  interests in the domestic limited partnership that is a party

  2  to a plan of merger as of the close of business of the day

  3  prior to the effective date of the merger to which the

  4  dissenter objects, excluding any appreciation or depreciation

  5  in anticipation of the merger, unless such exclusion would be

  6  inequitable.

  7         (2)  Each partner of a domestic limited partnership

  8  that is a party to a merger shall have the right to be paid

  9  the fair value of his partnership interests as a dissenter as

10  provided in this section.

11         (3)  Not later than 20 days after the date on which the

12  notification required by s. 620.202(3) is given to the

13  partners, or if such notification was waived in writing by the

14  dissenter, not later than 20 days after the date of such

15  written waiver, the dissenter shall deliver to the limited

16  partnership a written demand for payment to him of the fair

17  value of the interests as to which he seeks relief that states

18  his address, the number and class, if any, of those interests,

19  and, at the election of the dissenter, the amount claimed by

20  him as the fair value of the interests.  The statement of fair

21  market value by the dissenter, if any, shall constitute an

22  offer by the dissenter to sell the partnership interests to

23  the limited partnership for such amount.  A dissenter may

24  dissent as to less than all the partnership interests

25  registered in his name.  In such event, the dissenter's rights

26  shall be determined as if the partnership interests as to

27  which he has dissented and his remaining partnership interests

28  were registered in the names of different partners.  If the

29  interests as to which a dissenter seeks relief are represented

30  by certificates, the dissenter shall deposit such certificates

31  with the limited partnership simultaneously with the delivery


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  1  of the written demand for payment.  Upon receiving a demand

  2  for payment from a dissenter who is a record holder of

  3  uncertificated interests, the limited partnership shall make

  4  an appropriate notation of the demand for payment in its

  5  records.  The limited partnership may restrict the transfer of

  6  uncertificated interests from the date the dissenter's written

  7  demand for payment is delivered.  A written demand for payment

  8  served on the domestic limited partnership in which the

  9  dissenter is a partner shall constitute service on the

10  surviving entity.

11         (4)  The written demand for payment required by

12  subsection (3) shall be deemed to be delivered to the limited

13  partnership at the earliest of:

14         (a)  The date such written demand is received;

15         (b)  Five days after the date such written demand is

16  deposited in the United States mail addressed to the principal

17  business office of the limited partnership, with postage

18  thereon prepaid;

19         (c)  The date shown on the return receipt, if such

20  written demand is sent by registered or certified mail, return

21  receipt requested, and the receipt is signed by or on behalf

22  of the addressee; or

23         (d)  The date such written demand is given in

24  accordance with the provisions of the limited partnership's

25  partnership agreement.

26         (5)  Unless the partnership agreement of the limited

27  partnership in which the dissenter is a partner provides a

28  basis or method for determining and paying the fair value of

29  the interests as to which the dissenter seeks relief, or

30  unless the limited partnership or the surviving entity and the

31  dissenter have agreed in writing as to the fair value of the


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  1  interests as to which the dissenter seeks relief, the

  2  dissenter, the limited partnership, or the surviving entity,

  3  within 90 days after the dissenter delivers the written demand

  4  for payment to the limited partnership, may file an action in

  5  any court of competent jurisdiction in the county in this

  6  state where the registered office of the limited partnership

  7  is located or was located when the plan of merger was approved

  8  by its partners, or in the county in this state in which the

  9  principal office of the limited partnership that issued the

10  partnership interests is located or was located when the plan

11  of merger was approved by its partners, requesting a

12  determination of the fair value of the dissenter's partnership

13  interests.  The court shall also determine whether each

14  dissenter that is a party to such proceeding, as to whom the

15  limited partnership or the surviving entity requests the court

16  to make such determination, is entitled to receive payment of

17  the fair value for his partnership interests. Other

18  dissenters, within the 90-day period after a dissenter

19  delivers a written demand to the partnership, may join such

20  proceeding as plaintiffs or may be joined in any such

21  proceeding as defendants, and any two or more such proceedings

22  may be consolidated.  If the limited partnership or surviving

23  entity commences such a proceeding, all dissenters, whether or

24  not residents of this state, other than dissenters who have

25  agreed in writing with the limited partnership or the

26  surviving entity as to the fair value of the partnership

27  interests as to which such dissenters seek relief, shall be

28  made parties to such action as an action against their

29  partnership interests.  The limited partnership or the

30  surviving entity shall serve a copy of the initial pleading in

31  such proceeding upon each dissenter who is a party to such


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  1  proceeding and who is a resident of this state in the manner

  2  provided by law for the service of a summons and complaint and

  3  upon each such dissenter who is not a resident of this state

  4  either by registered or certified mail and publication or in

  5  such manner as is permitted by law.  The jurisdiction of the

  6  court in such a proceeding shall be plenary and exclusive.

  7  All dissenters who are proper parties to the proceeding are

  8  entitled to judgment against the limited partnership or the

  9  surviving entity for the amount of the fair value of their

10  partnership interests as to which payment is sought hereunder.

11  The court may, if it so elects, appoint one or more persons as

12  appraisers to receive evidence and recommend a decision on the

13  question of fair value.  The appraisers shall have such power

14  and authority as is specified in the order of their

15  appointment or an amendment thereof.  The limited partnership

16  shall pay each dissenter the amount found to be due him within

17  10 days after final determination of the proceedings.  Upon

18  payment of the judgment, the dissenter shall cease to have any

19  interest in the partnership interests as to which payment is

20  sought hereunder.

21         (6)  The judgment may, at the discretion of the court,

22  include a fair rate of interest, to be determined by the

23  court.

24         (7)  The costs and expenses of any such proceeding

25  shall be determined by the court and shall be assessed against

26  the limited partnership or the surviving entity.  However, all

27  or any part of such costs and expenses may be apportioned and

28  assessed as the court deems equitable against any or all of

29  the dissenters who are parties to the proceeding, to whom the

30  limited partnership or the surviving entity has made an offer

31  to pay for the partnership interests, if the court finds that


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  1  the action of such dissenters in failing to accept such offer

  2  was arbitrary, vexatious, or not in good faith. Such expenses

  3  shall include reasonable compensation for, and reasonable

  4  expenses of, the appraisers, but shall exclude the fees and

  5  expenses of counsel for, and experts employed by, any party.

  6  If the fair value of the partnership interests, as determined,

  7  materially exceeds the amount which the limited partnership or

  8  the surviving entity offered to pay therefor, the court in its

  9  discretion may award to any dissenter who is a party to the

10  proceeding such amount as the court determines to be

11  reasonable compensation to any attorney or expert employed by

12  the dissenter in the proceeding.

13         (8)  The right of a dissenter to receive fair value for

14  and the obligation to sell such partnership interests as to

15  which he seeks relief and the right of the domestic limited

16  partnership or the surviving entity to purchase such interests

17  and the obligation to pay the fair value of such interests

18  shall terminate if:

19         (a)  The dissenter has not complied with this section,

20  unless the limited partnership or the surviving entity waives

21  in writing such noncompliance;

22         (b)  The limited partnership abandons the merger or is

23  finally enjoined or prevented from carrying out the merger, or

24  the partners rescind their adoption or approval of the merger;

25         (c)  The dissenter withdraws his demand, with the

26  consent of the limited partnership or the surviving entity; or

27         (d)1.  The partnership agreement of the domestic

28  limited partnership in which the dissenter was a partner does

29  not provide a basis or method for determining and paying the

30  dissenter the fair value of his partnership interests.

31


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  1         2.  The limited partnership or the surviving entity and

  2  the dissenter have not agreed upon the fair value of the

  3  dissenter's partnership interests.

  4         3.  Neither the dissenter, the limited partnership nor

  5  the surviving entity has filed or is joined in a complaint

  6  under subsection (5) within the 90-day period provided in that

  7  subsection.

  8         (9)  Unless otherwise provided in the partnership

  9  agreement of the domestic limited partnership in which the

10  dissenter was a partner, after the date the dissenter delivers

11  the written demand for payment in accordance with subsection

12  (3) until either the termination of the rights and obligations

13  arising from it or the purchase of the dissenter's partnership

14  interests by the limited partnership or the surviving entity,

15  the dissenter shall be entitled only to payment as provided in

16  this section and shall not be entitled to any other rights

17  accruing from such interests, including voting or distribution

18  rights.  If the right to receive fair value is terminated

19  other than by the purchase of the dissenter's partnership

20  interests by the limited partnership or the surviving entity,

21  all rights of the dissenter as a partner of the limited

22  partnership shall be reinstated effective as of the date the

23  dissenter delivered the written demand for payment, including

24  the right to receive any intervening payment or other

25  distribution with respect to the dissenter's interests in the

26  limited partnership, or, if any such rights have expired or

27  any such distribution other than a cash payment has been

28  completed, in lieu thereof at the election of the surviving

29  entity, the fair value thereof in cash as determined by the

30  surviving entity as of the time of such expiration or

31  completion, but without prejudice otherwise to any action or


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  1  proceeding of the limited partnership that may have been taken

  2  by the limited partnership on or after the date the dissenter

  3  delivered the written demand for payment.

  4         (10)  A partner who is entitled under this section to

  5  demand payment for his partnership interests shall not have

  6  any right at law or in equity to challenge the validity of any

  7  merger that creates his entitlement to demand payment

  8  hereunder, or to have the merger set aside or rescinded,

  9  except with respect to compliance with the provisions of the

10  limited partnership's partnership agreement or if the merger

11  is unlawful or fraudulent with respect to such partner.

12         (11)  Unless otherwise provided in the partnership

13  agreement of the domestic limited partnership in which the

14  dissenter was a partner, this section does not apply with

15  respect to a plan of merger if, as of the date fixed for the

16  determination of partners entitled to notice of a plan of

17  merger:

18         (a)  The partnership interests of the limited

19  partnership were held of record by not fewer than 500

20  partners; or

21         (b)  The partnership interests were registered on a

22  national securities exchange or quoted on the National

23  Association of Securities Dealers Automated Quotation System.

24         Section 7.  Subsection (1) of section 220.02, Florida

25  Statutes, is amended and subsection (11) is added to that

26  section to read:

27         220.02  Legislative intent.--

28         (1)  It is the intent of the Legislature in enacting

29  this code to impose a tax upon all corporations,

30  organizations, associations, and other artificial entities

31  which derive from this state or from any other jurisdiction


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  1  permanent and inherent attributes not inherent in or available

  2  to natural persons, such as perpetual life, transferable

  3  ownership represented by shares or certificates, and limited

  4  liability for all owners. It is intended that any limited

  5  liability company that is classified as a partnership for

  6  federal income tax purposes and formed under chapter 608 or

  7  qualified to do business in this state as a foreign limited

  8  liability company not companies be subject to the tax imposed

  9  by this code. It is the intent of the Legislature to subject

10  such corporations and other entities to taxation hereunder for

11  the privilege of conducting business, deriving income, or

12  existing within this state.  This code is not intended to tax,

13  and shall not be construed so as to tax, any natural person

14  who engages in a trade, business, or profession in this state

15  under his or her own or any fictitious name, whether

16  individually as a proprietorship or in partnership with

17  others, or as a member or a manager of a limited liability

18  company classified as a partnership for federal income tax

19  purposes; any estate of a decedent or incompetent; or any

20  testamentary trust.  However, a corporation or other taxable

21  entity which is or which becomes partners with one or more

22  natural persons shall not, merely by reason of being a

23  partner, exclude from its net income subject to tax its

24  respective share of partnership net income.  This statement of

25  intent shall be given preeminent consideration in any

26  construction or interpretation of this code in order to avoid

27  any conflict between this code and the mandate in s. 5, Art.

28  VII of the State Constitution that no income tax be levied

29  upon natural persons who are residents and citizens of this

30  state.

31


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  1         (11)  Notwithstanding any other provision in this

  2  chapter, it is the intent of the Legislature that, except as

  3  otherwise provided under the Internal Revenue Code, for

  4  purposes of this chapter a "qualified subchapter S

  5  subsidiary," as that term is defined in s. 1361(b)(3) of the

  6  Internal Revenue Code, shall not be treated as a separate

  7  corporation or entity from the S corporation parent to which

  8  the subsidiary's assets, liabilities, income, deductions, and

  9  credits are attributed under s. 1361(b)(3) thereof.

10         (2)  This section shall take effect upon this act

11  becoming a law. The provisions of this section are intended to

12  clarify the intent of the Legislature under existing law and

13  are effective with respect to tax years beginning on or after

14  January 1, 1997.

15         Section 8.  (1)  Subsection (4) is added to section

16  220.22, Florida Statutes, to read:

17         220.22  Returns; filing requirement.--

18         (4)  For the year in which an election is made pursuant

19  to s. 1361(b)(3) of the Internal Revenue Code, the qualified

20  subchapter S subsidiary shall file an informational return

21  with the department, which return shall be restricted to

22  information identifying the subsidiary, the electing S

23  corporation parent, and the effective date of the election.

24         (2)  This section shall take effect upon this act

25  becoming a law. The provisions of this section are intended to

26  clarify the intent of the Legislature under existing law and

27  are effective with respect to tax years beginning on or after

28  January 1, 1997; however, no penalty shall be assessed for

29  failure to file the information return required by this

30  section if the return would have been due on or before the

31  date this act becomes a law.


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  1         Section 9.  Paragraph (e) of subsection (1) of section

  2  220.03, Florida Statutes, is amended to read:

  3         220.03  Definitions.--

  4         (1)  SPECIFIC TERMS.--When used in this code, and when

  5  not otherwise distinctly expressed or manifestly incompatible

  6  with the intent thereof, the following terms shall have the

  7  following meanings:

  8         (e)  "Corporation" includes all domestic corporations;

  9  foreign corporations qualified to do business in this state or

10  actually doing business in this state; joint-stock companies;

11  limited liability companies, under chapter 608; common-law

12  declarations of trust, under chapter 609; corporations not for

13  profit, under chapter 617; agricultural cooperative marketing

14  associations, under chapter 618; professional service

15  corporations, under chapter 621; foreign unincorporated

16  associations, under chapter 622; private school corporations,

17  under chapter 623; foreign corporations not for profit which

18  are carrying on their activities in this state; and all other

19  organizations, associations, legal entities, and artificial

20  persons which are created by or pursuant to the statutes of

21  this state, the United States, or any other state, territory,

22  possession, or jurisdiction. The term "corporation" does not

23  include proprietorships, even if using a fictitious name;

24  partnerships of any type, as such; limited liability companies

25  that are taxable as partnerships for federal income tax

26  purposes; state or public fairs or expositions, under chapter

27  616; estates of decedents or incompetents; testamentary

28  trusts; or private trusts.

29         Section 10.  Subsection (2) of section 220.13, Florida

30  Statutes, is amended to read:

31         220.13  "Adjusted federal income" defined.--


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  1         (2)  For purposes of this section, a taxpayer's taxable

  2  income for the taxable year means taxable income as defined in

  3  s. 63 of the Internal Revenue Code and properly reportable for

  4  federal income tax purposes for the taxable year, but subject

  5  to the limitations set forth in paragraph (1)(b) with respect

  6  to the deductions provided by ss. 172 (relating to net

  7  operating losses), 170(d)(2) (relating to excess charitable

  8  contributions), 404(a)(1)(D) (relating to excess pension trust

  9  contributions), 404(a)(3)(A) and (B) (to the extent relating

10  to excess stock bonus and profit-sharing trust contributions),

11  and 1212 (relating to capital losses) of the Internal Revenue

12  Code, except that, subject to the same limitations, the term:

13         (a)  "Taxable income," in the case of a life insurance

14  company subject to the tax imposed by s. 801 of the Internal

15  Revenue Code, means life insurance company taxable income;

16  however, for purposes of this code, the total of any amounts

17  subject to tax under s. 815(a)(2) of the Internal Revenue Code

18  pursuant to s. 801(c) of the Internal Revenue Code shall not

19  exceed, cumulatively, the total of any amounts determined

20  under s. 815(c)(2) of the Internal Revenue Code of 1954, as

21  amended, from January 1, 1972, to December 31, 1983;

22         (b)  "Taxable income," in the case of an insurance

23  company subject to the tax imposed by s. 831(b) of the

24  Internal Revenue Code, means taxable investment income;

25         (c)  "Taxable income," in the case of an insurance

26  company subject to the tax imposed by s. 831(a) of the

27  Internal Revenue Code, means insurance company taxable income;

28         (d)  "Taxable income," in the case of a regulated

29  investment company subject to the tax imposed by s. 852 of the

30  Internal Revenue Code, means investment company taxable

31  income;


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  1         (e)  "Taxable income," in the case of a real estate

  2  investment trust subject to the tax imposed by s. 857 of the

  3  Internal Revenue Code, means the income subject to tax,

  4  computed as provided in s. 857 of the Internal Revenue Code;

  5         (f)  "Taxable income," in the case of a corporation

  6  which is a member of an affiliated group of corporations

  7  filing a consolidated income tax return for the taxable year

  8  for federal income tax purposes, means taxable income of such

  9  corporation for federal income tax purposes as if such

10  corporation had filed a separate federal income tax return for

11  the taxable year and each preceding taxable year for which it

12  was a member of an affiliated group, unless a consolidated

13  return for the taxpayer and others is required or elected

14  under s. 220.131;

15         (g)  "Taxable income," in the case of a cooperative

16  corporation or association, means the taxable income of such

17  organization determined in accordance with the provisions of

18  ss. 1381 through 1388 of the Internal Revenue Code;

19         (h)  "Taxable income," in the case of an organization

20  which is exempt from the federal income tax by reason of s.

21  501(a) of the Internal Revenue Code, means its unrelated

22  business taxable income as determined under s. 512 of the

23  Internal Revenue Code;

24         (i)  "Taxable income," in the case of a corporation for

25  which there is in effect for the taxable year an election

26  under s. 1362(a) of the Internal Revenue Code, means the

27  amounts subject to tax under s. 1374 or s. 1375 of the

28  Internal Revenue Code for each taxable year;

29         (j)  "Taxable income," in the case of a limited

30  liability company, other than a limited liability company

31  classified as a partnership for federal income tax purposes,


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  1  as defined in and organized pursuant to chapter 608 or

  2  qualified to do business in this state as a foreign limited

  3  liability company or other than a similar limited liability

  4  company classified as a partnership for federal income tax

  5  purposes and created as an artificial entity pursuant to the

  6  statutes of the United States or any other state, territory,

  7  possession, or jurisdiction, if such limited liability company

  8  or similar entity is taxable as a corporation for federal

  9  income tax purposes absent a federal report and determination

10  of taxable income as a corporation under the Internal Revenue

11  Code, means taxable income determined as if such limited

12  liability company were required to file or had filed a federal

13  corporate income tax return under the Internal Revenue Code;

14         (k)  "Taxable income," in the case of a taxpayer liable

15  for the alternative minimum tax as defined in s. 55 of the

16  Internal Revenue Code, means the alternative minimum taxable

17  income as defined in s. 55(b)(2) of the Internal Revenue Code,

18  less the exemption amount computed under s. 55(d) of the

19  Internal Revenue Code.  A taxpayer is not liable for the

20  alternative minimum tax unless the taxpayer's federal tax

21  return, or related federal consolidated tax return, if

22  included in a consolidated return for federal tax purposes,

23  reflect a liability on the return filed for the alternative

24  minimum tax as defined in s. 55(b)(2) of the Internal Revenue

25  Code;

26         (l)  "Taxable income," in the case of a taxpayer whose

27  taxable income is not otherwise defined in this subsection,

28  means the sum of amounts to which a tax rate specified in s.

29  11 of the Internal Revenue Code plus the amount to which a tax

30  rate specified in s. 1201(a)(2) of the Internal Revenue Code

31  are applied for federal income tax purposes.


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  1         Section 11.  Section 608.406, Florida Statutes, is

  2  amended to read:

  3         608.406  Limited liability company name.--

  4         (1)  The words "limited liability company" or "limited

  5  company," or their abbreviation "L.L.C." or "L.C.," shall be

  6  the last words of the name of every limited liability company

  7  formed under the provisions of this chapter.

  8         (2)  The limited liability name may not contain

  9  language stating or implying that the limited liability

10  company is organized for a purpose other than that permitted

11  in this act and its articles of organization.

12         (3)  The limited liability name may not contain

13  language stating or implying that the limited liability

14  company is connected with a state or federal government agency

15  or a corporation chartered under the laws of the United

16  States.

17         (4)  The limited liability name must be distinguishable

18  upon the records of the Division of Corporations of the

19  Department of State from all other entities or filings, except

20  fictitious name registrations pursuant to s. 865.09, organized

21  or registered under the laws of this state that are on file

22  with the division.

23         (5)  Omission of the words "limited liability company"

24  or "limited company," or their abbreviation "L.L.C. or "L.C.,"

25  in the use of the name of the limited liability company shall

26  render any person who participates in the omission, or

27  knowingly acquiesces in it, liable for any indebtedness,

28  damage, or liability occasioned by the omission.

29         Section 12.  Section 608.405, Florida Statutes, is

30  amended to read:

31


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  1         608.405  Formation.--One Two or more persons may form a

  2  limited liability company.

  3         Section 13.  Section (2) of section 608.407, Florida

  4  Statutes, is amended to read:

  5         608.407  Articles of organization.--

  6         (2)  An affidavit declaring that the limited liability

  7  company has at least one member two members and setting forth

  8  the amount of the cash and a description and agreed value of

  9  property other than cash contributed by the members and the

10  amount anticipated to be contributed by the members shall

11  accompany the articles of organization of a limited liability

12  company.

13         Section 14.  Section 608.471, Florida Statutes, is

14  amended to read:

15         608.471  Tax exemption on income of certain limited

16  liability companies company.--

17         (1)  A limited liability company classified as a

18  partnership for federal income tax purposes and organized

19  pursuant to this chapter or qualified to do business in this

20  state as a foreign limited liability company is not an

21  "artificial entity" within the purview of s. 220.02 and is not

22  subject to the tax imposed under chapter 220.

23         (2)  The income of a limited liability company that is

24  classified as a partnership for federal income tax purposes

25  and that is organized pursuant to this chapter or is qualified

26  to do business in this state as a foreign limited liability

27  company shall not be subject to the Florida Income Tax Code

28  and the tax levied pursuant to chapter 220.

29         (3)  For purposes of taxation under chapter 220, a

30  limited liability company formed in this state or authorized

31  to transact business in this state as a foreign limited


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  1  liability company shall be classified as a partnership unless

  2  classified otherwise for federal income tax purposes, in which

  3  case the limited liability company shall be classified

  4  identically to its classification for federal income tax

  5  purposes.  For purposes of taxation under chapter 220, a

  6  member or an assignee of a member of a limited liability

  7  company formed in this state or qualified to do business in

  8  this state as a foreign limited liability company shall be

  9  treated as a resident or nonresident partner unless classified

10  otherwise for federal income tax purposes, in which case the

11  member or assignee of a member shall have the same status as

12  such member or assignee of a member has for federal income tax

13  purposes. A distribution shall be deemed a "dividend" under s.

14  316 of the Internal Revenue Code as such code is defined in s.

15  220.03.

16         Section 15.  Subsections (2) and (3) of section

17  607.0122, section 607.0402, paragraph (b) of subsection (2) of

18  section 607.1506, section 608.4061, subsections (2) and (3) of

19  section 617.0122, section 617.0402, paragraph (a) of

20  subsection (2) of section 617.1506, section 620.104,

21  subsection (7) of section 620.182, and subsection (2) of

22  section 620.784, Florida Statutes, are repealed.

23         Section 16.  This act shall take effect July 1, 1998.

24

25

26

27

28

29

30

31


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