Kansas House Bill HB2355

Kansas 2025-2026 Regular Session

• Introduced: 2/7/25
• Refer: 2/7/25

Caption

Modifying provisions related to series limited liability companies.

Summary

HB 2355 revises Kansas law governing series limited liability companies (series LLCs). The bill updates K.S.A. 17-76,143 to clarify how a series LLC may be formed, how its assets and liabilities are separated, and how a series may operate as a distinct business unit within a larger LLC. It confirms that a series can hold property, contract, sue and be sued, and conduct lawful business in its own name, while preserving the general rule that liabilities of one series are not enforceable against the assets of another series or the parent LLC, unless the operating agreement provides otherwise or the parties expressly assume joint liability. The bill also expands the role of operating agreements by expressly allowing them to impose internal governance rules and restrictions on members and managers, including choice of law, forum selection, capital contributions, transfer restrictions, noncompete and confidentiality provisions, fiduciary duties, and other obligations for the benefit of the LLC, its series, or affiliates. It adds provisions addressing distributions, dissolution, winding up, foreign series LLC registration, naming requirements, and cancellation/amendment of certificates of designation. The bill further states that wrongful transfers of property from one series to another or to the LLC, made with intent to hinder, delay, or defraud creditors, are void under Kansas fraudulent transfer law.

Impact

HB 2355 would amend Kansas’s Limited Liability Company Act to provide more detailed statutory authority for series LLCs and their internal series structures. It affects LLC organizers, members, managers, creditors, and the Secretary of State by clarifying filing requirements for certificates of designation, liability segregation rules, foreign LLC disclosures, and the legal treatment of series as separate associations for state-law purposes. It also gives operating agreements broader enforceability over governance and member obligations, which may affect how Kansas businesses structure asset protection, financing, and multi-asset operations.

Sentiment

The available context suggests the bill is generally favorable and technical in nature, with the measure requested on behalf of the Kansas Chamber and referred to the Judiciary Committee. No committee transcript or recorded votes were provided, so there is no direct evidence of debate, opposition, or amendment activity in the materials supplied. Based on the bill’s drafting, it appears aimed at business-organization modernization and clarification rather than a controversial policy change.

Contention

The main areas where disagreement could arise are the breadth of operating-agreement authority, the extent of liability shielding for series assets, and the treatment of transfers and creditor rights. Creditors may be concerned that stronger series separation could make collection more difficult, while business interests are likely to support the added flexibility and certainty. Another possible point of contention is the bill’s authorization for restrictive covenants, forum-selection clauses, and other internal governance provisions, which could be viewed as expanding private ordering at the expense of member protections.