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Security Interest Owner's Interest In Business Entity

Concerning the limitation of laws governing security interests to an owner's interest in a business entity.
2016 Regular Session
Financial Services & Commerce
Bill Summary

Under current law, the 'Uniform Commercial Code' (Code) invalidates contractual limits on the transferability of some assets that can be subject to a security interest. In 2006, the 'Colorado Corporations and Associations Act' (Act) was amended to clearly and broadly exempt an owner's interest in a business entity from these Code provisions to effectuate the 'pick your partner' principle that allows small businesses to control their ownership. Section 3 of the act narrows the exemption in the Act to that necessary for 'pick your partner', and sections 1 and 2 codify this narrowed exemption in the Code.

(Note: This summary applies to this bill as enacted.)


Became Law


Bill Text

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details