Purpose

Allows title insurance agents to conduct business as limited liability corporations (LLC).

Background

In 1992 the Arizona Legislature passed the Limited Liability Act which allows a business to organize as an LLC as long as it does not conduct or promote banking or insurance activities (A.R.S. 29-609). An LLC is a hybrid between a corporation and a partnership in that its investors have limited liability much like a corporation, while it is taxed like a partnership at both the state and federal levels.

H.B. 2580 allows title insurance agents to conduct business as an LLC.

There is no fiscal impact associated with H.B. 2580 according to the Joint Legislative Budget Committee staff.

Provisions

1. Permits an LLC to conduct business as a title insurance agent.

2. Adds limited liability companies to the definition of a “title insurance agent.”

3. Allows the Director of the Department of Insurance to grant a temporary license to a qualified LLC.

4. Requires members of an LLC to be individually liable for all engagements of the company up to the amount of each person’s initial investment in the LLC.

5. Makes technical corrections.

6. Provides for a general effective date.

House Action

3/6/01 DPA 57-1-2-0

Prepared by Senate Staff

March 13, 2001

Assigned to BI FOR COMMITTEE

Purpose