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House File 655 - IntroducedA Bill ForAn Act 1providing for business organizations, including limited
2liability companies, providing penalties, and including
3effective date provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2LIMITED LIABILITY COMPANIES
3 Section 1. Section 489.101, Code 2023, is amended to read
4as follows:
5489.101 Short title.
61. This chapter may be cited as the “Revised Uniform
7 “Uniform Limited Liability Company Act”.
82. In addition, article 14 subchapter XIV of this chapter
9may be cited as provided in section 489.14101.
10 Sec. 2. Section 489.102, Code 2023, is amended to read as
11follows:
12489.102 Definitions.
13As used in this chapter, unless the context otherwise
14requires:
151. “Certificate of organization” means the certificate
16required by section 489.201. The term includes the certificate
17as amended or restated.
182. “Contribution” means any benefit provided by a person to
19a limited liability company that is any of the following:
20a. In order to become a member upon formation of the company
21and in accordance with an agreement between or among the
22persons that have agreed to become the initial members of the
23company.
24b. In order to become a member after formation of the
25company and in accordance with an agreement between the person
26and the company.
27c. In the person’s capacity as a member and in accordance
28with the operating agreement or an agreement between the member
29and the company.
302. “Contribution”, except in the phrase “right of
31contribution”, means property or a benefit described in section
32489.402 which is provided by a person to a limited liability
33company to become a member or in the person’s capacity as a
34member.
353. “Debtor in bankruptcy” means a person that is the subject
-1-1of any of the following:
2a. An order for relief under Tit.11 of the United States
3Code or a comparable order under a successor statute of general
4application.
5b. A comparable order under federal, state, or foreign law
6governing insolvency.
74. “Deliver” or “delivery” means any method of delivery
8used in conventional commercial practice, including delivery in
9person, by hand, mail, commercial delivery, and if authorized
10in accordance with section 489.120, by electronic transmission.
115. “Distribution”, except as otherwise provided in section
12489.405, subsection 6, means a transfer of money or other
13property from a limited liability company to another a person
14on account of a transferable interest or in the person’s
15capacity as a member.
16a. “Distribution” includes all of the following:
17(1) A redemption or other purchase by a limited liability
18company of a transferable interest.
19(2) A transfer to a member in return for the member’s
20relinquishment of any right to participate as a member in
21the management or conduct of the limited liability company’s
22activities and affairs or to have access to records or other
23information concerning the company’s activities and affairs.
24b. “Distribution” does not include amounts constituting
25reasonable compensation for present or past service or payments
26made in the ordinary course of business under a bona fide
27retirement plan or other bona fide benefits program.
286. “Domestic cooperative” means an entity organized on a
29cooperative basis under chapter 497, 498, or 499, a cooperative
30organized under chapter 499A, or a cooperative organized under
31chapter 501 or 501A.
327. “Effective”, with respect to a record required or
33permitted to be delivered to the secretary of state for filing
34under this chapter, means effective under section 489.205,
35subsection 3.
-2- 17. “Electronic” means relating to technology having
2electrical, digital, magnetic, wireless, optical,
3electromagnetic, or similar capabilities.
48. “Electronic transmission” or “electronically transmitted”
5 means any form or process of communication not directly
6involving the physical transfer of paper that is suitable for
7the retention, retrieval, and reproduction of information by
8the recipient. or another tangible medium that is all of the
9following:
10a. Suitable for the retention, retrieval, and reproduction
11of information by the recipient.
12b. Retrievable in paper form by the recipient through an
13automated process used in conventional commercial practice,
14unless otherwise authorized in accordance with subsection 15.
159. “Filing entity” means an unincorporated entity, other
16than a limited liability partnership, that is of a type that
17is created by filing a public organic record or is required to
18file a public organic record that evidences its creation.
199. 10. “Foreign limited liability company” means an
20unincorporated entity formed under the law of a jurisdiction
21other than this state and denominated by that law as a limited
22liability company which would be a limited liability company if
23formed under the law of this state.
2411. “Jurisdiction”, used to refer to a political entity,
25means the United States, a state, a foreign county, or a
26political subdivision of a foreign country.
2712. “Jurisdiction of formation” means the jurisdiction whose
28law governs the internal affairs of an entity.
2910. 13. “Limited liability company”, except in the phrase
30“foreign limited liability company”, and in subchapter X means
31an entity formed under this chapter or which becomes subject to
32this chapter under subchapter X or section 489.110.
3311. 14. “Manager” means a person that under the operating
34agreement of a manager-managed limited liability company is
35responsible, alone or in concert with others, for performing
-3-1the management functions stated in section 489.407, subsection
23.
312. 15. “Manager-managed limited liability company” means a
4limited liability company that qualifies under section 489.407,
5subsection 1.
613. 16. “Member” means a person that has become a member
7of a limited liability company under section 489.401 and has
8not dissociated under section 489.602. for whom all of the
9following are true:
10a. The person has become a member of a limited liability
11company under section 489.401 or was a member in a limited
12liability company when the company became subject to this
13chapter under section 489.110.
14b. The person is not dissociated under section 489.602.
1514. 17. “Member-managed limited liability company” means a
16limited liability company that is not a manager-managed limited
17liability company.
1818. “Nonfiling entity” means an unincorporated entity that
19is of a type that is not created by filing a public organic
20record.
2115. 19. “Operating agreement” means the agreement, whether
22or not referred to as an operating agreement and whether oral,
23implied, in a record, implied, or in any combination thereof,
24of all the members of a limited liability company, including
25a sole member, concerning the matters described in section
26489.110, subsection 1. The term includes the agreement as
27amended or restated.
2816. 20. “Organizer” means a person that acts under section
29489.201 to form a limited liability company.
3017. 21. a. “Person” means an individual, business
31 corporation, business trust, estate, trust, nonprofit
32corporation, partnership, limited partnership, limited
33liability company, domestic cooperative, unincorporated
34nonprofit association, statutory trust, business trust,
35common-law business trust, estate, trust, association, joint
-4-1venture, public corporation, government or governmental
2subdivision, agency, or instrumentality, or any other legal or
3commercial entity.
4b. “Person” includes a protected series, however
5denominated, of an entity if the protected series is
6established under law that limits, or limits if conditions
7specified under law are satisfied, the ability of a creditor
8of the entity or of any other protected series of the entity to
9satisfy a claim from assets of the protected series.
1018. 22. “Principal office” means the principal executive
11office of a limited liability company or foreign limited
12liability company, whether or not the office is located in this
13state.
1423. “Property” means all property, whether real, personal,
15or mixed or tangible or intangible, or any right or interest
16therein.
1719. 24. “Record”, used as a noun, means information that
18is inscribed on a tangible medium or that is stored in an
19electronic or other medium and is retrievable in perceivable
20form.
2120. “Registered office” means the office that a limited
22liability company or foreign limited liability company is
23required to designate and maintain under section 489.113.
2425. “Registered agent” means an agent of a limited
25liability company or foreign limited liability company which is
26authorized to receive service of any process, notice, or demand
27required or permitted by law to be served on the company.
2826. “Registered foreign limited liability company” means
29a foreign limited liability company that is registered to do
30business in this state pursuant to a statement of registration
31filed by the secretary of state.
3221. 27. “Sign” means, with the present intent to
33authenticate or adopt a record, to do any of the following:
34a. Execute or adopt a tangible symbol.
35b. Attach to or logically associate with the record an
-5-1electronic symbol, sound, or process.
222. 28. “State” means a state of the United States, the
3District of Columbia, Puerto Rico, the United States Virgin
4Islands, or any territory or insular possession subject to the
5jurisdiction of the United States.
623. 29. “Transfer” includes an assignment, conveyance,
7deed, bill of sale, lease, mortgage, security interest,
8encumbrance, gift, or transfer by operation of law. any of the
9following:
10a. An assignment.
11b. A conveyance.
12c. A sale.
13d. A lease.
14e. An encumbrance, including a mortgage or security
15interest.
16f. A gift.
17g. A transfer by operation of law.
1824. 30. a. “Transferable interest” means the right, as
19originally associated with initially owned by a person in the
20 person’s capacity as a member, to receive distributions from
21a limited liability company, in accordance with the operating
22agreement, whether or not the person remains a member or
23continues to own any part of the right.
24b. “Transferable interest” applies to any fraction of the
25interest, by whomever owned.
2625. 31. a. “Transferee” means a person to which all or
27part of a transferable interest has been transferred, whether
28or not the transferor is a member.
29b. “Transferee” includes a person that owns a transferable
30interest under section 489.603, subsection 1, paragraph “c”.
31 Sec. 3. Section 489.103, Code 2023, is amended to read as
32follows:
33489.103 Knowledge — notice.
341. A person knows a fact when if the person has or is any
35of the following:
-6- 1a. Has actual knowledge of it.
2b. Is deemed to know it under subsection 4, paragraph “a”,
3or law other than this chapter.
42. A person has notice of a fact when if the person has or
5is any of the following:
6a. Has reason to know the fact from all of the facts known
7to the person at the time in question.
8b. Is deemed to have notice of the fact under subsection 4,
9paragraph “b”.
103. A Subject to section 489.210, subsection 6, a person
11notifies another person of a fact by taking steps reasonably
12required to inform the other person in ordinary course, whether
13or not those steps cause the other person knows to know the
14fact.
154. A person that is not a member is deemed both all of the
16following:
17a. To know of a limitation on authority to transfer real
18property as provided in section 489.302, subsection 7.
19b. To have notice of all of the following regarding a
20limited liability company’s:
21(1) Dissolution, The limited liability company’s
22dissolution, ninety days after a statement of dissolution under
23section 489.702, subsection 2, paragraph “b”, subparagraph (1),
24becomes effective.
25(2) Termination, The limited liability company’s
26termination, ninety days after a statement of termination under
27section 489.702, subsection 2, paragraph “b”, subparagraph (6),
28becomes effective.
29(3) Merger, The limited liability company’s participation
30in a merger, interest exchange, conversion, or domestication,
31ninety days after articles of merger, interest exchange,
32 conversion, or domestication under article 10 subchapter X
33 become effective.
34 Sec. 4. Section 489.104, Code 2023, is amended to read as
35follows:
-7- 1489.104 Nature, purpose, and duration of limited liability
2company.
31. A limited liability company is an entity distinct from
4its member or members.
52. A limited liability company may have any lawful purpose,
6regardless of whether for profit.
73. A limited liability company has perpetual duration.
8 Sec. 5. Section 489.105, Code 2023, is amended to read as
9follows:
10489.105 Powers.
111. Except as otherwise provided in subsection 2, a limited
12liability company has the capacity to sue and be sued in its
13own name and the power to do all things necessary or convenient
14to carry on its activities and affairs.
152. Until a limited liability company has or has had at
16least one member, the limited liability company lacks the
17capacity to do any act or carry on any activity except all of
18the following:
19a. Delivering to the secretary of state for filing a
20statement of change under section 489.114, an amendment to the
21certificate under section 489.202, a statement of correction
22under section 489.206, a biennial report under section 489.209,
23a statement of withdrawal or a statement of rescission under
24section 489.701A, or a statement of termination under section
25489.702, subsection 2, paragraph “b”, subparagraph (6).
26b. Admitting a member under section 489.401.
27c. Dissolving under section 489.701.
283. A limited liability company that has or has had at least
29one member may ratify an act or activity that occurred when the
30company lacked capacity under subsection 2.
31 Sec. 6. Section 489.106, Code 2023, is amended to read as
32follows:
33489.106 Governing law.
34The law of this state governs all of the following:
351. The internal affairs of a limited liability company.
-8- 12. The liability of a member as member and a manager as
2manager for the debts, obligations, a debt, obligation, or
3other liabilities liability of a limited liability company.
4 Sec. 7. Section 489.108, Code 2023, is amended to read as
5follows:
6489.108 Name Permitted names.
71. The name of a limited liability company must contain
8the words phrase “limited liability company” or “limited
9company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
10“Limited” may be abbreviated as “Ltd.”, and “company” may be
11abbreviated as “Co.”.
122. Unless authorized by Except as otherwise provided in
13 subsection 3, the name of a limited liability company, and
14the name under which a foreign limited liability company may
15register to do business in this state, must be distinguishable
16in on the records of the secretary of state from all any of the
17following:
18a. The name of each person that is not an individual and
19that is incorporated, organized, or authorized to transact
20business in this state.
21b. Each name reserved under section 489.109.
22a. The name of an existing person whose formation required
23the filing of a record by the secretary of state and which is
24not at the time administratively dissolved, or if such person
25has been administratively dissolved, within five years of the
26effective date of dissolution.
27b. The name of a limited liability partnership whose
28statement of qualification is in effect.
29c. The name under which a person is registered to do
30business in this state by the filing of a record by the
31secretary of state.
32d. The name reserved under section 489.109 or other law
33of this state providing for the reservation of a name by the
34filing of a record by the secretary of state.
35e. The name registered under section 489.114 or other law
-9-1of this state providing for the registration of a name by the
2filing of a record by the secretary of state.
3f. The name registered with the secretary of state as a
4fictitious name.
53. A limited liability company may apply to the secretary of
6state for authorization to use a name that does not comply with
7subsection 2. The secretary of state shall authorize use of
8the name applied for if either of the following applies: If a
9person consents in a record to the use of its name and submits
10an undertaking in a form satisfactory to the secretary of state
11to change its name to a name that is distinguishable on the
12records of the secretary of state from any name in any category
13of names in subsection 2, the name of the consenting person may
14be used by the person to which the consent was given.
15a. The present user, registrant, or owner of the
16noncomplying name consents in a signed record to the use
17and submits an undertaking in a form satisfactory to the
18secretary of state to change the noncomplying name to a name
19that complies with subsection 2 and is distinguishable in the
20records of the secretary of state from the name applied for.
21b. The applicant delivers to the secretary of state a
22certified copy of the final judgment of a court establishing
23the applicant’s right to use in this state the name applied
24for.
254. A limited liability company may use the name, including
26the fictitious name, of another entity that is used in this
27state if the other entity is formed under the law of this
28state or is authorized to transact business in this state
29and the proposed user limited liability company meets any
30of the following conditions: In determining whether a name
31is the same as or not distinguishable on the records of the
32secretary of state from the name of another person, words,
33phrases, or abbreviations indicating a type of person, such as
34“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
35corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
-10-1“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
2“limited liability partnership”, “L.L.P.”, “LLP”, “registered
3limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
4liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
5limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
6“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
7“coop”, or “CP” shall not be taken into account.
8a. Has merged with the other entity.
9b. Has been formed by reorganization of the other entity.
10c. Has acquired all or substantially all of the assets,
11including the name, of the other entity.
125. This article does not control the use of fictitious
13names. However, if a limited liability company uses a
14fictitious name in this state, it shall deliver to the
15secretary of state for filing a certified copy of the
16resolution of its members if it is member-managed or its
17managers if it is manager-managed, adopting the fictitious
18name. The name of a limited liability company or foreign
19limited liability company shall not contain words that may be
20used only with approval by another state department or state
21agency unless the company obtains the approval of such other
22state department or agency and delivers to the secretary of
23state for filing a record certifying such approval.
246. Subject to section 489.805, this section applies to
25a foreign limited liability company transacting business in
26this state which has a certificate of authority to transact
27business in this state or which has applied for a certificate
28of authority. A limited liability company or foreign limited
29liability company may use a name that is not distinguishable
30from a name described in subsection 2, paragraphs “a” through
31“f”, if the company delivers to the secretary of state a
32certified copy of a final judgment of a court of competent
33jurisdiction establishing the right of the company to use the
34name in this state.
357. A limited liability company may use the name, including
-11-1the fictitious name, of another entity that is used in this
2state if the other entity is formed under the law of this
3state or is authorized to transact business in this state and
4the proposed user limited liability company meets any of the
5following conditions:
6a. Has merged with the other entity.
7b. Has been formed by reorganization of the other entity.
8c. Has acquired all or substantially all of the assets,
9including the name, of the other entity.
108. This subchapter does not control the use of fictitious
11names. However, if a limited liability company uses a
12fictitious name in this state, it shall deliver to the
13secretary of state for filing a certified copy of the
14resolution of its members if it is member-managed or its
15managers if it is manager-managed, adopting the fictitious
16name.
17 Sec. 8. Section 489.109, Code 2023, is amended to read as
18follows:
19489.109 Reservation of name.
201. A person may reserve the exclusive use of the a name
21of a limited liability company, including a fictitious or
22assumed name for a foreign limited liability company whose
23name is not available, by delivering an application to the
24secretary of state for filing that complies with section
25489.112 by delivering an application to the secretary of state
26for filing. The application must state the name and address
27of the applicant and the name proposed to be reserved. If
28the secretary of state finds that the name applied for is
29available, it must be reserved the secretary of state shall
30reserve the name for the applicant’s exclusive use for a
31one-hundred-twenty-day period one hundred and twenty days.
322. The owner of a reserved name reserved for a limited
33liability company may transfer the reservation to another
34person by delivering to the secretary of state for filing a
35signed notice in a record of the transfer which states the name
-12-1and address of the transferee person to which the reservation
2is being transferred.
3 Sec. 9. Section 489.110, Code 2023, is amended to read as
4follows:
5489.110 Operating agreement — scope, function, and
6limitations.
71. Except as otherwise provided in subsections 2 3 and 3 4,
8the operating agreement governs all of the following:
9a. Relations among the members as members and between the
10members and the limited liability company.
11b. The rights and duties under this chapter of a person in
12the capacity of manager.
13c. The activities and affairs of the company and the conduct
14of those activities and affairs.
15d. The means and conditions for amending the operating
16agreement.
172. To the extent the operating agreement does not otherwise
18 provide for a matter described in subsection 1, this chapter
19governs the matter.
203. An operating agreement shall not do any of the following:
21a. Vary a limited liability company’s capacity under section
22489.105 to sue and be sued in its own name the law applicable
23under section 489.104.
24b. Vary the law applicable under section 489.106 a limited
25liability company’s capacity under section 489.109 to sue and
26be sued in its own name.
27c. Vary the power of the court under section 489.204. any
28requirement, procedure, or other provision of this chapter
29pertaining to any of the following:
30(1) Registered agents.
31(2) The secretary of state, including provisions pertaining
32to records authorized or required to be delivered to the
33secretary of state for filing under this chapter.
34d. Subject to subsections 4 through 7, eliminate the duty of
35loyalty, the duty of care, or any other fiduciary duty Vary the
-13-1provisions of section 489.204.
2e. Subject to subsections 4 through 7, eliminate the
3contractual obligation of good faith and fair dealing under
4section 489.409, subsection 4 Alter or eliminate the duty of
5loyalty or the duty of care, except as otherwise provided in
6subsection 4.
7f. Unreasonably restrict the duties and rights stated in
8section 489.410 Eliminate the contractual obligation of good
9faith and fair dealing under section 489.409, subsection 4,
10but the operating agreement may prescribe the standards, if
11not manifestly unreasonable, by which the performance of the
12obligation is to be measured.
13g. Vary the power of a court to decree dissolution in
14the circumstances specified in section 489.701, subsection
151, paragraphs “d” and “e” Relieve or exonerate a person from
16liability for conduct except as provided in subsection 6.
17h. Vary the requirement to wind up a limited liability
18company’s business as specified in section 489.702,
19subsection 1, and section 489.702, subsection 2, paragraph
20“a” Unreasonably restrict the duties and rights under section
21489.410, but the operating agreement may impose reasonable
22restrictions on the availability and use of information
23obtained under that section and may define appropriate
24remedies, including liquidated damages, for a breach of any
25reasonable restriction on use.
26i. Unreasonably restrict the right of a member to maintain
27an action under article 9 Vary the causes of dissolution
28specified in section 489.701, subsection 1, paragraph “d”.
29j. Restrict the right to approve a merger, conversion, or
30domestication under section 489.1014 to a member that will have
31personal liability with respect to a surviving, converted, or
32domesticated organization Vary the requirement to wind up the
33limited liability company’s activities and affairs as specified
34in section 489.702, subsection 1; subsection 2, paragraph “a”;
35and subsection 5.
-14- 1k. Except as otherwise provided in section 489.112,
2subsection 2, restrict the rights under this chapter of a
3person other than a member or manager Unreasonably restrict the
4right of a member to maintain an action under subchapter VIII.
5l. Vary the provisions of section 489.805A, but the
6operating agreement may provide that the limited liability
7company shall not have a special litigation committee.
8m. Vary the right of a member to approve a merger, interest
9exchange, conversion, or domestication under section 489.1023,
10subsection 1, paragraph “b”; section 489.1033, subsection 1,
11paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
12section 489.1053, subsection 1, paragraph “b”.
13n. Vary the required contents of a plan of merger under
14section 489.1022, subsection 1; plan of interest exchange
15under section 489.1032, subsection 1; plan of conversion under
16section 489.1042, subsection 1; or plan of domestication under
17section 489.1052, subsection 1.
18o. Except as otherwise provided in sections 489.111 and
19489.112, subsection 2, restrict the rights under this chapter
20of a person other than a member or manager.
214. If not manifestly unreasonable, the operating agreement
22may do any of the following: Subject to subsection 3,
23paragraph “g”, without limiting other terms that may be included
24in an operating agreement, all the following rules apply:
25a. Restrict or eliminate the duty to do any The operating
26agreement may do all of the following:
27(1) As required in section 489.409, subsection 2, paragraph
28“a”, and section 489.409, subsection 8, to account to the
29limited liability company and to hold as trustee for it any
30property, profit, or benefit derived by the member in the
31conduct or winding up of the company’s business, from a use by
32the member of the company’s property, or from the appropriation
33of a limited liability company opportunity Specify the method
34by which a specific act or transaction that would otherwise
35violate the duty of loyalty may be authorized or ratified by
-15-1one or more disinterested and independent persons after full
2disclosure of all material facts.
3(2) As required in section 489.409, subsection 2, paragraph
4“b”, and section 489.409, subsection 8, to refrain from dealing
5with the company in the conduct or winding up of the company’s
6business as or on behalf of a party having an interest adverse
7to the company Alter the prohibition in section 489.405,
8subsection 1, paragraph “b”, so that the prohibition requires
9only that the limited liability company’s total assets not be
10less than the sum of its total liabilities.
11(3) As required by section 489.409, subsection 2, paragraph
12“c”, and section 489.409, subsection 8, to refrain from
13competing with the company in the conduct of the company’s
14business before the dissolution of the company.
15b. Identify specific types or categories of activities
16that do not violate the duty of loyalty To the extent the
17operating agreement of a member-managed limited liability
18company expressly relieves a member of a responsibility that
19the member otherwise would have under this chapter and imposes
20the responsibility on one or more other members, the agreement
21also may eliminate or limit any fiduciary duty of the member
22relieved of the responsibility which would have pertained to
23the responsibility.
24c. Alter the duty of care, except to authorize intentional
25misconduct or knowing violation of law. If not manifestly
26unreasonable, the operating agreement may do all of the
27following:
28(1) Alter or eliminate the aspects of the duty of loyalty
29stated in section 489.409, subsections 2 and 9.
30(2) Identify specific types or categories of activities
31that do not violate the duty of loyalty.
32(3) Alter the duty of care, but may not authorize conduct
33involving bad faith, willful or intentional misconduct, or
34knowing violation of law.
35(4) Alter or eliminate any other fiduciary duty.
-16- 1d. Alter any other fiduciary duty, including eliminating
2particular aspects of that duty.
3e. Prescribe the standards by which to measure the
4performance of the contractual obligation of good faith and
5fair dealing under section 489.409, subsection 4.
65. The operating agreement may specify the method by which
7a specific act or transaction that would otherwise violate the
8duty of loyalty may be authorized or ratified by one or more
9disinterested and independent persons after full disclosure
10of all material facts The court shall decide as a matter of
11law whether a term of an operating agreement is manifestly
12unreasonable under subsection 3, paragraph “f”, or subsection
134, paragraph “c”. All of the following shall apply:
14a. The court shall make its determination as of the time the
15challenged term became part of the operating agreement and by
16considering only circumstances existing at that time.
17b. The court may invalidate the term only if, in light of
18the purposes, activities, and affairs of the limited liability
19company, it is readily apparent that any of the following
20apply:
21(1) The objective of the term is unreasonable.
22(2) The term is an unreasonable means to achieve the term’s
23objective.
246. To the extent the operating agreement of a member-managed
25limited liability company expressly relieves a member of a
26responsibility that the member would otherwise have under
27this chapter and imposes the responsibility on one or more
28other members, the operating agreement may, to the benefit
29of the member that the operating agreement relieves of the
30responsibility, also eliminate or limit any fiduciary duty that
31would have pertained to the responsibility.
327. 6. The An operating agreement may alter or eliminate
33the indemnification for a member or manager provided by section
34489.408, subsection 1, and may eliminate or limit a member’s
35or manager’s liability to the limited liability company and
-17-1members for money damages, except for any of the following:
2a. A breach of the duty of loyalty.
3b. A financial benefit received by the member or manager to
4which the member or manager is not entitled.
5c. A breach of a duty under section 489.406.
6d. Intentional infliction of harm on the company or a
7member.
8e. An intentional violation of criminal law.
98. The court shall decide any claim under subsection 4 that
10a term of an operating agreement is manifestly unreasonable.
11All of the following apply:
12a. The court shall make its determination as of the time the
13challenged term became part of the operating agreement and by
14considering only circumstances existing at that time.
15b. The court may invalidate the term only if, in light of
16the purposes and activities of the limited liability company,
17it is readily apparent that any of the following applies:
18(1) The objective of the term is unreasonable.
19(2) The term is an unreasonable means to achieve the
20provision’s objective.
21 Sec. 10. Section 489.111, Code 2023, is amended to read as
22follows:
23489.111 Operating agreement — effect on limited liability
24company and persons becoming members — preformation agreement.
251. A limited liability company is bound by and may enforce
26the operating agreement, whether or not the company has itself
27manifested assent to the operating agreement.
282. A person that becomes a member of a limited liability
29company is deemed to assent to the operating agreement.
303. Two or more persons intending to become the initial
31members of a limited liability company may make an agreement
32providing that upon the formation of the company the agreement
33will become the operating agreement. One person intending
34to become the initial member of a limited liability company
35may assent to terms providing that upon the formation of the
-18-1company the terms will become the operating agreement.
24. An operating agreement in a signed record that excludes
3modification or rescission except by a signed record cannot be
4otherwise modified or rescinded.
5 Sec. 11. Section 489.112, Code 2023, is amended to read as
6follows:
7489.112 Operating agreement — effect on third parties and
8relationship to records effective on behalf of limited liability
9company.
101. An operating agreement may specify that its amendment
11requires the approval of a person that is not a party to the
12operating agreement or the satisfaction of a condition. An
13amendment is ineffective if its adoption does not include the
14required approval or satisfy the specified condition.
152. The obligations of a limited liability company and its
16members to a person in the person’s capacity as a transferee or
17a person dissociated as a member are governed by the operating
18agreement. Subject only to any a court order issued under
19section 489.503, subsection 2, paragraph “b”, to effectuate a
20charging order, an amendment to the operating agreement made
21after a person becomes a transferee or is dissociated as a
22 member is or is not effective as follows:
23a. Is effectivewith regard to any debt, obligation, or
24other liability of the limited liability company or its members
25to the person in the person’s capacity as a transferee or
26person dissociated as a member.
27b. Is not effective to the extent the amendment imposes a
28new debt, obligation, or other liability on the transferee or
29person dissociated as a member.
303. If a record that has been delivered by a limited
31liability company to the secretary of state for filing and
32has become becomes effective under this chapter and contains
33a provision that would be ineffective under section 489.110,
34subsection 3 or subsection 4, paragraph “c”, if contained in
35the operating agreement, the provision is likewise ineffective
-19-1in the record.
24. Subject to subsection 3, if a record that has been
3 delivered by a limited liability company to the secretary
4of state for filing and has become becomes effective under
5this chapter and conflicts with a provision of the operating
6agreement, all of the following rules apply:
7a. The operating agreement prevails as to members, persons
8 dissociated as members, transferees, and managers.
9b. The record prevails as to other persons to the extent
10they reasonably rely on the record.
11 Sec. 12. Section 489.114, Code 2023, is amended to read as
12follows:
13489.114 Change of registered office or registered agent for
14service of process or address for registered agency by limited
15liability company.
161. A limited liability company or registered foreign
17limited liability company may change its registered office
18or its registered agent for service of process agent or the
19address of its registered agent by delivering to the secretary
20of state for filing a statement of change that sets forth
21 states all of the following:
22a. The name of the limited liability company or foreign
23limited liability company.
24b. If the current registered office is to be changed, the
25street and mailing addresses of the new registered office The
26information that is to be in effect as a result of the filing of
27the statement of change.
28c. If the current registered agent is to be changed, the
29name of the new registered agent and the new agent’s consent to
30the appointment. The agent’s consent may be on the statement
31or attached to it.
32d. That after the change or changes are made, the street
33address of its registered office and the business office of its
34registered agent will be identical.
352. If a registered agent changes the street address of
-20-1the registered agent’s business office, the registered agent
2may change the street address of the registered office of any
3limited liability company or foreign limited liability company
4for which the person is the registered agent by notifying the
5limited liability company or foreign limited liability company
6in writing of the change and signing, either manually or in
7facsimile, and delivering to the secretary of state for filing
8a statement that complies with the requirements of subsection
91 and recites that the limited liability company or foreign
10limited liability company has been notified of the change. The
11members or managers of a limited liability company need not
12approve the delivery to the secretary of state filing of any
13of the following:
14a. A statement of change under this section.
15b. A similar filing changing the registered agent or
16registered office, if any, of the limited liability company in
17any other jurisdiction.
183. If a registered agent changes the registered agent’s
19business address to another place, the registered agent may
20change the business address and the address of the registered
21agent by filing a statement as required by subsection 2 for
22each limited liability company or foreign limited liability
23company, or a single statement of all limited liability
24companies or all foreign limited liability companies named
25in the notice, except that it need be signed only by the
26registered agent and need not be responsive to subsection 1,
27paragraph “c”, and must recite that a copy of the statement
28has been mailed to each limited liability company or foreign
29limited liability company named in the notice A statement of
30change under this section designating a new registered agent
31is an affirmation of fact by the limited liability company or
32registered foreign limited liability company that the agent has
33consented to serve.
344. A limited liability company or foreign limited liability
35company may also change its registered office or registered
-21-1agent in its biennial report as provided in section 489.209
2As an alternative to using the procedure in this section,
3a limited liability company may amend its certificate of
4organization.
55. Subject to section 489.205, subsection 3, a statement of
6change is effective when filed by the secretary of state.
7 Sec. 13. NEW SECTION. 489.114A Registration of name.
81. A foreign limited liability company not registered to
9do business in this state under subchapter IX may register
10its name, or an alternate name adopted pursuant to section
11489.906A, if the name is distinguishable on the records of the
12secretary of state from the names that are not available under
13section 489.108.
142. To register its name or an alternate name adopted
15pursuant to section 489.906A, a foreign limited liability
16company must deliver to the secretary of state for filing an
17application stating the company’s name, the jurisdiction and
18date of its formation, and any alternate name adopted pursuant
19to section 489.906A. If the secretary of state finds that the
20name applied for is available, the secretary of state shall
21register the name for the applicant’s exclusive use.
223. The registration of a name under this section is
23effective for one year after the date of registration.
244. A foreign limited liability company whose name
25registration is effective may renew the registration for
26successive one-year periods by delivering, not earlier than
27three months before the expiration of the registration,
28to the secretary of state for filing a renewal application
29that complies with this section. When filed, the renewal
30application renews the registration for a succeeding one-year
31period.
325. A foreign limited liability company whose name
33registration is effective may register as a foreign limited
34liability company under the registered name or consent in a
35signed record to the use of that name by another person that is
-22-1not an individual.
2 Sec. 14. Section 489.115, Code 2023, is amended to read as
3follows:
4489.115 Resignation of registered agent for service of
5process.
61. A registered agent may resign the agent’s agency
7appointment by signing and as an agent for a limited liability
8company or registered foreign limited liability company by
9 delivering to the secretary of state for filing the signed
10original a statement of resignation. The statement of
11resignation may include a statement that the registered office
12is also discontinued. The registered agent shall send a copy
13of the statement of resignation by certified mail, return
14receipt requested, to the limited liability company or foreign
15limited liability company at its principal office and to the
16registered office, if not discontinued. The registered agent
17shall certify to the secretary of state that the copies have
18been sent to the limited liability company or foreign limited
19liability company, including the date the copies were sent.
20 that states all of the following:
21a. The name of the limited liability company or foreign
22limited liability company.
23b. The name of the agent.
24c. That the agent resigns from serving as registered agent
25for the limited liability company or foreign limited liability
26company.
27d. The address of the limited liability company or foreign
28limited liability company to which the agent will send the
29notice required by subsection 3.
302. A statement of resignation takes effect on the earlier
31of the following:
32a. 12:01 a.m.on the The thirty-first day after the day on
33which it is filed with the secretary of state.
34b. The designation of a new registered agent for the limited
35liability company or registered foreign limited liability
-23-1company.
23. A registered agent promptly shall furnish to the limited
3liability company or registered foreign limited liability
4company notice in a record of the date on which a statement of
5resignation was filed.
64. When a statement of resignation takes effect, the
7registered agent ceases to have responsibility under this
8chapter for any matter thereafter tendered to it as agent for
9the limited liability company or registered foreign limited
10liability company. The resignation does not affect any
11contractual rights the company or foreign company has against
12the agent or that the agent has against the company or foreign
13company.
145. A registered agent may resign with respect to a limited
15liability company or registered foreign limited liability
16company whether or not the company or foreign company is in
17good standing.
18 Sec. 15. NEW SECTION. 489.115A Registered agent.
191. Each limited liability company and each registered
20foreign limited liability company shall designate and maintain
21a registered agent in this state. The designation of a
22registered agent is an affirmation of fact by the limited
23liability company or registered foreign limited liability
24company that the agent has consented to serve.
252. A registered agent for a limited liability company or
26registered foreign limited liability company must have a place
27of business in this state.
283. The only duties under this chapter of a registered agent
29that has complied with this chapter are as follows:
30a. To forward to the limited liability company or registered
31foreign limited liability company at the address most recently
32supplied to the agent by the limited liability company or
33registered foreign limited liability company any process,
34notice, or demand pertaining to the company or foreign company
35which is served on or received by the agent.
-24- 1b. If the registered agent resigns, to provide the notice
2required by section 489.115, subsection 3, to the limited
3liability company or registered foreign limited liability
4company at the address most recently supplied to the agent by
5the limited liability company or registered foreign limited
6liability company.
7c. To keep current the information with respect to the agent
8in the certificate of organization or foreign registration
9statement.
10 Sec. 16. Section 489.116, Code 2023, is amended to read as
11follows:
12489.116 Service of process, notice, or demand.
131. A limited liability company’s company or registered
14 foreign limited liability company’s registered agent is the
15company’s agent for service of process, notice, or demand
16required or permitted by law to company may be served on
17the company with any process, notice, or demand required or
18permitted by law by serving its registered agent.
192. If a limited liability company or registered foreign
20limited liability company has no ceases to have a registered
21agent, or the if its registered agent cannot with reasonable
22diligence be served, the limited liability company or
23registered foreign limited liability company may be served by
24registered or certified mail, return receipt requested, or by
25similar commercial delivery service, addressed to the limited
26liability company or registered foreign limited liability
27company at its principal office. The address of the principal
28office must be as shown on the limited liability company’s or
29registered foreign limited liability company’s most recent
30biennial report filed with the secretary of state pursuant to
31section 489.209. Service is perfected effected under this
32subsection at on the earliest of any of the following:
33a. The date the limited liability company or registered
34 foreign limited liability company receives the mail or delivery
35by the commercial delivery service.
-25- 1b. The date shown on the return receipt, if signed on behalf
2of by the limited liability company or registered foreign
3limited liability company.
4c. Five days after its deposit in with the United States
5mail, as evidenced by the postmark, if mailed postpaid and
6 postal service or with the commercial delivery service, if
7 correctly addressed and with sufficient postage or payment.
83. A limited liability company or foreign limited liability
9company may be served pursuant to this section, as provided
10in another provision of this chapter, or as provided in
11sections 617.3 through 617.6, unless the manner of service is
12otherwise specifically provided for by another provision of law
13 If process, notice, or demand cannot be served on a limited
14liability company or registered foreign limited liability
15company pursuant to subsection 1 or 2, service may be made by
16handing a copy to the individual in charge of any regular place
17of business or activity of the limited liability company or
18registered foreign company if the individual served is not a
19plaintiff in the action.
204. Service of process, notice, or demand on a registered
21agent must be in a written record.
225. Service of process, notice, or demand may be made by
23other means under law other than this chapter, including as
24provided in sections 617.3 through 617.6 unless specifically
25provided for by another provision of law.
26 Sec. 17. Section 489.117, Code 2023, is amended to read as
27follows:
28489.117 Fees.
291. The secretary of state shall collect the following fees
30when documents described in this subsection are delivered to
31the secretary’s office for filing:
32a. Statement of rescission No fee
33b. Statement of withdrawal No fee
34c. Certificate of organization $ 50
35d. Application for use of
-26-1 indistinguishable name $ 10
2e. Application for reserved name $ 10
3f. Notice of transfer of reserved name $ 10
4g. Statement of change of registered
5 agent or registered office or both No fee
6h. Registered agent’s statement of
7 change of registered office for each
8 affected limited liability company No fee
9i. Registered agent’s statement
10 of resignation No fee
11j. Amendment to certificate of
12 organization $ 50
13k. Restatement of certificate of
14 organization with amendment
15 of certificate $ 50
16l. Articles of merger $ 50
17m. Statement of dissolution $ 5
18n. Declaration of administrative
19 dissolution No fee
20o. Application for reinstatement
21 following administrative dissolution $ 5
22p. Certificate of reinstatement No fee
23q. Application for certificate
24 of authority registration $100
25r. Application for amended
26 certificate of authority registration $100
27s. Statement of cancellation $ 10
28t. Certificate of revocation
29 of authority to transact business No fee
30u. Statement of correction $ 5
31v. Application for certificate of
32 existence or authorization $ 5
33w. Any other document required or
34 permitted to be filed by this chapter $ 5
352. The secretary of state shall collect a fee of five
-27-1dollars each time process is served on the secretary under this
2chapter. The party to a proceeding causing service of process
3is entitled to recover this fee as costs if the party prevails
4in the proceeding.
53. The secretary of state shall collect the following fees
6for copying and certifying the copy of any filed document
7relating to a domestic limited liability company or foreign
8limited liability company as follows:
9a. One dollar a page for copying.
10b. Five dollars for the certificate.
114. The secretary of state may impose, assess, and collect
12a filing fee as a condition to accepting a biennial report as
13provided in section 489.209.
14 Sec. 18. NEW SECTION. 489.118 Change of name or address by
15registered agent.
161. If a registered agent changes its name or address,
17the agent may deliver to the secretary of state for filing a
18statement of change that states all of the following:
19a. The name of the limited liability company or registered
20foreign limited liability company represented by the registered
21agent.
22b. The name of the agent as currently shown in the records
23of the secretary of state for the limited liability company or
24registered foreign limited liability company.
25c. If the name of the agent has changed, its new name.
26d. If the address of the agent has changed, its new address.
272. A registered agent promptly shall furnish notice to the
28represented limited liability company or registered foreign
29limited liability company of the filing by the secretary of
30state of the statement of change and the changes made by the
31statement.
32 Sec. 19. NEW SECTION. 489.120 Delivery of record.
331. Except as otherwise provided in this chapter,
34permissible means of delivery of a record include delivery by
35hand, mail, conventional commercial practice, and electronic
-28-1transmission.
22. Delivery to the secretary of state is effective only when
3a record is received by the secretary of state.
4 Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
5or repeal.
6The general assembly has power to amend or repeal all or
7part of this chapter at any time, and all limited liability
8companies and foreign limited liability companies subject to
9this chapter are governed by the amendment or repeal.
10 Sec. 21. Section 489.201, Code 2023, is amended to read as
11follows:
12489.201 Formation of limited liability company — certificate
13of organization.
141. One or more persons may act as organizers to form a
15limited liability company by signing and delivering to the
16secretary of state for filing a certificate of organization.
172. A certificate of organization must state all of the
18following:
19a. The name of the limited liability company, which must
20comply with section 489.108.
21b. The street address and mailing addresses of the initial
22registered office and the name of the initial registered
23agent for service of process on the company limited liability
24company’s principal office.
25c. The name and street and mailing addresses in this state
26of the limited liability company’s registered agent.
273. Subject to section 489.112, subsection 3, a A certificate
28of organization may also contain statements as to matters other
29than those required by subsection 2, but shall not vary or
30otherwise affect the provisions specified in section 489.110,
31subsections 3 and 4, in a manner inconsistent with that
32section. However, a statement in a certificate of organization
33is not effective as a statement of authority.
344. A limited liability company is formed when the secretary
35of state has filed the certificate of organization, unless the
-29-1certificate states a delayed becomes effective date pursuant
2to section 489.205, subsection 3. If the certificate states
3a delayed effective date, a limited liability company is not
4formed if, before the certificate takes effect, a statement of
5cancellation is signed and delivered to the secretary of state
6for filing and the secretary of state files the certificate.
75. Subject to any delayed effective date and except in
8a proceeding by this state to dissolve a limited liability
9company, the filing of the certificate of organization by the
10secretary of state is conclusive proof that the organizer
11satisfied all conditions to the formation of a limited
12liability company.
13 Sec. 22. Section 489.202, Code 2023, is amended to read as
14follows:
15489.202 Amendment or restatement of certificate of
16organization.
171. A certificate of organization may be amended or restated
18at any time.
192. To amend its certificate of organization, a limited
20liability company must deliver to the secretary of state for
21filing an amendment stating all of the following:
22a. The name of the limited liability company.
23b. The date of filing of its initial certificate of
24organization.
25c. The changes the amendment makes to the certificate as
26most recently amended or restated text of the amendment.
273. To restate its certificate of organization, a limited
28liability company must deliver to the secretary of state for
29filing a restatement, designated as such in its heading,
30stating and setting forth all of the following:
31a. In the heading or an introductory paragraph, the
32company’s present name and the date of the filing of the
33company’s initial certificate of organization The name of the
34limited liability company.
35b. If the company’s name has been changed at any time since
-30-1the company’s formation, each of the company’s former names The
2text of the restated certificate of organization.
3c. The changes the restatement makes to the certificate as
4most recently amended or restated A statement that the restated
5certificate consolidates all amendments into a single document.
6d. If a new amendment is included in the restated
7certificate of organization, the statements required under
8subsection 2 with respect to the new amendment if not otherwise
9provided.
104. Subject to section 489.112, subsection 3, and section
11489.205, subsection 3, an amendment to or restatement of a
12certificate of organization is effective when filed by the
13secretary of state. If a member of a member-managed limited
14liability company, or a manager of a manager-managed limited
15liability company, knows that any information in a filed
16certificate of organization was inaccurate when the certificate
17of organization was filed or has become inaccurate due to
18changed circumstances, the member or manager shall promptly do
19any of the following:
20a. Cause the certificate of organization to be amended.
21b. If appropriate, deliver to the secretary of state
22for filing a statement of change under section 489.114 or a
23statement of correction under section 489.206.
245. If a member of a member-managed limited liability
25company, or a manager of a manager-managed limited liability
26company, knows that any information in a filed certificate of
27organization was inaccurate when the certificate was filed
28or has become inaccurate owing to changed circumstances, the
29member or manager shall promptly do any of the following:
30a. Cause the certificate to be amended.
31b. If appropriate, deliver to the secretary of state
32for filing a statement of change under section 489.114 or a
33statement of correction under section 489.206.
34 Sec. 23. Section 489.203, Code 2023, is amended to read as
35follows:
-31- 1489.203 Signing of records to be delivered for filing to
2secretary of state.
31. A record delivered to the secretary of state for filing
4pursuant to this chapter must be signed as follows:
5a. Except as otherwise provided in paragraphs “b” and “c”, a
6record signed on behalf of by a limited liability company must
7be signed by a person authorized by the company.
8b. A limited liability company’s initial certificate of
9organization must be signed by at least one person acting as
10an organizer.
11c. A record filed delivered on behalf of a dissolved limited
12liability company that does not have or has not had at least
13one has no member must be signed by an organizer the person
14winding up the company’s activities and affairs under section
15489.702, subsection 3, or a person appointed under section
16489.702, subsection 4, to wind up the activities and affairs.
17d. A record filed on behalf of a dissolved limited liability
18company that has no members must be signed by the person
19winding up the company’s activities under section 489.702,
20subsection 3, or a person appointed under section 489.702,
21subsection 4, to wind up those activities A statement of denial
22by a person under section 489.303 must be signed by that
23person.
24e. A statement of cancellation under section 489.201,
25subsection 4, must be signed by each organizer that signed
26the initial certificate of organization, but a personal
27representative of a deceased or incompetent organizer may sign
28in the place of the decedent or incompetent Any other record
29delivered on behalf of a person to the secretary of state for
30filing must be signed by that person.
31f. A statement of denial by a person under section 489.303
32 must be signed by that person.
33g. Any other record must be signed by the person on whose
34behalf the record is delivered to the secretary of state.
352. Any A record filed delivered for filing under this
-32-1chapter may be signed by an agent. Whenever this chapter
2requires a particular individual to sign a record and the
3individual is deceased or incompetent, the record may be signed
4by a legal representative of the individual.
53. A person that signs a record as an agent or legal
6representative affirms as a fact that the person is authorized
7to sign the record.
8 Sec. 24. Section 489.204, Code 2023, is amended to read as
9follows:
10489.204 Signing and filing pursuant to judicial order.
111. If a person required by this chapter to sign a record
12or deliver a record to the secretary of state for filing under
13this chapter does not do so, any other person that is aggrieved
14may petition the district court to order one or more of the
15following:
16a. The person to sign the record.
17b. The person to deliver the record to the secretary of
18state for filing.
19c. The secretary of state to file the record unsigned.
202. If a petitioner under subsection 1 is not the limited
21liability company or foreign limited liability company to which
22the record pertains, the petitioner shall make the limited
23liability company or foreign limited liability company a party
24to the action.
253. If a district court orders an unsigned record to be
26delivered to the secretary of state, the secretary of state
27shall file the record and the court order upon receipt A record
28filed under subsection 1, paragraph “c”, is effective without
29being signed.
30 Sec. 25. Section 489.205, Code 2023, is amended by striking
31the section and inserting in lieu thereof the following:
32489.205 Liability for inaccurate information in filed
33records.
341. If a record delivered to the secretary of state for
35filing under this chapter and filed by the secretary of state
-33-1contains inaccurate information, a person that suffers loss by
2reliance on the information may recover damages for the loss
3from all of the following:
4a. A person that signed the record, or caused another to
5sign it on the person’s behalf, and knew the information to be
6inaccurate at the time the record was signed.
7b. Subject to subsection 2, a member of a member-managed
8limited liability company or a manager of a manager-managed
9limited liability company if all of the following apply:
10(1) The record was delivered for filing on behalf of the
11limited liability company.
12(2) The member or manager knew or had notice of the
13inaccuracy for a reasonably sufficient time before the
14information was relied upon so that, before the reliance,
15the member or manager reasonably could have done any of the
16following:
17(a) Effected an amendment under section 489.202.
18(b) Filed a petition under section 489.204.
19(c) Delivered to the secretary of state for filing a
20statement of change under section 489.114 or a statement of
21correction under section 489.206.
222. To the extent the operating agreement of a member-managed
23limited liability company expressly relieves a member of
24responsibility for maintaining the accuracy of information
25contained in records delivered on behalf of the limited
26liability company to the secretary of state for filing under
27this chapter and imposes that responsibility on one or more
28other members, the liability stated in subsection 1, paragraph
29“b”, applies to those other members and not to the member that
30the operating agreement relieves of the responsibility.
313. A person commits a serious misdemeanor if that person
32signs a record the person knows is false in any material
33respect with intent that the record be delivered to the
34secretary of state for filing.
35 Sec. 26. Section 489.206, Code 2023, is amended to read as
-34-1follows:
2489.206 Correcting filed record.
31. A limited liability company or foreign limited liability
4company may deliver to the secretary of state for filing
5a statement of correction to correct a record previously
6delivered by the company to the secretary of state and filed
7by the secretary of state, if at the time of filing the record
8contained inaccurate information or was defectively signed.
9A person on whose behalf a filed record was delivered to the
10secretary of state for filing may correct the record if any of
11the following apply:
12a. The record at the time of filing was inaccurate.
13b. The record was defectively signed.
14c. The electronic transmission of the record to the
15secretary of state was defective.
162. A statement of correction under subsection 1 shall not
17have a delayed effective date and must do all of the following:
18To correct a filed record, a person on whose behalf the record
19was delivered to the secretary of state must deliver to the
20secretary of state for filing a statement of correction.
21a. Describe the record to be corrected, including its filing
22date, or attach a copy of the record as filed.
23b. Specify the inaccurate information and the reason it is
24inaccurate or the manner in which the signing was defective.
25c. Correct the defective signature or inaccurate
26information.
273. When filed by the secretary of state, a statement of
28correction under subsection 1 is effective retroactively as
29of the effective date of the record the statement corrects,
30but the statement is effective when filed as to A statement of
31correction shall comply with all of the following:
32a. For the purposes of section 489.103, subsection 4 It must
33not state a delayed effective date.
34b. As to persons that previously relied on the uncorrected
35record and would be adversely affected by the retroactive
-35-1effect It must be signed by the person correcting the filed
2record.
3c. It must describe the record to be corrected including its
4filing date or attach a copy of the record as filed.
5d. It must specify the inaccuracy or defect to be corrected.
6e. It must correct the inaccuracy or defect.
74. A statement of correction is effective as of the
8effective date of the filed record that it corrects except for
9purposes of section 489.103, subsection 4, and as to persons
10relying on the uncorrected filed record and adversely affected
11by the correction. For those purposes and as to those persons,
12the statement of correction is effective when filed.
13 Sec. 27. NEW SECTION. 489.206A Filing requirements.
141. To be filed by the secretary of state pursuant to
15this chapter, a record must be captioned to describe the
16record’s purpose, must be received by the secretary of state,
17must comply with this chapter, and must satisfy all of the
18following:
19a. The filing of the record must be required or permitted by
20this chapter.
21b. The record must be physically delivered in written
22form unless and to the extent the secretary of state permits
23electronic delivery of records.
24c. The words in the record must be in English, and numbers
25must be in Arabic or Roman numerals, but the name of an entity
26need not be in English if written in English letters or Arabic
27or Roman numerals.
28d. The record must be signed by a person authorized or
29required under this chapter to sign the record.
30e. The record must state the name and capacity, if
31any, of each individual who signed it, either on behalf
32of the individual or the person authorized or required to
33sign the record, but need not contain a seal, attestation,
34acknowledgment, or verification.
352. If law other than this chapter prohibits the disclosure
-36-1by the secretary of state of information contained in a record
2delivered to the secretary of state for filing, the secretary
3of state shall file the record if the record otherwise complies
4with this chapter but may redact the information.
53. When a record is delivered to the secretary of state for
6filing, any fee required under this chapter and any fee, tax,
7interest, or penalty required to be paid under this chapter or
8law other than this chapter must be paid in a manner permitted
9by the secretary of state or by that law.
104. The secretary of state may require that a record
11delivered in written form be accompanied by an identical or
12conformed copy.
135. The secretary of state may provide forms for filings
14required or permitted to be made by this chapter, but, except
15as otherwise provided in subsection 6, their use is not
16required.
176. The secretary of state may prescribe, and furnish on
18request and require any of the following forms:
19a. A cover sheet for a filing.
20b. An application for a certificate of existence or
21certificate of registration.
22c. A foreign corporation’s registration statement.
23d. A foreign corporation’s statement of withdrawal.
24e. A foreign corporation’s transfer of registration
25statement.
26f. The biennial report required by section 489.209.
277. Upon request and payment of the requisite fee, the
28secretary of state shall send the requester a certified copy
29of a requested record.
30 Sec. 28. Section 489.207, Code 2023, is amended by striking
31the section and inserting in lieu thereof the following:
32489.207 Effective date and time.
33Except as otherwise provided in section 489.115 and section
34489.208A and subject to section 489.206, subsection 4, a record
35filed under this chapter is effective as follows:
-37- 11. On the date and at the time of its filing by the
2secretary of state, as provided in section 489.210, subsection
32.
42. On the date of filing and at the time specified in the
5record as its effective time, if later than the time under
6subsection 1.
73. At a specified delayed effective date and time, which may
8not be more than ninety days after the date of filing.
94. If a delayed effective date is specified, but no time is
10specified, at 12:01 a.m.on the date specified, which shall not
11be more than ninety days after the date of filing.
12 Sec. 29. Section 489.208, Code 2023, is amended to read as
13follows:
14489.208 Certificate of existence or authorization
15 registration.
161. Any person may apply to On request of any person, the
17secretary of state to be furnished shall issue a certificate
18of existence for a domestic limited liability company or a
19certificate of authorization registration for a registered
20 foreign limited liability company.
212. A certificate of existence or certificate of
22authorization registration under subsection 1 must set forth
23 state all of the following:
24a. The domestic limited liability company’s name or the
25registered foreign limited liability company’s name used in
26this state.
27b. One In the case of a limited liability company, all of
28the following:
29(1) If it is a domestic limited liability company, that
30the company is duly formed under the laws of this state, the
31date of its formation, and the period of its duration That
32a certificate of organization has been filed and has taken
33effect.
34(2) If it is a foreign limited liability company, that the
35company is authorized to transact business in this state The
-38-1date the certificate became effective.
2(3) The period of the limited liability company’s duration
3if the records of the secretary of state reflect that its
4period of duration is less than perpetual.
5(4) That all of the following apply:
6(a) No statement of dissolution, statement of
7administrative dissolution, or statement of termination has
8been filed.
9(b) The records of the secretary of state do not otherwise
10reflect that the limited liability company has been dissolved
11or terminated.
12(c) A proceeding is not pending under section 489.705.
13c. That all fees, taxes, and penalties due under this
14chapter or other law to the secretary of state have been paid
15 In the case of a registered foreign limited liability company,
16that it is registered to do business in this state.
17d. That the company’s most recent biennial report required
18by this chapter has been filed by the secretary of state That
19all fees, taxes, interest, and penalties owed to this state
20by the limited liability company or foreign limited liability
21company and collected through the secretary of state have been
22paid, if all of the following apply:
23(1) Payment is reflected in the records of the secretary of
24state.
25(2) Nonpayment affects the good standing or registration
26of the limited liability company or foreign limited liability
27company.
28e. If it is a domestic limited liability company, that a
29statement of dissolution or statement of termination has not
30been filed That the most recent biennial report required by
31section 489.209 has been delivered to the secretary of state
32for filing.
33f. Other facts of record in the office reflected in the
34records of the secretary of state that may be requested by
35the applicant pertaining to the limited liability company or
-39-1foreign limited liability company which the person requesting
2the certificate reasonably requests.
33. Subject to any qualification stated in the certificate, a
4certificate of existence or certificate of authorization issued
5by the secretary of state is under subsection 1 may be relied
6on as conclusive evidence that the domestic limited liability
7company is in existence or the foreign limited liability
8company is authorized to transact business in this state of the
9facts stated in the certificate.
10 Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
11before effectiveness.
121. Except as otherwise provided in sections 489.1024,
13489.1034, 489.1044, and 489.1054, a record delivered to the
14secretary of state for filing may be withdrawn before it takes
15effect by delivering to the secretary of state for filing a
16statement of withdrawal.
172. A statement of withdrawal must comply with all of the
18following:
19a. Be signed by each person that signed the record being
20withdrawn, except as otherwise agreed by those persons.
21b. Identify the record to be withdrawn.
22c. If signed by fewer than all the persons that signed the
23record being withdrawn, state that the record is withdrawn in
24accordance with the agreement of all the persons that signed
25the record.
263. On filing by the secretary of state of a statement of
27withdrawal, the action or transaction evidenced by the original
28record does not take effect.
29 Sec. 31. Section 489.209, Code 2023, is amended to read as
30follows:
31489.209 Biennial report for secretary of state.
321. A limited liability company or a foreign limited
33liability company authorized registered to transact do business
34in this state shall deliver to the secretary of state for
35filing a biennial report that states all of the following:
-40- 1a. The name of the company.
2b. The street address of the company’s registered office,
3the name of its registered agent at that office, and the
4consent of any new registered agent.
5c. The street address of its principal office.
6d. In the case of a foreign limited liability company, the
7state or other jurisdiction under whose law the foreign company
8is formed and any alternate name adopted under section 489.805,
9subsection 1.
102. Information in a biennial report under this section
11must be current as of the date the report is delivered to the
12secretary of state for filing. The report shall be executed
13on behalf of the limited liability company or foreign limited
14liability company and signed as provided in section 489.203.
153. The first biennial report under this section in this
16state must be delivered to the secretary of state between
17January 1 and April 1 of the first odd-numbered year following
18the calendar year in which a limited liability company was
19formed or a foreign limited liability company was authorized
20 registered to transact do business. A subsequent biennial
21report must be delivered to the secretary of state between
22January 1 and April 1 of each following odd-numbered calendar
23year. A filing fee for the biennial report shall be determined
24by the secretary of state pursuant to section 489.117. Each
25biennial report shall contain information related to the
26two-year period immediately preceding the calendar year in
27which the report is filed.
284. If a biennial report does not contain the information
29required in this section, the secretary of state shall promptly
30notify the reporting limited liability company or foreign
31limited liability company in writing and return the report to
32it for correction.
335. The secretary of state may provide for the change of
34registered office or registered agent on the form prescribed by
35the secretary of state for the biennial report, provided that
-41-1the form contains the information required in section 489.114.
2If the secretary of state determines that a biennial report
3does not contain the information required in this section but
4otherwise meets the requirements of section 489.114 for the
5purpose of changing the registered office or registered agent,
6the secretary of state shall file the statement of change
7for the registered office or registered agent, effective as
8provided in section 489.205 489.207, subsection 3, before
9returning the biennial report to the limited liability
10company as provided in this section. A statement of change of
11registered office or registered agent accomplished pursuant to
12this subsection shall be executed by a person authorized to
13execute the biennial report.
14 Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
15to file — review of refusal to file — delivery of record by
16secretary of state.
171. The secretary of state shall file a record delivered
18to the secretary of state for filing which satisfies this
19chapter. The duty of the secretary of state under this section
20is ministerial.
212. When the secretary of state files a record, the secretary
22of state shall record it as filed on the date and at the time of
23its delivery. After filing a record, the secretary of state
24shall deliver to the person that submitted the record a copy
25of the record with an acknowledgment of the date and time of
26filing and, in the case of a statement of denial, also to the
27limited liability company to which the statement pertains.
283. If the secretary of state refuses to file a record, the
29secretary of state shall, not later than fifteen business days
30after the record is delivered, do all of the following:
31a. Return the record or notify the person that submitted the
32record of the refusal.
33b. Provide a brief explanation in a record of the reason for
34the refusal.
354. If the secretary of state refuses to file a record, the
-42-1person that submitted the record may petition the district
2court of Polk county to compel filing of the record. The
3record and the explanation of the secretary of state of
4the refusal to file must be attached to the petition. The
5court may decide the matter in a summary proceeding. If the
6court orders the record to be filed, the court may order it
7filed with an effective date that is the date on which it was
8submitted to the secretary of state for filing.
95. The filing of or refusal to file a record does not do any
10of the following:
11a. Affect the validity or invalidity of the record in whole
12or in part.
13b. Create a presumption that the information contained in
14the record is correct or incorrect.
156. Except as otherwise provided by section 489.116 or by law
16other than this chapter, the secretary of state may deliver any
17record to a person by delivering it by any of the following:
18a. In person to the person that submitted it.
19b. To the address of the person’s registered agent.
20c. To the principal office of the person.
21d. To another address the person provides to the secretary
22of state for delivery.
23 Sec. 33. Section 489.302, Code 2023, is amended to read as
24follows:
25489.302 Statement of limited liability company authority.
261. A limited liability company may deliver to the secretary
27of state for filing a statement of authority. All of the
28following apply to the statement:
29a. It must include the name of the limited liability company
30and the name and street address and mailing addresses of its
31principal office registered agent.
32b. With respect to any position that exists in or with
33respect to the limited liability company, it may state the
34authority, or limitations on the authority, of all persons
35holding the position to do any of the following:
-43- 1(1) Execute Sign an instrument transferring real property
2held in the name of the limited liability company.
3(2) Enter into other transactions on behalf of, or otherwise
4act for or bind, the limited liability company.
5c. It may state the authority, or limitations on the
6authority, of a specific person to do any of the following:
7(1) Execute Sign an instrument transferring real property
8held in the name of the limited liability company.
9(2) Enter into other transactions on behalf of, or otherwise
10act for or bind, the limited liability company.
112. To amend or cancel a statement of authority filed by
12the secretary of state under section 489.205, subsection 1,
13a limited liability company must deliver to the secretary of
14state for filing an amendment or cancellation stating all of
15the following:
16a. The name of the limited liability company.
17b. The name and street address and mailing addresses of the
18limited liability company’s principal office registered agent.
19c. The caption of the statement being amended or canceled
20and the date the statement being affected became effective.
21d. The contents of the amendment or a declaration that the
22statement being affected is canceled.
233. A statement of authority affects only the power of a
24person to bind a limited liability company to persons that are
25not members.
264. Subject to subsection 3 and section 489.103, subsection
274, and except as otherwise provided in subsections 6, 7, and
288, a limitation on the authority of a person or a position
29contained in an effective statement of authority is not by
30itself evidence of any person’s knowledge or notice of the
31limitation by any person.
325. Subject to subsection 3, a grant of authority not
33pertaining to a transfer of real property and contained in an
34effective statement of authority is conclusive in favor of a
35person that gives value in reliance on the grant, except to the
-44-1extent that when the person gives value, any of the following
2applies:
3a. The person has knowledge to the contrary.
4b. The statement has been canceled or restrictively amended
5under subsection 2.
6c. A limitation on the grant is contained in another
7statement of authority that became effective after the
8statement containing the grant became effective.
96. Subject to subsection 3, an effective statement of
10authority that grants authority to transfer real property
11held in the name of the limited liability company and that, a
12certified copy of which statement is recorded by certified copy
13 in the office for recording transfers of the real property is
14conclusive in favor of a person that gives value in reliance
15on the grant without knowledge to the contrary, except to the
16extent that when the person gives value, any of the following
17applies:
18a. The statement has been canceled or restrictively amended
19under subsection 2 and a certified copy of the cancellation
20or restrictive amendment has been recorded in the office for
21recording transfers of the real property.
22b. A limitation on the grant is contained in another
23statement of authority that became effective after the
24statement containing the grant became effective, and a
25certified copy of the later-effective statement is recorded in
26the office for recording transfers of the real property.
277. Subject to subsection 3, if a certified copy of an
28effective statement containing a limitation on the authority to
29transfer real property held in the name of a limited liability
30company is recorded in the office for recording transfers of
31that real property, all persons are deemed to know of the
32limitation.
338. Subject to subsection 9, an effective statement of
34dissolution or a statement of termination is a cancellation
35of any filed statement of authority for the purposes of
-45-1subsection 6 and is a limitation on authority for the purposes
2of subsection 7.
39. After a statement of dissolution becomes effective,
4a limited liability company may deliver to the secretary of
5state for filing and, if appropriate, the secretary of state
6 may record a statement of authority that is designated as
7a post-dissolution statement of authority. The statement
8operates as provided in subsections 6 and 7.
910. A statement of authority filed by the secretary of
10state under section 489.205 489.207, subsection 1, is effective
11until amended or canceled as provided in subsection 2, unless
12an earlier cancellation date is specified in the statement.
1311. An effective statement of denial operates as a
14restrictive amendment under this section and may be recorded by
15certified copy for the purposes of subsection 6, paragraph “a”.
16 Sec. 34. Section 489.304, Code 2023, is amended to read as
17follows:
18489.304 Liability of members and managers.
191. For debts, obligations, or other liabilities A debt,
20obligation, or other liability of a limited liability
21company, whether arising in contract, tort, or otherwise
22all of the following apply: is solely the debt, obligation,
23or other liability of the company. A member or manager is
24not personally liable, directly or indirectly, by way of
25contribution or otherwise, for a debt, obligation, or other
26liability of the company solely by reason of being or acting
27as a member or manager. This subsection applies regardless of
28the dissolution of the company.
29a. They are solely the debts, obligations, or other
30liabilities of the company.
31b. They do not become the debts, obligations, or other
32liabilities of a member or manager solely by reason of the
33member acting as a member or manager acting as a manager.
342. The failure of a limited liability company to observe any
35particular formalities relating to the exercise of its powers
-46-1or management of its activities and affairs is not a ground
2for imposing liability on the members a member or managers
3 manager for the debts, obligations, a debt, obligation, or
4other liabilities liability of the company.
5 Sec. 35. Section 489.401, Code 2023, is amended to read as
6follows:
7489.401 Becoming member.
81. If a limited liability company is to have only one member
9upon formation, a the person becomes the a member as agreed by
10that person and the organizer of the company or a majority of
11organizers if more than one. That person and the organizer
12may be, but need not be, different persons. If different, the
13organizer acts on behalf of the initial member.
142. If a limited liability company is to have more than
15one member upon formation, those persons become members as
16agreed by the persons before the formation of the company. The
17organizer acts on behalf of the persons in forming the company
18and may be, but need not be, one of the persons.
193. If a limited liability company has no members upon
20formation, a person becomes a member of the limited liability
21company with the consent of the organizer or a majority of
22the organizers if more than one. The organizers may consent
23to more than one person simultaneously becoming the company’s
24initial members After formation of a limited liability company,
25a person becomes a member according to any of the following:
26a. As provided in the operating agreement.
27b. As the result of a transaction effective under subchapter
28X.
29c. With the affirmative vote or consent of all the members.
30d. As provided in section 489.701, subsection 1, paragraph
31“c”.
324. After formation of a limited liability company, a person
33becomes a member upon A person may become a member without any
34of the following:
35a. As provided in the operating agreement Acquiring a
-47-1transferable interest.
2b. As the result of a transaction effective under article 10
3 Making or being obligated to make a contribution to the limited
4liability company.
5c. With the consent of all the members.
6d. If, within ninety consecutive days after the company
7ceases to have any members, all of the following occur:
8(1) The last person to have been a member, or the legal
9representative of that person, designates a person to become a
10member.
11(2) The designated person consents to become a member.
125. A person may become a member without acquiring a
13transferable interest and without making or being obligated to
14make a contribution to the limited liability company.
15 Sec. 36. Section 489.402, Code 2023, is amended to read as
16follows:
17489.402 Form of contribution.
18A contribution may consist of tangible or intangible
19property or other benefit to a limited liability company,
20including money, services performed, promissory notes, other
21agreements to contribute money or property, and contracts for
22services to be performed property transferred to, services
23performed for, or another benefit provided to the limited
24liability company or an agreement to transfer property to,
25perform services for, or provide another benefit to the
26company.
27 Sec. 37. Section 489.403, Code 2023, is amended to read as
28follows:
29489.403 Liability for contributions.
301. A person’s obligation to make a contribution to a
31limited liability company is not excused by the person’s
32death, disability, termination, or other inability to perform
33personally. If a person does not make a required contribution,
34the person or the person’s estate is obligated to contribute
35money equal to the value of the part of the contribution which
-48-1has not been made, at the option of the company.
22. A creditor of a limited liability company which extends
3credit or otherwise acts in reliance on an obligation described
4in subsection 1 may enforce the obligation If a person does not
5fulfill an obligation to make a contribution other than money,
6the person is obligated at the option of the limited liability
7company to contribute money equal to the value of the part of
8the contribution which has not been made.
93. An operating agreement may provide that the interest of
10any member who fails to make a contribution that the member
11is obligated to make is subject to specified penalties for,
12or specified consequences of, such failure. The penalty or
13consequence may take the form of reducing or eliminating
14the defaulting member’s proportionate interest in a limited
15liability company, subordinating the member’s interest to
16that of a nondefaulting member, a forced sale of the member’s
17interest, forfeiture of the member’s interest, the lending by
18other members of the amount necessary to meet the member’s
19commitment, a fixing of the value of the member’s interest
20by appraisal or by formula and redemption, or sale of the
21member’s interest at such value or other penalty or consequence
22 The obligation of a person to make a contribution may be
23compromised only by the affirmative vote or consent of all the
24members. If a creditor of a limited liability company extends
25credit or otherwise acts in reliance on an obligation described
26in subsection 1 without knowledge or notice of a compromise
27under this subsection, the creditor may enforce the obligation.
284. An operating agreement may provide that the interest of
29any member who fails to make a contribution that the member
30is obligated to make is subject to specified penalties for,
31or specified consequences of, such failure. The penalty or
32consequence may take the form of reducing or eliminating
33the defaulting member’s proportionate interest in a limited
34liability company, subordinating the member’s interest to
35that of a nondefaulting member, a forced sale of the member’s
-49-1interest, forfeiture of the member’s interest, the lending by
2other members of the amount necessary to meet the member’s
3commitment, a fixing of the value of the member’s interest by
4appraisal or by formula and redemption, or sale of the member’s
5interest at such value or other penalty or consequence.
6 Sec. 38. Section 489.404, Code 2023, is amended to read as
7follows:
8489.404 Sharing of and right to distributions before
9dissolution.
101. Any distributions distribution made by a limited
11liability company before its dissolution and winding up must
12be in equal shares among members and persons dissociated as
13 members, except to the extent necessary to comply with any a
14 transfer effective under section 489.502 and any charging order
15in effect under section 489.503.
162. A person has a right to a distribution before the
17dissolution and winding up of a limited liability company only
18if the limited liability company decides to make an interim
19distribution. A person’s dissociation does not entitle the
20person to a distribution.
213. A person does not have a right to demand or receive a
22distribution from a limited liability company in any form other
23than money. Except as otherwise provided in section 489.708,
24subsection 3 4, a limited liability company may distribute an
25asset in kind only if each part of the asset is fungible with
26each other part and each person receives a percentage of the
27asset equal in value to the person’s share of distributions.
284. If a member or transferee becomes entitled to receive a
29distribution, the member or transferee has the status of, and
30is entitled to all remedies available to, a creditor of the
31limited liability company with respect to the distribution.
32However, the company’s obligation to make a distribution is
33subject to offset for any amount owed to the company by the
34member or a person dissociated as a member on whose account the
35distribution is made.
-50-1 Sec. 39. Section 489.405, Code 2023, is amended to read as
2follows:
3489.405 Limitations on distribution.
41. A limited liability company shall not make a
5distribution, including a distribution under section 489.708,
6 if after the distribution any of the following applies:
7a. The limited liability company would not be able to pay
8its debts as they become due in the ordinary course of the
9company’s activities and affairs.
10b. The limited liability company’s total assets would be
11less than the sum of its total liabilities plus the amount that
12would be needed, if the company were to be dissolved, and wound
13up, and terminated at the time of the distribution, to satisfy
14the preferential rights upon dissolution, and winding up, and
15termination of members up of members and transferees whose
16preferential rights are superior to those the rights of persons
17receiving the distribution.
182. A limited liability company may base a determination
19that a distribution is not prohibited under subsection 1 on
20financial statements prepared on the basis of accounting
21practices and principles that are reasonable in the
22circumstances or on a fair valuation or other method that is
23reasonable under the circumstances any of the following:
24a. Financial statements prepared on the basis of
25accounting practices and principles that are reasonable in the
26circumstances.
27b. A fair valuation or other method that is reasonable under
28the circumstances.
293. Except as otherwise provided in subsection 5, the effect
30of a distribution under subsection 1 is measured as follows:
31a. In the case of a distribution by purchase, redemption, or
32other acquisition of a transferable interest in the company,
33as of the date money or other property is transferred or
34debt incurred by the company as defined in section 489.102,
35subsection 5, paragraph “a”, as of the earlier of any of the
-51-1following:
2(1) The date money or other property is transferred or debt
3is incurred by the limited liability company.
4(2) The date the person entitled to the distribution ceases
5to own the interest or right being acquired by the limited
6liability company in return for the distribution.
7b. In the case of any other distribution of indebtedness, as
8of the date the indebtedness is distributed.
9b. c. In all other cases, as follows any of the following:
10(1) The date that the distribution is authorized, if the
11payment occurs within not later than one hundred twenty days
12after that date.
13(2) The date that the payment is made, if the payment occurs
14more than one hundred twenty days after the distribution is
15authorized.
164. A limited liability company’s indebtedness to a member
17or transferee incurred by reason of a distribution made in
18accordance with this section is at parity with the company’s
19indebtedness to its general, unsecured creditors, except to the
20extent subordinated by agreement.
215. A limited liability company’s indebtedness, including
22indebtedness issued in connection with or as part of as a
23distribution, is not a liability for purposes of subsection
241 if the terms of the indebtedness provide that payment of
25principal and interest are is made only if and to the extent
26that payment of a distribution could then be made to members
27 under this section. If the indebtedness is issued as a
28distribution, each payment of principal or interest on the
29indebtedness is treated as a distribution, the effect of which
30is measured on the date the payment is made.
316. In subsection 1, “distribution” does not include amounts
32constituting reasonable compensation for present or past
33services or reasonable payments made in the ordinary course of
34business under a bona fide retirement plan or other benefits
35program In measuring the effect of a distribution under section
-52-1489.708, the liabilities of a dissolved limited liability
2company do not include any claim that has been disposed of
3under section 489.703, 489.704, or 489.706A.
4 Sec. 40. Section 489.406, Code 2023, is amended to read as
5follows:
6489.406 Liability for improper distributions.
71. Except as otherwise provided in subsection 2, if a member
8of a member-managed limited liability company or a manager
9of a manager-managed limited liability company consents to
10a distribution made in violation of section 489.405 and in
11consenting to the distribution fails to comply with section
12489.409, the member or manager is personally liable to the
13company for the amount of the distribution that which exceeds
14the amount that could have been distributed without the
15violation of section 489.405.
162. To the extent the operating agreement of a member-managed
17limited liability company expressly relieves a member of the
18authority and responsibility to consent to distributions and
19imposes that authority and responsibility on one or more other
20members, the liability stated in subsection 1 applies to the
21other members and not the member that the operating agreement
22relieves of the authority and responsibility.
233. A person that receives a distribution knowing that the
24distribution to that person was made in violation of violated
25 section 489.405 is personally liable to the limited liability
26company but only to the extent that the distribution received
27by the person exceeded the amount that could have been properly
28paid under section 489.405.
294. A person against which an action is commenced because
30the person is liable under subsection 1 may do all of the
31following:
32a. Implead any other person that is subject to liability
33 liable under subsection 1 and seek to compel enforce a right of
34 contribution from the person.
35b. Implead any person that received a distribution in
-53-1violation of subsection 3 and seek to compel enforce a right of
2 contribution from the person in the amount the person received
3in violation of subsection 3.
45. An action under this section is barred if not
5 unless commenced within not later than two years after the
6distribution.
7 Sec. 41. Section 489.407, Code 2023, is amended to read as
8follows:
9489.407 Management of limited liability company.
101. A limited liability company is a member-managed limited
11liability company unless the operating agreement does any of
12the following:
13a. Expressly provides that any of the following apply:
14(1) The limited liability company is or will be
15“manager-managed”.
16(2) The limited liability company is or will be “managed by
17managers”.
18(3) Management of the limited liability company is or will
19be “vested in managers”.
20b. Includes words of similar import.
212. In a member-managed limited liability company, all of the
22following rules apply:
23a. The Except as expressly provided in this chapter, the
24 management and conduct of the limited liability company are
25vested in the members.
26b. Each member has equal rights in the management and
27conduct of the limited liability company’s activities and
28affairs.
29c. A difference arising among members as to a matter in the
30ordinary course of the activities and affairs of the limited
31liability company may be decided by a majority of the members.
32d. An act outside the ordinary course of the activities
33of the company, including selling, leasing, exchanging, or
34otherwise disposing of all, or substantially all, of the
35company’s property, with or without the goodwill, may be
-54-1undertaken only with the consent of all members The affirmative
2vote or consent of all the members is required to do any of the
3following:
4(1) Sell, lease, exchange, or otherwise dispose of all, or
5substantially all, of the limited liability company’s property,
6with or without good will, outside the ordinary course of the
7company’s activities.
8(2) Undertake an act outside the ordinary course of the
9activities and affairs of the limited liability company.
10(3) Approve a merger, interest exchange, conversion, or
11domestication under subchapter X.
12(4) Amend the operating agreement.
13e. The operating agreement may be amended only with the
14consent of all members.
153. In a manager-managed limited liability company, all of
16the following rules apply:
17a. Except as otherwise expressly provided in this chapter,
18any matter relating to the activities and affairs of the
19limited liability company is decided exclusively by the
20managers manager, or, if there is more than one manager, by a
21majority of the managers.
22b. Each manager has equal rights in the management and
23conduct of the activities and affairs of the limited liability
24 company.
25c. A difference arising among managers as to a matter in the
26ordinary course of the activities of the company may be decided
27by a majority of the managers.
28d. c. The affirmative vote or consent of all members is
29required to do any of the following:
30(1) Sell, lease, exchange, or otherwise dispose of all, or
31substantially all, of the limited liability company’s property,
32with or without the goodwill, outside the ordinary course of
33the company’s activities.
34(2) Approve a merger, conversion, or domestication under
35article 10 Undertake any other act outside the ordinary course
-55-1of the limited liability company’s activities and affairs.
2(3) Undertake any other act outside the ordinary course of
3the company’s activities Approve a merger, interest exchange,
4conversion, or domestication under subchapter X.
5(4) Amend the operating agreement.
6e. d. A manager may be chosen at any time by the
7affirmative vote or consent of a majority of the members and
8remains a manager until a successor has been chosen, unless the
9manager at an earlier time resigns, is removed, or dies, or, in
10the case of a manager that is not an individual, terminates. A
11manager may be removed at any time by the affirmative vote or
12 consent of a majority of the members without notice or cause.
13f. e. A person need not be a member to be a manager, but
14the dissociation of a member that is also a manager removes the
15person as a manager. If a person that is both a manager and
16a member ceases to be a manager, that cessation does not by
17itself dissociate the person as a member.
18g. f. A person’s ceasing to be a manager does not discharge
19any debt, obligation, or other liability to the limited
20liability company or members which the person incurred while
21a manager.
224. An action requiring the vote or consent of members under
23this chapter may be taken without a meeting, and a member may
24appoint a proxy or other agent to vote, consent, or otherwise
25act for the member by signing an appointing record, personally
26or by the member’s agent.
275. The dissolution of a limited liability company does not
28affect the applicability of this section. However, a person
29that wrongfully causes dissolution of the company loses the
30right to participate in management as a member and a manager.
316. This chapter does not entitle a member to remuneration
32for services performed for a member-managed limited liability
33company, except for reasonable compensation for services
34rendered in winding up the activities of the company A limited
35liability company shall reimburse a member for an advance to
-56-1the company beyond the amount of capital the member agreed to
2contribute.
37. A payment or advance made by a member which gives rise
4to a limited liability company obligation under subsection 6
5or section 489.408, subsection 1, constitutes a loan to the
6company which accrues interest from the date of the payment or
7advance.
88. A member is not entitled to remuneration for services
9performed for a member-managed limited liability company,
10except for reasonable compensation for services rendered in
11winding up the activities of the company.
12 Sec. 42. Section 489.407A, Code 2023, is amended to read as
13follows:
14489.407A Real estate interest transferred by limited
15liability company or foreign limited liability company.
161. A transfer of an interest in real estate situated in
17this state held by a limited liability company or a registered
18 foreign limited liability company authorized to transact do
19 business in this state is subject to the provisions of this
20section.
212. a. In a member-managed limited liability company, a
22transfer of an interest in real estate held by the company may
23be undertaken by any of the following:
24(1) As provided in the operating agreement, or if the
25operating agreement does not so provide, only with the consent
26of all members.
27(2) As provided in a statement of authority filed by the
28limited liability company with the secretary of state and
29the recorder of the county where the real estate is situated
30pursuant to section 489.302.
31b. A requirement of paragraph “a” is applicable to every
32transfer of an interest in real estate situated in this state
33held by a member-managed limited liability company, whether or
34not the transfer is in the ordinary course of the company’s
35business.
-57- 13. a. In a manager-managed limited liability company, a
2transfer of an interest in real estate held by the company may
3be undertaken by any of the following:
4(1) As provided in the operating agreement, or if the
5operating agreement does not so provide, only with the consent
6of a majority of all managers.
7(2) As provided in a statement of authority filed by the
8limited liability company with the secretary of state and
9the recorder of the county where the real estate is situated
10pursuant to section 489.302.
11b. A requirement in paragraph “a” is applicable to every
12transfer of an interest in real estate situated in this state
13held by a manager-managed limited liability company, whether
14or not the transfer is in the ordinary course of the company’s
15business.
16 Sec. 43. Section 489.408, Code 2023, is amended to read as
17follows:
18489.408 Indemnification Reimbursement, indemnification,
19advancement, and insurance.
201. A limited liability company shall reimburse a member of
21a member-managed limited liability company or the manager of
22a manager-managed limited liability company for any payment
23made and indemnify for any debt, obligation, or other liability
24incurred by a member of a member-managed company or the manager
25of a manager-managed company in the course of the member’s
26or manager’s activities on behalf of the company, if, in
27making the payment or incurring the debt, obligation, or other
28liability, the member or manager complied with the duties
29stated in sections 489.405 and 489.409 by the member or manager
30in the course of the member’s or manager’s activities on behalf
31of the company, if the member or manager complied with sections
32489.405, 489.407, and 489.409 in making the payment.
332. A limited liability company may purchase and maintain
34insurance on behalf of a member or manager of the company
35against liability asserted against or incurred by the member or
-58-1manager in that capacity or arising from that status even if,
2under section 489.110, subsection 7, the operating agreement
3could not eliminate or limit the person’s liability to the
4company for the conduct giving rise to the liability A limited
5liability company shall indemnify and hold harmless a person
6with respect to any claim or demand against the person and any
7debt, obligation, or other liability incurred by the person by
8reason of the person’s former or present capacity as a member
9or manager, if the claim, demand, debt, obligation, or other
10liability does not arise from the person’s breach of section
11489.405, 489.407, or 489.409.
123. In the ordinary course of its activities and affairs,
13a limited liability company may advance reasonable expenses,
14including attorney’s fees and costs, incurred by a person
15in connection with a claim or demand against the person by
16reason of the person’s former or present capacity as a member
17or manager, if the person promises to repay the company if
18the person ultimately is determined not to be entitled to be
19indemnified under subsection 2.
204. A limited liability company may purchase and maintain
21insurance on behalf of a member or manager against liability
22asserted against or incurred by the member or manager in that
23capacity or arising from that status even if, under section
24489.110, subsection 3, paragraph “g”, the operating agreement
25could not eliminate or limit the person’s liability to the
26company for the conduct giving rise to the liability.
27 Sec. 44. Section 489.409, Code 2023, is amended to read as
28follows:
29489.409 Standards of conduct for members and managers.
301. A member of a member-managed limited liability company
31owes to the company and, subject to section 489.901, subsection
322, the other members the fiduciary duties of loyalty and care
33stated in subsections 2 and 3.
342. The fiduciary duty of loyalty of a member in a
35member-managed limited liability company includes all of the
-59-1following duties:
2a. To account to the limited liability company and to hold
3as trustee for it any property, profit, or benefit derived by
4the member regarding any of the following:
5(1) In the conduct or winding up of the limited liability
6 company’s activities and affairs.
7(2) From a use by the member of the limited liability
8 company’s property.
9(3) From the appropriation of a limited liability company
10opportunity.
11b. To refrain from dealing with the limited liability
12 company in the conduct or winding up of the company’s
13activities and affairs as or on behalf of a person having an
14interest adverse to the company.
15c. To refrain from competing with the limited liability
16 company in the conduct of the company’s activities and affairs
17 before the dissolution of the company.
183. Subject to the business judgment rule as stated in
19subsection 7, the duty of care of a member of a member-managed
20limited liability company in the conduct and winding up of the
21company’s activities is to act with the care that a person
22in a like position would reasonably exercise under similar
23circumstances and in a manner the member reasonably believes to
24be in the best interests of the company. In discharging this
25duty, a member may rely in good faith upon opinions, reports,
26statements, or other information provided by another person
27that the member reasonably believes is a competent and reliable
28source for the information The duty of care of a member of
29a member-managed limited liability company in the conduct
30or winding up of the company’s activities and affairs is to
31refrain from engaging in grossly negligent or reckless conduct,
32willful or intentional misconduct, or knowing violation of law.
334. A member in a member-managed limited liability company
34or a manager-managed limited liability company shall discharge
35the duties under this chapter or under the operating agreement
-60-1and exercise any rights consistently with the contractual
2obligation of good faith and fair dealing A member shall
3discharge the duties and obligations under this chapter
4or under the operating agreement and exercise any rights
5consistently with the contractual obligation of good faith and
6fair dealing.
75. It is a defense to a claim under subsection 2, paragraph
8“b”, and any comparable claim in equity or at common law that
9the transaction was fair to the limited liability company A
10member does not violate a duty or obligation under this chapter
11or under the operating agreement solely because the member’s
12conduct furthers the member’s own interest.
136. All of the members of a member-managed limited liability
14company or a manager-managed limited liability company may
15authorize or ratify, after full disclosure of all material
16facts, a specific act or transaction that otherwise would
17violate the duty of loyalty.
187. a. A member satisfies the duty of care in subsection 3
19 if all of the following apply: It is a defense to a claim under
20subsection 2, paragraph “b”, and any comparable claim in equity
21or at common law that the transaction was fair to the limited
22liability company.
23(1) The member is not interested in the subject matter of
24the business judgment.
25(2) The member is informed with respect to the subject
26of the business judgment to the extent the member reasonably
27believes to be appropriate in the circumstances.
28(3) The member has a rational basis for believing that
29the business judgment is in the best interests of the limited
30liability company.
31b. A person challenging the business judgment of a member
32has the burden of proving a breach of the duty of care, and
33in a damage action, the burden of proving that the breach was
34the legal cause of damage suffered by the limited liability
35company.
-61- 18. In a manager-managed limited liability company, all of
2the following rules apply: If, as permitted by subsection 6
3or subsection 9, paragraph “f”, or the operating agreement, a
4member enters into a transaction with the limited liability
5company which otherwise would be prohibited by subsection 2,
6paragraph “b”, the member’s rights and obligations arising from
7the transaction are the same as those of a person that is not a
8member.
9a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
10managers and not the members.
11b. The duty stated under subsection 2, paragraph “c”,
12continues until winding up is completed.
13c. Subsection 4 applies to the members and managers.
14d. Subsection 6 applies only to the members.
15e. A member does not have any fiduciary duty to the company
16or to any other member solely by reason of being a member.
179. In a manager-managed limited liability company, all of
18the following rules apply:
19a. Subsections 1, 2, 3, and 7 apply to the manager or
20managers and not the members.
21b. The duty stated under subsection 2, paragraph “c”,
22continues until winding up is completed.
23c. Subsection 4 applies to managers and members.
24d. Subsection 5 applies only to members.
25e. The power to ratify under subsection 6 may be exercised
26only by the members.
27f. Subject to subsection 4, a member does not have any duty
28to the limited liability company or to any other member solely
29by reason of being a member.
30 Sec. 45. Section 489.410, Code 2023, is amended to read as
31follows:
32489.410 Right of members, managers, and dissociated members
33to information Rights to information of member, manager, and
34person dissociated as member.
351. In a member-managed limited liability company, all of the
-62-1following rules apply:
2a. On reasonable notice, a member may inspect and copy
3during regular business hours, at a reasonable location
4specified by the limited liability company, any record
5maintained by the company regarding the company’s activities,
6affairs, financial condition, and other circumstances, to the
7extent the information is material to the member’s rights and
8duties under the operating agreement or this chapter.
9b. The limited liability company shall furnish to each
10member all of the following:
11(1) Without demand, any information concerning the limited
12liability company’s activities, affairs, financial condition,
13and other circumstances which the company knows and is material
14to the proper exercise of the member’s rights and duties under
15the operating agreement or this chapter, except to the extent
16the company can establish that it reasonably believes the
17member already knows the information.
18(2) On demand, any other information concerning the limited
19liability company’s activities, affairs, financial condition,
20and other circumstances, except to the extent the demand or for
21the information demanded is unreasonable or otherwise improper
22under the circumstances.
23c. The duty to furnish information under paragraph “b” also
24applies to each member to the extent the member knows any of
25the information described in paragraph “b”.
262. In a manager-managed limited liability company, all of
27the following rules apply:
28a. The informational rights stated in subsection 1 and
29the duty stated in subsection 1, paragraph “c”, apply to the
30managers and not the members.
31b. During regular business hours and at a reasonable
32location specified by the limited liability company, a
33member may obtain from the company and inspect and copy full
34 information regarding the activities, affairs, financial
35condition, and other circumstances of the company as is just
-63-1and reasonable if all of the following apply:
2(1) The member seeks the information for a purpose material
3 reasonably related to the member’s interest as a member.
4(2) The member makes a demand in a record received by
5the limited liability company, describing with reasonable
6particularity the information sought and the purpose for
7seeking the information.
8(3) The information sought is directly connected to the
9member’s purpose.
10c. Within Not later than ten days after receiving a demand
11pursuant to paragraph “b”, subparagraph (2), the limited
12liability company shall in a record inform in a record the
13member that made the demand that includes all of the following:
14(1) Of the What information that the limited liability
15 company will provide in response to the demand and when and
16where the company will provide the information.
17(2) If the company declines to provide any demanded
18information, the company’s reasons for declining The limited
19liability company’s reasons for declining, if the company
20declines to provide any demanded information.
21d. Whenever this chapter or an operating agreement provides
22for a member to vote on or give or withhold consent to a matter,
23before the vote is cast or consent is given or withheld, the
24limited liability company shall, without demand, provide the
25member with all information that is known to the company and is
26material to the member’s decision.
273. On ten days’ demand made in a record received by a
28limited liability company, a dissociated member may have access
29to information to which the person was entitled while a member
30if the information pertains to the period during which the
31person was a member, the person seeks the information in good
32faith, and the person satisfies the requirements imposed on
33a member by subsection 2, paragraph “b”. The company shall
34respond to a demand made pursuant to this subsection in the
35manner provided in subsection 2, paragraph “c” Subject to
-64-1subsection 8, on ten days’ demand made in a record received by
2a limited liability company, a person dissociated as a member
3may have access to the information to which the person was
4entitled while a member if all of the following apply:
5a. The information pertains to the period during which the
6person was a member.
7b. The person seeks the information in good faith.
8c. The person satisfies the requirements imposed on a member
9by subsection 2, paragraph “b”.
104. A limited liability company may charge a person that
11makes a demand under this section the reasonable costs of
12copying, limited to the costs of labor and material shall
13respond to a demand made pursuant to subsection 3 in the manner
14provided in subsection 2, paragraph “c”.
155. A member or dissociated member may exercise rights
16under this section through an agent or, in the case of an
17individual under legal disability, a legal representative. Any
18restriction or condition imposed by the operating agreement
19or under subsection 7 applies both to the agent or legal
20representative and the member or dissociated member A limited
21liability company may charge a person that makes a demand under
22this section the reasonable costs of copying, limited to the
23costs of labor and material.
246. The rights under this section do not extend to a person
25as transferee A member or person dissociated as a member may
26exercise the rights under this section through an agent or,
27in the case of an individual under legal disability, a legal
28representative. Any restriction or condition imposed by the
29operating agreement or under subsection 8 applies both to the
30agent or legal representative and to the member or person
31dissociated as a member.
327. In addition to any restriction or condition stated
33in its operating agreement, a limited liability company, as
34a matter within the ordinary course of its activities, may
35impose reasonable restrictions and conditions on access to
-65-1and use of information to be furnished under this section,
2including designating information confidential and imposing
3nondisclosure and safeguarding obligations on the recipient.
4In a dispute concerning the reasonableness of a restriction
5under this subsection, the company has the burden of proving
6reasonableness Subject to section 489.504, the rights under
7this section do not extend to a person as transferee.
88. In addition to any restriction or condition stated in its
9operating agreement, a limited liability company, as a matter
10within the ordinary course of its activities and affairs, may
11impose reasonable restrictions and conditions on access to
12and use of information to be furnished under this section,
13including designating information confidential and imposing
14nondisclosure and safeguarding obligations on the recipient.
15In a dispute concerning the reasonableness of a restriction
16under this subsection, the company has the burden of proving
17reasonableness.
18 Sec. 46. Section 489.502, Code 2023, is amended to read as
19follows:
20489.502 Transfer of transferable interest.
211. For Subject to section 489.503, subsection 6, for a
22transfer, in whole or in part, all of the following applies to
23a transferable interest:
24a. It is permissible.
25b. It does not by itself cause a member’s person’s
26 dissociation as a member or a dissolution and winding up of the
27limited liability company’s activities and affairs.
28c. Subject to section 489.504, it does not entitle the
29transferee to do any of the following:
30(1) Participate in the management or conduct of the limited
31liability company’s activities and affairs.
32(2) Except as otherwise provided in subsection 3, have
33access to records or other information concerning the limited
34liability company’s activities and affairs.
352. A transferee has the right to receive, in accordance
-66-1with the transfer, distributions to which the transferor would
2otherwise be entitled.
33. In a dissolution and winding up of a limited liability
4company, a transferee is entitled to an account of the
5company’s transactions only from the date of dissolution.
64. A transferable interest may be evidenced by a certificate
7of the interest issued by the a limited liability company in a
8record, and, subject to this section, the interest represented
9by the certificate may be transferred by a transfer of the
10certificate.
115. A limited liability company need not give effect to a
12transferee’s rights under this section until the company knows
13or has notice of the transfer.
146. A transfer of a transferable interest in violation of a
15restriction on transfer contained in the operating agreement
16or another agreement to which the transferor is a party is
17ineffective as to a person having notice of the restriction at
18the time of transfer if the intended transferee has knowledge
19or notice of the restriction at the time of transfer.
207. Except as otherwise provided in section 489.602,
21subsection 4 5, paragraph “b”, when if a member transfers a
22transferable interest, the transferor retains the rights of a
23member other than the transferable interest in distributions
24 transferred and retains all duties and obligations of a member.
258. When If a member transfers a transferable interest to a
26person that becomes a member with respect to the transferred
27interest, the transferee is liable for the member’s obligations
28under section sections 489.403 and section 489.406, subsection
293, 489.406 known to the transferee when the transferee becomes
30a member.
31 Sec. 47. Section 489.503, Code 2023, is amended to read as
32follows:
33489.503 Charging order.
341. On application by a judgment creditor of a member
35or transferee, a court may enter a charging order against
-67-1the transferable interest of the judgment debtor for the
2unsatisfied amount of the judgment. A Except as otherwise
3provided in subsection 6, a charging order constitutes a lien
4on a judgment debtor’s transferable interest and requires the
5limited liability company to pay over to the person to which
6the charging order was issued any distribution that would
7 otherwise would be paid to the judgment debtor.
82. To the extent necessary to effectuate the collection
9of distributions pursuant to a charging order in effect under
10subsection 1, the court may do all of the following:
11a. Appoint a receiver of the distributions subject to
12the charging order, with the power to make all inquiries the
13judgment debtor might have made.
14b. Make all other orders necessary to give effect to the
15charging order.
163. Upon a showing that distributions under a charging
17order will not pay the judgment debt within a reasonable
18time, the court may foreclose the lien and order the sale of
19the transferable interest. The Except as otherwise provided
20in subsection 6, the purchaser at the foreclosure sale only
21 obtains only the transferable interest, does not thereby become
22a member, and is subject to section 489.502.
234. At any time before foreclosure under subsection 3, the
24member or transferee whose transferable interest is subject to
25a charging order under subsection 1 may extinguish the charging
26order by satisfying the judgment and filing a certified copy of
27the satisfaction with the court that issued the charging order.
285. At any time before foreclosure under subsection 3,
29a limited liability company or one or more members whose
30transferable interests are not subject to the charging order
31may pay to the judgment creditor the full amount due under the
32judgment and thereby succeed to the rights of the judgment
33creditor, including the charging order.
346. This chapter does not deprive any member or transferee of
35the benefit of any exemption laws applicable to the member’s
-68-1or transferee’s transferable interest If a court orders
2foreclosure of a charging order lien against the sole member of
3a limited liability company all of the following apply:
4a. The court shall confirm the sale.
5b. The purchaser at the sale obtains the member’s entire
6interest, not only the member’s transferable interest.
7c. The purchaser thereby becomes a member.
8d. The person whose interest was subject to the foreclosed
9charging order is dissociated as a member.
107. This section provides the exclusive remedy by which
11a person seeking to enforce a judgment against a member or
12transferee may, in the capacity of judgment creditor, satisfy
13the judgment from the judgment debtor’s transferable interest
14 This chapter does not deprive any member or transferee of the
15benefit of any exemption law applicable to the transferable
16interest of the member or transferee.
178. This section provides the exclusive remedy by which a
18person seeking in the capacity of judgment creditor to enforce
19a judgment against a member or transferee may satisfy the
20judgment from the judgment debtor’s transferable interest.
21 Sec. 48. Section 489.504, Code 2023, is amended to read as
22follows:
23489.504 Power of personal representative of deceased member.
24If a member dies, the deceased member’s personal legal
25 representative or other legal representative may exercise all
26of the following:
271. Therights of a transferee provided in section 489.502,
28subsection 3, and, for.
292. Forthe purposes of settling the estate, the rights of a
30current the deceased member had under section 489.410.
31 Sec. 49. Section 489.601, Code 2023, is amended to read as
32follows:
33489.601 Member’s power Power to dissociate as a member —
34wrongful dissociation.
351. A person has the power to dissociate as a member at any
-69-1time, rightfully or wrongfully, by withdrawing as a member by
2express will under section 489.602, subsection 1.
32. A person’s dissociation from a limited liability company
4 as a member is wrongful only if any of the following applies to
5the dissociation:
6a. It is in breach of an express provision of the operating
7agreement.
8b. It occurs before the termination completion of the
9winding up of the limited liability company and any of the
10following applies:
11(1) The person withdraws as a member by express will.
12(2) The person is expelled as a member by judicial order
13under section 489.602, subsection 5 6.
14(3) The person is dissociated under section 489.602,
15subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
16 8.
17(4) In the case of a person that is not a trust other than
18a business trust, an estate, or an individual, the person
19is expelled or otherwise dissociated as a member because it
20willfully dissolved or terminated.
213. A person that wrongfully dissociates as a member is
22liable to the limited liability company and, subject to
23section 489.901, to the other members for damages caused by the
24dissociation. The liability is in addition to any other debt,
25obligation, or other liability of the member to the company or
26the other members.
27 Sec. 50. Section 489.602, Code 2023, is amended to read as
28follows:
29489.602 Events causing dissociation.
30A person is dissociated as a member from a limited liability
31company when any of the following applies:
321. The limited liability company knows or has notice of
33the person’s express will to withdraw as a member, but, if the
34person specified a withdrawal date later than the date the
35limited liability company knew or had notice, on that later
-70-1date.
22. An event stated in the operating agreement as causing the
3person’s dissociation occurs.
43. The person is expelled as a member pursuant to the
5operating agreement The person’s entire interest is transferred
6in a foreclosure sale under section 489.503, subsection 6.
74. The person is expelled as a member by the unanimous
8consent of the other members if any of the following applies:
9 pursuant to the operating agreement.
10a. It is unlawful to carry on the company’s activities with
11the person as a member.
12b. There has been a transfer of all of the person’s
13transferable interest in the company, other than any of the
14following:
15(1) A transfer for security purposes.
16(2) A charging order in effect under section 489.503 which
17has not been foreclosed.
18c. The person is a corporation and, within ninety days
19after the company notifies the person that it will be expelled
20as a member because the person has filed a certificate of
21dissolution or the equivalent, its charter has been revoked,
22or its right to conduct business has been suspended by
23the jurisdiction of its incorporation, the certificate of
24dissolution has not been revoked or its charter or right to
25conduct business has not been reinstated.
26d. The person is a limited liability company or partnership
27that has been dissolved and whose business is being wound up.
285. On application by the company, the person is expelled
29as a member by judicial order because the person has done any
30of the following The person is expelled as a member by the
31affirmative vote or consent of all the other members if any of
32the following apply:
33a. Has engaged, or is engaging, in wrongful conduct that
34has adversely and materially affected, or will adversely and
35materially affect, the company’s activities It is unlawful to
-71-1carry on the limited liability company’s activities and affairs
2with the person as a member.
3b. Has willfully or persistently committed, or is willfully
4and persistently committing, a material breach of the
5operating agreement or the person’s duties or obligations under
6section 489.409 There has been a transfer of all the person’s
7transferable interest in the limited liability company, other
8than any of the following:
9(1) A transfer for security purposes.
10(2) A charging order in effect under section 489.503 which
11has not been foreclosed.
12c. Has engaged in, or is engaging in, conduct relating
13to the company’s activities which makes it not reasonably
14practicable to carry on the activities with the person as a
15member The person is an entity and all of the following apply:
16(1) The limited liability company notifies the person that
17it will be expelled as a member because the person has filed
18a statement of dissolution or the equivalent, the person has
19been administratively dissolved, the person’s charter or the
20equivalent has been revoked, or the person’s right to conduct
21business has been suspended by the person’s jurisdiction of
22formation.
23(2) Not later than ninety days after the notification,
24the statement of dissolution or the equivalent has not been
25withdrawn, rescinded, or revoked, the person has not been
26reinstated, or the person’s charter or the equivalent or right
27to conduct business has not been reinstated.
28d. The person is an unincorporated entity that has been
29dissolved and whose activities and affairs are being wound up.
306. In the case of a person who is an individual, any of
31the following applies On application by the limited liability
32company or a member in a direct action under section 489.901,
33the person is expelled as a member by judicial order because
34any of the following apply:
35a. The person dies has engaged or is engaging in wrongful
-72-1conduct that has affected adversely and materially, or will
2affect adversely and materially, the company’s activities and
3affairs.
4b. In a member-managed limited liability company, any of
5the following applies: The person has committed willfully or
6persistently, or is committing willfully or persistently,
7a material breach of the operating agreement or a duty or
8obligation under section 489.409.
9(1) A guardian or general conservator for the person is
10appointed.
11(2) There is a judicial order that the person has otherwise
12become incapable of performing the person’s duties as a member
13under this chapter or the operating agreement.
14c. The person has engaged or is engaging in conduct relating
15to the limited liability company’s activities and affairs which
16makes it not reasonably practicable to carry on the activities
17and affairs with the person as a member.
187. In a member-managed limited liability company, the
19person does any of the following In the case of an individual
20any of the following apply:
21a. Becomes a debtor in bankruptcy The individual dies.
22b. Executes an assignment for the benefit of creditors In a
23member-managed limited liability company any of the following
24apply:
25(1) A guardian or general conservator for the individual is
26appointed.
27(2) A court orders that the individual has otherwise become
28incapable of performing the individual’s duties as a member
29under this chapter or the operating agreement.
30c. Seeks, consents to, or acquiesces in the appointment of
31a trustee, receiver, or liquidator of the person or of all or
32substantially all of the person’s property.
338. In the case of a person that is a trust or is acting as
34a member by virtue of being a trustee of a trust, the trust’s
35entire transferable interest in the company is distributed In a
-73-1member-managed limited liability company, any of the following
2apply:
3a. The person becomes a debtor in bankruptcy.
4b. The person signs an assignment for the benefit of
5creditors.
6c. The person seeks, consents to, or acquiesces in the
7appointment of a trustee, receiver, or liquidator of the person
8or of all or substantially all the person’s property.
99. In the case of a person that is an estate or is acting
10as a member by virtue of being a personal representative of
11an estate, the estate’s entire transferable interest in the
12company is distributed In the case of a person that is a
13testamentary or inter vivos trust or is acting as a member by
14virtue of being a trustee of such a trust, the trust’s entire
15transferable interest in the limited liability company is
16distributed.
1710. In the case of a member that is not an individual,
18partnership, limited liability company, corporation, trust, or
19estate, the termination of the member In the case of a person
20that is an estate or is acting as a member by virtue of being
21a personal representative of an estate, the estate’s entire
22transferable interest in the limited liability company is
23distributed.
2411. The company participates in a merger under article 10,
25if any of the following applies: In the case of a person that
26is not an individual, the existence of the person terminates.
27a. The company is not the surviving entity.
28b. Otherwise as a result of the merger, the person ceases
29to be a member.
3012. The company participates in a conversion under article
3110 The limited liability company participates in a merger under
32subchapter X and any of the following apply:
33a. The limited liability company is not the surviving
34entity.
35b. Otherwise as a result of the merger, the person ceases
-74-1to be a member.
213. The company participates in a domestication under
3article 10, if, as a result of the domestication, the
4person ceases to be a member The limited liability company
5participates in an interest exchange under subchapter X and,
6as a result of the interest exchange, the person ceases to be a
7member.
814. The limited liability company terminates participates
9in a conversion under subchapter X.
1015. The limited liability company participates in a
11domestication under subchapter X and, as a result of the
12domestication, the person ceases to be a member.
1316. The limited liability company dissolves and completes
14winding up.
15 Sec. 51. Section 489.603, Code 2023, is amended to read as
16follows:
17489.603 Effect of person’s dissociation as member.
181. When If a person is dissociated as a member, of a limited
19liability company, all of the following apply:
20a. The person’s right to participate as a member in the
21management and conduct of the limited liability company’s
22activities and affairs terminates.
23b. If the company is member-managed, the person’s fiduciary
24duties as a member end with regard to matters arising and
25events occurring after the person’s dissociation The person’s
26duties and obligations under section 489.409 as a member end
27with regard to matters arising and events occurring after the
28person’s dissociation.
29c. Subject to section 489.504 and article 10 subchapter X,
30any transferable interest owned by the person in the person’s
31capacity as a member immediately before dissociation in the
32person’s capacity as a member is owned by the person solely as
33a transferee.
342. A person’s dissociation as a member of a limited
35liability company does not of itself discharge the person from
-75-1any debt, obligation, or other liability to the company or the
2other members which the person incurred while a member.
3 Sec. 52. Section 489.604, Code 2023, is amended to read as
4follows:
5489.604 Member’s power to dissociate under certain
6circumstances.
71. If the certificate of organization or an operating
8agreement does not specify the time or the events upon the
9happening of which a member may dissociate from a limited
10liability company, a member may dissociate from the limited
11liability company in the event any amendment to the certificate
12of organization or operating agreement that is adopted over
13the member’s written dissent adversely affects the rights or
14preferences of the dissenting member’s transferable interest
15in any of the ways described in paragraphs “a” through “f”.
16A dissociation in the event of such dissent and adverse
17effect is deemed to have occurred as of the effective date
18of the amendment, if the member gives notice to the limited
19liability company not more than sixty days after the date of
20the amendment. In valuing the member’s distribution pursuant
21to this subsection, any depreciation in anticipation of the
22amendment shall be excluded. An amendment that does any of the
23following is subject to this section:
24a. Alters or abolishes a member’s right to receive a
25distribution.
26b. Alters or abolishes a member’s right to voluntarily
27dissociate.
28c. Alters or abolishes a member’s right to vote on any
29matter, except as the rights may be altered or abolished
30through the acceptance of contributions or the making of
31contribution agreements.
32d. Alters or abolishes a member’s preemptive right to make
33contributions.
34e. Establishes or changes the conditions for or consequences
35of expulsion.
-76- 1f. Waives the application of this section to the limited
2liability company.
32. A member dissociating from a limited liability company
4 under this section is not liable for damages for the breach of
5any agreement not to withdraw.
63. This section applies to a limited liability company
7whose original articles of organization or certificate of
8organization is filed with the secretary of state on or after
9July 1, 1997.
104. This section applies to a limited liability company whose
11original articles of organization are filed with the secretary
12of state and effective on or prior to June 30, 1997, if such
13company’s operating agreement provides that it is subject to
14this section.
155. The operating agreement of a limited liability company
16may waive the applicability of this section to the company and
17its members.
18 Sec. 53. Section 489.701, Code 2023, is amended to read as
19follows:
20489.701 Events causing dissolution.
211. A limited liability company is dissolved, and its
22activities and affairs must be wound up, upon the occurrence
23of any of the following:
24a. An event or circumstance that the operating agreement
25states causes dissolution.
26b. The affirmative vote or consent of all the members.
27c. Once the The limited liability company has at least one
28member, and then the passage of ninety consecutive days during
29which the company has no members. unless before the end of the
30period all of the following apply:
31(1) Consent to admit at least one specified person as a
32member is given by transferees owning the rights to receive
33a majority of distributions as transferees at the time the
34consent is to be effective.
35(2) At least one person becomes a member in accordance with
-77-1the consent.
2d. On application by a member, the entry by a the district
3court of an order dissolving the limited liability company on
4the grounds that any of the following applies:
5(1) The conduct of all or substantially all of the limited
6liability company’s activities and affairs is unlawful.
7(2) It is not reasonably practicable to carry on the limited
8liability company’s activities and affairs in conformity with
9the certificate of organization and the operating agreement.
10(3) The managers or those members in control of the limited
11liability company conduct themselves according to any of the
12following:
13(a) Have acted, are acting, or will act in a manner that is
14illegal or fraudulent.
15(b) Have acted or are acting in a manner that is oppressive
16and was, is, or will be directly harmful to the applicant.
17e. On application by a member or transferee, the entry by
18a district court of an order dissolving the company on the
19grounds that the managers or those members in control of the
20company have done any of the following: The signing and filing
21of a statement of administrative dissolution by the secretary
22of state under section 489.705.
23(1) Have acted, are acting, or will act in a manner that is
24illegal or fraudulent.
25(2) Have acted or are acting in a manner that is oppressive
26and was, is, or will be directly harmful to the applicant.
272. In a proceeding brought under subsection 1, paragraph
28“e”, “d”, subparagraph (3), the district court may order a
29remedy other than dissolution.
30 Sec. 54. Section 489.701A, Code 2023, is amended to read as
31follows:
32489.701A Rescinding dissolution.
331. A limited liability company may rescind its dissolution,
34unless a statement of termination applicable to the company has
35become effective, a the district court has entered an order
-78-1under section 489.701, subsection 1, paragraph “d”, dissolving
2the company, or the secretary of state has dissolved the
3company under section 489.705.
42. Rescinding dissolution under this section requires all
5of the following:
6a. The affirmative vote or consent of each member.
7b. If the limited liability company has delivered to the
8secretary of state for filing a statement of dissolution and
9any of the following applies apply:
10(1) If the statement has not become effective, delivery to
11the secretary of state for filing of a statement of withdrawal
12under section 489.205 489.208A applicable to the statement of
13dissolution.
14(2) If the statement of dissolution has become effective,
15delivery to the secretary of state for filing of a statement of
16rescission stating the name of the limited liability company
17and that dissolution has been rescinded under this section.
183. If a limited liability company rescinds its dissolution
19all of the following apply:
20a. The limited liability company shall may resume carrying
21on its activities and affairs as if the dissolution had never
22occurred.
23b. Subject to paragraph “c”, any liability incurred by the
24limited liability company after the dissolution and before
25the rescission has become effective shall be determined as if
26dissolution had never occurred.
27c. The rights of a third party arising out of conduct in
28reliance on the dissolution before the third party knew or had
29notice of the rescission must not be adversely affected.
30 Sec. 55. Section 489.702, Code 2023, is amended to read as
31follows:
32489.702 Winding up.
331. A dissolved limited liability company shall wind up its
34activities and affairs, and except as otherwise provided in
35section 489.701A, the company continues after dissolution only
-79-1for the purpose of winding up.
22. In winding up its activities and affairs, all of the
3following apply to a limited liability company:
4a. It shall discharge the limited liability company’s debts,
5obligations, or and other liabilities, settle and close the
6company’s activities and affairs, and marshal and distribute
7the assets of the company.
8b. It may do all of the following:
9(1) Deliver to the secretary of state for filing a statement
10of dissolution stating the name of the limited liability
11 company and that the company is dissolved.
12(2) Preserve the limited liability company activities,
13affairs, and property as a going concern for a reasonable time.
14(3) Prosecute and defend actions and proceedings, whether
15civil, criminal, or administrative.
16(4) Transfer the limited liability company’s property.
17(5) Settle disputes by mediation or arbitration.
18(6) Deliver to the secretary of state for filing a statement
19of termination stating the name of the limited liability
20 company and that the company is terminated.
21(7) Perform other acts necessary or appropriate to the
22winding up.
233. If a dissolved limited liability company has no members,
24the legal representative of the last person to have been a
25member may wind up the activities and affairs of the company.
26If the person does so, the person has the powers of a sole
27manager under section 489.407, subsection 3, and is deemed to
28be a manager for the purposes of section 489.304, subsection
291, paragraph “b”.
304. If the legal representative under subsection 3 declines
31or fails to wind up the limited liability company’s activities
32and affairs, a person may be appointed to do so by the consent
33of transferees owning a majority of the rights to receive
34distributions as transferees at the time the consent is to be
35effective. All of the following apply to a person appointed
-80-1under this subsection:
2a. The person has the powers of a sole manager under section
3489.407, subsection 3, and is deemed to be a manager for the
4purposes of section 489.304, subsection 1, paragraph “b”.
5b. The person shall deliver promptly deliver to the
6secretary of state for filing an amendment to the limited
7liability company’s certificate of organization to do stating
8 all of the following:
9(1) State that That the limited liability company has no
10members.
11(2) State that the person has been appointed pursuant to
12this subsection to wind up the company The name and street and
13mailing addresses of the person.
14(3) Provide the street and mailing addresses of the person
15 That the person has been appointed pursuant to this subsection
16to wind up the limited liability company’s activities and
17affairs.
185. The district court may order judicial supervision of the
19winding up of a dissolved limited liability company, including
20the appointment of a person to wind up the company’s activities
21and affairs pursuant to any of the following:
22a. On application of a member, if the applicant establishes
23good cause.
24b. On the application of a transferee, if all of the
25following apply:
26(1) The limited liability company does not have any members.
27(2) The legal representative of the last person to have been
28a member declines or fails to wind up the limited liability
29 company’s activities and affairs.
30(3) Within a reasonable time following the dissolution a
31person has not been appointed pursuant to subsection 4 3.
32c. In connection with a proceeding under section 489.701,
33subsection 1, paragraph “d” or “e”.
34 Sec. 56. Section 489.703, Code 2023, is amended to read as
35follows:
-81- 1489.703 Known claims against dissolved limited liability
2company.
31. Except as otherwise provided in subsection 4, a dissolved
4limited liability company may give notice of a known claim
5under subsection 2, which has the effect as provided in
6subsection 3.
72. A dissolved limited liability company may in a record
8notify its known claimants of the dissolution. The notice must
9do all of the following:
10a. Specify the information required to be included in a
11claim.
12b. Provide State that a claim must be in writing and provide
13 a mailing address to which the claim is to be sent.
14c. State the deadline for receipt of the a claim, which may
15not be less than one hundred twenty days after the date the
16notice is received by the claimant.
17d. State that the claim will be barred if not received by
18the deadline.
193. A claim against a dissolved limited liability company is
20barred if the requirements of subsection 2 are met and any of
21the following applies:
22a. The claim is not received by the specified deadline.
23b. If the claim is timely received but rejected by the
24limited liability company, all of the following must apply:
25(1) The limited liability company causes the claimant to
26receive a notice in a record stating that the claim is rejected
27and will be barred unless the claimant commences an action
28against the company to enforce the claim within not later than
29 ninety days after the claimant receives the notice.
30(2) The claimant does not commence the required action
31within not later than the ninety days after the claimant
32receives the notice.
334. This section does not apply to a claim based on an
34event occurring after the effective date of dissolution or a
35liability that on that date is contingent.
-82-1 Sec. 57. Section 489.704, Code 2023, is amended to read as
2follows:
3489.704 Other claims against dissolved limited liability
4company.
51. A dissolved limited liability company may publish notice
6of its dissolution and request persons having claims against
7the company to present them in accordance with the notice.
82. The notice authorized by under subsection 1 must do all
9of the following meet all of the following requirements:
10a. Be published at least once in a newspaper of general
11circulation in the county in this state in which the dissolved
12limited liability company’s principal office is located or, if
13it has none in this state, in the county in which the company’s
14registered office is or was last located Comply with any of the
15following:
16(1) Publication of the notice one time in a newspaper of
17general circulation in the county in this state in which the
18dissolved limited liability company’s principal office is
19located or, if the principal office is not located in this
20state, in the county in which the office of the company’s
21registered agent is or was last located.
22(2) Publication by posting the notice conspicuously for at
23least thirty days on the dissolved limited liability company’s
24internet site.
25b. Describe the information required to be contained in a
26claim, state that the claim must be in writing, and provide a
27mailing address to which the claim is to be sent.
28c. State that a claim against the limited liability company
29is barred unless an action to enforce the claim is commenced
30within five not later than three years after publication of the
31notice.
323. If a dissolved limited liability company publishes a
33notice in accordance with subsection 2, unless the claimant
34commences an action to enforce the claim against the company
35within five years after the publication date of the notice, the
-83-1claim of each of the following claimants is barred of each of
2the following claimants is barred unless the claimant commences
3an action to enforce the claim against the company not later
4than three years after the publication date of the notice:
5a. A claimant that did not receive notice in a record under
6section 489.703.
7b. A claimant whose claim was timely sent to the limited
8liability company but not acted on.
9c. A claimant whose claim is contingent at, or based on an
10event occurring after, the effective date of dissolution.
114. A claim not barred under this section or section 489.703
12 may be enforced as follows:
13a. Against a dissolved limited liability company, to the
14extent of its undistributed assets.
15b. If Except as otherwise provided in section 489.706A, if
16 assets of the limited liability company have been distributed
17after dissolution, against a member or transferee to the extent
18of that person’s proportionate share of the claim or of the
19company’s assets distributed to the member or transferee after
20dissolution, whichever is less, but a person’s total liability
21for all claims under this paragraph does not exceed the total
22amount of assets distributed to the person after dissolution.
23 Sec. 58. Section 489.705, Code 2023, is amended to read as
24follows:
25489.705 Administrative Grounds for administrative
26 dissolution.
271. The secretary of state may commence a proceeding under
28this section 489.709 to administratively dissolve a limited
29liability company administratively, if any of the following
30apply:
31a. 1. The limited liability company has not delivered a
32biennial report to the secretary of state in a form that meets
33the requirements of section 489.209 within sixty days after
34it is due, or has not paid within sixty days after the due
35date, any fee, tax, or penalty due to the secretary of state
-84-1under this chapter or law other than this chapter The limited
2liability company does not pay within sixty days after they are
3due any fees, taxes, interest, or penalties imposed by this
4chapter or other laws of this state.
5b. The limited liability company is without a registered
6office or registered agent in this state for sixty days or
7more.
8c. The limited liability company does not notify the
9secretary of state within sixty days that its registered agent
10or registered office has been changed, that its registered
11agent has resigned, or that its registered office has been
12discontinued.
13d. The limited liability company’s period of duration stated
14in its certificate of organization has expired.
152. If the secretary of state determines that a ground exists
16for administratively dissolving a limited liability company,
17the secretary of state shall file a record of the determination
18and serve the company with a copy of the filed record The
19limited liability company does not deliver its biennial report
20required by section 489.209 to the secretary of state within
21sixty days after it is due.
223. If within sixty days after service of the copy pursuant
23to subsection 2 a limited liability company does not correct
24each ground for dissolution or demonstrate to the reasonable
25satisfaction of the secretary of state that each ground
26determined by the secretary of state does not exist, the
27secretary of state shall dissolve the company administratively
28by preparing, signing, and filing a declaration of dissolution
29that states the grounds for dissolution. The secretary
30of state shall serve the company with a copy of the filed
31declaration The limited liability company is without a
32registered agent or the registered agent does not have a place
33of business in this state for sixty days or more.
344. A limited liability company that has been
35administratively dissolved continues in existence but, subject
-85-1to section 489.706, may carry on only activities necessary to
2wind up its activities and liquidate its assets under sections
3489.702 and 489.708 and to notify claimants under sections
4489.703 and 489.704 The secretary of state has not been
5notified within sixty days that the limited liability company’s
6registered agent or place of business of the registered agent
7has been changed, or that its registered agent has resigned, or
8that its registered office has been discontinued.
95. The administrative dissolution of a limited liability
10company does not terminate the authority of its registered
11agent for service of process The limited liability company’s
12period of duration stated in its certificate of organization
13expires.
14 Sec. 59. Section 489.706, Code 2023, is amended to read as
15follows:
16489.706 Reinstatement following administrative dissolution.
171. A limited liability company administratively dissolved
18under section 489.705 may apply to the secretary of state
19for reinstatement at any time after the effective date
20of dissolution. The application must be delivered to the
21secretary of state and meet all of the following requirements:
22a. Recite State the name of the limited liability company
23at its date of dissolution and the effective date of its
24administrative dissolution.
25b. State that the ground or grounds for dissolution as
26provided in section 489.705 either did not exist or have been
27eliminated.
28c. If the application is received more than five years after
29the effective date of the administrative dissolution, state a
30name that satisfies the requirements of section 489.108.
31d. State the federal tax identification number of the
32limited liability company.
332. a. The secretary of state shall refer the federal
34tax identification number contained in the application for
35reinstatement to the department of workforce development.
-86-1The department of workforce development shall report to the
2secretary of state the tax status of the limited liability
3company. If the department reports to the secretary of state
4that a filing delinquency or liability exists against the
5limited liability company, the secretary of state shall not
6cancel the declaration certificate of dissolution until the
7filing delinquency or liability is satisfied.
83. b. (1) If the secretary of state determines that the
9application contains the information required by subsection
101, and that a delinquency or liability reported pursuant to
11subsection 2 paragraph “a” has been satisfied, and that the
12information is correct, the secretary of state shall cancel
13the declaration certificate of dissolution and prepare a
14certificate of reinstatement that recites the secretary of
15state’s determination and the effective date of reinstatement,
16file the original of the certificate of reinstatement, and
17serve deliver a copy on to the limited liability company under
18section 489.116.
19(2) If the limited liability company’s name in subsection
201, paragraph “c”, is different than from the name in subsection
211, paragraph “a”, the certificate of reinstatement shall
22constitute an amendment to the limited liability company’s
23certificate of organization insofar as it pertains to its
24name. A limited liability company shall not relinquish the
25right to retain its name as provided in section 489.108, if the
26reinstatement is effective within five years of the effective
27date of the limited liability company’s dissolution.
284. 3. When the reinstatement is effective, it relates
29back to and takes effect as of the effective date of the
30administrative dissolution as if the administrative dissolution
31had never occurred.
32 Sec. 60. NEW SECTION. 489.706A Court proceedings.
331. A dissolved limited liability company that has published
34a notice under section 489.704 may file an application with
35the district court in the county where the company’s principal
-87-1office is located or, if the principal office is not located
2in this state, where the office of its registered agent is
3or was last located, for a determination of the amount and
4form of security to be provided for payment of claims that are
5reasonably expected to arise after the date of dissolution
6based on facts known to the company and any of the following
7apply:
8a. At the time of application any of the following apply:
9(1) The facts are contingent.
10(2) The facts have not been made known to the limited
11liability company.
12b. The facts are based on an event occurring after the date
13of dissolution.
142. Security is not required for any claim that is or is
15reasonably anticipated to be barred under section 489.704.
163. Not later than ten days after the filing of an
17application under subsection 1, the dissolved limited liability
18company shall give notice of the proceeding to each claimant
19holding a contingent claim known to the company.
204. In a proceeding under this section, the court may appoint
21a guardian ad litem to represent all claimants whose identities
22are unknown. The reasonable fees and expenses of the guardian,
23including all reasonable expert witness fees, must be paid by
24the dissolved limited liability company.
255. A dissolved limited liability company that provides
26security in the amount and form ordered by the court under
27subsection 1 satisfies the company’s obligations with respect
28to claims that are contingent, have not been made known to
29the company, or are based on an event occurring after the
30date of dissolution, and such claims may not be enforced
31against a member or transferee on account of assets received
32in liquidation.
33 Sec. 61. Section 489.707, Code 2023, is amended to read as
34follows:
35489.707 Appeal from rejection denial of reinstatement.
-88- 11. If the secretary of state rejects denies a limited
2liability company’s application for reinstatement following
3administrative dissolution, the secretary of state shall
4prepare, sign, and file a notice that explains the reason for
5rejection and serve the company under section 489.116 with a
6copy of the written notice that explains the reason or reasons
7for denial.
82. Within thirty days after service of a notice of rejection
9of reinstatement under subsection 1, a limited liability
10company may appeal from the rejection by petitioning the
11district court to set aside the dissolution. The petition
12must be served on the secretary of state and contain a copy
13of the secretary of state’s declaration of dissolution, the
14company’s application for reinstatement, and the secretary
15of state’s notice of rejection The limited liability company
16may appeal the denial of reinstatement to the district court
17of the county where the company’s principal office or, if none
18in this state, where its registered office is located within
19thirty days after service of the notice of denial is effected.
20The company appeals by petitioning the court to set aside
21the dissolution and attaching to the petition copies of the
22secretary of state’s certificate of dissolution, the company’s
23application for reinstatement, and the secretary of state’s
24notice of denial.
253. The court may summarily order the secretary of state to
26reinstate a the dissolved limited liability company or may take
27other action the court considers appropriate.
284. The court’s final decision may be appealed as in other
29civil proceedings.
30 Sec. 62. Section 489.708, Code 2023, is amended to read as
31follows:
32489.708 Distribution Disposition of assets in winding up
33limited liability company’s activities.
341. In winding up its activities and affairs, a limited
35liability company must shall apply its assets to discharge its
-89-1 the company’s obligations to creditors, including members that
2are creditors.
32. After a limited liability company complies with
4subsection 1, any surplus must be distributed in the following
5order, subject to any charging order in effect under section
6489.503:
7a. To each person owning a transferable interest that
8reflects contributions made by a member and not previously
9returned, an amount equal to the value of the unreturned
10contributions and not previously returned, an amount equal to
11the value of the unreturned contributions.
12b. In equal shares among members and dissociated members,
13except to the extent necessary to comply with any transfer
14effective under section 489.502 Among persons owning
15transferable interests in proportion to their respective rights
16to share in distributions immediately before the dissolution of
17the limited liability company.
183. If a limited liability company does not have sufficient
19surplus to comply with subsection 2, paragraph “a”, any surplus
20must be distributed among the owners of transferable interests
21in proportion to the value of their the respective unreturned
22contributions.
234. All distributions made under subsections 2 and 3 must be
24paid in money.
25 Sec. 63. NEW SECTION. 489.709 Procedure for and effect of
26administrative dissolution.
271. If the secretary of state determines that one or more
28grounds exist under section 489.705 for dissolving a limited
29liability company, the secretary of state shall serve the
30company with written notice of such determination under section
31489.116.
322. If the limited liability company does not correct
33each ground for dissolution or demonstrate to the reasonable
34satisfaction of the secretary of state that each ground
35determined by the secretary of state does not exist within
-90-1sixty days after service of the notice under section 489.116,
2the secretary of state shall administratively dissolve the
3company by signing a certificate of dissolution that recites
4the ground or grounds for dissolution and its effective
5date. The secretary of state shall file the original of the
6certificate and serve a copy on the company under section
7489.116.
83. A limited liability company administratively dissolved
9continues its existence but shall not carry on any business
10except that necessary to wind up and liquidate its business
11and affairs under section 489.702 and notify claimants under
12sections 489.703 and 489.704.
134. The administrative dissolution of a limited liability
14company does not terminate the authority of its registered
15agent.
16 Sec. 64. Section 489.801, Code 2023, is amended to read as
17follows:
18489.801 Governing law.
191. Subject to sections 489.14402 and 489.14404, the law
20of the state or other jurisdiction under which The law of
21the jurisdiction of formation of a foreign limited liability
22company is formed governs all of the following:
23a. The internal affairs of the foreign limited liability
24 company.
25b. The liability of a member as member and a manager as
26manager for the debts, obligations, or other liabilities a
27debt, obligation, or other liability of the foreign limited
28liability company.
29c. The liability of a series of the foreign limited
30liability company.
312. A foreign limited liability company shall not be denied
32a certificate of authority by reason of any difference between
33the law of the jurisdiction under which the company is formed
34 is not precluded from registering to do business in this state
35because of any difference between the law of the foreign
-91-1limited liability company’s jurisdiction of formation and the
2law of this state.
33. A certificate of authority does not authorize a
4foreign limited liability company to engage in any business
5or exercise any power that a limited liability company shall
6not Registration of a foreign limited liability company to do
7business in this state does not permit the foreign limited
8liability company to engage in any business or affairs or
9exercise any power that a limited liability company cannot
10lawfully engage in or exercise in this state.
11 Sec. 65. NEW SECTION. 489.805A Special litigation
12committee.
131. If a limited liability company is named as or made a
14party in a derivative proceeding, the company may appoint a
15special litigation committee to investigate the claims asserted
16in the proceeding and determine whether pursuing the action is
17in the best interests of the company. If the company appoints
18a special litigation committee, on motion by the committee made
19in the name of the company, except for good cause shown, the
20court shall stay discovery for the time reasonably necessary
21to permit the committee to make its investigation. This
22subsection does not prevent the court from doing any of the
23following:
24a. Enforcing a person’s right to information under section
25489.410.
26b. Granting extraordinary relief in the form of a temporary
27restraining order or preliminary injunction.
282. A special litigation committee must be composed of one
29or more disinterested and independent individuals, who may be
30members.
313. A special litigation committee may be appointed as
32follows:
33a. In a member-managed limited liability company, any of the
34following:
35(1) By the affirmative vote or consent of a majority of the
-92-1members not named as parties in the proceeding.
2(2) If all members are named as parties in the proceeding,
3by a majority of the members named as defendants.
4b. In a manager-managed limited liability company, any of
5the following:
6(1) By a majority of the managers not named as parties in
7the proceeding.
8(2) If all managers are named as parties in the proceeding,
9by a majority of the managers named as defendants.
104. After appropriate investigation, a special litigation
11committee may determine that it is in the best interests of the
12limited liability company that the proceeding comply with any
13of the following:
14a. Continue under the control of the plaintiff.
15b. Continue under the control of the committee.
16c. Be settled on terms approved by the committee.
17d. Be dismissed.
185. After making a determination under subsection 4, a
19special litigation committee shall file with the court a
20statement of its determination and its report supporting its
21determination and shall serve each party with a copy of the
22determination and report. The court shall determine whether
23the members of the committee were disinterested and independent
24and whether the committee conducted its investigation and made
25its recommendation in good faith, independently, and with
26reasonable care, with the committee having the burden of proof.
27If the court finds that the members of the committee were
28disinterested and independent and that the committee acted in
29good faith, independently, and with reasonable care, the court
30shall enforce the determination of the committee. Otherwise,
31the court shall dissolve the stay of discovery entered under
32subsection 1 and allow the action to continue under the control
33of the plaintiff.
34 Sec. 66. Section 489.809, Code 2023, is amended to read as
35follows:
-93- 1489.809 Action by attorney general.
2The attorney general may maintain an action to enjoin a
3foreign limited liability company from transacting doing
4 business in this state in violation of this article chapter.
5 Sec. 67. Section 489.902, Code 2023, is amended to read as
6follows:
7489.902 Derivative action.
8A member may maintain a derivative action to enforce a
9right of a limited liability company as follows if any of the
10following apply:
111. The member first makes a demand on the other members in a
12member-managed limited liability company, or the managers of a
13manager-managed limited liability company, requesting that they
14cause the company to bring an action to enforce the right, and
15the managers or other members do not bring the action within
16ninety days from the date the demand was made unless the member
17has earlier been notified that the demand has been rejected by
18the company or unless irreparable injury to the company would
19result by waiting for the expiration of the ninety-day period
20 a reasonable time.
212. A demand under subsection 1 would be futile.
22 Sec. 68. Section 489.904, Code 2023, is amended to read as
23follows:
24489.904 Pleading.
25In a derivative action under section 489.902, the complaint
26must state with particularity any of the following:
271. The date and content of the plaintiff’s demand and the
28response to the demand by the managers or other members.
292. If a demand has not been made, the reasons a demand under
30section 489.902, subsection 1, would be Why demand should be
31excused as futile.
32 Sec. 69. NEW SECTION. 489.905 Activities not constituting
33doing business in this state.
341. Activities of a foreign limited liability company that
35do not constitute doing business in this state for purposes of
-94-1this subchapter include all of the following:
2a. Maintaining, defending, mediating, arbitrating, or
3settling a proceeding.
4b. Carrying on any activity concerning the internal affairs
5of the foreign limited liability company, including holding
6meetings of its members or managers.
7c. Maintaining accounts in financial institutions.
8d. Maintaining offices or agencies for the transfer,
9exchange, and registration of securities of the foreign limited
10liability company or maintaining trustees or depositories with
11respect to those securities.
12e. Selling through independent contractors.
13f. Soliciting or obtaining orders by any means if the
14orders require acceptance outside this state before they become
15contracts.
16g. Creating or acquiring indebtedness, mortgages, or
17security interests in property.
18h. Securing or collecting debts or enforcing mortgages or
19other security interests in property securing the debts and
20holding, protecting, or maintaining property so acquired.
21i. Conducting an isolated transaction that is not in the
22course of similar transactions.
23j. Owning, protecting, and maintaining property.
24k. Doing business in interstate commerce.
252. This section does not apply in determining the contacts
26or activities that may subject a foreign limited liability
27company to service of process, taxation, or regulation under
28the laws of this state other than this chapter.
29 Sec. 70. Section 489.906, Code 2023, is amended to read as
30follows:
31489.906 Proceeds and expenses.
321. Except as otherwise provided in subsection 2, all of the
33following apply:
34a. Any proceeds or other benefits of a derivative action
35under section 489.902, whether by judgment, compromise, or
-95-1settlement, belong to the limited liability company and not to
2the plaintiff.
3b. If the plaintiff receives any proceeds, the plaintiff
4shall remit them immediately to the limited liability company.
52. If a derivative action under section 489.902 is
6successful in whole or in part, the court may award the
7plaintiff reasonable expenses, including reasonable attorney
8fees and costs, from the recovery of the limited liability
9company.
103. A derivative action on behalf of a limited liability
11company shall not be voluntarily dismissed or settled without
12the court’s approval.
13 Sec. 71. NEW SECTION. 489.906A Noncomplying name of foreign
14limited liability company.
151. A foreign limited liability company whose name does
16not comply with section 489.108 shall not register to do
17business in this state until it adopts, for the purpose of
18doing business in this state, an alternate name that complies
19with section 489.108 by filing a foreign registration statement
20under section 489.911B, or if applicable, a transfer of
21registration statement under section 489.910, setting forth
22that alternate name. After registering to do business in this
23state with an alternate name, a foreign limited liability
24company shall do business in this state under any of the
25following:
26a. The alternate name.
27b. The foreign limited liability company’s name, with the
28addition of its jurisdiction of formation.
292. If a registered foreign limited liability company
30changes its name after registration to a name that does not
31comply with section 489.108, it shall not do business in this
32state until it complies with subsection 1 by amending its
33registration statement to adopt an alternate name that complies
34with section 489.108.
35 Sec. 72. NEW SECTION. 489.907 Withdrawal of registration of
-96-1registered foreign limited liability company.
21. A registered foreign limited liability company may
3withdraw its registration by delivering a statement of
4withdrawal to the secretary of state for filing. The statement
5of withdrawal must be signed by the foreign limited liability
6company and state all of the following:
7a. The name of the foreign limited liability company and its
8jurisdiction of formation.
9b. That the foreign limited liability company is not doing
10business in this state and that it withdraws its registration
11to do business in this state.
12c. That the foreign limited liability company revokes the
13authority of its registered agent in this state.
14d. An address to which process on the foreign limited
15liability company may be sent by the secretary of state under
16section 489.116, subsection 3.
172. After the withdrawal of the registration of a foreign
18limited liability company, service of process in any proceeding
19based on a cause of action arising during the time the entity
20was registered to do business in this state may be made as
21provided in section 489.116.
22 Sec. 73. NEW SECTION. 489.908 Deemed withdrawal upon
23domestication or conversion to certain domestic entities.
24A registered foreign limited liability company that
25domesticates to a domestic limited liability company or
26converts to a domestic business corporation or domestic
27nonprofit corporation or any type of domestic filing entity or
28to a domestic limited liability partnership is deemed to have
29withdrawn its registration on the effectiveness of such event.
30 Sec. 74. NEW SECTION. 489.909 Withdrawal upon dissolution
31or conversion to certain nonfiling entities.
321. A registered foreign limited liability company that
33has dissolved and completed winding up or has converted to
34a domestic or foreign nonfiling entity other than a limited
35liability partnership shall deliver to the secretary of state
-97-1for filing a statement of withdrawal. The statement must be
2signed by the dissolved foreign limited liability company or
3the converted domestic or foreign nonfiling entity and state:
4a. In the case of a foreign limited liability company that
5has completed winding up all of the following:
6(1) Its name and jurisdiction of formation.
7(2) That the foreign limited liability company withdraws
8its registration to do business in this state and revokes the
9authority of its registered agent to accept service on its
10behalf.
11(3) An address to which process on the foreign limited
12liability company may be sent by the secretary of state under
13section 489.116, subsection 3.
14b. In the case of a foreign limited liability company that
15has converted to a domestic or foreign nonfiling entity other
16than a limited liability partnership, all of the following:
17(1) The name of the converting foreign limited liability
18company and its jurisdiction of formation.
19(2) The type of the nonfiling entity to which it has
20converted and its name and jurisdiction of formation.
21(3) That it withdraws its registration to do business in
22this state and revokes the authority of its registered agent to
23accept service on its behalf.
24(4) An address to which process on the foreign limited
25liability company may be sent by the secretary of state under
26section 489.116, subsection 3.
272. After the withdrawal of the registration of a foreign
28limited liability company, service of process in any proceeding
29based on a cause of action arising during the time the entity
30was registered to do business in this state may be made as
31provided in section 489.116.
32 Sec. 75. NEW SECTION. 489.910 Transfer of registration.
331. If a registered foreign limited liability company merges
34into a nonregistered foreign entity or converts to a foreign
35entity required to register with the secretary of state to do
-98-1business in this state, the foreign entity shall deliver to
2the secretary of state for filing a transfer of registration
3statement. The transfer of registration statement must be
4signed by the surviving or converted foreign entity and state
5all of the following:
6a. The name of the registered foreign limited liability
7company and its jurisdiction of formation before the merger or
8conversion.
9b. The name and type of the surviving or converted foreign
10entity and its jurisdiction of formation after the merger
11or conversion and, if the name does not comply with section
12489.108, an alternate name adopted pursuant to section
13489.906A.
14c. All of the following information regarding the surviving
15or converted foreign entity after the merger or conversion:
16(1) The street and mailing addresses of the principal office
17of the foreign entity and, if the law of the foreign entity’s
18jurisdiction of formation requires it to maintain an office in
19that jurisdiction, the street and mailing addresses of that
20office.
21(2) The street and mailing addresses of the place of
22business of the foreign entity’s registered agent in this state
23and the name of its registered agent.
242. On the effective date of a transfer of registration
25statement as determined in accordance with section 489.207,
26the registration of the registered foreign limited liability
27company to do business in this state is transferred without
28interruption to the foreign entity into which it has merged or
29to which it has been converted.
30 Sec. 76. NEW SECTION. 489.911 Administrative termination of
31registration.
321. The secretary of state may terminate the registration of
33a registered foreign limited liability company in the manner
34provided in subsections 2 and 3, if any of the following
35applies:
-99- 1a. The foreign limited liability company does not pay within
2sixty days after they are due any fees, taxes, interest, or
3penalties imposed by this chapter or other laws of this state.
4b. The foreign limited liability company does not deliver
5its biennial report to the secretary of state within sixty days
6after it is due.
7c. The foreign limited liability company is without a
8registered agent or its registered agent has no place of
9business in this state for sixty days or more.
10d. The secretary of state has not been notified within sixty
11days that the foreign limited liability company’s registered
12agent or the registered agent’s place of business has been
13changed, that its registered agent has resigned, or that its
14registered office has been discontinued.
152. The secretary of state may terminate the registration of
16a registered foreign limited liability company by doing all of
17the following:
18a. Filing a certificate of termination.
19b. Delivering a copy of the certificate of termination
20to the foreign company’s registered agent or, if the foreign
21company does not have a registered agent, to the foreign
22company’s principal office.
233. The certificate of termination must state all of the
24following:
25a. The effective date of the termination, which must be
26not less than sixty days after the secretary of state delivers
27the copy of the certificate of termination as prescribed in
28subsection 2, paragraph “b”.
29b. The grounds for termination under subsection 1.
304. The registration of a registered foreign limited
31liability company to do business in this state ceases on
32the effective date of the termination as set forth in the
33certificate of termination, unless before that date the
34foreign company cures each ground for termination stated in the
35certificate of termination. If the foreign company cures each
-100-1ground, the secretary of state shall file a statement that the
2certificate of termination is withdrawn.
35. After the effective date of the termination as set forth
4in the certificate of termination, service of process in any
5proceeding based on a cause of action arising during the time
6the entity was registered to do business in this state may be
7made as provided in section 489.116.
8 Sec. 77. NEW SECTION. 489.911A Registration to do business
9in this state.
101. A foreign limited liability company shall not do business
11in this state until it registers with the secretary of state
12under this chapter.
132. A foreign limited liability company doing business in
14this state shall not maintain a proceeding in any court of this
15state until it is registered to do business in this state.
163. The failure of a foreign limited liability company
17to register to do business in this state does not impair
18the validity of a contract or act of the foreign company or
19preclude it from defending a proceeding in this state.
204. A limitation on the liability of a member or manager
21of a foreign limited liability company is not waived solely
22because the foreign company does business in this state without
23registering.
245. Section 489.801, subsection 1, applies even if a
25foreign limited liability company fails to register under this
26subchapter.
27 Sec. 78. NEW SECTION. 489.911B Foreign registration
28statement.
291. To register to do business in this state, a foreign
30limited liability company shall deliver a foreign registration
31statement to the secretary of state for filing. The
32registration statement must be signed by the foreign company
33and state all of the following:
34a. The name of the foreign limited liability company and,
35if the name does not comply with section 489.108, an alternate
-101-1name as required by section 489.906A.
2b. The foreign limited liability company’s jurisdiction of
3formation.
4c. The street and mailing addresses of the foreign limited
5liability company’s principal office and, if the law of the
6foreign company’s jurisdiction of formation requires the
7foreign company to maintain an office in that jurisdiction, the
8street and mailing addresses of that required office.
9d. The street and mailing addresses of the place of business
10of the foreign limited liability company’s registered agent in
11this state and the name of its registered agent.
122. The foreign limited liability company shall deliver the
13completed foreign registration statement to the secretary of
14state, and also deliver to the secretary of state a certificate
15of existence or a document of similar import duly authenticated
16by the secretary of state or other official having custody of
17corporate records in the state or country under whose law it is
18incorporated which is dated no earlier than ninety days prior
19to the date the application is filed by the secretary of state.
20 Sec. 79. NEW SECTION. 489.911C Amendment of foreign
21registration statement.
22A registered foreign limited liability company shall sign
23and deliver to the secretary of state for filing an amendment
24to its foreign registration statement if there is a change in
25any of the following:
261. Its name or alternate name.
272. Its jurisdiction of formation, unless its registration
28is deemed to have been withdrawn under section 489.908 or
29transferred under section 489.910.
303. An address required by section 489.911B, subsection 1,
31paragraph “c”.
324. The information required by section 489.911B, subsection
331, paragraph “d”.
34 Sec. 80. Section 489.1001, Code 2023, is amended by striking
35the section and inserting in lieu thereof the following:
-102- 1489.1001 Definitions.
2As used in this subchapter, unless the context otherwise
3requires:
41. “Acquired entity” means the entity, all of one or more
5classes or series of interests of which are acquired in an
6interest exchange.
72. “Acquiring entity” means the entity that acquires all
8of one or more classes or series of interests of the acquired
9entity in an interest exchange.
103. “Conversion” means a transaction authorized by part 4.
114. “Converted entity” means the converting entity as it
12continues in existence after a conversion.
135. “Converting entity” means the domestic entity that
14approves a plan of conversion pursuant to section 489.1043 or
15the foreign entity that approves a conversion pursuant to the
16law of its jurisdiction of formation.
176. “Distributional interest” means the right under an
18unincorporated entity’s organic law and organic rules to
19receive distributions from the entity.
207. “Domestic”, with respect to an entity, means governed as
21to its internal affairs by the law of this state.
228. “Domesticated limited liability company” means the
23domesticating limited liability company as it continues in
24existence after a domestication.
259. “Domesticating limited liability company” means the
26domestic limited liability company that approves a plan of
27domestication pursuant to section 489.1053 or the foreign
28limited liability company that approves a domestication
29pursuant to the law of its jurisdiction of formation.
3010. “Domestication” means a transaction authorized by part
315.
3211. a. “Entity” means any of the following:
33(1) A business corporation.
34(2) A nonprofit corporation.
35(3) A general partnership, including a limited liability
-103-1partnership.
2(4) A limited partnership, including a limited liability
3limited partnership.
4(5) A limited liability company.
5(6) A domestic cooperative.
6(7) An unincorporated nonprofit association.
7(8) A statutory trust, business trust, or common-law
8business trust.
9(9) Any other person that has any of the following:
10(a) A legal existence separate from any interest holder of
11that person.
12(b) The power to acquire an interest in real property in
13its own name.
14b. “Entity” does not include any of the following:
15(1) An individual.
16(2) A trust with a predominantly donative purpose or a
17charitable trust.
18(3) An association or relationship that is not an entity
19listed in paragraph “a” and is not a partnership under the
20rules stated in section 486A.202, subsection 3, or a similar
21provision of the law of another jurisdiction.
22(4) A decedent’s estate.
23(5) A government or a governmental subdivision, agency, or
24instrumentality.
2512. “Filing entity” means an entity whose formation requires
26the filing of a public organic record. The term does not
27include a limited liability partnership.
2813. “Foreign”, with respect to an entity, means an
29entity governed as to its internal affairs by the law of a
30jurisdiction other than this state.
3114. “Governance interest” means a right under the organic
32law or organic rules of an unincorporated entity, other than as
33a governor, agent, assignee, or proxy, to any of the following:
34a. Receive or demand access to information concerning, or
35the books and records of, the entity.
-104- 1b. Vote for or consent to the election of the governors of
2the entity.
3c. Receive notice of or vote on or consent to an issue
4involving the internal affairs of the entity.
515. “Governor” means any of the following:
6a. A director of a business corporation.
7b. A director or trustee of a nonprofit corporation.
8c. A general partner of a general partnership.
9d. A general partner of a limited partnership.
10e. A manager of a manager-managed limited liability company.
11f. A member of a member-managed limited liability company.
12g. A director of a domestic cooperative.
13h. A manager of an unincorporated nonprofit association.
14i. A trustee of a statutory trust, business trust, or
15common-law business trust.
16j. Any other person under whose authority the powers of an
17entity are exercised and under whose direction the activities
18and affairs of the entity are managed pursuant to the organic
19law and organic rules of the entity.
2016. “Interest” means any of the following:
21a. A share in a business corporation.
22b. A membership in a nonprofit corporation.
23c. A partnership interest in a general partnership.
24d. A partnership interest in a limited partnership.
25e. A membership interest in a limited liability company.
26f. A share in a domestic cooperative.
27g. A membership in an unincorporated nonprofit association.
28h. A beneficial interest in a statutory trust, business
29trust, or common-law business trust.
30i. A governance interest or distributional interest in any
31other type of unincorporated entity.
3217. “Interest exchange” means a transaction authorized by
33part 3.
3418. “Interest holder” means any of the following:
35a. A shareholder of a business corporation.
-105- 1b. A member of a nonprofit corporation.
2c. A general partner of a general partnership.
3d. A general partner of a limited partnership.
4e. A limited partner of a limited partnership.
5f. A member of a limited liability company.
6g. a shareholder of a domestic cooperative.
7h. A member of an unincorporated nonprofit association.
8i. A beneficiary or beneficial owner of a statutory trust,
9business trust, or common-law business trust.
10j. Any other direct holder of an interest.
1119. “Interest holder liability” means any of the following:
12a. Personal liability for a liability of an entity which is
13imposed on a person due to any of the following:
14(1) Solely by reason of the status of the person as an
15interest holder.
16(2) By the organic rules of the entity which make one or
17more specified interest holders or categories of interest
18holders liable in their capacity as interest holders for all or
19specified liabilities of the entity.
20b. An obligation of an interest holder under the organic
21rules of an entity to contribute to the entity.
2220. “Merger” means a transaction authorized by part 2.
2321. “Merging entity” means an entity that is a party to
24a merger and exists immediately before the merger becomes
25effective.
2622. “Organic law” means the law of an entity’s jurisdiction
27of formation governing the internal affairs of the entity.
2823. “Organic rules” means the public organic record and
29private organic rules of an entity.
3024. “Plan” means a plan of merger, plan of interest
31exchange, plan of conversion, or plan of domestication.
3225. “Plan of conversion” means a plan under section
33489.1042.
3426. “Plan of domestication” means a plan under section
35489.1052.
-106- 127. “Plan of interest exchange” means a plan under section
2489.1032.
328. “Plan of merger” means a plan under section 489.1022.
429. a. “Private organic rules” means the rules, whether or
5not in a record, that govern the internal affairs of an entity,
6are binding on all its interest holders, and are not part of
7its public organic record, if any.
8b. “Private organic rules” includes all of the following:
9(1) The bylaws of a business corporation.
10(2) The bylaws of a nonprofit corporation.
11(3) The partnership agreement of a general partnership.
12(4) The partnership agreement of a limited partnership.
13(5) The operating agreement of a limited liability company.
14(6) The bylaws of a domestic cooperative.
15(7) The governing principles of an unincorporated nonprofit
16association.
17(8) The trust instrument of a statutory trust or similar
18rules of a business trust or common-law business trust.
1930. “Protected agreement” means any of the following:
20a. A record evidencing indebtedness and any related
21agreement in effect on January 1, 2009.
22b. An agreement that is binding on an entity on January 1,
232009.
24c. The organic rules of an entity in effect on January 1,
252009.
26d. An agreement that is binding on any of the governors or
27interest holders of an entity on January 1, 2009.
2831. a. “Public organic record” means the record the filing
29of which by the secretary of state is required to form an
30entity and any amendment to or restatement of that record.
31b. “Public organic record” includes any of the following:
32(1) The articles of incorporation of a business
33corporation.
34(2) The articles of incorporation of a nonprofit
35corporation.
-107- 1(3) The certificate of limited partnership of a limited
2partnership.
3(4) The certificate of organization of a limited liability
4company.
5(5) The articles of incorporation of a domestic
6cooperative.
7(6) The certificate of trust of a statutory trust or similar
8record of a business trust.
932. “Registered foreign entity” means a foreign entity that
10is registered to do business in this state pursuant to a record
11filed by the secretary of state.
1233. “Statement of conversion” means a statement under
13section 489.1045.
1434. “Statement of domestication” means a statement under
15section 489.1055.
1635. “Statement of interest exchange” means a statement under
17section 489.1035.
1836. “Statement of merger” means a statement under section
19489.1025.
2037. “Surviving entity” means the entity that continues in
21existence after or is created by a merger.
2238. “Type of entity” means a generic form of entity that is
23any of the following:
24a. Recognized at common law.
25b. Formed under an organic law, whether or not some entities
26formed under that organic law are subject to provisions of that
27law that create different categories of the form of entity.
28 Sec. 81. Section 489.1002, Code 2023, is amended by striking
29the section and inserting in lieu thereof the following:
30489.1002 Relationship of subchapter to other laws.
311. This subchapter does not authorize an act prohibited by,
32and does not affect the application or requirements of, law
33other than this subchapter.
342. A transaction effected under this subchapter shall
35not create or impair a right, duty, or obligation of a
-108-1person under the statutory law of this state other than this
2subchapter relating to a change in control, takeover, business
3combination, control-share acquisition, or similar transaction
4involving a domestic merging, acquired, converting, or
5domesticating business corporation unless any of the following
6applies:
7a. If the corporation does not survive the transaction, the
8transaction satisfies any requirements of the law.
9b. If the corporation survives the transaction, the approval
10of the plan is by a vote of the shareholders or directors which
11would be sufficient to create or impair the right, duty, or
12obligation directly under the law.
13 Sec. 82. Section 489.1003, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15489.1003 Required notice or approval.
161. A domestic or foreign entity that is required to give
17notice to, or obtain the approval of, a governmental agency
18or officer of this state to be a party to a merger must give
19the notice or obtain the approval to be a party to an interest
20exchange, conversion, or domestication.
212. Property held for a charitable purpose under the law of
22this state by a domestic or foreign entity immediately before
23a transaction under this subchapter becomes effective may be
24diverted from the objects for which it was donated, granted,
25devised, or otherwise transferred only to the extent a public
26benefit corporation is able to divert from such objects under
27chapter 504.
283. A bequest, devise, gift, grant, or promise contained
29in a will or other instrument of donation, subscription, or
30conveyance which is made to a merging entity that is not the
31surviving entity and which takes effect or remains payable
32after the merger inures to the surviving entity.
334. A trust obligation that would govern property if
34transferred to a nonsurviving entity applies to property that
35is transferred to the surviving entity under this section.
-109-1 Sec. 83. Section 489.1004, Code 2023, is amended by striking
2the section and inserting in lieu thereof the following:
3489.1004 Nonexclusivity.
4The fact that a transaction under this subchapter produces
5a certain result does not preclude the same result from being
6accomplished in any other manner permitted by law other than
7this subchapter.
8 Sec. 84. Section 489.1005, Code 2023, is amended by striking
9the section and inserting in lieu thereof the following:
10489.1005 Reference to external facts.
111. A plan may refer to facts ascertainable outside the plan
12if the manner in which the facts will operate upon the plan is
13specified in the plan. The facts may include the occurrence of
14an event or a determination or action by a person, whether or
15not the event, determination, or action is within the control
16of a party to the transaction.
172. The following provisions of a record delivered to the
18secretary of state for filing under this chapter or a plan
19delivered for filing in lieu of a statement shall not be made
20dependent on facts outside the record or plan:
21a. The name and address of any person.
22b. The registered office of any entity.
23c. The registered agent of any entity.
24d. The number of authorized interests and designation of
25each class or series of interests.
26e. The effective date of a record delivered to the secretary
27of state for filing.
28f. Any required statement in a record delivered to the
29secretary of state for filing of the date on which the
30underlying transaction was approved or the manner in which that
31approval was given.
32 Sec. 85. Section 489.1006, Code 2023, is amended by striking
33the section and inserting in lieu thereof the following:
34489.1006 Appraisal rights.
35An interest holder of a domestic merging, acquired,
-110-1converting, or domesticating limited liability company is
2entitled to contractual appraisal rights in connection with a
3transaction under this subchapter to the extent provided in any
4of the following:
51. The operating agreement.
62. The plan.
7 Sec. 86. Section 489.1007, Code 2023, is amended by striking
8the section and inserting in lieu thereof the following:
9489.1007 Excluded entities and transactions.
10This subchapter shall not be used to effect a transaction
11involving a bank, insurance company, or public utility where
12any chapter governing the regulation of such entity does not
13permit the transaction.
14 Sec. 87. NEW SECTION. 489.1021 Merger authorized.
151. By complying with this part, all of the following apply:
16a. One or more domestic limited liability companies may
17merge with one or more domestic or foreign entities into a
18domestic or foreign surviving entity.
19b. Two or more foreign entities may merge into a domestic
20limited liability company.
212. By complying with the provisions of this part applicable
22to foreign entities, a foreign entity may be a party to a
23merger under this part or may be the surviving entity in such
24a merger if the merger is authorized by the law of the foreign
25entity’s jurisdiction of formation.
26 Sec. 88. NEW SECTION. 489.1022 Plan of merger.
271. A domestic limited liability company may become a party
28to a merger under this part by approving a plan of merger. The
29plan must be in a record and contain all of the following:
30a. As to each merging entity, its name, jurisdiction of
31formation, and type of entity.
32b. If the surviving entity is to be created in the merger, a
33statement to that effect and the entity’s name, jurisdiction of
34formation, and type of entity.
35c. The manner of converting the interests in each party
-111-1to the merger into interests, securities, obligations, money,
2other property, rights to acquire interests or securities, or
3any combination of the foregoing.
4d. If the surviving entity exists before the merger, any
5proposed amendments to all of the following:
6(1) Its public organic record, if any.
7(2) Its private organic rules that are, or are proposed to
8be, in a record.
9e. If the surviving entity is to be created in the merger,
10all of the following:
11(1) Its proposed public organic record, if any.
12(2) The full text of its private organic rules that are
13proposed to be in a record.
14f. The other terms and conditions of the merger.
15g. Any other provision required by the law of a merging
16entity’s jurisdiction of formation or the organic rules of a
17merging entity.
182. In addition to the requirements of subsection 1, a plan
19of merger may contain any other provision not prohibited by
20law.
21 Sec. 89. NEW SECTION. 489.1023 Approval of merger.
221. A plan of merger is not effective unless it has been
23approved according to all of the following:
24a. By a domestic merging limited liability company, by all
25the members of the company entitled to vote on or consent to
26any matter.
27b. In a record, by each member of a domestic merging limited
28liability company which will have interest holder liability for
29debts, obligations, and other liabilities that are incurred
30after the merger becomes effective, unless all of the following
31apply:
32(1) The operating agreement of the limited liability
33company provides in a record for the approval of a merger in
34which some or all of its members become subject to interest
35holder liability by the affirmative vote or consent of fewer
-112-1than all the members.
2(2) The member consented in a record to or voted for that
3provision of the operating agreement or became a member after
4the adoption of that provision.
52. A merger involving a domestic merging entity that is not
6a limited liability company is not effective unless the merger
7is approved by that entity in accordance with its organic law.
83. A merger involving a foreign merging entity is not
9effective unless the merger is approved by the foreign entity
10in accordance with the law of the foreign entity’s jurisdiction
11of formation.
12 Sec. 90. NEW SECTION. 489.1024 Amendment or abandonment
13of plan of merger.
141. A plan of merger may be amended only with the consent
15of each party to the plan, except as otherwise provided in the
16plan.
172. A domestic merging limited liability company may approve
18an amendment of a plan of merger according to any of the
19following:
20a. In the same manner as the plan was approved, if the plan
21does not provide for the manner in which it may be amended.
22b. By its managers or members in the manner provided in the
23plan, but a member that was entitled to vote on or consent to
24approval of the merger is entitled to vote on or consent to any
25amendment of the plan that will change any of the following:
26(1) The amount or kind of interests, securities,
27obligations, money, other property, rights to acquire interests
28or securities, or any combination of the foregoing, to be
29received by the interest holders of any party to the plan.
30(2) The public organic record, if any, or private
31organic rules of the surviving entity that will be in effect
32immediately after the merger becomes effective, except for
33changes that do not require approval of the interest holders of
34the surviving entity under its organic law or organic rules.
35(3) Any other terms or conditions of the plan, if the change
-113-1would adversely affect the member in any material respect.
23. After a plan of merger has been approved and before
3a statement of merger becomes effective, the plan may be
4abandoned as provided in the plan. Unless prohibited by the
5plan, a domestic merging limited liability company may abandon
6the plan in the same manner as the plan was approved.
74. If a plan of merger is abandoned after a statement of
8merger has been delivered to the secretary of state for filing
9and before the statement becomes effective, a statement of
10abandonment, signed by a party to the plan, must be delivered
11to the secretary of state for filing before the statement of
12merger becomes effective. The statement of abandonment takes
13effect on filing, and the merger is abandoned and does not
14become effective. The statement of abandonment must contain
15all of the following:
16a. The name of each party to the plan of merger.
17b. The date on which the statement of merger was filed by
18the secretary of state.
19c. A statement that the merger has been abandoned in
20accordance with this section.
21 Sec. 91. NEW SECTION. 489.1025 Statement of merger —
22effective date of merger.
231. A statement of merger must be signed by each merging
24entity and delivered to the secretary of state for filing.
252. A statement of merger must contain all of the following:
26a. The name, jurisdiction of formation, and type of entity
27of each merging entity that is not the surviving entity.
28b. The name, jurisdiction of formation, and type of entity
29of the surviving entity, and if the surviving entity is a
30foreign entity, the street and mailing addresses of an office
31of the surviving entity that the secretary of state may use for
32purposes of section 489.1026, subsection 5.
33c. A statement that the merger was approved by each domestic
34merging entity, if any, in accordance with this part and by
35each foreign merging entity, if any, in accordance with the law
-114-1of its jurisdiction of formation.
2d. If the surviving entity exists before the merger and is
3a domestic filing entity, any amendment to its public organic
4record approved as part of the plan of merger.
5e. If the surviving entity is created by the merger and
6is a domestic filing entity, its public organic record, as an
7attachment.
8f. If the surviving entity is created by the merger and
9is a domestic limited liability partnership, its statement of
10qualification, as an attachment.
113. In addition to the requirements of subsection 2, a
12statement of merger may contain any other provision not
13prohibited by law.
144. If the surviving entity is a domestic entity, its public
15organic record, if any, must satisfy the requirements of the
16law of this state, except that the public organic record does
17not need to be signed.
185. If the surviving entity is a domestic limited liability
19company, the merger becomes effective when the statement of
20merger is effective. In all other cases, the merger becomes
21effective on the later of the following:
22a. The date and time provided by the organic law of the
23surviving entity.
24b. When the statement is effective.
25 Sec. 92. NEW SECTION. 489.1026 Effect of merger.
261. When a merger becomes effective, all of the following
27apply:
28a. The surviving entity continues or comes into existence.
29b. Each merging entity that is not the surviving entity
30ceases to exist.
31c. All property of each merging entity vests in the
32surviving entity without transfer, reversion, or impairment.
33d. All debts, obligations, and other liabilities of each
34merging entity are debts, obligations, and other liabilities
35of the surviving entity.
-115- 1e. Except as otherwise provided by law or the plan of
2merger, all the rights, privileges, immunities, powers, and
3purposes of each merging entity vest in the surviving entity.
4f. If the surviving entity exists before the merger, all of
5the following apply:
6(1) All its property continues to be vested in it without
7transfer, reversion, or impairment.
8(2) It remains subject to all its debts, obligations, and
9other liabilities.
10(3) All its rights, privileges, immunities, powers, and
11purposes continue to be vested in it.
12g. The name of the surviving entity may be substituted for
13the name of any merging entity that is a party to any pending
14action or proceeding.
15h. If the surviving entity exists before the merger, all of
16the following apply:
17(1) Its public organic record, if any, is amended to the
18extent provided in the statement of merger.
19(2) Its private organic rules that are to be in a record, if
20any, are amended to the extent provided in the plan of merger.
21i. If the surviving entity is created by the merger, its
22private organic rules are effective and all of the following
23apply:
24(1) If it is a filing entity, its public organic record
25becomes effective.
26(2) If it is a limited liability partnership, its statement
27of qualification becomes effective.
28j. The interests in each merging entity which are to be
29converted in the merger are converted, and the interest holders
30of those interests are entitled only to the rights provided to
31them under the plan of merger and to any appraisal rights they
32have under section 489.1006 and the merging entity’s organic
33law.
342. Except as otherwise provided in the organic law or
35organic rules of a merging entity, the merger does not give
-116-1rise to any rights that an interest holder, governor, or third
2party would have upon a dissolution, liquidation, or winding up
3of the merging entity.
43. When a merger becomes effective, a person that did
5not have interest holder liability with respect to any of
6the merging entities and becomes subject to interest holder
7liability with respect to a domestic entity as a result of
8the merger has interest holder liability only to the extent
9provided by the organic law of that entity and only for those
10debts, obligations, and other liabilities that are incurred
11after the merger becomes effective.
124. When a merger becomes effective, the interest holder
13liability of a person that ceases to hold an interest in a
14domestic merging limited liability company with respect to
15which the person had interest holder liability is subject to
16the following rules:
17a. The merger does not discharge any interest holder
18liability under this chapter to the extent the interest holder
19liability was incurred before the merger became effective.
20b. The person does not have interest holder liability under
21this chapter for any debt, obligation, or other liability that
22is incurred after the merger becomes effective.
23c. This chapter continues to apply to the release,
24collection, or discharge of any interest holder liability
25preserved under paragraph “a” as if the merger had not occurred.
26d. The person has whatever rights of contribution from
27any other person as are provided by this chapter, law other
28than this chapter, or the operating agreement of the domestic
29merging limited liability company with respect to any interest
30holder liability preserved under paragraph “a” as if the merger
31had not occurred.
325. When a merger becomes effective, a foreign entity that is
33the surviving entity may be served with process in this state
34for the collection and enforcement of any debts, obligations,
35or other liabilities of a domestic merging limited liability
-117-1company as provided in section 489.116.
26. When a merger becomes effective, the registration to do
3business in this state of any foreign merging entity that is
4not the surviving entity is canceled.
5 Sec. 93. NEW SECTION. 489.1031 Interest exchange
6authorized.
71. By complying with this part, any of the following apply:
8a. A domestic limited liability company may acquire all
9of one or more classes or series of interests of another
10domestic entity or a foreign entity in exchange for interests,
11securities, obligations, money, other property, rights to
12acquire interests or securities, or any combination of the
13foregoing.
14b. All of one or more classes or series of interests of a
15domestic limited liability company may be acquired by another
16domestic entity or a foreign entity in exchange for interests,
17securities, obligations, money, other property, rights to
18acquire interests or securities, or any combination of the
19foregoing.
202. By complying with the provisions of this part applicable
21to foreign entities, a foreign entity may be the acquiring or
22acquired entity in an interest exchange under this part if
23the interest exchange is authorized by the law of the foreign
24entity’s jurisdiction of formation.
253. If a protected agreement contains a provision that
26applies to a merger of a domestic limited liability company but
27does not refer to an interest exchange, the provision applies
28to an interest exchange in which the domestic limited liability
29company is the acquired entity as if the interest exchange were
30a merger until the provision is amended on or after January 1,
312009.
32 Sec. 94. NEW SECTION. 489.1032 Plan of interest exchange.
331. A domestic limited liability company may be the acquired
34entity in an interest exchange under this part by approving a
35plan of interest exchange. The plan must be in a record and
-118-1contain all of the following:
2a. The name of the acquired entity.
3b. The name, jurisdiction of formation, and type of entity
4of the acquiring entity.
5c. The manner of converting the interests in the acquired
6entity into interests, securities, obligations, money, other
7property, rights to acquire interests or securities, or any
8combination of the foregoing.
9d. Any proposed amendments to all of the following:
10(1) The certificate of organization of the acquired entity.
11(2) The operating agreement of the acquired entity that are,
12or are proposed to be, in a record.
13e. The other terms and conditions of the interest exchange.
14f. Any other provision required by the law of this state or
15the operating agreement of the acquired entity.
162. In addition to the requirements of subsection 1, a
17plan of interest exchange may contain any other provision not
18prohibited by law.
19 Sec. 95. NEW SECTION. 489.1033 Approval of interest
20exchange.
211. A plan of interest exchange is not effective unless it
22has been approved according to all of the following:
23a. By all the members of a domestic acquired limited
24liability company entitled to vote on or consent to any matter.
25b. In a record, by each member of the domestic acquired
26limited liability company that will have interest holder
27liability for debts, obligations, and other liabilities that
28are incurred after the interest exchange becomes effective,
29unless all of the following apply:
30(1) The operating agreement of the limited liability
31company provides in a record for the approval of an interest
32exchange or a merger in which some or all of its members become
33subject to interest holder liability by the affirmative vote or
34consent of fewer than all the members.
35(2) The member consented in a record to or voted for that
-119-1provision of the operating agreement or became a member after
2the adoption of that provision.
32. An interest exchange involving a domestic acquired
4entity that is not a limited liability company is not effective
5unless it is approved by the domestic entity in accordance with
6its organic law.
73. An interest exchange involving a foreign acquired entity
8is not effective unless it is approved by the foreign entity in
9accordance with the law of the foreign entity’s jurisdiction
10of formation.
114. Except as otherwise provided in its organic law or
12organic rules, the interest holders of the acquiring entity are
13not required to approve the interest exchange.
14 Sec. 96. NEW SECTION. 489.1034 Amendment or abandonment
15of plan of interest exchange.
161. A plan of interest exchange may be amended only with the
17consent of each party to the plan, except as otherwise provided
18in the plan.
192. A domestic acquired limited liability company may
20approve an amendment of a plan of interest exchange according
21to any of the following:
22a. In the same manner as the plan was approved, if the plan
23does not provide for the manner in which it may be amended.
24b. By its managers or members in the manner provided in
25the plan, but a member that was entitled to vote on or consent
26to approval of the interest exchange is entitled to vote on or
27consent to any amendment of the plan that will change any of
28the following:
29(1) The amount or kind of interests, securities,
30obligations, money, other property, rights to acquire interests
31or securities, or any combination of the foregoing, to be
32received by any of the members of the acquired company under
33the plan.
34(2) The certificate of organization or operating agreement
35of the acquired company that will be in effect immediately
-120-1after the interest exchange becomes effective, except for
2changes that do not require approval of the members of the
3acquired company under this chapter or the operating agreement.
4(3) Any other terms or conditions of the plan, if the change
5would adversely affect the member in any material respect.
63. After a plan of interest exchange has been approved and
7before a statement of interest exchange becomes effective,
8the plan may be abandoned as provided in the plan. Unless
9prohibited by the plan, a domestic acquired limited liability
10company may abandon the plan in the same manner as the plan was
11approved.
124. If a plan of interest exchange is abandoned after a
13statement of interest exchange has been delivered to the
14secretary of state for filing and before the statement becomes
15effective, a statement of abandonment, signed by the acquired
16limited liability company, must be delivered to the secretary
17of state for filing before the statement of interest exchange
18becomes effective. The statement of abandonment takes effect
19on filing, and the interest exchange is abandoned and does not
20become effective. The statement of abandonment must contain
21all of the following:
22a. The name of the acquired limited liability company.
23b. The date on which the statement of interest exchange was
24filed by the secretary of state.
25c. A statement that the interest exchange has been abandoned
26in accordance with this section.
27 Sec. 97. NEW SECTION. 489.1035 Statement of interest
28exchange — effective date of interest exchange.
291. A statement of interest exchange must be signed by a
30domestic acquired limited liability company and delivered to
31the secretary of state for filing.
322. A statement of interest exchange must contain all of the
33following:
34a. The name of the acquired limited liability company.
35b. The name, jurisdiction of formation, and type of entity
-121-1of the acquiring entity.
2c. A statement that the plan of interest exchange was
3approved by the acquired company in accordance with this part.
4d. Any amendments to the acquired company’s certificate of
5organization approved as part of the plan of interest exchange.
63. In addition to the requirements of subsection 2, a
7statement of interest exchange may contain any other provision
8not prohibited by law.
94. An interest exchange becomes effective when the
10statement of interest exchange is effective.
11 Sec. 98. NEW SECTION. 489.1036 Effect of interest exchange.
121. When an interest exchange in which the acquired entity
13is a domestic limited liability company becomes effective, all
14of the following apply:
15a. The interests in the acquired limited liability company
16which are the subject of the interest exchange are converted,
17and the members holding those interests are entitled only to
18the rights provided to them under the plan of interest exchange
19and to any appraisal rights they have under section 486.1006.
20b. The acquiring entity becomes the interest holder of the
21interests in the acquired limited liability company stated in
22the plan of interest exchange to be acquired by the acquiring
23entity.
24c. The certificate of organization of the acquired limited
25liability company is amended to the extent provided in the
26statement of interest exchange.
27d. The provisions of the operating agreement of the acquired
28limited liability company that are to be in a record, if any,
29are amended to the extent provided in the plan of interest
30exchange.
312. Except as otherwise provided in the operating agreement
32of a domestic acquired limited liability company, the interest
33exchange does not give rise to any rights that a member,
34manager, or third party would have upon a dissolution,
35liquidation, or winding up of the acquired limited liability
-122-1company.
23. When an interest exchange becomes effective, a person
3that did not have interest holder liability with respect to
4a domestic acquired limited liability company and becomes
5subject to interest holder liability with respect to a domestic
6entity as a result of the interest exchange has interest holder
7liability only to the extent provided by the organic law of
8the entity and only for those debts, obligations, and other
9liabilities that are incurred after the interest exchange
10becomes effective.
114. When an interest exchange becomes effective, the
12interest holder liability of a person that ceases to hold an
13interest in a domestic acquired limited liability company with
14respect to which the person had interest holder liability is
15subject to all of the following rules:
16a. The interest exchange does not discharge any interest
17holder liability under this chapter to the extent the interest
18holder liability was incurred before the interest exchange
19became effective.
20b. The person does not have interest holder liability under
21this chapter for any debt, obligation, or other liability that
22is incurred after the interest exchange becomes effective.
23c. This chapter continues to apply to the release,
24collection, or discharge of any interest holder liability
25preserved under paragraph “a” as if the interest exchange had
26not occurred.
27d. The person has whatever rights of contribution from
28any other person as are provided by this chapter, law other
29than this chapter, or the operating agreement of the acquired
30limited liability company with respect to any interest holder
31liability preserved under paragraph “a” as if the interest
32exchange had not occurred.
33 Sec. 99. NEW SECTION. 489.1041 Conversion authorized.
341. By complying with this part, a domestic limited liability
35company may become any of the following:
-123- 1a. A domestic entity that is a different type of entity.
2b. A foreign entity that is a different type of entity, if
3the conversion is authorized by the law of the foreign entity’s
4jurisdiction of formation.
52. By complying with the provisions of this part applicable
6to foreign entities, a foreign entity that is not a foreign
7limited liability company may become a domestic limited
8liability company if the conversion is authorized by the law of
9the foreign entity’s jurisdiction of formation.
103. If a protected agreement contains a provision that
11applies to a merger of a domestic limited liability company
12but does not refer to a conversion, the provision applies
13to a conversion of the limited liability company as if the
14conversion were a merger until the provision is amended on or
15after January 1, 2009.
164. A domestic entity that is not a limited liability company
17may become a domestic limited liability company if all of the
18following apply:
19a. The domestic converting entity complies with section
20489.1043.
21b. The domestic converting entity files a statement of
22conversion in accordance with section 489.1045.
23 Sec. 100. NEW SECTION. 489.1042 Plan of conversion.
241. A domestic limited liability company may convert to a
25different type of entity under this part by approving a plan
26of conversion. The plan must be in a record and contain all of
27the following:
28a. The name of the converting limited liability company.
29b. The name, jurisdiction of formation, and type of entity
30of the converted entity.
31c. The manner of converting the interests in the converting
32limited liability company into interests, securities,
33obligations, money, other property, rights to acquire interests
34or securities, or any combination of the foregoing.
35d. The proposed public organic record of the converted
-124-1entity if it will be a filing entity.
2e. The full text of the private organic rules of the
3converted entity which are proposed to be in a record.
4f. The other terms and conditions of the conversion.
5g. Any other provision required by the law of this state
6or the operating agreement of the converting limited liability
7company.
82. In addition to the requirements of subsection 1, a plan
9of conversion may contain any other provision not prohibited
10by law.
11 Sec. 101. NEW SECTION. 489.1043 Approval of conversion.
121. A plan of conversion is not effective unless it has been
13approved according to all of the following:
14a. By a domestic converting limited liability company, by
15all the members of the limited liability company entitled to
16vote on or consent to any matter.
17b. In a record, by each member of a domestic converting
18limited liability company which will have interest holder
19liability for debts, obligations, and other liabilities that
20are incurred after the conversion becomes effective, unless all
21of the following apply:
22(1) The operating agreement of the limited liability
23company provides in a record for the approval of a conversion
24or a merger in which some or all of its members become subject
25to interest holder liability by the affirmative vote or consent
26of fewer than all the members.
27(2) The member voted for or consented in a record to that
28provision of the operating agreement or became a member after
29the adoption of that provision.
302. A conversion involving a domestic converting entity that
31is not a limited liability company is not effective unless it
32is approved by the domestic converting entity in accordance
33with its organic law.
343. A conversion of a foreign converting entity is not
35effective unless it is approved by the foreign entity in
-125-1accordance with the law of the foreign entity’s jurisdiction
2of formation.
3 Sec. 102. NEW SECTION. 489.1044 Amendment or abandonment of
4plan of conversion.
51. A plan of conversion of a domestic converting limited
6liability company may be amended according to any of the
7following:
8a. In the same manner as the plan was approved, if the plan
9does not provide for the manner in which it may be amended.
10b. By its managers or members in the manner provided in the
11plan, but a member that was entitled to vote on or consent to
12approval of the conversion is entitled to vote on or consent
13to any amendment of the plan that will change any of the
14following:
15(1) The amount or kind of interests, securities,
16obligations, money, other property, rights to acquire interests
17or securities, or any combination of the foregoing, to be
18received by any of the members of the converting limited
19liability company under the plan.
20(2) The public organic record, if any, or private organic
21rules of the converted entity which will be in effect
22immediately after the conversion becomes effective, except for
23changes that do not require approval of the interest holders of
24the converted entity under its organic law or organic rules.
25(3) Any other terms or conditions of the plan, if the change
26would adversely affect the member in any material respect.
272. After a plan of conversion has been approved by a
28domestic converting limited liability company and before a
29statement of conversion becomes effective, the plan may be
30abandoned as provided in the plan. Unless prohibited by the
31plan, a domestic converting limited liability company may
32abandon the plan in the same manner as the plan was approved.
333. If a plan of conversion is abandoned after a statement
34of conversion has been delivered to the secretary of state
35for filing and before the statement becomes effective, a
-126-1statement of abandonment, signed by the converting entity,
2must be delivered to the secretary of state for filing before
3the statement of conversion becomes effective. The statement
4of abandonment takes effect on filing, and the conversion is
5abandoned and does not become effective. The statement of
6abandonment must contain all of the following:
7a. The name of the converting limited liability company.
8b. The date on which the statement of conversion was filed
9by the secretary of state.
10c. A statement that the conversion has been abandoned in
11accordance with this section.
12 Sec. 103. NEW SECTION. 489.1045 Statement of conversion —
13effective date of conversion.
141. A statement of conversion must be signed by the
15converting entity and delivered to the secretary of state for
16filing.
172. A statement of conversion must contain all of the
18following:
19a. The name, jurisdiction of formation, and type of entity
20of the converting entity.
21b. The name, jurisdiction of formation, and type of entity
22of the converted entity and if the converted entity is a
23foreign entity, the street and mailing addresses of an office
24of the converted entity that the secretary of state may use for
25purposes of section 489.1046, subsection 5.
26c. If the converting entity is a domestic limited liability
27company, a statement that the plan of conversion was approved
28in accordance with this part or, if the converting entity is a
29foreign entity, a statement that the conversion was approved
30by the foreign entity in accordance with the law of its
31jurisdiction of formation.
32d. If the converted entity is a domestic filing entity, its
33public organic record, as an attachment.
34e. If the converted entity is a domestic limited liability
35partnership, its statement of qualification, as an attachment.
-127- 13. In addition to the requirements of subsection 2, a
2statement of conversion may contain any other provision not
3prohibited by law.
44. If the converted entity is a domestic entity, its public
5organic record, if any, must satisfy the requirements of the
6law of this state, except that the public organic record does
7not need to be signed.
85. If the converted entity is a domestic limited liability
9company, the conversion becomes effective when the statement of
10conversion is effective. In all other cases, the conversion
11becomes effective on the later of the following:
12a. The date and time provided by the organic law of the
13converted entity.
14b. When the statement is effective.
15 Sec. 104. NEW SECTION. 489.1046 Effect of conversion.
161. When a conversion becomes effective all of the following
17apply:
18a. The converted entity is any of the following:
19(1) Organized under and subject to the organic law of the
20converted entity.
21(2) The same entity without interruption as the converting
22entity.
23b. All property of the converting entity continues to be
24vested in the converted entity without transfer, reversion, or
25impairment.
26c. All debts, obligations, and other liabilities of the
27converting entity continue as debts, obligations, and other
28liabilities of the converted entity.
29d. Except as otherwise provided by law or the plan of
30conversion, all the rights, privileges, immunities, powers,
31and purposes of the converting entity remain in the converted
32entity.
33e. The name of the converted entity may be substituted for
34the name of the converting entity in any pending action or
35proceeding.
-128- 1f. The certificate of organization of the converted entity
2becomes effective.
3g. The provisions of the operating agreement of the
4converted entity which are to be in a record, if any, approved
5as part of the plan of conversion become effective.
6h. The interests in the converting entity are converted, and
7the interest holders of the converting entity are entitled only
8to the rights provided to them under the plan of conversion and
9to any appraisal rights they have under section 489.1006.
102. Except as otherwise provided in the operating agreement
11of a domestic converting limited liability company, the
12conversion does not give rise to any rights that a member,
13manager, or third party would have upon a dissolution,
14liquidation, or winding up of the converting entity.
153. When a conversion becomes effective, a person that
16did not have interest holder liability with respect to the
17converting entity and becomes subject to interest holder
18liability with respect to a domestic entity as a result of the
19conversion has interest holder liability only to the extent
20provided by the organic law of the entity and only for those
21debts, obligations, and other liabilities that are incurred
22after the conversion becomes effective.
234. When a conversion becomes effective, the interest holder
24liability of a person that ceases to hold an interest in a
25domestic converting limited liability company with respect to
26which the person had interest holder liability is subject to
27all of the following rules:
28a. The conversion does not discharge any interest holder
29liability under this chapter to the extent the interest holder
30liability was incurred before the conversion became effective.
31b. The person does not have interest holder liability under
32this chapter for any debt, obligation, or other liability that
33arises after the conversion becomes effective.
34c. This chapter continues to apply to the release,
35collection, or discharge of any interest holder liability
-129-1preserved under paragraph “a” as if the conversion had not
2occurred.
3d. The person has whatever rights of contribution from any
4other person as are provided by this chapter, law other than
5this chapter, or the organic rules of the converting entity
6with respect to any interest holder liability preserved under
7paragraph “a” as if the conversion had not occurred.
85. When a conversion becomes effective, a foreign entity
9that is the converted entity may be served with process in this
10state for the collection and enforcement of any of its debts,
11obligations, and other liabilities as provided in section
12489.116.
136. If the converting entity is a registered foreign entity,
14its registration to do business in this state is canceled when
15the conversion becomes effective.
167. A conversion does not require the entity to wind up its
17affairs and does not constitute or cause the dissolution of the
18entity.
19 Sec. 105. NEW SECTION. 489.1051 Domestication authorized.
201. By complying with this part, a domestic limited liability
21company may become a foreign limited liability company if
22the domestication is authorized by the law of the foreign
23jurisdiction.
242. By complying with the provisions of this part applicable
25to foreign limited liability companies, a foreign limited
26liability company may become a domestic limited liability
27company if the domestication is authorized by the law of the
28foreign limited liability company’s jurisdiction of formation.
293. If a protected agreement contains a provision that
30applies to a merger of a domestic limited liability company
31but does not refer to a domestication, the provision applies
32to a domestication of the limited liability company as if the
33domestication were a merger until the provision is amended on
34or after January 1, 2009.
35 Sec. 106. NEW SECTION. 489.1052 Plan of domestication.
-130- 11. A domestic limited liability company may become a foreign
2limited liability company in a domestication by approving
3a plan of domestication. The plan must be in a record and
4contain all of the following:
5a. The name of the domesticating limited liability company.
6b. The name and jurisdiction of formation of the
7domesticated limited liability company.
8c. The manner of converting the interests in the
9domesticating limited liability company into interests,
10securities, obligations, money, other property, rights to
11acquire interests or securities, or any combination of the
12foregoing.
13d. The proposed certificate of organization of the
14domesticated limited liability company.
15e. The full text of the provisions of the operating
16agreement of the domesticated limited liability company that
17are proposed to be in a record.
18f. The other terms and conditions of the domestication.
19g. Any other provision required by the law of this state or
20the operating agreement of the domesticating limited liability
21company.
222. In addition to the requirements of subsection 1, a plan
23of domestication may contain any other provision not prohibited
24by law.
25 Sec. 107. NEW SECTION. 489.1053 Approval of domestication.
261. A plan of domestication of a domestic domesticating
27limited liability company is not effective unless it has been
28approved according to any of the following:
29a. By all the members entitled to vote on or consent to any
30matter.
31b. In a record, by each member that will have interest
32holder liability for debts, obligations, and other liabilities
33that are incurred after the domestication becomes effective,
34unless all of the following apply:
35(1) The operating agreement of the domesticating limited
-131-1liability company in a record provides for the approval of a
2domestication or merger in which some or all of its members
3become subject to interest holder liability by the affirmative
4vote or consent of fewer than all the members.
5(2) The member voted for or consented in a record to that
6provision of the operating agreement or became a member after
7the adoption of that provision.
82. A domestication of a foreign domesticating limited
9liability company is not effective unless it is approved in
10accordance with the law of the foreign limited liability
11company’s jurisdiction of formation.
12 Sec. 108. NEW SECTION. 489.1054 Amendment or abandonment
13of plan of domestication.
141. A plan of domestication of a domestic domesticating
15limited liability company may be amended according to any of
16the following:
17a. In the same manner as the plan was approved, if the plan
18does not provide for the manner in which it may be amended.
19b. By its managers or members in the manner provided in
20the plan, but a member that was entitled to vote on or consent
21to approval of the domestication is entitled to vote on or
22consent to any amendment of the plan that will change any of
23the following:
24(1) The amount or kind of interests, securities,
25obligations, money, other property, rights to acquire interests
26or securities, or any combination of the foregoing, to be
27received by any of the members of the domesticating limited
28liability company under the plan.
29(2) The certificate of organization or operating agreement
30of the domesticated limited liability company that will be in
31effect immediately after the domestication becomes effective,
32except for changes that do not require approval of the members
33of the domesticated limited liability company under its organic
34law or operating agreement.
35(3) Any other terms or conditions of the plan, if the change
-132-1would adversely affect the member in any material respect.
22. After a plan of domestication has been approved by a
3domestic domesticating limited liability company and before a
4statement of domestication becomes effective, the plan may be
5abandoned as provided in the plan. Unless prohibited by the
6plan, a domestic domesticating limited liability company may
7abandon the plan in the same manner as the plan was approved.
83. If a plan of domestication is abandoned after a statement
9of domestication has been delivered to the secretary of state
10for filing and before the statement becomes effective, a
11statement of abandonment, signed by the domesticating limited
12liability company, must be delivered to the secretary of state
13for filing before the statement of domestication becomes
14effective. The statement of abandonment takes effect on
15filing, and the domestication is abandoned and does not become
16effective. The statement of abandonment must contain all of
17the following:
18a. The name of the domesticating limited liability company.
19b. The date on which the statement of domestication was
20filed by the secretary of state.
21c. A statement that the domestication has been abandoned in
22accordance with this section.
23 Sec. 109. NEW SECTION. 489.1055 Statement of domestication
24— effective date of domestication.
251. A statement of domestication must be signed by the
26domesticating limited liability company and delivered to the
27secretary of state for filing.
282. A statement of domestication must contain all of the
29following:
30a. The name and jurisdiction of formation of the
31domesticating limited liability company.
32b. The name and jurisdiction of formation of the
33domesticated limited liability company and the street and
34mailing addresses of an office of the domesticated limited
35liability company that the secretary of state may use for
-133-1purposes of section 489.1056, subsection 5.
2c. If the domesticating limited liability company is a
3domestic limited liability company, a statement that the plan
4of domestication was approved in accordance with this part or,
5if the domesticating limited liability company is a foreign
6limited liability company, a statement that the domestication
7was approved in accordance with the law of its jurisdiction of
8formation.
9d. The certificate of organization of the domesticated
10limited liability company, as an attachment.
113. In addition to the requirements of subsection 2, a
12statement of domestication may contain any other provision not
13prohibited by law.
144. The certificate of organization of a domestic
15domesticated limited liability company must satisfy the
16requirements of this chapter, but the certificate does not need
17to be signed.
185. If the domesticated entity is a domestic limited
19liability company, the domestication becomes effective
20when the statement of domestication is effective. If the
21domesticated entity is a foreign limited liability company,
22the domestication becomes effective on the later of all of the
23following:
24a. The date and time provided by the organic law of the
25domesticated entity.
26b. When the statement is effective.
27 Sec. 110. NEW SECTION. 489.1056 Effect of domestication.
281. When a domestication becomes effective, all of the
29following apply:
30a. The domesticated entity is all of the following:
31(1) Organized under and subject to the organic law of the
32domesticated entity.
33(2) The same entity without interruption as the
34domesticating entity.
35b. All property of the domesticating entity continues to be
-134-1vested in the domesticated entity without transfer, reversion,
2or impairment.
3c. All debts, obligations, and other liabilities of the
4domesticating entity continue as debts, obligations, and other
5liabilities of the domesticated entity.
6d. Except as otherwise provided by law or the plan of
7domestication, all the rights, privileges, immunities,
8powers, and purposes of the domesticating entity remain in the
9domesticated entity.
10e. The name of the domesticated entity may be substituted
11for the name of the domesticating entity in any pending action
12or proceeding.
13f. The certificate of organization of the domesticated
14entity becomes effective.
15g. The provisions of the operating agreement of the
16domesticated entity that are to be in a record, if any,
17approved as part of the plan of domestication become effective.
18h. The interests in the domesticating entity are converted
19to the extent and as approved in connection with the
20domestication, and the members of the domesticating entity are
21entitled only to the rights provided to them under the plan
22of domestication and to any appraisal rights they have under
23section 489.1006.
242. Except as otherwise provided in the organic law or
25operating agreement of the domesticating limited liability
26company, the domestication does not give rise to any rights
27that a member, manager, or third party would otherwise
28have upon a dissolution, liquidation, or winding up of the
29domesticating company.
303. When a domestication becomes effective, a person that
31did not have interest holder liability with respect to the
32domesticating limited liability company and becomes subject to
33interest holder liability with respect to a domestic limited
34liability company as a result of the domestication has interest
35holder liability only to the extent provided by this chapter
-135-1and only for those debts, obligations, and other liabilities
2that are incurred after the domestication becomes effective.
34. When a domestication becomes effective, the interest
4holder liability of a person that ceases to hold an interest in
5a domestic domesticating limited liability company with respect
6to which the person had interest holder liability is subject
7to all of the following rules:
8a. The domestication does not discharge any interest
9holder liability under this chapter to the extent the interest
10holder liability was incurred before the domestication became
11effective.
12b. A person does not have interest holder liability under
13this chapter for any debt, obligation, or other liability that
14is incurred after the domestication becomes effective.
15c. This chapter continues to apply to the release,
16collection, or discharge of any interest holder liability
17preserved under paragraph “a” as if the domestication had not
18occurred.
19d. A person has whatever rights of contribution from any
20other person as are provided by this chapter, law other than
21this chapter, or the operating agreement of the domestic
22domesticating limited liability company with respect to any
23interest holder liability preserved under paragraph “a” as if
24the domestication had not occurred.
255. When a domestication becomes effective, a foreign
26limited liability company that is the domesticated company
27may be served with process in this state for the collection
28and enforcement of any of its debts, obligations, and other
29liabilities as provided in section 489.116.
306. If the domesticating limited liability company is a
31registered foreign entity, the registration of the limited
32liability company is canceled when the domestication becomes
33effective.
347. A domestication does not require a domestic
35domesticating limited liability company to wind up its affairs
-136-1and does not constitute or cause the dissolution of the limited
2liability company.
3 Sec. 111. Section 489.1101, Code 2023, is amended to read
4as follows:
5489.1101 Definitions.
6As used in this article subchapter, unless the context
7otherwise requires:
81. “Employee” or “agent” does not include a clerk,
9stenographer, secretary, bookkeeper, technician, or other
10person who is not usually and ordinarily considered by custom
11and practice to be practicing a profession nor any other person
12who performs all that person’s duties for the professional
13limited liability company under the direct supervision and
14control of one or more managers, employees, or agents of the
15professional limited liability company who are duly licensed in
16this state to practice a profession which the limited liability
17company is authorized to practice in this state. This article
18 subchapter does not require any such persons to be licensed to
19practice a profession if they are not required to be licensed
20under any other law of this state.
212. “Foreign professional limited liability company” means
22a limited liability company organized under laws other than
23the laws of this state for a purpose for which a professional
24limited liability company may be organized under this article
25 subchapter.
263. “Licensed” includes registered, certified, admitted to
27practice, or otherwise legally authorized under the laws of
28this state.
294. “Profession” means the following professions:
30a. Certified public accountancy.
31b. Architecture.
32c. Chiropractic.
33d. Dentistry.
34e. Physical therapy.
35f. Practice as a physician assistant.
-137- 1g. Psychology.
2h. Professional engineering.
3i. Land surveying.
4j. Landscape architecture.
5k. Law.
6l. Medicine and surgery.
7m. Optometry.
8n. Osteopathic medicine and surgery.
9o. Accounting practitioner.
10p. Podiatry.
11q. Real estate brokerage.
12r. Speech pathology.
13s. Audiology.
14t. Veterinary medicine.
15u. Pharmacy.
16v. Nursing.
17w. Marital and family therapy or mental health counseling,
18provided that the marital and family therapist or mental health
19counselor is licensed under chapters 147 and 154D.
20x. Social work, provided that the social worker is licensed
21pursuant to chapter 147 and section 154C.3, subsection 1,
22paragraph “c”.
235. “Professional limited liability company” means a limited
24liability company subject to this article subchapter, except a
25foreign professional limited liability company.
266. “Regulating board” means any board, commission, court,
27or governmental authority which, under the laws of this state,
28is charged with the licensing, registration, certification,
29admission to practice, or other legal authorization of the
30practitioners of any profession.
317. a. “Voluntary transfer” includes a sale, voluntary
32assignment, gift, pledge, or encumbrance; a voluntary change
33of legal or equitable ownership or beneficial interest; or a
34voluntary change of persons having voting rights with respect
35to any transferable interest, except as proxies.
-138- 1b. “Voluntary transfer” does not include a transfer of
2an individual’s interest in a limited liability company or
3other property to a guardian or conservator appointed for that
4individual or the individual’s property.
5 Sec. 112. Section 489.1106, Code 2023, is amended to read
6as follows:
7489.1106 Professional regulation.
8A professional limited liability company shall not
9be required to register with or to obtain any license,
10registration, certificate, or other legal authorization from
11a regulating board in order to practice a profession. Except
12as provided in this section, this article subchapter does not
13restrict or limit in any manner the authority or duties of any
14regulating board with respect to individuals an individual
15 practicing a profession which is within the jurisdiction of the
16regulating board, even if the individual is a member, manager,
17employee, or agent of a professional limited liability company
18or foreign professional limited liability company and practices
19the individual’s profession through such professional limited
20liability company.
21 Sec. 113. Section 489.1107, Code 2023, is amended to read
22as follows:
23489.1107 Relationship and liability to persons served.
24This article subchapter does not modify any law applicable
25to the relationship between an individual practicing a
26profession and a person receiving professional services,
27including but not limited to any liability arising out of such
28practice or any law respecting privileged communications.
29This article subchapter does not modify or affect the ethical
30standards or standards of conduct of any profession, including
31but not limited to any standards prohibiting or limiting the
32practice of the profession by a limited liability company or
33prohibiting or limiting the practice of two or more professions
34in combination. All such standards shall apply to the members,
35managers, employees, and agents through whom a professional
-139-1limited liability company practices any profession in this
2state, to the same extent that the standards apply to an
3individual practitioner.
4 Sec. 114. Section 489.1110, Code 2023, is amended to read
5as follows:
6489.1110 Convertible interests — rights and options.
7A professional limited liability company shall not create
8or issue any interest convertible into an interest of the
9professional limited liability company. The provisions of this
10article subchapter with respect to the issuance and transfer
11of interests apply to the creation, issuance, and transfer
12of any right or option entitling the holder to purchase from
13a professional limited liability company any interest of the
14professional limited liability company. A right or option
15shall not be transferable, whether voluntarily, involuntarily,
16by operation of law, or in any other manner. Upon the death
17of the holder, or when the holder ceases to be licensed to
18practice a profession in this state which the professional
19limited liability company is authorized to practice, the right
20or option shall expire.
21 Sec. 115. Section 489.1112, subsections 4, 5, and 6, Code
222023, are amended to read as follows:
234. When a person other than a member of record becomes
24entitled to have interests of a professional limited liability
25company transferred into that person’s name or to exercise
26voting rights, except as a proxy, with respect to interests of
27the professional limited liability company, the professional
28limited liability company shall immediately purchase the
29interests. Without limiting the generality of the foregoing,
30this section shall be applicable whether the event occurs
31as a result of appointment of a guardian or conservator for
32a member or the member’s property, transfer of interests
33by operation of law, involuntary transfer of interests,
34judicial proceeding, execution, levy, bankruptcy proceeding,
35receivership proceeding, foreclosure or enforcement of a pledge
-140-1or encumbrance, or any other situation or occurrence. However,
2this section does not apply to any voluntary transfer of
3interests as defined in this article subchapter.
45. Interests purchased by a professional limited liability
5company under this section shall be transferred to the
6professional limited liability company as of the close
7of business on the date of the death or other event which
8requires purchase. The member and the member’s executors,
9administrators, legal representatives, or successors in
10interest, shall promptly do all things which may be necessary
11or convenient to cause transfer to be made as of the transfer
12date. However, the interests shall promptly be transferred on
13the books and records of the professional limited liability
14company as of the transfer date, notwithstanding any delay in
15transferring or surrendering the interests or certificates
16representing the interests, and the transfer shall be valid and
17effective for all purposes as of the close of business on the
18transfer date. The purchase price for such interests shall be
19paid as provided in this article subchapter, but the transfer
20of interests to the professional limited liability company as
21provided in this section shall not be delayed or affected by
22any delay or default in making payment.
236. a. Notwithstanding subsections 1 through 5, purchase by
24the professional limited liability company is not required upon
25the occurrence of any event other than death of a member, if
26the professional limited liability company is dissolved within
27sixty days after the occurrence of the event or voluntarily
28elects to no longer be a professional limited liability company
29but continue its existence as a limited liability company
30pursuant to section 489.1119A within sixty days after the
31occurrence of the event. The certificate of organization or
32operating agreement of the professional limited liability
33company may provide that purchase is not required upon the
34death of a member, if the professional limited liability
35company is dissolved within sixty days after the date of the
-141-1member’s death.
2b. Notwithstanding sections 1 through 5, purchase by the
3professional limited liability company is not required upon the
4death of a shareholder if the professional limited liability
5company voluntarily elects to no longer be a professional
6limited liability company but continue its existence as a
7limited liability company pursuant to section 489.1119A within
8sixty days after death.
9 Sec. 116. Section 489.1113, Code 2023, is amended to read
10as follows:
11489.1113 Certificates representing interests.
12Each certificate representing an interest of a professional
13limited liability company shall state in substance that the
14certificate represents an interest in a professional limited
15liability company and is not transferable except as expressly
16provided in this article subchapter and in the certificate of
17organization or an operating agreement of the professional
18limited liability company.
19 Sec. 117. Section 489.1114, Code 2023, is amended to read
20as follows:
21489.1114 Management.
221. All managers of a professional limited liability
23company shall at all times be individuals who are licensed to
24practice a profession in this state or a lawful combination of
25professions pursuant to section 489.1102, which the limited
26liability company is authorized to practice. A person who
27is not licensed shall have no authority or duties in the
28management or control of the professional limited liability
29company. If a manager ceases to have this qualification, the
30manager shall immediately and automatically cease to hold such
31management position.
322. Notwithstanding subsection 1, upon the occurrence of
33any event that requires the professional limited liability
34company either to be dissolved or to elect to no longer be
35a professional limited liability company but continue its
-142-1existence as a limited liability company, as provided in
2section 489.1119A, all of the following apply:
3a. The professional limited liability company ceases to
4practice the profession that the professional limited liability
5company is authorized to practice, as provided in section
6489.1119A.
7b. The individuals who are not licensed to practice in this
8state a profession that the professional limited liability
9company is authorized to practice may be appointed as officers
10and directors for the sole purpose of doing any of the
11following:
12(1) Carrying out the dissolution of the professional
13limited liability company.
14(2) If applicable, carrying out the voluntary election
15of the professional limited liability company to no longer
16be a professional limited liability company but continue its
17existence as a limited liability company, as provided in
18section 489.1119A.
19 Sec. 118. Section 489.1115, Code 2023, is amended to read
20as follows:
21489.1115 Merger.
22A professional limited liability company shall not merge
23with any entity except another professional limited liability
24company subject to this article subchapter or a professional
25corporation subject to chapter 496C. Merger is not permitted
26unless the surviving or new professional limited liability
27company is a professional limited liability company which that
28 complies with all requirements of this article subchapter.
29 Sec. 119. Section 489.1116, Code 2023, is amended to read
30as follows:
31489.1116 Dissolution or liquidation.
32A violation of any provision of this article subchapter by a
33professional limited liability company or any of its members
34or managers shall be cause for its involuntary dissolution, or
35liquidation of its assets and business by the district court.
-143-1Upon the death of the last remaining member of a professional
2limited liability company, or when the last remaining member is
3not licensed or ceases to be licensed to practice a profession
4in this state which the professional limited liability company
5is authorized to practice, or when any person other than
6the member of record becomes entitled to have all interests
7of the last remaining member of the professional limited
8liability company transferred into that person’s name or to
9exercise voting rights, except as a proxy, with respect to such
10interests, the professional limited liability company shall not
11practice any profession and it. In that case, the professional
12limited liability company shall either be promptly dissolved
13or shall promptly elect to no longer be a professional limited
14liability company but continue its existence as a limited
15liability company as provided in section 489.1119A. However,
16if prior to dissolution all outstanding interests of the
17professional limited liability company are acquired by two
18or more persons licensed to practice a profession in this
19state which the professional limited liability company is
20authorized to practice, the professional limited liability
21company need not be dissolved nor elect to no longer be a
22professional limited liability company and may instead practice
23the profession as provided in this article subchapter.
24 Sec. 120. Section 489.1117, Code 2023, is amended to read
25as follows:
26489.1117 Foreign professional limited liability company.
271. A foreign professional limited liability company may
28practice a profession in this state if it complies with the
29provisions of this article subchapter. The secretary of state
30may prescribe forms for this purpose. A foreign professional
31limited liability company may practice a profession in this
32state only through members, managers, employees, and agents
33who are licensed to practice the profession in this state.
34The provisions of this article subchapter with respect to the
35practice of a profession by a professional limited liability
-144-1company apply to a foreign professional limited liability
2company.
32. This article subchapter does not prohibit the practice
4of a profession in this state by an individual who is a member,
5manager, employee, or agent of a foreign professional limited
6liability company, if the individual could lawfully practice
7the profession in this state in the absence of any relationship
8to a foreign professional limited liability company. This
9subsection applies regardless of whether or not the foreign
10professional limited liability company is authorized to
11practice a profession in this state.
12 Sec. 121. Section 489.1118, Code 2023, is amended to read
13as follows:
14489.1118 Limited liability companies organized under the
15other laws.
16This article subchapter does not apply to or interfere with
17the practice of any profession by or through any professional
18limited liability company organized after July 1, 1992, under
19any other law of this state or any other state or country, if
20the practice is lawful under any other statute or rule of law
21of this state. Any such professional limited liability company
22may voluntarily elect to adopt this article subchapter and
23become subject to its provisions, by amending its certificate
24of organization to be consistent with all provisions of this
25article subchapter and by stating in its amended certificate
26of organization that the limited liability company has
27voluntarily elected to adopt this article subchapter. Any
28limited liability company organized under any law of any other
29state or country may become subject to the provisions of this
30article subchapter by complying with all provisions of this
31article subchapter with respect to foreign professional limited
32liability companies.
33 Sec. 122. Section 489.1119, Code 2023, is amended to read
34as follows:
35489.1119 Conflicts with other provisions of this chapter.
-145- 1The provisions of this article subchapter shall prevail over
2any inconsistent provisions of this chapter.
3 Sec. 123. NEW SECTION. 489.1119A Election to no longer be
4a professional limited liability company.
5A professional limited liability company may elect to no
6longer be a professional limited liability company but continue
7its existence as a limited liability company by filing with
8the secretary of state an amendment to or restatement of its
9certificate of organization that states that the limited
10liability company is no longer a professional limited liability
11company and amending its name to no longer indicate it is a
12professional limited liability company.
13 Sec. 124. NEW SECTION. 489.1204 Severability clause.
14If any provision of this chapter or its application to any
15person or circumstance is held invalid, the invalidity does
16not affect other provisions or applications of this chapter
17which can be given effect without the invalid provision or
18application, and to this end the provisions of this chapter are
19severable.
20 Sec. 125. NEW SECTION. 489.1207 Application to existing
21relationships.
221. For purposes of applying this chapter to a limited
23liability company formed before the effective date of this
24Act, references in the limited liability company’s operating
25agreement to provisions in this chapter in effect before the
26effective date of this Act are deemed to be references to the
27comparable provision in this chapter after the effective date
28of this Act.
292. A limited liability company that has published notice of
30its dissolution and requested persons having claims against the
31limited liability company to present them in accordance with
32the notice pursuant to section 489.703 as that section existed
33immediately prior to the effective date of this Act shall be
34subject to the requirements set forth in that section as it
35existed immediately prior to the effective date of this Act,
-146-1including the right of a claim by a person that is commenced
2within five years after publication of the notice.
33. For the purposes of applying this chapter to a limited
4liability company formed before January 1, 2009, all of the
5following apply:
6a. The limited liability company’s articles of organization
7are deemed to be the company’s certificate of organization.
8b. For the purposes of applying section 489.102, subsection
915, and subject to section 489.112, subsection 4, language
10in the limited liability company’s articles of organization
11designating the limited liability company’s management
12structure operates as if that language were in the operating
13agreement.
14c. If a professional limited liability company’s name
15complied with section 490A.1503 as that section existed on
16December 30, 2010, that company’s name shall also be deemed to
17comply with the name requirements of section 489.1103 of the
182011 edition of the Iowa Code.
19 Sec. 126. Section 489.14101, Code 2023, is amended to read
20as follows:
21489.14101 Short title.
22This article subchapter may be cited as the “Uniform
23Protected Series Act”.
24 Sec. 127. Section 489.14102, unnumbered paragraph 1, Code
252023, is amended to read as follows:
26As used in this article subchapter, unless the context
27otherwise requires:
28 Sec. 128. Section 489.14102, subsections 4 and 9, Code 2023,
29are amended to read as follows:
304. “Foreign protected series” means an arrangement,
31configuration, or other structure established by a foreign
32limited liability company which has attributes comparable to
33a protected series established under this article subchapter.
34The term applies whether or not the law under which the foreign
35company is organized refers to “protected series”.
-147- 19. “Protected-series manager” means a person under whose
2authority the powers of a protected series are exercised
3and under whose direction the activities and affairs of the
4protected series are managed under the operating agreement,
5this article subchapter, and this chapter.
6 Sec. 129. Section 489.14104, subsection 4, paragraph c,
7Code 2023, is amended to read as follows:
8c. Except as permitted by law of this state other than
9this article subchapter, have a purpose or power that the law
10of this state other than this article subchapter prohibits a
11limited liability company from doing or having.
12 Sec. 130. Section 489.14106, subsections 2, 3, and 4, Code
132023, are amended to read as follows:
142. If this chapter otherwise restricts the power of an
15operating agreement to affect a matter, the restriction applies
16to a matter under this article subchapter in accordance with
17section 489.14108.
183. If law of this state other than this article subchapter
19 imposes a prohibition, limitation, requirement, condition,
20obligation, liability, or other restriction on a limited
21liability company, a member, manager, or other agent of the
22company, or a transferee of the company, except as otherwise
23provided in law of this state other than this article
24 subchapter, the restriction applies in accordance with section
25489.14108.
264. Except as otherwise provided in section 489.14107, if the
27operating agreement of a series limited liability company does
28not provide for a matter described in subsection 1 in a manner
29permitted by this article subchapter, the matter is determined
30in accordance with the following rules:
31a. To the extent this article subchapter addresses the
32matter, this article subchapter governs.
33b. To the extent this article subchapter does not address
34the matter, the other articles subchapters of this chapter
35govern the matter in accordance with section 489.14108.
-148-1 Sec. 131. Section 489.14107, subsection 1, paragraphs v, w,
2x, and y, Code 2023, are amended to read as follows:
3v. Article 6 Subchapter VI.
4w. Article 7 Subchapter VII.
5x. Article 8 Subchapter VIII.
6y. A provision of this article subchapter pertaining to any
7of the following:
8(1) Registered agents.
9(2) The secretary of state, including provisions pertaining
10to records authorized or required to be delivered to the
11secretary of state for filing under this article subchapter.
12 Sec. 132. Section 489.14108, subsection 2, paragraph b,
13subparagraphs (1) and (2), Code 2023, are amended to read as
14follows:
15(1) Accept for filing a type of record that neither this
16article subchapter nor any of the other articles subchapters of
17this chapter authorizes or requires a person to deliver to the
18secretary of state for filing.
19(2) Make or deliver a record that neither this article
20 subchapter nor the other articles subchapters of this chapter
21authorizes or requires the secretary of state to make or
22deliver.
23 Sec. 133. Section 489.14204, subsection 1, paragraph c,
24Code 2023, is amended to read as follows:
25c. Other means authorized by law of this state other than
26the other articles subchapters of this chapter.
27 Sec. 134. Section 489.14301, subsection 5, unnumbered
28paragraph 1, Code 2023, is amended to read as follows:
29To the extent permitted by this section and law of this
30state other than this article subchapter, a series limited
31liability company or protected series of the company may
32hold an associated asset directly or indirectly, through a
33representative, nominee, or similar arrangement, except that
34all of the following applies:
35 Sec. 135. Section 489.14303, subsection 4, Code 2023, is
-149-1amended to read as follows:
24. Except for section 489.14108, subsection 1, paragraph
3“c”, a provision of this article subchapter which applies
4to a protected-series transferee of a protected series of a
5series limited liability company applies to the company in
6its capacity as an owner of a protected-series transferable
7interest of the protected series. A provision of the operating
8agreement of a series limited liability company which applies
9to a protected-series transferee of a protected series of the
10company applies to the company in its capacity as an owner of a
11protected-series transferable interest of the protected series.
12 Sec. 136. Section 489.14304, subsection 6, Code 2023, is
13amended to read as follows:
146. Article 9 Subchapter IX applies to a protected series in
15accordance with section 489.14108.
16 Sec. 137. Section 489.14402, subsection 3, paragraph b,
17Code 2023, is amended to read as follows:
18b. The claim is to establish or enforce a liability arising
19under law of this state other than this article subchapter or
20from an act or omission in this state.
21 Sec. 138. Section 489.14404, subsection 3, Code 2023, is
22amended to read as follows:
233. In addition to any other remedy provided by law or
24equity, if a claim against a series limited liability company
25or a protected series has not been reduced to a judgment and
26law other than this article subchapter permits a prejudgment
27remedy by attachment, levy, or the like, the court may apply
28subsection 2 as a prejudgment remedy.
29 Sec. 139. Section 489.14404, subsection 5, paragraph b,
30Code 2023, is amended to read as follows:
31b. The claimant is a resident of this state or doing
32business or authorized to do business in this state, or the
33claim under section 489.14404 is to enforce a judgment, or to
34seek a prejudgment remedy, pertaining to a liability arising
35from law of this state other than this article subchapter or an
-150-1act or omission in this state.
2 Sec. 140. Section 489.14801, Code 2023, is amended to read
3as follows:
4489.14801 Uniformity of application and construction.
5In applying and construing this article subchapter,
6consideration shall be given to the need to promote uniformity
7of the law with respect to its subject matter among states
8that enact the uniform protected series Act as approved and
9recommended by the national conference of commissioners on
10uniform state laws.
11 Sec. 141. Section 489.14804, Code 2023, is amended to read
12as follows:
13489.14804 Savings clause.
14This article subchapter does not affect an action commenced,
15proceeding brought, or right accrued before July 1, 2020.
16 Sec. 142. REPEAL. Sections 489.113, 489.802, 489.803,
17489.804, 489.805, 489.806, 489.807, 489.808, 489.1008,
18489.1009, 489.1010, 489.1011, 489.1012, 489.1013, 489.1014,
19489.1015, 489.1016, and 489.1304, Code 2023, are repealed.
20 Sec. 143. CODE EDITOR DIRECTIVE.
211. The Code editor is directed to make the following
22transfers:
23a. Section 489.104 to section 489.108.
24b. Section 489.105 to section 489.109.
25c. Section 489.106 to section 489.104.
26d. Section 489.107 to section 489.111.
27e. Section 489.108 to section 489.112.
28f. Section 489.109 to section 489.113.
29g. Section 489.110 to section 489.105.
30h. Section 489.111 to section 489.106.
31i. Section 489.112 to section 489.107.
32j. Section 489.114 to section 489.116.
33k. Section 489.114A, as enacted by this Act, to section
34489.114.
35l. Section 489.115 to section 489.117.
-151- 1m. Section 489.115A, as enacted by this Act, to section
2489.115.
3n. Section 489.116 to section 489.119.
4o. Section 489.117 to section 489.122.
5p. Section 489.205A to section 489.122A.
6q. Section 489.206 to section 489.209.
7r. Section 489.206A, as enacted by this Act, to section
8489.206.
9s. Section 489.208 to section 489.211.
10t. Section 489.208A, as enacted by this Act, to section
11489.208.
12u. Section 489.209 to section 489.211A.
13v. Section 489.701A to section 489.703.
14w. Section 489.703 to section 489.704.
15x. Section 489.704 to section 489.705.
16y. Section 489.705 to section 489.708.
17z. Section 489.706 to section 489.710.
18aa. Section 489.706A, as enacted by this Act, to section
19489.706.
20ab. Section 489.707 to section 489.711.
21ac. Section 489.708 to section 489.707.
22ad. Section 489.801 to section 489.901.
23ae. Section 489.805A, as enacted by this Act, to section
24489.805.
25af. Section 489.809 to section 489.912.
26ag. Section 489.901 to section 489.801.
27ah. Section 489.902 to section 489.802.
28ai. Section 489.903 to section 489.803.
29aj. Section 489.904 to section 489.804.
30ak. Section 489.906 to section 489.806.
31al. Section 489.906A, as enacted by this Act, to section
32489.906.
33am. Section 489.911A to section 489.902.
34an. Section 489.911B to section 489.903.
35ao. Section 489.911C to section 489.904.
-152- 1ap. Section 489.1119 to section 489.1120.
2aq. Section 489.1119A to section 489.1119.
3ar. Section 489.1301 to section 489.1201.
4as. Section 489.1302 to section 489.1202.
5at. Section 489.1303 to section 489.1203.
62. The Code editor shall correct internal references in the
7Code and in any enacted legislation as necessary due to the
8enactment of this section.
9 Sec. 144. DIRECTIONS TO THE CODE EDITOR — DIVIDING
10SUBCHAPTER X INTO PARTS. The Code editor is directed to divide
11the provisions of chapter 489, subchapter X, as amended or
12enacted in this division of this Act, into parts as follows:
131. Part 1, including sections 489.1001 through 489.1007.
142. Part 2, including sections 489.1021 through 489.1026.
153. Part 3, including sections 489.1031 through 489.1036.
164. Part 4, including sections 489.1041 through 489.1046.
175. Part 5, including sections 489.1051 through 489.1056.
18DIVISION II
19COORDINATING AMENDMENTS
20 Sec. 145. Section 9.11, subsection 1, paragraph c, Code
212023, is amended to read as follows:
22c. Chapter 489, including as provided in section 489.205,
23 489.205A and as stated in section 489.117 or as otherwise
24described in sections 489.112, 489.302, 489.702, 489.1008,
25489.1012, and 489.14502 section 489.210.
26 Sec. 146. Section 10.1, subsection 9, paragraph b, Code
272023, is amended to read as follows:
28b. As used in paragraph “a”, a type of membership interest
29in a limited liability company includes a protected series as
30provided in chapter 489, article 14 subchapter XIV.
31 Sec. 147. Section 10.1, subsection 17, paragraph b, Code
322023, is amended to read as follows:
33b. As used in paragraph “a”, a type of membership interest
34in a limited liability company includes a protected series of a
35series limited liability company as provided in chapter 489,
-153-1article 14 subchapter XIV.
2 Sec. 148. Section 10.10, subsection 1, paragraph c,
3subparagraph (2), Code 2023, is amended to read as follows:
4(2) As used in subparagraph (1), a type of membership
5interest in a limited liability company includes a protected
6series of a series limited liability company as provided in
7chapter 489, article 14 subchapter XIV.
8 Sec. 149. Section 488.108, subsection 4, paragraph b,
9subparagraph (4), Code 2023, is amended to read as follows:
10(4) For a limited liability company under chapter 489,
11section 489.108, 489.109, 489.114A, or 489.706.
12 Sec. 150. Section 490.401, subsection 2, paragraph h,
13subparagraph (4), Code 2023, is amended to read as follows:
14(4) For a limited liability company under chapter 489,
15section 489.108, 489.109, 489.114A, or 489.706.
16 Sec. 151. Section 501A.102, subsection 13, Code 2023, is
17amended by striking the subsection.
18 Sec. 152. Section 501A.1101, subsections 1, 2, and 5, Code
192023, are amended to read as follows:
201. Authorization. Unless otherwise prohibited, cooperatives
21organized under the laws of this state, including cooperatives
22organized under this chapter or traditional cooperatives, may
23merge or consolidate with each other, an Iowa limited liability
24company under the provisions of section 489.1015, or other
25 another business entities entity organized under the laws
26of another state, by complying with the provisions of this
27section and the law of the state where the surviving or new
28business entity will exist. A cooperative shall not merge or
29consolidate with a business entity organized under the laws
30of this state, other than a traditional cooperative, unless
31the law governing the business entity expressly authorizes
32merger or consolidation with a cooperative. This subsection
33does not authorize a foreign business entity to do any act not
34authorized by the law governing the foreign business entity.
352. Plan. To initiate a merger or consolidation of a
-154-1cooperative, a written plan of merger or consolidation shall be
2prepared by the board or by a committee selected by the board
3to prepare a plan. The plan shall state all of the following:
4a. The names of the each constituent domestic cooperative,
5the name of any Iowa limited liability company that is a party
6to the merger, to the extent authorized under section 489.1015,
7 and any foreign business entities entity that is a party to the
8merger.
9b. The name of the surviving or new domestic cooperative,
10Iowa limited liability company as required by section 489.1015,
11 or other foreign business entity.
12c. The manner and basis of converting membership or
13ownership interests of the constituent domestic cooperative,
14the Iowa limited liability company that is a party as provided
15in section 489.1015, or foreign business entity into membership
16or ownership interests in the surviving or new domestic
17cooperative, the surviving Iowa limited liability company as
18authorized in section 489.1015, or foreign business entity.
19d. The terms of the merger or consolidation.
20e. The proposed effect of the merger or consolidation on
21the members and patron members of each constituent domestic
22cooperative.
23f. For a consolidation, the plan shall contain the articles
24of the entity or organizational documents to be filed with the
25state in which the entity is organized or, if the surviving
26organization is an Iowa limited liability company, the articles
27of organization.
285. Effect of merger or consolidation. For a merger that does
29not involve an Iowa limited liability company, the following
30shall apply to the The effect of a merger or consolidation
31shall be as follows:
32a. After the effective date, the each domestic cooperative,
33Iowa limited liability company, if party to the plan,
34 cooperatives and any foreign business entity that is a party to
35the plan become a single entity. For a merger, the surviving
-155-1business entity is the business entity designated in the plan.
2For a consolidation, the new domestic cooperative, the Iowa
3limited liability company, if any, and any or new foreign
4business entity is the business entity provided for in the
5plan. Except for the surviving or new domestic cooperative,
6Iowa limited liability company, or foreign business entity, the
7separate existence of each merged or consolidated domestic or
8foreign business entity that is a party to the plan ceases on
9the effective date of the merger or consolidation.
10b. The surviving or new domestic cooperative, Iowa limited
11liability company, or foreign business entity possesses all of
12the rights and property of each of the merged or consolidated
13business entities and is responsible for all their obligations.
14The title to property of the merged or consolidated domestic
15cooperative, Iowa limited liability company, or foreign
16business entity, is vested in the surviving or new domestic
17cooperative, Iowa limited liability company, or foreign
18business entity without reversion or impairment of the title
19caused by the merger or consolidation.
20c. If a merger involves an Iowa limited liability company,
21this subsection is subject to the provisions of section
22489.1015.
23 Sec. 153. Section 501A.1102, subsection 1, Code 2023, is
24amended to read as follows:
251. Definition. For purposes of this section, “subsidiary”
26means a domestic cooperative, an Iowa limited liability
27company, or a foreign cooperative.
28 Sec. 154. Section 501A.1102, subsection 2, unnumbered
29paragraph 1, Code 2023, is amended to read as follows:
30An Iowa limited liability company may only participate
31in a merger under this section to the extent authorized
32under section 489.1015. A parent domestic cooperative or
33a subsidiary that is a domestic cooperative may complete
34the merger of a subsidiary as provided in this section.
35However, if either the parent cooperative or the subsidiary
-156-1is a business entity organized under the laws of this state,
2the merger of the subsidiary is not authorized under this
3section unless the law governing the business entity expressly
4authorizes merger with a cooperative.
5 Sec. 155. Section 501A.1103, subsection 2, paragraph a,
6Code 2023, is amended to read as follows:
7a. A merger may be abandoned upon any of the following:
8(1) The members of each of the constituent domestic
9cooperatives entitled to vote on the approval of the plan
10have approved the abandonment at a meeting by the affirmative
11vote of the holders of a majority of the voting power of the
12membership interests entitled to vote.
13(2) The merger is with a domestic cooperative and an Iowa
14limited liability company or foreign business entity.
15(3) (2) The abandonment is approved in such manner as may
16be required by section 489.1015 for the involvement of an Iowa
17limited liability company, or for a foreign business entity by
18 under the laws of the state under which the foreign business
19entity is organized.
20(4) (3) The members of a constituent domestic cooperative
21are not entitled to vote on the approval of the plan, and the
22board of the constituent domestic cooperative has approved
23the abandonment by the affirmative vote of a majority of the
24directors present.
25(5) (4) The plan provides for abandonment and all
26conditions for abandonment set forth in the plan are met.
27(6) (5) The plan is abandoned before the effective date
28of the plan by a resolution of the board of any constituent
29domestic cooperative abandoning the plan of merger approved by
30the affirmative vote of a majority of the directors present,
31subject to the contract rights of any other person under the
32plan. If a plan of merger is with a domestic business entity or
33foreign business entity, the plan of merger may be abandoned
34before the effective date of the plan by a resolution of the
35foreign business entity adopted according to the laws of the
-157-1state under which the foreign business entity is organized,
2subject to the contract rights of any other person under the
3plan. If the plan of merger is with an Iowa limited liability
4company, the plan of merger may be abandoned by the Iowa
5limited liability company as provided in section 489.1015,
6subject to the contractual rights of any other person under the
7plan.
8 Sec. 156. Section 504.401, subsection 2, paragraph b,
9subparagraph (4), Code 2023, is amended to read as follows:
10(4) For a limited liability company under chapter 489,
11section 489.108, 489.109, 489.114A, or 489.706.
12 Sec. 157. Section 504.403, subsection 1, paragraph b,
13subparagraph (4), Code 2023, is amended to read as follows:
14(4) For a limited liability company under chapter 489,
15section 489.108, 489.109, 489.114A, or 489.706.
16 Sec. 158. Section 524.310, subsection 5, paragraph b, Code
172023, is amended to read as follows:
18b. A corporate or company name reserved, registered, or
19protected as provided in section 489.109, 489.114A, 489.706,
20 490.402, 490.403, 504.402, or 504.403.
21 Sec. 159. Section 524.303, subsection 2, Code 2023, is
22amended to read as follows:
232. Applicable fees, payable to the secretary of state as
24specified in section 489.117 or section 490.122, for the filing
25of the articles of incorporation or section 489.117 for filing
26a certificate of organization.
27 Sec. 160. Section 542.7, subsection 3, paragraph c,
28subparagraph (2), Code 2023, is amended to read as follows:
29(2) Notwithstanding chapter 489, article 11 subchapter XI,
30or any other provision of law to the contrary, a certified
31public accounting firm organized as a professional limited
32liability company under chapter 489, article 11 subchapter XI,
33may have nonlicensee members provided that the professional
34limited liability company complies with the requirements of
35this section.
-158-1DIVISION III
2EFFECTIVE DATE
3 Sec. 161. EFFECTIVE DATE. This Act takes effect January 1,
42024.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8GENERAL. This bill enacts new or amends existing Code
9sections in the Revised Uniform Limited Liability Company
10Act (RULLCA), now referred to as simply the Uniform Limited
11Liability Act, as approved and recommended by the national
12conference on commissioners of uniform state laws, more
13commonly referred to as the uniform law commissioners (ULC)
14(see Code chapter 5). The RULLCA, which was enacted by the
15general assembly by 2008 Iowa Acts, chapter 1162, replaced
16the Iowa limited liability company Act effective January 1,
172011. Its provisions are published in Code chapter 489. The
18bill is based on amendments approved and recommended by the
19ULC in 2013. The bill amends every one of the 14 articles in
20the RULLCA other than the last article, the uniform protected
21series Act enacted by the general assembly in 2019 Iowa Acts,
22chapter 26. The bill also amends provisions to the Iowa
23professional corporation Act (IPCA) enacted as Article 11 by
24the general assembly in 2008 Iowa Acts, chapter 1088.
25BACKGROUND. A limited liability company (LLC), sometimes
26referred to as simply a company, is a type of domestic business
27entity usually perpetual in duration and formed for capital
28acquisition and the distribution of any profits. An LLC
29is formed by filing a certificate of organization with the
30secretary of state (SOS). A foreign LLC is recognized to
31do business in the state when acting under a certificate of
32authorization. An LLC is often organized in a manner similar
33to a limited partnership which may include a number of passive
34investors and one or more managers who owe a fiduciary duty
35of care to the entity and its members when making decisions
-159-1affecting the company, although the law also recognizes
2member-managed organizational structure. An LLC is governed
3by an operating agreement executed by the members, which may
4supersede certain statutory provisions, and is comparable to
5a partnership agreement in a general or limited partnership.
6Members and managers are shielded from personal liability
7similar to shareholders and directors of a corporation. Unlike
8a corporation, taxes attributable as income to an LLC are
9passed through to investors without being taxed at the business
10level.
11BILL’S PROVISIONS. The bill changes the names of articles
12to subchapters to be consistent with Iowa’s system of Code
13organization (see Code chapter 490, the Iowa business
14corporation Act). The bill also changes the name of the Code
15chapter, other than subchapter XI, to the uniform limited
16liability company Act (ULLCA). Subchapter I includes basic
17provisions that govern the interpretation of terms in the
18ULLCA, the nature and powers of LLCs, the formation of LLCs
19including through the use of an operating agreement, the use
20and protection of its name, the use of a registered agent,
21and service of process, including by the SOS. Subchapter
22II governs the formation of an LLC, including the filing of
23a certificate of organization. The bill provides that a
24foreign LLC does business in the state under a certificate
25of registration. The subchapter provides for the records
26filed with the SOS or pursuant to judicial order, the filing
27of biennial reports with the SOS, and payment of fees or
28charges to the SOS. Subchapter III governs the relationship
29between members and managers and between the LLC and persons
30dealing with the business entity, including the liability
31of members and managers. Subchapter IV governs membership,
32contributions and distributions, the management, standards of
33conduct, and the right to information. Subchapter V governs
34the transfer of rights and the rights of persons transferred an
35interest. Subchapter VI governs a member’s dissociation from
-160-1an LLC. Subchapter VII governs the dissolution of the entity
2voluntarily, by the SOS, and the winding up of its affairs,
3including providing for the settlement of claims by creditors
4and members. Subchapter VIII governs foreign LLCs and the
5process to obtain a certificate of registration to do business
6in the state. Subchapter IX governs action by members taken
7against an LLC either directly or derivatively, and subchapter
8X governs mergers, conversions, and domestications. Subchapter
9XI amends provisions governing professional liability
10companies. Subchapter XII governed series limited liability
11companies before it was replaced by subchapter XIV. Subchapter
12XIV enacts the uniform protected series Act.
13PENALTY. A person who files a record containing information
14that the person knows is false commits a serious misdemeanor.
15A serious misdemeanor is punishable by confinement for no more
16than one year and a fine of at least $430 but not more than
17$2,560.
18COORDINATING PROVISIONS. The bill makes a number of
19corresponding changes, including eliminating special
20requirements applicable to cooperatives involved in a merger or
21consolidation with a cooperative under Code chapter 501A.
22EFFECTIVE DATE. The bill takes effect January 1, 2024.
-161-da/jh
2liability companies, providing penalties, and including
3effective date provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1DIVISION I
2LIMITED LIABILITY COMPANIES
3 Section 1. Section 489.101, Code 2023, is amended to read
4as follows:
5489.101 Short title.
61. This chapter may be cited as the “Revised Uniform
7 “Uniform Limited Liability Company Act”.
82. In addition, article 14 subchapter XIV of this chapter
9may be cited as provided in section 489.14101.
10 Sec. 2. Section 489.102, Code 2023, is amended to read as
11follows:
12489.102 Definitions.
13As used in this chapter, unless the context otherwise
14requires:
151. “Certificate of organization” means the certificate
16required by section 489.201. The term includes the certificate
17as amended or restated.
182. “Contribution” means any benefit provided by a person to
19a limited liability company that is any of the following:
20a. In order to become a member upon formation of the company
21and in accordance with an agreement between or among the
22persons that have agreed to become the initial members of the
23company.
24b. In order to become a member after formation of the
25company and in accordance with an agreement between the person
26and the company.
27c. In the person’s capacity as a member and in accordance
28with the operating agreement or an agreement between the member
29and the company.
302. “Contribution”, except in the phrase “right of
31contribution”, means property or a benefit described in section
32489.402 which is provided by a person to a limited liability
33company to become a member or in the person’s capacity as a
34member.
353. “Debtor in bankruptcy” means a person that is the subject
-1-1of any of the following:
2a. An order for relief under Tit.11 of the United States
3Code or a comparable order under a successor statute of general
4application.
5b. A comparable order under federal, state, or foreign law
6governing insolvency.
74. “Deliver” or “delivery” means any method of delivery
8used in conventional commercial practice, including delivery in
9person, by hand, mail, commercial delivery, and if authorized
10in accordance with section 489.120, by electronic transmission.
115. “Distribution”, except as otherwise provided in section
12489.405, subsection 6, means a transfer of money or other
13property from a limited liability company to another a person
14on account of a transferable interest or in the person’s
15capacity as a member.
16a. “Distribution” includes all of the following:
17(1) A redemption or other purchase by a limited liability
18company of a transferable interest.
19(2) A transfer to a member in return for the member’s
20relinquishment of any right to participate as a member in
21the management or conduct of the limited liability company’s
22activities and affairs or to have access to records or other
23information concerning the company’s activities and affairs.
24b. “Distribution” does not include amounts constituting
25reasonable compensation for present or past service or payments
26made in the ordinary course of business under a bona fide
27retirement plan or other bona fide benefits program.
286. “Domestic cooperative” means an entity organized on a
29cooperative basis under chapter 497, 498, or 499, a cooperative
30organized under chapter 499A, or a cooperative organized under
31chapter 501 or 501A.
327. “Effective”, with respect to a record required or
33permitted to be delivered to the secretary of state for filing
34under this chapter, means effective under section 489.205,
35subsection 3.
-2- 17. “Electronic” means relating to technology having
2electrical, digital, magnetic, wireless, optical,
3electromagnetic, or similar capabilities.
48. “Electronic transmission” or “electronically transmitted”
5 means any form or process of communication not directly
6involving the physical transfer of paper that is suitable for
7the retention, retrieval, and reproduction of information by
8the recipient. or another tangible medium that is all of the
9following:
10a. Suitable for the retention, retrieval, and reproduction
11of information by the recipient.
12b. Retrievable in paper form by the recipient through an
13automated process used in conventional commercial practice,
14unless otherwise authorized in accordance with subsection 15.
159. “Filing entity” means an unincorporated entity, other
16than a limited liability partnership, that is of a type that
17is created by filing a public organic record or is required to
18file a public organic record that evidences its creation.
199. 10. “Foreign limited liability company” means an
20unincorporated entity formed under the law of a jurisdiction
21other than this state and denominated by that law as a limited
22liability company which would be a limited liability company if
23formed under the law of this state.
2411. “Jurisdiction”, used to refer to a political entity,
25means the United States, a state, a foreign county, or a
26political subdivision of a foreign country.
2712. “Jurisdiction of formation” means the jurisdiction whose
28law governs the internal affairs of an entity.
2910. 13. “Limited liability company”, except in the phrase
30“foreign limited liability company”, and in subchapter X means
31an entity formed under this chapter or which becomes subject to
32this chapter under subchapter X or section 489.110.
3311. 14. “Manager” means a person that under the operating
34agreement of a manager-managed limited liability company is
35responsible, alone or in concert with others, for performing
-3-1the management functions stated in section 489.407, subsection
23.
312. 15. “Manager-managed limited liability company” means a
4limited liability company that qualifies under section 489.407,
5subsection 1.
613. 16. “Member” means a person that has become a member
7of a limited liability company under section 489.401 and has
8not dissociated under section 489.602. for whom all of the
9following are true:
10a. The person has become a member of a limited liability
11company under section 489.401 or was a member in a limited
12liability company when the company became subject to this
13chapter under section 489.110.
14b. The person is not dissociated under section 489.602.
1514. 17. “Member-managed limited liability company” means a
16limited liability company that is not a manager-managed limited
17liability company.
1818. “Nonfiling entity” means an unincorporated entity that
19is of a type that is not created by filing a public organic
20record.
2115. 19. “Operating agreement” means the agreement, whether
22or not referred to as an operating agreement and whether oral,
23implied, in a record, implied, or in any combination thereof,
24of all the members of a limited liability company, including
25a sole member, concerning the matters described in section
26489.110, subsection 1. The term includes the agreement as
27amended or restated.
2816. 20. “Organizer” means a person that acts under section
29489.201 to form a limited liability company.
3017. 21. a. “Person” means an individual, business
31 corporation, business trust, estate, trust, nonprofit
32corporation, partnership, limited partnership, limited
33liability company, domestic cooperative, unincorporated
34nonprofit association, statutory trust, business trust,
35common-law business trust, estate, trust, association, joint
-4-1venture, public corporation, government or governmental
2subdivision, agency, or instrumentality, or any other legal or
3commercial entity.
4b. “Person” includes a protected series, however
5denominated, of an entity if the protected series is
6established under law that limits, or limits if conditions
7specified under law are satisfied, the ability of a creditor
8of the entity or of any other protected series of the entity to
9satisfy a claim from assets of the protected series.
1018. 22. “Principal office” means the principal executive
11office of a limited liability company or foreign limited
12liability company, whether or not the office is located in this
13state.
1423. “Property” means all property, whether real, personal,
15or mixed or tangible or intangible, or any right or interest
16therein.
1719. 24. “Record”, used as a noun, means information that
18is inscribed on a tangible medium or that is stored in an
19electronic or other medium and is retrievable in perceivable
20form.
2120. “Registered office” means the office that a limited
22liability company or foreign limited liability company is
23required to designate and maintain under section 489.113.
2425. “Registered agent” means an agent of a limited
25liability company or foreign limited liability company which is
26authorized to receive service of any process, notice, or demand
27required or permitted by law to be served on the company.
2826. “Registered foreign limited liability company” means
29a foreign limited liability company that is registered to do
30business in this state pursuant to a statement of registration
31filed by the secretary of state.
3221. 27. “Sign” means, with the present intent to
33authenticate or adopt a record, to do any of the following:
34a. Execute or adopt a tangible symbol.
35b. Attach to or logically associate with the record an
-5-1electronic symbol, sound, or process.
222. 28. “State” means a state of the United States, the
3District of Columbia, Puerto Rico, the United States Virgin
4Islands, or any territory or insular possession subject to the
5jurisdiction of the United States.
623. 29. “Transfer” includes an assignment, conveyance,
7deed, bill of sale, lease, mortgage, security interest,
8encumbrance, gift, or transfer by operation of law. any of the
9following:
10a. An assignment.
11b. A conveyance.
12c. A sale.
13d. A lease.
14e. An encumbrance, including a mortgage or security
15interest.
16f. A gift.
17g. A transfer by operation of law.
1824. 30. a. “Transferable interest” means the right, as
19originally associated with initially owned by a person in the
20 person’s capacity as a member, to receive distributions from
21a limited liability company, in accordance with the operating
22agreement, whether or not the person remains a member or
23continues to own any part of the right.
24b. “Transferable interest” applies to any fraction of the
25interest, by whomever owned.
2625. 31. a. “Transferee” means a person to which all or
27part of a transferable interest has been transferred, whether
28or not the transferor is a member.
29b. “Transferee” includes a person that owns a transferable
30interest under section 489.603, subsection 1, paragraph “c”.
31 Sec. 3. Section 489.103, Code 2023, is amended to read as
32follows:
33489.103 Knowledge — notice.
341. A person knows a fact when if the person has or is any
35of the following:
-6- 1a. Has actual knowledge of it.
2b. Is deemed to know it under subsection 4, paragraph “a”,
3or law other than this chapter.
42. A person has notice of a fact when if the person has or
5is any of the following:
6a. Has reason to know the fact from all of the facts known
7to the person at the time in question.
8b. Is deemed to have notice of the fact under subsection 4,
9paragraph “b”.
103. A Subject to section 489.210, subsection 6, a person
11notifies another person of a fact by taking steps reasonably
12required to inform the other person in ordinary course, whether
13or not those steps cause the other person knows to know the
14fact.
154. A person that is not a member is deemed both all of the
16following:
17a. To know of a limitation on authority to transfer real
18property as provided in section 489.302, subsection 7.
19b. To have notice of all of the following regarding a
20limited liability company’s:
21(1) Dissolution, The limited liability company’s
22dissolution, ninety days after a statement of dissolution under
23section 489.702, subsection 2, paragraph “b”, subparagraph (1),
24becomes effective.
25(2) Termination, The limited liability company’s
26termination, ninety days after a statement of termination under
27section 489.702, subsection 2, paragraph “b”, subparagraph (6),
28becomes effective.
29(3) Merger, The limited liability company’s participation
30in a merger, interest exchange, conversion, or domestication,
31ninety days after articles of merger, interest exchange,
32 conversion, or domestication under article 10 subchapter X
33 become effective.
34 Sec. 4. Section 489.104, Code 2023, is amended to read as
35follows:
-7- 1489.104 Nature, purpose, and duration of limited liability
2company.
31. A limited liability company is an entity distinct from
4its member or members.
52. A limited liability company may have any lawful purpose,
6regardless of whether for profit.
73. A limited liability company has perpetual duration.
8 Sec. 5. Section 489.105, Code 2023, is amended to read as
9follows:
10489.105 Powers.
111. Except as otherwise provided in subsection 2, a limited
12liability company has the capacity to sue and be sued in its
13own name and the power to do all things necessary or convenient
14to carry on its activities and affairs.
152. Until a limited liability company has or has had at
16least one member, the limited liability company lacks the
17capacity to do any act or carry on any activity except all of
18the following:
19a. Delivering to the secretary of state for filing a
20statement of change under section 489.114, an amendment to the
21certificate under section 489.202, a statement of correction
22under section 489.206, a biennial report under section 489.209,
23a statement of withdrawal or a statement of rescission under
24section 489.701A, or a statement of termination under section
25489.702, subsection 2, paragraph “b”, subparagraph (6).
26b. Admitting a member under section 489.401.
27c. Dissolving under section 489.701.
283. A limited liability company that has or has had at least
29one member may ratify an act or activity that occurred when the
30company lacked capacity under subsection 2.
31 Sec. 6. Section 489.106, Code 2023, is amended to read as
32follows:
33489.106 Governing law.
34The law of this state governs all of the following:
351. The internal affairs of a limited liability company.
-8- 12. The liability of a member as member and a manager as
2manager for the debts, obligations, a debt, obligation, or
3other liabilities liability of a limited liability company.
4 Sec. 7. Section 489.108, Code 2023, is amended to read as
5follows:
6489.108 Name Permitted names.
71. The name of a limited liability company must contain
8the words phrase “limited liability company” or “limited
9company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
10“Limited” may be abbreviated as “Ltd.”, and “company” may be
11abbreviated as “Co.”.
122. Unless authorized by Except as otherwise provided in
13 subsection 3, the name of a limited liability company, and
14the name under which a foreign limited liability company may
15register to do business in this state, must be distinguishable
16in on the records of the secretary of state from all any of the
17following:
18a. The name of each person that is not an individual and
19that is incorporated, organized, or authorized to transact
20business in this state.
21b. Each name reserved under section 489.109.
22a. The name of an existing person whose formation required
23the filing of a record by the secretary of state and which is
24not at the time administratively dissolved, or if such person
25has been administratively dissolved, within five years of the
26effective date of dissolution.
27b. The name of a limited liability partnership whose
28statement of qualification is in effect.
29c. The name under which a person is registered to do
30business in this state by the filing of a record by the
31secretary of state.
32d. The name reserved under section 489.109 or other law
33of this state providing for the reservation of a name by the
34filing of a record by the secretary of state.
35e. The name registered under section 489.114 or other law
-9-1of this state providing for the registration of a name by the
2filing of a record by the secretary of state.
3f. The name registered with the secretary of state as a
4fictitious name.
53. A limited liability company may apply to the secretary of
6state for authorization to use a name that does not comply with
7subsection 2. The secretary of state shall authorize use of
8the name applied for if either of the following applies: If a
9person consents in a record to the use of its name and submits
10an undertaking in a form satisfactory to the secretary of state
11to change its name to a name that is distinguishable on the
12records of the secretary of state from any name in any category
13of names in subsection 2, the name of the consenting person may
14be used by the person to which the consent was given.
15a. The present user, registrant, or owner of the
16noncomplying name consents in a signed record to the use
17and submits an undertaking in a form satisfactory to the
18secretary of state to change the noncomplying name to a name
19that complies with subsection 2 and is distinguishable in the
20records of the secretary of state from the name applied for.
21b. The applicant delivers to the secretary of state a
22certified copy of the final judgment of a court establishing
23the applicant’s right to use in this state the name applied
24for.
254. A limited liability company may use the name, including
26the fictitious name, of another entity that is used in this
27state if the other entity is formed under the law of this
28state or is authorized to transact business in this state
29and the proposed user limited liability company meets any
30of the following conditions: In determining whether a name
31is the same as or not distinguishable on the records of the
32secretary of state from the name of another person, words,
33phrases, or abbreviations indicating a type of person, such as
34“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
35corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
-10-1“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
2“limited liability partnership”, “L.L.P.”, “LLP”, “registered
3limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
4liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
5limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
6“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
7“coop”, or “CP” shall not be taken into account.
8a. Has merged with the other entity.
9b. Has been formed by reorganization of the other entity.
10c. Has acquired all or substantially all of the assets,
11including the name, of the other entity.
125. This article does not control the use of fictitious
13names. However, if a limited liability company uses a
14fictitious name in this state, it shall deliver to the
15secretary of state for filing a certified copy of the
16resolution of its members if it is member-managed or its
17managers if it is manager-managed, adopting the fictitious
18name. The name of a limited liability company or foreign
19limited liability company shall not contain words that may be
20used only with approval by another state department or state
21agency unless the company obtains the approval of such other
22state department or agency and delivers to the secretary of
23state for filing a record certifying such approval.
246. Subject to section 489.805, this section applies to
25a foreign limited liability company transacting business in
26this state which has a certificate of authority to transact
27business in this state or which has applied for a certificate
28of authority. A limited liability company or foreign limited
29liability company may use a name that is not distinguishable
30from a name described in subsection 2, paragraphs “a” through
31“f”, if the company delivers to the secretary of state a
32certified copy of a final judgment of a court of competent
33jurisdiction establishing the right of the company to use the
34name in this state.
357. A limited liability company may use the name, including
-11-1the fictitious name, of another entity that is used in this
2state if the other entity is formed under the law of this
3state or is authorized to transact business in this state and
4the proposed user limited liability company meets any of the
5following conditions:
6a. Has merged with the other entity.
7b. Has been formed by reorganization of the other entity.
8c. Has acquired all or substantially all of the assets,
9including the name, of the other entity.
108. This subchapter does not control the use of fictitious
11names. However, if a limited liability company uses a
12fictitious name in this state, it shall deliver to the
13secretary of state for filing a certified copy of the
14resolution of its members if it is member-managed or its
15managers if it is manager-managed, adopting the fictitious
16name.
17 Sec. 8. Section 489.109, Code 2023, is amended to read as
18follows:
19489.109 Reservation of name.
201. A person may reserve the exclusive use of the a name
21of a limited liability company, including a fictitious or
22assumed name for a foreign limited liability company whose
23name is not available, by delivering an application to the
24secretary of state for filing that complies with section
25489.112 by delivering an application to the secretary of state
26for filing. The application must state the name and address
27of the applicant and the name proposed to be reserved. If
28the secretary of state finds that the name applied for is
29available, it must be reserved the secretary of state shall
30reserve the name for the applicant’s exclusive use for a
31one-hundred-twenty-day period one hundred and twenty days.
322. The owner of a reserved name reserved for a limited
33liability company may transfer the reservation to another
34person by delivering to the secretary of state for filing a
35signed notice in a record of the transfer which states the name
-12-1and address of the transferee person to which the reservation
2is being transferred.
3 Sec. 9. Section 489.110, Code 2023, is amended to read as
4follows:
5489.110 Operating agreement — scope, function, and
6limitations.
71. Except as otherwise provided in subsections 2 3 and 3 4,
8the operating agreement governs all of the following:
9a. Relations among the members as members and between the
10members and the limited liability company.
11b. The rights and duties under this chapter of a person in
12the capacity of manager.
13c. The activities and affairs of the company and the conduct
14of those activities and affairs.
15d. The means and conditions for amending the operating
16agreement.
172. To the extent the operating agreement does not otherwise
18 provide for a matter described in subsection 1, this chapter
19governs the matter.
203. An operating agreement shall not do any of the following:
21a. Vary a limited liability company’s capacity under section
22489.105 to sue and be sued in its own name the law applicable
23under section 489.104.
24b. Vary the law applicable under section 489.106 a limited
25liability company’s capacity under section 489.109 to sue and
26be sued in its own name.
27c. Vary the power of the court under section 489.204. any
28requirement, procedure, or other provision of this chapter
29pertaining to any of the following:
30(1) Registered agents.
31(2) The secretary of state, including provisions pertaining
32to records authorized or required to be delivered to the
33secretary of state for filing under this chapter.
34d. Subject to subsections 4 through 7, eliminate the duty of
35loyalty, the duty of care, or any other fiduciary duty Vary the
-13-1provisions of section 489.204.
2e. Subject to subsections 4 through 7, eliminate the
3contractual obligation of good faith and fair dealing under
4section 489.409, subsection 4 Alter or eliminate the duty of
5loyalty or the duty of care, except as otherwise provided in
6subsection 4.
7f. Unreasonably restrict the duties and rights stated in
8section 489.410 Eliminate the contractual obligation of good
9faith and fair dealing under section 489.409, subsection 4,
10but the operating agreement may prescribe the standards, if
11not manifestly unreasonable, by which the performance of the
12obligation is to be measured.
13g. Vary the power of a court to decree dissolution in
14the circumstances specified in section 489.701, subsection
151, paragraphs “d” and “e” Relieve or exonerate a person from
16liability for conduct except as provided in subsection 6.
17h. Vary the requirement to wind up a limited liability
18company’s business as specified in section 489.702,
19subsection 1, and section 489.702, subsection 2, paragraph
20“a” Unreasonably restrict the duties and rights under section
21489.410, but the operating agreement may impose reasonable
22restrictions on the availability and use of information
23obtained under that section and may define appropriate
24remedies, including liquidated damages, for a breach of any
25reasonable restriction on use.
26i. Unreasonably restrict the right of a member to maintain
27an action under article 9 Vary the causes of dissolution
28specified in section 489.701, subsection 1, paragraph “d”.
29j. Restrict the right to approve a merger, conversion, or
30domestication under section 489.1014 to a member that will have
31personal liability with respect to a surviving, converted, or
32domesticated organization Vary the requirement to wind up the
33limited liability company’s activities and affairs as specified
34in section 489.702, subsection 1; subsection 2, paragraph “a”;
35and subsection 5.
-14- 1k. Except as otherwise provided in section 489.112,
2subsection 2, restrict the rights under this chapter of a
3person other than a member or manager Unreasonably restrict the
4right of a member to maintain an action under subchapter VIII.
5l. Vary the provisions of section 489.805A, but the
6operating agreement may provide that the limited liability
7company shall not have a special litigation committee.
8m. Vary the right of a member to approve a merger, interest
9exchange, conversion, or domestication under section 489.1023,
10subsection 1, paragraph “b”; section 489.1033, subsection 1,
11paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
12section 489.1053, subsection 1, paragraph “b”.
13n. Vary the required contents of a plan of merger under
14section 489.1022, subsection 1; plan of interest exchange
15under section 489.1032, subsection 1; plan of conversion under
16section 489.1042, subsection 1; or plan of domestication under
17section 489.1052, subsection 1.
18o. Except as otherwise provided in sections 489.111 and
19489.112, subsection 2, restrict the rights under this chapter
20of a person other than a member or manager.
214. If not manifestly unreasonable, the operating agreement
22may do any of the following: Subject to subsection 3,
23paragraph “g”, without limiting other terms that may be included
24in an operating agreement, all the following rules apply:
25a. Restrict or eliminate the duty to do any The operating
26agreement may do all of the following:
27(1) As required in section 489.409, subsection 2, paragraph
28“a”, and section 489.409, subsection 8, to account to the
29limited liability company and to hold as trustee for it any
30property, profit, or benefit derived by the member in the
31conduct or winding up of the company’s business, from a use by
32the member of the company’s property, or from the appropriation
33of a limited liability company opportunity Specify the method
34by which a specific act or transaction that would otherwise
35violate the duty of loyalty may be authorized or ratified by
-15-1one or more disinterested and independent persons after full
2disclosure of all material facts.
3(2) As required in section 489.409, subsection 2, paragraph
4“b”, and section 489.409, subsection 8, to refrain from dealing
5with the company in the conduct or winding up of the company’s
6business as or on behalf of a party having an interest adverse
7to the company Alter the prohibition in section 489.405,
8subsection 1, paragraph “b”, so that the prohibition requires
9only that the limited liability company’s total assets not be
10less than the sum of its total liabilities.
11(3) As required by section 489.409, subsection 2, paragraph
12“c”, and section 489.409, subsection 8, to refrain from
13competing with the company in the conduct of the company’s
14business before the dissolution of the company.
15b. Identify specific types or categories of activities
16that do not violate the duty of loyalty To the extent the
17operating agreement of a member-managed limited liability
18company expressly relieves a member of a responsibility that
19the member otherwise would have under this chapter and imposes
20the responsibility on one or more other members, the agreement
21also may eliminate or limit any fiduciary duty of the member
22relieved of the responsibility which would have pertained to
23the responsibility.
24c. Alter the duty of care, except to authorize intentional
25misconduct or knowing violation of law. If not manifestly
26unreasonable, the operating agreement may do all of the
27following:
28(1) Alter or eliminate the aspects of the duty of loyalty
29stated in section 489.409, subsections 2 and 9.
30(2) Identify specific types or categories of activities
31that do not violate the duty of loyalty.
32(3) Alter the duty of care, but may not authorize conduct
33involving bad faith, willful or intentional misconduct, or
34knowing violation of law.
35(4) Alter or eliminate any other fiduciary duty.
-16- 1d. Alter any other fiduciary duty, including eliminating
2particular aspects of that duty.
3e. Prescribe the standards by which to measure the
4performance of the contractual obligation of good faith and
5fair dealing under section 489.409, subsection 4.
65. The operating agreement may specify the method by which
7a specific act or transaction that would otherwise violate the
8duty of loyalty may be authorized or ratified by one or more
9disinterested and independent persons after full disclosure
10of all material facts The court shall decide as a matter of
11law whether a term of an operating agreement is manifestly
12unreasonable under subsection 3, paragraph “f”, or subsection
134, paragraph “c”. All of the following shall apply:
14a. The court shall make its determination as of the time the
15challenged term became part of the operating agreement and by
16considering only circumstances existing at that time.
17b. The court may invalidate the term only if, in light of
18the purposes, activities, and affairs of the limited liability
19company, it is readily apparent that any of the following
20apply:
21(1) The objective of the term is unreasonable.
22(2) The term is an unreasonable means to achieve the term’s
23objective.
246. To the extent the operating agreement of a member-managed
25limited liability company expressly relieves a member of a
26responsibility that the member would otherwise have under
27this chapter and imposes the responsibility on one or more
28other members, the operating agreement may, to the benefit
29of the member that the operating agreement relieves of the
30responsibility, also eliminate or limit any fiduciary duty that
31would have pertained to the responsibility.
327. 6. The An operating agreement may alter or eliminate
33the indemnification for a member or manager provided by section
34489.408, subsection 1, and may eliminate or limit a member’s
35or manager’s liability to the limited liability company and
-17-1members for money damages, except for any of the following:
2a. A breach of the duty of loyalty.
3b. A financial benefit received by the member or manager to
4which the member or manager is not entitled.
5c. A breach of a duty under section 489.406.
6d. Intentional infliction of harm on the company or a
7member.
8e. An intentional violation of criminal law.
98. The court shall decide any claim under subsection 4 that
10a term of an operating agreement is manifestly unreasonable.
11All of the following apply:
12a. The court shall make its determination as of the time the
13challenged term became part of the operating agreement and by
14considering only circumstances existing at that time.
15b. The court may invalidate the term only if, in light of
16the purposes and activities of the limited liability company,
17it is readily apparent that any of the following applies:
18(1) The objective of the term is unreasonable.
19(2) The term is an unreasonable means to achieve the
20provision’s objective.
21 Sec. 10. Section 489.111, Code 2023, is amended to read as
22follows:
23489.111 Operating agreement — effect on limited liability
24company and persons becoming members — preformation agreement.
251. A limited liability company is bound by and may enforce
26the operating agreement, whether or not the company has itself
27manifested assent to the operating agreement.
282. A person that becomes a member of a limited liability
29company is deemed to assent to the operating agreement.
303. Two or more persons intending to become the initial
31members of a limited liability company may make an agreement
32providing that upon the formation of the company the agreement
33will become the operating agreement. One person intending
34to become the initial member of a limited liability company
35may assent to terms providing that upon the formation of the
-18-1company the terms will become the operating agreement.
24. An operating agreement in a signed record that excludes
3modification or rescission except by a signed record cannot be
4otherwise modified or rescinded.
5 Sec. 11. Section 489.112, Code 2023, is amended to read as
6follows:
7489.112 Operating agreement — effect on third parties and
8relationship to records effective on behalf of limited liability
9company.
101. An operating agreement may specify that its amendment
11requires the approval of a person that is not a party to the
12operating agreement or the satisfaction of a condition. An
13amendment is ineffective if its adoption does not include the
14required approval or satisfy the specified condition.
152. The obligations of a limited liability company and its
16members to a person in the person’s capacity as a transferee or
17a person dissociated as a member are governed by the operating
18agreement. Subject only to any a court order issued under
19section 489.503, subsection 2, paragraph “b”, to effectuate a
20charging order, an amendment to the operating agreement made
21after a person becomes a transferee or is dissociated as a
22 member is or is not effective as follows:
23a. Is effectivewith regard to any debt, obligation, or
24other liability of the limited liability company or its members
25to the person in the person’s capacity as a transferee or
26person dissociated as a member.
27b. Is not effective to the extent the amendment imposes a
28new debt, obligation, or other liability on the transferee or
29person dissociated as a member.
303. If a record that has been delivered by a limited
31liability company to the secretary of state for filing and
32has become becomes effective under this chapter and contains
33a provision that would be ineffective under section 489.110,
34subsection 3 or subsection 4, paragraph “c”, if contained in
35the operating agreement, the provision is likewise ineffective
-19-1in the record.
24. Subject to subsection 3, if a record that has been
3 delivered by a limited liability company to the secretary
4of state for filing and has become becomes effective under
5this chapter and conflicts with a provision of the operating
6agreement, all of the following rules apply:
7a. The operating agreement prevails as to members, persons
8 dissociated as members, transferees, and managers.
9b. The record prevails as to other persons to the extent
10they reasonably rely on the record.
11 Sec. 12. Section 489.114, Code 2023, is amended to read as
12follows:
13489.114 Change of registered office or registered agent for
14service of process or address for registered agency by limited
15liability company.
161. A limited liability company or registered foreign
17limited liability company may change its registered office
18or its registered agent for service of process agent or the
19address of its registered agent by delivering to the secretary
20of state for filing a statement of change that sets forth
21 states all of the following:
22a. The name of the limited liability company or foreign
23limited liability company.
24b. If the current registered office is to be changed, the
25street and mailing addresses of the new registered office The
26information that is to be in effect as a result of the filing of
27the statement of change.
28c. If the current registered agent is to be changed, the
29name of the new registered agent and the new agent’s consent to
30the appointment. The agent’s consent may be on the statement
31or attached to it.
32d. That after the change or changes are made, the street
33address of its registered office and the business office of its
34registered agent will be identical.
352. If a registered agent changes the street address of
-20-1the registered agent’s business office, the registered agent
2may change the street address of the registered office of any
3limited liability company or foreign limited liability company
4for which the person is the registered agent by notifying the
5limited liability company or foreign limited liability company
6in writing of the change and signing, either manually or in
7facsimile, and delivering to the secretary of state for filing
8a statement that complies with the requirements of subsection
91 and recites that the limited liability company or foreign
10limited liability company has been notified of the change. The
11members or managers of a limited liability company need not
12approve the delivery to the secretary of state filing of any
13of the following:
14a. A statement of change under this section.
15b. A similar filing changing the registered agent or
16registered office, if any, of the limited liability company in
17any other jurisdiction.
183. If a registered agent changes the registered agent’s
19business address to another place, the registered agent may
20change the business address and the address of the registered
21agent by filing a statement as required by subsection 2 for
22each limited liability company or foreign limited liability
23company, or a single statement of all limited liability
24companies or all foreign limited liability companies named
25in the notice, except that it need be signed only by the
26registered agent and need not be responsive to subsection 1,
27paragraph “c”, and must recite that a copy of the statement
28has been mailed to each limited liability company or foreign
29limited liability company named in the notice A statement of
30change under this section designating a new registered agent
31is an affirmation of fact by the limited liability company or
32registered foreign limited liability company that the agent has
33consented to serve.
344. A limited liability company or foreign limited liability
35company may also change its registered office or registered
-21-1agent in its biennial report as provided in section 489.209
2As an alternative to using the procedure in this section,
3a limited liability company may amend its certificate of
4organization.
55. Subject to section 489.205, subsection 3, a statement of
6change is effective when filed by the secretary of state.
7 Sec. 13. NEW SECTION. 489.114A Registration of name.
81. A foreign limited liability company not registered to
9do business in this state under subchapter IX may register
10its name, or an alternate name adopted pursuant to section
11489.906A, if the name is distinguishable on the records of the
12secretary of state from the names that are not available under
13section 489.108.
142. To register its name or an alternate name adopted
15pursuant to section 489.906A, a foreign limited liability
16company must deliver to the secretary of state for filing an
17application stating the company’s name, the jurisdiction and
18date of its formation, and any alternate name adopted pursuant
19to section 489.906A. If the secretary of state finds that the
20name applied for is available, the secretary of state shall
21register the name for the applicant’s exclusive use.
223. The registration of a name under this section is
23effective for one year after the date of registration.
244. A foreign limited liability company whose name
25registration is effective may renew the registration for
26successive one-year periods by delivering, not earlier than
27three months before the expiration of the registration,
28to the secretary of state for filing a renewal application
29that complies with this section. When filed, the renewal
30application renews the registration for a succeeding one-year
31period.
325. A foreign limited liability company whose name
33registration is effective may register as a foreign limited
34liability company under the registered name or consent in a
35signed record to the use of that name by another person that is
-22-1not an individual.
2 Sec. 14. Section 489.115, Code 2023, is amended to read as
3follows:
4489.115 Resignation of registered agent for service of
5process.
61. A registered agent may resign the agent’s agency
7appointment by signing and as an agent for a limited liability
8company or registered foreign limited liability company by
9 delivering to the secretary of state for filing the signed
10original a statement of resignation. The statement of
11resignation may include a statement that the registered office
12is also discontinued. The registered agent shall send a copy
13of the statement of resignation by certified mail, return
14receipt requested, to the limited liability company or foreign
15limited liability company at its principal office and to the
16registered office, if not discontinued. The registered agent
17shall certify to the secretary of state that the copies have
18been sent to the limited liability company or foreign limited
19liability company, including the date the copies were sent.
20 that states all of the following:
21a. The name of the limited liability company or foreign
22limited liability company.
23b. The name of the agent.
24c. That the agent resigns from serving as registered agent
25for the limited liability company or foreign limited liability
26company.
27d. The address of the limited liability company or foreign
28limited liability company to which the agent will send the
29notice required by subsection 3.
302. A statement of resignation takes effect on the earlier
31of the following:
32a. 12:01 a.m.on the The thirty-first day after the day on
33which it is filed with the secretary of state.
34b. The designation of a new registered agent for the limited
35liability company or registered foreign limited liability
-23-1company.
23. A registered agent promptly shall furnish to the limited
3liability company or registered foreign limited liability
4company notice in a record of the date on which a statement of
5resignation was filed.
64. When a statement of resignation takes effect, the
7registered agent ceases to have responsibility under this
8chapter for any matter thereafter tendered to it as agent for
9the limited liability company or registered foreign limited
10liability company. The resignation does not affect any
11contractual rights the company or foreign company has against
12the agent or that the agent has against the company or foreign
13company.
145. A registered agent may resign with respect to a limited
15liability company or registered foreign limited liability
16company whether or not the company or foreign company is in
17good standing.
18 Sec. 15. NEW SECTION. 489.115A Registered agent.
191. Each limited liability company and each registered
20foreign limited liability company shall designate and maintain
21a registered agent in this state. The designation of a
22registered agent is an affirmation of fact by the limited
23liability company or registered foreign limited liability
24company that the agent has consented to serve.
252. A registered agent for a limited liability company or
26registered foreign limited liability company must have a place
27of business in this state.
283. The only duties under this chapter of a registered agent
29that has complied with this chapter are as follows:
30a. To forward to the limited liability company or registered
31foreign limited liability company at the address most recently
32supplied to the agent by the limited liability company or
33registered foreign limited liability company any process,
34notice, or demand pertaining to the company or foreign company
35which is served on or received by the agent.
-24- 1b. If the registered agent resigns, to provide the notice
2required by section 489.115, subsection 3, to the limited
3liability company or registered foreign limited liability
4company at the address most recently supplied to the agent by
5the limited liability company or registered foreign limited
6liability company.
7c. To keep current the information with respect to the agent
8in the certificate of organization or foreign registration
9statement.
10 Sec. 16. Section 489.116, Code 2023, is amended to read as
11follows:
12489.116 Service of process, notice, or demand.
131. A limited liability company’s company or registered
14 foreign limited liability company’s registered agent is the
15company’s agent for service of process, notice, or demand
16required or permitted by law to company may be served on
17the company with any process, notice, or demand required or
18permitted by law by serving its registered agent.
192. If a limited liability company or registered foreign
20limited liability company has no ceases to have a registered
21agent, or the if its registered agent cannot with reasonable
22diligence be served, the limited liability company or
23registered foreign limited liability company may be served by
24registered or certified mail, return receipt requested, or by
25similar commercial delivery service, addressed to the limited
26liability company or registered foreign limited liability
27company at its principal office. The address of the principal
28office must be as shown on the limited liability company’s or
29registered foreign limited liability company’s most recent
30biennial report filed with the secretary of state pursuant to
31section 489.209. Service is perfected effected under this
32subsection at on the earliest of any of the following:
33a. The date the limited liability company or registered
34 foreign limited liability company receives the mail or delivery
35by the commercial delivery service.
-25- 1b. The date shown on the return receipt, if signed on behalf
2of by the limited liability company or registered foreign
3limited liability company.
4c. Five days after its deposit in with the United States
5mail, as evidenced by the postmark, if mailed postpaid and
6 postal service or with the commercial delivery service, if
7 correctly addressed and with sufficient postage or payment.
83. A limited liability company or foreign limited liability
9company may be served pursuant to this section, as provided
10in another provision of this chapter, or as provided in
11sections 617.3 through 617.6, unless the manner of service is
12otherwise specifically provided for by another provision of law
13 If process, notice, or demand cannot be served on a limited
14liability company or registered foreign limited liability
15company pursuant to subsection 1 or 2, service may be made by
16handing a copy to the individual in charge of any regular place
17of business or activity of the limited liability company or
18registered foreign company if the individual served is not a
19plaintiff in the action.
204. Service of process, notice, or demand on a registered
21agent must be in a written record.
225. Service of process, notice, or demand may be made by
23other means under law other than this chapter, including as
24provided in sections 617.3 through 617.6 unless specifically
25provided for by another provision of law.
26 Sec. 17. Section 489.117, Code 2023, is amended to read as
27follows:
28489.117 Fees.
291. The secretary of state shall collect the following fees
30when documents described in this subsection are delivered to
31the secretary’s office for filing:
32a. Statement of rescission No fee
33b. Statement of withdrawal No fee
34c. Certificate of organization $ 50
35d. Application for use of
-26-1 indistinguishable name $ 10
2e. Application for reserved name $ 10
3f. Notice of transfer of reserved name $ 10
4g. Statement of change of registered
5 agent or registered office or both No fee
6h. Registered agent’s statement of
7 change of registered office for each
8 affected limited liability company No fee
9i. Registered agent’s statement
10 of resignation No fee
11j. Amendment to certificate of
12 organization $ 50
13k. Restatement of certificate of
14 organization with amendment
15 of certificate $ 50
16l. Articles of merger $ 50
17m. Statement of dissolution $ 5
18n. Declaration of administrative
19 dissolution No fee
20o. Application for reinstatement
21 following administrative dissolution $ 5
22p. Certificate of reinstatement No fee
23q. Application for certificate
24 of authority registration $100
25r. Application for amended
26 certificate of authority registration $100
27s. Statement of cancellation $ 10
28t. Certificate of revocation
29 of authority to transact business No fee
30u. Statement of correction $ 5
31v. Application for certificate of
32 existence or authorization $ 5
33w. Any other document required or
34 permitted to be filed by this chapter $ 5
352. The secretary of state shall collect a fee of five
-27-1dollars each time process is served on the secretary under this
2chapter. The party to a proceeding causing service of process
3is entitled to recover this fee as costs if the party prevails
4in the proceeding.
53. The secretary of state shall collect the following fees
6for copying and certifying the copy of any filed document
7relating to a domestic limited liability company or foreign
8limited liability company as follows:
9a. One dollar a page for copying.
10b. Five dollars for the certificate.
114. The secretary of state may impose, assess, and collect
12a filing fee as a condition to accepting a biennial report as
13provided in section 489.209.
14 Sec. 18. NEW SECTION. 489.118 Change of name or address by
15registered agent.
161. If a registered agent changes its name or address,
17the agent may deliver to the secretary of state for filing a
18statement of change that states all of the following:
19a. The name of the limited liability company or registered
20foreign limited liability company represented by the registered
21agent.
22b. The name of the agent as currently shown in the records
23of the secretary of state for the limited liability company or
24registered foreign limited liability company.
25c. If the name of the agent has changed, its new name.
26d. If the address of the agent has changed, its new address.
272. A registered agent promptly shall furnish notice to the
28represented limited liability company or registered foreign
29limited liability company of the filing by the secretary of
30state of the statement of change and the changes made by the
31statement.
32 Sec. 19. NEW SECTION. 489.120 Delivery of record.
331. Except as otherwise provided in this chapter,
34permissible means of delivery of a record include delivery by
35hand, mail, conventional commercial practice, and electronic
-28-1transmission.
22. Delivery to the secretary of state is effective only when
3a record is received by the secretary of state.
4 Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
5or repeal.
6The general assembly has power to amend or repeal all or
7part of this chapter at any time, and all limited liability
8companies and foreign limited liability companies subject to
9this chapter are governed by the amendment or repeal.
10 Sec. 21. Section 489.201, Code 2023, is amended to read as
11follows:
12489.201 Formation of limited liability company — certificate
13of organization.
141. One or more persons may act as organizers to form a
15limited liability company by signing and delivering to the
16secretary of state for filing a certificate of organization.
172. A certificate of organization must state all of the
18following:
19a. The name of the limited liability company, which must
20comply with section 489.108.
21b. The street address and mailing addresses of the initial
22registered office and the name of the initial registered
23agent for service of process on the company limited liability
24company’s principal office.
25c. The name and street and mailing addresses in this state
26of the limited liability company’s registered agent.
273. Subject to section 489.112, subsection 3, a A certificate
28of organization may also contain statements as to matters other
29than those required by subsection 2, but shall not vary or
30otherwise affect the provisions specified in section 489.110,
31subsections 3 and 4, in a manner inconsistent with that
32section. However, a statement in a certificate of organization
33is not effective as a statement of authority.
344. A limited liability company is formed when the secretary
35of state has filed the certificate of organization, unless the
-29-1certificate states a delayed becomes effective date pursuant
2to section 489.205, subsection 3. If the certificate states
3a delayed effective date, a limited liability company is not
4formed if, before the certificate takes effect, a statement of
5cancellation is signed and delivered to the secretary of state
6for filing and the secretary of state files the certificate.
75. Subject to any delayed effective date and except in
8a proceeding by this state to dissolve a limited liability
9company, the filing of the certificate of organization by the
10secretary of state is conclusive proof that the organizer
11satisfied all conditions to the formation of a limited
12liability company.
13 Sec. 22. Section 489.202, Code 2023, is amended to read as
14follows:
15489.202 Amendment or restatement of certificate of
16organization.
171. A certificate of organization may be amended or restated
18at any time.
192. To amend its certificate of organization, a limited
20liability company must deliver to the secretary of state for
21filing an amendment stating all of the following:
22a. The name of the limited liability company.
23b. The date of filing of its initial certificate of
24organization.
25c. The changes the amendment makes to the certificate as
26most recently amended or restated text of the amendment.
273. To restate its certificate of organization, a limited
28liability company must deliver to the secretary of state for
29filing a restatement, designated as such in its heading,
30stating and setting forth all of the following:
31a. In the heading or an introductory paragraph, the
32company’s present name and the date of the filing of the
33company’s initial certificate of organization The name of the
34limited liability company.
35b. If the company’s name has been changed at any time since
-30-1the company’s formation, each of the company’s former names The
2text of the restated certificate of organization.
3c. The changes the restatement makes to the certificate as
4most recently amended or restated A statement that the restated
5certificate consolidates all amendments into a single document.
6d. If a new amendment is included in the restated
7certificate of organization, the statements required under
8subsection 2 with respect to the new amendment if not otherwise
9provided.
104. Subject to section 489.112, subsection 3, and section
11489.205, subsection 3, an amendment to or restatement of a
12certificate of organization is effective when filed by the
13secretary of state. If a member of a member-managed limited
14liability company, or a manager of a manager-managed limited
15liability company, knows that any information in a filed
16certificate of organization was inaccurate when the certificate
17of organization was filed or has become inaccurate due to
18changed circumstances, the member or manager shall promptly do
19any of the following:
20a. Cause the certificate of organization to be amended.
21b. If appropriate, deliver to the secretary of state
22for filing a statement of change under section 489.114 or a
23statement of correction under section 489.206.
245. If a member of a member-managed limited liability
25company, or a manager of a manager-managed limited liability
26company, knows that any information in a filed certificate of
27organization was inaccurate when the certificate was filed
28or has become inaccurate owing to changed circumstances, the
29member or manager shall promptly do any of the following:
30a. Cause the certificate to be amended.
31b. If appropriate, deliver to the secretary of state
32for filing a statement of change under section 489.114 or a
33statement of correction under section 489.206.
34 Sec. 23. Section 489.203, Code 2023, is amended to read as
35follows:
-31- 1489.203 Signing of records to be delivered for filing to
2secretary of state.
31. A record delivered to the secretary of state for filing
4pursuant to this chapter must be signed as follows:
5a. Except as otherwise provided in paragraphs “b” and “c”, a
6record signed on behalf of by a limited liability company must
7be signed by a person authorized by the company.
8b. A limited liability company’s initial certificate of
9organization must be signed by at least one person acting as
10an organizer.
11c. A record filed delivered on behalf of a dissolved limited
12liability company that does not have or has not had at least
13one has no member must be signed by an organizer the person
14winding up the company’s activities and affairs under section
15489.702, subsection 3, or a person appointed under section
16489.702, subsection 4, to wind up the activities and affairs.
17d. A record filed on behalf of a dissolved limited liability
18company that has no members must be signed by the person
19winding up the company’s activities under section 489.702,
20subsection 3, or a person appointed under section 489.702,
21subsection 4, to wind up those activities A statement of denial
22by a person under section 489.303 must be signed by that
23person.
24e. A statement of cancellation under section 489.201,
25subsection 4, must be signed by each organizer that signed
26the initial certificate of organization, but a personal
27representative of a deceased or incompetent organizer may sign
28in the place of the decedent or incompetent Any other record
29delivered on behalf of a person to the secretary of state for
30filing must be signed by that person.
31f. A statement of denial by a person under section 489.303
32 must be signed by that person.
33g. Any other record must be signed by the person on whose
34behalf the record is delivered to the secretary of state.
352. Any A record filed delivered for filing under this
-32-1chapter may be signed by an agent. Whenever this chapter
2requires a particular individual to sign a record and the
3individual is deceased or incompetent, the record may be signed
4by a legal representative of the individual.
53. A person that signs a record as an agent or legal
6representative affirms as a fact that the person is authorized
7to sign the record.
8 Sec. 24. Section 489.204, Code 2023, is amended to read as
9follows:
10489.204 Signing and filing pursuant to judicial order.
111. If a person required by this chapter to sign a record
12or deliver a record to the secretary of state for filing under
13this chapter does not do so, any other person that is aggrieved
14may petition the district court to order one or more of the
15following:
16a. The person to sign the record.
17b. The person to deliver the record to the secretary of
18state for filing.
19c. The secretary of state to file the record unsigned.
202. If a petitioner under subsection 1 is not the limited
21liability company or foreign limited liability company to which
22the record pertains, the petitioner shall make the limited
23liability company or foreign limited liability company a party
24to the action.
253. If a district court orders an unsigned record to be
26delivered to the secretary of state, the secretary of state
27shall file the record and the court order upon receipt A record
28filed under subsection 1, paragraph “c”, is effective without
29being signed.
30 Sec. 25. Section 489.205, Code 2023, is amended by striking
31the section and inserting in lieu thereof the following:
32489.205 Liability for inaccurate information in filed
33records.
341. If a record delivered to the secretary of state for
35filing under this chapter and filed by the secretary of state
-33-1contains inaccurate information, a person that suffers loss by
2reliance on the information may recover damages for the loss
3from all of the following:
4a. A person that signed the record, or caused another to
5sign it on the person’s behalf, and knew the information to be
6inaccurate at the time the record was signed.
7b. Subject to subsection 2, a member of a member-managed
8limited liability company or a manager of a manager-managed
9limited liability company if all of the following apply:
10(1) The record was delivered for filing on behalf of the
11limited liability company.
12(2) The member or manager knew or had notice of the
13inaccuracy for a reasonably sufficient time before the
14information was relied upon so that, before the reliance,
15the member or manager reasonably could have done any of the
16following:
17(a) Effected an amendment under section 489.202.
18(b) Filed a petition under section 489.204.
19(c) Delivered to the secretary of state for filing a
20statement of change under section 489.114 or a statement of
21correction under section 489.206.
222. To the extent the operating agreement of a member-managed
23limited liability company expressly relieves a member of
24responsibility for maintaining the accuracy of information
25contained in records delivered on behalf of the limited
26liability company to the secretary of state for filing under
27this chapter and imposes that responsibility on one or more
28other members, the liability stated in subsection 1, paragraph
29“b”, applies to those other members and not to the member that
30the operating agreement relieves of the responsibility.
313. A person commits a serious misdemeanor if that person
32signs a record the person knows is false in any material
33respect with intent that the record be delivered to the
34secretary of state for filing.
35 Sec. 26. Section 489.206, Code 2023, is amended to read as
-34-1follows:
2489.206 Correcting filed record.
31. A limited liability company or foreign limited liability
4company may deliver to the secretary of state for filing
5a statement of correction to correct a record previously
6delivered by the company to the secretary of state and filed
7by the secretary of state, if at the time of filing the record
8contained inaccurate information or was defectively signed.
9A person on whose behalf a filed record was delivered to the
10secretary of state for filing may correct the record if any of
11the following apply:
12a. The record at the time of filing was inaccurate.
13b. The record was defectively signed.
14c. The electronic transmission of the record to the
15secretary of state was defective.
162. A statement of correction under subsection 1 shall not
17have a delayed effective date and must do all of the following:
18To correct a filed record, a person on whose behalf the record
19was delivered to the secretary of state must deliver to the
20secretary of state for filing a statement of correction.
21a. Describe the record to be corrected, including its filing
22date, or attach a copy of the record as filed.
23b. Specify the inaccurate information and the reason it is
24inaccurate or the manner in which the signing was defective.
25c. Correct the defective signature or inaccurate
26information.
273. When filed by the secretary of state, a statement of
28correction under subsection 1 is effective retroactively as
29of the effective date of the record the statement corrects,
30but the statement is effective when filed as to A statement of
31correction shall comply with all of the following:
32a. For the purposes of section 489.103, subsection 4 It must
33not state a delayed effective date.
34b. As to persons that previously relied on the uncorrected
35record and would be adversely affected by the retroactive
-35-1effect It must be signed by the person correcting the filed
2record.
3c. It must describe the record to be corrected including its
4filing date or attach a copy of the record as filed.
5d. It must specify the inaccuracy or defect to be corrected.
6e. It must correct the inaccuracy or defect.
74. A statement of correction is effective as of the
8effective date of the filed record that it corrects except for
9purposes of section 489.103, subsection 4, and as to persons
10relying on the uncorrected filed record and adversely affected
11by the correction. For those purposes and as to those persons,
12the statement of correction is effective when filed.
13 Sec. 27. NEW SECTION. 489.206A Filing requirements.
141. To be filed by the secretary of state pursuant to
15this chapter, a record must be captioned to describe the
16record’s purpose, must be received by the secretary of state,
17must comply with this chapter, and must satisfy all of the
18following:
19a. The filing of the record must be required or permitted by
20this chapter.
21b. The record must be physically delivered in written
22form unless and to the extent the secretary of state permits
23electronic delivery of records.
24c. The words in the record must be in English, and numbers
25must be in Arabic or Roman numerals, but the name of an entity
26need not be in English if written in English letters or Arabic
27or Roman numerals.
28d. The record must be signed by a person authorized or
29required under this chapter to sign the record.
30e. The record must state the name and capacity, if
31any, of each individual who signed it, either on behalf
32of the individual or the person authorized or required to
33sign the record, but need not contain a seal, attestation,
34acknowledgment, or verification.
352. If law other than this chapter prohibits the disclosure
-36-1by the secretary of state of information contained in a record
2delivered to the secretary of state for filing, the secretary
3of state shall file the record if the record otherwise complies
4with this chapter but may redact the information.
53. When a record is delivered to the secretary of state for
6filing, any fee required under this chapter and any fee, tax,
7interest, or penalty required to be paid under this chapter or
8law other than this chapter must be paid in a manner permitted
9by the secretary of state or by that law.
104. The secretary of state may require that a record
11delivered in written form be accompanied by an identical or
12conformed copy.
135. The secretary of state may provide forms for filings
14required or permitted to be made by this chapter, but, except
15as otherwise provided in subsection 6, their use is not
16required.
176. The secretary of state may prescribe, and furnish on
18request and require any of the following forms:
19a. A cover sheet for a filing.
20b. An application for a certificate of existence or
21certificate of registration.
22c. A foreign corporation’s registration statement.
23d. A foreign corporation’s statement of withdrawal.
24e. A foreign corporation’s transfer of registration
25statement.
26f. The biennial report required by section 489.209.
277. Upon request and payment of the requisite fee, the
28secretary of state shall send the requester a certified copy
29of a requested record.
30 Sec. 28. Section 489.207, Code 2023, is amended by striking
31the section and inserting in lieu thereof the following:
32489.207 Effective date and time.
33Except as otherwise provided in section 489.115 and section
34489.208A and subject to section 489.206, subsection 4, a record
35filed under this chapter is effective as follows:
-37- 11. On the date and at the time of its filing by the
2secretary of state, as provided in section 489.210, subsection
32.
42. On the date of filing and at the time specified in the
5record as its effective time, if later than the time under
6subsection 1.
73. At a specified delayed effective date and time, which may
8not be more than ninety days after the date of filing.
94. If a delayed effective date is specified, but no time is
10specified, at 12:01 a.m.on the date specified, which shall not
11be more than ninety days after the date of filing.
12 Sec. 29. Section 489.208, Code 2023, is amended to read as
13follows:
14489.208 Certificate of existence or authorization
15 registration.
161. Any person may apply to On request of any person, the
17secretary of state to be furnished shall issue a certificate
18of existence for a domestic limited liability company or a
19certificate of authorization registration for a registered
20 foreign limited liability company.
212. A certificate of existence or certificate of
22authorization registration under subsection 1 must set forth
23 state all of the following:
24a. The domestic limited liability company’s name or the
25registered foreign limited liability company’s name used in
26this state.
27b. One In the case of a limited liability company, all of
28the following:
29(1) If it is a domestic limited liability company, that
30the company is duly formed under the laws of this state, the
31date of its formation, and the period of its duration That
32a certificate of organization has been filed and has taken
33effect.
34(2) If it is a foreign limited liability company, that the
35company is authorized to transact business in this state The
-38-1date the certificate became effective.
2(3) The period of the limited liability company’s duration
3if the records of the secretary of state reflect that its
4period of duration is less than perpetual.
5(4) That all of the following apply:
6(a) No statement of dissolution, statement of
7administrative dissolution, or statement of termination has
8been filed.
9(b) The records of the secretary of state do not otherwise
10reflect that the limited liability company has been dissolved
11or terminated.
12(c) A proceeding is not pending under section 489.705.
13c. That all fees, taxes, and penalties due under this
14chapter or other law to the secretary of state have been paid
15 In the case of a registered foreign limited liability company,
16that it is registered to do business in this state.
17d. That the company’s most recent biennial report required
18by this chapter has been filed by the secretary of state That
19all fees, taxes, interest, and penalties owed to this state
20by the limited liability company or foreign limited liability
21company and collected through the secretary of state have been
22paid, if all of the following apply:
23(1) Payment is reflected in the records of the secretary of
24state.
25(2) Nonpayment affects the good standing or registration
26of the limited liability company or foreign limited liability
27company.
28e. If it is a domestic limited liability company, that a
29statement of dissolution or statement of termination has not
30been filed That the most recent biennial report required by
31section 489.209 has been delivered to the secretary of state
32for filing.
33f. Other facts of record in the office reflected in the
34records of the secretary of state that may be requested by
35the applicant pertaining to the limited liability company or
-39-1foreign limited liability company which the person requesting
2the certificate reasonably requests.
33. Subject to any qualification stated in the certificate, a
4certificate of existence or certificate of authorization issued
5by the secretary of state is under subsection 1 may be relied
6on as conclusive evidence that the domestic limited liability
7company is in existence or the foreign limited liability
8company is authorized to transact business in this state of the
9facts stated in the certificate.
10 Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
11before effectiveness.
121. Except as otherwise provided in sections 489.1024,
13489.1034, 489.1044, and 489.1054, a record delivered to the
14secretary of state for filing may be withdrawn before it takes
15effect by delivering to the secretary of state for filing a
16statement of withdrawal.
172. A statement of withdrawal must comply with all of the
18following:
19a. Be signed by each person that signed the record being
20withdrawn, except as otherwise agreed by those persons.
21b. Identify the record to be withdrawn.
22c. If signed by fewer than all the persons that signed the
23record being withdrawn, state that the record is withdrawn in
24accordance with the agreement of all the persons that signed
25the record.
263. On filing by the secretary of state of a statement of
27withdrawal, the action or transaction evidenced by the original
28record does not take effect.
29 Sec. 31. Section 489.209, Code 2023, is amended to read as
30follows:
31489.209 Biennial report for secretary of state.
321. A limited liability company or a foreign limited
33liability company authorized registered to transact do business
34in this state shall deliver to the secretary of state for
35filing a biennial report that states all of the following:
-40- 1a. The name of the company.
2b. The street address of the company’s registered office,
3the name of its registered agent at that office, and the
4consent of any new registered agent.
5c. The street address of its principal office.
6d. In the case of a foreign limited liability company, the
7state or other jurisdiction under whose law the foreign company
8is formed and any alternate name adopted under section 489.805,
9subsection 1.
102. Information in a biennial report under this section
11must be current as of the date the report is delivered to the
12secretary of state for filing. The report shall be executed
13on behalf of the limited liability company or foreign limited
14liability company and signed as provided in section 489.203.
153. The first biennial report under this section in this
16state must be delivered to the secretary of state between
17January 1 and April 1 of the first odd-numbered year following
18the calendar year in which a limited liability company was
19formed or a foreign limited liability company was authorized
20 registered to transact do business. A subsequent biennial
21report must be delivered to the secretary of state between
22January 1 and April 1 of each following odd-numbered calendar
23year. A filing fee for the biennial report shall be determined
24by the secretary of state pursuant to section 489.117. Each
25biennial report shall contain information related to the
26two-year period immediately preceding the calendar year in
27which the report is filed.
284. If a biennial report does not contain the information
29required in this section, the secretary of state shall promptly
30notify the reporting limited liability company or foreign
31limited liability company in writing and return the report to
32it for correction.
335. The secretary of state may provide for the change of
34registered office or registered agent on the form prescribed by
35the secretary of state for the biennial report, provided that
-41-1the form contains the information required in section 489.114.
2If the secretary of state determines that a biennial report
3does not contain the information required in this section but
4otherwise meets the requirements of section 489.114 for the
5purpose of changing the registered office or registered agent,
6the secretary of state shall file the statement of change
7for the registered office or registered agent, effective as
8provided in section 489.205 489.207, subsection 3, before
9returning the biennial report to the limited liability
10company as provided in this section. A statement of change of
11registered office or registered agent accomplished pursuant to
12this subsection shall be executed by a person authorized to
13execute the biennial report.
14 Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
15to file — review of refusal to file — delivery of record by
16secretary of state.
171. The secretary of state shall file a record delivered
18to the secretary of state for filing which satisfies this
19chapter. The duty of the secretary of state under this section
20is ministerial.
212. When the secretary of state files a record, the secretary
22of state shall record it as filed on the date and at the time of
23its delivery. After filing a record, the secretary of state
24shall deliver to the person that submitted the record a copy
25of the record with an acknowledgment of the date and time of
26filing and, in the case of a statement of denial, also to the
27limited liability company to which the statement pertains.
283. If the secretary of state refuses to file a record, the
29secretary of state shall, not later than fifteen business days
30after the record is delivered, do all of the following:
31a. Return the record or notify the person that submitted the
32record of the refusal.
33b. Provide a brief explanation in a record of the reason for
34the refusal.
354. If the secretary of state refuses to file a record, the
-42-1person that submitted the record may petition the district
2court of Polk county to compel filing of the record. The
3record and the explanation of the secretary of state of
4the refusal to file must be attached to the petition. The
5court may decide the matter in a summary proceeding. If the
6court orders the record to be filed, the court may order it
7filed with an effective date that is the date on which it was
8submitted to the secretary of state for filing.
95. The filing of or refusal to file a record does not do any
10of the following:
11a. Affect the validity or invalidity of the record in whole
12or in part.
13b. Create a presumption that the information contained in
14the record is correct or incorrect.
156. Except as otherwise provided by section 489.116 or by law
16other than this chapter, the secretary of state may deliver any
17record to a person by delivering it by any of the following:
18a. In person to the person that submitted it.
19b. To the address of the person’s registered agent.
20c. To the principal office of the person.
21d. To another address the person provides to the secretary
22of state for delivery.
23 Sec. 33. Section 489.302, Code 2023, is amended to read as
24follows:
25489.302 Statement of limited liability company authority.
261. A limited liability company may deliver to the secretary
27of state for filing a statement of authority. All of the
28following apply to the statement:
29a. It must include the name of the limited liability company
30and the name and street address and mailing addresses of its
31principal office registered agent.
32b. With respect to any position that exists in or with
33respect to the limited liability company, it may state the
34authority, or limitations on the authority, of all persons
35holding the position to do any of the following:
-43- 1(1) Execute Sign an instrument transferring real property
2held in the name of the limited liability company.
3(2) Enter into other transactions on behalf of, or otherwise
4act for or bind, the limited liability company.
5c. It may state the authority, or limitations on the
6authority, of a specific person to do any of the following:
7(1) Execute Sign an instrument transferring real property
8held in the name of the limited liability company.
9(2) Enter into other transactions on behalf of, or otherwise
10act for or bind, the limited liability company.
112. To amend or cancel a statement of authority filed by
12the secretary of state under section 489.205, subsection 1,
13a limited liability company must deliver to the secretary of
14state for filing an amendment or cancellation stating all of
15the following:
16a. The name of the limited liability company.
17b. The name and street address and mailing addresses of the
18limited liability company’s principal office registered agent.
19c. The caption of the statement being amended or canceled
20and the date the statement being affected became effective.
21d. The contents of the amendment or a declaration that the
22statement being affected is canceled.
233. A statement of authority affects only the power of a
24person to bind a limited liability company to persons that are
25not members.
264. Subject to subsection 3 and section 489.103, subsection
274, and except as otherwise provided in subsections 6, 7, and
288, a limitation on the authority of a person or a position
29contained in an effective statement of authority is not by
30itself evidence of any person’s knowledge or notice of the
31limitation by any person.
325. Subject to subsection 3, a grant of authority not
33pertaining to a transfer of real property and contained in an
34effective statement of authority is conclusive in favor of a
35person that gives value in reliance on the grant, except to the
-44-1extent that when the person gives value, any of the following
2applies:
3a. The person has knowledge to the contrary.
4b. The statement has been canceled or restrictively amended
5under subsection 2.
6c. A limitation on the grant is contained in another
7statement of authority that became effective after the
8statement containing the grant became effective.
96. Subject to subsection 3, an effective statement of
10authority that grants authority to transfer real property
11held in the name of the limited liability company and that, a
12certified copy of which statement is recorded by certified copy
13 in the office for recording transfers of the real property is
14conclusive in favor of a person that gives value in reliance
15on the grant without knowledge to the contrary, except to the
16extent that when the person gives value, any of the following
17applies:
18a. The statement has been canceled or restrictively amended
19under subsection 2 and a certified copy of the cancellation
20or restrictive amendment has been recorded in the office for
21recording transfers of the real property.
22b. A limitation on the grant is contained in another
23statement of authority that became effective after the
24statement containing the grant became effective, and a
25certified copy of the later-effective statement is recorded in
26the office for recording transfers of the real property.
277. Subject to subsection 3, if a certified copy of an
28effective statement containing a limitation on the authority to
29transfer real property held in the name of a limited liability
30company is recorded in the office for recording transfers of
31that real property, all persons are deemed to know of the
32limitation.
338. Subject to subsection 9, an effective statement of
34dissolution or a statement of termination is a cancellation
35of any filed statement of authority for the purposes of
-45-1subsection 6 and is a limitation on authority for the purposes
2of subsection 7.
39. After a statement of dissolution becomes effective,
4a limited liability company may deliver to the secretary of
5state for filing and, if appropriate, the secretary of state
6 may record a statement of authority that is designated as
7a post-dissolution statement of authority. The statement
8operates as provided in subsections 6 and 7.
910. A statement of authority filed by the secretary of
10state under section 489.205 489.207, subsection 1, is effective
11until amended or canceled as provided in subsection 2, unless
12an earlier cancellation date is specified in the statement.
1311. An effective statement of denial operates as a
14restrictive amendment under this section and may be recorded by
15certified copy for the purposes of subsection 6, paragraph “a”.
16 Sec. 34. Section 489.304, Code 2023, is amended to read as
17follows:
18489.304 Liability of members and managers.
191. For debts, obligations, or other liabilities A debt,
20obligation, or other liability of a limited liability
21company, whether arising in contract, tort, or otherwise
22all of the following apply: is solely the debt, obligation,
23or other liability of the company. A member or manager is
24not personally liable, directly or indirectly, by way of
25contribution or otherwise, for a debt, obligation, or other
26liability of the company solely by reason of being or acting
27as a member or manager. This subsection applies regardless of
28the dissolution of the company.
29a. They are solely the debts, obligations, or other
30liabilities of the company.
31b. They do not become the debts, obligations, or other
32liabilities of a member or manager solely by reason of the
33member acting as a member or manager acting as a manager.
342. The failure of a limited liability company to observe any
35particular formalities relating to the exercise of its powers
-46-1or management of its activities and affairs is not a ground
2for imposing liability on the members a member or managers
3 manager for the debts, obligations, a debt, obligation, or
4other liabilities liability of the company.
5 Sec. 35. Section 489.401, Code 2023, is amended to read as
6follows:
7489.401 Becoming member.
81. If a limited liability company is to have only one member
9upon formation, a the person becomes the a member as agreed by
10that person and the organizer of the company or a majority of
11organizers if more than one. That person and the organizer
12may be, but need not be, different persons. If different, the
13organizer acts on behalf of the initial member.
142. If a limited liability company is to have more than
15one member upon formation, those persons become members as
16agreed by the persons before the formation of the company. The
17organizer acts on behalf of the persons in forming the company
18and may be, but need not be, one of the persons.
193. If a limited liability company has no members upon
20formation, a person becomes a member of the limited liability
21company with the consent of the organizer or a majority of
22the organizers if more than one. The organizers may consent
23to more than one person simultaneously becoming the company’s
24initial members After formation of a limited liability company,
25a person becomes a member according to any of the following:
26a. As provided in the operating agreement.
27b. As the result of a transaction effective under subchapter
28X.
29c. With the affirmative vote or consent of all the members.
30d. As provided in section 489.701, subsection 1, paragraph
31“c”.
324. After formation of a limited liability company, a person
33becomes a member upon A person may become a member without any
34of the following:
35a. As provided in the operating agreement Acquiring a
-47-1transferable interest.
2b. As the result of a transaction effective under article 10
3 Making or being obligated to make a contribution to the limited
4liability company.
5c. With the consent of all the members.
6d. If, within ninety consecutive days after the company
7ceases to have any members, all of the following occur:
8(1) The last person to have been a member, or the legal
9representative of that person, designates a person to become a
10member.
11(2) The designated person consents to become a member.
125. A person may become a member without acquiring a
13transferable interest and without making or being obligated to
14make a contribution to the limited liability company.
15 Sec. 36. Section 489.402, Code 2023, is amended to read as
16follows:
17489.402 Form of contribution.
18A contribution may consist of tangible or intangible
19property or other benefit to a limited liability company,
20including money, services performed, promissory notes, other
21agreements to contribute money or property, and contracts for
22services to be performed property transferred to, services
23performed for, or another benefit provided to the limited
24liability company or an agreement to transfer property to,
25perform services for, or provide another benefit to the
26company.
27 Sec. 37. Section 489.403, Code 2023, is amended to read as
28follows:
29489.403 Liability for contributions.
301. A person’s obligation to make a contribution to a
31limited liability company is not excused by the person’s
32death, disability, termination, or other inability to perform
33personally. If a person does not make a required contribution,
34the person or the person’s estate is obligated to contribute
35money equal to the value of the part of the contribution which
-48-1has not been made, at the option of the company.
22. A creditor of a limited liability company which extends
3credit or otherwise acts in reliance on an obligation described
4in subsection 1 may enforce the obligation If a person does not
5fulfill an obligation to make a contribution other than money,
6the person is obligated at the option of the limited liability
7company to contribute money equal to the value of the part of
8the contribution which has not been made.
93. An operating agreement may provide that the interest of
10any member who fails to make a contribution that the member
11is obligated to make is subject to specified penalties for,
12or specified consequences of, such failure. The penalty or
13consequence may take the form of reducing or eliminating
14the defaulting member’s proportionate interest in a limited
15liability company, subordinating the member’s interest to
16that of a nondefaulting member, a forced sale of the member’s
17interest, forfeiture of the member’s interest, the lending by
18other members of the amount necessary to meet the member’s
19commitment, a fixing of the value of the member’s interest
20by appraisal or by formula and redemption, or sale of the
21member’s interest at such value or other penalty or consequence
22 The obligation of a person to make a contribution may be
23compromised only by the affirmative vote or consent of all the
24members. If a creditor of a limited liability company extends
25credit or otherwise acts in reliance on an obligation described
26in subsection 1 without knowledge or notice of a compromise
27under this subsection, the creditor may enforce the obligation.
284. An operating agreement may provide that the interest of
29any member who fails to make a contribution that the member
30is obligated to make is subject to specified penalties for,
31or specified consequences of, such failure. The penalty or
32consequence may take the form of reducing or eliminating
33the defaulting member’s proportionate interest in a limited
34liability company, subordinating the member’s interest to
35that of a nondefaulting member, a forced sale of the member’s
-49-1interest, forfeiture of the member’s interest, the lending by
2other members of the amount necessary to meet the member’s
3commitment, a fixing of the value of the member’s interest by
4appraisal or by formula and redemption, or sale of the member’s
5interest at such value or other penalty or consequence.
6 Sec. 38. Section 489.404, Code 2023, is amended to read as
7follows:
8489.404 Sharing of and right to distributions before
9dissolution.
101. Any distributions distribution made by a limited
11liability company before its dissolution and winding up must
12be in equal shares among members and persons dissociated as
13 members, except to the extent necessary to comply with any a
14 transfer effective under section 489.502 and any charging order
15in effect under section 489.503.
162. A person has a right to a distribution before the
17dissolution and winding up of a limited liability company only
18if the limited liability company decides to make an interim
19distribution. A person’s dissociation does not entitle the
20person to a distribution.
213. A person does not have a right to demand or receive a
22distribution from a limited liability company in any form other
23than money. Except as otherwise provided in section 489.708,
24subsection 3 4, a limited liability company may distribute an
25asset in kind only if each part of the asset is fungible with
26each other part and each person receives a percentage of the
27asset equal in value to the person’s share of distributions.
284. If a member or transferee becomes entitled to receive a
29distribution, the member or transferee has the status of, and
30is entitled to all remedies available to, a creditor of the
31limited liability company with respect to the distribution.
32However, the company’s obligation to make a distribution is
33subject to offset for any amount owed to the company by the
34member or a person dissociated as a member on whose account the
35distribution is made.
-50-1 Sec. 39. Section 489.405, Code 2023, is amended to read as
2follows:
3489.405 Limitations on distribution.
41. A limited liability company shall not make a
5distribution, including a distribution under section 489.708,
6 if after the distribution any of the following applies:
7a. The limited liability company would not be able to pay
8its debts as they become due in the ordinary course of the
9company’s activities and affairs.
10b. The limited liability company’s total assets would be
11less than the sum of its total liabilities plus the amount that
12would be needed, if the company were to be dissolved, and wound
13up, and terminated at the time of the distribution, to satisfy
14the preferential rights upon dissolution, and winding up, and
15termination of members up of members and transferees whose
16preferential rights are superior to those the rights of persons
17receiving the distribution.
182. A limited liability company may base a determination
19that a distribution is not prohibited under subsection 1 on
20financial statements prepared on the basis of accounting
21practices and principles that are reasonable in the
22circumstances or on a fair valuation or other method that is
23reasonable under the circumstances any of the following:
24a. Financial statements prepared on the basis of
25accounting practices and principles that are reasonable in the
26circumstances.
27b. A fair valuation or other method that is reasonable under
28the circumstances.
293. Except as otherwise provided in subsection 5, the effect
30of a distribution under subsection 1 is measured as follows:
31a. In the case of a distribution by purchase, redemption, or
32other acquisition of a transferable interest in the company,
33as of the date money or other property is transferred or
34debt incurred by the company as defined in section 489.102,
35subsection 5, paragraph “a”, as of the earlier of any of the
-51-1following:
2(1) The date money or other property is transferred or debt
3is incurred by the limited liability company.
4(2) The date the person entitled to the distribution ceases
5to own the interest or right being acquired by the limited
6liability company in return for the distribution.
7b. In the case of any other distribution of indebtedness, as
8of the date the indebtedness is distributed.
9b. c. In all other cases, as follows any of the following:
10(1) The date that the distribution is authorized, if the
11payment occurs within not later than one hundred twenty days
12after that date.
13(2) The date that the payment is made, if the payment occurs
14more than one hundred twenty days after the distribution is
15authorized.
164. A limited liability company’s indebtedness to a member
17or transferee incurred by reason of a distribution made in
18accordance with this section is at parity with the company’s
19indebtedness to its general, unsecured creditors, except to the
20extent subordinated by agreement.
215. A limited liability company’s indebtedness, including
22indebtedness issued in connection with or as part of as a
23distribution, is not a liability for purposes of subsection
241 if the terms of the indebtedness provide that payment of
25principal and interest are is made only if and to the extent
26that payment of a distribution could then be made to members
27 under this section. If the indebtedness is issued as a
28distribution, each payment of principal or interest on the
29indebtedness is treated as a distribution, the effect of which
30is measured on the date the payment is made.
316. In subsection 1, “distribution” does not include amounts
32constituting reasonable compensation for present or past
33services or reasonable payments made in the ordinary course of
34business under a bona fide retirement plan or other benefits
35program In measuring the effect of a distribution under section
-52-1489.708, the liabilities of a dissolved limited liability
2company do not include any claim that has been disposed of
3under section 489.703, 489.704, or 489.706A.
4 Sec. 40. Section 489.406, Code 2023, is amended to read as
5follows:
6489.406 Liability for improper distributions.
71. Except as otherwise provided in subsection 2, if a member
8of a member-managed limited liability company or a manager
9of a manager-managed limited liability company consents to
10a distribution made in violation of section 489.405 and in
11consenting to the distribution fails to comply with section
12489.409, the member or manager is personally liable to the
13company for the amount of the distribution that which exceeds
14the amount that could have been distributed without the
15violation of section 489.405.
162. To the extent the operating agreement of a member-managed
17limited liability company expressly relieves a member of the
18authority and responsibility to consent to distributions and
19imposes that authority and responsibility on one or more other
20members, the liability stated in subsection 1 applies to the
21other members and not the member that the operating agreement
22relieves of the authority and responsibility.
233. A person that receives a distribution knowing that the
24distribution to that person was made in violation of violated
25 section 489.405 is personally liable to the limited liability
26company but only to the extent that the distribution received
27by the person exceeded the amount that could have been properly
28paid under section 489.405.
294. A person against which an action is commenced because
30the person is liable under subsection 1 may do all of the
31following:
32a. Implead any other person that is subject to liability
33 liable under subsection 1 and seek to compel enforce a right of
34 contribution from the person.
35b. Implead any person that received a distribution in
-53-1violation of subsection 3 and seek to compel enforce a right of
2 contribution from the person in the amount the person received
3in violation of subsection 3.
45. An action under this section is barred if not
5 unless commenced within not later than two years after the
6distribution.
7 Sec. 41. Section 489.407, Code 2023, is amended to read as
8follows:
9489.407 Management of limited liability company.
101. A limited liability company is a member-managed limited
11liability company unless the operating agreement does any of
12the following:
13a. Expressly provides that any of the following apply:
14(1) The limited liability company is or will be
15“manager-managed”.
16(2) The limited liability company is or will be “managed by
17managers”.
18(3) Management of the limited liability company is or will
19be “vested in managers”.
20b. Includes words of similar import.
212. In a member-managed limited liability company, all of the
22following rules apply:
23a. The Except as expressly provided in this chapter, the
24 management and conduct of the limited liability company are
25vested in the members.
26b. Each member has equal rights in the management and
27conduct of the limited liability company’s activities and
28affairs.
29c. A difference arising among members as to a matter in the
30ordinary course of the activities and affairs of the limited
31liability company may be decided by a majority of the members.
32d. An act outside the ordinary course of the activities
33of the company, including selling, leasing, exchanging, or
34otherwise disposing of all, or substantially all, of the
35company’s property, with or without the goodwill, may be
-54-1undertaken only with the consent of all members The affirmative
2vote or consent of all the members is required to do any of the
3following:
4(1) Sell, lease, exchange, or otherwise dispose of all, or
5substantially all, of the limited liability company’s property,
6with or without good will, outside the ordinary course of the
7company’s activities.
8(2) Undertake an act outside the ordinary course of the
9activities and affairs of the limited liability company.
10(3) Approve a merger, interest exchange, conversion, or
11domestication under subchapter X.
12(4) Amend the operating agreement.
13e. The operating agreement may be amended only with the
14consent of all members.
153. In a manager-managed limited liability company, all of
16the following rules apply:
17a. Except as otherwise expressly provided in this chapter,
18any matter relating to the activities and affairs of the
19limited liability company is decided exclusively by the
20managers manager, or, if there is more than one manager, by a
21majority of the managers.
22b. Each manager has equal rights in the management and
23conduct of the activities and affairs of the limited liability
24 company.
25c. A difference arising among managers as to a matter in the
26ordinary course of the activities of the company may be decided
27by a majority of the managers.
28d. c. The affirmative vote or consent of all members is
29required to do any of the following:
30(1) Sell, lease, exchange, or otherwise dispose of all, or
31substantially all, of the limited liability company’s property,
32with or without the goodwill, outside the ordinary course of
33the company’s activities.
34(2) Approve a merger, conversion, or domestication under
35article 10 Undertake any other act outside the ordinary course
-55-1of the limited liability company’s activities and affairs.
2(3) Undertake any other act outside the ordinary course of
3the company’s activities Approve a merger, interest exchange,
4conversion, or domestication under subchapter X.
5(4) Amend the operating agreement.
6e. d. A manager may be chosen at any time by the
7affirmative vote or consent of a majority of the members and
8remains a manager until a successor has been chosen, unless the
9manager at an earlier time resigns, is removed, or dies, or, in
10the case of a manager that is not an individual, terminates. A
11manager may be removed at any time by the affirmative vote or
12 consent of a majority of the members without notice or cause.
13f. e. A person need not be a member to be a manager, but
14the dissociation of a member that is also a manager removes the
15person as a manager. If a person that is both a manager and
16a member ceases to be a manager, that cessation does not by
17itself dissociate the person as a member.
18g. f. A person’s ceasing to be a manager does not discharge
19any debt, obligation, or other liability to the limited
20liability company or members which the person incurred while
21a manager.
224. An action requiring the vote or consent of members under
23this chapter may be taken without a meeting, and a member may
24appoint a proxy or other agent to vote, consent, or otherwise
25act for the member by signing an appointing record, personally
26or by the member’s agent.
275. The dissolution of a limited liability company does not
28affect the applicability of this section. However, a person
29that wrongfully causes dissolution of the company loses the
30right to participate in management as a member and a manager.
316. This chapter does not entitle a member to remuneration
32for services performed for a member-managed limited liability
33company, except for reasonable compensation for services
34rendered in winding up the activities of the company A limited
35liability company shall reimburse a member for an advance to
-56-1the company beyond the amount of capital the member agreed to
2contribute.
37. A payment or advance made by a member which gives rise
4to a limited liability company obligation under subsection 6
5or section 489.408, subsection 1, constitutes a loan to the
6company which accrues interest from the date of the payment or
7advance.
88. A member is not entitled to remuneration for services
9performed for a member-managed limited liability company,
10except for reasonable compensation for services rendered in
11winding up the activities of the company.
12 Sec. 42. Section 489.407A, Code 2023, is amended to read as
13follows:
14489.407A Real estate interest transferred by limited
15liability company or foreign limited liability company.
161. A transfer of an interest in real estate situated in
17this state held by a limited liability company or a registered
18 foreign limited liability company authorized to transact do
19 business in this state is subject to the provisions of this
20section.
212. a. In a member-managed limited liability company, a
22transfer of an interest in real estate held by the company may
23be undertaken by any of the following:
24(1) As provided in the operating agreement, or if the
25operating agreement does not so provide, only with the consent
26of all members.
27(2) As provided in a statement of authority filed by the
28limited liability company with the secretary of state and
29the recorder of the county where the real estate is situated
30pursuant to section 489.302.
31b. A requirement of paragraph “a” is applicable to every
32transfer of an interest in real estate situated in this state
33held by a member-managed limited liability company, whether or
34not the transfer is in the ordinary course of the company’s
35business.
-57- 13. a. In a manager-managed limited liability company, a
2transfer of an interest in real estate held by the company may
3be undertaken by any of the following:
4(1) As provided in the operating agreement, or if the
5operating agreement does not so provide, only with the consent
6of a majority of all managers.
7(2) As provided in a statement of authority filed by the
8limited liability company with the secretary of state and
9the recorder of the county where the real estate is situated
10pursuant to section 489.302.
11b. A requirement in paragraph “a” is applicable to every
12transfer of an interest in real estate situated in this state
13held by a manager-managed limited liability company, whether
14or not the transfer is in the ordinary course of the company’s
15business.
16 Sec. 43. Section 489.408, Code 2023, is amended to read as
17follows:
18489.408 Indemnification Reimbursement, indemnification,
19advancement, and insurance.
201. A limited liability company shall reimburse a member of
21a member-managed limited liability company or the manager of
22a manager-managed limited liability company for any payment
23made and indemnify for any debt, obligation, or other liability
24incurred by a member of a member-managed company or the manager
25of a manager-managed company in the course of the member’s
26or manager’s activities on behalf of the company, if, in
27making the payment or incurring the debt, obligation, or other
28liability, the member or manager complied with the duties
29stated in sections 489.405 and 489.409 by the member or manager
30in the course of the member’s or manager’s activities on behalf
31of the company, if the member or manager complied with sections
32489.405, 489.407, and 489.409 in making the payment.
332. A limited liability company may purchase and maintain
34insurance on behalf of a member or manager of the company
35against liability asserted against or incurred by the member or
-58-1manager in that capacity or arising from that status even if,
2under section 489.110, subsection 7, the operating agreement
3could not eliminate or limit the person’s liability to the
4company for the conduct giving rise to the liability A limited
5liability company shall indemnify and hold harmless a person
6with respect to any claim or demand against the person and any
7debt, obligation, or other liability incurred by the person by
8reason of the person’s former or present capacity as a member
9or manager, if the claim, demand, debt, obligation, or other
10liability does not arise from the person’s breach of section
11489.405, 489.407, or 489.409.
123. In the ordinary course of its activities and affairs,
13a limited liability company may advance reasonable expenses,
14including attorney’s fees and costs, incurred by a person
15in connection with a claim or demand against the person by
16reason of the person’s former or present capacity as a member
17or manager, if the person promises to repay the company if
18the person ultimately is determined not to be entitled to be
19indemnified under subsection 2.
204. A limited liability company may purchase and maintain
21insurance on behalf of a member or manager against liability
22asserted against or incurred by the member or manager in that
23capacity or arising from that status even if, under section
24489.110, subsection 3, paragraph “g”, the operating agreement
25could not eliminate or limit the person’s liability to the
26company for the conduct giving rise to the liability.
27 Sec. 44. Section 489.409, Code 2023, is amended to read as
28follows:
29489.409 Standards of conduct for members and managers.
301. A member of a member-managed limited liability company
31owes to the company and, subject to section 489.901, subsection
322, the other members the fiduciary duties of loyalty and care
33stated in subsections 2 and 3.
342. The fiduciary duty of loyalty of a member in a
35member-managed limited liability company includes all of the
-59-1following duties:
2a. To account to the limited liability company and to hold
3as trustee for it any property, profit, or benefit derived by
4the member regarding any of the following:
5(1) In the conduct or winding up of the limited liability
6 company’s activities and affairs.
7(2) From a use by the member of the limited liability
8 company’s property.
9(3) From the appropriation of a limited liability company
10opportunity.
11b. To refrain from dealing with the limited liability
12 company in the conduct or winding up of the company’s
13activities and affairs as or on behalf of a person having an
14interest adverse to the company.
15c. To refrain from competing with the limited liability
16 company in the conduct of the company’s activities and affairs
17 before the dissolution of the company.
183. Subject to the business judgment rule as stated in
19subsection 7, the duty of care of a member of a member-managed
20limited liability company in the conduct and winding up of the
21company’s activities is to act with the care that a person
22in a like position would reasonably exercise under similar
23circumstances and in a manner the member reasonably believes to
24be in the best interests of the company. In discharging this
25duty, a member may rely in good faith upon opinions, reports,
26statements, or other information provided by another person
27that the member reasonably believes is a competent and reliable
28source for the information The duty of care of a member of
29a member-managed limited liability company in the conduct
30or winding up of the company’s activities and affairs is to
31refrain from engaging in grossly negligent or reckless conduct,
32willful or intentional misconduct, or knowing violation of law.
334. A member in a member-managed limited liability company
34or a manager-managed limited liability company shall discharge
35the duties under this chapter or under the operating agreement
-60-1and exercise any rights consistently with the contractual
2obligation of good faith and fair dealing A member shall
3discharge the duties and obligations under this chapter
4or under the operating agreement and exercise any rights
5consistently with the contractual obligation of good faith and
6fair dealing.
75. It is a defense to a claim under subsection 2, paragraph
8“b”, and any comparable claim in equity or at common law that
9the transaction was fair to the limited liability company A
10member does not violate a duty or obligation under this chapter
11or under the operating agreement solely because the member’s
12conduct furthers the member’s own interest.
136. All of the members of a member-managed limited liability
14company or a manager-managed limited liability company may
15authorize or ratify, after full disclosure of all material
16facts, a specific act or transaction that otherwise would
17violate the duty of loyalty.
187. a. A member satisfies the duty of care in subsection 3
19 if all of the following apply: It is a defense to a claim under
20subsection 2, paragraph “b”, and any comparable claim in equity
21or at common law that the transaction was fair to the limited
22liability company.
23(1) The member is not interested in the subject matter of
24the business judgment.
25(2) The member is informed with respect to the subject
26of the business judgment to the extent the member reasonably
27believes to be appropriate in the circumstances.
28(3) The member has a rational basis for believing that
29the business judgment is in the best interests of the limited
30liability company.
31b. A person challenging the business judgment of a member
32has the burden of proving a breach of the duty of care, and
33in a damage action, the burden of proving that the breach was
34the legal cause of damage suffered by the limited liability
35company.
-61- 18. In a manager-managed limited liability company, all of
2the following rules apply: If, as permitted by subsection 6
3or subsection 9, paragraph “f”, or the operating agreement, a
4member enters into a transaction with the limited liability
5company which otherwise would be prohibited by subsection 2,
6paragraph “b”, the member’s rights and obligations arising from
7the transaction are the same as those of a person that is not a
8member.
9a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
10managers and not the members.
11b. The duty stated under subsection 2, paragraph “c”,
12continues until winding up is completed.
13c. Subsection 4 applies to the members and managers.
14d. Subsection 6 applies only to the members.
15e. A member does not have any fiduciary duty to the company
16or to any other member solely by reason of being a member.
179. In a manager-managed limited liability company, all of
18the following rules apply:
19a. Subsections 1, 2, 3, and 7 apply to the manager or
20managers and not the members.
21b. The duty stated under subsection 2, paragraph “c”,
22continues until winding up is completed.
23c. Subsection 4 applies to managers and members.
24d. Subsection 5 applies only to members.
25e. The power to ratify under subsection 6 may be exercised
26only by the members.
27f. Subject to subsection 4, a member does not have any duty
28to the limited liability company or to any other member solely
29by reason of being a member.
30 Sec. 45. Section 489.410, Code 2023, is amended to read as
31follows:
32489.410 Right of members, managers, and dissociated members
33to information Rights to information of member, manager, and
34person dissociated as member.
351. In a member-managed limited liability company, all of the
-62-1following rules apply:
2a. On reasonable notice, a member may inspect and copy
3during regular business hours, at a reasonable location
4specified by the limited liability company, any record
5maintained by the company regarding the company’s activities,
6affairs, financial condition, and other circumstances, to the
7extent the information is material to the member’s rights and
8duties under the operating agreement or this chapter.
9b. The limited liability company shall furnish to each
10member all of the following:
11(1) Without demand, any information concerning the limited
12liability company’s activities, affairs, financial condition,
13and other circumstances which the company knows and is material
14to the proper exercise of the member’s rights and duties under
15the operating agreement or this chapter, except to the extent
16the company can establish that it reasonably believes the
17member already knows the information.
18(2) On demand, any other information concerning the limited
19liability company’s activities, affairs, financial condition,
20and other circumstances, except to the extent the demand or for
21the information demanded is unreasonable or otherwise improper
22under the circumstances.
23c. The duty to furnish information under paragraph “b” also
24applies to each member to the extent the member knows any of
25the information described in paragraph “b”.
262. In a manager-managed limited liability company, all of
27the following rules apply:
28a. The informational rights stated in subsection 1 and
29the duty stated in subsection 1, paragraph “c”, apply to the
30managers and not the members.
31b. During regular business hours and at a reasonable
32location specified by the limited liability company, a
33member may obtain from the company and inspect and copy full
34 information regarding the activities, affairs, financial
35condition, and other circumstances of the company as is just
-63-1and reasonable if all of the following apply:
2(1) The member seeks the information for a purpose material
3 reasonably related to the member’s interest as a member.
4(2) The member makes a demand in a record received by
5the limited liability company, describing with reasonable
6particularity the information sought and the purpose for
7seeking the information.
8(3) The information sought is directly connected to the
9member’s purpose.
10c. Within Not later than ten days after receiving a demand
11pursuant to paragraph “b”, subparagraph (2), the limited
12liability company shall in a record inform in a record the
13member that made the demand that includes all of the following:
14(1) Of the What information that the limited liability
15 company will provide in response to the demand and when and
16where the company will provide the information.
17(2) If the company declines to provide any demanded
18information, the company’s reasons for declining The limited
19liability company’s reasons for declining, if the company
20declines to provide any demanded information.
21d. Whenever this chapter or an operating agreement provides
22for a member to vote on or give or withhold consent to a matter,
23before the vote is cast or consent is given or withheld, the
24limited liability company shall, without demand, provide the
25member with all information that is known to the company and is
26material to the member’s decision.
273. On ten days’ demand made in a record received by a
28limited liability company, a dissociated member may have access
29to information to which the person was entitled while a member
30if the information pertains to the period during which the
31person was a member, the person seeks the information in good
32faith, and the person satisfies the requirements imposed on
33a member by subsection 2, paragraph “b”. The company shall
34respond to a demand made pursuant to this subsection in the
35manner provided in subsection 2, paragraph “c” Subject to
-64-1subsection 8, on ten days’ demand made in a record received by
2a limited liability company, a person dissociated as a member
3may have access to the information to which the person was
4entitled while a member if all of the following apply:
5a. The information pertains to the period during which the
6person was a member.
7b. The person seeks the information in good faith.
8c. The person satisfies the requirements imposed on a member
9by subsection 2, paragraph “b”.
104. A limited liability company may charge a person that
11makes a demand under this section the reasonable costs of
12copying, limited to the costs of labor and material shall
13respond to a demand made pursuant to subsection 3 in the manner
14provided in subsection 2, paragraph “c”.
155. A member or dissociated member may exercise rights
16under this section through an agent or, in the case of an
17individual under legal disability, a legal representative. Any
18restriction or condition imposed by the operating agreement
19or under subsection 7 applies both to the agent or legal
20representative and the member or dissociated member A limited
21liability company may charge a person that makes a demand under
22this section the reasonable costs of copying, limited to the
23costs of labor and material.
246. The rights under this section do not extend to a person
25as transferee A member or person dissociated as a member may
26exercise the rights under this section through an agent or,
27in the case of an individual under legal disability, a legal
28representative. Any restriction or condition imposed by the
29operating agreement or under subsection 8 applies both to the
30agent or legal representative and to the member or person
31dissociated as a member.
327. In addition to any restriction or condition stated
33in its operating agreement, a limited liability company, as
34a matter within the ordinary course of its activities, may
35impose reasonable restrictions and conditions on access to
-65-1and use of information to be furnished under this section,
2including designating information confidential and imposing
3nondisclosure and safeguarding obligations on the recipient.
4In a dispute concerning the reasonableness of a restriction
5under this subsection, the company has the burden of proving
6reasonableness Subject to section 489.504, the rights under
7this section do not extend to a person as transferee.
88. In addition to any restriction or condition stated in its
9operating agreement, a limited liability company, as a matter
10within the ordinary course of its activities and affairs, may
11impose reasonable restrictions and conditions on access to
12and use of information to be furnished under this section,
13including designating information confidential and imposing
14nondisclosure and safeguarding obligations on the recipient.
15In a dispute concerning the reasonableness of a restriction
16under this subsection, the company has the burden of proving
17reasonableness.
18 Sec. 46. Section 489.502, Code 2023, is amended to read as
19follows:
20489.502 Transfer of transferable interest.
211. For Subject to section 489.503, subsection 6, for a
22transfer, in whole or in part, all of the following applies to
23a transferable interest:
24a. It is permissible.
25b. It does not by itself cause a member’s person’s
26 dissociation as a member or a dissolution and winding up of the
27limited liability company’s activities and affairs.
28c. Subject to section 489.504, it does not entitle the
29transferee to do any of the following:
30(1) Participate in the management or conduct of the limited
31liability company’s activities and affairs.
32(2) Except as otherwise provided in subsection 3, have
33access to records or other information concerning the limited
34liability company’s activities and affairs.
352. A transferee has the right to receive, in accordance
-66-1with the transfer, distributions to which the transferor would
2otherwise be entitled.
33. In a dissolution and winding up of a limited liability
4company, a transferee is entitled to an account of the
5company’s transactions only from the date of dissolution.
64. A transferable interest may be evidenced by a certificate
7of the interest issued by the a limited liability company in a
8record, and, subject to this section, the interest represented
9by the certificate may be transferred by a transfer of the
10certificate.
115. A limited liability company need not give effect to a
12transferee’s rights under this section until the company knows
13or has notice of the transfer.
146. A transfer of a transferable interest in violation of a
15restriction on transfer contained in the operating agreement
16or another agreement to which the transferor is a party is
17ineffective as to a person having notice of the restriction at
18the time of transfer if the intended transferee has knowledge
19or notice of the restriction at the time of transfer.
207. Except as otherwise provided in section 489.602,
21subsection 4 5, paragraph “b”, when if a member transfers a
22transferable interest, the transferor retains the rights of a
23member other than the transferable interest in distributions
24 transferred and retains all duties and obligations of a member.
258. When If a member transfers a transferable interest to a
26person that becomes a member with respect to the transferred
27interest, the transferee is liable for the member’s obligations
28under section sections 489.403 and section 489.406, subsection
293, 489.406 known to the transferee when the transferee becomes
30a member.
31 Sec. 47. Section 489.503, Code 2023, is amended to read as
32follows:
33489.503 Charging order.
341. On application by a judgment creditor of a member
35or transferee, a court may enter a charging order against
-67-1the transferable interest of the judgment debtor for the
2unsatisfied amount of the judgment. A Except as otherwise
3provided in subsection 6, a charging order constitutes a lien
4on a judgment debtor’s transferable interest and requires the
5limited liability company to pay over to the person to which
6the charging order was issued any distribution that would
7 otherwise would be paid to the judgment debtor.
82. To the extent necessary to effectuate the collection
9of distributions pursuant to a charging order in effect under
10subsection 1, the court may do all of the following:
11a. Appoint a receiver of the distributions subject to
12the charging order, with the power to make all inquiries the
13judgment debtor might have made.
14b. Make all other orders necessary to give effect to the
15charging order.
163. Upon a showing that distributions under a charging
17order will not pay the judgment debt within a reasonable
18time, the court may foreclose the lien and order the sale of
19the transferable interest. The Except as otherwise provided
20in subsection 6, the purchaser at the foreclosure sale only
21 obtains only the transferable interest, does not thereby become
22a member, and is subject to section 489.502.
234. At any time before foreclosure under subsection 3, the
24member or transferee whose transferable interest is subject to
25a charging order under subsection 1 may extinguish the charging
26order by satisfying the judgment and filing a certified copy of
27the satisfaction with the court that issued the charging order.
285. At any time before foreclosure under subsection 3,
29a limited liability company or one or more members whose
30transferable interests are not subject to the charging order
31may pay to the judgment creditor the full amount due under the
32judgment and thereby succeed to the rights of the judgment
33creditor, including the charging order.
346. This chapter does not deprive any member or transferee of
35the benefit of any exemption laws applicable to the member’s
-68-1or transferee’s transferable interest If a court orders
2foreclosure of a charging order lien against the sole member of
3a limited liability company all of the following apply:
4a. The court shall confirm the sale.
5b. The purchaser at the sale obtains the member’s entire
6interest, not only the member’s transferable interest.
7c. The purchaser thereby becomes a member.
8d. The person whose interest was subject to the foreclosed
9charging order is dissociated as a member.
107. This section provides the exclusive remedy by which
11a person seeking to enforce a judgment against a member or
12transferee may, in the capacity of judgment creditor, satisfy
13the judgment from the judgment debtor’s transferable interest
14 This chapter does not deprive any member or transferee of the
15benefit of any exemption law applicable to the transferable
16interest of the member or transferee.
178. This section provides the exclusive remedy by which a
18person seeking in the capacity of judgment creditor to enforce
19a judgment against a member or transferee may satisfy the
20judgment from the judgment debtor’s transferable interest.
21 Sec. 48. Section 489.504, Code 2023, is amended to read as
22follows:
23489.504 Power of personal representative of deceased member.
24If a member dies, the deceased member’s personal legal
25 representative or other legal representative may exercise all
26of the following:
271. Therights of a transferee provided in section 489.502,
28subsection 3, and, for.
292. Forthe purposes of settling the estate, the rights of a
30current the deceased member had under section 489.410.
31 Sec. 49. Section 489.601, Code 2023, is amended to read as
32follows:
33489.601 Member’s power Power to dissociate as a member —
34wrongful dissociation.
351. A person has the power to dissociate as a member at any
-69-1time, rightfully or wrongfully, by withdrawing as a member by
2express will under section 489.602, subsection 1.
32. A person’s dissociation from a limited liability company
4 as a member is wrongful only if any of the following applies to
5the dissociation:
6a. It is in breach of an express provision of the operating
7agreement.
8b. It occurs before the termination completion of the
9winding up of the limited liability company and any of the
10following applies:
11(1) The person withdraws as a member by express will.
12(2) The person is expelled as a member by judicial order
13under section 489.602, subsection 5 6.
14(3) The person is dissociated under section 489.602,
15subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
16 8.
17(4) In the case of a person that is not a trust other than
18a business trust, an estate, or an individual, the person
19is expelled or otherwise dissociated as a member because it
20willfully dissolved or terminated.
213. A person that wrongfully dissociates as a member is
22liable to the limited liability company and, subject to
23section 489.901, to the other members for damages caused by the
24dissociation. The liability is in addition to any other debt,
25obligation, or other liability of the member to the company or
26the other members.
27 Sec. 50. Section 489.602, Code 2023, is amended to read as
28follows:
29489.602 Events causing dissociation.
30A person is dissociated as a member from a limited liability
31company when any of the following applies:
321. The limited liability company knows or has notice of
33the person’s express will to withdraw as a member, but, if the
34person specified a withdrawal date later than the date the
35limited liability company knew or had notice, on that later
-70-1date.
22. An event stated in the operating agreement as causing the
3person’s dissociation occurs.
43. The person is expelled as a member pursuant to the
5operating agreement The person’s entire interest is transferred
6in a foreclosure sale under section 489.503, subsection 6.
74. The person is expelled as a member by the unanimous
8consent of the other members if any of the following applies:
9 pursuant to the operating agreement.
10a. It is unlawful to carry on the company’s activities with
11the person as a member.
12b. There has been a transfer of all of the person’s
13transferable interest in the company, other than any of the
14following:
15(1) A transfer for security purposes.
16(2) A charging order in effect under section 489.503 which
17has not been foreclosed.
18c. The person is a corporation and, within ninety days
19after the company notifies the person that it will be expelled
20as a member because the person has filed a certificate of
21dissolution or the equivalent, its charter has been revoked,
22or its right to conduct business has been suspended by
23the jurisdiction of its incorporation, the certificate of
24dissolution has not been revoked or its charter or right to
25conduct business has not been reinstated.
26d. The person is a limited liability company or partnership
27that has been dissolved and whose business is being wound up.
285. On application by the company, the person is expelled
29as a member by judicial order because the person has done any
30of the following The person is expelled as a member by the
31affirmative vote or consent of all the other members if any of
32the following apply:
33a. Has engaged, or is engaging, in wrongful conduct that
34has adversely and materially affected, or will adversely and
35materially affect, the company’s activities It is unlawful to
-71-1carry on the limited liability company’s activities and affairs
2with the person as a member.
3b. Has willfully or persistently committed, or is willfully
4and persistently committing, a material breach of the
5operating agreement or the person’s duties or obligations under
6section 489.409 There has been a transfer of all the person’s
7transferable interest in the limited liability company, other
8than any of the following:
9(1) A transfer for security purposes.
10(2) A charging order in effect under section 489.503 which
11has not been foreclosed.
12c. Has engaged in, or is engaging in, conduct relating
13to the company’s activities which makes it not reasonably
14practicable to carry on the activities with the person as a
15member The person is an entity and all of the following apply:
16(1) The limited liability company notifies the person that
17it will be expelled as a member because the person has filed
18a statement of dissolution or the equivalent, the person has
19been administratively dissolved, the person’s charter or the
20equivalent has been revoked, or the person’s right to conduct
21business has been suspended by the person’s jurisdiction of
22formation.
23(2) Not later than ninety days after the notification,
24the statement of dissolution or the equivalent has not been
25withdrawn, rescinded, or revoked, the person has not been
26reinstated, or the person’s charter or the equivalent or right
27to conduct business has not been reinstated.
28d. The person is an unincorporated entity that has been
29dissolved and whose activities and affairs are being wound up.
306. In the case of a person who is an individual, any of
31the following applies On application by the limited liability
32company or a member in a direct action under section 489.901,
33the person is expelled as a member by judicial order because
34any of the following apply:
35a. The person dies has engaged or is engaging in wrongful
-72-1conduct that has affected adversely and materially, or will
2affect adversely and materially, the company’s activities and
3affairs.
4b. In a member-managed limited liability company, any of
5the following applies: The person has committed willfully or
6persistently, or is committing willfully or persistently,
7a material breach of the operating agreement or a duty or
8obligation under section 489.409.
9(1) A guardian or general conservator for the person is
10appointed.
11(2) There is a judicial order that the person has otherwise
12become incapable of performing the person’s duties as a member
13under this chapter or the operating agreement.
14c. The person has engaged or is engaging in conduct relating
15to the limited liability company’s activities and affairs which
16makes it not reasonably practicable to carry on the activities
17and affairs with the person as a member.
187. In a member-managed limited liability company, the
19person does any of the following In the case of an individual
20any of the following apply:
21a. Becomes a debtor in bankruptcy The individual dies.
22b. Executes an assignment for the benefit of creditors In a
23member-managed limited liability company any of the following
24apply:
25(1) A guardian or general conservator for the individual is
26appointed.
27(2) A court orders that the individual has otherwise become
28incapable of performing the individual’s duties as a member
29under this chapter or the operating agreement.
30c. Seeks, consents to, or acquiesces in the appointment of
31a trustee, receiver, or liquidator of the person or of all or
32substantially all of the person’s property.
338. In the case of a person that is a trust or is acting as
34a member by virtue of being a trustee of a trust, the trust’s
35entire transferable interest in the company is distributed In a
-73-1member-managed limited liability company, any of the following
2apply:
3a. The person becomes a debtor in bankruptcy.
4b. The person signs an assignment for the benefit of
5creditors.
6c. The person seeks, consents to, or acquiesces in the
7appointment of a trustee, receiver, or liquidator of the person
8or of all or substantially all the person’s property.
99. In the case of a person that is an estate or is acting
10as a member by virtue of being a personal representative of
11an estate, the estate’s entire transferable interest in the
12company is distributed In the case of a person that is a
13testamentary or inter vivos trust or is acting as a member by
14virtue of being a trustee of such a trust, the trust’s entire
15transferable interest in the limited liability company is
16distributed.
1710. In the case of a member that is not an individual,
18partnership, limited liability company, corporation, trust, or
19estate, the termination of the member In the case of a person
20that is an estate or is acting as a member by virtue of being
21a personal representative of an estate, the estate’s entire
22transferable interest in the limited liability company is
23distributed.
2411. The company participates in a merger under article 10,
25if any of the following applies: In the case of a person that
26is not an individual, the existence of the person terminates.
27a. The company is not the surviving entity.
28b. Otherwise as a result of the merger, the person ceases
29to be a member.
3012. The company participates in a conversion under article
3110 The limited liability company participates in a merger under
32subchapter X and any of the following apply:
33a. The limited liability company is not the surviving
34entity.
35b. Otherwise as a result of the merger, the person ceases
-74-1to be a member.
213. The company participates in a domestication under
3article 10, if, as a result of the domestication, the
4person ceases to be a member The limited liability company
5participates in an interest exchange under subchapter X and,
6as a result of the interest exchange, the person ceases to be a
7member.
814. The limited liability company terminates participates
9in a conversion under subchapter X.
1015. The limited liability company participates in a
11domestication under subchapter X and, as a result of the
12domestication, the person ceases to be a member.
1316. The limited liability company dissolves and completes
14winding up.
15 Sec. 51. Section 489.603, Code 2023, is amended to read as
16follows:
17489.603 Effect of person’s dissociation as member.
181. When If a person is dissociated as a member, of a limited
19liability company, all of the following apply:
20a. The person’s right to participate as a member in the
21management and conduct of the limited liability company’s
22activities and affairs terminates.
23b. If the company is member-managed, the person’s fiduciary
24duties as a member end with regard to matters arising and
25events occurring after the person’s dissociation The person’s
26duties and obligations under section 489.409 as a member end
27with regard to matters arising and events occurring after the
28person’s dissociation.
29c. Subject to section 489.504 and article 10 subchapter X,
30any transferable interest owned by the person in the person’s
31capacity as a member immediately before dissociation in the
32person’s capacity as a member is owned by the person solely as
33a transferee.
342. A person’s dissociation as a member of a limited
35liability company does not of itself discharge the person from
-75-1any debt, obligation, or other liability to the company or the
2other members which the person incurred while a member.
3 Sec. 52. Section 489.604, Code 2023, is amended to read as
4follows:
5489.604 Member’s power to dissociate under certain
6circumstances.
71. If the certificate of organization or an operating
8agreement does not specify the time or the events upon the
9happening of which a member may dissociate from a limited
10liability company, a member may dissociate from the limited
11liability company in the event any amendment to the certificate
12of organization or operating agreement that is adopted over
13the member’s written dissent adversely affects the rights or
14preferences of the dissenting member’s transferable interest
15in any of the ways described in paragraphs “a” through “f”.
16A dissociation in the event of such dissent and adverse
17effect is deemed to have occurred as of the effective date
18of the amendment, if the member gives notice to the limited
19liability company not more than sixty days after the date of
20the amendment. In valuing the member’s distribution pursuant
21to this subsection, any depreciation in anticipation of the
22amendment shall be excluded. An amendment that does any of the
23following is subject to this section:
24a. Alters or abolishes a member’s right to receive a
25distribution.
26b. Alters or abolishes a member’s right to voluntarily
27dissociate.
28c. Alters or abolishes a member’s right to vote on any
29matter, except as the rights may be altered or abolished
30through the acceptance of contributions or the making of
31contribution agreements.
32d. Alters or abolishes a member’s preemptive right to make
33contributions.
34e. Establishes or changes the conditions for or consequences
35of expulsion.
-76- 1f. Waives the application of this section to the limited
2liability company.
32. A member dissociating from a limited liability company
4 under this section is not liable for damages for the breach of
5any agreement not to withdraw.
63. This section applies to a limited liability company
7whose original articles of organization or certificate of
8organization is filed with the secretary of state on or after
9July 1, 1997.
104. This section applies to a limited liability company whose
11original articles of organization are filed with the secretary
12of state and effective on or prior to June 30, 1997, if such
13company’s operating agreement provides that it is subject to
14this section.
155. The operating agreement of a limited liability company
16may waive the applicability of this section to the company and
17its members.
18 Sec. 53. Section 489.701, Code 2023, is amended to read as
19follows:
20489.701 Events causing dissolution.
211. A limited liability company is dissolved, and its
22activities and affairs must be wound up, upon the occurrence
23of any of the following:
24a. An event or circumstance that the operating agreement
25states causes dissolution.
26b. The affirmative vote or consent of all the members.
27c. Once the The limited liability company has at least one
28member, and then the passage of ninety consecutive days during
29which the company has no members. unless before the end of the
30period all of the following apply:
31(1) Consent to admit at least one specified person as a
32member is given by transferees owning the rights to receive
33a majority of distributions as transferees at the time the
34consent is to be effective.
35(2) At least one person becomes a member in accordance with
-77-1the consent.
2d. On application by a member, the entry by a the district
3court of an order dissolving the limited liability company on
4the grounds that any of the following applies:
5(1) The conduct of all or substantially all of the limited
6liability company’s activities and affairs is unlawful.
7(2) It is not reasonably practicable to carry on the limited
8liability company’s activities and affairs in conformity with
9the certificate of organization and the operating agreement.
10(3) The managers or those members in control of the limited
11liability company conduct themselves according to any of the
12following:
13(a) Have acted, are acting, or will act in a manner that is
14illegal or fraudulent.
15(b) Have acted or are acting in a manner that is oppressive
16and was, is, or will be directly harmful to the applicant.
17e. On application by a member or transferee, the entry by
18a district court of an order dissolving the company on the
19grounds that the managers or those members in control of the
20company have done any of the following: The signing and filing
21of a statement of administrative dissolution by the secretary
22of state under section 489.705.
23(1) Have acted, are acting, or will act in a manner that is
24illegal or fraudulent.
25(2) Have acted or are acting in a manner that is oppressive
26and was, is, or will be directly harmful to the applicant.
272. In a proceeding brought under subsection 1, paragraph
28“e”, “d”, subparagraph (3), the district court may order a
29remedy other than dissolution.
30 Sec. 54. Section 489.701A, Code 2023, is amended to read as
31follows:
32489.701A Rescinding dissolution.
331. A limited liability company may rescind its dissolution,
34unless a statement of termination applicable to the company has
35become effective, a the district court has entered an order
-78-1under section 489.701, subsection 1, paragraph “d”, dissolving
2the company, or the secretary of state has dissolved the
3company under section 489.705.
42. Rescinding dissolution under this section requires all
5of the following:
6a. The affirmative vote or consent of each member.
7b. If the limited liability company has delivered to the
8secretary of state for filing a statement of dissolution and
9any of the following applies apply:
10(1) If the statement has not become effective, delivery to
11the secretary of state for filing of a statement of withdrawal
12under section 489.205 489.208A applicable to the statement of
13dissolution.
14(2) If the statement of dissolution has become effective,
15delivery to the secretary of state for filing of a statement of
16rescission stating the name of the limited liability company
17and that dissolution has been rescinded under this section.
183. If a limited liability company rescinds its dissolution
19all of the following apply:
20a. The limited liability company shall may resume carrying
21on its activities and affairs as if the dissolution had never
22occurred.
23b. Subject to paragraph “c”, any liability incurred by the
24limited liability company after the dissolution and before
25the rescission has become effective shall be determined as if
26dissolution had never occurred.
27c. The rights of a third party arising out of conduct in
28reliance on the dissolution before the third party knew or had
29notice of the rescission must not be adversely affected.
30 Sec. 55. Section 489.702, Code 2023, is amended to read as
31follows:
32489.702 Winding up.
331. A dissolved limited liability company shall wind up its
34activities and affairs, and except as otherwise provided in
35section 489.701A, the company continues after dissolution only
-79-1for the purpose of winding up.
22. In winding up its activities and affairs, all of the
3following apply to a limited liability company:
4a. It shall discharge the limited liability company’s debts,
5obligations, or and other liabilities, settle and close the
6company’s activities and affairs, and marshal and distribute
7the assets of the company.
8b. It may do all of the following:
9(1) Deliver to the secretary of state for filing a statement
10of dissolution stating the name of the limited liability
11 company and that the company is dissolved.
12(2) Preserve the limited liability company activities,
13affairs, and property as a going concern for a reasonable time.
14(3) Prosecute and defend actions and proceedings, whether
15civil, criminal, or administrative.
16(4) Transfer the limited liability company’s property.
17(5) Settle disputes by mediation or arbitration.
18(6) Deliver to the secretary of state for filing a statement
19of termination stating the name of the limited liability
20 company and that the company is terminated.
21(7) Perform other acts necessary or appropriate to the
22winding up.
233. If a dissolved limited liability company has no members,
24the legal representative of the last person to have been a
25member may wind up the activities and affairs of the company.
26If the person does so, the person has the powers of a sole
27manager under section 489.407, subsection 3, and is deemed to
28be a manager for the purposes of section 489.304, subsection
291, paragraph “b”.
304. If the legal representative under subsection 3 declines
31or fails to wind up the limited liability company’s activities
32and affairs, a person may be appointed to do so by the consent
33of transferees owning a majority of the rights to receive
34distributions as transferees at the time the consent is to be
35effective. All of the following apply to a person appointed
-80-1under this subsection:
2a. The person has the powers of a sole manager under section
3489.407, subsection 3, and is deemed to be a manager for the
4purposes of section 489.304, subsection 1, paragraph “b”.
5b. The person shall deliver promptly deliver to the
6secretary of state for filing an amendment to the limited
7liability company’s certificate of organization to do stating
8 all of the following:
9(1) State that That the limited liability company has no
10members.
11(2) State that the person has been appointed pursuant to
12this subsection to wind up the company The name and street and
13mailing addresses of the person.
14(3) Provide the street and mailing addresses of the person
15 That the person has been appointed pursuant to this subsection
16to wind up the limited liability company’s activities and
17affairs.
185. The district court may order judicial supervision of the
19winding up of a dissolved limited liability company, including
20the appointment of a person to wind up the company’s activities
21and affairs pursuant to any of the following:
22a. On application of a member, if the applicant establishes
23good cause.
24b. On the application of a transferee, if all of the
25following apply:
26(1) The limited liability company does not have any members.
27(2) The legal representative of the last person to have been
28a member declines or fails to wind up the limited liability
29 company’s activities and affairs.
30(3) Within a reasonable time following the dissolution a
31person has not been appointed pursuant to subsection 4 3.
32c. In connection with a proceeding under section 489.701,
33subsection 1, paragraph “d” or “e”.
34 Sec. 56. Section 489.703, Code 2023, is amended to read as
35follows:
-81- 1489.703 Known claims against dissolved limited liability
2company.
31. Except as otherwise provided in subsection 4, a dissolved
4limited liability company may give notice of a known claim
5under subsection 2, which has the effect as provided in
6subsection 3.
72. A dissolved limited liability company may in a record
8notify its known claimants of the dissolution. The notice must
9do all of the following:
10a. Specify the information required to be included in a
11claim.
12b. Provide State that a claim must be in writing and provide
13 a mailing address to which the claim is to be sent.
14c. State the deadline for receipt of the a claim, which may
15not be less than one hundred twenty days after the date the
16notice is received by the claimant.
17d. State that the claim will be barred if not received by
18the deadline.
193. A claim against a dissolved limited liability company is
20barred if the requirements of subsection 2 are met and any of
21the following applies:
22a. The claim is not received by the specified deadline.
23b. If the claim is timely received but rejected by the
24limited liability company, all of the following must apply:
25(1) The limited liability company causes the claimant to
26receive a notice in a record stating that the claim is rejected
27and will be barred unless the claimant commences an action
28against the company to enforce the claim within not later than
29 ninety days after the claimant receives the notice.
30(2) The claimant does not commence the required action
31within not later than the ninety days after the claimant
32receives the notice.
334. This section does not apply to a claim based on an
34event occurring after the effective date of dissolution or a
35liability that on that date is contingent.
-82-1 Sec. 57. Section 489.704, Code 2023, is amended to read as
2follows:
3489.704 Other claims against dissolved limited liability
4company.
51. A dissolved limited liability company may publish notice
6of its dissolution and request persons having claims against
7the company to present them in accordance with the notice.
82. The notice authorized by under subsection 1 must do all
9of the following meet all of the following requirements:
10a. Be published at least once in a newspaper of general
11circulation in the county in this state in which the dissolved
12limited liability company’s principal office is located or, if
13it has none in this state, in the county in which the company’s
14registered office is or was last located Comply with any of the
15following:
16(1) Publication of the notice one time in a newspaper of
17general circulation in the county in this state in which the
18dissolved limited liability company’s principal office is
19located or, if the principal office is not located in this
20state, in the county in which the office of the company’s
21registered agent is or was last located.
22(2) Publication by posting the notice conspicuously for at
23least thirty days on the dissolved limited liability company’s
24internet site.
25b. Describe the information required to be contained in a
26claim, state that the claim must be in writing, and provide a
27mailing address to which the claim is to be sent.
28c. State that a claim against the limited liability company
29is barred unless an action to enforce the claim is commenced
30within five not later than three years after publication of the
31notice.
323. If a dissolved limited liability company publishes a
33notice in accordance with subsection 2, unless the claimant
34commences an action to enforce the claim against the company
35within five years after the publication date of the notice, the
-83-1claim of each of the following claimants is barred of each of
2the following claimants is barred unless the claimant commences
3an action to enforce the claim against the company not later
4than three years after the publication date of the notice:
5a. A claimant that did not receive notice in a record under
6section 489.703.
7b. A claimant whose claim was timely sent to the limited
8liability company but not acted on.
9c. A claimant whose claim is contingent at, or based on an
10event occurring after, the effective date of dissolution.
114. A claim not barred under this section or section 489.703
12 may be enforced as follows:
13a. Against a dissolved limited liability company, to the
14extent of its undistributed assets.
15b. If Except as otherwise provided in section 489.706A, if
16 assets of the limited liability company have been distributed
17after dissolution, against a member or transferee to the extent
18of that person’s proportionate share of the claim or of the
19company’s assets distributed to the member or transferee after
20dissolution, whichever is less, but a person’s total liability
21for all claims under this paragraph does not exceed the total
22amount of assets distributed to the person after dissolution.
23 Sec. 58. Section 489.705, Code 2023, is amended to read as
24follows:
25489.705 Administrative Grounds for administrative
26 dissolution.
271. The secretary of state may commence a proceeding under
28this section 489.709 to administratively dissolve a limited
29liability company administratively, if any of the following
30apply:
31a. 1. The limited liability company has not delivered a
32biennial report to the secretary of state in a form that meets
33the requirements of section 489.209 within sixty days after
34it is due, or has not paid within sixty days after the due
35date, any fee, tax, or penalty due to the secretary of state
-84-1under this chapter or law other than this chapter The limited
2liability company does not pay within sixty days after they are
3due any fees, taxes, interest, or penalties imposed by this
4chapter or other laws of this state.
5b. The limited liability company is without a registered
6office or registered agent in this state for sixty days or
7more.
8c. The limited liability company does not notify the
9secretary of state within sixty days that its registered agent
10or registered office has been changed, that its registered
11agent has resigned, or that its registered office has been
12discontinued.
13d. The limited liability company’s period of duration stated
14in its certificate of organization has expired.
152. If the secretary of state determines that a ground exists
16for administratively dissolving a limited liability company,
17the secretary of state shall file a record of the determination
18and serve the company with a copy of the filed record The
19limited liability company does not deliver its biennial report
20required by section 489.209 to the secretary of state within
21sixty days after it is due.
223. If within sixty days after service of the copy pursuant
23to subsection 2 a limited liability company does not correct
24each ground for dissolution or demonstrate to the reasonable
25satisfaction of the secretary of state that each ground
26determined by the secretary of state does not exist, the
27secretary of state shall dissolve the company administratively
28by preparing, signing, and filing a declaration of dissolution
29that states the grounds for dissolution. The secretary
30of state shall serve the company with a copy of the filed
31declaration The limited liability company is without a
32registered agent or the registered agent does not have a place
33of business in this state for sixty days or more.
344. A limited liability company that has been
35administratively dissolved continues in existence but, subject
-85-1to section 489.706, may carry on only activities necessary to
2wind up its activities and liquidate its assets under sections
3489.702 and 489.708 and to notify claimants under sections
4489.703 and 489.704 The secretary of state has not been
5notified within sixty days that the limited liability company’s
6registered agent or place of business of the registered agent
7has been changed, or that its registered agent has resigned, or
8that its registered office has been discontinued.
95. The administrative dissolution of a limited liability
10company does not terminate the authority of its registered
11agent for service of process The limited liability company’s
12period of duration stated in its certificate of organization
13expires.
14 Sec. 59. Section 489.706, Code 2023, is amended to read as
15follows:
16489.706 Reinstatement following administrative dissolution.
171. A limited liability company administratively dissolved
18under section 489.705 may apply to the secretary of state
19for reinstatement at any time after the effective date
20of dissolution. The application must be delivered to the
21secretary of state and meet all of the following requirements:
22a. Recite State the name of the limited liability company
23at its date of dissolution and the effective date of its
24administrative dissolution.
25b. State that the ground or grounds for dissolution as
26provided in section 489.705 either did not exist or have been
27eliminated.
28c. If the application is received more than five years after
29the effective date of the administrative dissolution, state a
30name that satisfies the requirements of section 489.108.
31d. State the federal tax identification number of the
32limited liability company.
332. a. The secretary of state shall refer the federal
34tax identification number contained in the application for
35reinstatement to the department of workforce development.
-86-1The department of workforce development shall report to the
2secretary of state the tax status of the limited liability
3company. If the department reports to the secretary of state
4that a filing delinquency or liability exists against the
5limited liability company, the secretary of state shall not
6cancel the declaration certificate of dissolution until the
7filing delinquency or liability is satisfied.
83. b. (1) If the secretary of state determines that the
9application contains the information required by subsection
101, and that a delinquency or liability reported pursuant to
11subsection 2 paragraph “a” has been satisfied, and that the
12information is correct, the secretary of state shall cancel
13the declaration certificate of dissolution and prepare a
14certificate of reinstatement that recites the secretary of
15state’s determination and the effective date of reinstatement,
16file the original of the certificate of reinstatement, and
17serve deliver a copy on to the limited liability company under
18section 489.116.
19(2) If the limited liability company’s name in subsection
201, paragraph “c”, is different than from the name in subsection
211, paragraph “a”, the certificate of reinstatement shall
22constitute an amendment to the limited liability company’s
23certificate of organization insofar as it pertains to its
24name. A limited liability company shall not relinquish the
25right to retain its name as provided in section 489.108, if the
26reinstatement is effective within five years of the effective
27date of the limited liability company’s dissolution.
284. 3. When the reinstatement is effective, it relates
29back to and takes effect as of the effective date of the
30administrative dissolution as if the administrative dissolution
31had never occurred.
32 Sec. 60. NEW SECTION. 489.706A Court proceedings.
331. A dissolved limited liability company that has published
34a notice under section 489.704 may file an application with
35the district court in the county where the company’s principal
-87-1office is located or, if the principal office is not located
2in this state, where the office of its registered agent is
3or was last located, for a determination of the amount and
4form of security to be provided for payment of claims that are
5reasonably expected to arise after the date of dissolution
6based on facts known to the company and any of the following
7apply:
8a. At the time of application any of the following apply:
9(1) The facts are contingent.
10(2) The facts have not been made known to the limited
11liability company.
12b. The facts are based on an event occurring after the date
13of dissolution.
142. Security is not required for any claim that is or is
15reasonably anticipated to be barred under section 489.704.
163. Not later than ten days after the filing of an
17application under subsection 1, the dissolved limited liability
18company shall give notice of the proceeding to each claimant
19holding a contingent claim known to the company.
204. In a proceeding under this section, the court may appoint
21a guardian ad litem to represent all claimants whose identities
22are unknown. The reasonable fees and expenses of the guardian,
23including all reasonable expert witness fees, must be paid by
24the dissolved limited liability company.
255. A dissolved limited liability company that provides
26security in the amount and form ordered by the court under
27subsection 1 satisfies the company’s obligations with respect
28to claims that are contingent, have not been made known to
29the company, or are based on an event occurring after the
30date of dissolution, and such claims may not be enforced
31against a member or transferee on account of assets received
32in liquidation.
33 Sec. 61. Section 489.707, Code 2023, is amended to read as
34follows:
35489.707 Appeal from rejection denial of reinstatement.
-88- 11. If the secretary of state rejects denies a limited
2liability company’s application for reinstatement following
3administrative dissolution, the secretary of state shall
4prepare, sign, and file a notice that explains the reason for
5rejection and serve the company under section 489.116 with a
6copy of the written notice that explains the reason or reasons
7for denial.
82. Within thirty days after service of a notice of rejection
9of reinstatement under subsection 1, a limited liability
10company may appeal from the rejection by petitioning the
11district court to set aside the dissolution. The petition
12must be served on the secretary of state and contain a copy
13of the secretary of state’s declaration of dissolution, the
14company’s application for reinstatement, and the secretary
15of state’s notice of rejection The limited liability company
16may appeal the denial of reinstatement to the district court
17of the county where the company’s principal office or, if none
18in this state, where its registered office is located within
19thirty days after service of the notice of denial is effected.
20The company appeals by petitioning the court to set aside
21the dissolution and attaching to the petition copies of the
22secretary of state’s certificate of dissolution, the company’s
23application for reinstatement, and the secretary of state’s
24notice of denial.
253. The court may summarily order the secretary of state to
26reinstate a the dissolved limited liability company or may take
27other action the court considers appropriate.
284. The court’s final decision may be appealed as in other
29civil proceedings.
30 Sec. 62. Section 489.708, Code 2023, is amended to read as
31follows:
32489.708 Distribution Disposition of assets in winding up
33limited liability company’s activities.
341. In winding up its activities and affairs, a limited
35liability company must shall apply its assets to discharge its
-89-1 the company’s obligations to creditors, including members that
2are creditors.
32. After a limited liability company complies with
4subsection 1, any surplus must be distributed in the following
5order, subject to any charging order in effect under section
6489.503:
7a. To each person owning a transferable interest that
8reflects contributions made by a member and not previously
9returned, an amount equal to the value of the unreturned
10contributions and not previously returned, an amount equal to
11the value of the unreturned contributions.
12b. In equal shares among members and dissociated members,
13except to the extent necessary to comply with any transfer
14effective under section 489.502 Among persons owning
15transferable interests in proportion to their respective rights
16to share in distributions immediately before the dissolution of
17the limited liability company.
183. If a limited liability company does not have sufficient
19surplus to comply with subsection 2, paragraph “a”, any surplus
20must be distributed among the owners of transferable interests
21in proportion to the value of their the respective unreturned
22contributions.
234. All distributions made under subsections 2 and 3 must be
24paid in money.
25 Sec. 63. NEW SECTION. 489.709 Procedure for and effect of
26administrative dissolution.
271. If the secretary of state determines that one or more
28grounds exist under section 489.705 for dissolving a limited
29liability company, the secretary of state shall serve the
30company with written notice of such determination under section
31489.116.
322. If the limited liability company does not correct
33each ground for dissolution or demonstrate to the reasonable
34satisfaction of the secretary of state that each ground
35determined by the secretary of state does not exist within
-90-1sixty days after service of the notice under section 489.116,
2the secretary of state shall administratively dissolve the
3company by signing a certificate of dissolution that recites
4the ground or grounds for dissolution and its effective
5date. The secretary of state shall file the original of the
6certificate and serve a copy on the company under section
7489.116.
83. A limited liability company administratively dissolved
9continues its existence but shall not carry on any business
10except that necessary to wind up and liquidate its business
11and affairs under section 489.702 and notify claimants under
12sections 489.703 and 489.704.
134. The administrative dissolution of a limited liability
14company does not terminate the authority of its registered
15agent.
16 Sec. 64. Section 489.801, Code 2023, is amended to read as
17follows:
18489.801 Governing law.
191. Subject to sections 489.14402 and 489.14404, the law
20of the state or other jurisdiction under which The law of
21the jurisdiction of formation of a foreign limited liability
22company is formed governs all of the following:
23a. The internal affairs of the foreign limited liability
24 company.
25b. The liability of a member as member and a manager as
26manager for the debts, obligations, or other liabilities a
27debt, obligation, or other liability of the foreign limited
28liability company.
29c. The liability of a series of the foreign limited
30liability company.
312. A foreign limited liability company shall not be denied
32a certificate of authority by reason of any difference between
33the law of the jurisdiction under which the company is formed
34 is not precluded from registering to do business in this state
35because of any difference between the law of the foreign
-91-1limited liability company’s jurisdiction of formation and the
2law of this state.
33. A certificate of authority does not authorize a
4foreign limited liability company to engage in any business
5or exercise any power that a limited liability company shall
6not Registration of a foreign limited liability company to do
7business in this state does not permit the foreign limited
8liability company to engage in any business or affairs or
9exercise any power that a limited liability company cannot
10lawfully engage in or exercise in this state.
11 Sec. 65. NEW SECTION. 489.805A Special litigation
12committee.
131. If a limited liability company is named as or made a
14party in a derivative proceeding, the company may appoint a
15special litigation committee to investigate the claims asserted
16in the proceeding and determine whether pursuing the action is
17in the best interests of the company. If the company appoints
18a special litigation committee, on motion by the committee made
19in the name of the company, except for good cause shown, the
20court shall stay discovery for the time reasonably necessary
21to permit the committee to make its investigation. This
22subsection does not prevent the court from doing any of the
23following:
24a. Enforcing a person’s right to information under section
25489.410.
26b. Granting extraordinary relief in the form of a temporary
27restraining order or preliminary injunction.
282. A special litigation committee must be composed of one
29or more disinterested and independent individuals, who may be
30members.
313. A special litigation committee may be appointed as
32follows:
33a. In a member-managed limited liability company, any of the
34following:
35(1) By the affirmative vote or consent of a majority of the
-92-1members not named as parties in the proceeding.
2(2) If all members are named as parties in the proceeding,
3by a majority of the members named as defendants.
4b. In a manager-managed limited liability company, any of
5the following:
6(1) By a majority of the managers not named as parties in
7the proceeding.
8(2) If all managers are named as parties in the proceeding,
9by a majority of the managers named as defendants.
104. After appropriate investigation, a special litigation
11committee may determine that it is in the best interests of the
12limited liability company that the proceeding comply with any
13of the following:
14a. Continue under the control of the plaintiff.
15b. Continue under the control of the committee.
16c. Be settled on terms approved by the committee.
17d. Be dismissed.
185. After making a determination under subsection 4, a
19special litigation committee shall file with the court a
20statement of its determination and its report supporting its
21determination and shall serve each party with a copy of the
22determination and report. The court shall determine whether
23the members of the committee were disinterested and independent
24and whether the committee conducted its investigation and made
25its recommendation in good faith, independently, and with
26reasonable care, with the committee having the burden of proof.
27If the court finds that the members of the committee were
28disinterested and independent and that the committee acted in
29good faith, independently, and with reasonable care, the court
30shall enforce the determination of the committee. Otherwise,
31the court shall dissolve the stay of discovery entered under
32subsection 1 and allow the action to continue under the control
33of the plaintiff.
34 Sec. 66. Section 489.809, Code 2023, is amended to read as
35follows:
-93- 1489.809 Action by attorney general.
2The attorney general may maintain an action to enjoin a
3foreign limited liability company from transacting doing
4 business in this state in violation of this article chapter.
5 Sec. 67. Section 489.902, Code 2023, is amended to read as
6follows:
7489.902 Derivative action.
8A member may maintain a derivative action to enforce a
9right of a limited liability company as follows if any of the
10following apply:
111. The member first makes a demand on the other members in a
12member-managed limited liability company, or the managers of a
13manager-managed limited liability company, requesting that they
14cause the company to bring an action to enforce the right, and
15the managers or other members do not bring the action within
16ninety days from the date the demand was made unless the member
17has earlier been notified that the demand has been rejected by
18the company or unless irreparable injury to the company would
19result by waiting for the expiration of the ninety-day period
20 a reasonable time.
212. A demand under subsection 1 would be futile.
22 Sec. 68. Section 489.904, Code 2023, is amended to read as
23follows:
24489.904 Pleading.
25In a derivative action under section 489.902, the complaint
26must state with particularity any of the following:
271. The date and content of the plaintiff’s demand and the
28response to the demand by the managers or other members.
292. If a demand has not been made, the reasons a demand under
30section 489.902, subsection 1, would be Why demand should be
31excused as futile.
32 Sec. 69. NEW SECTION. 489.905 Activities not constituting
33doing business in this state.
341. Activities of a foreign limited liability company that
35do not constitute doing business in this state for purposes of
-94-1this subchapter include all of the following:
2a. Maintaining, defending, mediating, arbitrating, or
3settling a proceeding.
4b. Carrying on any activity concerning the internal affairs
5of the foreign limited liability company, including holding
6meetings of its members or managers.
7c. Maintaining accounts in financial institutions.
8d. Maintaining offices or agencies for the transfer,
9exchange, and registration of securities of the foreign limited
10liability company or maintaining trustees or depositories with
11respect to those securities.
12e. Selling through independent contractors.
13f. Soliciting or obtaining orders by any means if the
14orders require acceptance outside this state before they become
15contracts.
16g. Creating or acquiring indebtedness, mortgages, or
17security interests in property.
18h. Securing or collecting debts or enforcing mortgages or
19other security interests in property securing the debts and
20holding, protecting, or maintaining property so acquired.
21i. Conducting an isolated transaction that is not in the
22course of similar transactions.
23j. Owning, protecting, and maintaining property.
24k. Doing business in interstate commerce.
252. This section does not apply in determining the contacts
26or activities that may subject a foreign limited liability
27company to service of process, taxation, or regulation under
28the laws of this state other than this chapter.
29 Sec. 70. Section 489.906, Code 2023, is amended to read as
30follows:
31489.906 Proceeds and expenses.
321. Except as otherwise provided in subsection 2, all of the
33following apply:
34a. Any proceeds or other benefits of a derivative action
35under section 489.902, whether by judgment, compromise, or
-95-1settlement, belong to the limited liability company and not to
2the plaintiff.
3b. If the plaintiff receives any proceeds, the plaintiff
4shall remit them immediately to the limited liability company.
52. If a derivative action under section 489.902 is
6successful in whole or in part, the court may award the
7plaintiff reasonable expenses, including reasonable attorney
8fees and costs, from the recovery of the limited liability
9company.
103. A derivative action on behalf of a limited liability
11company shall not be voluntarily dismissed or settled without
12the court’s approval.
13 Sec. 71. NEW SECTION. 489.906A Noncomplying name of foreign
14limited liability company.
151. A foreign limited liability company whose name does
16not comply with section 489.108 shall not register to do
17business in this state until it adopts, for the purpose of
18doing business in this state, an alternate name that complies
19with section 489.108 by filing a foreign registration statement
20under section 489.911B, or if applicable, a transfer of
21registration statement under section 489.910, setting forth
22that alternate name. After registering to do business in this
23state with an alternate name, a foreign limited liability
24company shall do business in this state under any of the
25following:
26a. The alternate name.
27b. The foreign limited liability company’s name, with the
28addition of its jurisdiction of formation.
292. If a registered foreign limited liability company
30changes its name after registration to a name that does not
31comply with section 489.108, it shall not do business in this
32state until it complies with subsection 1 by amending its
33registration statement to adopt an alternate name that complies
34with section 489.108.
35 Sec. 72. NEW SECTION. 489.907 Withdrawal of registration of
-96-1registered foreign limited liability company.
21. A registered foreign limited liability company may
3withdraw its registration by delivering a statement of
4withdrawal to the secretary of state for filing. The statement
5of withdrawal must be signed by the foreign limited liability
6company and state all of the following:
7a. The name of the foreign limited liability company and its
8jurisdiction of formation.
9b. That the foreign limited liability company is not doing
10business in this state and that it withdraws its registration
11to do business in this state.
12c. That the foreign limited liability company revokes the
13authority of its registered agent in this state.
14d. An address to which process on the foreign limited
15liability company may be sent by the secretary of state under
16section 489.116, subsection 3.
172. After the withdrawal of the registration of a foreign
18limited liability company, service of process in any proceeding
19based on a cause of action arising during the time the entity
20was registered to do business in this state may be made as
21provided in section 489.116.
22 Sec. 73. NEW SECTION. 489.908 Deemed withdrawal upon
23domestication or conversion to certain domestic entities.
24A registered foreign limited liability company that
25domesticates to a domestic limited liability company or
26converts to a domestic business corporation or domestic
27nonprofit corporation or any type of domestic filing entity or
28to a domestic limited liability partnership is deemed to have
29withdrawn its registration on the effectiveness of such event.
30 Sec. 74. NEW SECTION. 489.909 Withdrawal upon dissolution
31or conversion to certain nonfiling entities.
321. A registered foreign limited liability company that
33has dissolved and completed winding up or has converted to
34a domestic or foreign nonfiling entity other than a limited
35liability partnership shall deliver to the secretary of state
-97-1for filing a statement of withdrawal. The statement must be
2signed by the dissolved foreign limited liability company or
3the converted domestic or foreign nonfiling entity and state:
4a. In the case of a foreign limited liability company that
5has completed winding up all of the following:
6(1) Its name and jurisdiction of formation.
7(2) That the foreign limited liability company withdraws
8its registration to do business in this state and revokes the
9authority of its registered agent to accept service on its
10behalf.
11(3) An address to which process on the foreign limited
12liability company may be sent by the secretary of state under
13section 489.116, subsection 3.
14b. In the case of a foreign limited liability company that
15has converted to a domestic or foreign nonfiling entity other
16than a limited liability partnership, all of the following:
17(1) The name of the converting foreign limited liability
18company and its jurisdiction of formation.
19(2) The type of the nonfiling entity to which it has
20converted and its name and jurisdiction of formation.
21(3) That it withdraws its registration to do business in
22this state and revokes the authority of its registered agent to
23accept service on its behalf.
24(4) An address to which process on the foreign limited
25liability company may be sent by the secretary of state under
26section 489.116, subsection 3.
272. After the withdrawal of the registration of a foreign
28limited liability company, service of process in any proceeding
29based on a cause of action arising during the time the entity
30was registered to do business in this state may be made as
31provided in section 489.116.
32 Sec. 75. NEW SECTION. 489.910 Transfer of registration.
331. If a registered foreign limited liability company merges
34into a nonregistered foreign entity or converts to a foreign
35entity required to register with the secretary of state to do
-98-1business in this state, the foreign entity shall deliver to
2the secretary of state for filing a transfer of registration
3statement. The transfer of registration statement must be
4signed by the surviving or converted foreign entity and state
5all of the following:
6a. The name of the registered foreign limited liability
7company and its jurisdiction of formation before the merger or
8conversion.
9b. The name and type of the surviving or converted foreign
10entity and its jurisdiction of formation after the merger
11or conversion and, if the name does not comply with section
12489.108, an alternate name adopted pursuant to section
13489.906A.
14c. All of the following information regarding the surviving
15or converted foreign entity after the merger or conversion:
16(1) The street and mailing addresses of the principal office
17of the foreign entity and, if the law of the foreign entity’s
18jurisdiction of formation requires it to maintain an office in
19that jurisdiction, the street and mailing addresses of that
20office.
21(2) The street and mailing addresses of the place of
22business of the foreign entity’s registered agent in this state
23and the name of its registered agent.
242. On the effective date of a transfer of registration
25statement as determined in accordance with section 489.207,
26the registration of the registered foreign limited liability
27company to do business in this state is transferred without
28interruption to the foreign entity into which it has merged or
29to which it has been converted.
30 Sec. 76. NEW SECTION. 489.911 Administrative termination of
31registration.
321. The secretary of state may terminate the registration of
33a registered foreign limited liability company in the manner
34provided in subsections 2 and 3, if any of the following
35applies:
-99- 1a. The foreign limited liability company does not pay within
2sixty days after they are due any fees, taxes, interest, or
3penalties imposed by this chapter or other laws of this state.
4b. The foreign limited liability company does not deliver
5its biennial report to the secretary of state within sixty days
6after it is due.
7c. The foreign limited liability company is without a
8registered agent or its registered agent has no place of
9business in this state for sixty days or more.
10d. The secretary of state has not been notified within sixty
11days that the foreign limited liability company’s registered
12agent or the registered agent’s place of business has been
13changed, that its registered agent has resigned, or that its
14registered office has been discontinued.
152. The secretary of state may terminate the registration of
16a registered foreign limited liability company by doing all of
17the following:
18a. Filing a certificate of termination.
19b. Delivering a copy of the certificate of termination
20to the foreign company’s registered agent or, if the foreign
21company does not have a registered agent, to the foreign
22company’s principal office.
233. The certificate of termination must state all of the
24following:
25a. The effective date of the termination, which must be
26not less than sixty days after the secretary of state delivers
27the copy of the certificate of termination as prescribed in
28subsection 2, paragraph “b”.
29b. The grounds for termination under subsection 1.
304. The registration of a registered foreign limited
31liability company to do business in this state ceases on
32the effective date of the termination as set forth in the
33certificate of termination, unless before that date the
34foreign company cures each ground for termination stated in the
35certificate of termination. If the foreign company cures each
-100-1ground, the secretary of state shall file a statement that the
2certificate of termination is withdrawn.
35. After the effective date of the termination as set forth
4in the certificate of termination, service of process in any
5proceeding based on a cause of action arising during the time
6the entity was registered to do business in this state may be
7made as provided in section 489.116.
8 Sec. 77. NEW SECTION. 489.911A Registration to do business
9in this state.
101. A foreign limited liability company shall not do business
11in this state until it registers with the secretary of state
12under this chapter.
132. A foreign limited liability company doing business in
14this state shall not maintain a proceeding in any court of this
15state until it is registered to do business in this state.
163. The failure of a foreign limited liability company
17to register to do business in this state does not impair
18the validity of a contract or act of the foreign company or
19preclude it from defending a proceeding in this state.
204. A limitation on the liability of a member or manager
21of a foreign limited liability company is not waived solely
22because the foreign company does business in this state without
23registering.
245. Section 489.801, subsection 1, applies even if a
25foreign limited liability company fails to register under this
26subchapter.
27 Sec. 78. NEW SECTION. 489.911B Foreign registration
28statement.
291. To register to do business in this state, a foreign
30limited liability company shall deliver a foreign registration
31statement to the secretary of state for filing. The
32registration statement must be signed by the foreign company
33and state all of the following:
34a. The name of the foreign limited liability company and,
35if the name does not comply with section 489.108, an alternate
-101-1name as required by section 489.906A.
2b. The foreign limited liability company’s jurisdiction of
3formation.
4c. The street and mailing addresses of the foreign limited
5liability company’s principal office and, if the law of the
6foreign company’s jurisdiction of formation requires the
7foreign company to maintain an office in that jurisdiction, the
8street and mailing addresses of that required office.
9d. The street and mailing addresses of the place of business
10of the foreign limited liability company’s registered agent in
11this state and the name of its registered agent.
122. The foreign limited liability company shall deliver the
13completed foreign registration statement to the secretary of
14state, and also deliver to the secretary of state a certificate
15of existence or a document of similar import duly authenticated
16by the secretary of state or other official having custody of
17corporate records in the state or country under whose law it is
18incorporated which is dated no earlier than ninety days prior
19to the date the application is filed by the secretary of state.
20 Sec. 79. NEW SECTION. 489.911C Amendment of foreign
21registration statement.
22A registered foreign limited liability company shall sign
23and deliver to the secretary of state for filing an amendment
24to its foreign registration statement if there is a change in
25any of the following:
261. Its name or alternate name.
272. Its jurisdiction of formation, unless its registration
28is deemed to have been withdrawn under section 489.908 or
29transferred under section 489.910.
303. An address required by section 489.911B, subsection 1,
31paragraph “c”.
324. The information required by section 489.911B, subsection
331, paragraph “d”.
34 Sec. 80. Section 489.1001, Code 2023, is amended by striking
35the section and inserting in lieu thereof the following:
-102- 1489.1001 Definitions.
2As used in this subchapter, unless the context otherwise
3requires:
41. “Acquired entity” means the entity, all of one or more
5classes or series of interests of which are acquired in an
6interest exchange.
72. “Acquiring entity” means the entity that acquires all
8of one or more classes or series of interests of the acquired
9entity in an interest exchange.
103. “Conversion” means a transaction authorized by part 4.
114. “Converted entity” means the converting entity as it
12continues in existence after a conversion.
135. “Converting entity” means the domestic entity that
14approves a plan of conversion pursuant to section 489.1043 or
15the foreign entity that approves a conversion pursuant to the
16law of its jurisdiction of formation.
176. “Distributional interest” means the right under an
18unincorporated entity’s organic law and organic rules to
19receive distributions from the entity.
207. “Domestic”, with respect to an entity, means governed as
21to its internal affairs by the law of this state.
228. “Domesticated limited liability company” means the
23domesticating limited liability company as it continues in
24existence after a domestication.
259. “Domesticating limited liability company” means the
26domestic limited liability company that approves a plan of
27domestication pursuant to section 489.1053 or the foreign
28limited liability company that approves a domestication
29pursuant to the law of its jurisdiction of formation.
3010. “Domestication” means a transaction authorized by part
315.
3211. a. “Entity” means any of the following:
33(1) A business corporation.
34(2) A nonprofit corporation.
35(3) A general partnership, including a limited liability
-103-1partnership.
2(4) A limited partnership, including a limited liability
3limited partnership.
4(5) A limited liability company.
5(6) A domestic cooperative.
6(7) An unincorporated nonprofit association.
7(8) A statutory trust, business trust, or common-law
8business trust.
9(9) Any other person that has any of the following:
10(a) A legal existence separate from any interest holder of
11that person.
12(b) The power to acquire an interest in real property in
13its own name.
14b. “Entity” does not include any of the following:
15(1) An individual.
16(2) A trust with a predominantly donative purpose or a
17charitable trust.
18(3) An association or relationship that is not an entity
19listed in paragraph “a” and is not a partnership under the
20rules stated in section 486A.202, subsection 3, or a similar
21provision of the law of another jurisdiction.
22(4) A decedent’s estate.
23(5) A government or a governmental subdivision, agency, or
24instrumentality.
2512. “Filing entity” means an entity whose formation requires
26the filing of a public organic record. The term does not
27include a limited liability partnership.
2813. “Foreign”, with respect to an entity, means an
29entity governed as to its internal affairs by the law of a
30jurisdiction other than this state.
3114. “Governance interest” means a right under the organic
32law or organic rules of an unincorporated entity, other than as
33a governor, agent, assignee, or proxy, to any of the following:
34a. Receive or demand access to information concerning, or
35the books and records of, the entity.
-104- 1b. Vote for or consent to the election of the governors of
2the entity.
3c. Receive notice of or vote on or consent to an issue
4involving the internal affairs of the entity.
515. “Governor” means any of the following:
6a. A director of a business corporation.
7b. A director or trustee of a nonprofit corporation.
8c. A general partner of a general partnership.
9d. A general partner of a limited partnership.
10e. A manager of a manager-managed limited liability company.
11f. A member of a member-managed limited liability company.
12g. A director of a domestic cooperative.
13h. A manager of an unincorporated nonprofit association.
14i. A trustee of a statutory trust, business trust, or
15common-law business trust.
16j. Any other person under whose authority the powers of an
17entity are exercised and under whose direction the activities
18and affairs of the entity are managed pursuant to the organic
19law and organic rules of the entity.
2016. “Interest” means any of the following:
21a. A share in a business corporation.
22b. A membership in a nonprofit corporation.
23c. A partnership interest in a general partnership.
24d. A partnership interest in a limited partnership.
25e. A membership interest in a limited liability company.
26f. A share in a domestic cooperative.
27g. A membership in an unincorporated nonprofit association.
28h. A beneficial interest in a statutory trust, business
29trust, or common-law business trust.
30i. A governance interest or distributional interest in any
31other type of unincorporated entity.
3217. “Interest exchange” means a transaction authorized by
33part 3.
3418. “Interest holder” means any of the following:
35a. A shareholder of a business corporation.
-105- 1b. A member of a nonprofit corporation.
2c. A general partner of a general partnership.
3d. A general partner of a limited partnership.
4e. A limited partner of a limited partnership.
5f. A member of a limited liability company.
6g. a shareholder of a domestic cooperative.
7h. A member of an unincorporated nonprofit association.
8i. A beneficiary or beneficial owner of a statutory trust,
9business trust, or common-law business trust.
10j. Any other direct holder of an interest.
1119. “Interest holder liability” means any of the following:
12a. Personal liability for a liability of an entity which is
13imposed on a person due to any of the following:
14(1) Solely by reason of the status of the person as an
15interest holder.
16(2) By the organic rules of the entity which make one or
17more specified interest holders or categories of interest
18holders liable in their capacity as interest holders for all or
19specified liabilities of the entity.
20b. An obligation of an interest holder under the organic
21rules of an entity to contribute to the entity.
2220. “Merger” means a transaction authorized by part 2.
2321. “Merging entity” means an entity that is a party to
24a merger and exists immediately before the merger becomes
25effective.
2622. “Organic law” means the law of an entity’s jurisdiction
27of formation governing the internal affairs of the entity.
2823. “Organic rules” means the public organic record and
29private organic rules of an entity.
3024. “Plan” means a plan of merger, plan of interest
31exchange, plan of conversion, or plan of domestication.
3225. “Plan of conversion” means a plan under section
33489.1042.
3426. “Plan of domestication” means a plan under section
35489.1052.
-106- 127. “Plan of interest exchange” means a plan under section
2489.1032.
328. “Plan of merger” means a plan under section 489.1022.
429. a. “Private organic rules” means the rules, whether or
5not in a record, that govern the internal affairs of an entity,
6are binding on all its interest holders, and are not part of
7its public organic record, if any.
8b. “Private organic rules” includes all of the following:
9(1) The bylaws of a business corporation.
10(2) The bylaws of a nonprofit corporation.
11(3) The partnership agreement of a general partnership.
12(4) The partnership agreement of a limited partnership.
13(5) The operating agreement of a limited liability company.
14(6) The bylaws of a domestic cooperative.
15(7) The governing principles of an unincorporated nonprofit
16association.
17(8) The trust instrument of a statutory trust or similar
18rules of a business trust or common-law business trust.
1930. “Protected agreement” means any of the following:
20a. A record evidencing indebtedness and any related
21agreement in effect on January 1, 2009.
22b. An agreement that is binding on an entity on January 1,
232009.
24c. The organic rules of an entity in effect on January 1,
252009.
26d. An agreement that is binding on any of the governors or
27interest holders of an entity on January 1, 2009.
2831. a. “Public organic record” means the record the filing
29of which by the secretary of state is required to form an
30entity and any amendment to or restatement of that record.
31b. “Public organic record” includes any of the following:
32(1) The articles of incorporation of a business
33corporation.
34(2) The articles of incorporation of a nonprofit
35corporation.
-107- 1(3) The certificate of limited partnership of a limited
2partnership.
3(4) The certificate of organization of a limited liability
4company.
5(5) The articles of incorporation of a domestic
6cooperative.
7(6) The certificate of trust of a statutory trust or similar
8record of a business trust.
932. “Registered foreign entity” means a foreign entity that
10is registered to do business in this state pursuant to a record
11filed by the secretary of state.
1233. “Statement of conversion” means a statement under
13section 489.1045.
1434. “Statement of domestication” means a statement under
15section 489.1055.
1635. “Statement of interest exchange” means a statement under
17section 489.1035.
1836. “Statement of merger” means a statement under section
19489.1025.
2037. “Surviving entity” means the entity that continues in
21existence after or is created by a merger.
2238. “Type of entity” means a generic form of entity that is
23any of the following:
24a. Recognized at common law.
25b. Formed under an organic law, whether or not some entities
26formed under that organic law are subject to provisions of that
27law that create different categories of the form of entity.
28 Sec. 81. Section 489.1002, Code 2023, is amended by striking
29the section and inserting in lieu thereof the following:
30489.1002 Relationship of subchapter to other laws.
311. This subchapter does not authorize an act prohibited by,
32and does not affect the application or requirements of, law
33other than this subchapter.
342. A transaction effected under this subchapter shall
35not create or impair a right, duty, or obligation of a
-108-1person under the statutory law of this state other than this
2subchapter relating to a change in control, takeover, business
3combination, control-share acquisition, or similar transaction
4involving a domestic merging, acquired, converting, or
5domesticating business corporation unless any of the following
6applies:
7a. If the corporation does not survive the transaction, the
8transaction satisfies any requirements of the law.
9b. If the corporation survives the transaction, the approval
10of the plan is by a vote of the shareholders or directors which
11would be sufficient to create or impair the right, duty, or
12obligation directly under the law.
13 Sec. 82. Section 489.1003, Code 2023, is amended by striking
14the section and inserting in lieu thereof the following:
15489.1003 Required notice or approval.
161. A domestic or foreign entity that is required to give
17notice to, or obtain the approval of, a governmental agency
18or officer of this state to be a party to a merger must give
19the notice or obtain the approval to be a party to an interest
20exchange, conversion, or domestication.
212. Property held for a charitable purpose under the law of
22this state by a domestic or foreign entity immediately before
23a transaction under this subchapter becomes effective may be
24diverted from the objects for which it was donated, granted,
25devised, or otherwise transferred only to the extent a public
26benefit corporation is able to divert from such objects under
27chapter 504.
283. A bequest, devise, gift, grant, or promise contained
29in a will or other instrument of donation, subscription, or
30conveyance which is made to a merging entity that is not the
31surviving entity and which takes effect or remains payable
32after the merger inures to the surviving entity.
334. A trust obligation that would govern property if
34transferred to a nonsurviving entity applies to property that
35is transferred to the surviving entity under this section.
-109-1 Sec. 83. Section 489.1004, Code 2023, is amended by striking
2the section and inserting in lieu thereof the following:
3489.1004 Nonexclusivity.
4The fact that a transaction under this subchapter produces
5a certain result does not preclude the same result from being
6accomplished in any other manner permitted by law other than
7this subchapter.
8 Sec. 84. Section 489.1005, Code 2023, is amended by striking
9the section and inserting in lieu thereof the following:
10489.1005 Reference to external facts.
111. A plan may refer to facts ascertainable outside the plan
12if the manner in which the facts will operate upon the plan is
13specified in the plan. The facts may include the occurrence of
14an event or a determination or action by a person, whether or
15not the event, determination, or action is within the control
16of a party to the transaction.
172. The following provisions of a record delivered to the
18secretary of state for filing under this chapter or a plan
19delivered for filing in lieu of a statement shall not be made
20dependent on facts outside the record or plan:
21a. The name and address of any person.
22b. The registered office of any entity.
23c. The registered agent of any entity.
24d. The number of authorized interests and designation of
25each class or series of interests.
26e. The effective date of a record delivered to the secretary
27of state for filing.
28f. Any required statement in a record delivered to the
29secretary of state for filing of the date on which the
30underlying transaction was approved or the manner in which that
31approval was given.
32 Sec. 85. Section 489.1006, Code 2023, is amended by striking
33the section and inserting in lieu thereof the following:
34489.1006 Appraisal rights.
35An interest holder of a domestic merging, acquired,
-110-1converting, or domesticating limited liability company is
2entitled to contractual appraisal rights in connection with a
3transaction under this subchapter to the extent provided in any
4of the following:
51. The operating agreement.
62. The plan.
7 Sec. 86. Section 489.1007, Code 2023, is amended by striking
8the section and inserting in lieu thereof the following:
9489.1007 Excluded entities and transactions.
10This subchapter shall not be used to effect a transaction
11involving a bank, insurance company, or public utility where
12any chapter governing the regulation of such entity does not
13permit the transaction.
14 Sec. 87. NEW SECTION. 489.1021 Merger authorized.
151. By complying with this part, all of the following apply:
16a. One or more domestic limited liability companies may
17merge with one or more domestic or foreign entities into a
18domestic or foreign surviving entity.
19b. Two or more foreign entities may merge into a domestic
20limited liability company.
212. By complying with the provisions of this part applicable
22to foreign entities, a foreign entity may be a party to a
23merger under this part or may be the surviving entity in such
24a merger if the merger is authorized by the law of the foreign
25entity’s jurisdiction of formation.
26 Sec. 88. NEW SECTION. 489.1022 Plan of merger.
271. A domestic limited liability company may become a party
28to a merger under this part by approving a plan of merger. The
29plan must be in a record and contain all of the following:
30a. As to each merging entity, its name, jurisdiction of
31formation, and type of entity.
32b. If the surviving entity is to be created in the merger, a
33statement to that effect and the entity’s name, jurisdiction of
34formation, and type of entity.
35c. The manner of converting the interests in each party
-111-1to the merger into interests, securities, obligations, money,
2other property, rights to acquire interests or securities, or
3any combination of the foregoing.
4d. If the surviving entity exists before the merger, any
5proposed amendments to all of the following:
6(1) Its public organic record, if any.
7(2) Its private organic rules that are, or are proposed to
8be, in a record.
9e. If the surviving entity is to be created in the merger,
10all of the following:
11(1) Its proposed public organic record, if any.
12(2) The full text of its private organic rules that are
13proposed to be in a record.
14f. The other terms and conditions of the merger.
15g. Any other provision required by the law of a merging
16entity’s jurisdiction of formation or the organic rules of a
17merging entity.
182. In addition to the requirements of subsection 1, a plan
19of merger may contain any other provision not prohibited by
20law.
21 Sec. 89. NEW SECTION. 489.1023 Approval of merger.
221. A plan of merger is not effective unless it has been
23approved according to all of the following:
24a. By a domestic merging limited liability company, by all
25the members of the company entitled to vote on or consent to
26any matter.
27b. In a record, by each member of a domestic merging limited
28liability company which will have interest holder liability for
29debts, obligations, and other liabilities that are incurred
30after the merger becomes effective, unless all of the following
31apply:
32(1) The operating agreement of the limited liability
33company provides in a record for the approval of a merger in
34which some or all of its members become subject to interest
35holder liability by the affirmative vote or consent of fewer
-112-1than all the members.
2(2) The member consented in a record to or voted for that
3provision of the operating agreement or became a member after
4the adoption of that provision.
52. A merger involving a domestic merging entity that is not
6a limited liability company is not effective unless the merger
7is approved by that entity in accordance with its organic law.
83. A merger involving a foreign merging entity is not
9effective unless the merger is approved by the foreign entity
10in accordance with the law of the foreign entity’s jurisdiction
11of formation.
12 Sec. 90. NEW SECTION. 489.1024 Amendment or abandonment
13of plan of merger.
141. A plan of merger may be amended only with the consent
15of each party to the plan, except as otherwise provided in the
16plan.
172. A domestic merging limited liability company may approve
18an amendment of a plan of merger according to any of the
19following:
20a. In the same manner as the plan was approved, if the plan
21does not provide for the manner in which it may be amended.
22b. By its managers or members in the manner provided in the
23plan, but a member that was entitled to vote on or consent to
24approval of the merger is entitled to vote on or consent to any
25amendment of the plan that will change any of the following:
26(1) The amount or kind of interests, securities,
27obligations, money, other property, rights to acquire interests
28or securities, or any combination of the foregoing, to be
29received by the interest holders of any party to the plan.
30(2) The public organic record, if any, or private
31organic rules of the surviving entity that will be in effect
32immediately after the merger becomes effective, except for
33changes that do not require approval of the interest holders of
34the surviving entity under its organic law or organic rules.
35(3) Any other terms or conditions of the plan, if the change
-113-1would adversely affect the member in any material respect.
23. After a plan of merger has been approved and before
3a statement of merger becomes effective, the plan may be
4abandoned as provided in the plan. Unless prohibited by the
5plan, a domestic merging limited liability company may abandon
6the plan in the same manner as the plan was approved.
74. If a plan of merger is abandoned after a statement of
8merger has been delivered to the secretary of state for filing
9and before the statement becomes effective, a statement of
10abandonment, signed by a party to the plan, must be delivered
11to the secretary of state for filing before the statement of
12merger becomes effective. The statement of abandonment takes
13effect on filing, and the merger is abandoned and does not
14become effective. The statement of abandonment must contain
15all of the following:
16a. The name of each party to the plan of merger.
17b. The date on which the statement of merger was filed by
18the secretary of state.
19c. A statement that the merger has been abandoned in
20accordance with this section.
21 Sec. 91. NEW SECTION. 489.1025 Statement of merger —
22effective date of merger.
231. A statement of merger must be signed by each merging
24entity and delivered to the secretary of state for filing.
252. A statement of merger must contain all of the following:
26a. The name, jurisdiction of formation, and type of entity
27of each merging entity that is not the surviving entity.
28b. The name, jurisdiction of formation, and type of entity
29of the surviving entity, and if the surviving entity is a
30foreign entity, the street and mailing addresses of an office
31of the surviving entity that the secretary of state may use for
32purposes of section 489.1026, subsection 5.
33c. A statement that the merger was approved by each domestic
34merging entity, if any, in accordance with this part and by
35each foreign merging entity, if any, in accordance with the law
-114-1of its jurisdiction of formation.
2d. If the surviving entity exists before the merger and is
3a domestic filing entity, any amendment to its public organic
4record approved as part of the plan of merger.
5e. If the surviving entity is created by the merger and
6is a domestic filing entity, its public organic record, as an
7attachment.
8f. If the surviving entity is created by the merger and
9is a domestic limited liability partnership, its statement of
10qualification, as an attachment.
113. In addition to the requirements of subsection 2, a
12statement of merger may contain any other provision not
13prohibited by law.
144. If the surviving entity is a domestic entity, its public
15organic record, if any, must satisfy the requirements of the
16law of this state, except that the public organic record does
17not need to be signed.
185. If the surviving entity is a domestic limited liability
19company, the merger becomes effective when the statement of
20merger is effective. In all other cases, the merger becomes
21effective on the later of the following:
22a. The date and time provided by the organic law of the
23surviving entity.
24b. When the statement is effective.
25 Sec. 92. NEW SECTION. 489.1026 Effect of merger.
261. When a merger becomes effective, all of the following
27apply:
28a. The surviving entity continues or comes into existence.
29b. Each merging entity that is not the surviving entity
30ceases to exist.
31c. All property of each merging entity vests in the
32surviving entity without transfer, reversion, or impairment.
33d. All debts, obligations, and other liabilities of each
34merging entity are debts, obligations, and other liabilities
35of the surviving entity.
-115- 1e. Except as otherwise provided by law or the plan of
2merger, all the rights, privileges, immunities, powers, and
3purposes of each merging entity vest in the surviving entity.
4f. If the surviving entity exists before the merger, all of
5the following apply:
6(1) All its property continues to be vested in it without
7transfer, reversion, or impairment.
8(2) It remains subject to all its debts, obligations, and
9other liabilities.
10(3) All its rights, privileges, immunities, powers, and
11purposes continue to be vested in it.
12g. The name of the surviving entity may be substituted for
13the name of any merging entity that is a party to any pending
14action or proceeding.
15h. If the surviving entity exists before the merger, all of
16the following apply:
17(1) Its public organic record, if any, is amended to the
18extent provided in the statement of merger.
19(2) Its private organic rules that are to be in a record, if
20any, are amended to the extent provided in the plan of merger.
21i. If the surviving entity is created by the merger, its
22private organic rules are effective and all of the following
23apply:
24(1) If it is a filing entity, its public organic record
25becomes effective.
26(2) If it is a limited liability partnership, its statement
27of qualification becomes effective.
28j. The interests in each merging entity which are to be
29converted in the merger are converted, and the interest holders
30of those interests are entitled only to the rights provided to
31them under the plan of merger and to any appraisal rights they
32have under section 489.1006 and the merging entity’s organic
33law.
342. Except as otherwise provided in the organic law or
35organic rules of a merging entity, the merger does not give
-116-1rise to any rights that an interest holder, governor, or third
2party would have upon a dissolution, liquidation, or winding up
3of the merging entity.
43. When a merger becomes effective, a person that did
5not have interest holder liability with respect to any of
6the merging entities and becomes subject to interest holder
7liability with respect to a domestic entity as a result of
8the merger has interest holder liability only to the extent
9provided by the organic law of that entity and only for those
10debts, obligations, and other liabilities that are incurred
11after the merger becomes effective.
124. When a merger becomes effective, the interest holder
13liability of a person that ceases to hold an interest in a
14domestic merging limited liability company with respect to
15which the person had interest holder liability is subject to
16the following rules:
17a. The merger does not discharge any interest holder
18liability under this chapter to the extent the interest holder
19liability was incurred before the merger became effective.
20b. The person does not have interest holder liability under
21this chapter for any debt, obligation, or other liability that
22is incurred after the merger becomes effective.
23c. This chapter continues to apply to the release,
24collection, or discharge of any interest holder liability
25preserved under paragraph “a” as if the merger had not occurred.
26d. The person has whatever rights of contribution from
27any other person as are provided by this chapter, law other
28than this chapter, or the operating agreement of the domestic
29merging limited liability company with respect to any interest
30holder liability preserved under paragraph “a” as if the merger
31had not occurred.
325. When a merger becomes effective, a foreign entity that is
33the surviving entity may be served with process in this state
34for the collection and enforcement of any debts, obligations,
35or other liabilities of a domestic merging limited liability
-117-1company as provided in section 489.116.
26. When a merger becomes effective, the registration to do
3business in this state of any foreign merging entity that is
4not the surviving entity is canceled.
5 Sec. 93. NEW SECTION. 489.1031 Interest exchange
6authorized.
71. By complying with this part, any of the following apply:
8a. A domestic limited liability company may acquire all
9of one or more classes or series of interests of another
10domestic entity or a foreign entity in exchange for interests,
11securities, obligations, money, other property, rights to
12acquire interests or securities, or any combination of the
13foregoing.
14b. All of one or more classes or series of interests of a
15domestic limited liability company may be acquired by another
16domestic entity or a foreign entity in exchange for interests,
17securities, obligations, money, other property, rights to
18acquire interests or securities, or any combination of the
19foregoing.
202. By complying with the provisions of this part applicable
21to foreign entities, a foreign entity may be the acquiring or
22acquired entity in an interest exchange under this part if
23the interest exchange is authorized by the law of the foreign
24entity’s jurisdiction of formation.
253. If a protected agreement contains a provision that
26applies to a merger of a domestic limited liability company but
27does not refer to an interest exchange, the provision applies
28to an interest exchange in which the domestic limited liability
29company is the acquired entity as if the interest exchange were
30a merger until the provision is amended on or after January 1,
312009.
32 Sec. 94. NEW SECTION. 489.1032 Plan of interest exchange.
331. A domestic limited liability company may be the acquired
34entity in an interest exchange under this part by approving a
35plan of interest exchange. The plan must be in a record and
-118-1contain all of the following:
2a. The name of the acquired entity.
3b. The name, jurisdiction of formation, and type of entity
4of the acquiring entity.
5c. The manner of converting the interests in the acquired
6entity into interests, securities, obligations, money, other
7property, rights to acquire interests or securities, or any
8combination of the foregoing.
9d. Any proposed amendments to all of the following:
10(1) The certificate of organization of the acquired entity.
11(2) The operating agreement of the acquired entity that are,
12or are proposed to be, in a record.
13e. The other terms and conditions of the interest exchange.
14f. Any other provision required by the law of this state or
15the operating agreement of the acquired entity.
162. In addition to the requirements of subsection 1, a
17plan of interest exchange may contain any other provision not
18prohibited by law.
19 Sec. 95. NEW SECTION. 489.1033 Approval of interest
20exchange.
211. A plan of interest exchange is not effective unless it
22has been approved according to all of the following:
23a. By all the members of a domestic acquired limited
24liability company entitled to vote on or consent to any matter.
25b. In a record, by each member of the domestic acquired
26limited liability company that will have interest holder
27liability for debts, obligations, and other liabilities that
28are incurred after the interest exchange becomes effective,
29unless all of the following apply:
30(1) The operating agreement of the limited liability
31company provides in a record for the approval of an interest
32exchange or a merger in which some or all of its members become
33subject to interest holder liability by the affirmative vote or
34consent of fewer than all the members.
35(2) The member consented in a record to or voted for that
-119-1provision of the operating agreement or became a member after
2the adoption of that provision.
32. An interest exchange involving a domestic acquired
4entity that is not a limited liability company is not effective
5unless it is approved by the domestic entity in accordance with
6its organic law.
73. An interest exchange involving a foreign acquired entity
8is not effective unless it is approved by the foreign entity in
9accordance with the law of the foreign entity’s jurisdiction
10of formation.
114. Except as otherwise provided in its organic law or
12organic rules, the interest holders of the acquiring entity are
13not required to approve the interest exchange.
14 Sec. 96. NEW SECTION. 489.1034 Amendment or abandonment
15of plan of interest exchange.
161. A plan of interest exchange may be amended only with the
17consent of each party to the plan, except as otherwise provided
18in the plan.
192. A domestic acquired limited liability company may
20approve an amendment of a plan of interest exchange according
21to any of the following:
22a. In the same manner as the plan was approved, if the plan
23does not provide for the manner in which it may be amended.
24b. By its managers or members in the manner provided in
25the plan, but a member that was entitled to vote on or consent
26to approval of the interest exchange is entitled to vote on or
27consent to any amendment of the plan that will change any of
28the following:
29(1) The amount or kind of interests, securities,
30obligations, money, other property, rights to acquire interests
31or securities, or any combination of the foregoing, to be
32received by any of the members of the acquired company under
33the plan.
34(2) The certificate of organization or operating agreement
35of the acquired company that will be in effect immediately
-120-1after the interest exchange becomes effective, except for
2changes that do not require approval of the members of the
3acquired company under this chapter or the operating agreement.
4(3) Any other terms or conditions of the plan, if the change
5would adversely affect the member in any material respect.
63. After a plan of interest exchange has been approved and
7before a statement of interest exchange becomes effective,
8the plan may be abandoned as provided in the plan. Unless
9prohibited by the plan, a domestic acquired limited liability
10company may abandon the plan in the same manner as the plan was
11approved.
124. If a plan of interest exchange is abandoned after a
13statement of interest exchange has been delivered to the
14secretary of state for filing and before the statement becomes
15effective, a statement of abandonment, signed by the acquired
16limited liability company, must be delivered to the secretary
17of state for filing before the statement of interest exchange
18becomes effective. The statement of abandonment takes effect
19on filing, and the interest exchange is abandoned and does not
20become effective. The statement of abandonment must contain
21all of the following:
22a. The name of the acquired limited liability company.
23b. The date on which the statement of interest exchange was
24filed by the secretary of state.
25c. A statement that the interest exchange has been abandoned
26in accordance with this section.
27 Sec. 97. NEW SECTION. 489.1035 Statement of interest
28exchange — effective date of interest exchange.
291. A statement of interest exchange must be signed by a
30domestic acquired limited liability company and delivered to
31the secretary of state for filing.
322. A statement of interest exchange must contain all of the
33following:
34a. The name of the acquired limited liability company.
35b. The name, jurisdiction of formation, and type of entity
-121-1of the acquiring entity.
2c. A statement that the plan of interest exchange was
3approved by the acquired company in accordance with this part.
4d. Any amendments to the acquired company’s certificate of
5organization approved as part of the plan of interest exchange.
63. In addition to the requirements of subsection 2, a
7statement of interest exchange may contain any other provision
8not prohibited by law.
94. An interest exchange becomes effective when the
10statement of interest exchange is effective.
11 Sec. 98. NEW SECTION. 489.1036 Effect of interest exchange.
121. When an interest exchange in which the acquired entity
13is a domestic limited liability company becomes effective, all
14of the following apply:
15a. The interests in the acquired limited liability company
16which are the subject of the interest exchange are converted,
17and the members holding those interests are entitled only to
18the rights provided to them under the plan of interest exchange
19and to any appraisal rights they have under section 486.1006.
20b. The acquiring entity becomes the interest holder of the
21interests in the acquired limited liability company stated in
22the plan of interest exchange to be acquired by the acquiring
23entity.
24c. The certificate of organization of the acquired limited
25liability company is amended to the extent provided in the
26statement of interest exchange.
27d. The provisions of the operating agreement of the acquired
28limited liability company that are to be in a record, if any,
29are amended to the extent provided in the plan of interest
30exchange.
312. Except as otherwise provided in the operating agreement
32of a domestic acquired limited liability company, the interest
33exchange does not give rise to any rights that a member,
34manager, or third party would have upon a dissolution,
35liquidation, or winding up of the acquired limited liability
-122-1company.
23. When an interest exchange becomes effective, a person
3that did not have interest holder liability with respect to
4a domestic acquired limited liability company and becomes
5subject to interest holder liability with respect to a domestic
6entity as a result of the interest exchange has interest holder
7liability only to the extent provided by the organic law of
8the entity and only for those debts, obligations, and other
9liabilities that are incurred after the interest exchange
10becomes effective.
114. When an interest exchange becomes effective, the
12interest holder liability of a person that ceases to hold an
13interest in a domestic acquired limited liability company with
14respect to which the person had interest holder liability is
15subject to all of the following rules:
16a. The interest exchange does not discharge any interest
17holder liability under this chapter to the extent the interest
18holder liability was incurred before the interest exchange
19became effective.
20b. The person does not have interest holder liability under
21this chapter for any debt, obligation, or other liability that
22is incurred after the interest exchange becomes effective.
23c. This chapter continues to apply to the release,
24collection, or discharge of any interest holder liability
25preserved under paragraph “a” as if the interest exchange had
26not occurred.
27d. The person has whatever rights of contribution from
28any other person as are provided by this chapter, law other
29than this chapter, or the operating agreement of the acquired
30limited liability company with respect to any interest holder
31liability preserved under paragraph “a” as if the interest
32exchange had not occurred.
33 Sec. 99. NEW SECTION. 489.1041 Conversion authorized.
341. By complying with this part, a domestic limited liability
35company may become any of the following:
-123- 1a. A domestic entity that is a different type of entity.
2b. A foreign entity that is a different type of entity, if
3the conversion is authorized by the law of the foreign entity’s
4jurisdiction of formation.
52. By complying with the provisions of this part applicable
6to foreign entities, a foreign entity that is not a foreign
7limited liability company may become a domestic limited
8liability company if the conversion is authorized by the law of
9the foreign entity’s jurisdiction of formation.
103. If a protected agreement contains a provision that
11applies to a merger of a domestic limited liability company
12but does not refer to a conversion, the provision applies
13to a conversion of the limited liability company as if the
14conversion were a merger until the provision is amended on or
15after January 1, 2009.
164. A domestic entity that is not a limited liability company
17may become a domestic limited liability company if all of the
18following apply:
19a. The domestic converting entity complies with section
20489.1043.
21b. The domestic converting entity files a statement of
22conversion in accordance with section 489.1045.
23 Sec. 100. NEW SECTION. 489.1042 Plan of conversion.
241. A domestic limited liability company may convert to a
25different type of entity under this part by approving a plan
26of conversion. The plan must be in a record and contain all of
27the following:
28a. The name of the converting limited liability company.
29b. The name, jurisdiction of formation, and type of entity
30of the converted entity.
31c. The manner of converting the interests in the converting
32limited liability company into interests, securities,
33obligations, money, other property, rights to acquire interests
34or securities, or any combination of the foregoing.
35d. The proposed public organic record of the converted
-124-1entity if it will be a filing entity.
2e. The full text of the private organic rules of the
3converted entity which are proposed to be in a record.
4f. The other terms and conditions of the conversion.
5g. Any other provision required by the law of this state
6or the operating agreement of the converting limited liability
7company.
82. In addition to the requirements of subsection 1, a plan
9of conversion may contain any other provision not prohibited
10by law.
11 Sec. 101. NEW SECTION. 489.1043 Approval of conversion.
121. A plan of conversion is not effective unless it has been
13approved according to all of the following:
14a. By a domestic converting limited liability company, by
15all the members of the limited liability company entitled to
16vote on or consent to any matter.
17b. In a record, by each member of a domestic converting
18limited liability company which will have interest holder
19liability for debts, obligations, and other liabilities that
20are incurred after the conversion becomes effective, unless all
21of the following apply:
22(1) The operating agreement of the limited liability
23company provides in a record for the approval of a conversion
24or a merger in which some or all of its members become subject
25to interest holder liability by the affirmative vote or consent
26of fewer than all the members.
27(2) The member voted for or consented in a record to that
28provision of the operating agreement or became a member after
29the adoption of that provision.
302. A conversion involving a domestic converting entity that
31is not a limited liability company is not effective unless it
32is approved by the domestic converting entity in accordance
33with its organic law.
343. A conversion of a foreign converting entity is not
35effective unless it is approved by the foreign entity in
-125-1accordance with the law of the foreign entity’s jurisdiction
2of formation.
3 Sec. 102. NEW SECTION. 489.1044 Amendment or abandonment of
4plan of conversion.
51. A plan of conversion of a domestic converting limited
6liability company may be amended according to any of the
7following:
8a. In the same manner as the plan was approved, if the plan
9does not provide for the manner in which it may be amended.
10b. By its managers or members in the manner provided in the
11plan, but a member that was entitled to vote on or consent to
12approval of the conversion is entitled to vote on or consent
13to any amendment of the plan that will change any of the
14following:
15(1) The amount or kind of interests, securities,
16obligations, money, other property, rights to acquire interests
17or securities, or any combination of the foregoing, to be
18received by any of the members of the converting limited
19liability company under the plan.
20(2) The public organic record, if any, or private organic
21rules of the converted entity which will be in effect
22immediately after the conversion becomes effective, except for
23changes that do not require approval of the interest holders of
24the converted entity under its organic law or organic rules.
25(3) Any other terms or conditions of the plan, if the change
26would adversely affect the member in any material respect.
272. After a plan of conversion has been approved by a
28domestic converting limited liability company and before a
29statement of conversion becomes effective, the plan may be
30abandoned as provided in the plan. Unless prohibited by the
31plan, a domestic converting limited liability company may
32abandon the plan in the same manner as the plan was approved.
333. If a plan of conversion is abandoned after a statement
34of conversion has been delivered to the secretary of state
35for filing and before the statement becomes effective, a
-126-1statement of abandonment, signed by the converting entity,
2must be delivered to the secretary of state for filing before
3the statement of conversion becomes effective. The statement
4of abandonment takes effect on filing, and the conversion is
5abandoned and does not become effective. The statement of
6abandonment must contain all of the following:
7a. The name of the converting limited liability company.
8b. The date on which the statement of conversion was filed
9by the secretary of state.
10c. A statement that the conversion has been abandoned in
11accordance with this section.
12 Sec. 103. NEW SECTION. 489.1045 Statement of conversion —
13effective date of conversion.
141. A statement of conversion must be signed by the
15converting entity and delivered to the secretary of state for
16filing.
172. A statement of conversion must contain all of the
18following:
19a. The name, jurisdiction of formation, and type of entity
20of the converting entity.
21b. The name, jurisdiction of formation, and type of entity
22of the converted entity and if the converted entity is a
23foreign entity, the street and mailing addresses of an office
24of the converted entity that the secretary of state may use for
25purposes of section 489.1046, subsection 5.
26c. If the converting entity is a domestic limited liability
27company, a statement that the plan of conversion was approved
28in accordance with this part or, if the converting entity is a
29foreign entity, a statement that the conversion was approved
30by the foreign entity in accordance with the law of its
31jurisdiction of formation.
32d. If the converted entity is a domestic filing entity, its
33public organic record, as an attachment.
34e. If the converted entity is a domestic limited liability
35partnership, its statement of qualification, as an attachment.
-127- 13. In addition to the requirements of subsection 2, a
2statement of conversion may contain any other provision not
3prohibited by law.
44. If the converted entity is a domestic entity, its public
5organic record, if any, must satisfy the requirements of the
6law of this state, except that the public organic record does
7not need to be signed.
85. If the converted entity is a domestic limited liability
9company, the conversion becomes effective when the statement of
10conversion is effective. In all other cases, the conversion
11becomes effective on the later of the following:
12a. The date and time provided by the organic law of the
13converted entity.
14b. When the statement is effective.
15 Sec. 104. NEW SECTION. 489.1046 Effect of conversion.
161. When a conversion becomes effective all of the following
17apply:
18a. The converted entity is any of the following:
19(1) Organized under and subject to the organic law of the
20converted entity.
21(2) The same entity without interruption as the converting
22entity.
23b. All property of the converting entity continues to be
24vested in the converted entity without transfer, reversion, or
25impairment.
26c. All debts, obligations, and other liabilities of the
27converting entity continue as debts, obligations, and other
28liabilities of the converted entity.
29d. Except as otherwise provided by law or the plan of
30conversion, all the rights, privileges, immunities, powers,
31and purposes of the converting entity remain in the converted
32entity.
33e. The name of the converted entity may be substituted for
34the name of the converting entity in any pending action or
35proceeding.
-128- 1f. The certificate of organization of the converted entity
2becomes effective.
3g. The provisions of the operating agreement of the
4converted entity which are to be in a record, if any, approved
5as part of the plan of conversion become effective.
6h. The interests in the converting entity are converted, and
7the interest holders of the converting entity are entitled only
8to the rights provided to them under the plan of conversion and
9to any appraisal rights they have under section 489.1006.
102. Except as otherwise provided in the operating agreement
11of a domestic converting limited liability company, the
12conversion does not give rise to any rights that a member,
13manager, or third party would have upon a dissolution,
14liquidation, or winding up of the converting entity.
153. When a conversion becomes effective, a person that
16did not have interest holder liability with respect to the
17converting entity and becomes subject to interest holder
18liability with respect to a domestic entity as a result of the
19conversion has interest holder liability only to the extent
20provided by the organic law of the entity and only for those
21debts, obligations, and other liabilities that are incurred
22after the conversion becomes effective.
234. When a conversion becomes effective, the interest holder
24liability of a person that ceases to hold an interest in a
25domestic converting limited liability company with respect to
26which the person had interest holder liability is subject to
27all of the following rules:
28a. The conversion does not discharge any interest holder
29liability under this chapter to the extent the interest holder
30liability was incurred before the conversion became effective.
31b. The person does not have interest holder liability under
32this chapter for any debt, obligation, or other liability that
33arises after the conversion becomes effective.
34c. This chapter continues to apply to the release,
35collection, or discharge of any interest holder liability
-129-1preserved under paragraph “a” as if the conversion had not
2occurred.
3d. The person has whatever rights of contribution from any
4other person as are provided by this chapter, law other than
5this chapter, or the organic rules of the converting entity
6with respect to any interest holder liability preserved under
7paragraph “a” as if the conversion had not occurred.
85. When a conversion becomes effective, a foreign entity
9that is the converted entity may be served with process in this
10state for the collection and enforcement of any of its debts,
11obligations, and other liabilities as provided in section
12489.116.
136. If the converting entity is a registered foreign entity,
14its registration to do business in this state is canceled when
15the conversion becomes effective.
167. A conversion does not require the entity to wind up its
17affairs and does not constitute or cause the dissolution of the
18entity.
19 Sec. 105. NEW SECTION. 489.1051 Domestication authorized.
201. By complying with this part, a domestic limited liability
21company may become a foreign limited liability company if
22the domestication is authorized by the law of the foreign
23jurisdiction.
242. By complying with the provisions of this part applicable
25to foreign limited liability companies, a foreign limited
26liability company may become a domestic limited liability
27company if the domestication is authorized by the law of the
28foreign limited liability company’s jurisdiction of formation.
293. If a protected agreement contains a provision that
30applies to a merger of a domestic limited liability company
31but does not refer to a domestication, the provision applies
32to a domestication of the limited liability company as if the
33domestication were a merger until the provision is amended on
34or after January 1, 2009.
35 Sec. 106. NEW SECTION. 489.1052 Plan of domestication.
-130- 11. A domestic limited liability company may become a foreign
2limited liability company in a domestication by approving
3a plan of domestication. The plan must be in a record and
4contain all of the following:
5a. The name of the domesticating limited liability company.
6b. The name and jurisdiction of formation of the
7domesticated limited liability company.
8c. The manner of converting the interests in the
9domesticating limited liability company into interests,
10securities, obligations, money, other property, rights to
11acquire interests or securities, or any combination of the
12foregoing.
13d. The proposed certificate of organization of the
14domesticated limited liability company.
15e. The full text of the provisions of the operating
16agreement of the domesticated limited liability company that
17are proposed to be in a record.
18f. The other terms and conditions of the domestication.
19g. Any other provision required by the law of this state or
20the operating agreement of the domesticating limited liability
21company.
222. In addition to the requirements of subsection 1, a plan
23of domestication may contain any other provision not prohibited
24by law.
25 Sec. 107. NEW SECTION. 489.1053 Approval of domestication.
261. A plan of domestication of a domestic domesticating
27limited liability company is not effective unless it has been
28approved according to any of the following:
29a. By all the members entitled to vote on or consent to any
30matter.
31b. In a record, by each member that will have interest
32holder liability for debts, obligations, and other liabilities
33that are incurred after the domestication becomes effective,
34unless all of the following apply:
35(1) The operating agreement of the domesticating limited
-131-1liability company in a record provides for the approval of a
2domestication or merger in which some or all of its members
3become subject to interest holder liability by the affirmative
4vote or consent of fewer than all the members.
5(2) The member voted for or consented in a record to that
6provision of the operating agreement or became a member after
7the adoption of that provision.
82. A domestication of a foreign domesticating limited
9liability company is not effective unless it is approved in
10accordance with the law of the foreign limited liability
11company’s jurisdiction of formation.
12 Sec. 108. NEW SECTION. 489.1054 Amendment or abandonment
13of plan of domestication.
141. A plan of domestication of a domestic domesticating
15limited liability company may be amended according to any of
16the following:
17a. In the same manner as the plan was approved, if the plan
18does not provide for the manner in which it may be amended.
19b. By its managers or members in the manner provided in
20the plan, but a member that was entitled to vote on or consent
21to approval of the domestication is entitled to vote on or
22consent to any amendment of the plan that will change any of
23the following:
24(1) The amount or kind of interests, securities,
25obligations, money, other property, rights to acquire interests
26or securities, or any combination of the foregoing, to be
27received by any of the members of the domesticating limited
28liability company under the plan.
29(2) The certificate of organization or operating agreement
30of the domesticated limited liability company that will be in
31effect immediately after the domestication becomes effective,
32except for changes that do not require approval of the members
33of the domesticated limited liability company under its organic
34law or operating agreement.
35(3) Any other terms or conditions of the plan, if the change
-132-1would adversely affect the member in any material respect.
22. After a plan of domestication has been approved by a
3domestic domesticating limited liability company and before a
4statement of domestication becomes effective, the plan may be
5abandoned as provided in the plan. Unless prohibited by the
6plan, a domestic domesticating limited liability company may
7abandon the plan in the same manner as the plan was approved.
83. If a plan of domestication is abandoned after a statement
9of domestication has been delivered to the secretary of state
10for filing and before the statement becomes effective, a
11statement of abandonment, signed by the domesticating limited
12liability company, must be delivered to the secretary of state
13for filing before the statement of domestication becomes
14effective. The statement of abandonment takes effect on
15filing, and the domestication is abandoned and does not become
16effective. The statement of abandonment must contain all of
17the following:
18a. The name of the domesticating limited liability company.
19b. The date on which the statement of domestication was
20filed by the secretary of state.
21c. A statement that the domestication has been abandoned in
22accordance with this section.
23 Sec. 109. NEW SECTION. 489.1055 Statement of domestication
24— effective date of domestication.
251. A statement of domestication must be signed by the
26domesticating limited liability company and delivered to the
27secretary of state for filing.
282. A statement of domestication must contain all of the
29following:
30a. The name and jurisdiction of formation of the
31domesticating limited liability company.
32b. The name and jurisdiction of formation of the
33domesticated limited liability company and the street and
34mailing addresses of an office of the domesticated limited
35liability company that the secretary of state may use for
-133-1purposes of section 489.1056, subsection 5.
2c. If the domesticating limited liability company is a
3domestic limited liability company, a statement that the plan
4of domestication was approved in accordance with this part or,
5if the domesticating limited liability company is a foreign
6limited liability company, a statement that the domestication
7was approved in accordance with the law of its jurisdiction of
8formation.
9d. The certificate of organization of the domesticated
10limited liability company, as an attachment.
113. In addition to the requirements of subsection 2, a
12statement of domestication may contain any other provision not
13prohibited by law.
144. The certificate of organization of a domestic
15domesticated limited liability company must satisfy the
16requirements of this chapter, but the certificate does not need
17to be signed.
185. If the domesticated entity is a domestic limited
19liability company, the domestication becomes effective
20when the statement of domestication is effective. If the
21domesticated entity is a foreign limited liability company,
22the domestication becomes effective on the later of all of the
23following:
24a. The date and time provided by the organic law of the
25domesticated entity.
26b. When the statement is effective.
27 Sec. 110. NEW SECTION. 489.1056 Effect of domestication.
281. When a domestication becomes effective, all of the
29following apply:
30a. The domesticated entity is all of the following:
31(1) Organized under and subject to the organic law of the
32domesticated entity.
33(2) The same entity without interruption as the
34domesticating entity.
35b. All property of the domesticating entity continues to be
-134-1vested in the domesticated entity without transfer, reversion,
2or impairment.
3c. All debts, obligations, and other liabilities of the
4domesticating entity continue as debts, obligations, and other
5liabilities of the domesticated entity.
6d. Except as otherwise provided by law or the plan of
7domestication, all the rights, privileges, immunities,
8powers, and purposes of the domesticating entity remain in the
9domesticated entity.
10e. The name of the domesticated entity may be substituted
11for the name of the domesticating entity in any pending action
12or proceeding.
13f. The certificate of organization of the domesticated
14entity becomes effective.
15g. The provisions of the operating agreement of the
16domesticated entity that are to be in a record, if any,
17approved as part of the plan of domestication become effective.
18h. The interests in the domesticating entity are converted
19to the extent and as approved in connection with the
20domestication, and the members of the domesticating entity are
21entitled only to the rights provided to them under the plan
22of domestication and to any appraisal rights they have under
23section 489.1006.
242. Except as otherwise provided in the organic law or
25operating agreement of the domesticating limited liability
26company, the domestication does not give rise to any rights
27that a member, manager, or third party would otherwise
28have upon a dissolution, liquidation, or winding up of the
29domesticating company.
303. When a domestication becomes effective, a person that
31did not have interest holder liability with respect to the
32domesticating limited liability company and becomes subject to
33interest holder liability with respect to a domestic limited
34liability company as a result of the domestication has interest
35holder liability only to the extent provided by this chapter
-135-1and only for those debts, obligations, and other liabilities
2that are incurred after the domestication becomes effective.
34. When a domestication becomes effective, the interest
4holder liability of a person that ceases to hold an interest in
5a domestic domesticating limited liability company with respect
6to which the person had interest holder liability is subject
7to all of the following rules:
8a. The domestication does not discharge any interest
9holder liability under this chapter to the extent the interest
10holder liability was incurred before the domestication became
11effective.
12b. A person does not have interest holder liability under
13this chapter for any debt, obligation, or other liability that
14is incurred after the domestication becomes effective.
15c. This chapter continues to apply to the release,
16collection, or discharge of any interest holder liability
17preserved under paragraph “a” as if the domestication had not
18occurred.
19d. A person has whatever rights of contribution from any
20other person as are provided by this chapter, law other than
21this chapter, or the operating agreement of the domestic
22domesticating limited liability company with respect to any
23interest holder liability preserved under paragraph “a” as if
24the domestication had not occurred.
255. When a domestication becomes effective, a foreign
26limited liability company that is the domesticated company
27may be served with process in this state for the collection
28and enforcement of any of its debts, obligations, and other
29liabilities as provided in section 489.116.
306. If the domesticating limited liability company is a
31registered foreign entity, the registration of the limited
32liability company is canceled when the domestication becomes
33effective.
347. A domestication does not require a domestic
35domesticating limited liability company to wind up its affairs
-136-1and does not constitute or cause the dissolution of the limited
2liability company.
3 Sec. 111. Section 489.1101, Code 2023, is amended to read
4as follows:
5489.1101 Definitions.
6As used in this article subchapter, unless the context
7otherwise requires:
81. “Employee” or “agent” does not include a clerk,
9stenographer, secretary, bookkeeper, technician, or other
10person who is not usually and ordinarily considered by custom
11and practice to be practicing a profession nor any other person
12who performs all that person’s duties for the professional
13limited liability company under the direct supervision and
14control of one or more managers, employees, or agents of the
15professional limited liability company who are duly licensed in
16this state to practice a profession which the limited liability
17company is authorized to practice in this state. This article
18 subchapter does not require any such persons to be licensed to
19practice a profession if they are not required to be licensed
20under any other law of this state.
212. “Foreign professional limited liability company” means
22a limited liability company organized under laws other than
23the laws of this state for a purpose for which a professional
24limited liability company may be organized under this article
25 subchapter.
263. “Licensed” includes registered, certified, admitted to
27practice, or otherwise legally authorized under the laws of
28this state.
294. “Profession” means the following professions:
30a. Certified public accountancy.
31b. Architecture.
32c. Chiropractic.
33d. Dentistry.
34e. Physical therapy.
35f. Practice as a physician assistant.
-137- 1g. Psychology.
2h. Professional engineering.
3i. Land surveying.
4j. Landscape architecture.
5k. Law.
6l. Medicine and surgery.
7m. Optometry.
8n. Osteopathic medicine and surgery.
9o. Accounting practitioner.
10p. Podiatry.
11q. Real estate brokerage.
12r. Speech pathology.
13s. Audiology.
14t. Veterinary medicine.
15u. Pharmacy.
16v. Nursing.
17w. Marital and family therapy or mental health counseling,
18provided that the marital and family therapist or mental health
19counselor is licensed under chapters 147 and 154D.
20x. Social work, provided that the social worker is licensed
21pursuant to chapter 147 and section 154C.3, subsection 1,
22paragraph “c”.
235. “Professional limited liability company” means a limited
24liability company subject to this article subchapter, except a
25foreign professional limited liability company.
266. “Regulating board” means any board, commission, court,
27or governmental authority which, under the laws of this state,
28is charged with the licensing, registration, certification,
29admission to practice, or other legal authorization of the
30practitioners of any profession.
317. a. “Voluntary transfer” includes a sale, voluntary
32assignment, gift, pledge, or encumbrance; a voluntary change
33of legal or equitable ownership or beneficial interest; or a
34voluntary change of persons having voting rights with respect
35to any transferable interest, except as proxies.
-138- 1b. “Voluntary transfer” does not include a transfer of
2an individual’s interest in a limited liability company or
3other property to a guardian or conservator appointed for that
4individual or the individual’s property.
5 Sec. 112. Section 489.1106, Code 2023, is amended to read
6as follows:
7489.1106 Professional regulation.
8A professional limited liability company shall not
9be required to register with or to obtain any license,
10registration, certificate, or other legal authorization from
11a regulating board in order to practice a profession. Except
12as provided in this section, this article subchapter does not
13restrict or limit in any manner the authority or duties of any
14regulating board with respect to individuals an individual
15 practicing a profession which is within the jurisdiction of the
16regulating board, even if the individual is a member, manager,
17employee, or agent of a professional limited liability company
18or foreign professional limited liability company and practices
19the individual’s profession through such professional limited
20liability company.
21 Sec. 113. Section 489.1107, Code 2023, is amended to read
22as follows:
23489.1107 Relationship and liability to persons served.
24This article subchapter does not modify any law applicable
25to the relationship between an individual practicing a
26profession and a person receiving professional services,
27including but not limited to any liability arising out of such
28practice or any law respecting privileged communications.
29This article subchapter does not modify or affect the ethical
30standards or standards of conduct of any profession, including
31but not limited to any standards prohibiting or limiting the
32practice of the profession by a limited liability company or
33prohibiting or limiting the practice of two or more professions
34in combination. All such standards shall apply to the members,
35managers, employees, and agents through whom a professional
-139-1limited liability company practices any profession in this
2state, to the same extent that the standards apply to an
3individual practitioner.
4 Sec. 114. Section 489.1110, Code 2023, is amended to read
5as follows:
6489.1110 Convertible interests — rights and options.
7A professional limited liability company shall not create
8or issue any interest convertible into an interest of the
9professional limited liability company. The provisions of this
10article subchapter with respect to the issuance and transfer
11of interests apply to the creation, issuance, and transfer
12of any right or option entitling the holder to purchase from
13a professional limited liability company any interest of the
14professional limited liability company. A right or option
15shall not be transferable, whether voluntarily, involuntarily,
16by operation of law, or in any other manner. Upon the death
17of the holder, or when the holder ceases to be licensed to
18practice a profession in this state which the professional
19limited liability company is authorized to practice, the right
20or option shall expire.
21 Sec. 115. Section 489.1112, subsections 4, 5, and 6, Code
222023, are amended to read as follows:
234. When a person other than a member of record becomes
24entitled to have interests of a professional limited liability
25company transferred into that person’s name or to exercise
26voting rights, except as a proxy, with respect to interests of
27the professional limited liability company, the professional
28limited liability company shall immediately purchase the
29interests. Without limiting the generality of the foregoing,
30this section shall be applicable whether the event occurs
31as a result of appointment of a guardian or conservator for
32a member or the member’s property, transfer of interests
33by operation of law, involuntary transfer of interests,
34judicial proceeding, execution, levy, bankruptcy proceeding,
35receivership proceeding, foreclosure or enforcement of a pledge
-140-1or encumbrance, or any other situation or occurrence. However,
2this section does not apply to any voluntary transfer of
3interests as defined in this article subchapter.
45. Interests purchased by a professional limited liability
5company under this section shall be transferred to the
6professional limited liability company as of the close
7of business on the date of the death or other event which
8requires purchase. The member and the member’s executors,
9administrators, legal representatives, or successors in
10interest, shall promptly do all things which may be necessary
11or convenient to cause transfer to be made as of the transfer
12date. However, the interests shall promptly be transferred on
13the books and records of the professional limited liability
14company as of the transfer date, notwithstanding any delay in
15transferring or surrendering the interests or certificates
16representing the interests, and the transfer shall be valid and
17effective for all purposes as of the close of business on the
18transfer date. The purchase price for such interests shall be
19paid as provided in this article subchapter, but the transfer
20of interests to the professional limited liability company as
21provided in this section shall not be delayed or affected by
22any delay or default in making payment.
236. a. Notwithstanding subsections 1 through 5, purchase by
24the professional limited liability company is not required upon
25the occurrence of any event other than death of a member, if
26the professional limited liability company is dissolved within
27sixty days after the occurrence of the event or voluntarily
28elects to no longer be a professional limited liability company
29but continue its existence as a limited liability company
30pursuant to section 489.1119A within sixty days after the
31occurrence of the event. The certificate of organization or
32operating agreement of the professional limited liability
33company may provide that purchase is not required upon the
34death of a member, if the professional limited liability
35company is dissolved within sixty days after the date of the
-141-1member’s death.
2b. Notwithstanding sections 1 through 5, purchase by the
3professional limited liability company is not required upon the
4death of a shareholder if the professional limited liability
5company voluntarily elects to no longer be a professional
6limited liability company but continue its existence as a
7limited liability company pursuant to section 489.1119A within
8sixty days after death.
9 Sec. 116. Section 489.1113, Code 2023, is amended to read
10as follows:
11489.1113 Certificates representing interests.
12Each certificate representing an interest of a professional
13limited liability company shall state in substance that the
14certificate represents an interest in a professional limited
15liability company and is not transferable except as expressly
16provided in this article subchapter and in the certificate of
17organization or an operating agreement of the professional
18limited liability company.
19 Sec. 117. Section 489.1114, Code 2023, is amended to read
20as follows:
21489.1114 Management.
221. All managers of a professional limited liability
23company shall at all times be individuals who are licensed to
24practice a profession in this state or a lawful combination of
25professions pursuant to section 489.1102, which the limited
26liability company is authorized to practice. A person who
27is not licensed shall have no authority or duties in the
28management or control of the professional limited liability
29company. If a manager ceases to have this qualification, the
30manager shall immediately and automatically cease to hold such
31management position.
322. Notwithstanding subsection 1, upon the occurrence of
33any event that requires the professional limited liability
34company either to be dissolved or to elect to no longer be
35a professional limited liability company but continue its
-142-1existence as a limited liability company, as provided in
2section 489.1119A, all of the following apply:
3a. The professional limited liability company ceases to
4practice the profession that the professional limited liability
5company is authorized to practice, as provided in section
6489.1119A.
7b. The individuals who are not licensed to practice in this
8state a profession that the professional limited liability
9company is authorized to practice may be appointed as officers
10and directors for the sole purpose of doing any of the
11following:
12(1) Carrying out the dissolution of the professional
13limited liability company.
14(2) If applicable, carrying out the voluntary election
15of the professional limited liability company to no longer
16be a professional limited liability company but continue its
17existence as a limited liability company, as provided in
18section 489.1119A.
19 Sec. 118. Section 489.1115, Code 2023, is amended to read
20as follows:
21489.1115 Merger.
22A professional limited liability company shall not merge
23with any entity except another professional limited liability
24company subject to this article subchapter or a professional
25corporation subject to chapter 496C. Merger is not permitted
26unless the surviving or new professional limited liability
27company is a professional limited liability company which that
28 complies with all requirements of this article subchapter.
29 Sec. 119. Section 489.1116, Code 2023, is amended to read
30as follows:
31489.1116 Dissolution or liquidation.
32A violation of any provision of this article subchapter by a
33professional limited liability company or any of its members
34or managers shall be cause for its involuntary dissolution, or
35liquidation of its assets and business by the district court.
-143-1Upon the death of the last remaining member of a professional
2limited liability company, or when the last remaining member is
3not licensed or ceases to be licensed to practice a profession
4in this state which the professional limited liability company
5is authorized to practice, or when any person other than
6the member of record becomes entitled to have all interests
7of the last remaining member of the professional limited
8liability company transferred into that person’s name or to
9exercise voting rights, except as a proxy, with respect to such
10interests, the professional limited liability company shall not
11practice any profession and it. In that case, the professional
12limited liability company shall either be promptly dissolved
13or shall promptly elect to no longer be a professional limited
14liability company but continue its existence as a limited
15liability company as provided in section 489.1119A. However,
16if prior to dissolution all outstanding interests of the
17professional limited liability company are acquired by two
18or more persons licensed to practice a profession in this
19state which the professional limited liability company is
20authorized to practice, the professional limited liability
21company need not be dissolved nor elect to no longer be a
22professional limited liability company and may instead practice
23the profession as provided in this article subchapter.
24 Sec. 120. Section 489.1117, Code 2023, is amended to read
25as follows:
26489.1117 Foreign professional limited liability company.
271. A foreign professional limited liability company may
28practice a profession in this state if it complies with the
29provisions of this article subchapter. The secretary of state
30may prescribe forms for this purpose. A foreign professional
31limited liability company may practice a profession in this
32state only through members, managers, employees, and agents
33who are licensed to practice the profession in this state.
34The provisions of this article subchapter with respect to the
35practice of a profession by a professional limited liability
-144-1company apply to a foreign professional limited liability
2company.
32. This article subchapter does not prohibit the practice
4of a profession in this state by an individual who is a member,
5manager, employee, or agent of a foreign professional limited
6liability company, if the individual could lawfully practice
7the profession in this state in the absence of any relationship
8to a foreign professional limited liability company. This
9subsection applies regardless of whether or not the foreign
10professional limited liability company is authorized to
11practice a profession in this state.
12 Sec. 121. Section 489.1118, Code 2023, is amended to read
13as follows:
14489.1118 Limited liability companies organized under the
15other laws.
16This article subchapter does not apply to or interfere with
17the practice of any profession by or through any professional
18limited liability company organized after July 1, 1992, under
19any other law of this state or any other state or country, if
20the practice is lawful under any other statute or rule of law
21of this state. Any such professional limited liability company
22may voluntarily elect to adopt this article subchapter and
23become subject to its provisions, by amending its certificate
24of organization to be consistent with all provisions of this
25article subchapter and by stating in its amended certificate
26of organization that the limited liability company has
27voluntarily elected to adopt this article subchapter. Any
28limited liability company organized under any law of any other
29state or country may become subject to the provisions of this
30article subchapter by complying with all provisions of this
31article subchapter with respect to foreign professional limited
32liability companies.
33 Sec. 122. Section 489.1119, Code 2023, is amended to read
34as follows:
35489.1119 Conflicts with other provisions of this chapter.
-145- 1The provisions of this article subchapter shall prevail over
2any inconsistent provisions of this chapter.
3 Sec. 123. NEW SECTION. 489.1119A Election to no longer be
4a professional limited liability company.
5A professional limited liability company may elect to no
6longer be a professional limited liability company but continue
7its existence as a limited liability company by filing with
8the secretary of state an amendment to or restatement of its
9certificate of organization that states that the limited
10liability company is no longer a professional limited liability
11company and amending its name to no longer indicate it is a
12professional limited liability company.
13 Sec. 124. NEW SECTION. 489.1204 Severability clause.
14If any provision of this chapter or its application to any
15person or circumstance is held invalid, the invalidity does
16not affect other provisions or applications of this chapter
17which can be given effect without the invalid provision or
18application, and to this end the provisions of this chapter are
19severable.
20 Sec. 125. NEW SECTION. 489.1207 Application to existing
21relationships.
221. For purposes of applying this chapter to a limited
23liability company formed before the effective date of this
24Act, references in the limited liability company’s operating
25agreement to provisions in this chapter in effect before the
26effective date of this Act are deemed to be references to the
27comparable provision in this chapter after the effective date
28of this Act.
292. A limited liability company that has published notice of
30its dissolution and requested persons having claims against the
31limited liability company to present them in accordance with
32the notice pursuant to section 489.703 as that section existed
33immediately prior to the effective date of this Act shall be
34subject to the requirements set forth in that section as it
35existed immediately prior to the effective date of this Act,
-146-1including the right of a claim by a person that is commenced
2within five years after publication of the notice.
33. For the purposes of applying this chapter to a limited
4liability company formed before January 1, 2009, all of the
5following apply:
6a. The limited liability company’s articles of organization
7are deemed to be the company’s certificate of organization.
8b. For the purposes of applying section 489.102, subsection
915, and subject to section 489.112, subsection 4, language
10in the limited liability company’s articles of organization
11designating the limited liability company’s management
12structure operates as if that language were in the operating
13agreement.
14c. If a professional limited liability company’s name
15complied with section 490A.1503 as that section existed on
16December 30, 2010, that company’s name shall also be deemed to
17comply with the name requirements of section 489.1103 of the
182011 edition of the Iowa Code.
19 Sec. 126. Section 489.14101, Code 2023, is amended to read
20as follows:
21489.14101 Short title.
22This article subchapter may be cited as the “Uniform
23Protected Series Act”.
24 Sec. 127. Section 489.14102, unnumbered paragraph 1, Code
252023, is amended to read as follows:
26As used in this article subchapter, unless the context
27otherwise requires:
28 Sec. 128. Section 489.14102, subsections 4 and 9, Code 2023,
29are amended to read as follows:
304. “Foreign protected series” means an arrangement,
31configuration, or other structure established by a foreign
32limited liability company which has attributes comparable to
33a protected series established under this article subchapter.
34The term applies whether or not the law under which the foreign
35company is organized refers to “protected series”.
-147- 19. “Protected-series manager” means a person under whose
2authority the powers of a protected series are exercised
3and under whose direction the activities and affairs of the
4protected series are managed under the operating agreement,
5this article subchapter, and this chapter.
6 Sec. 129. Section 489.14104, subsection 4, paragraph c,
7Code 2023, is amended to read as follows:
8c. Except as permitted by law of this state other than
9this article subchapter, have a purpose or power that the law
10of this state other than this article subchapter prohibits a
11limited liability company from doing or having.
12 Sec. 130. Section 489.14106, subsections 2, 3, and 4, Code
132023, are amended to read as follows:
142. If this chapter otherwise restricts the power of an
15operating agreement to affect a matter, the restriction applies
16to a matter under this article subchapter in accordance with
17section 489.14108.
183. If law of this state other than this article subchapter
19 imposes a prohibition, limitation, requirement, condition,
20obligation, liability, or other restriction on a limited
21liability company, a member, manager, or other agent of the
22company, or a transferee of the company, except as otherwise
23provided in law of this state other than this article
24 subchapter, the restriction applies in accordance with section
25489.14108.
264. Except as otherwise provided in section 489.14107, if the
27operating agreement of a series limited liability company does
28not provide for a matter described in subsection 1 in a manner
29permitted by this article subchapter, the matter is determined
30in accordance with the following rules:
31a. To the extent this article subchapter addresses the
32matter, this article subchapter governs.
33b. To the extent this article subchapter does not address
34the matter, the other articles subchapters of this chapter
35govern the matter in accordance with section 489.14108.
-148-1 Sec. 131. Section 489.14107, subsection 1, paragraphs v, w,
2x, and y, Code 2023, are amended to read as follows:
3v. Article 6 Subchapter VI.
4w. Article 7 Subchapter VII.
5x. Article 8 Subchapter VIII.
6y. A provision of this article subchapter pertaining to any
7of the following:
8(1) Registered agents.
9(2) The secretary of state, including provisions pertaining
10to records authorized or required to be delivered to the
11secretary of state for filing under this article subchapter.
12 Sec. 132. Section 489.14108, subsection 2, paragraph b,
13subparagraphs (1) and (2), Code 2023, are amended to read as
14follows:
15(1) Accept for filing a type of record that neither this
16article subchapter nor any of the other articles subchapters of
17this chapter authorizes or requires a person to deliver to the
18secretary of state for filing.
19(2) Make or deliver a record that neither this article
20 subchapter nor the other articles subchapters of this chapter
21authorizes or requires the secretary of state to make or
22deliver.
23 Sec. 133. Section 489.14204, subsection 1, paragraph c,
24Code 2023, is amended to read as follows:
25c. Other means authorized by law of this state other than
26the other articles subchapters of this chapter.
27 Sec. 134. Section 489.14301, subsection 5, unnumbered
28paragraph 1, Code 2023, is amended to read as follows:
29To the extent permitted by this section and law of this
30state other than this article subchapter, a series limited
31liability company or protected series of the company may
32hold an associated asset directly or indirectly, through a
33representative, nominee, or similar arrangement, except that
34all of the following applies:
35 Sec. 135. Section 489.14303, subsection 4, Code 2023, is
-149-1amended to read as follows:
24. Except for section 489.14108, subsection 1, paragraph
3“c”, a provision of this article subchapter which applies
4to a protected-series transferee of a protected series of a
5series limited liability company applies to the company in
6its capacity as an owner of a protected-series transferable
7interest of the protected series. A provision of the operating
8agreement of a series limited liability company which applies
9to a protected-series transferee of a protected series of the
10company applies to the company in its capacity as an owner of a
11protected-series transferable interest of the protected series.
12 Sec. 136. Section 489.14304, subsection 6, Code 2023, is
13amended to read as follows:
146. Article 9 Subchapter IX applies to a protected series in
15accordance with section 489.14108.
16 Sec. 137. Section 489.14402, subsection 3, paragraph b,
17Code 2023, is amended to read as follows:
18b. The claim is to establish or enforce a liability arising
19under law of this state other than this article subchapter or
20from an act or omission in this state.
21 Sec. 138. Section 489.14404, subsection 3, Code 2023, is
22amended to read as follows:
233. In addition to any other remedy provided by law or
24equity, if a claim against a series limited liability company
25or a protected series has not been reduced to a judgment and
26law other than this article subchapter permits a prejudgment
27remedy by attachment, levy, or the like, the court may apply
28subsection 2 as a prejudgment remedy.
29 Sec. 139. Section 489.14404, subsection 5, paragraph b,
30Code 2023, is amended to read as follows:
31b. The claimant is a resident of this state or doing
32business or authorized to do business in this state, or the
33claim under section 489.14404 is to enforce a judgment, or to
34seek a prejudgment remedy, pertaining to a liability arising
35from law of this state other than this article subchapter or an
-150-1act or omission in this state.
2 Sec. 140. Section 489.14801, Code 2023, is amended to read
3as follows:
4489.14801 Uniformity of application and construction.
5In applying and construing this article subchapter,
6consideration shall be given to the need to promote uniformity
7of the law with respect to its subject matter among states
8that enact the uniform protected series Act as approved and
9recommended by the national conference of commissioners on
10uniform state laws.
11 Sec. 141. Section 489.14804, Code 2023, is amended to read
12as follows:
13489.14804 Savings clause.
14This article subchapter does not affect an action commenced,
15proceeding brought, or right accrued before July 1, 2020.
16 Sec. 142. REPEAL. Sections 489.113, 489.802, 489.803,
17489.804, 489.805, 489.806, 489.807, 489.808, 489.1008,
18489.1009, 489.1010, 489.1011, 489.1012, 489.1013, 489.1014,
19489.1015, 489.1016, and 489.1304, Code 2023, are repealed.
20 Sec. 143. CODE EDITOR DIRECTIVE.
211. The Code editor is directed to make the following
22transfers:
23a. Section 489.104 to section 489.108.
24b. Section 489.105 to section 489.109.
25c. Section 489.106 to section 489.104.
26d. Section 489.107 to section 489.111.
27e. Section 489.108 to section 489.112.
28f. Section 489.109 to section 489.113.
29g. Section 489.110 to section 489.105.
30h. Section 489.111 to section 489.106.
31i. Section 489.112 to section 489.107.
32j. Section 489.114 to section 489.116.
33k. Section 489.114A, as enacted by this Act, to section
34489.114.
35l. Section 489.115 to section 489.117.
-151- 1m. Section 489.115A, as enacted by this Act, to section
2489.115.
3n. Section 489.116 to section 489.119.
4o. Section 489.117 to section 489.122.
5p. Section 489.205A to section 489.122A.
6q. Section 489.206 to section 489.209.
7r. Section 489.206A, as enacted by this Act, to section
8489.206.
9s. Section 489.208 to section 489.211.
10t. Section 489.208A, as enacted by this Act, to section
11489.208.
12u. Section 489.209 to section 489.211A.
13v. Section 489.701A to section 489.703.
14w. Section 489.703 to section 489.704.
15x. Section 489.704 to section 489.705.
16y. Section 489.705 to section 489.708.
17z. Section 489.706 to section 489.710.
18aa. Section 489.706A, as enacted by this Act, to section
19489.706.
20ab. Section 489.707 to section 489.711.
21ac. Section 489.708 to section 489.707.
22ad. Section 489.801 to section 489.901.
23ae. Section 489.805A, as enacted by this Act, to section
24489.805.
25af. Section 489.809 to section 489.912.
26ag. Section 489.901 to section 489.801.
27ah. Section 489.902 to section 489.802.
28ai. Section 489.903 to section 489.803.
29aj. Section 489.904 to section 489.804.
30ak. Section 489.906 to section 489.806.
31al. Section 489.906A, as enacted by this Act, to section
32489.906.
33am. Section 489.911A to section 489.902.
34an. Section 489.911B to section 489.903.
35ao. Section 489.911C to section 489.904.
-152- 1ap. Section 489.1119 to section 489.1120.
2aq. Section 489.1119A to section 489.1119.
3ar. Section 489.1301 to section 489.1201.
4as. Section 489.1302 to section 489.1202.
5at. Section 489.1303 to section 489.1203.
62. The Code editor shall correct internal references in the
7Code and in any enacted legislation as necessary due to the
8enactment of this section.
9 Sec. 144. DIRECTIONS TO THE CODE EDITOR — DIVIDING
10SUBCHAPTER X INTO PARTS. The Code editor is directed to divide
11the provisions of chapter 489, subchapter X, as amended or
12enacted in this division of this Act, into parts as follows:
131. Part 1, including sections 489.1001 through 489.1007.
142. Part 2, including sections 489.1021 through 489.1026.
153. Part 3, including sections 489.1031 through 489.1036.
164. Part 4, including sections 489.1041 through 489.1046.
175. Part 5, including sections 489.1051 through 489.1056.
18DIVISION II
19COORDINATING AMENDMENTS
20 Sec. 145. Section 9.11, subsection 1, paragraph c, Code
212023, is amended to read as follows:
22c. Chapter 489, including as provided in section 489.205,
23 489.205A and as stated in section 489.117 or as otherwise
24described in sections 489.112, 489.302, 489.702, 489.1008,
25489.1012, and 489.14502 section 489.210.
26 Sec. 146. Section 10.1, subsection 9, paragraph b, Code
272023, is amended to read as follows:
28b. As used in paragraph “a”, a type of membership interest
29in a limited liability company includes a protected series as
30provided in chapter 489, article 14 subchapter XIV.
31 Sec. 147. Section 10.1, subsection 17, paragraph b, Code
322023, is amended to read as follows:
33b. As used in paragraph “a”, a type of membership interest
34in a limited liability company includes a protected series of a
35series limited liability company as provided in chapter 489,
-153-1article 14 subchapter XIV.
2 Sec. 148. Section 10.10, subsection 1, paragraph c,
3subparagraph (2), Code 2023, is amended to read as follows:
4(2) As used in subparagraph (1), a type of membership
5interest in a limited liability company includes a protected
6series of a series limited liability company as provided in
7chapter 489, article 14 subchapter XIV.
8 Sec. 149. Section 488.108, subsection 4, paragraph b,
9subparagraph (4), Code 2023, is amended to read as follows:
10(4) For a limited liability company under chapter 489,
11section 489.108, 489.109, 489.114A, or 489.706.
12 Sec. 150. Section 490.401, subsection 2, paragraph h,
13subparagraph (4), Code 2023, is amended to read as follows:
14(4) For a limited liability company under chapter 489,
15section 489.108, 489.109, 489.114A, or 489.706.
16 Sec. 151. Section 501A.102, subsection 13, Code 2023, is
17amended by striking the subsection.
18 Sec. 152. Section 501A.1101, subsections 1, 2, and 5, Code
192023, are amended to read as follows:
201. Authorization. Unless otherwise prohibited, cooperatives
21organized under the laws of this state, including cooperatives
22organized under this chapter or traditional cooperatives, may
23merge or consolidate with each other, an Iowa limited liability
24company under the provisions of section 489.1015, or other
25 another business entities entity organized under the laws
26of another state, by complying with the provisions of this
27section and the law of the state where the surviving or new
28business entity will exist. A cooperative shall not merge or
29consolidate with a business entity organized under the laws
30of this state, other than a traditional cooperative, unless
31the law governing the business entity expressly authorizes
32merger or consolidation with a cooperative. This subsection
33does not authorize a foreign business entity to do any act not
34authorized by the law governing the foreign business entity.
352. Plan. To initiate a merger or consolidation of a
-154-1cooperative, a written plan of merger or consolidation shall be
2prepared by the board or by a committee selected by the board
3to prepare a plan. The plan shall state all of the following:
4a. The names of the each constituent domestic cooperative,
5the name of any Iowa limited liability company that is a party
6to the merger, to the extent authorized under section 489.1015,
7 and any foreign business entities entity that is a party to the
8merger.
9b. The name of the surviving or new domestic cooperative,
10Iowa limited liability company as required by section 489.1015,
11 or other foreign business entity.
12c. The manner and basis of converting membership or
13ownership interests of the constituent domestic cooperative,
14the Iowa limited liability company that is a party as provided
15in section 489.1015, or foreign business entity into membership
16or ownership interests in the surviving or new domestic
17cooperative, the surviving Iowa limited liability company as
18authorized in section 489.1015, or foreign business entity.
19d. The terms of the merger or consolidation.
20e. The proposed effect of the merger or consolidation on
21the members and patron members of each constituent domestic
22cooperative.
23f. For a consolidation, the plan shall contain the articles
24of the entity or organizational documents to be filed with the
25state in which the entity is organized or, if the surviving
26organization is an Iowa limited liability company, the articles
27of organization.
285. Effect of merger or consolidation. For a merger that does
29not involve an Iowa limited liability company, the following
30shall apply to the The effect of a merger or consolidation
31shall be as follows:
32a. After the effective date, the each domestic cooperative,
33Iowa limited liability company, if party to the plan,
34 cooperatives and any foreign business entity that is a party to
35the plan become a single entity. For a merger, the surviving
-155-1business entity is the business entity designated in the plan.
2For a consolidation, the new domestic cooperative, the Iowa
3limited liability company, if any, and any or new foreign
4business entity is the business entity provided for in the
5plan. Except for the surviving or new domestic cooperative,
6Iowa limited liability company, or foreign business entity, the
7separate existence of each merged or consolidated domestic or
8foreign business entity that is a party to the plan ceases on
9the effective date of the merger or consolidation.
10b. The surviving or new domestic cooperative, Iowa limited
11liability company, or foreign business entity possesses all of
12the rights and property of each of the merged or consolidated
13business entities and is responsible for all their obligations.
14The title to property of the merged or consolidated domestic
15cooperative, Iowa limited liability company, or foreign
16business entity, is vested in the surviving or new domestic
17cooperative, Iowa limited liability company, or foreign
18business entity without reversion or impairment of the title
19caused by the merger or consolidation.
20c. If a merger involves an Iowa limited liability company,
21this subsection is subject to the provisions of section
22489.1015.
23 Sec. 153. Section 501A.1102, subsection 1, Code 2023, is
24amended to read as follows:
251. Definition. For purposes of this section, “subsidiary”
26means a domestic cooperative, an Iowa limited liability
27company, or a foreign cooperative.
28 Sec. 154. Section 501A.1102, subsection 2, unnumbered
29paragraph 1, Code 2023, is amended to read as follows:
30An Iowa limited liability company may only participate
31in a merger under this section to the extent authorized
32under section 489.1015. A parent domestic cooperative or
33a subsidiary that is a domestic cooperative may complete
34the merger of a subsidiary as provided in this section.
35However, if either the parent cooperative or the subsidiary
-156-1is a business entity organized under the laws of this state,
2the merger of the subsidiary is not authorized under this
3section unless the law governing the business entity expressly
4authorizes merger with a cooperative.
5 Sec. 155. Section 501A.1103, subsection 2, paragraph a,
6Code 2023, is amended to read as follows:
7a. A merger may be abandoned upon any of the following:
8(1) The members of each of the constituent domestic
9cooperatives entitled to vote on the approval of the plan
10have approved the abandonment at a meeting by the affirmative
11vote of the holders of a majority of the voting power of the
12membership interests entitled to vote.
13(2) The merger is with a domestic cooperative and an Iowa
14limited liability company or foreign business entity.
15(3) (2) The abandonment is approved in such manner as may
16be required by section 489.1015 for the involvement of an Iowa
17limited liability company, or for a foreign business entity by
18 under the laws of the state under which the foreign business
19entity is organized.
20(4) (3) The members of a constituent domestic cooperative
21are not entitled to vote on the approval of the plan, and the
22board of the constituent domestic cooperative has approved
23the abandonment by the affirmative vote of a majority of the
24directors present.
25(5) (4) The plan provides for abandonment and all
26conditions for abandonment set forth in the plan are met.
27(6) (5) The plan is abandoned before the effective date
28of the plan by a resolution of the board of any constituent
29domestic cooperative abandoning the plan of merger approved by
30the affirmative vote of a majority of the directors present,
31subject to the contract rights of any other person under the
32plan. If a plan of merger is with a domestic business entity or
33foreign business entity, the plan of merger may be abandoned
34before the effective date of the plan by a resolution of the
35foreign business entity adopted according to the laws of the
-157-1state under which the foreign business entity is organized,
2subject to the contract rights of any other person under the
3plan. If the plan of merger is with an Iowa limited liability
4company, the plan of merger may be abandoned by the Iowa
5limited liability company as provided in section 489.1015,
6subject to the contractual rights of any other person under the
7plan.
8 Sec. 156. Section 504.401, subsection 2, paragraph b,
9subparagraph (4), Code 2023, is amended to read as follows:
10(4) For a limited liability company under chapter 489,
11section 489.108, 489.109, 489.114A, or 489.706.
12 Sec. 157. Section 504.403, subsection 1, paragraph b,
13subparagraph (4), Code 2023, is amended to read as follows:
14(4) For a limited liability company under chapter 489,
15section 489.108, 489.109, 489.114A, or 489.706.
16 Sec. 158. Section 524.310, subsection 5, paragraph b, Code
172023, is amended to read as follows:
18b. A corporate or company name reserved, registered, or
19protected as provided in section 489.109, 489.114A, 489.706,
20 490.402, 490.403, 504.402, or 504.403.
21 Sec. 159. Section 524.303, subsection 2, Code 2023, is
22amended to read as follows:
232. Applicable fees, payable to the secretary of state as
24specified in section 489.117 or section 490.122, for the filing
25of the articles of incorporation or section 489.117 for filing
26a certificate of organization.
27 Sec. 160. Section 542.7, subsection 3, paragraph c,
28subparagraph (2), Code 2023, is amended to read as follows:
29(2) Notwithstanding chapter 489, article 11 subchapter XI,
30or any other provision of law to the contrary, a certified
31public accounting firm organized as a professional limited
32liability company under chapter 489, article 11 subchapter XI,
33may have nonlicensee members provided that the professional
34limited liability company complies with the requirements of
35this section.
-158-1DIVISION III
2EFFECTIVE DATE
3 Sec. 161. EFFECTIVE DATE. This Act takes effect January 1,
42024.
5EXPLANATION
6The inclusion of this explanation does not constitute agreement with
7the explanation’s substance by the members of the general assembly.
8GENERAL. This bill enacts new or amends existing Code
9sections in the Revised Uniform Limited Liability Company
10Act (RULLCA), now referred to as simply the Uniform Limited
11Liability Act, as approved and recommended by the national
12conference on commissioners of uniform state laws, more
13commonly referred to as the uniform law commissioners (ULC)
14(see Code chapter 5). The RULLCA, which was enacted by the
15general assembly by 2008 Iowa Acts, chapter 1162, replaced
16the Iowa limited liability company Act effective January 1,
172011. Its provisions are published in Code chapter 489. The
18bill is based on amendments approved and recommended by the
19ULC in 2013. The bill amends every one of the 14 articles in
20the RULLCA other than the last article, the uniform protected
21series Act enacted by the general assembly in 2019 Iowa Acts,
22chapter 26. The bill also amends provisions to the Iowa
23professional corporation Act (IPCA) enacted as Article 11 by
24the general assembly in 2008 Iowa Acts, chapter 1088.
25BACKGROUND. A limited liability company (LLC), sometimes
26referred to as simply a company, is a type of domestic business
27entity usually perpetual in duration and formed for capital
28acquisition and the distribution of any profits. An LLC
29is formed by filing a certificate of organization with the
30secretary of state (SOS). A foreign LLC is recognized to
31do business in the state when acting under a certificate of
32authorization. An LLC is often organized in a manner similar
33to a limited partnership which may include a number of passive
34investors and one or more managers who owe a fiduciary duty
35of care to the entity and its members when making decisions
-159-1affecting the company, although the law also recognizes
2member-managed organizational structure. An LLC is governed
3by an operating agreement executed by the members, which may
4supersede certain statutory provisions, and is comparable to
5a partnership agreement in a general or limited partnership.
6Members and managers are shielded from personal liability
7similar to shareholders and directors of a corporation. Unlike
8a corporation, taxes attributable as income to an LLC are
9passed through to investors without being taxed at the business
10level.
11BILL’S PROVISIONS. The bill changes the names of articles
12to subchapters to be consistent with Iowa’s system of Code
13organization (see Code chapter 490, the Iowa business
14corporation Act). The bill also changes the name of the Code
15chapter, other than subchapter XI, to the uniform limited
16liability company Act (ULLCA). Subchapter I includes basic
17provisions that govern the interpretation of terms in the
18ULLCA, the nature and powers of LLCs, the formation of LLCs
19including through the use of an operating agreement, the use
20and protection of its name, the use of a registered agent,
21and service of process, including by the SOS. Subchapter
22II governs the formation of an LLC, including the filing of
23a certificate of organization. The bill provides that a
24foreign LLC does business in the state under a certificate
25of registration. The subchapter provides for the records
26filed with the SOS or pursuant to judicial order, the filing
27of biennial reports with the SOS, and payment of fees or
28charges to the SOS. Subchapter III governs the relationship
29between members and managers and between the LLC and persons
30dealing with the business entity, including the liability
31of members and managers. Subchapter IV governs membership,
32contributions and distributions, the management, standards of
33conduct, and the right to information. Subchapter V governs
34the transfer of rights and the rights of persons transferred an
35interest. Subchapter VI governs a member’s dissociation from
-160-1an LLC. Subchapter VII governs the dissolution of the entity
2voluntarily, by the SOS, and the winding up of its affairs,
3including providing for the settlement of claims by creditors
4and members. Subchapter VIII governs foreign LLCs and the
5process to obtain a certificate of registration to do business
6in the state. Subchapter IX governs action by members taken
7against an LLC either directly or derivatively, and subchapter
8X governs mergers, conversions, and domestications. Subchapter
9XI amends provisions governing professional liability
10companies. Subchapter XII governed series limited liability
11companies before it was replaced by subchapter XIV. Subchapter
12XIV enacts the uniform protected series Act.
13PENALTY. A person who files a record containing information
14that the person knows is false commits a serious misdemeanor.
15A serious misdemeanor is punishable by confinement for no more
16than one year and a fine of at least $430 but not more than
17$2,560.
18COORDINATING PROVISIONS. The bill makes a number of
19corresponding changes, including eliminating special
20requirements applicable to cooperatives involved in a merger or
21consolidation with a cooperative under Code chapter 501A.
22EFFECTIVE DATE. The bill takes effect January 1, 2024.
-161-da/jh