ORS 63.661
Grounds for judicial dissolution

  • finding that limited liability company is shell entity
  • prima facie showing by Attorney General
  • effects
  • affirmative defenses

(1)

A circuit court may dissolve a limited liability company:

(a)

In a proceeding by the Attorney General if the court finds that:

(A)

The limited liability company filed articles of organization with fraudulent intent, with fraudulent information or in a manner that otherwise indicates fraud;

(B)

The limited liability company has continued to exceed or abuse the authority conferred upon the limited liability company by law; or

(C)

The limited liability company is a shell entity. For purposes of this subparagraph:
(i)
A court may find that a limited liability company is a shell entity if the court determines that the limited liability company was used or organized for an illegal purpose, was used or organized to defraud or deceive a person or a governmental agency or was used or organized to fraudulently conceal any business activity from another person or a governmental agency; and
(ii)
The Attorney General may make a prima facie showing that a limited liability company is a shell entity by stating in an affidavit that:

(I)

The limited liability company did not provide a name or address required by the Secretary of State, or the name or address the limited liability company provided was false, fraudulent or inadequate;

(II)

The limited liability company’s articles of organization, a record the limited liability company must keep under ORS 63.771 (Limited liability company records) or the limited liability company’s annual report is false, fraudulent or inadequate;

(III)

A public body, as defined in ORS 174.109 (“Public body” defined), attempted to communicate with, or serve legal process upon, the limited liability company at the address or by means of other contact information the limited liability company provided to the Secretary of State, but the limited liability company failed to respond; or

(IV)

The Attorney General has other evidence that shows that the limited liability company was used or organized for an illegal purpose, was used or organized to defraud or deceive a person or a governmental agency or was used or organized to fraudulently conceal any business activity from another person or a governmental agency.

(b)

In a proceeding by or for a member if the court finds that it is not reasonably practicable to carry on the business of the limited liability company in conformance with the articles of organization or any operating agreement.

(c)

In a proceeding by the limited liability company to have the limited liability company’s voluntary dissolution continued under court supervision.

(2)

In addition to subjecting a limited liability company to dissolution under subsection (1)(a)(C) of this section, a finding that a limited liability company is a shell entity has the following effects:

(a)

A court may rebuttably presume that the limited liability company’s filings with the Secretary of State constitute a false claim, as defined in ORS 180.750 (Definitions), in any action the Attorney General brings against the limited liability company under ORS 180.760 (Civil action for violation) and may award to the Attorney General reasonable attorney fees and the costs of investigation, preparation and litigation if the Attorney General prevails in the action; and

(b)

A public body, as defined in ORS 174.109 (“Public body” defined), in any proceeding against the limited liability company, may move to enjoin a member, manager or other person that exercises significant direction or control over the limited liability company from engaging in commercial activity in this state, including but not limited to incorporating or organizing another entity in this state.

(3)

A limited liability company may affirmatively defend against an allegation that the limited liability company is a shell entity by showing that the limited liability company, within 60 days after receiving a request to provide or correct a name, address or other information required for a filing or in articles of organization, a record the limited liability company must keep or an annual report, or within 60 days after the date of a request to respond to a communication or service of process, provided or corrected the name, address or other information or responded to the communication or service of process. [1993 c.173 §66; 2017 c.705 §24]

Source: Section 63.661 — Grounds for judicial dissolution; finding that limited liability company is shell entity; prima facie showing by Attorney General; effects; affirmative defenses, https://www.­oregonlegislature.­gov/bills_laws/ors/ors063.­html.

Law Review Citations

73 OLR 55 (1994)

63.001
Definitions
63.002
Inclusion of limited liability companies and managers and members of limited liability companies in definitions
63.004
Filing requirements
63.007
Filing, service, copying and certification fees
63.011
Effective time and date of document
63.014
Correcting filed document
63.016
Forms
63.017
Filing duty of Secretary of State
63.021
Appeal from Secretary of State’s refusal to file document
63.024
Evidentiary effect of copy of filed document
63.027
Certificate of existence or authorization
63.031
Powers
63.032
Investigations of violations of chapter
63.034
Knowledge and notice
63.044
Formation
63.047
Articles of organization
63.051
Organization
63.054
Liability for preorganization transactions
63.057
Operating agreements
63.074
Purposes
63.077
General powers
63.094
Limited liability company name
63.097
Reserved name
63.101
Registered name
63.111
Registered office and registered agent
63.114
Change of registered office or registered agent
63.117
Resignation of registered agent
63.121
Service on limited liability company
63.130
Rights of members and managers
63.140
Agency power of managers and members
63.155
Duties and standard of conduct
63.160
Limitation of liability and indemnification
63.165
Liability of members and managers
63.170
Liability of limited liability company for acts, omissions or conduct of member or manager
63.175
Contributions
63.180
Liability for contributions
63.185
Allocation of profits and losses
63.195
Allocation of interim distributions
63.200
Right to interim distributions
63.205
Voluntary withdrawal of member
63.209
Expulsion of member
63.219
Distribution in kind
63.225
Right to distribution
63.229
Limitations on distribution
63.235
Liability for wrongful distribution
63.239
Nature of membership interest
63.245
Admission of members
63.249
Assignment of membership interest
63.255
Rights of assignee who becomes member
63.259
Rights of judgment creditor against member
63.265
Cessation of membership
63.431
Operating agreement
63.434
Amendment to articles of organization
63.437
Restated articles of organization
63.441
Amendment by managers
63.444
Amendment by members
63.467
Definitions for ORS 63.467 to 63.497
63.470
Conversion
63.473
Action on plan of conversion
63.476
Articles and plan of conversion
63.479
Effect of conversion
63.481
Merger
63.487
Action on plan of merger
63.494
Articles and plan of merger
63.497
Effect of merger
63.621
Dissolution
63.625
Distribution of assets upon dissolution
63.629
Agency power of members and managers after dissolution
63.631
Articles of dissolution
63.637
Effect of dissolution
63.641
Known claims against dissolved limited liability company
63.644
Unknown claims against dissolved limited liability company
63.645
Enforcement of claims against dissolved limited liability company
63.647
Grounds for administrative dissolution
63.651
Procedure
63.654
Reinstatement following administrative dissolution
63.657
Appeal from denial of reinstatement
63.661
Grounds for judicial dissolution
63.664
Procedure for judicial dissolution
63.671
Judgment of dissolution
63.674
Deposit with State Treasurer
63.701
Authority to transact business required
63.704
Consequences of transacting business without authority
63.707
Application for authority to transact business
63.711
Amendment to application for authority
63.714
Effect of authority
63.717
Name of foreign limited liability company
63.721
Registered office and registered agent of foreign limited liability company
63.724
Change of registered office or registered agent of foreign limited liability company
63.727
Resignation of registered agent of a foreign limited liability company
63.731
Service on a foreign limited liability company
63.734
Withdrawal of foreign limited liability company
63.737
Grounds for revocation
63.741
Procedure for and effect of revocation
63.744
Appeal from revocation
63.747
Reinstatement of authority
63.771
Limited liability company records
63.777
Scope of inspection right
63.781
Court-ordered inspection
63.784
Certain expense reports to members
63.787
Annual report
63.801
Derivative proceedings
63.810
Taxation of limited liability companies and members
63.951
Short title
63.955
Interstate application
63.960
Applicability of chapter to practice of dentistry
63.965
Reservation of power to amend or repeal
63.990
Penalty for signing false document
63.992
Liability for certain actions in connection with operation of shell entity
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