SECTION 1. Section 7-12-31.1 of the General Laws in Chapter 7-12 entitled "Partnerships" is hereby amended to read as follows:

7-12-31.1. Nature of business. -- (a) Except as provided in subsection (b), a registered limited liability partnership or a foreign registered limited liability partnership may conduct any lawful business in this state.

(b) (1) A registered limited liability partnership or a foreign registered limited liability partnership may not render professional services as defined in section 7-5.1-2, except that a registered limited liability partnership may engage in the practice of public accountancy pursuant to chapter 3 of title 5 or in the practice of law pursuant to Article II, III, IV, and V of the Supreme Court rules. subsection 7-5.1-2(1), as and to the extent permitted under law or rules and regulations of the applicable regulatory agency or agencies, as defined in subsection 7-5.1-2(2). Each regulatory agency as so defined is authorized to adopt, subject to applicable law, rules and regulations regarding a domestic and foreign limited liability partnership rendering professional services. Such rules and regulations shall not be inconsistent with law or rules or regulations regarding the rendering of professional services through a professional corporation.

(2) A registered limited liability partnership or foreign registered limited liability partnership that is engaged in the practice of public accountancy in this state is subject to the laws and regulations of this state governing the practice of public accountancy by partnerships. Nothing in this section affects the authority of the Rhode Island board of accountancy to regulate the practice of public accountancy.

(3) A registered limited liability partnership or foreign registered limited liability partnership that is engaged in the practice of law in this state is subject to the laws and regulations of this state governing the practice of law by partnerships. Nothing in this section affects the authority of the Rhode Island Supreme Court to regulate the practice of law.

SECTION 2. Section 7-16-3 of the General Laws in Chapter 7-16 entitled "The Rhode Island Limited Liability Company Act" is hereby amended to read as follows:

7-16-3. Purpose and duration. -- Every limited liability company organized under this chapter has the purpose of engaging in any lawful business which a limited partnership may carry on, except the provision of professional services, as defined in section 7-5.1-2, and has perpetual existence until dissolved as terminated in accordance with this chapter, unless a more limited purpose or duration is set forth in the articles of organization.

SECTION 3. Chapter 7-16 of the General Laws entitled "The Rhode Island Limited Liability Company Act" is hereby amended by adding thereto the following sections:

7-16-3.1. Professional services. -- A limited liability company may render professional services as defined in subsection 7-5.1-2(1) as and to the extent permitted under law or rules and regulations of the applicable regulatory agency or agencies, as defined in subsection 7-5.1-2(2). Each regulatory agency as so defined is authorized to adopt, subject to applicable law, rules and regulations regarding a domestic and foreign limited liability company rendering professional services. Such rules and regulations shall not be inconsistent with law or rules or regulations regarding the rendering of professional services through a professional corporation.

7-16-3.2. Liability in rendering professional services. -- (a) The liability of an individual authorized to practice a profession for his or her own negligence, wrongful acts or misconduct, or that of any person under his or her direct supervision and control other than in an administrative capacity shall nor be affected by the individual's providing professional services in this state as a member or agent of a domestic or foreign limited liability company.

(b) An individual authorized to practice a profession and who is a member of a domestic or foreign limited liability company rendering professional services in this state is not liable solely by reason of being such a member for any negligence, wrongful acts or misconduct of another member or agent of the limited liability company. A domestic or foreign limited liability company rendering professional services in the state is liable for the negligence, wrongful acts or misconduct of its members and agents providing professional services through the limited liability company within the scope of their authority or apparent authority to act for the limited liability company.

(c) Notwithstanding any other provisions of this section, the personal liability of a member in a limited liability company engaged in the rendering of professional services shall not be less than or greater than the personal liability of a shareholder of a professional corporation organized under chapter 5.1 of title 7 engaged in the rendering of the same professional services.

7-16-3.3. Insurance or financial responsibility of limited liability company. -- (a) A limited liability company that is to perform professional services as defined in section 7-5.1-2 of the general laws shall carry, if reasonably available, liability insurance of a kind that is designed to cover the kinds of negligence, wrongful acts or misconduct for which liability is limited by section 7-16-3.2. The insurance shall be in the aggregate amount of fifty thousand dollars ($50,000) multiplied by the number of professional employees of the limited liability company as of the policy anniversary date; provided, however, that in no case shall the coverage be less than one hundred thousand dollars ($100,000) but in no event shall the necessary coverage exceed a maximum of five hundred thousand dollars ($500,000); provided further, however, that any policy for insurance coverage may include a deductible provision in any amount not to exceed twenty-five thousand dollars ($25,000) for each claim multiplied by the number of professional employees of the limited liability company as of the date of the issuance of the policy. Such policy or policies of insurance may be subject to such terms, conditions, exclusions and endorsements as are typically contained in policies of this type.

(b) If, in any proceeding, compliance by a limited liability company with the requirements of subsection (a) of this section is disputed:

(1) That issue shall be determined by the court; and

(2) The burden of proof of compliance shall be on the person who claims the limitation of liability in section 7-16-3.2.

(c) If a limited liability company is in compliance with the requirements of subsection (a) of this section, the requirements of this section shall not be admissible or in any way be made known to a jury in determining an issue of liability for or extent of the debt or obligation or damages in question.

(d) Insurance is reasonably available for the purpose of subsection (a) of this section if, at such time as the coverage would apply to the negligence, wrongful acts or misconduct in question it was reasonably available to similar types of limited liability companies through the admitted or eligible surplus lines market.

(e) A limited liability company is considered to be in compliance with subsection (a) of this section if the limited liability company provides five hundred thousand dollars ($500,000) of funds specifically designated and segregated for the satisfaction of judgments against the limited liability company based on the forms of negligence, wrongful acts and misconduct for which liability is limited by section 7-16-3.2 by:

(1) Deposit in trust or in bank escrow of cash, bank certificate of deposit or United States Treasury obligations; or

(2) A bank letter of credit or insurance company bonds.

(f) To the extent that a limited liability company maintains liability insurance or segregated funds pursuant to the laws or regulations of another jurisdiction, such liability insurance or segregated funds shall be deemed to satisfy this section if the amount hereof is equal to or greater than the amount specified in subsection (a) or subsection (e).

7-16-5.3. Conversion of general partnership to a limited liability company. -- (a) Any domestic or foreign general partnership may convert to a limited liability company by filing articles of organization that meet the requirements of section 7-16 -6 or by filing an amendment or restatement of articles of organization of an existing limited liability company that meets the requirements of section 7-16-2 accompanied in any case by a certificate of conversion to a limited liability company, which shall include the following:

(1) the name of the former general partnership and the name of the limited liability company as set forth in its articles of organization;

(2) the date of the initial partnership agreement of the former general partnership and all amendments thereof, and the jurisdiction where the other entity was first created, formed or otherwise came into being, and if it has changed, its jurisdiction immediately prior to its conversion; and

(3) a statement that the conversion has been approved by the partners in the manner provided in the partnership agreement for amendments to the partnership agreement or, if no such provision is made in the partnership agreement, by all partners.

(b) Nothing in this section shall be construed to require, or be deemed to constitute, a dissolution or termination of the general partnership prior to its conversion to a limited liability company as herein permitted.

(c) Following the conversion of the general partnership to a limited liability company:

(1) The limited liability company shall thereupon and thereafter possess all the rights, privileges, immunities, powers, and franchises, of a public as well as a private nature, of the former general partnership and shall be subject to all the restrictions, disabilities, and duties of the former general partnership to the extent such rights, privileges, immunities, powers, franchises, restrictions, disabilities, and duties were applicable to the former general partnership and to the extent such rights, privileges, immunities, powers, franchises, restrictions, disabilities, and duties are applicable to the limited liability company after the conversion.

(2) All property, real, personal and mixed, and all debts due on whatever account, including promises to make capital contributions, and all other choices in action and all and every other interest of or belonging to the former general partnership shall be vested in the limited liability company after the conversion without further act or deed;

(3) The title to all real estate and any interest therein vested in any former general partnership and the limited liability company shall not revert or be in any way impaired by reason of such conversion;

(4) The limited liability company shall be responsible and liable for all liabilities and obligations of the former general partnership, and any claim existing or action or proceeding pending by or against the former general partnership may be prosecuted as if such conversion had not taken place, or the limited liability company may be substituted in the action;

(5) Neither the rights of creditors nor any liens on the property of the former general partnership shall be impaired by the conversion;

(6) Nothing in this section shall abridge or impair any rights that may otherwise be available to the partners under the partnership agreement of the former general partnership, except as amended in connection with the conversion, and under applicable law; and

(7)_The limited liability company shall be deemed to be the successor of the general partnership and to have succeeded by operation of law to the interest in all property, real, personal and mixed or any interest therein of the former general partnership.

SECTION 4. This act shall take effect 30 days after passage.