West VirginiaSB 6702026 Regular SessionSenateWALLET

Adopting Uniform Protected Series Act

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Bill Overview

Analyzed Economic Effects

24 provisions identified: 9 benefits, 3 costs, 12 mixed.

Stronger disclosures on report solicitations

Beginning July 1, 2026, any nongovernment seller that offers annual‑report filing services must clearly say the product is not approved by a government agency. They must also tell businesses they can file directly with the Secretary of State for the $25 annual fee, or $50 every two years where that applies. If a solicitation breaks these disclosure rules, a harmed person can sue for three times the amount solicited, plus court costs and attorney fees.

Protected series asset and creditor rules

An asset counts as a series asset only if records name the series and clearly describe the asset, when it was acquired, and from whom. Only company members can be associated members, and leaving the company ends that status; initial distributional interests belong to an associated member or the company. A series can have more than one manager; if no associated members exist, the company manages. Certain members and legal representatives can get information under the same rules as LLC members. People are not personally liable just for being a member, manager, or transferee, and courts use normal LLC veil‑piercing standards. Creditor remedies apply to members and transferees, and judgments can reach non‑associated assets under set timing rules; the party claiming an asset is associated must prove it.

Core legal status for protected series

A protected series is its own legal person, separate from the company and other series. It can sue and be sued in its own name and has the same powers as the company. West Virginia law sets the internal rules and relationships for series. The operating agreement controls most internal matters unless the law says otherwise. For some rules, the law treats a protected series like a separate LLC.

How dissolved nonprofits wind up assets

Beginning July 1, 2026, a dissolved association continues only to wind up. It pays debts first. Any remaining property goes to a like‑purpose nonprofit if another law requires, or follows the group’s rules. If neither applies, it follows unclaimed property law or goes to current members by membership share.

Legal protections for nonprofit members

Beginning July 1, 2026, an association may repay authorized, reasonable expenses. It may indemnify members and administrators for liabilities from acting for the group; administrators must have followed their legal duties. A person facing a case can ask in writing for advance payment of legal costs, must affirm indemnity applies, promise repayment if not, and get approval from disinterested members in writing. The association may buy liability insurance for members and administrators. These protections also cover former members and administrators for acts while serving. A judgment against the association alone is not a judgment against a member or administrator.

Veteran-owned business logo and how to apply

The Secretary of State creates an official veteran‑owned business logo by July 1, 2026. Within 90 days after the rule takes effect, the Secretary provides an application to request use of the logo. Starting July 1, 2026, the Secretary sets rules to verify a business is veteran‑owned. Within 60 days after the logo is created, the Secretary posts a public notice with how to apply.

Opt in or out of the new nonprofit law

An eligible unincorporated nonprofit can choose to be governed by this article if members approve, or later choose to stop. If it opts in, it is treated as a decentralized unincorporated nonprofit; if it opts out or drops below 100 members, it continues under the earlier nonprofit law. The entity stays the same legal person throughout, with the same property, debts, and pending cases, and its internal rules continue unless they conflict with the law that now applies. Courts use general law and fairness rules to fill gaps, and the Secretary of State may make rules. The article takes effect July 1, 2026.

Penalties for misleading business solicitations

Beginning July 1, 2026, failing to include the required disclosure in a solicitation is a misdemeanor. On conviction, the penalty is up to a $1,000 fine for each noncompliant solicitation, up to one year in jail, or both.

Foreign series LLCs: which law applies

If a foreign series LLC does business in the state, its internal affairs follow the law of the state where it was formed. Activities of a foreign protected series are not automatically counted as the company’s activities for court or “doing business” tests, and the reverse is also true. State law may still change some liability rules.

Legal protections for decentralized nonprofits

State law governs any decentralized nonprofit formed in West Virginia, and the group’s rules must say where it was formed. The association is a separate legal person, and members are not automatically liable for its debts or wrongs. The association can sue, defend, and bring claims for its members when the claim fits the group’s purpose and does not need each member to join. Beginning July 1, 2026, an association may limit administrators’ money‑damage liability in its rules, but not for improper personal gain, intentional harm or crimes, serious loyalty breaches, or improper distributions.

Flat $25 fee for amendments

Starting July 1, 2026, you pay $25 for each amendment or correction to organization papers, including name changes. This covers filings for LLCs, series LLCs, protected series, professional LLCs, LLPs, limited partnerships, business trusts, and similar entities. Also starting July 1, 2026, annual and biennial report fees the state collects go into the General Administrative Fees Account. Report fee amounts do not change.

Nonprofits must file a service agent

An association must file with the Secretary of State an agent to receive legal papers. An authorized person and the agent must sign and acknowledge the filing. If the agent resigns, the association has 10 business days to appoint and file a new agent. The filing office may charge fees and can refuse incorrect filings.

Limits on series LLC deals

A protected series cannot be a member of the company or create another protected series. A protected series also cannot merge, be bought or sold, convert, or take part in merger‑like transactions. A series LLC is generally barred from being acquired, acquiring others, converting, or being the surviving company in a merger unless a specific legal exception applies. An operating agreement cannot override core statutory rules like distinctness, powers, governing law, and filing requirements.

Decentralized nonprofit records and oversight

Beginning July 1, 2026, these associations do not need to name an administrator. Members and administrators can get electronic records about the group’s activities and money with reasonable notice when the request relates to their rights or duties. The association may set reasonable confidentiality rules and must prove they are reasonable if challenged. Former members and administrators can get records tied to their time of service in good faith. The association does not have to keep a list of member names or addresses.

Ending or merging a protected series

A protected series dissolves if the company dissolves, if all members consent, when an event in the operating agreement occurs, or by court order. After dissolution, the series must wind up like an LLC; the company is not done winding up until every series finishes. The series can publish a notice for claims, and the company can end a series by filing a cancellation. Reinstatement and waiver rules apply series‑by‑series when the company is reinstated or waives winding up. A series LLC can merge only with other LLCs, and the surviving company cannot be newly created.

Forming and maintaining a protected series

All members must agree to create a protected series, and the company must file a signed designation. The series name must start with the company’s name and include “Protected Series” or “P.S.”/“PS”. The company’s registered agent also serves each series, and that agreement must be in place before filing. A series can be served by serving the company or the series’ agent. To get a certificate of good standing, the latest annual report must list the series and no dissolution filing can be on record; not listing blocks the certificate but the series still exists.

New business filing fees and limited waivers

Beginning July 1, 2026: you pay $10 per certificate of existence, authorization, or good standing. Foreign LLCs pay $150 for a certificate of authority. Registering a series LLC costs $25. Reinstating an administratively dissolved LLC or protected series costs $25. The Secretary may waive new business registration fees at up to three state entrepreneurship events. The law does not forgive past missed annual reports or unpaid fees.

Veteran‑owned logo rules and donations

Beginning July 1, 2026, the veteran‑owned business logo may not say or imply the state endorses the business; it may only show that it is veteran‑owned. Starting the same date, the Secretary of State may add an optional donation box to the logo application. Any amount you choose to give goes to the West Virginia Veterans’ Home Loan Mortgage Fund. Donations are voluntary.

Court rules for decentralized nonprofit groups

In lawsuits, the summons must go to the group’s agent, officer, managing agent, or authorized person. If none can be served, a member may be served. A claim does not end just because members or administrators change. For venue, the group counts as a resident in any county where it has an office, does business, or where its agent lives.

How these nonprofits end and wind up

A group exists forever unless its rules say otherwise. It can dissolve under its rules, by member approval if there are no rules, if membership drops below 100 and other state rules are not met, or by court order. After dissolving, it continues only to wind up. Beginning July 1, 2026, members may authorize an administrator to wind up, who must avoid gross negligence, willful misconduct, and knowing law violations. If no administrator is picked, members must meet the same duty of care while winding up.

New governance rules for decentralized nonprofits

The law sets default rules for how members join, resign, and can be suspended or expelled. Debts or duties you had before leaving still apply after you resign or are expelled. Members do not owe fiduciary duties just for being members, and being a member does not make you an agent. Membership interests can be transferred unless the group’s rules limit transfers. If the rules are silent, major actions pass by a majority vote of interests that vote. Groups may use blockchains, smart contracts, and algorithms to run votes and decisions if their rules allow it.

Clearer merger rules for series LLCs

In mergers involving a series LLC, the merger plan must state for each protected series if it continues, moves, or dissolves and who gets membership or transferee rights. The articles of merger must attach signed records that end, relocate, or establish protected series. When the merger takes effect, each protected series follows the plan. Rights, property, and debts of continuing or relocated series carry on without a break, and creditors can enforce pre‑merger rights against assets now in the survivor.

Foreign series registration and court disclosures

A foreign protected series registering to do business here must follow the state’s foreign LLC rules. The application must state the series’ name and where it was formed, and, if there are other foreign protected series, list a contact with their names and addresses. If a foreign series LLC or protected series becomes a party in a West Virginia case, it must, within 30 days, disclose the names and street and mailing addresses of each protected series, manager, and registered agent. The 30‑day clock pauses while the party challenges personal jurisdiction, and courts may enforce these duties.

Property and profit rules for nonprofits

A decentralized nonprofit can own, mortgage, and transfer property in its own name and be named in trusts or contracts. It may record who is authorized to sign real‑estate transfers; the county may charge a fee, and the record ends after five years unless renewed. The group can earn profits, but profits must support its nonprofit purpose. It generally cannot distribute profits to members, but it can pay reasonable wages and expenses, buy back interests if allowed, and distribute property when it winds up. Starting July 1, 2026, it does not have to provide duplicate records if the same information is already available, including on a distributed ledger.

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Sponsors & Cosponsors

Sponsor

Carl Martin
Republican • House

Cosponsors

Vince Deeds
Republican • Senate
Eric Tarr
Republican • Senate
Jay Taylor
Republican • Senate
Jimmy Willis
Republican • House

Roll Call Votes

All Roll Calls

Yes: 162 • No: 0

Senate vote • 3/14/2026

Senate concurred in House amendments and passed bill (Roll No. 694)

Yes: 34 • No: 0

House vote • 3/13/2026

Passed House (Roll No. 547)

Yes: 94 • No: 0

Senate vote • 2/25/2026

Passed Senate (Roll No. 224)