Steve Mulligan, Legislative Liaison for the CBA Business Law Section Legislative Policy Committee: the section reviewed the bill introduced in 2020 and was opposed to it. When an LLC is formed, the operating agreement can provide for individual series underneath it that can be distinct and separate but remain protected under the LLC agreement. The section is working with Representative Baisley on a bill regarding protected series but that bill is also taking into consideration the Corporations and Associations act, specifically section 7-90-801, et al. C.R.S.
The commission clarified that the bill being drafted is not a uniform law. Mr. Mulligan confirmed that it would not be the uniform act. The CBA is not asking the commission to take a position on the bill, but is merely notifying the commission that the uniform act is not necessary in Colorado at this time as another group is working on a bill regarding protected series. Mr. Mulligan indicated that the section is reviewing the uniform act to see what portions may be incorporated into the bill. The commission encouraged the section to incorporate as much uniformity as possible to promote uniformity across the state lines.
Kurt Huffman, legislative volunteer for Representative Baisley, read a prepared statement from the Representative who was unable to attend this meeting. "While Representative Baisley supports the Uniform Protected Series Act, the Representative will be working with the Colorado Bar Association to write targeted legislation that will provide a legal framework that will allow foreign protected series to register and do business in the state of Colorado. Thank you."
The commission will not move forward with this act at this time. If protected series are allowed to operate in Colorado law, then the commission may revisit the Uniform Voidable Transactions Act.