SB 670: Adopting Uniform Protected Series Act - West Virginia

sb670 hfa akers 3-12 _1 adopted.htm → sb670 hfat akers 3-13_revised adopted.htm · 3 edits

MINOR

The bill was revised to update the title and description to reflect the addition of two major new business entity types: the Uniform Protected Series Act for limited liability companies and the Decentralized Unincorporated Nonprofit Association Act. The substantive text of the new laws remains largely the same, but the revision clarifies that these new entities are now part of the official bill text.

Scope change

The scope of the bill was expanded to include the creation of 'protected series' within limited liability companies and 'decentralized unincorporated nonprofit associations' that utilize distributed ledger technology, which were previously only present in the committee substitute version.

TITLE

The bill title was updated from 'HFA' to 'HFAT' and the date was changed from 3-12 to 3-13 to reflect the revised committee substitute.

DESCRIPTION

The introductory description of the bill was rewritten to explicitly list the new articles and sections added, including the Uniform Protected Series Act and the Decentralized Unincorporated Nonprofit Association Act.

CONTENT

The original text of the new laws (Uniform Protected Series Act and Decentralized Unincorporated Nonprofit Association Act) was removed from the bill text, indicating that this version of the bill only contains the title and description amendments rather than the full statutory language.

sb670 h jud am _1 adopted.htm → sb670 hfa akers 3-12 _1 adopted.htm · 6 edits

MODERATE

This bill significantly expands West Virginia's business laws by adding a new chapter for 'Decentralized Unincorporated Nonprofit Associations' that allows groups to operate using blockchain and smart contracts while maintaining nonprofit status. It also updates the Uniform Limited Liability Company Act to include 'protected series' and modifies business fee structures and reporting requirements, including new exemptions for veteran-owned businesses and changes to late filing penalties.

Scope change

The bill expands the scope of state law to include a new type of entity (decentralized unincorporated nonprofit association) and modifies the scope of existing entities by adding protected series to limited liability companies.

SCOPE

Added a new chapter creating a legal framework for 'Decentralized Unincorporated Nonprofit Associations' that can use distributed ledger technology (blockchain) and smart contracts for governance.

DEFINITION

Added definitions for 'Protected Series' and 'Protected-Series Distributional Interest' within the Limited Liability Company Act to allow for internal organizational structures that limit liability.

ELIGIBILITY

Modified the definition of 'Veteran-owned business' to include active-duty members and clarified that these businesses are exempt from annual report fees for their first four years.

REQUIREMENT

Changed the annual report fee from a flat $25 to a tiered system where corporations pay $25 and nonprofit corporations pay $25, while biennial reports cost $50, and updated the late fee structure.

Added new requirements for the Secretary of State to develop an official logotype for veteran-owned businesses and an application process for its use.

TIMELINE

Updated the effective date for biennial reporting elections and veteran-owned business fee exemptions to July 1, 2026.

Committee Substitute → sb670 h jud am _1 adopted.htm · 7 edits

MODERATE

The bill was amended to replace the original Committee Substitute with a new version that adopts the Uniform Protected Series Act, establishing a legal framework for 'protected series' within limited liability companies to separate assets and liabilities. It also updates fee schedules for the Secretary of State and adjusts annual reporting requirements, including a new biennial reporting option for entities that have filed timely reports for five consecutive years.

Scope change

The bill now explicitly creates a new legal structure for 'protected series' within limited liability companies, allowing them to operate as distinct entities with their own assets and liabilities, while also expanding the scope of business entity fees and reporting options.

SCOPE

Added the Uniform Protected Series Act to create a new legal structure for 'protected series' within limited liability companies, allowing them to hold assets and incur liabilities separately from the main company and other series.

DEFINITION

Defined new terms including 'associated asset', 'associated member', 'protected series', and 'protected-series manager' to support the new legal structure.

REQUIREMENT

Added requirements for filing protected series designations with the Secretary of State and maintaining specific records to distinguish assets between the company and protected series.

Modified annual reporting requirements to include the name of each protected series and introduced an option for entities to elect biennial reporting after five consecutive years of timely annual filings.

FISCAL

Updated fee schedules for the Secretary of State, including new fees for filing protected series designations and amendments, and adjusted the deposit of annual report fees into state accounts.

ENFORCEMENT

Added rules for enforcing judgments against assets of protected series and non-associated assets, clarifying liability limits between companies and their protected series.

TIMELINE

Set effective dates for new reporting options and fee structures, with specific references to July 1, 2026, for certain provisions.

Enrolled Committee Substitute → Committee Substitute · 6 edits

MODERATE

The bill text was converted from a finalized, enacted version to a draft version submitted by the Judiciary Committee, including updated metadata like the report date and committee name. Substantively, the legislation introduces a new legal structure called 'protected series' within limited liability companies, allowing owners to ring-fence specific assets and liabilities to protect them from claims against the rest of the company. The bill also establishes new fees for registering these entities and amends existing fee schedules to include charges for foreign protected series.

Scope change

The bill expands the scope of West Virginia's Uniform Limited Liability Company Act to include a new mechanism for asset protection within companies, while also extending the Uniform Commercial Code definition of 'person' to include these protected series.

SCOPE

Introduced a new 'Uniform Protected Series Act' creating a legal structure where specific assets and liabilities of a limited liability company are isolated in a 'protected series' to shield them from creditors of other parts of the company.

DEFINITION

Added new legal definitions for 'protected series', 'associated asset', 'associated member', and 'foreign protected series' to govern the new entity structure.

REQUIREMENT

Established new requirements for companies to file specific designations with the Secretary of State to create a protected series and to list these series in annual reports.

Added disclosure requirements for foreign series limited liability companies to reveal their protected series and managers when participating in legal proceedings in West Virginia.

ENFORCEMENT

Created specific rules for serving legal process on protected series and defined how judgments against a company or one series can be enforced against the assets of other series.

FISCAL

Amended fee schedules to include charges for filing protected series designations ($25), registering foreign protected series ($150), and issuing certificates of good standing for them ($10).

Introduced Version → Enrolled Committee Substitute · 6 edits · Apr 1, 2026

MODERATE

This bill introduces two major new legal structures in West Virginia: a 'Protected Series' for Limited Liability Companies to separate assets and liabilities, and a 'Decentralized Unincorporated Nonprofit Association' to legally recognize blockchain-based nonprofit groups. It also updates fee schedules for the Secretary of State and clarifies reporting requirements for various business entities.

Scope change

The bill expands the scope of West Virginia law to include two new types of business entities that did not previously have specific statutory recognition: protected series within LLCs and decentralized nonprofit associations based on distributed ledger technology.

SCOPE

Created a new 'Uniform Protected Series Act' allowing LLCs to establish internal divisions (protected series) that can hold assets and incur debts separately from the main company and other divisions, provided strict record-keeping is maintained.

Created a new 'Decentralized Unincorporated Nonprofit Association Act' to legally recognize nonprofit groups formed using distributed ledger technology (like blockchain) with at least 100 members.

FISCAL

Increased the filing fee for foreign limited liability companies and foreign protected series from $100 to $150.

REQUIREMENT

Added specific record-keeping requirements for LLCs establishing protected series, mandating detailed logs of assets and members to prove separation.

DEFINITION

Added new definitions for 'Protected Series', 'Associated Asset', 'Decentralized Unincorporated Nonprofit Association', and 'Distributed Ledger Technology' to the state code.

TIMELINE

Set the effective date for the new nonprofit association rules and updated annual report fees to July 1, 2026.

Adopting Uniform Protected Series Act

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