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House File 655 - ReprintedA 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.
149. “Filing entity” means an unincorporated entity, other
15than a limited liability partnership, that is of a type that
16is created by filing a public organic record or is required to
17file a public organic record that evidences its creation.
189. 10. “Foreign limited liability company” means an
19unincorporated entity formed under the law of a jurisdiction
20other than this state and denominated by that law as a limited
21liability company which would be a limited liability company if
22formed under the law of this state.
2311. “Jurisdiction”, used to refer to a political entity,
24means the United States, a state, a foreign country, or a
25political subdivision of a foreign country.
2612. “Jurisdiction of formation” means the jurisdiction whose
27law governs the internal affairs of an entity.
2810. 13. “Limited liability company”, except in the phrase
29“foreign limited liability company”, and in subchapter X means
30an entity formed under this chapter or which becomes subject to
31this chapter under subchapter X or section 489.110.
3211. 14. “Manager” means a person that under the operating
33agreement of a manager-managed limited liability company is
34responsible, alone or in concert with others, for performing
35the management functions stated in section 489.407, subsection
-3-13.
212. 15. “Manager-managed limited liability company” means a
3limited liability company that qualifies under section 489.407,
4subsection 1.
513. 16. “Member” means a person that has become a member
6of a limited liability company under section 489.401 and has
7not dissociated under section 489.602. for whom all of the
8following are true:
9a. The person has become a member of a limited liability
10company under section 489.401 or was a member in a limited
11liability company when the company became subject to this
12chapter under section 489.110.
13b. The person is not dissociated under section 489.602.
1414. 17. “Member-managed limited liability company” means a
15limited liability company that is not a manager-managed limited
16liability company.
1718. “Nonfiling entity” means an unincorporated entity that
18is of a type that is not created by filing a public organic
19record.
2015. 19. “Operating agreement” means the agreement, whether
21or not referred to as an operating agreement and whether oral,
22implied, in a record, implied, or in any combination thereof,
23of all the members of a limited liability company, including
24a sole member, concerning the matters described in section
25489.110, subsection 1. The term includes the agreement as
26amended or restated.
2716. 20. “Organizer” means a person that acts under section
28489.201 to form a limited liability company.
2917. 21. a. “Person” means an individual, business
30 corporation, business trust, estate, trust, nonprofit
31corporation, partnership, limited partnership, limited
32liability company, domestic cooperative, unincorporated
33nonprofit association, statutory trust, business trust,
34common-law business trust, estate, trust, association, joint
35venture, public corporation, government or governmental
-4-1subdivision, agency, or instrumentality, or any other legal or
2commercial entity.
3b. “Person” includes a protected series, however
4denominated, of an entity if the protected series is
5established under law that limits, or limits if conditions
6specified under law are satisfied, the ability of a creditor
7of the entity or of any other protected series of the entity to
8satisfy a claim from assets of the protected series.
918. 22. “Principal office” means the principal executive
10office of a limited liability company or foreign limited
11liability company, whether or not the office is located in this
12state.
1323. “Property” means all property, whether real, personal,
14or mixed or tangible or intangible, or any right or interest
15therein.
1619. 24. “Record”, used as a noun, means information that
17is inscribed on a tangible medium or that is stored in an
18electronic or other medium and is retrievable in perceivable
19form.
2020. “Registered office” means the office that a limited
21liability company or foreign limited liability company is
22required to designate and maintain under section 489.113.
2325. “Registered agent” means an agent of a limited
24liability company or foreign limited liability company which is
25authorized to receive service of any process, notice, or demand
26required or permitted by law to be served on the company.
2726. “Registered foreign limited liability company” means
28a foreign limited liability company that is registered to do
29business in this state pursuant to a statement of registration
30filed by the secretary of state.
3121. 27. “Sign” means, with the present intent to
32authenticate or adopt a record, to do any of the following:
33a. Execute or adopt a tangible symbol.
34b. Attach to or logically associate with the record an
35electronic symbol, sound, or process.
-5- 122. 28. “State” means a state of the United States, the
2District of Columbia, Puerto Rico, the United States Virgin
3Islands, or any territory or insular possession subject to the
4jurisdiction of the United States.
523. 29. “Transfer” includes an assignment, conveyance,
6deed, bill of sale, lease, mortgage, security interest,
7encumbrance, gift, or transfer by operation of law. any of the
8following:
9a. An assignment.
10b. A conveyance.
11c. A sale.
12d. A lease.
13e. An encumbrance, including a mortgage or security
14interest.
15f. A gift.
16g. A transfer by operation of law.
1724. 30. a. “Transferable interest” means the right, as
18originally associated with initially owned by a person in the
19 person’s capacity as a member, to receive distributions from
20a limited liability company, in accordance with the operating
21agreement, whether or not the person remains a member or
22continues to own any part of the right.
23b. “Transferable interest” applies to any fraction of the
24interest, by whomever owned.
2525. 31. a. “Transferee” means a person to which all or
26part of a transferable interest has been transferred, whether
27or not the transferor is a member.
28b. “Transferee” includes a person that owns a transferable
29interest under section 489.603, subsection 1, paragraph “c”.
30 Sec. 3. Section 489.103, Code 2023, is amended to read as
31follows:
32489.103 Knowledge — notice.
331. A person knows a fact when if the person has or is any
34of the following:
35a. Has actual knowledge of it.
-6- 1b. Is deemed to know it under subsection 4, paragraph “a”,
2or law other than this chapter.
32. A person has notice of a fact when if the person has or
4is any of the following:
5a. Has reason to know the fact from all of the facts known
6to the person at the time in question.
7b. Is deemed to have notice of the fact under subsection 4,
8paragraph “b”.
93. A Subject to section 489.210, subsection 6, a person
10notifies another person of a fact by taking steps reasonably
11required to inform the other person in ordinary course, whether
12or not those steps cause the other person knows to know the
13fact.
144. A person that is not a member is deemed both all of the
15following:
16a. To know of a limitation on authority to transfer real
17property as provided in section 489.302, subsection 7.
18b. To have notice of all of the following regarding a
19limited liability company’s:
20(1) Dissolution, The limited liability company’s
21dissolution, ninety days after a statement of dissolution under
22section 489.702, subsection 2, paragraph “b”, subparagraph (1),
23becomes effective.
24(2) Termination, The limited liability company’s
25termination, ninety days after a statement of termination under
26section 489.702, subsection 2, paragraph “b”, subparagraph (6),
27becomes effective.
28(3) Merger, The limited liability company’s participation
29in a merger, interest exchange, conversion, or domestication,
30ninety days after articles of merger, interest exchange,
31 conversion, or domestication under article 10 subchapter X
32 become effective.
33 Sec. 4. Section 489.104, Code 2023, is amended to read as
34follows:
35489.104 Nature, purpose, and duration of limited liability
-7-1company.
21. A limited liability company is an entity distinct from
3its member or members.
42. A limited liability company may have any lawful purpose,
5regardless of whether for profit.
63. A limited liability company has perpetual duration.
7 Sec. 5. Section 489.105, Code 2023, is amended to read as
8follows:
9489.105 Powers.
101. Except as otherwise provided in subsection 2, a limited
11liability company has the capacity to sue and be sued in its
12own name and the power to do all things necessary or convenient
13to carry on its activities and affairs.
142. Until a limited liability company has or has had at
15least one member, the limited liability company lacks the
16capacity to do any act or carry on any activity except all of
17the following:
18a. Delivering to the secretary of state for filing a
19statement of change under section 489.114, an amendment to the
20certificate under section 489.202, a statement of correction
21under section 489.206, a biennial report under section 489.209,
22a statement of withdrawal or a statement of rescission under
23section 489.701A, or a statement of termination under section
24489.702, subsection 2, paragraph “b”, subparagraph (6).
25b. Admitting a member under section 489.401.
26c. Dissolving under section 489.701.
273. A limited liability company that has or has had at least
28one member may ratify an act or activity that occurred when the
29company lacked capacity under subsection 2.
30 Sec. 6. Section 489.106, Code 2023, is amended to read as
31follows:
32489.106 Governing law.
33The law of this state governs all of the following:
341. The internal affairs of a limited liability company.
352. The liability of a member as member and a manager as
-8-1manager for the debts, obligations, a debt, obligation, or
2other liabilities liability of a limited liability company.
3 Sec. 7. Section 489.108, Code 2023, is amended to read as
4follows:
5489.108 Name Permitted names.
61. The name of a limited liability company must contain
7the words phrase “limited liability company” or “limited
8company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
9“Limited” may be abbreviated as “Ltd.”, and “company” may be
10abbreviated as “Co.”.
112. Unless authorized by Except as otherwise provided in
12 subsection 3, the name of a limited liability company, and
13the name under which a foreign limited liability company may
14register to do business in this state, must be distinguishable
15in on the records of the secretary of state from all any of the
16following:
17a. The name of each person that is not an individual and
18that is incorporated, organized, or authorized to transact
19business in this state.
20b. Each name reserved under section 489.109.
21a. The name of an existing person whose formation required
22the filing of a record by the secretary of state and which is
23not at the time administratively dissolved, or if such person
24has been administratively dissolved, within five years of the
25effective date of dissolution.
26b. The name of a limited liability partnership whose
27statement of qualification is in effect.
28c. The name under which a person is registered to do
29business in this state by the filing of a record by the
30secretary of state.
31d. The name reserved under section 489.109 or other law
32of this state providing for the reservation of a name by the
33filing of a record by the secretary of state.
34e. The name registered under section 489.114 or other law
35of this state providing for the registration of a name by the
-9-1filing of a record by the secretary of state.
2f. The name registered with the secretary of state as a
3fictitious name.
43. A limited liability company may apply to the secretary of
5state for authorization to use a name that does not comply with
6subsection 2. The secretary of state shall authorize use of
7the name applied for if either of the following applies: If a
8person consents in a record to the use of its name and submits
9an undertaking in a form satisfactory to the secretary of state
10to change its name to a name that is distinguishable on the
11records of the secretary of state from any name in any category
12of names in subsection 2, the name of the consenting person may
13be used by the person to which the consent was given.
14a. The present user, registrant, or owner of the
15noncomplying name consents in a signed record to the use
16and submits an undertaking in a form satisfactory to the
17secretary of state to change the noncomplying name to a name
18that complies with subsection 2 and is distinguishable in the
19records of the secretary of state from the name applied for.
20b. The applicant delivers to the secretary of state a
21certified copy of the final judgment of a court establishing
22the applicant’s right to use in this state the name applied
23for.
244. A limited liability company may use the name, including
25the fictitious name, of another entity that is used in this
26state if the other entity is formed under the law of this
27state or is authorized to transact business in this state
28and the proposed user limited liability company meets any
29of the following conditions: In determining whether a name
30is the same as or not distinguishable on the records of the
31secretary of state from the name of another person, words,
32phrases, or abbreviations indicating a type of person, such as
33“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
34corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
35“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
-10-1“limited liability partnership”, “L.L.P.”, “LLP”, “registered
2limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
3liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
4limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
5“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
6“coop”, or “CP” shall not be taken into account.
7a. Has merged with the other entity.
8b. Has been formed by reorganization of the other entity.
9c. Has acquired all or substantially all of the assets,
10including the name, of the other entity.
115. This article does not control the use of fictitious
12names. However, if a limited liability company uses a
13fictitious name in this state, it shall deliver to the
14secretary of state for filing a certified copy of the
15resolution of its members if it is member-managed or its
16managers if it is manager-managed, adopting the fictitious
17name. The name of a limited liability company or foreign
18limited liability company shall not contain words that may be
19used only with approval by another state department or state
20agency unless the company obtains the approval of such other
21state department or agency and delivers to the secretary of
22state for filing a record certifying such approval.
236. Subject to section 489.805, this section applies to
24a foreign limited liability company transacting business in
25this state which has a certificate of authority to transact
26business in this state or which has applied for a certificate
27of authority. A limited liability company or foreign limited
28liability company may use a name that is not distinguishable
29from a name described in subsection 2, paragraphs “a” through
30“f”, if the company delivers to the secretary of state a
31certified copy of a final judgment of a court of competent
32jurisdiction establishing the right of the company to use the
33name in this state.
347. A limited liability company may use the name, including
35the fictitious name, of another entity that is used in this
-11-1state if the other entity is formed under the law of this
2state or is authorized to transact business in this state and
3the proposed user limited liability company meets any of the
4following conditions:
5a. Has merged with the other entity.
6b. Has been formed by reorganization of the other entity.
7c. Has acquired all or substantially all of the assets,
8including the name, of the other entity.
98. This subchapter does not control the use of fictitious
10names. However, if a limited liability company uses a
11fictitious name in this state, it shall deliver to the
12secretary of state for filing a certified copy of the
13resolution of its members if it is member-managed or its
14managers if it is manager-managed, adopting the fictitious
15name.
16 Sec. 8. Section 489.109, Code 2023, is amended to read as
17follows:
18489.109 Reservation of name.
191. A person may reserve the exclusive use of the a name
20of a limited liability company, including a fictitious or
21assumed name for a foreign limited liability company whose
22name is not available, by delivering an application to the
23secretary of state for filing that complies with section
24489.112 by delivering an application to the secretary of state
25for filing. The application must state the name and address
26of the applicant and the name proposed to be reserved. If
27the secretary of state finds that the name applied for is
28available, it must be reserved the secretary of state shall
29reserve the name for the applicant’s exclusive use for a
30one-hundred-twenty-day period one hundred and twenty days.
312. The owner of a reserved name reserved for a limited
32liability company may transfer the reservation to another
33person by delivering to the secretary of state for filing a
34signed notice in a record of the transfer which states the name
35and address of the transferee person to which the reservation
-12-1is being transferred.
2 Sec. 9. Section 489.110, Code 2023, is amended to read as
3follows:
4489.110 Operating agreement — scope, function, and
5limitations.
61. Except as otherwise provided in subsections 2 3 and 3 4,
7the operating agreement governs all of the following:
8a. Relations among the members as members and between the
9members and the limited liability company.
10b. The rights and duties under this chapter of a person in
11the capacity of manager.
12c. The activities and affairs of the company and the conduct
13of those activities and affairs.
14d. The means and conditions for amending the operating
15agreement.
162. To the extent the operating agreement does not otherwise
17 provide for a matter described in subsection 1, this chapter
18governs the matter.
193. An operating agreement shall not do any of the following:
20a. Vary a limited liability company’s capacity under section
21489.105 to sue and be sued in its own name the law applicable
22under section 489.104.
23b. Vary the law applicable under section 489.106 a limited
24liability company’s capacity under section 489.109 to sue and
25be sued in its own name.
26c. Vary the power of the court under section 489.204. any
27requirement, procedure, or other provision of this chapter
28pertaining to any of the following:
29(1) Registered agents.
30(2) The secretary of state, including provisions pertaining
31to records authorized or required to be delivered to the
32secretary of state for filing under this chapter.
33d. Subject to subsections 4 through 7, eliminate the duty of
34loyalty, the duty of care, or any other fiduciary duty Vary the
35provisions of section 489.204.
-13- 1e. Subject to subsections 4 through 7, eliminate the
2contractual obligation of good faith and fair dealing under
3section 489.409, subsection 4 Alter or eliminate the duty of
4loyalty or the duty of care, except as otherwise provided in
5subsection 4.
6f. Unreasonably restrict the duties and rights stated in
7section 489.410 Eliminate the contractual obligation of good
8faith and fair dealing under section 489.409, subsection 4,
9but the operating agreement may prescribe the standards, if
10not manifestly unreasonable, by which the performance of the
11obligation is to be measured.
12g. Vary the power of a court to decree dissolution in
13the circumstances specified in section 489.701, subsection
141, paragraphs “d” and “e” Relieve or exonerate a person from
15liability for conduct except as provided in subsection 6.
16h. Vary the requirement to wind up a limited liability
17company’s business as specified in section 489.702,
18subsection 1, and section 489.702, subsection 2, paragraph
19“a” Unreasonably restrict the duties and rights under section
20489.410, but the operating agreement may impose reasonable
21restrictions on the availability and use of information
22obtained under that section and may define appropriate
23remedies, including liquidated damages, for a breach of any
24reasonable restriction on use.
25i. Unreasonably restrict the right of a member to maintain
26an action under article 9 Vary the causes of dissolution
27specified in section 489.701, subsection 1, paragraph “d”.
28j. Restrict the right to approve a merger, conversion, or
29domestication under section 489.1014 to a member that will have
30personal liability with respect to a surviving, converted, or
31domesticated organization Vary the requirement to wind up the
32limited liability company’s activities and affairs as specified
33in section 489.702, subsection 1; subsection 2, paragraph “a”;
34and subsection 5.
35k. Except as otherwise provided in section 489.112,
-14-1subsection 2, restrict the rights under this chapter of a
2person other than a member or manager Unreasonably restrict the
3right of a member to maintain an action under subchapter VIII.
4l. Vary the provisions of section 489.805A, but the
5operating agreement may provide that the limited liability
6company shall not have a special litigation committee.
7m. Vary the right of a member to approve a merger, interest
8exchange, conversion, or domestication under section 489.1023,
9subsection 1, paragraph “b”; section 489.1033, subsection 1,
10paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
11section 489.1053, subsection 1, paragraph “b”.
12n. Vary the required contents of a plan of merger under
13section 489.1022, subsection 1; plan of interest exchange
14under section 489.1032, subsection 1; plan of conversion under
15section 489.1042, subsection 1; or plan of domestication under
16section 489.1052, subsection 1.
17o. Except as otherwise provided in sections 489.111 and
18489.112, subsection 2, restrict the rights under this chapter
19of a person other than a member or manager.
204. If not manifestly unreasonable, the operating agreement
21may do any of the following: Subject to subsection 3,
22paragraph “g”, without limiting other terms that may be included
23in an operating agreement, all the following rules apply:
24a. Restrict or eliminate the duty to do any The operating
25agreement may do all of the following:
26(1) As required in section 489.409, subsection 2, paragraph
27“a”, and section 489.409, subsection 8, to account to the
28limited liability company and to hold as trustee for it any
29property, profit, or benefit derived by the member in the
30conduct or winding up of the company’s business, from a use by
31the member of the company’s property, or from the appropriation
32of a limited liability company opportunity Specify the method
33by which a specific act or transaction that would otherwise
34violate the duty of loyalty may be authorized or ratified by
35one or more disinterested and independent persons after full
-15-1disclosure of all material facts.
2(2) As required in section 489.409, subsection 2, paragraph
3“b”, and section 489.409, subsection 8, to refrain from dealing
4with the company in the conduct or winding up of the company’s
5business as or on behalf of a party having an interest adverse
6to the company Alter the prohibition in section 489.405,
7subsection 1, paragraph “b”, so that the prohibition requires
8only that the limited liability company’s total assets not be
9less than the sum of its total liabilities.
10(3) As required by section 489.409, subsection 2, paragraph
11“c”, and section 489.409, subsection 8, to refrain from
12competing with the company in the conduct of the company’s
13business before the dissolution of the company.
14b. Identify specific types or categories of activities
15that do not violate the duty of loyalty To the extent the
16operating agreement of a member-managed limited liability
17company expressly relieves a member of a responsibility that
18the member otherwise would have under this chapter and imposes
19the responsibility on one or more other members, the agreement
20also may eliminate or limit any fiduciary duty of the member
21relieved of the responsibility which would have pertained to
22the responsibility.
23c. Alter the duty of care, except to authorize intentional
24misconduct or knowing violation of law. If not manifestly
25unreasonable, the operating agreement may do all of the
26following:
27(1) Alter or eliminate the aspects of the duty of loyalty
28stated in section 489.409, subsections 2 and 9.
29(2) Identify specific types or categories of activities
30that do not violate the duty of loyalty.
31(3) Alter the duty of care, but may not authorize conduct
32involving bad faith, willful or intentional misconduct, or
33knowing violation of law.
34(4) Alter or eliminate any other fiduciary duty.
35d. Alter any other fiduciary duty, including eliminating
-16-1particular aspects of that duty.
2e. Prescribe the standards by which to measure the
3performance of the contractual obligation of good faith and
4fair dealing under section 489.409, subsection 4.
55. The operating agreement may specify the method by which
6a specific act or transaction that would otherwise violate the
7duty of loyalty may be authorized or ratified by one or more
8disinterested and independent persons after full disclosure
9of all material facts The court shall decide as a matter of
10law whether a term of an operating agreement is manifestly
11unreasonable under subsection 3, paragraph “f”, or subsection
124, paragraph “c”. All of the following shall apply:
13a. The court shall make its determination as of the time the
14challenged term became part of the operating agreement and by
15considering only circumstances existing at that time.
16b. The court may invalidate the term only if, in light of
17the purposes, activities, and affairs of the limited liability
18company, it is readily apparent that any of the following
19apply:
20(1) The objective of the term is unreasonable.
21(2) The term is an unreasonable means to achieve the term’s
22objective.
236. To the extent the operating agreement of a member-managed
24limited liability company expressly relieves a member of a
25responsibility that the member would otherwise have under
26this chapter and imposes the responsibility on one or more
27other members, the operating agreement may, to the benefit
28of the member that the operating agreement relieves of the
29responsibility, also eliminate or limit any fiduciary duty that
30would have pertained to the responsibility.
317. 6. The An operating agreement may alter or eliminate
32the indemnification for a member or manager provided by section
33489.408, subsection 1, and may eliminate or limit a member’s
34or manager’s liability to the limited liability company and
35members for money damages, except for any of the following:
-17- 1a. A breach of the duty of loyalty.
2b. A financial benefit received by the member or manager to
3which the member or manager is not entitled.
4c. A breach of a duty under section 489.406.
5d. Intentional infliction of harm on the company or a
6member.
7e. An intentional violation of criminal law.
88. The court shall decide any claim under subsection 4 that
9a term of an operating agreement is manifestly unreasonable.
10All of the following apply:
11a. The court shall make its determination as of the time the
12challenged term became part of the operating agreement and by
13considering only circumstances existing at that time.
14b. The court may invalidate the term only if, in light of
15the purposes and activities of the limited liability company,
16it is readily apparent that any of the following applies:
17(1) The objective of the term is unreasonable.
18(2) The term is an unreasonable means to achieve the
19provision’s objective.
20 Sec. 10. Section 489.111, Code 2023, is amended to read as
21follows:
22489.111 Operating agreement — effect on limited liability
23company and persons becoming members — preformation agreement.
241. A limited liability company is bound by and may enforce
25the operating agreement, whether or not the company has itself
26manifested assent to the operating agreement.
272. A person that becomes a member of a limited liability
28company is deemed to assent to the operating agreement.
293. Two or more persons intending to become the initial
30members of a limited liability company may make an agreement
31providing that upon the formation of the company the agreement
32will become the operating agreement. One person intending
33to become the initial member of a limited liability company
34may assent to terms providing that upon the formation of the
35company the terms will become the operating agreement.
-18- 14. An operating agreement in a signed record that excludes
2modification or rescission except by a signed record cannot be
3otherwise modified or rescinded.
4 Sec. 11. Section 489.112, Code 2023, is amended to read as
5follows:
6489.112 Operating agreement — effect on third parties and
7relationship to records effective on behalf of limited liability
8company.
91. An operating agreement may specify that its amendment
10requires the approval of a person that is not a party to the
11operating agreement or the satisfaction of a condition. An
12amendment is ineffective if its adoption does not include the
13required approval or satisfy the specified condition.
142. The obligations of a limited liability company and its
15members to a person in the person’s capacity as a transferee or
16a person dissociated as a member are governed by the operating
17agreement. Subject only to any a court order issued under
18section 489.503, subsection 2, paragraph “b”, to effectuate a
19charging order, an amendment to the operating agreement made
20after a person becomes a transferee or is dissociated as a
21 member is or is not effective as follows:
22a. Is effectivewith regard to any debt, obligation, or
23other liability of the limited liability company or its members
24to the person in the person’s capacity as a transferee or
25person dissociated as a member.
26b. Is not effective to the extent the amendment imposes a
27new debt, obligation, or other liability on the transferee or
28person dissociated as a member.
293. If a record that has been delivered by a limited
30liability company to the secretary of state for filing and
31has become becomes effective under this chapter and contains
32a provision that would be ineffective under section 489.110,
33subsection 3 or subsection 4, paragraph “c”, if contained in
34the operating agreement, the provision is likewise ineffective
35in the record.
-19- 14. Subject to subsection 3, if a record that has been
2 delivered by a limited liability company to the secretary
3of state for filing and has become becomes effective under
4this chapter and conflicts with a provision of the operating
5agreement, all of the following rules apply:
6a. The operating agreement prevails as to members, persons
7 dissociated as members, transferees, and managers.
8b. The record prevails as to other persons to the extent
9they reasonably rely on the record.
10 Sec. 12. Section 489.114, Code 2023, is amended to read as
11follows:
12489.114 Change of registered office or registered agent for
13service of process or address for registered agency by limited
14liability company.
151. A limited liability company or registered foreign
16limited liability company may change its registered office
17or its registered agent for service of process agent or the
18address of its registered agent by delivering to the secretary
19of state for filing a statement of change that sets forth
20 states all of the following:
21a. The name of the limited liability company or foreign
22limited liability company.
23b. If the current registered office is to be changed, the
24street and mailing addresses of the new registered office The
25information that is to be in effect as a result of the filing of
26the statement of change.
27c. If the current registered agent is to be changed, the
28name of the new registered agent and the new agent’s consent to
29the appointment. The agent’s consent may be on the statement
30or attached to it.
31d. That after the change or changes are made, the street
32address of its registered office and the business office of its
33registered agent will be identical.
342. If a registered agent changes the street address of
35the registered agent’s business office, the registered agent
-20-1may change the street address of the registered office of any
2limited liability company or foreign limited liability company
3for which the person is the registered agent by notifying the
4limited liability company or foreign limited liability company
5in writing of the change and signing, either manually or in
6facsimile, and delivering to the secretary of state for filing
7a statement that complies with the requirements of subsection
81 and recites that the limited liability company or foreign
9limited liability company has been notified of the change. The
10members or managers of a limited liability company need not
11approve the delivery to the secretary of state for filing of
12any of the following:
13a. A statement of change under this section.
14b. A similar filing changing the registered agent or
15registered office, if any, of the limited liability company in
16any other jurisdiction.
173. If a registered agent changes the registered agent’s
18business address to another place, the registered agent may
19change the business address and the address of the registered
20agent by filing a statement as required by subsection 2 for
21each limited liability company or foreign limited liability
22company, or a single statement of all limited liability
23companies or all foreign limited liability companies named
24in the notice, except that it need be signed only by the
25registered agent and need not be responsive to subsection 1,
26paragraph “c”, and must recite that a copy of the statement
27has been mailed to each limited liability company or foreign
28limited liability company named in the notice A statement of
29change under this section designating a new registered agent
30is an affirmation of fact by the limited liability company or
31registered foreign limited liability company that the agent has
32consented to serve.
334. A limited liability company or foreign limited liability
34company may also change its registered office or registered
35agent in its biennial report as provided in section 489.209
-21-1As an alternative to using the procedure in this section,
2a limited liability company may amend its certificate of
3organization.
45. Subject to section 489.205, subsection 3, a statement of
5change is effective when filed by the secretary of state.
6 Sec. 13. NEW SECTION. 489.114A Registration of name.
71. A foreign limited liability company not registered to
8do business in this state under subchapter IX may register
9its name, or an alternate name adopted pursuant to section
10489.906A, if the name is distinguishable on the records of the
11secretary of state from the names that are not available under
12section 489.108.
132. To register its name or an alternate name adopted
14pursuant to section 489.906A, a foreign limited liability
15company must deliver to the secretary of state for filing an
16application stating the company’s name, the jurisdiction and
17date of its formation, and any alternate name adopted pursuant
18to section 489.906A. If the secretary of state finds that the
19name applied for is available, the secretary of state shall
20register the name for the applicant’s exclusive use.
213. The registration of a name under this section is
22effective for one year after the date of registration.
234. A foreign limited liability company whose name
24registration is effective may renew the registration for
25successive one-year periods by delivering, not earlier than
26three months before the expiration of the registration,
27to the secretary of state for filing a renewal application
28that complies with this section. When filed, the renewal
29application renews the registration for a succeeding one-year
30period.
315. A foreign limited liability company whose name
32registration is effective may register as a foreign limited
33liability company under the registered name or consent in a
34signed record to the use of that name by another person that is
35not an individual.
-22-1 Sec. 14. Section 489.115, Code 2023, is amended to read as
2follows:
3489.115 Resignation of registered agent for service of
4process.
51. A registered agent may resign the agent’s agency
6appointment by signing and as an agent for a limited liability
7company or registered foreign limited liability company by
8 delivering to the secretary of state for filing the signed
9original a statement of resignation. The statement of
10resignation may include a statement that the registered office
11is also discontinued. The registered agent shall send a copy
12of the statement of resignation by certified mail, return
13receipt requested, to the limited liability company or foreign
14limited liability company at its principal office and to the
15registered office, if not discontinued. The registered agent
16shall certify to the secretary of state that the copies have
17been sent to the limited liability company or foreign limited
18liability company, including the date the copies were sent.
19 that states all of the following:
20a. The name of the limited liability company or foreign
21limited liability company.
22b. The name of the agent.
23c. That the agent resigns from serving as registered agent
24for the limited liability company or foreign limited liability
25company.
26d. The address of the limited liability company or foreign
27limited liability company to which the agent will send the
28notice required by subsection 3.
292. A statement of resignation takes effect on the earlier
30of the following:
31a. 12:01 a.m.on the The thirty-first day after the day on
32which it is filed with the secretary of state.
33b. The designation of a new registered agent for the limited
34liability company or registered foreign limited liability
35company.
-23- 13. A registered agent promptly shall furnish to the limited
2liability company or registered foreign limited liability
3company notice in a record of the date on which a statement of
4resignation was filed.
54. When a statement of resignation takes effect, the
6registered agent ceases to have responsibility under this
7chapter for any matter thereafter tendered to it as agent for
8the limited liability company or registered foreign limited
9liability company. The resignation does not affect any
10contractual rights the company or foreign company has against
11the agent or that the agent has against the company or foreign
12company.
135. A registered agent may resign with respect to a limited
14liability company or registered foreign limited liability
15company whether or not the company or foreign company is in
16good standing.
17 Sec. 15. NEW SECTION. 489.115A Registered agent.
181. Each limited liability company and each registered
19foreign limited liability company shall designate and maintain
20a registered agent in this state. The designation of a
21registered agent is an affirmation of fact by the limited
22liability company or registered foreign limited liability
23company that the agent has consented to serve.
242. A registered agent for a limited liability company or
25registered foreign limited liability company must have a place
26of business in this state.
273. The only duties under this chapter of a registered agent
28that has complied with this chapter are as follows:
29a. To forward to the limited liability company or registered
30foreign limited liability company at the address most recently
31supplied to the agent by the limited liability company or
32registered foreign limited liability company any process,
33notice, or demand pertaining to the company or foreign company
34which is served on or received by the agent.
35b. If the registered agent resigns, to provide the notice
-24-1required by section 489.115, subsection 3, to the limited
2liability company or registered foreign limited liability
3company at the address most recently supplied to the agent by
4the limited liability company or registered foreign limited
5liability company.
6c. To keep current the information with respect to the agent
7in the certificate of organization or foreign registration
8statement.
9 Sec. 16. Section 489.116, Code 2023, is amended to read as
10follows:
11489.116 Service of process, notice, or demand.
121. A limited liability company’s company or registered
13 foreign limited liability company’s registered agent is the
14company’s agent for service of process, notice, or demand
15required or permitted by law to company may be served on
16the company with any process, notice, or demand required or
17permitted by law by serving its registered agent.
182. If a limited liability company or registered foreign
19limited liability company has no ceases to have a registered
20agent, or the if its registered agent cannot with reasonable
21diligence be served, the limited liability company or
22registered foreign limited liability company may be served by
23registered or certified mail, return receipt requested, or by
24similar commercial delivery service, addressed to the limited
25liability company or registered foreign limited liability
26company at its principal office. The address of the principal
27office must be as shown on the limited liability company’s or
28registered foreign limited liability company’s most recent
29biennial report filed with the secretary of state pursuant to
30section 489.209. Service is perfected effected under this
31subsection at on the earliest of any of the following:
32a. The date the limited liability company or registered
33 foreign limited liability company receives the mail or delivery
34by the commercial delivery service.
35b. The date shown on the return receipt, if signed on behalf
-25-1of by the limited liability company or registered foreign
2limited liability company.
3c. Five days after its deposit in with the United States
4mail, as evidenced by the postmark, if mailed postpaid and
5 postal service or with the commercial delivery service, if
6 correctly addressed and with sufficient postage or payment.
73. A limited liability company or foreign limited liability
8company may be served pursuant to this section, as provided
9in another provision of this chapter, or as provided in
10sections 617.3 through 617.6, unless the manner of service is
11otherwise specifically provided for by another provision of law
12 If process, notice, or demand cannot be served on a limited
13liability company or registered foreign limited liability
14company pursuant to subsection 1 or 2, service may be made by
15handing a copy to the individual in charge of any regular place
16of business or activity of the limited liability company or
17registered foreign company if the individual served is not a
18plaintiff in the action.
194. Service of process, notice, or demand on a registered
20agent must be in a written record.
215. Service of process, notice, or demand may be made by
22other means under law other than this chapter, including as
23provided in sections 617.3 through 617.6 unless specifically
24provided for by another provision of law.
25 Sec. 17. Section 489.117, Code 2023, is amended to read as
26follows:
27489.117 Fees.
281. The secretary of state shall collect the following fees
29when documents described in this subsection are delivered to
30the secretary’s office for filing:
31a. Statement of rescission No fee
32b. Statement of withdrawal No fee
33c. Certificate of organization $ 50
34d. Application for use of
35 indistinguishable name $ 10
-26- 1e. Application for reserved name $ 10
2f. Notice of transfer of reserved name $ 10
3g. Statement of change of registered
4 agent or registered office or both No fee
5h. Registered agent’s statement of
6 change of registered office for each
7 affected limited liability company No fee
8i. Registered agent’s statement
9 of resignation No fee
10j. Amendment to certificate of
11 organization $ 50
12k. Restatement of certificate of
13 organization with amendment
14 of certificate $ 50
15l. Articles of merger $ 50
16m. Statement of dissolution $ 5
17n. Declaration of administrative
18 dissolution No fee
19o. Application for reinstatement
20 following administrative dissolution $ 5
21p. Certificate of reinstatement No fee
22q. Application for certificate
23 of authority registration $100
24r. Application for amended
25 certificate of authority registration $100
26s. Statement of cancellation $ 10
27t. Certificate of revocation
28 of authority to transact business No fee
29u. Statement of correction $ 5
30v. Application for certificate of
31 existence or authorization registration $ 5
32w. Any other document required or
33 permitted to be filed by this chapter $ 5
342. The secretary of state shall collect a fee of five
35dollars each time process is served on the secretary under this
-27-1chapter. The party to a proceeding causing service of process
2is entitled to recover this fee as costs if the party prevails
3in the proceeding.
43. The secretary of state shall collect the following fees
5for copying and certifying the copy of any filed document
6relating to a domestic limited liability company or foreign
7limited liability company as follows:
8a. One dollar a page for copying.
9b. Five dollars for the certificate.
104. The secretary of state may impose, assess, and collect
11a filing fee as a condition to accepting a biennial report as
12provided in section 489.209.
13 Sec. 18. NEW SECTION. 489.118 Change of name or address by
14registered agent.
151. If a registered agent changes its name or address,
16the agent may deliver to the secretary of state for filing a
17statement of change that states all of the following:
18a. The name of the limited liability company or registered
19foreign limited liability company represented by the registered
20agent.
21b. The name of the agent as currently shown in the records
22of the secretary of state for the limited liability company or
23registered foreign limited liability company.
24c. If the name of the agent has changed, its new name.
25d. If the address of the agent has changed, its new address.
262. A registered agent promptly shall furnish notice to the
27represented limited liability company or registered foreign
28limited liability company of the filing by the secretary of
29state of the statement of change and the changes made by the
30statement.
31 Sec. 19. NEW SECTION. 489.120 Delivery of record.
321. Except as otherwise provided in this chapter,
33permissible means of delivery of a record include delivery by
34hand, mail, conventional commercial practice, and electronic
35transmission.
-28- 12. Delivery to the secretary of state is effective only when
2a record is received by the secretary of state.
3 Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
4or repeal.
5The general assembly has power to amend or repeal all or
6part of this chapter at any time, and all limited liability
7companies and foreign limited liability companies subject to
8this chapter are governed by the amendment or repeal.
9 Sec. 21. Section 489.201, Code 2023, is amended to read as
10follows:
11489.201 Formation of limited liability company — certificate
12of organization.
131. One or more persons may act as organizers to form a
14limited liability company by signing and delivering to the
15secretary of state for filing a certificate of organization.
162. A certificate of organization must state all of the
17following:
18a. The name of the limited liability company, which must
19comply with section 489.108.
20b. The street address and mailing addresses of the initial
21registered office and the name of the initial registered
22agent for service of process on the company limited liability
23company’s principal office.
24c. The name and street and mailing addresses in this state
25of the limited liability company’s registered agent.
263. Subject to section 489.112, subsection 3, a A certificate
27of organization may also contain statements as to matters other
28than those required by subsection 2, but shall not vary or
29otherwise affect the provisions specified in section 489.110,
30subsections 3 and 4, in a manner inconsistent with that
31section. However, a statement in a certificate of organization
32is not effective as a statement of authority.
334. A limited liability company is formed when the secretary
34of state has filed the certificate of organization, unless the
35certificate states a delayed becomes effective date pursuant
-29-1to section 489.205, subsection 3. If the certificate states
2a delayed effective date, a limited liability company is not
3formed if, before the certificate takes effect, a statement of
4cancellation is signed and delivered to the secretary of state
5for filing and the secretary of state files the certificate.
65. Subject to any delayed effective date and except in
7a proceeding by this state to dissolve a limited liability
8company, the filing of the certificate of organization by the
9secretary of state is conclusive proof that the organizer
10satisfied all conditions to the formation of a limited
11liability company.
12 Sec. 22. Section 489.202, Code 2023, is amended to read as
13follows:
14489.202 Amendment or restatement of certificate of
15organization.
161. A certificate of organization may be amended or restated
17at any time.
182. To amend its certificate of organization, a limited
19liability company must deliver to the secretary of state for
20filing an amendment stating all of the following:
21a. The name of the limited liability company.
22b. The date of filing of its initial certificate of
23organization.
24c. The changes the amendment makes to the certificate as
25most recently amended or restated text of the amendment.
263. To restate its certificate of organization, a limited
27liability company must deliver to the secretary of state for
28filing a restatement, designated as such in its heading,
29stating and setting forth all of the following:
30a. In the heading or an introductory paragraph, the
31company’s present name and the date of the filing of the
32company’s initial certificate of organization The name of the
33limited liability company.
34b. If the company’s name has been changed at any time since
35the company’s formation, each of the company’s former names The
-30-1text of the restated certificate of organization.
2c. The changes the restatement makes to the certificate as
3most recently amended or restated A statement that the restated
4certificate consolidates all amendments into a single document.
5d. If a new amendment is included in the restated
6certificate of organization, the statements required under
7subsection 2 with respect to the new amendment if not otherwise
8provided.
94. Subject to section 489.112, subsection 3, and section
10489.205, subsection 3, an amendment to or restatement of a
11certificate of organization is effective when filed by the
12secretary of state. If a member of a member-managed limited
13liability company, or a manager of a manager-managed limited
14liability company, knows that any information in a filed
15certificate of organization was inaccurate when the certificate
16of organization was filed or has become inaccurate due to
17changed circumstances, the member or manager shall promptly do
18any of the following:
19a. Cause the certificate of organization to be amended.
20b. If appropriate, deliver to the secretary of state
21for filing a statement of change under section 489.114 or a
22statement of correction under section 489.206.
235. If a member of a member-managed limited liability
24company, or a manager of a manager-managed limited liability
25company, knows that any information in a filed certificate of
26organization was inaccurate when the certificate was filed
27or has become inaccurate owing to changed circumstances, the
28member or manager shall promptly do any of the following:
29a. Cause the certificate to be amended.
30b. If appropriate, deliver to the secretary of state
31for filing a statement of change under section 489.114 or a
32statement of correction under section 489.206.
33 Sec. 23. Section 489.203, Code 2023, is amended to read as
34follows:
35489.203 Signing of records to be delivered for filing to
-31-1secretary of state.
21. A record delivered to the secretary of state for filing
3pursuant to this chapter must be signed as follows:
4a. Except as otherwise provided in paragraphs “b” and “c”, a
5record signed on behalf of by a limited liability company must
6be signed by a person authorized by the company.
7b. A limited liability company’s initial certificate of
8organization must be signed by at least one person acting as
9an organizer.
10c. A record filed delivered on behalf of a dissolved limited
11liability company that does not have or has not had at least
12one has no member must be signed by an organizer the person
13winding up the company’s activities and affairs under section
14489.702, subsection 3, or a person appointed under section
15489.702, subsection 4, to wind up the activities and affairs.
16d. A record filed on behalf of a dissolved limited liability
17company that has no members must be signed by the person
18winding up the company’s activities under section 489.702,
19subsection 3, or a person appointed under section 489.702,
20subsection 4, to wind up those activities A statement of denial
21by a person under section 489.303 must be signed by that
22person.
23e. A statement of cancellation under section 489.201,
24subsection 4, must be signed by each organizer that signed
25the initial certificate of organization, but a personal
26representative of a deceased or incompetent organizer may sign
27in the place of the decedent or incompetent Any other record
28delivered on behalf of a person to the secretary of state for
29filing must be signed by that person.
30f. A statement of denial by a person under section 489.303
31 must be signed by that person.
32g. Any other record must be signed by the person on whose
33behalf the record is delivered to the secretary of state.
342. Any A record filed delivered for filing under this
35chapter may be signed by an agent. Whenever this chapter
-32-1requires a particular individual to sign a record and the
2individual is deceased or incompetent, the record may be signed
3by a legal representative of the individual.
43. A person that signs a record as an agent or legal
5representative affirms as a fact that the person is authorized
6to sign the record.
7 Sec. 24. Section 489.204, Code 2023, is amended to read as
8follows:
9489.204 Signing and filing pursuant to judicial order.
101. If a person required by this chapter to sign a record
11or deliver a record to the secretary of state for filing under
12this chapter does not do so, any other person that is aggrieved
13may petition the district court to order one or more of the
14following:
15a. The person to sign the record.
16b. The person to deliver the record to the secretary of
17state for filing.
18c. The secretary of state to file the record unsigned.
192. If a petitioner under subsection 1 is not the limited
20liability company or foreign limited liability company to which
21the record pertains, the petitioner shall make the limited
22liability company or foreign limited liability company a party
23to the action.
243. If a district court orders an unsigned record to be
25delivered to the secretary of state, the secretary of state
26shall file the record and the court order upon receipt A record
27filed under subsection 1, paragraph “c”, is effective without
28being signed.
29 Sec. 25. Section 489.205, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31489.205 Liability for inaccurate information in filed
32records.
331. If a record delivered to the secretary of state for
34filing under this chapter and filed by the secretary of state
35contains inaccurate information, a person that suffers loss by
-33-1reliance on the information may recover damages for the loss
2from all of the following:
3a. A person that signed the record, or caused another to
4sign it on the person’s behalf, and knew the information to be
5inaccurate at the time the record was signed.
6b. Subject to subsection 2, a member of a member-managed
7limited liability company or a manager of a manager-managed
8limited liability company if all of the following apply:
9(1) The record was delivered for filing on behalf of the
10limited liability company.
11(2) The member or manager knew or had notice of the
12inaccuracy for a reasonably sufficient time before the
13information was relied upon so that, before the reliance,
14the member or manager reasonably could have done any of the
15following:
16(a) Effected an amendment under section 489.202.
17(b) Filed a petition under section 489.204.
18(c) Delivered to the secretary of state for filing a
19statement of change under section 489.114 or a statement of
20correction under section 489.206.
212. To the extent the operating agreement of a member-managed
22limited liability company expressly relieves a member of
23responsibility for maintaining the accuracy of information
24contained in records delivered on behalf of the limited
25liability company to the secretary of state for filing under
26this chapter and imposes that responsibility on one or more
27other members, the liability stated in subsection 1, paragraph
28“b”, applies to those other members and not to the member that
29the operating agreement relieves of the responsibility.
303. A person commits a serious misdemeanor if that person
31signs a record the person knows is false in any material
32respect with intent that the record be delivered to the
33secretary of state for filing.
34 Sec. 26. Section 489.206, Code 2023, is amended to read as
35follows:
-34- 1489.206 Correcting filed record.
21. A limited liability company or foreign limited liability
3company may deliver to the secretary of state for filing
4a statement of correction to correct a record previously
5delivered by the company to the secretary of state and filed
6by the secretary of state, if at the time of filing the record
7contained inaccurate information or was defectively signed.
8A person on whose behalf a filed record was delivered to the
9secretary of state for filing may correct the record if any of
10the following apply:
11a. The record at the time of filing was inaccurate.
12b. The record was defectively signed.
13c. The electronic transmission of the record to the
14secretary of state was defective.
152. A statement of correction under subsection 1 shall not
16have a delayed effective date and must do all of the following:
17To correct a filed record, a person on whose behalf the record
18was delivered to the secretary of state must deliver to the
19secretary of state for filing a statement of correction.
20a. Describe the record to be corrected, including its filing
21date, or attach a copy of the record as filed.
22b. Specify the inaccurate information and the reason it is
23inaccurate or the manner in which the signing was defective.
24c. Correct the defective signature or inaccurate
25information.
263. When filed by the secretary of state, a statement of
27correction under subsection 1 is effective retroactively as
28of the effective date of the record the statement corrects,
29but the statement is effective when filed as to A statement of
30correction shall comply with all of the following:
31a. For the purposes of section 489.103, subsection 4 It must
32not state a delayed effective date.
33b. As to persons that previously relied on the uncorrected
34record and would be adversely affected by the retroactive
35effect It must be signed by the person correcting the filed
-35-1record.
2c. It must describe the record to be corrected including its
3filing date or attach a copy of the record as filed.
4d. It must specify the inaccuracy or defect to be corrected.
5e. It must correct the inaccuracy or defect.
64. A statement of correction is effective as of the
7effective date of the filed record that it corrects except for
8purposes of section 489.103, subsection 4, and as to persons
9relying on the uncorrected filed record and adversely affected
10by the correction. For those purposes and as to those persons,
11the statement of correction is effective when filed.
12 Sec. 27. NEW SECTION. 489.206A Filing requirements.
131. To be filed by the secretary of state pursuant to
14this chapter, a record must be captioned to describe the
15record’s purpose, must be received by the secretary of state,
16must comply with this chapter, and must satisfy all of the
17following:
18a. The filing of the record must be required or permitted by
19this chapter.
20b. The record must be physically delivered in written
21form unless and to the extent the secretary of state permits
22electronic delivery of records.
23c. The words in the record must be in English, and numbers
24must be in Arabic or Roman numerals, but the name of an entity
25need not be in English if written in English letters or Arabic
26or Roman numerals.
27d. The record must be signed by a person authorized or
28required under this chapter to sign the record.
29e. The record must state the name and capacity, if
30any, of each individual who signed it, either on behalf
31of the individual or the person authorized or required to
32sign the record, but need not contain a seal, attestation,
33acknowledgment, or verification.
342. If law other than this chapter prohibits the disclosure
35by the secretary of state of information contained in a record
-36-1delivered to the secretary of state for filing, the secretary
2of state shall file the record if the record otherwise complies
3with this chapter but may redact the information.
43. When a record is delivered to the secretary of state for
5filing, any fee required under this chapter and any fee, tax,
6interest, or penalty required to be paid under this chapter or
7law other than this chapter must be paid in a manner permitted
8by the secretary of state or by that law.
94. The secretary of state may require that a record
10delivered in written form be accompanied by an identical or
11conformed copy.
125. The secretary of state may provide forms for filings
13required or permitted to be made by this chapter, but, except
14as otherwise provided in subsection 6, their use is not
15required.
166. The secretary of state may prescribe, and furnish on
17request and require any of the following forms:
18a. A cover sheet for a filing.
19b. An application for a certificate of existence or
20certificate of registration.
21c. A foreign corporation’s registration statement.
22d. A foreign corporation’s statement of withdrawal.
23e. A foreign corporation’s transfer of registration
24statement.
25f. The biennial report required by section 489.209.
267. Upon request and payment of the requisite fee, the
27secretary of state shall send the requester a certified copy
28of a requested record.
29 Sec. 28. Section 489.207, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31489.207 Effective date and time.
32Except as otherwise provided in section 489.115 and section
33489.208A and subject to section 489.206, subsection 4, a record
34filed under this chapter is effective as follows:
351. On the date and at the time of its filing by the
-37-1secretary of state, as provided in section 489.210, subsection
22.
32. On the date of filing and at the time specified in the
4record as its effective time, if later than the time under
5subsection 1.
63. At a specified delayed effective date and time, which may
7not be more than ninety days after the date of filing.
84. If a delayed effective date is specified, but no time is
9specified, at 12:01 a.m.on the date specified, which shall not
10be more than ninety days after the date of filing.
11 Sec. 29. Section 489.208, Code 2023, is amended to read as
12follows:
13489.208 Certificate of existence or authorization
14 registration.
151. Any person may apply to On request of any person, the
16secretary of state to be furnished shall issue a certificate
17of existence for a domestic limited liability company or a
18certificate of authorization registration for a registered
19 foreign limited liability company.
202. A certificate of existence or certificate of
21authorization registration under subsection 1 must set forth
22 state all of the following:
23a. The domestic limited liability company’s name or the
24registered foreign limited liability company’s name used in
25this state.
26b. One In the case of a limited liability company, all of
27the following:
28(1) If it is a domestic limited liability company, that
29the company is duly formed under the laws of this state, the
30date of its formation, and the period of its duration That
31a certificate of organization has been filed and has taken
32effect.
33(2) If it is a foreign limited liability company, that the
34company is authorized to transact business in this state The
35date the certificate became effective.
-38- 1(3) The period of the limited liability company’s duration
2if the records of the secretary of state reflect that its
3period of duration is less than perpetual.
4(4) That all of the following apply:
5(a) No statement of dissolution, statement of
6administrative dissolution, or statement of termination has
7been filed.
8(b) The records of the secretary of state do not otherwise
9reflect that the limited liability company has been dissolved
10or terminated.
11(c) A proceeding is not pending under section 489.705.
12c. That all fees, taxes, and penalties due under this
13chapter or other law to the secretary of state have been paid
14 In the case of a registered foreign limited liability company,
15that it is registered to do business in this state.
16d. That the company’s most recent biennial report required
17by this chapter has been filed by the secretary of state That
18all fees, taxes, interest, and penalties owed to this state
19by the limited liability company or foreign limited liability
20company and collected through the secretary of state have been
21paid, if all of the following apply:
22(1) Payment is reflected in the records of the secretary of
23state.
24(2) Nonpayment affects the good standing or registration
25of the limited liability company or foreign limited liability
26company.
27e. If it is a domestic limited liability company, that a
28statement of dissolution or statement of termination has not
29been filed That the most recent biennial report required by
30section 489.209 has been delivered to the secretary of state
31for filing.
32f. Other facts of record in the office reflected in the
33records of the secretary of state that may be requested by
34the applicant pertaining to the limited liability company or
35foreign limited liability company which the person requesting
-39-1the certificate reasonably requests.
23. Subject to any qualification stated in the certificate, a
3certificate of existence or certificate of authorization issued
4by the secretary of state is under subsection 1 may be relied
5on as conclusive evidence that the domestic limited liability
6company is in existence or the foreign limited liability
7company is authorized to transact business in this state of the
8facts stated in the certificate.
9 Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
10before effectiveness.
111. Except as otherwise provided in sections 489.1024,
12489.1034, 489.1044, and 489.1054, a record delivered to the
13secretary of state for filing may be withdrawn before it takes
14effect by delivering to the secretary of state for filing a
15statement of withdrawal.
162. A statement of withdrawal must comply with all of the
17following:
18a. Be signed by each person that signed the record being
19withdrawn, except as otherwise agreed by those persons.
20b. Identify the record to be withdrawn.
21c. If signed by fewer than all the persons that signed the
22record being withdrawn, state that the record is withdrawn in
23accordance with the agreement of all the persons that signed
24the record.
253. On filing by the secretary of state of a statement of
26withdrawal, the action or transaction evidenced by the original
27record does not take effect.
28 Sec. 31. Section 489.209, Code 2023, is amended to read as
29follows:
30489.209 Biennial report for secretary of state.
311. A limited liability company or a foreign limited
32liability company authorized registered to transact do business
33in this state shall deliver to the secretary of state for
34filing a biennial report that states all of the following:
35a. The name of the company.
-40- 1b. The street address of the company’s registered office,
2the name of its registered agent at that office, and the
3consent of any new registered agent.
4c. The street address of its principal office.
5d. In the case of a foreign limited liability company, the
6state or other jurisdiction under whose law the foreign company
7is formed and any alternate name adopted under section 489.805,
8subsection 1.
92. Information in a biennial report under this section
10must be current as of the date the report is delivered to the
11secretary of state for filing. The report shall be executed
12on behalf of the limited liability company or foreign limited
13liability company and signed as provided in section 489.203.
143. The first biennial report under this section in this
15state must be delivered to the secretary of state between
16January 1 and April 1 of the first odd-numbered year following
17the calendar year in which a limited liability company was
18formed or a foreign limited liability company was authorized
19 registered to transact do business. A subsequent biennial
20report must be delivered to the secretary of state between
21January 1 and April 1 of each following odd-numbered calendar
22year. A filing fee for the biennial report shall be determined
23by the secretary of state pursuant to section 489.117. Each
24biennial report shall contain information related to the
25two-year period immediately preceding the calendar year in
26which the report is filed.
274. If a biennial report does not contain the information
28required in this section, the secretary of state shall promptly
29notify the reporting limited liability company or foreign
30limited liability company in writing and return the report to
31it for correction.
325. The secretary of state may provide for the change of
33registered office or registered agent on the form prescribed by
34the secretary of state for the biennial report, provided that
35the form contains the information required in section 489.114.
-41-1If the secretary of state determines that a biennial report
2does not contain the information required in this section but
3otherwise meets the requirements of section 489.114 for the
4purpose of changing the registered office or registered agent,
5the secretary of state shall file the statement of change
6for the registered office or registered agent, effective as
7provided in section 489.205 489.207, subsection 3, before
8returning the biennial report to the limited liability
9company as provided in this section. A statement of change of
10registered office or registered agent accomplished pursuant to
11this subsection shall be executed by a person authorized to
12execute the biennial report.
13 Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
14to file — review of refusal to file — delivery of record by
15secretary of state.
161. The secretary of state shall file a record delivered
17to the secretary of state for filing which satisfies this
18chapter. The duty of the secretary of state under this section
19is ministerial.
202. When the secretary of state files a record, the secretary
21of state shall record it as filed on the date and at the time of
22its delivery. After filing a record, the secretary of state
23shall deliver to the person that submitted the record a copy
24of the record with an acknowledgment of the date and time of
25filing and, in the case of a statement of denial, also to the
26limited liability company to which the statement pertains.
273. If the secretary of state refuses to file a record, the
28secretary of state shall, not later than fifteen business days
29after the record is delivered, do all of the following:
30a. Return the record or notify the person that submitted the
31record of the refusal.
32b. Provide a brief explanation in a record of the reason for
33the refusal.
344. If the secretary of state refuses to file a record, the
35person that submitted the record may petition the district
-42-1court of Polk county to compel filing of the record. The
2record and the explanation of the secretary of state of
3the refusal to file must be attached to the petition. The
4court may decide the matter in a summary proceeding. If the
5court orders the record to be filed, the court may order it
6filed with an effective date that is the date on which it was
7submitted to the secretary of state for filing.
85. The filing of or refusal to file a record does not do any
9of the following:
10a. Affect the validity or invalidity of the record in whole
11or in part.
12b. Create a presumption that the information contained in
13the record is correct or incorrect.
146. Except as otherwise provided by section 489.116 or by law
15other than this chapter, the secretary of state may deliver any
16record to a person by delivering it by any of the following:
17a. In person to the person that submitted it.
18b. To the address of the person’s registered agent.
19c. To the principal office of the person.
20d. To another address the person provides to the secretary
21of state for delivery.
22 Sec. 33. Section 489.302, Code 2023, is amended to read as
23follows:
24489.302 Statement of limited liability company authority.
251. A limited liability company may deliver to the secretary
26of state for filing a statement of authority. All of the
27following apply to the statement:
28a. It must include the name of the limited liability company
29and the name and street address and mailing addresses of its
30principal office registered agent.
31b. With respect to any position that exists in or with
32respect to the limited liability company, it may state the
33authority, or limitations on the authority, of all persons
34holding the position to do any of the following:
35(1) Execute Sign an instrument transferring real property
-43-1held in the name of the limited liability company.
2(2) Enter into other transactions on behalf of, or otherwise
3act for or bind, the limited liability company.
4c. It may state the authority, or limitations on the
5authority, of a specific person to do any of the following:
6(1) Execute Sign an instrument transferring real property
7held in the name of the limited liability company.
8(2) Enter into other transactions on behalf of, or otherwise
9act for or bind, the limited liability company.
102. To amend or cancel a statement of authority filed by
11the secretary of state under section 489.205, subsection 1,
12a limited liability company must deliver to the secretary of
13state for filing an amendment or cancellation stating all of
14the following:
15a. The name of the limited liability company.
16b. The name and street address and mailing addresses of the
17limited liability company’s principal office registered agent.
18c. The caption of the statement being amended or canceled
19and the date the statement being affected became effective.
20d. The contents of the amendment or a declaration that the
21statement being affected is canceled.
223. A statement of authority affects only the power of a
23person to bind a limited liability company to persons that are
24not members.
254. Subject to subsection 3 and section 489.103, subsection
264, and except as otherwise provided in subsections 6, 7, and
278, a limitation on the authority of a person or a position
28contained in an effective statement of authority is not by
29itself evidence of any person’s knowledge or notice of the
30limitation by any person.
315. Subject to subsection 3, a grant of authority not
32pertaining to a transfer of real property and contained in an
33effective statement of authority is conclusive in favor of a
34person that gives value in reliance on the grant, except to the
35extent that when the person gives value, any of the following
-44-1applies:
2a. The person has knowledge to the contrary.
3b. The statement has been canceled or restrictively amended
4under subsection 2.
5c. A limitation on the grant is contained in another
6statement of authority that became effective after the
7statement containing the grant became effective.
86. Subject to subsection 3, an effective statement of
9authority that grants authority to transfer real property
10held in the name of the limited liability company and that, a
11certified copy of which statement is recorded by certified copy
12 in the office for recording transfers of the real property, is
13conclusive in favor of a person that gives value in reliance
14on the grant without knowledge to the contrary, except to the
15extent that when the person gives value, any of the following
16applies:
17a. The statement has been canceled or restrictively amended
18under subsection 2 and a certified copy of the cancellation
19or restrictive amendment has been recorded in the office for
20recording transfers of the real property.
21b. A limitation on the grant is contained in another
22statement of authority that became effective after the
23statement containing the grant became effective, and a
24certified copy of the later-effective statement is recorded in
25the office for recording transfers of the real property.
267. Subject to subsection 3, if a certified copy of an
27effective statement containing a limitation on the authority to
28transfer real property held in the name of a limited liability
29company is recorded in the office for recording transfers of
30that real property, all persons are deemed to know of the
31limitation.
328. Subject to subsection 9, an effective statement of
33dissolution or a statement of termination is a cancellation
34of any filed statement of authority for the purposes of
35subsection 6 and is a limitation on authority for the purposes
-45-1of subsection 7.
29. After a statement of dissolution becomes effective,
3a limited liability company may deliver to the secretary of
4state for filing and, if appropriate, the secretary of state
5 may record a statement of authority that is designated as
6a post-dissolution statement of authority. The statement
7operates as provided in subsections 6 and 7.
810. A statement of authority filed by the secretary of
9state under section 489.205 489.207, subsection 1, is effective
10until amended or canceled as provided in subsection 2, unless
11an earlier cancellation date is specified in the statement.
1211. An effective statement of denial operates as a
13restrictive amendment under this section and may be recorded by
14certified copy for the purposes of subsection 6, paragraph “a”.
15 Sec. 34. Section 489.304, Code 2023, is amended to read as
16follows:
17489.304 Liability of members and managers.
181. For debts, obligations, or other liabilities A debt,
19obligation, or other liability of a limited liability
20company, whether arising in contract, tort, or otherwise
21all of the following apply: is solely the debt, obligation,
22or other liability of the company. A member or manager is
23not personally liable, directly or indirectly, by way of
24contribution or otherwise, for a debt, obligation, or other
25liability of the company solely by reason of being or acting
26as a member or manager. This subsection applies regardless of
27the dissolution of the company.
28a. They are solely the debts, obligations, or other
29liabilities of the company.
30b. They do not become the debts, obligations, or other
31liabilities of a member or manager solely by reason of the
32member acting as a member or manager acting as a manager.
332. The failure of a limited liability company to observe any
34particular formalities relating to the exercise of its powers
35or management of its activities and affairs is not a ground
-46-1for imposing liability on the members a member or managers
2 manager for the debts, obligations, a debt, obligation, or
3other liabilities liability of the company.
4 Sec. 35. Section 489.401, Code 2023, is amended to read as
5follows:
6489.401 Becoming member.
71. If a limited liability company is to have only one member
8upon formation, a the person becomes the a member as agreed by
9that person and the organizer of the company or a majority of
10organizers if more than one. That person and the organizer
11may be, but need not be, different persons. If different, the
12organizer acts on behalf of the initial member.
132. If a limited liability company is to have more than
14one member upon formation, those persons become members as
15agreed by the persons before the formation of the company. The
16organizer acts on behalf of the persons in forming the company
17and may be, but need not be, one of the persons.
183. If a limited liability company has no members upon
19formation, a person becomes a member of the limited liability
20company with the consent of the organizer or a majority of
21the organizers if more than one. The organizers may consent
22to more than one person simultaneously becoming the company’s
23initial members After formation of a limited liability company,
24a person becomes a member according to any of the following:
25a. As provided in the operating agreement.
26b. As the result of a transaction effective under subchapter
27X.
28c. With the affirmative vote or consent of all the members.
29d. As provided in section 489.701, subsection 1, paragraph
30“c”.
314. After formation of a limited liability company, a person
32becomes a member upon A person may become a member without any
33of the following:
34a. As provided in the operating agreement Acquiring a
35transferable interest.
-47- 1b. As the result of a transaction effective under article 10
2 Making or being obligated to make a contribution to the limited
3liability company.
4c. With the consent of all the members.
5d. If, within ninety consecutive days after the company
6ceases to have any members, all of the following occur:
7(1) The last person to have been a member, or the legal
8representative of that person, designates a person to become a
9member.
10(2) The designated person consents to become a member.
115. A person may become a member without acquiring a
12transferable interest and without making or being obligated to
13make a contribution to the limited liability company.
14 Sec. 36. Section 489.402, Code 2023, is amended to read as
15follows:
16489.402 Form of contribution.
17A contribution may consist of tangible or intangible
18property or other benefit to a limited liability company,
19including money, services performed, promissory notes, other
20agreements to contribute money or property, and contracts for
21services to be performed property transferred to, services
22performed for, or another benefit provided to the limited
23liability company or an agreement to transfer property to,
24perform services for, or provide another benefit to the
25company.
26 Sec. 37. Section 489.403, Code 2023, is amended to read as
27follows:
28489.403 Liability for contributions.
291. A person’s obligation to make a contribution to a
30limited liability company is not excused by the person’s
31death, disability, termination, or other inability to perform
32personally. If a person does not make a required contribution,
33the person or the person’s estate is obligated to contribute
34money equal to the value of the part of the contribution which
35has not been made, at the option of the company.
-48- 12. A creditor of a limited liability company which extends
2credit or otherwise acts in reliance on an obligation described
3in subsection 1 may enforce the obligation If a person does not
4fulfill an obligation to make a contribution other than money,
5the person is obligated at the option of the limited liability
6company to contribute money equal to the value of the part of
7the contribution which has not been made.
83. An operating agreement may provide that the interest of
9any member who fails to make a contribution that the member
10is obligated to make is subject to specified penalties for,
11or specified consequences of, such failure. The penalty or
12consequence may take the form of reducing or eliminating
13the defaulting member’s proportionate interest in a limited
14liability company, subordinating the member’s interest to
15that of a nondefaulting member, a forced sale of the member’s
16interest, forfeiture of the member’s interest, the lending by
17other members of the amount necessary to meet the member’s
18commitment, a fixing of the value of the member’s interest
19by appraisal or by formula and redemption, or sale of the
20member’s interest at such value or other penalty or consequence
21 The obligation of a person to make a contribution may be
22compromised only by the affirmative vote or consent of all the
23members. If a creditor of a limited liability company extends
24credit or otherwise acts in reliance on an obligation described
25in subsection 1 without knowledge or notice of a compromise
26under this subsection, the creditor may enforce the obligation.
274. An operating agreement may provide that the interest of
28any member who fails to make a contribution that the member
29is obligated to make is subject to specified penalties for,
30or specified consequences of, such failure. The penalty or
31consequence may take the form of reducing or eliminating
32the defaulting member’s proportionate interest in a limited
33liability company, subordinating the member’s interest to
34that of a nondefaulting member, a forced sale of the member’s
35interest, forfeiture of the member’s interest, the lending by
-49-1other members of the amount necessary to meet the member’s
2commitment, a fixing of the value of the member’s interest by
3appraisal or by formula and redemption, or sale of the member’s
4interest at such value or other penalty or consequence.
5 Sec. 38. Section 489.404, Code 2023, is amended to read as
6follows:
7489.404 Sharing of and right to distributions before
8dissolution.
91. Any distributions distribution made by a limited
10liability company before its dissolution and winding up must
11be in equal shares among members and persons dissociated as
12 members, except to the extent necessary to comply with any a
13 transfer effective under section 489.502 and any charging order
14in effect under section 489.503.
152. A person has a right to a distribution before the
16dissolution and winding up of a limited liability company only
17if the limited liability company decides to make an interim
18distribution. A person’s dissociation does not entitle the
19person to a distribution.
203. A person does not have a right to demand or receive a
21distribution from a limited liability company in any form other
22than money. Except as otherwise provided in section 489.708,
23subsection 3 4, a limited liability company may distribute an
24asset in kind only if each part of the asset is fungible with
25each other part and each person receives a percentage of the
26asset equal in value to the person’s share of distributions.
274. If a member or transferee becomes entitled to receive a
28distribution, the member or transferee has the status of, and
29is entitled to all remedies available to, a creditor of the
30limited liability company with respect to the distribution.
31However, the company’s obligation to make a distribution is
32subject to offset for any amount owed to the company by the
33member or a person dissociated as a member on whose account the
34distribution is made.
35 Sec. 39. Section 489.405, Code 2023, is amended to read as
-50-1follows:
2489.405 Limitations on distribution.
31. A limited liability company shall not make a
4distribution, including a distribution under section 489.708,
5 if after the distribution any of the following applies:
6a. The limited liability company would not be able to pay
7its debts as they become due in the ordinary course of the
8company’s activities and affairs.
9b. The limited liability company’s total assets would be
10less than the sum of its total liabilities plus the amount that
11would be needed, if the company were to be dissolved, and wound
12up, and terminated at the time of the distribution, to satisfy
13the preferential rights upon dissolution, and winding up, and
14termination of members up of members and transferees whose
15preferential rights are superior to those the rights of persons
16receiving the distribution.
172. A limited liability company may base a determination
18that a distribution is not prohibited under subsection 1 on
19financial statements prepared on the basis of accounting
20practices and principles that are reasonable in the
21circumstances or on a fair valuation or other method that is
22reasonable under the circumstances any of the following:
23a. Financial statements prepared on the basis of
24accounting practices and principles that are reasonable in the
25circumstances.
26b. A fair valuation or other method that is reasonable under
27the circumstances.
283. Except as otherwise provided in subsection 5, the effect
29of a distribution under subsection 1 is measured as follows:
30a. In the case of a distribution by purchase, redemption, or
31other acquisition of a transferable interest in the company,
32as of the date money or other property is transferred or
33debt incurred by the company as defined in section 489.102,
34subsection 5, paragraph “a”, as of the earlier of any of the
35following:
-51- 1(1) The date money or other property is transferred or debt
2is incurred by the limited liability company.
3(2) The date the person entitled to the distribution ceases
4to own the interest or right being acquired by the limited
5liability company in return for the distribution.
6b. In the case of any other distribution of indebtedness, as
7of the date the indebtedness is distributed.
8b. c. In all other cases, as follows any of the following:
9(1) The date that the distribution is authorized, if the
10payment occurs within not later than one hundred twenty days
11after that date.
12(2) The date that the payment is made, if the payment occurs
13more than one hundred twenty days after the distribution is
14authorized.
154. A limited liability company’s indebtedness to a member
16or transferee incurred by reason of a distribution made in
17accordance with this section is at parity with the company’s
18indebtedness to its general, unsecured creditors, except to the
19extent subordinated by agreement.
205. A limited liability company’s indebtedness, including
21indebtedness issued in connection with or as part of as a
22distribution, is not a liability for purposes of subsection
231 if the terms of the indebtedness provide that payment of
24principal and interest are is made only if and to the extent
25that payment of a distribution could then be made to members
26 under this section. If the indebtedness is issued as a
27distribution, each payment of principal or interest on the
28indebtedness is treated as a distribution, the effect of which
29is measured on the date the payment is made.
306. In subsection 1, “distribution” does not include amounts
31constituting reasonable compensation for present or past
32services or reasonable payments made in the ordinary course of
33business under a bona fide retirement plan or other benefits
34program In measuring the effect of a distribution under section
35489.708, the liabilities of a dissolved limited liability
-52-1company do not include any claim that has been disposed of
2under section 489.703, 489.704, or 489.706A.
3 Sec. 40. Section 489.406, Code 2023, is amended to read as
4follows:
5489.406 Liability for improper distributions.
61. Except as otherwise provided in subsection 2, if a member
7of a member-managed limited liability company or a manager
8of a manager-managed limited liability company consents to
9a distribution made in violation of section 489.405 and in
10consenting to the distribution fails to comply with section
11489.409, the member or manager is personally liable to the
12company for the amount of the distribution that which exceeds
13the amount that could have been distributed without the
14violation of section 489.405.
152. To the extent the operating agreement of a member-managed
16limited liability company expressly relieves a member of the
17authority and responsibility to consent to distributions and
18imposes that authority and responsibility on one or more other
19members, the liability stated in subsection 1 applies to the
20other members and not the member that the operating agreement
21relieves of the authority and responsibility.
223. A person that receives a distribution knowing that the
23distribution to that person was made in violation of violated
24 section 489.405 is personally liable to the limited liability
25company but only to the extent that the distribution received
26by the person exceeded the amount that could have been properly
27paid under section 489.405.
284. A person against which an action is commenced because
29the person is liable under subsection 1 may do all of the
30following:
31a. Implead any other person that is subject to liability
32 liable under subsection 1 and seek to compel enforce a right of
33 contribution from the person.
34b. Implead any person that received a distribution in
35violation of subsection 3 and seek to compel enforce a right of
-53-1 contribution from the person in the amount the person received
2in violation of subsection 3.
35. An action under this section is barred if not
4 unless commenced within not later than two years after the
5distribution.
6 Sec. 41. Section 489.407, Code 2023, is amended to read as
7follows:
8489.407 Management of limited liability company.
91. A limited liability company is a member-managed limited
10liability company unless the operating agreement does any of
11the following:
12a. Expressly provides that any of the following apply:
13(1) The limited liability company is or will be
14“manager-managed”.
15(2) The limited liability company is or will be “managed by
16managers”.
17(3) Management of the limited liability company is or will
18be “vested in managers”.
19b. Includes words of similar import.
202. In a member-managed limited liability company, all of the
21following rules apply:
22a. The Except as expressly provided in this chapter, the
23 management and conduct of the limited liability company are
24vested in the members.
25b. Each member has equal rights in the management and
26conduct of the limited liability company’s activities and
27affairs.
28c. A difference arising among members as to a matter in the
29ordinary course of the activities and affairs of the limited
30liability company may be decided by a majority of the members.
31d. An act outside the ordinary course of the activities
32of the company, including selling, leasing, exchanging, or
33otherwise disposing of all, or substantially all, of the
34company’s property, with or without the goodwill, may be
35undertaken only with the consent of all members The affirmative
-54-1vote or consent of all the members is required to do any of the
2following:
3(1) Sell, lease, exchange, or otherwise dispose of all, or
4substantially all, of the limited liability company’s property,
5with or without good will, outside the ordinary course of the
6company’s activities.
7(2) Undertake an act outside the ordinary course of the
8activities and affairs of the limited liability company.
9(3) Approve a merger, interest exchange, conversion, or
10domestication under subchapter X.
11(4) Amend the operating agreement.
12e. The operating agreement may be amended only with the
13consent of all members.
143. In a manager-managed limited liability company, all of
15the following rules apply:
16a. Except as otherwise expressly provided in this chapter,
17any matter relating to the activities and affairs of the
18limited liability company is decided exclusively by the
19managers manager, or, if there is more than one manager, by a
20majority of the managers.
21b. Each manager has equal rights in the management and
22conduct of the activities and affairs of the limited liability
23 company.
24c. A difference arising among managers as to a matter in the
25ordinary course of the activities of the company may be decided
26by a majority of the managers.
27d. c. The affirmative vote or consent of all members is
28required to do any of the following:
29(1) Sell, lease, exchange, or otherwise dispose of all, or
30substantially all, of the limited liability company’s property,
31with or without the goodwill, outside the ordinary course of
32the company’s activities.
33(2) Approve a merger, conversion, or domestication under
34article 10 Undertake any other act outside the ordinary course
35of the limited liability company’s activities and affairs.
-55- 1(3) Undertake any other act outside the ordinary course of
2the company’s activities Approve a merger, interest exchange,
3conversion, or domestication under subchapter X.
4(4) Amend the operating agreement.
5e. d. A manager may be chosen at any time by the
6affirmative vote or consent of a majority of the members and
7remains a manager until a successor has been chosen, unless the
8manager at an earlier time resigns, is removed, or dies, or, in
9the case of a manager that is not an individual, terminates. A
10manager may be removed at any time by the affirmative vote or
11 consent of a majority of the members without notice or cause.
12f. e. A person need not be a member to be a manager, but
13the dissociation of a member that is also a manager removes the
14person as a manager. If a person that is both a manager and
15a member ceases to be a manager, that cessation does not by
16itself dissociate the person as a member.
17g. f. A person’s ceasing to be a manager does not discharge
18any debt, obligation, or other liability to the limited
19liability company or members which the person incurred while
20a manager.
214. An action requiring the vote or consent of members under
22this chapter may be taken without a meeting, and a member may
23appoint a proxy or other agent to vote, consent, or otherwise
24act for the member by signing an appointing record, personally
25or by the member’s agent.
265. The dissolution of a limited liability company does not
27affect the applicability of this section. However, a person
28that wrongfully causes dissolution of the company loses the
29right to participate in management as a member and a manager.
306. This chapter does not entitle a member to remuneration
31for services performed for a member-managed limited liability
32company, except for reasonable compensation for services
33rendered in winding up the activities of the company A limited
34liability company shall reimburse a member for an advance to
35the company beyond the amount of capital the member agreed to
-56-1contribute.
27. A payment or advance made by a member which gives rise
3to a limited liability company obligation under subsection 6
4or section 489.408, subsection 1, constitutes a loan to the
5company which accrues interest from the date of the payment or
6advance.
78. A member is not entitled to remuneration for services
8performed for a member-managed limited liability company,
9except for reasonable compensation for services rendered in
10winding up the activities of the company.
11 Sec. 42. Section 489.407A, Code 2023, is amended to read as
12follows:
13489.407A Real estate interest transferred by limited
14liability company or foreign limited liability company.
151. A transfer of an interest in real estate situated in
16this state held by a limited liability company or a registered
17 foreign limited liability company authorized to transact do
18 business in this state is subject to the provisions of this
19section.
202. a. In a member-managed limited liability company, a
21transfer of an interest in real estate held by the company may
22be undertaken by any of the following:
23(1) As provided in the operating agreement, or if the
24operating agreement does not so provide, only with the consent
25of all members.
26(2) As provided in a statement of authority filed by the
27limited liability company with the secretary of state and
28the recorder of the county where the real estate is situated
29pursuant to section 489.302.
30b. A requirement of paragraph “a” is applicable to every
31transfer of an interest in real estate situated in this state
32held by a member-managed limited liability company, whether or
33not the transfer is in the ordinary course of the company’s
34business.
353. a. In a manager-managed limited liability company, a
-57-1transfer of an interest in real estate held by the company may
2be undertaken by any of the following:
3(1) As provided in the operating agreement, or if the
4operating agreement does not so provide, only with the consent
5of a majority of all managers.
6(2) As provided in a statement of authority filed by the
7limited liability company with the secretary of state and
8the recorder of the county where the real estate is situated
9pursuant to section 489.302.
10b. A requirement in paragraph “a” is applicable to every
11transfer of an interest in real estate situated in this state
12held by a manager-managed limited liability company, whether
13or not the transfer is in the ordinary course of the company’s
14business.
15 Sec. 43. Section 489.408, Code 2023, is amended to read as
16follows:
17489.408 Indemnification Reimbursement, indemnification,
18advancement, and insurance.
191. A limited liability company shall reimburse a member of
20a member-managed limited liability company or the manager of
21a manager-managed limited liability company for any payment
22made and indemnify for any debt, obligation, or other liability
23incurred by a member of a member-managed company or the manager
24of a manager-managed company in the course of the member’s
25or manager’s activities on behalf of the company, if, in
26making the payment or incurring the debt, obligation, or other
27liability, the member or manager complied with the duties
28stated in sections 489.405 and 489.409 by the member or manager
29in the course of the member’s or manager’s activities on behalf
30of the company, if the member or manager complied with sections
31489.405, 489.407, and 489.409 in making the payment.
322. A limited liability company may purchase and maintain
33insurance on behalf of a member or manager of the company
34against liability asserted against or incurred by the member or
35manager in that capacity or arising from that status even if,
-58-1under section 489.110, subsection 7, the operating agreement
2could not eliminate or limit the person’s liability to the
3company for the conduct giving rise to the liability A limited
4liability company shall indemnify and hold harmless a person
5with respect to any claim or demand against the person and any
6debt, obligation, or other liability incurred by the person by
7reason of the person’s former or present capacity as a member
8or manager, if the claim, demand, debt, obligation, or other
9liability does not arise from the person’s breach of section
10489.405, 489.407, or 489.409.
113. In the ordinary course of its activities and affairs,
12a limited liability company may advance reasonable expenses,
13including attorney’s fees and costs, incurred by a person
14in connection with a claim or demand against the person by
15reason of the person’s former or present capacity as a member
16or manager, if the person promises to repay the company if
17the person ultimately is determined not to be entitled to be
18indemnified under subsection 2.
194. A limited liability company may purchase and maintain
20insurance on behalf of a member or manager against liability
21asserted against or incurred by the member or manager in that
22capacity or arising from that status even if, under section
23489.110, subsection 3, paragraph “g”, the operating agreement
24could not eliminate or limit the person’s liability to the
25company for the conduct giving rise to the liability.
26 Sec. 44. Section 489.409, Code 2023, is amended to read as
27follows:
28489.409 Standards of conduct for members and managers.
291. A member of a member-managed limited liability company
30owes to the company and, subject to section 489.901, subsection
312, the other members the fiduciary duties of loyalty and care
32stated in subsections 2 and 3.
332. The fiduciary duty of loyalty of a member in a
34member-managed limited liability company includes all of the
35following duties:
-59- 1a. To account to the limited liability company and to hold
2as trustee for it any property, profit, or benefit derived by
3the member regarding any of the following:
4(1) In the conduct or winding up of the limited liability
5 company’s activities and affairs.
6(2) From a use by the member of the limited liability
7 company’s property.
8(3) From the appropriation of a limited liability company
9opportunity.
10b. To refrain from dealing with the limited liability
11 company in the conduct or winding up of the company’s
12activities and affairs as or on behalf of a person having an
13interest adverse to the company.
14c. To refrain from competing with the limited liability
15 company in the conduct of the company’s activities and affairs
16 before the dissolution of the company.
173. Subject to the business judgment rule as stated in
18subsection 7, the duty of care of a member of a member-managed
19limited liability company in the conduct and winding up of the
20company’s activities is to act with the care that a person
21in a like position would reasonably exercise under similar
22circumstances and in a manner the member reasonably believes to
23be in the best interests of the company. In discharging this
24duty, a member may rely in good faith upon opinions, reports,
25statements, or other information provided by another person
26that the member reasonably believes is a competent and reliable
27source for the information The duty of care of a member of
28a member-managed limited liability company in the conduct
29or winding up of the company’s activities and affairs is to
30refrain from engaging in grossly negligent or reckless conduct,
31willful or intentional misconduct, or knowing violation of law.
324. A member in a member-managed limited liability company
33or a manager-managed limited liability company shall discharge
34the duties under this chapter or under the operating agreement
35and exercise any rights consistently with the contractual
-60-1obligation of good faith and fair dealing A member shall
2discharge the duties and obligations under this chapter
3or under the operating agreement and exercise any rights
4consistently with the contractual obligation of good faith and
5fair dealing.
65. It is a defense to a claim under subsection 2, paragraph
7“b”, and any comparable claim in equity or at common law that
8the transaction was fair to the limited liability company A
9member does not violate a duty or obligation under this chapter
10or under the operating agreement solely because the member’s
11conduct furthers the member’s own interest.
126. All of the members of a member-managed limited liability
13company or a manager-managed limited liability company may
14authorize or ratify, after full disclosure of all material
15facts, a specific act or transaction that otherwise would
16violate the duty of loyalty.
177. a. A member satisfies the duty of care in subsection 3
18 if all of the following apply: It is a defense to a claim under
19subsection 2, paragraph “b”, and any comparable claim in equity
20or at common law that the transaction was fair to the limited
21liability company.
22(1) The member is not interested in the subject matter of
23the business judgment.
24(2) The member is informed with respect to the subject
25of the business judgment to the extent the member reasonably
26believes to be appropriate in the circumstances.
27(3) The member has a rational basis for believing that
28the business judgment is in the best interests of the limited
29liability company.
30b. A person challenging the business judgment of a member
31has the burden of proving a breach of the duty of care, and
32in a damage action, the burden of proving that the breach was
33the legal cause of damage suffered by the limited liability
34company.
358. In a manager-managed limited liability company, all of
-61-1the following rules apply: If, as permitted by subsection 6
2or subsection 9, paragraph “f”, or the operating agreement, a
3member enters into a transaction with the limited liability
4company which otherwise would be prohibited by subsection 2,
5paragraph “b”, the member’s rights and obligations arising from
6the transaction are the same as those of a person that is not a
7member.
8a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
9managers and not the members.
10b. The duty stated under subsection 2, paragraph “c”,
11continues until winding up is completed.
12c. Subsection 4 applies to the members and managers.
13d. Subsection 6 applies only to the members.
14e. A member does not have any fiduciary duty to the company
15or to any other member solely by reason of being a member.
169. In a manager-managed limited liability company, all of
17the following rules apply:
18a. Subsections 1, 2, 3, and 7 apply to the manager or
19managers and not the members.
20b. The duty stated under subsection 2, paragraph “c”,
21continues until winding up is completed.
22c. Subsection 4 applies to managers and members.
23d. Subsection 5 applies only to members.
24e. The power to ratify under subsection 6 may be exercised
25only by the members.
26f. Subject to subsection 4, a member does not have any duty
27to the limited liability company or to any other member solely
28by reason of being a member.
29 Sec. 45. Section 489.410, Code 2023, is amended to read as
30follows:
31489.410 Right of members, managers, and dissociated members
32to information Rights to information of member, manager, and
33person dissociated as member.
341. In a member-managed limited liability company, all of the
35following rules apply:
-62- 1a. On reasonable notice, a member may inspect and copy
2during regular business hours, at a reasonable location
3specified by the limited liability company, any record
4maintained by the company regarding the company’s activities,
5affairs, financial condition, and other circumstances, to the
6extent the information is material to the member’s rights and
7duties under the operating agreement or this chapter.
8b. The limited liability company shall furnish to each
9member all of the following:
10(1) Without demand, any information concerning the limited
11liability company’s activities, affairs, financial condition,
12and other circumstances which the company knows and is material
13to the proper exercise of the member’s rights and duties under
14the operating agreement or this chapter, except to the extent
15the company can establish that it reasonably believes the
16member already knows the information.
17(2) On demand, any other information concerning the limited
18liability company’s activities, affairs, financial condition,
19and other circumstances, except to the extent the demand or for
20the information demanded is unreasonable or otherwise improper
21under the circumstances.
22c. The duty to furnish information under paragraph “b” also
23applies to each member to the extent the member knows any of
24the information described in paragraph “b”.
252. In a manager-managed limited liability company, all of
26the following rules apply:
27a. The informational rights stated in subsection 1 and
28the duty stated in subsection 1, paragraph “c”, apply to the
29managers and not the members.
30b. During regular business hours and at a reasonable
31location specified by the limited liability company, a
32member may obtain from the company and inspect and copy full
33 information regarding the activities, affairs, financial
34condition, and other circumstances of the company as is just
35and reasonable if all of the following apply:
-63- 1(1) The member seeks the information for a purpose material
2 reasonably related to the member’s interest as a member.
3(2) The member makes a demand in a record received by
4the limited liability company, describing with reasonable
5particularity the information sought and the purpose for
6seeking the information.
7(3) The information sought is directly connected to the
8member’s purpose.
9c. Within Not later than ten days after receiving a demand
10pursuant to paragraph “b”, subparagraph (2), the limited
11liability company shall in a record inform in a record the
12member that made the demand that includes all of the following:
13(1) Of the What information that the limited liability
14 company will provide in response to the demand and when and
15where the company will provide the information.
16(2) If the company declines to provide any demanded
17information, the company’s reasons for declining The limited
18liability company’s reasons for declining, if the company
19declines to provide any demanded information.
20d. Whenever this chapter or an operating agreement provides
21for a member to vote on or give or withhold consent to a matter,
22before the vote is cast or consent is given or withheld, the
23limited liability company shall, without demand, provide the
24member with all information that is known to the company and is
25material to the member’s decision.
263. On ten days’ demand made in a record received by a
27limited liability company, a dissociated member may have access
28to information to which the person was entitled while a member
29if the information pertains to the period during which the
30person was a member, the person seeks the information in good
31faith, and the person satisfies the requirements imposed on
32a member by subsection 2, paragraph “b”. The company shall
33respond to a demand made pursuant to this subsection in the
34manner provided in subsection 2, paragraph “c” Subject to
35subsection 8, on ten days’ demand made in a record received by
-64-1a limited liability company, a person dissociated as a member
2may have access to the information to which the person was
3entitled while a member if all of the following apply:
4a. The information pertains to the period during which the
5person was a member.
6b. The person seeks the information in good faith.
7c. The person satisfies the requirements imposed on a member
8by subsection 2, paragraph “b”.
94. A limited liability company may charge a person that
10makes a demand under this section the reasonable costs of
11copying, limited to the costs of labor and material shall
12respond to a demand made pursuant to subsection 3 in the manner
13provided in subsection 2, paragraph “c”.
145. A member or dissociated member may exercise rights
15under this section through an agent or, in the case of an
16individual under legal disability, a legal representative. Any
17restriction or condition imposed by the operating agreement
18or under subsection 7 applies both to the agent or legal
19representative and the member or dissociated member A limited
20liability company may charge a person that makes a demand under
21this section the reasonable costs of copying, limited to the
22costs of labor and material.
236. The rights under this section do not extend to a person
24as transferee A member or person dissociated as a member may
25exercise the rights under this section through an agent or,
26in the case of an individual under legal disability, a legal
27representative. Any restriction or condition imposed by the
28operating agreement or under subsection 8 applies both to the
29agent or legal representative and to the member or person
30dissociated as a member.
317. In addition to any restriction or condition stated
32in its operating agreement, a limited liability company, as
33a matter within the ordinary course of its activities, may
34impose reasonable restrictions and conditions on access to
35and use of information to be furnished under this section,
-65-1including designating information confidential and imposing
2nondisclosure and safeguarding obligations on the recipient.
3In a dispute concerning the reasonableness of a restriction
4under this subsection, the company has the burden of proving
5reasonableness Subject to section 489.504, the rights under
6this section do not extend to a person as transferee.
78. In addition to any restriction or condition stated in its
8operating agreement, a limited liability company, as a matter
9within the ordinary course of its activities and affairs, may
10impose reasonable restrictions and conditions on access to
11and use of information to be furnished under this section,
12including designating information confidential and imposing
13nondisclosure and safeguarding obligations on the recipient.
14In a dispute concerning the reasonableness of a restriction
15under this subsection, the company has the burden of proving
16reasonableness.
17 Sec. 46. Section 489.502, Code 2023, is amended to read as
18follows:
19489.502 Transfer of transferable interest.
201. For Subject to section 489.503, subsection 6, for a
21transfer, in whole or in part, all of the following applies to
22a transferable interest:
23a. It is permissible.
24b. It does not by itself cause a member’s person’s
25 dissociation as a member or a dissolution and winding up of the
26limited liability company’s activities and affairs.
27c. Subject to section 489.504, it does not entitle the
28transferee to do any of the following:
29(1) Participate in the management or conduct of the limited
30liability company’s activities and affairs.
31(2) Except as otherwise provided in subsection 3, have
32access to records or other information concerning the limited
33liability company’s activities and affairs.
342. A transferee has the right to receive, in accordance
35with the transfer, distributions to which the transferor would
-66-1otherwise be entitled.
23. In a dissolution and winding up of a limited liability
3company, a transferee is entitled to an account of the
4company’s transactions only from the date of dissolution.
54. A transferable interest may be evidenced by a certificate
6of the interest issued by the a limited liability company in a
7record, and, subject to this section, the interest represented
8by the certificate may be transferred by a transfer of the
9certificate.
105. A limited liability company need not give effect to a
11transferee’s rights under this section until the company knows
12or has notice of the transfer.
136. A transfer of a transferable interest in violation of a
14restriction on transfer contained in the operating agreement
15or another agreement to which the transferor is a party is
16ineffective as to a person having notice of the restriction at
17the time of transfer if the intended transferee has knowledge
18or notice of the restriction at the time of transfer.
197. Except as otherwise provided in section 489.602,
20subsection 4 5, paragraph “b”, when if a member transfers a
21transferable interest, the transferor retains the rights of a
22member other than the transferable interest in distributions
23 transferred and retains all duties and obligations of a member.
248. When If a member transfers a transferable interest to a
25person that becomes a member with respect to the transferred
26interest, the transferee is liable for the member’s obligations
27under section sections 489.403 and section 489.406, subsection
283, 489.406 known to the transferee when the transferee becomes
29a member.
30 Sec. 47. Section 489.503, Code 2023, is amended to read as
31follows:
32489.503 Charging order.
331. On application by a judgment creditor of a member
34or transferee, a court may enter a charging order against
35the transferable interest of the judgment debtor for the
-67-1unsatisfied amount of the judgment. A Except as otherwise
2provided in subsection 6, a charging order constitutes a lien
3on a judgment debtor’s transferable interest and requires the
4limited liability company to pay over to the person to which
5the charging order was issued any distribution that would
6 otherwise would be paid to the judgment debtor.
72. To the extent necessary to effectuate the collection
8of distributions pursuant to a charging order in effect under
9subsection 1, the court may do all of the following:
10a. Appoint a receiver of the distributions subject to
11the charging order, with the power to make all inquiries the
12judgment debtor might have made.
13b. Make all other orders necessary to give effect to the
14charging order.
153. Upon a showing that distributions under a charging
16order will not pay the judgment debt within a reasonable
17time, the court may foreclose the lien and order the sale of
18the transferable interest. The Except as otherwise provided
19in subsection 6, the purchaser at the foreclosure sale only
20 obtains only the transferable interest, does not thereby become
21a member, and is subject to section 489.502.
224. At any time before foreclosure under subsection 3, the
23member or transferee whose transferable interest is subject to
24a charging order under subsection 1 may extinguish the charging
25order by satisfying the judgment and filing a certified copy of
26the satisfaction with the court that issued the charging order.
275. At any time before foreclosure under subsection 3,
28a limited liability company or one or more members whose
29transferable interests are not subject to the charging order
30may pay to the judgment creditor the full amount due under the
31judgment and thereby succeed to the rights of the judgment
32creditor, including the charging order.
336. This chapter does not deprive any member or transferee of
34the benefit of any exemption laws applicable to the member’s
35or transferee’s transferable interest If a court orders
-68-1foreclosure of a charging order lien against the sole member of
2a limited liability company all of the following apply:
3a. The court shall confirm the sale.
4b. The purchaser at the sale obtains the member’s entire
5interest, not only the member’s transferable interest.
6c. The purchaser thereby becomes a member.
7d. The person whose interest was subject to the foreclosed
8charging order is dissociated as a member.
97. This section provides the exclusive remedy by which
10a person seeking to enforce a judgment against a member or
11transferee may, in the capacity of judgment creditor, satisfy
12the judgment from the judgment debtor’s transferable interest
13 This chapter does not deprive any member or transferee of the
14benefit of any exemption law applicable to the transferable
15interest of the member or transferee.
168. This section provides the exclusive remedy by which a
17person seeking in the capacity of judgment creditor to enforce
18a judgment against a member or transferee may satisfy the
19judgment from the judgment debtor’s transferable interest.
20 Sec. 48. Section 489.504, Code 2023, is amended to read as
21follows:
22489.504 Power of personal representative of deceased member.
23If a member dies, the deceased member’s personal legal
24 representative or other legal representative may exercise all
25of the following:
261. Therights of a transferee provided in section 489.502,
27subsection 3, and, for.
282. Forthe purposes of settling the estate, the rights of a
29current the deceased member had under section 489.410.
30 Sec. 49. Section 489.601, Code 2023, is amended to read as
31follows:
32489.601 Member’s power Power to dissociate as a member —
33wrongful dissociation.
341. A person has the power to dissociate as a member at any
35time, rightfully or wrongfully, by withdrawing as a member by
-69-1express will under section 489.602, subsection 1.
22. A person’s dissociation from a limited liability company
3 as a member is wrongful only if any of the following applies to
4the dissociation:
5a. It is in breach of an express provision of the operating
6agreement.
7b. It occurs before the termination completion of the
8winding up of the limited liability company and any of the
9following applies:
10(1) The person withdraws as a member by express will.
11(2) The person is expelled as a member by judicial order
12under section 489.602, subsection 5 6.
13(3) The person is dissociated under section 489.602,
14subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
15 8.
16(4) In the case of a person that is not a trust other than
17a business trust, an estate, or an individual, the person
18is expelled or otherwise dissociated as a member because it
19willfully dissolved or terminated.
203. A person that wrongfully dissociates as a member is
21liable to the limited liability company and, subject to
22section 489.901, to the other members for damages caused by the
23dissociation. The liability is in addition to any other debt,
24obligation, or other liability of the member to the company or
25the other members.
26 Sec. 50. Section 489.602, Code 2023, is amended to read as
27follows:
28489.602 Events causing dissociation.
29A person is dissociated as a member from a limited liability
30company when any of the following applies:
311. The limited liability company knows or has notice of
32the person’s express will to withdraw as a member, but, if the
33person specified a withdrawal date later than the date the
34limited liability company knew or had notice, on that later
35date.
-70- 12. An event stated in the operating agreement as causing the
2person’s dissociation occurs.
33. The person is expelled as a member pursuant to the
4operating agreement The person’s entire interest is transferred
5in a foreclosure sale under section 489.503, subsection 6.
64. The person is expelled as a member by the unanimous
7consent of the other members if any of the following applies:
8 pursuant to the operating agreement.
9a. It is unlawful to carry on the company’s activities with
10the person as a member.
11b. There has been a transfer of all of the person’s
12transferable interest in the company, other than any of the
13following:
14(1) A transfer for security purposes.
15(2) A charging order in effect under section 489.503 which
16has not been foreclosed.
17c. The person is a corporation and, within ninety days
18after the company notifies the person that it will be expelled
19as a member because the person has filed a certificate of
20dissolution or the equivalent, its charter has been revoked,
21or its right to conduct business has been suspended by
22the jurisdiction of its incorporation, the certificate of
23dissolution has not been revoked or its charter or right to
24conduct business has not been reinstated.
25d. The person is a limited liability company or partnership
26that has been dissolved and whose business is being wound up.
275. On application by the company, the person is expelled
28as a member by judicial order because the person has done any
29of the following The person is expelled as a member by the
30affirmative vote or consent of all the other members if any of
31the following apply:
32a. Has engaged, or is engaging, in wrongful conduct that
33has adversely and materially affected, or will adversely and
34materially affect, the company’s activities It is unlawful to
35carry on the limited liability company’s activities and affairs
-71-1with the person as a member.
2b. Has willfully or persistently committed, or is willfully
3and persistently committing, a material breach of the
4operating agreement or the person’s duties or obligations under
5section 489.409 There has been a transfer of all the person’s
6transferable interest in the limited liability company, other
7than any of the following:
8(1) A transfer for security purposes.
9(2) A charging order in effect under section 489.503 which
10has not been foreclosed.
11c. Has engaged in, or is engaging in, conduct relating
12to the company’s activities which makes it not reasonably
13practicable to carry on the activities with the person as a
14member The person is an entity and all of the following apply:
15(1) The limited liability company notifies the person that
16it will be expelled as a member because the person has filed
17a statement of dissolution or the equivalent, the person has
18been administratively dissolved, the person’s charter or the
19equivalent has been revoked, or the person’s right to conduct
20business has been suspended by the person’s jurisdiction of
21formation.
22(2) Not later than ninety days after the notification,
23the statement of dissolution or the equivalent has not been
24withdrawn, rescinded, or revoked, the person has not been
25reinstated, or the person’s charter or the equivalent or right
26to conduct business has not been reinstated.
27d. The person is an unincorporated entity that has been
28dissolved and whose activities and affairs are being wound up.
296. In the case of a person who is an individual, any of
30the following applies On application by the limited liability
31company or a member in a direct action under section 489.901,
32the person is expelled as a member by judicial order because
33any of the following apply:
34a. The person dies has engaged or is engaging in wrongful
35conduct that has affected adversely and materially, or will
-72-1affect adversely and materially, the company’s activities and
2affairs.
3b. In a member-managed limited liability company, any of
4the following applies: The person has committed willfully or
5persistently, or is committing willfully or persistently,
6a material breach of the operating agreement or a duty or
7obligation under section 489.409.
8(1) A guardian or general conservator for the person is
9appointed.
10(2) There is a judicial order that the person has otherwise
11become incapable of performing the person’s duties as a member
12under this chapter or the operating agreement.
13c. The person has engaged or is engaging in conduct relating
14to the limited liability company’s activities and affairs which
15makes it not reasonably practicable to carry on the activities
16and affairs with the person as a member.
177. In a member-managed limited liability company, the
18person does any of the following In the case of an individual
19any of the following apply:
20a. Becomes a debtor in bankruptcy The individual dies.
21b. Executes an assignment for the benefit of creditors In a
22member-managed limited liability company any of the following
23apply:
24(1) A guardian or general conservator for the individual is
25appointed.
26(2) A court orders that the individual has otherwise become
27incapable of performing the individual’s duties as a member
28under this chapter or the operating agreement.
29c. Seeks, consents to, or acquiesces in the appointment of
30a trustee, receiver, or liquidator of the person or of all or
31substantially all of the person’s property.
328. In the case of a person that is a trust or is acting as
33a member by virtue of being a trustee of a trust, the trust’s
34entire transferable interest in the company is distributed In a
35member-managed limited liability company, any of the following
-73-1apply:
2a. The person becomes a debtor in bankruptcy.
3b. The person signs an assignment for the benefit of
4creditors.
5c. The person seeks, consents to, or acquiesces in the
6appointment of a trustee, receiver, or liquidator of the person
7or of all or substantially all the person’s property.
89. In the case of a person that is an estate or is acting
9as a member by virtue of being a personal representative of
10an estate, the estate’s entire transferable interest in the
11company is distributed In the case of a person that is a
12testamentary or inter vivos trust or is acting as a member by
13virtue of being a trustee of such a trust, the trust’s entire
14transferable interest in the limited liability company is
15distributed.
1610. In the case of a member that is not an individual,
17partnership, limited liability company, corporation, trust, or
18estate, the termination of the member In the case of a person
19that is an estate or is acting as a member by virtue of being
20a personal representative of an estate, the estate’s entire
21transferable interest in the limited liability company is
22distributed.
2311. The company participates in a merger under article 10,
24if any of the following applies: In the case of a person that
25is not an individual, the existence of the person terminates.
26a. The company is not the surviving entity.
27b. Otherwise as a result of the merger, the person ceases
28to be a member.
2912. The company participates in a conversion under article
3010 The limited liability company participates in a merger under
31subchapter X and any of the following apply:
32a. The limited liability company is not the surviving
33entity.
34b. Otherwise as a result of the merger, the person ceases
35to be a member.
-74- 113. The company participates in a domestication under
2article 10, if, as a result of the domestication, the
3person ceases to be a member The limited liability company
4participates in an interest exchange under subchapter X and,
5as a result of the interest exchange, the person ceases to be a
6member.
714. The limited liability company terminates participates
8in a conversion under subchapter X.
915. The limited liability company participates in a
10domestication under subchapter X and, as a result of the
11domestication, the person ceases to be a member.
1216. The limited liability company dissolves and completes
13winding up.
14 Sec. 51. Section 489.603, Code 2023, is amended to read as
15follows:
16489.603 Effect of person’s dissociation as member.
171. When If a person is dissociated as a member, of a limited
18liability company, all of the following apply:
19a. The person’s right to participate as a member in the
20management and conduct of the limited liability company’s
21activities and affairs terminates.
22b. If the company is member-managed, the person’s fiduciary
23duties as a member end with regard to matters arising and
24events occurring after the person’s dissociation The person’s
25duties and obligations under section 489.409 as a member end
26with regard to matters arising and events occurring after the
27person’s dissociation.
28c. Subject to section 489.504 and article 10 subchapter X,
29any transferable interest owned by the person in the person’s
30capacity as a member immediately before dissociation in the
31person’s capacity as a member is owned by the person solely as
32a transferee.
332. A person’s dissociation as a member of a limited
34liability company does not of itself discharge the person from
35any debt, obligation, or other liability to the company or the
-75-1other members which the person incurred while a member.
2 Sec. 52. Section 489.604, Code 2023, is amended to read as
3follows:
4489.604 Member’s power to dissociate under certain
5circumstances.
61. If the certificate of organization or an operating
7agreement does not specify the time or the events upon the
8happening of which a member may dissociate from a limited
9liability company, a member may dissociate from the limited
10liability company in the event any amendment to the certificate
11of organization or operating agreement that is adopted over
12the member’s written dissent adversely affects the rights or
13preferences of the dissenting member’s transferable interest
14in any of the ways described in paragraphs “a” through “f”.
15A dissociation in the event of such dissent and adverse
16effect is deemed to have occurred as of the effective date
17of the amendment, if the member gives notice to the limited
18liability company not more than sixty days after the date of
19the amendment. In valuing the member’s distribution pursuant
20to this subsection, any depreciation in anticipation of the
21amendment shall be excluded. An amendment that does any of the
22following is subject to this section:
23a. Alters or abolishes a member’s right to receive a
24distribution.
25b. Alters or abolishes a member’s right to voluntarily
26dissociate.
27c. Alters or abolishes a member’s right to vote on any
28matter, except as the rights may be altered or abolished
29through the acceptance of contributions or the making of
30contribution agreements.
31d. Alters or abolishes a member’s preemptive right to make
32contributions.
33e. Establishes or changes the conditions for or consequences
34of expulsion.
35f. Waives the application of this section to the limited
-76-1liability company.
22. A member dissociating from a limited liability company
3 under this section is not liable for damages for the breach of
4any agreement not to withdraw.
53. This section applies to a limited liability company
6whose original articles of organization or certificate of
7organization is filed with the secretary of state on or after
8July 1, 1997.
94. This section applies to a limited liability company whose
10original articles of organization are filed with the secretary
11of state and effective on or prior to June 30, 1997, if such
12company’s operating agreement provides that it is subject to
13this section.
145. The operating agreement of a limited liability company
15may waive the applicability of this section to the company and
16its members.
17 Sec. 53. Section 489.701, Code 2023, is amended to read as
18follows:
19489.701 Events causing dissolution.
201. A limited liability company is dissolved, and its
21activities and affairs must be wound up, upon the occurrence
22of any of the following:
23a. An event or circumstance that the operating agreement
24states causes dissolution.
25b. The affirmative vote or consent of all the members.
26c. Once After the limited liability company has at least
27one member, the passage of that member and any other member
28dissociate, and ninety consecutive days pass during which the
29company has no members., unless before the end of the period
30all 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 resume resumes
21 carrying on its activities and affairs as if the dissolution
22had never occurred.
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 right
9of a limited liability company as follows:
101. The A member may maintain a derivative action to enforce
11a right of a limited liability company, if the member first
12makes a demand on the other members in a member-managed limited
13liability company, or the managers of a manager-managed limited
14liability company, requesting that they cause the company to
15bring an action to enforce the right, and the managers or other
16members do not bring the action within ninety days from the
17date the demand was made unless the member has earlier been
18notified that the demand has been rejected by the company
19or unless irreparable injury to the company would result by
20waiting for the expiration of the ninety-day period.
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 member if the professional limited liability company
5voluntarily elects to no longer be a professional limited
6liability company but continue its existence as a limited
7liability company pursuant to section 489.1119A within sixty
8days 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 524.303, subsection 2, Code 2023, is
17amended to read as follows:
182. Applicable fees, payable to the secretary of state as
19specified in section 489.117 or section 490.122, for the filing
20of the articles of incorporation or section 489.117 for filing
21a certificate of organization.
22 Sec. 159. Section 524.310, subsection 5, paragraph b, Code
232023, is amended to read as follows:
24b. A corporate or company name reserved, registered, or
25protected as provided in section 489.109, 489.114A, 489.706,
26 490.402, 490.403, 504.402, or 504.403.
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.
da/jh/md
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.
149. “Filing entity” means an unincorporated entity, other
15than a limited liability partnership, that is of a type that
16is created by filing a public organic record or is required to
17file a public organic record that evidences its creation.
189. 10. “Foreign limited liability company” means an
19unincorporated entity formed under the law of a jurisdiction
20other than this state and denominated by that law as a limited
21liability company which would be a limited liability company if
22formed under the law of this state.
2311. “Jurisdiction”, used to refer to a political entity,
24means the United States, a state, a foreign country, or a
25political subdivision of a foreign country.
2612. “Jurisdiction of formation” means the jurisdiction whose
27law governs the internal affairs of an entity.
2810. 13. “Limited liability company”, except in the phrase
29“foreign limited liability company”, and in subchapter X means
30an entity formed under this chapter or which becomes subject to
31this chapter under subchapter X or section 489.110.
3211. 14. “Manager” means a person that under the operating
33agreement of a manager-managed limited liability company is
34responsible, alone or in concert with others, for performing
35the management functions stated in section 489.407, subsection
-3-13.
212. 15. “Manager-managed limited liability company” means a
3limited liability company that qualifies under section 489.407,
4subsection 1.
513. 16. “Member” means a person that has become a member
6of a limited liability company under section 489.401 and has
7not dissociated under section 489.602. for whom all of the
8following are true:
9a. The person has become a member of a limited liability
10company under section 489.401 or was a member in a limited
11liability company when the company became subject to this
12chapter under section 489.110.
13b. The person is not dissociated under section 489.602.
1414. 17. “Member-managed limited liability company” means a
15limited liability company that is not a manager-managed limited
16liability company.
1718. “Nonfiling entity” means an unincorporated entity that
18is of a type that is not created by filing a public organic
19record.
2015. 19. “Operating agreement” means the agreement, whether
21or not referred to as an operating agreement and whether oral,
22implied, in a record, implied, or in any combination thereof,
23of all the members of a limited liability company, including
24a sole member, concerning the matters described in section
25489.110, subsection 1. The term includes the agreement as
26amended or restated.
2716. 20. “Organizer” means a person that acts under section
28489.201 to form a limited liability company.
2917. 21. a. “Person” means an individual, business
30 corporation, business trust, estate, trust, nonprofit
31corporation, partnership, limited partnership, limited
32liability company, domestic cooperative, unincorporated
33nonprofit association, statutory trust, business trust,
34common-law business trust, estate, trust, association, joint
35venture, public corporation, government or governmental
-4-1subdivision, agency, or instrumentality, or any other legal or
2commercial entity.
3b. “Person” includes a protected series, however
4denominated, of an entity if the protected series is
5established under law that limits, or limits if conditions
6specified under law are satisfied, the ability of a creditor
7of the entity or of any other protected series of the entity to
8satisfy a claim from assets of the protected series.
918. 22. “Principal office” means the principal executive
10office of a limited liability company or foreign limited
11liability company, whether or not the office is located in this
12state.
1323. “Property” means all property, whether real, personal,
14or mixed or tangible or intangible, or any right or interest
15therein.
1619. 24. “Record”, used as a noun, means information that
17is inscribed on a tangible medium or that is stored in an
18electronic or other medium and is retrievable in perceivable
19form.
2020. “Registered office” means the office that a limited
21liability company or foreign limited liability company is
22required to designate and maintain under section 489.113.
2325. “Registered agent” means an agent of a limited
24liability company or foreign limited liability company which is
25authorized to receive service of any process, notice, or demand
26required or permitted by law to be served on the company.
2726. “Registered foreign limited liability company” means
28a foreign limited liability company that is registered to do
29business in this state pursuant to a statement of registration
30filed by the secretary of state.
3121. 27. “Sign” means, with the present intent to
32authenticate or adopt a record, to do any of the following:
33a. Execute or adopt a tangible symbol.
34b. Attach to or logically associate with the record an
35electronic symbol, sound, or process.
-5- 122. 28. “State” means a state of the United States, the
2District of Columbia, Puerto Rico, the United States Virgin
3Islands, or any territory or insular possession subject to the
4jurisdiction of the United States.
523. 29. “Transfer” includes an assignment, conveyance,
6deed, bill of sale, lease, mortgage, security interest,
7encumbrance, gift, or transfer by operation of law. any of the
8following:
9a. An assignment.
10b. A conveyance.
11c. A sale.
12d. A lease.
13e. An encumbrance, including a mortgage or security
14interest.
15f. A gift.
16g. A transfer by operation of law.
1724. 30. a. “Transferable interest” means the right, as
18originally associated with initially owned by a person in the
19 person’s capacity as a member, to receive distributions from
20a limited liability company, in accordance with the operating
21agreement, whether or not the person remains a member or
22continues to own any part of the right.
23b. “Transferable interest” applies to any fraction of the
24interest, by whomever owned.
2525. 31. a. “Transferee” means a person to which all or
26part of a transferable interest has been transferred, whether
27or not the transferor is a member.
28b. “Transferee” includes a person that owns a transferable
29interest under section 489.603, subsection 1, paragraph “c”.
30 Sec. 3. Section 489.103, Code 2023, is amended to read as
31follows:
32489.103 Knowledge — notice.
331. A person knows a fact when if the person has or is any
34of the following:
35a. Has actual knowledge of it.
-6- 1b. Is deemed to know it under subsection 4, paragraph “a”,
2or law other than this chapter.
32. A person has notice of a fact when if the person has or
4is any of the following:
5a. Has reason to know the fact from all of the facts known
6to the person at the time in question.
7b. Is deemed to have notice of the fact under subsection 4,
8paragraph “b”.
93. A Subject to section 489.210, subsection 6, a person
10notifies another person of a fact by taking steps reasonably
11required to inform the other person in ordinary course, whether
12or not those steps cause the other person knows to know the
13fact.
144. A person that is not a member is deemed both all of the
15following:
16a. To know of a limitation on authority to transfer real
17property as provided in section 489.302, subsection 7.
18b. To have notice of all of the following regarding a
19limited liability company’s:
20(1) Dissolution, The limited liability company’s
21dissolution, ninety days after a statement of dissolution under
22section 489.702, subsection 2, paragraph “b”, subparagraph (1),
23becomes effective.
24(2) Termination, The limited liability company’s
25termination, ninety days after a statement of termination under
26section 489.702, subsection 2, paragraph “b”, subparagraph (6),
27becomes effective.
28(3) Merger, The limited liability company’s participation
29in a merger, interest exchange, conversion, or domestication,
30ninety days after articles of merger, interest exchange,
31 conversion, or domestication under article 10 subchapter X
32 become effective.
33 Sec. 4. Section 489.104, Code 2023, is amended to read as
34follows:
35489.104 Nature, purpose, and duration of limited liability
-7-1company.
21. A limited liability company is an entity distinct from
3its member or members.
42. A limited liability company may have any lawful purpose,
5regardless of whether for profit.
63. A limited liability company has perpetual duration.
7 Sec. 5. Section 489.105, Code 2023, is amended to read as
8follows:
9489.105 Powers.
101. Except as otherwise provided in subsection 2, a limited
11liability company has the capacity to sue and be sued in its
12own name and the power to do all things necessary or convenient
13to carry on its activities and affairs.
142. Until a limited liability company has or has had at
15least one member, the limited liability company lacks the
16capacity to do any act or carry on any activity except all of
17the following:
18a. Delivering to the secretary of state for filing a
19statement of change under section 489.114, an amendment to the
20certificate under section 489.202, a statement of correction
21under section 489.206, a biennial report under section 489.209,
22a statement of withdrawal or a statement of rescission under
23section 489.701A, or a statement of termination under section
24489.702, subsection 2, paragraph “b”, subparagraph (6).
25b. Admitting a member under section 489.401.
26c. Dissolving under section 489.701.
273. A limited liability company that has or has had at least
28one member may ratify an act or activity that occurred when the
29company lacked capacity under subsection 2.
30 Sec. 6. Section 489.106, Code 2023, is amended to read as
31follows:
32489.106 Governing law.
33The law of this state governs all of the following:
341. The internal affairs of a limited liability company.
352. The liability of a member as member and a manager as
-8-1manager for the debts, obligations, a debt, obligation, or
2other liabilities liability of a limited liability company.
3 Sec. 7. Section 489.108, Code 2023, is amended to read as
4follows:
5489.108 Name Permitted names.
61. The name of a limited liability company must contain
7the words phrase “limited liability company” or “limited
8company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
9“Limited” may be abbreviated as “Ltd.”, and “company” may be
10abbreviated as “Co.”.
112. Unless authorized by Except as otherwise provided in
12 subsection 3, the name of a limited liability company, and
13the name under which a foreign limited liability company may
14register to do business in this state, must be distinguishable
15in on the records of the secretary of state from all any of the
16following:
17a. The name of each person that is not an individual and
18that is incorporated, organized, or authorized to transact
19business in this state.
20b. Each name reserved under section 489.109.
21a. The name of an existing person whose formation required
22the filing of a record by the secretary of state and which is
23not at the time administratively dissolved, or if such person
24has been administratively dissolved, within five years of the
25effective date of dissolution.
26b. The name of a limited liability partnership whose
27statement of qualification is in effect.
28c. The name under which a person is registered to do
29business in this state by the filing of a record by the
30secretary of state.
31d. The name reserved under section 489.109 or other law
32of this state providing for the reservation of a name by the
33filing of a record by the secretary of state.
34e. The name registered under section 489.114 or other law
35of this state providing for the registration of a name by the
-9-1filing of a record by the secretary of state.
2f. The name registered with the secretary of state as a
3fictitious name.
43. A limited liability company may apply to the secretary of
5state for authorization to use a name that does not comply with
6subsection 2. The secretary of state shall authorize use of
7the name applied for if either of the following applies: If a
8person consents in a record to the use of its name and submits
9an undertaking in a form satisfactory to the secretary of state
10to change its name to a name that is distinguishable on the
11records of the secretary of state from any name in any category
12of names in subsection 2, the name of the consenting person may
13be used by the person to which the consent was given.
14a. The present user, registrant, or owner of the
15noncomplying name consents in a signed record to the use
16and submits an undertaking in a form satisfactory to the
17secretary of state to change the noncomplying name to a name
18that complies with subsection 2 and is distinguishable in the
19records of the secretary of state from the name applied for.
20b. The applicant delivers to the secretary of state a
21certified copy of the final judgment of a court establishing
22the applicant’s right to use in this state the name applied
23for.
244. A limited liability company may use the name, including
25the fictitious name, of another entity that is used in this
26state if the other entity is formed under the law of this
27state or is authorized to transact business in this state
28and the proposed user limited liability company meets any
29of the following conditions: In determining whether a name
30is the same as or not distinguishable on the records of the
31secretary of state from the name of another person, words,
32phrases, or abbreviations indicating a type of person, such as
33“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
34corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
35“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
-10-1“limited liability partnership”, “L.L.P.”, “LLP”, “registered
2limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
3liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
4limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
5“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
6“coop”, or “CP” shall not be taken into account.
7a. Has merged with the other entity.
8b. Has been formed by reorganization of the other entity.
9c. Has acquired all or substantially all of the assets,
10including the name, of the other entity.
115. This article does not control the use of fictitious
12names. However, if a limited liability company uses a
13fictitious name in this state, it shall deliver to the
14secretary of state for filing a certified copy of the
15resolution of its members if it is member-managed or its
16managers if it is manager-managed, adopting the fictitious
17name. The name of a limited liability company or foreign
18limited liability company shall not contain words that may be
19used only with approval by another state department or state
20agency unless the company obtains the approval of such other
21state department or agency and delivers to the secretary of
22state for filing a record certifying such approval.
236. Subject to section 489.805, this section applies to
24a foreign limited liability company transacting business in
25this state which has a certificate of authority to transact
26business in this state or which has applied for a certificate
27of authority. A limited liability company or foreign limited
28liability company may use a name that is not distinguishable
29from a name described in subsection 2, paragraphs “a” through
30“f”, if the company delivers to the secretary of state a
31certified copy of a final judgment of a court of competent
32jurisdiction establishing the right of the company to use the
33name in this state.
347. A limited liability company may use the name, including
35the fictitious name, of another entity that is used in this
-11-1state if the other entity is formed under the law of this
2state or is authorized to transact business in this state and
3the proposed user limited liability company meets any of the
4following conditions:
5a. Has merged with the other entity.
6b. Has been formed by reorganization of the other entity.
7c. Has acquired all or substantially all of the assets,
8including the name, of the other entity.
98. This subchapter does not control the use of fictitious
10names. However, if a limited liability company uses a
11fictitious name in this state, it shall deliver to the
12secretary of state for filing a certified copy of the
13resolution of its members if it is member-managed or its
14managers if it is manager-managed, adopting the fictitious
15name.
16 Sec. 8. Section 489.109, Code 2023, is amended to read as
17follows:
18489.109 Reservation of name.
191. A person may reserve the exclusive use of the a name
20of a limited liability company, including a fictitious or
21assumed name for a foreign limited liability company whose
22name is not available, by delivering an application to the
23secretary of state for filing that complies with section
24489.112 by delivering an application to the secretary of state
25for filing. The application must state the name and address
26of the applicant and the name proposed to be reserved. If
27the secretary of state finds that the name applied for is
28available, it must be reserved the secretary of state shall
29reserve the name for the applicant’s exclusive use for a
30one-hundred-twenty-day period one hundred and twenty days.
312. The owner of a reserved name reserved for a limited
32liability company may transfer the reservation to another
33person by delivering to the secretary of state for filing a
34signed notice in a record of the transfer which states the name
35and address of the transferee person to which the reservation
-12-1is being transferred.
2 Sec. 9. Section 489.110, Code 2023, is amended to read as
3follows:
4489.110 Operating agreement — scope, function, and
5limitations.
61. Except as otherwise provided in subsections 2 3 and 3 4,
7the operating agreement governs all of the following:
8a. Relations among the members as members and between the
9members and the limited liability company.
10b. The rights and duties under this chapter of a person in
11the capacity of manager.
12c. The activities and affairs of the company and the conduct
13of those activities and affairs.
14d. The means and conditions for amending the operating
15agreement.
162. To the extent the operating agreement does not otherwise
17 provide for a matter described in subsection 1, this chapter
18governs the matter.
193. An operating agreement shall not do any of the following:
20a. Vary a limited liability company’s capacity under section
21489.105 to sue and be sued in its own name the law applicable
22under section 489.104.
23b. Vary the law applicable under section 489.106 a limited
24liability company’s capacity under section 489.109 to sue and
25be sued in its own name.
26c. Vary the power of the court under section 489.204. any
27requirement, procedure, or other provision of this chapter
28pertaining to any of the following:
29(1) Registered agents.
30(2) The secretary of state, including provisions pertaining
31to records authorized or required to be delivered to the
32secretary of state for filing under this chapter.
33d. Subject to subsections 4 through 7, eliminate the duty of
34loyalty, the duty of care, or any other fiduciary duty Vary the
35provisions of section 489.204.
-13- 1e. Subject to subsections 4 through 7, eliminate the
2contractual obligation of good faith and fair dealing under
3section 489.409, subsection 4 Alter or eliminate the duty of
4loyalty or the duty of care, except as otherwise provided in
5subsection 4.
6f. Unreasonably restrict the duties and rights stated in
7section 489.410 Eliminate the contractual obligation of good
8faith and fair dealing under section 489.409, subsection 4,
9but the operating agreement may prescribe the standards, if
10not manifestly unreasonable, by which the performance of the
11obligation is to be measured.
12g. Vary the power of a court to decree dissolution in
13the circumstances specified in section 489.701, subsection
141, paragraphs “d” and “e” Relieve or exonerate a person from
15liability for conduct except as provided in subsection 6.
16h. Vary the requirement to wind up a limited liability
17company’s business as specified in section 489.702,
18subsection 1, and section 489.702, subsection 2, paragraph
19“a” Unreasonably restrict the duties and rights under section
20489.410, but the operating agreement may impose reasonable
21restrictions on the availability and use of information
22obtained under that section and may define appropriate
23remedies, including liquidated damages, for a breach of any
24reasonable restriction on use.
25i. Unreasonably restrict the right of a member to maintain
26an action under article 9 Vary the causes of dissolution
27specified in section 489.701, subsection 1, paragraph “d”.
28j. Restrict the right to approve a merger, conversion, or
29domestication under section 489.1014 to a member that will have
30personal liability with respect to a surviving, converted, or
31domesticated organization Vary the requirement to wind up the
32limited liability company’s activities and affairs as specified
33in section 489.702, subsection 1; subsection 2, paragraph “a”;
34and subsection 5.
35k. Except as otherwise provided in section 489.112,
-14-1subsection 2, restrict the rights under this chapter of a
2person other than a member or manager Unreasonably restrict the
3right of a member to maintain an action under subchapter VIII.
4l. Vary the provisions of section 489.805A, but the
5operating agreement may provide that the limited liability
6company shall not have a special litigation committee.
7m. Vary the right of a member to approve a merger, interest
8exchange, conversion, or domestication under section 489.1023,
9subsection 1, paragraph “b”; section 489.1033, subsection 1,
10paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
11section 489.1053, subsection 1, paragraph “b”.
12n. Vary the required contents of a plan of merger under
13section 489.1022, subsection 1; plan of interest exchange
14under section 489.1032, subsection 1; plan of conversion under
15section 489.1042, subsection 1; or plan of domestication under
16section 489.1052, subsection 1.
17o. Except as otherwise provided in sections 489.111 and
18489.112, subsection 2, restrict the rights under this chapter
19of a person other than a member or manager.
204. If not manifestly unreasonable, the operating agreement
21may do any of the following: Subject to subsection 3,
22paragraph “g”, without limiting other terms that may be included
23in an operating agreement, all the following rules apply:
24a. Restrict or eliminate the duty to do any The operating
25agreement may do all of the following:
26(1) As required in section 489.409, subsection 2, paragraph
27“a”, and section 489.409, subsection 8, to account to the
28limited liability company and to hold as trustee for it any
29property, profit, or benefit derived by the member in the
30conduct or winding up of the company’s business, from a use by
31the member of the company’s property, or from the appropriation
32of a limited liability company opportunity Specify the method
33by which a specific act or transaction that would otherwise
34violate the duty of loyalty may be authorized or ratified by
35one or more disinterested and independent persons after full
-15-1disclosure of all material facts.
2(2) As required in section 489.409, subsection 2, paragraph
3“b”, and section 489.409, subsection 8, to refrain from dealing
4with the company in the conduct or winding up of the company’s
5business as or on behalf of a party having an interest adverse
6to the company Alter the prohibition in section 489.405,
7subsection 1, paragraph “b”, so that the prohibition requires
8only that the limited liability company’s total assets not be
9less than the sum of its total liabilities.
10(3) As required by section 489.409, subsection 2, paragraph
11“c”, and section 489.409, subsection 8, to refrain from
12competing with the company in the conduct of the company’s
13business before the dissolution of the company.
14b. Identify specific types or categories of activities
15that do not violate the duty of loyalty To the extent the
16operating agreement of a member-managed limited liability
17company expressly relieves a member of a responsibility that
18the member otherwise would have under this chapter and imposes
19the responsibility on one or more other members, the agreement
20also may eliminate or limit any fiduciary duty of the member
21relieved of the responsibility which would have pertained to
22the responsibility.
23c. Alter the duty of care, except to authorize intentional
24misconduct or knowing violation of law. If not manifestly
25unreasonable, the operating agreement may do all of the
26following:
27(1) Alter or eliminate the aspects of the duty of loyalty
28stated in section 489.409, subsections 2 and 9.
29(2) Identify specific types or categories of activities
30that do not violate the duty of loyalty.
31(3) Alter the duty of care, but may not authorize conduct
32involving bad faith, willful or intentional misconduct, or
33knowing violation of law.
34(4) Alter or eliminate any other fiduciary duty.
35d. Alter any other fiduciary duty, including eliminating
-16-1particular aspects of that duty.
2e. Prescribe the standards by which to measure the
3performance of the contractual obligation of good faith and
4fair dealing under section 489.409, subsection 4.
55. The operating agreement may specify the method by which
6a specific act or transaction that would otherwise violate the
7duty of loyalty may be authorized or ratified by one or more
8disinterested and independent persons after full disclosure
9of all material facts The court shall decide as a matter of
10law whether a term of an operating agreement is manifestly
11unreasonable under subsection 3, paragraph “f”, or subsection
124, paragraph “c”. All of the following shall apply:
13a. The court shall make its determination as of the time the
14challenged term became part of the operating agreement and by
15considering only circumstances existing at that time.
16b. The court may invalidate the term only if, in light of
17the purposes, activities, and affairs of the limited liability
18company, it is readily apparent that any of the following
19apply:
20(1) The objective of the term is unreasonable.
21(2) The term is an unreasonable means to achieve the term’s
22objective.
236. To the extent the operating agreement of a member-managed
24limited liability company expressly relieves a member of a
25responsibility that the member would otherwise have under
26this chapter and imposes the responsibility on one or more
27other members, the operating agreement may, to the benefit
28of the member that the operating agreement relieves of the
29responsibility, also eliminate or limit any fiduciary duty that
30would have pertained to the responsibility.
317. 6. The An operating agreement may alter or eliminate
32the indemnification for a member or manager provided by section
33489.408, subsection 1, and may eliminate or limit a member’s
34or manager’s liability to the limited liability company and
35members for money damages, except for any of the following:
-17- 1a. A breach of the duty of loyalty.
2b. A financial benefit received by the member or manager to
3which the member or manager is not entitled.
4c. A breach of a duty under section 489.406.
5d. Intentional infliction of harm on the company or a
6member.
7e. An intentional violation of criminal law.
88. The court shall decide any claim under subsection 4 that
9a term of an operating agreement is manifestly unreasonable.
10All of the following apply:
11a. The court shall make its determination as of the time the
12challenged term became part of the operating agreement and by
13considering only circumstances existing at that time.
14b. The court may invalidate the term only if, in light of
15the purposes and activities of the limited liability company,
16it is readily apparent that any of the following applies:
17(1) The objective of the term is unreasonable.
18(2) The term is an unreasonable means to achieve the
19provision’s objective.
20 Sec. 10. Section 489.111, Code 2023, is amended to read as
21follows:
22489.111 Operating agreement — effect on limited liability
23company and persons becoming members — preformation agreement.
241. A limited liability company is bound by and may enforce
25the operating agreement, whether or not the company has itself
26manifested assent to the operating agreement.
272. A person that becomes a member of a limited liability
28company is deemed to assent to the operating agreement.
293. Two or more persons intending to become the initial
30members of a limited liability company may make an agreement
31providing that upon the formation of the company the agreement
32will become the operating agreement. One person intending
33to become the initial member of a limited liability company
34may assent to terms providing that upon the formation of the
35company the terms will become the operating agreement.
-18- 14. An operating agreement in a signed record that excludes
2modification or rescission except by a signed record cannot be
3otherwise modified or rescinded.
4 Sec. 11. Section 489.112, Code 2023, is amended to read as
5follows:
6489.112 Operating agreement — effect on third parties and
7relationship to records effective on behalf of limited liability
8company.
91. An operating agreement may specify that its amendment
10requires the approval of a person that is not a party to the
11operating agreement or the satisfaction of a condition. An
12amendment is ineffective if its adoption does not include the
13required approval or satisfy the specified condition.
142. The obligations of a limited liability company and its
15members to a person in the person’s capacity as a transferee or
16a person dissociated as a member are governed by the operating
17agreement. Subject only to any a court order issued under
18section 489.503, subsection 2, paragraph “b”, to effectuate a
19charging order, an amendment to the operating agreement made
20after a person becomes a transferee or is dissociated as a
21 member is or is not effective as follows:
22a. Is effectivewith regard to any debt, obligation, or
23other liability of the limited liability company or its members
24to the person in the person’s capacity as a transferee or
25person dissociated as a member.
26b. Is not effective to the extent the amendment imposes a
27new debt, obligation, or other liability on the transferee or
28person dissociated as a member.
293. If a record that has been delivered by a limited
30liability company to the secretary of state for filing and
31has become becomes effective under this chapter and contains
32a provision that would be ineffective under section 489.110,
33subsection 3 or subsection 4, paragraph “c”, if contained in
34the operating agreement, the provision is likewise ineffective
35in the record.
-19- 14. Subject to subsection 3, if a record that has been
2 delivered by a limited liability company to the secretary
3of state for filing and has become becomes effective under
4this chapter and conflicts with a provision of the operating
5agreement, all of the following rules apply:
6a. The operating agreement prevails as to members, persons
7 dissociated as members, transferees, and managers.
8b. The record prevails as to other persons to the extent
9they reasonably rely on the record.
10 Sec. 12. Section 489.114, Code 2023, is amended to read as
11follows:
12489.114 Change of registered office or registered agent for
13service of process or address for registered agency by limited
14liability company.
151. A limited liability company or registered foreign
16limited liability company may change its registered office
17or its registered agent for service of process agent or the
18address of its registered agent by delivering to the secretary
19of state for filing a statement of change that sets forth
20 states all of the following:
21a. The name of the limited liability company or foreign
22limited liability company.
23b. If the current registered office is to be changed, the
24street and mailing addresses of the new registered office The
25information that is to be in effect as a result of the filing of
26the statement of change.
27c. If the current registered agent is to be changed, the
28name of the new registered agent and the new agent’s consent to
29the appointment. The agent’s consent may be on the statement
30or attached to it.
31d. That after the change or changes are made, the street
32address of its registered office and the business office of its
33registered agent will be identical.
342. If a registered agent changes the street address of
35the registered agent’s business office, the registered agent
-20-1may change the street address of the registered office of any
2limited liability company or foreign limited liability company
3for which the person is the registered agent by notifying the
4limited liability company or foreign limited liability company
5in writing of the change and signing, either manually or in
6facsimile, and delivering to the secretary of state for filing
7a statement that complies with the requirements of subsection
81 and recites that the limited liability company or foreign
9limited liability company has been notified of the change. The
10members or managers of a limited liability company need not
11approve the delivery to the secretary of state for filing of
12any of the following:
13a. A statement of change under this section.
14b. A similar filing changing the registered agent or
15registered office, if any, of the limited liability company in
16any other jurisdiction.
173. If a registered agent changes the registered agent’s
18business address to another place, the registered agent may
19change the business address and the address of the registered
20agent by filing a statement as required by subsection 2 for
21each limited liability company or foreign limited liability
22company, or a single statement of all limited liability
23companies or all foreign limited liability companies named
24in the notice, except that it need be signed only by the
25registered agent and need not be responsive to subsection 1,
26paragraph “c”, and must recite that a copy of the statement
27has been mailed to each limited liability company or foreign
28limited liability company named in the notice A statement of
29change under this section designating a new registered agent
30is an affirmation of fact by the limited liability company or
31registered foreign limited liability company that the agent has
32consented to serve.
334. A limited liability company or foreign limited liability
34company may also change its registered office or registered
35agent in its biennial report as provided in section 489.209
-21-1As an alternative to using the procedure in this section,
2a limited liability company may amend its certificate of
3organization.
45. Subject to section 489.205, subsection 3, a statement of
5change is effective when filed by the secretary of state.
6 Sec. 13. NEW SECTION. 489.114A Registration of name.
71. A foreign limited liability company not registered to
8do business in this state under subchapter IX may register
9its name, or an alternate name adopted pursuant to section
10489.906A, if the name is distinguishable on the records of the
11secretary of state from the names that are not available under
12section 489.108.
132. To register its name or an alternate name adopted
14pursuant to section 489.906A, a foreign limited liability
15company must deliver to the secretary of state for filing an
16application stating the company’s name, the jurisdiction and
17date of its formation, and any alternate name adopted pursuant
18to section 489.906A. If the secretary of state finds that the
19name applied for is available, the secretary of state shall
20register the name for the applicant’s exclusive use.
213. The registration of a name under this section is
22effective for one year after the date of registration.
234. A foreign limited liability company whose name
24registration is effective may renew the registration for
25successive one-year periods by delivering, not earlier than
26three months before the expiration of the registration,
27to the secretary of state for filing a renewal application
28that complies with this section. When filed, the renewal
29application renews the registration for a succeeding one-year
30period.
315. A foreign limited liability company whose name
32registration is effective may register as a foreign limited
33liability company under the registered name or consent in a
34signed record to the use of that name by another person that is
35not an individual.
-22-1 Sec. 14. Section 489.115, Code 2023, is amended to read as
2follows:
3489.115 Resignation of registered agent for service of
4process.
51. A registered agent may resign the agent’s agency
6appointment by signing and as an agent for a limited liability
7company or registered foreign limited liability company by
8 delivering to the secretary of state for filing the signed
9original a statement of resignation. The statement of
10resignation may include a statement that the registered office
11is also discontinued. The registered agent shall send a copy
12of the statement of resignation by certified mail, return
13receipt requested, to the limited liability company or foreign
14limited liability company at its principal office and to the
15registered office, if not discontinued. The registered agent
16shall certify to the secretary of state that the copies have
17been sent to the limited liability company or foreign limited
18liability company, including the date the copies were sent.
19 that states all of the following:
20a. The name of the limited liability company or foreign
21limited liability company.
22b. The name of the agent.
23c. That the agent resigns from serving as registered agent
24for the limited liability company or foreign limited liability
25company.
26d. The address of the limited liability company or foreign
27limited liability company to which the agent will send the
28notice required by subsection 3.
292. A statement of resignation takes effect on the earlier
30of the following:
31a. 12:01 a.m.on the The thirty-first day after the day on
32which it is filed with the secretary of state.
33b. The designation of a new registered agent for the limited
34liability company or registered foreign limited liability
35company.
-23- 13. A registered agent promptly shall furnish to the limited
2liability company or registered foreign limited liability
3company notice in a record of the date on which a statement of
4resignation was filed.
54. When a statement of resignation takes effect, the
6registered agent ceases to have responsibility under this
7chapter for any matter thereafter tendered to it as agent for
8the limited liability company or registered foreign limited
9liability company. The resignation does not affect any
10contractual rights the company or foreign company has against
11the agent or that the agent has against the company or foreign
12company.
135. A registered agent may resign with respect to a limited
14liability company or registered foreign limited liability
15company whether or not the company or foreign company is in
16good standing.
17 Sec. 15. NEW SECTION. 489.115A Registered agent.
181. Each limited liability company and each registered
19foreign limited liability company shall designate and maintain
20a registered agent in this state. The designation of a
21registered agent is an affirmation of fact by the limited
22liability company or registered foreign limited liability
23company that the agent has consented to serve.
242. A registered agent for a limited liability company or
25registered foreign limited liability company must have a place
26of business in this state.
273. The only duties under this chapter of a registered agent
28that has complied with this chapter are as follows:
29a. To forward to the limited liability company or registered
30foreign limited liability company at the address most recently
31supplied to the agent by the limited liability company or
32registered foreign limited liability company any process,
33notice, or demand pertaining to the company or foreign company
34which is served on or received by the agent.
35b. If the registered agent resigns, to provide the notice
-24-1required by section 489.115, subsection 3, to the limited
2liability company or registered foreign limited liability
3company at the address most recently supplied to the agent by
4the limited liability company or registered foreign limited
5liability company.
6c. To keep current the information with respect to the agent
7in the certificate of organization or foreign registration
8statement.
9 Sec. 16. Section 489.116, Code 2023, is amended to read as
10follows:
11489.116 Service of process, notice, or demand.
121. A limited liability company’s company or registered
13 foreign limited liability company’s registered agent is the
14company’s agent for service of process, notice, or demand
15required or permitted by law to company may be served on
16the company with any process, notice, or demand required or
17permitted by law by serving its registered agent.
182. If a limited liability company or registered foreign
19limited liability company has no ceases to have a registered
20agent, or the if its registered agent cannot with reasonable
21diligence be served, the limited liability company or
22registered foreign limited liability company may be served by
23registered or certified mail, return receipt requested, or by
24similar commercial delivery service, addressed to the limited
25liability company or registered foreign limited liability
26company at its principal office. The address of the principal
27office must be as shown on the limited liability company’s or
28registered foreign limited liability company’s most recent
29biennial report filed with the secretary of state pursuant to
30section 489.209. Service is perfected effected under this
31subsection at on the earliest of any of the following:
32a. The date the limited liability company or registered
33 foreign limited liability company receives the mail or delivery
34by the commercial delivery service.
35b. The date shown on the return receipt, if signed on behalf
-25-1of by the limited liability company or registered foreign
2limited liability company.
3c. Five days after its deposit in with the United States
4mail, as evidenced by the postmark, if mailed postpaid and
5 postal service or with the commercial delivery service, if
6 correctly addressed and with sufficient postage or payment.
73. A limited liability company or foreign limited liability
8company may be served pursuant to this section, as provided
9in another provision of this chapter, or as provided in
10sections 617.3 through 617.6, unless the manner of service is
11otherwise specifically provided for by another provision of law
12 If process, notice, or demand cannot be served on a limited
13liability company or registered foreign limited liability
14company pursuant to subsection 1 or 2, service may be made by
15handing a copy to the individual in charge of any regular place
16of business or activity of the limited liability company or
17registered foreign company if the individual served is not a
18plaintiff in the action.
194. Service of process, notice, or demand on a registered
20agent must be in a written record.
215. Service of process, notice, or demand may be made by
22other means under law other than this chapter, including as
23provided in sections 617.3 through 617.6 unless specifically
24provided for by another provision of law.
25 Sec. 17. Section 489.117, Code 2023, is amended to read as
26follows:
27489.117 Fees.
281. The secretary of state shall collect the following fees
29when documents described in this subsection are delivered to
30the secretary’s office for filing:
31a. Statement of rescission No fee
32b. Statement of withdrawal No fee
33c. Certificate of organization $ 50
34d. Application for use of
35 indistinguishable name $ 10
-26- 1e. Application for reserved name $ 10
2f. Notice of transfer of reserved name $ 10
3g. Statement of change of registered
4 agent or registered office or both No fee
5h. Registered agent’s statement of
6 change of registered office for each
7 affected limited liability company No fee
8i. Registered agent’s statement
9 of resignation No fee
10j. Amendment to certificate of
11 organization $ 50
12k. Restatement of certificate of
13 organization with amendment
14 of certificate $ 50
15l. Articles of merger $ 50
16m. Statement of dissolution $ 5
17n. Declaration of administrative
18 dissolution No fee
19o. Application for reinstatement
20 following administrative dissolution $ 5
21p. Certificate of reinstatement No fee
22q. Application for certificate
23 of authority registration $100
24r. Application for amended
25 certificate of authority registration $100
26s. Statement of cancellation $ 10
27t. Certificate of revocation
28 of authority to transact business No fee
29u. Statement of correction $ 5
30v. Application for certificate of
31 existence or authorization registration $ 5
32w. Any other document required or
33 permitted to be filed by this chapter $ 5
342. The secretary of state shall collect a fee of five
35dollars each time process is served on the secretary under this
-27-1chapter. The party to a proceeding causing service of process
2is entitled to recover this fee as costs if the party prevails
3in the proceeding.
43. The secretary of state shall collect the following fees
5for copying and certifying the copy of any filed document
6relating to a domestic limited liability company or foreign
7limited liability company as follows:
8a. One dollar a page for copying.
9b. Five dollars for the certificate.
104. The secretary of state may impose, assess, and collect
11a filing fee as a condition to accepting a biennial report as
12provided in section 489.209.
13 Sec. 18. NEW SECTION. 489.118 Change of name or address by
14registered agent.
151. If a registered agent changes its name or address,
16the agent may deliver to the secretary of state for filing a
17statement of change that states all of the following:
18a. The name of the limited liability company or registered
19foreign limited liability company represented by the registered
20agent.
21b. The name of the agent as currently shown in the records
22of the secretary of state for the limited liability company or
23registered foreign limited liability company.
24c. If the name of the agent has changed, its new name.
25d. If the address of the agent has changed, its new address.
262. A registered agent promptly shall furnish notice to the
27represented limited liability company or registered foreign
28limited liability company of the filing by the secretary of
29state of the statement of change and the changes made by the
30statement.
31 Sec. 19. NEW SECTION. 489.120 Delivery of record.
321. Except as otherwise provided in this chapter,
33permissible means of delivery of a record include delivery by
34hand, mail, conventional commercial practice, and electronic
35transmission.
-28- 12. Delivery to the secretary of state is effective only when
2a record is received by the secretary of state.
3 Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
4or repeal.
5The general assembly has power to amend or repeal all or
6part of this chapter at any time, and all limited liability
7companies and foreign limited liability companies subject to
8this chapter are governed by the amendment or repeal.
9 Sec. 21. Section 489.201, Code 2023, is amended to read as
10follows:
11489.201 Formation of limited liability company — certificate
12of organization.
131. One or more persons may act as organizers to form a
14limited liability company by signing and delivering to the
15secretary of state for filing a certificate of organization.
162. A certificate of organization must state all of the
17following:
18a. The name of the limited liability company, which must
19comply with section 489.108.
20b. The street address and mailing addresses of the initial
21registered office and the name of the initial registered
22agent for service of process on the company limited liability
23company’s principal office.
24c. The name and street and mailing addresses in this state
25of the limited liability company’s registered agent.
263. Subject to section 489.112, subsection 3, a A certificate
27of organization may also contain statements as to matters other
28than those required by subsection 2, but shall not vary or
29otherwise affect the provisions specified in section 489.110,
30subsections 3 and 4, in a manner inconsistent with that
31section. However, a statement in a certificate of organization
32is not effective as a statement of authority.
334. A limited liability company is formed when the secretary
34of state has filed the certificate of organization, unless the
35certificate states a delayed becomes effective date pursuant
-29-1to section 489.205, subsection 3. If the certificate states
2a delayed effective date, a limited liability company is not
3formed if, before the certificate takes effect, a statement of
4cancellation is signed and delivered to the secretary of state
5for filing and the secretary of state files the certificate.
65. Subject to any delayed effective date and except in
7a proceeding by this state to dissolve a limited liability
8company, the filing of the certificate of organization by the
9secretary of state is conclusive proof that the organizer
10satisfied all conditions to the formation of a limited
11liability company.
12 Sec. 22. Section 489.202, Code 2023, is amended to read as
13follows:
14489.202 Amendment or restatement of certificate of
15organization.
161. A certificate of organization may be amended or restated
17at any time.
182. To amend its certificate of organization, a limited
19liability company must deliver to the secretary of state for
20filing an amendment stating all of the following:
21a. The name of the limited liability company.
22b. The date of filing of its initial certificate of
23organization.
24c. The changes the amendment makes to the certificate as
25most recently amended or restated text of the amendment.
263. To restate its certificate of organization, a limited
27liability company must deliver to the secretary of state for
28filing a restatement, designated as such in its heading,
29stating and setting forth all of the following:
30a. In the heading or an introductory paragraph, the
31company’s present name and the date of the filing of the
32company’s initial certificate of organization The name of the
33limited liability company.
34b. If the company’s name has been changed at any time since
35the company’s formation, each of the company’s former names The
-30-1text of the restated certificate of organization.
2c. The changes the restatement makes to the certificate as
3most recently amended or restated A statement that the restated
4certificate consolidates all amendments into a single document.
5d. If a new amendment is included in the restated
6certificate of organization, the statements required under
7subsection 2 with respect to the new amendment if not otherwise
8provided.
94. Subject to section 489.112, subsection 3, and section
10489.205, subsection 3, an amendment to or restatement of a
11certificate of organization is effective when filed by the
12secretary of state. If a member of a member-managed limited
13liability company, or a manager of a manager-managed limited
14liability company, knows that any information in a filed
15certificate of organization was inaccurate when the certificate
16of organization was filed or has become inaccurate due to
17changed circumstances, the member or manager shall promptly do
18any of the following:
19a. Cause the certificate of organization to be amended.
20b. If appropriate, deliver to the secretary of state
21for filing a statement of change under section 489.114 or a
22statement of correction under section 489.206.
235. If a member of a member-managed limited liability
24company, or a manager of a manager-managed limited liability
25company, knows that any information in a filed certificate of
26organization was inaccurate when the certificate was filed
27or has become inaccurate owing to changed circumstances, the
28member or manager shall promptly do any of the following:
29a. Cause the certificate to be amended.
30b. If appropriate, deliver to the secretary of state
31for filing a statement of change under section 489.114 or a
32statement of correction under section 489.206.
33 Sec. 23. Section 489.203, Code 2023, is amended to read as
34follows:
35489.203 Signing of records to be delivered for filing to
-31-1secretary of state.
21. A record delivered to the secretary of state for filing
3pursuant to this chapter must be signed as follows:
4a. Except as otherwise provided in paragraphs “b” and “c”, a
5record signed on behalf of by a limited liability company must
6be signed by a person authorized by the company.
7b. A limited liability company’s initial certificate of
8organization must be signed by at least one person acting as
9an organizer.
10c. A record filed delivered on behalf of a dissolved limited
11liability company that does not have or has not had at least
12one has no member must be signed by an organizer the person
13winding up the company’s activities and affairs under section
14489.702, subsection 3, or a person appointed under section
15489.702, subsection 4, to wind up the activities and affairs.
16d. A record filed on behalf of a dissolved limited liability
17company that has no members must be signed by the person
18winding up the company’s activities under section 489.702,
19subsection 3, or a person appointed under section 489.702,
20subsection 4, to wind up those activities A statement of denial
21by a person under section 489.303 must be signed by that
22person.
23e. A statement of cancellation under section 489.201,
24subsection 4, must be signed by each organizer that signed
25the initial certificate of organization, but a personal
26representative of a deceased or incompetent organizer may sign
27in the place of the decedent or incompetent Any other record
28delivered on behalf of a person to the secretary of state for
29filing must be signed by that person.
30f. A statement of denial by a person under section 489.303
31 must be signed by that person.
32g. Any other record must be signed by the person on whose
33behalf the record is delivered to the secretary of state.
342. Any A record filed delivered for filing under this
35chapter may be signed by an agent. Whenever this chapter
-32-1requires a particular individual to sign a record and the
2individual is deceased or incompetent, the record may be signed
3by a legal representative of the individual.
43. A person that signs a record as an agent or legal
5representative affirms as a fact that the person is authorized
6to sign the record.
7 Sec. 24. Section 489.204, Code 2023, is amended to read as
8follows:
9489.204 Signing and filing pursuant to judicial order.
101. If a person required by this chapter to sign a record
11or deliver a record to the secretary of state for filing under
12this chapter does not do so, any other person that is aggrieved
13may petition the district court to order one or more of the
14following:
15a. The person to sign the record.
16b. The person to deliver the record to the secretary of
17state for filing.
18c. The secretary of state to file the record unsigned.
192. If a petitioner under subsection 1 is not the limited
20liability company or foreign limited liability company to which
21the record pertains, the petitioner shall make the limited
22liability company or foreign limited liability company a party
23to the action.
243. If a district court orders an unsigned record to be
25delivered to the secretary of state, the secretary of state
26shall file the record and the court order upon receipt A record
27filed under subsection 1, paragraph “c”, is effective without
28being signed.
29 Sec. 25. Section 489.205, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31489.205 Liability for inaccurate information in filed
32records.
331. If a record delivered to the secretary of state for
34filing under this chapter and filed by the secretary of state
35contains inaccurate information, a person that suffers loss by
-33-1reliance on the information may recover damages for the loss
2from all of the following:
3a. A person that signed the record, or caused another to
4sign it on the person’s behalf, and knew the information to be
5inaccurate at the time the record was signed.
6b. Subject to subsection 2, a member of a member-managed
7limited liability company or a manager of a manager-managed
8limited liability company if all of the following apply:
9(1) The record was delivered for filing on behalf of the
10limited liability company.
11(2) The member or manager knew or had notice of the
12inaccuracy for a reasonably sufficient time before the
13information was relied upon so that, before the reliance,
14the member or manager reasonably could have done any of the
15following:
16(a) Effected an amendment under section 489.202.
17(b) Filed a petition under section 489.204.
18(c) Delivered to the secretary of state for filing a
19statement of change under section 489.114 or a statement of
20correction under section 489.206.
212. To the extent the operating agreement of a member-managed
22limited liability company expressly relieves a member of
23responsibility for maintaining the accuracy of information
24contained in records delivered on behalf of the limited
25liability company to the secretary of state for filing under
26this chapter and imposes that responsibility on one or more
27other members, the liability stated in subsection 1, paragraph
28“b”, applies to those other members and not to the member that
29the operating agreement relieves of the responsibility.
303. A person commits a serious misdemeanor if that person
31signs a record the person knows is false in any material
32respect with intent that the record be delivered to the
33secretary of state for filing.
34 Sec. 26. Section 489.206, Code 2023, is amended to read as
35follows:
-34- 1489.206 Correcting filed record.
21. A limited liability company or foreign limited liability
3company may deliver to the secretary of state for filing
4a statement of correction to correct a record previously
5delivered by the company to the secretary of state and filed
6by the secretary of state, if at the time of filing the record
7contained inaccurate information or was defectively signed.
8A person on whose behalf a filed record was delivered to the
9secretary of state for filing may correct the record if any of
10the following apply:
11a. The record at the time of filing was inaccurate.
12b. The record was defectively signed.
13c. The electronic transmission of the record to the
14secretary of state was defective.
152. A statement of correction under subsection 1 shall not
16have a delayed effective date and must do all of the following:
17To correct a filed record, a person on whose behalf the record
18was delivered to the secretary of state must deliver to the
19secretary of state for filing a statement of correction.
20a. Describe the record to be corrected, including its filing
21date, or attach a copy of the record as filed.
22b. Specify the inaccurate information and the reason it is
23inaccurate or the manner in which the signing was defective.
24c. Correct the defective signature or inaccurate
25information.
263. When filed by the secretary of state, a statement of
27correction under subsection 1 is effective retroactively as
28of the effective date of the record the statement corrects,
29but the statement is effective when filed as to A statement of
30correction shall comply with all of the following:
31a. For the purposes of section 489.103, subsection 4 It must
32not state a delayed effective date.
33b. As to persons that previously relied on the uncorrected
34record and would be adversely affected by the retroactive
35effect It must be signed by the person correcting the filed
-35-1record.
2c. It must describe the record to be corrected including its
3filing date or attach a copy of the record as filed.
4d. It must specify the inaccuracy or defect to be corrected.
5e. It must correct the inaccuracy or defect.
64. A statement of correction is effective as of the
7effective date of the filed record that it corrects except for
8purposes of section 489.103, subsection 4, and as to persons
9relying on the uncorrected filed record and adversely affected
10by the correction. For those purposes and as to those persons,
11the statement of correction is effective when filed.
12 Sec. 27. NEW SECTION. 489.206A Filing requirements.
131. To be filed by the secretary of state pursuant to
14this chapter, a record must be captioned to describe the
15record’s purpose, must be received by the secretary of state,
16must comply with this chapter, and must satisfy all of the
17following:
18a. The filing of the record must be required or permitted by
19this chapter.
20b. The record must be physically delivered in written
21form unless and to the extent the secretary of state permits
22electronic delivery of records.
23c. The words in the record must be in English, and numbers
24must be in Arabic or Roman numerals, but the name of an entity
25need not be in English if written in English letters or Arabic
26or Roman numerals.
27d. The record must be signed by a person authorized or
28required under this chapter to sign the record.
29e. The record must state the name and capacity, if
30any, of each individual who signed it, either on behalf
31of the individual or the person authorized or required to
32sign the record, but need not contain a seal, attestation,
33acknowledgment, or verification.
342. If law other than this chapter prohibits the disclosure
35by the secretary of state of information contained in a record
-36-1delivered to the secretary of state for filing, the secretary
2of state shall file the record if the record otherwise complies
3with this chapter but may redact the information.
43. When a record is delivered to the secretary of state for
5filing, any fee required under this chapter and any fee, tax,
6interest, or penalty required to be paid under this chapter or
7law other than this chapter must be paid in a manner permitted
8by the secretary of state or by that law.
94. The secretary of state may require that a record
10delivered in written form be accompanied by an identical or
11conformed copy.
125. The secretary of state may provide forms for filings
13required or permitted to be made by this chapter, but, except
14as otherwise provided in subsection 6, their use is not
15required.
166. The secretary of state may prescribe, and furnish on
17request and require any of the following forms:
18a. A cover sheet for a filing.
19b. An application for a certificate of existence or
20certificate of registration.
21c. A foreign corporation’s registration statement.
22d. A foreign corporation’s statement of withdrawal.
23e. A foreign corporation’s transfer of registration
24statement.
25f. The biennial report required by section 489.209.
267. Upon request and payment of the requisite fee, the
27secretary of state shall send the requester a certified copy
28of a requested record.
29 Sec. 28. Section 489.207, Code 2023, is amended by striking
30the section and inserting in lieu thereof the following:
31489.207 Effective date and time.
32Except as otherwise provided in section 489.115 and section
33489.208A and subject to section 489.206, subsection 4, a record
34filed under this chapter is effective as follows:
351. On the date and at the time of its filing by the
-37-1secretary of state, as provided in section 489.210, subsection
22.
32. On the date of filing and at the time specified in the
4record as its effective time, if later than the time under
5subsection 1.
63. At a specified delayed effective date and time, which may
7not be more than ninety days after the date of filing.
84. If a delayed effective date is specified, but no time is
9specified, at 12:01 a.m.on the date specified, which shall not
10be more than ninety days after the date of filing.
11 Sec. 29. Section 489.208, Code 2023, is amended to read as
12follows:
13489.208 Certificate of existence or authorization
14 registration.
151. Any person may apply to On request of any person, the
16secretary of state to be furnished shall issue a certificate
17of existence for a domestic limited liability company or a
18certificate of authorization registration for a registered
19 foreign limited liability company.
202. A certificate of existence or certificate of
21authorization registration under subsection 1 must set forth
22 state all of the following:
23a. The domestic limited liability company’s name or the
24registered foreign limited liability company’s name used in
25this state.
26b. One In the case of a limited liability company, all of
27the following:
28(1) If it is a domestic limited liability company, that
29the company is duly formed under the laws of this state, the
30date of its formation, and the period of its duration That
31a certificate of organization has been filed and has taken
32effect.
33(2) If it is a foreign limited liability company, that the
34company is authorized to transact business in this state The
35date the certificate became effective.
-38- 1(3) The period of the limited liability company’s duration
2if the records of the secretary of state reflect that its
3period of duration is less than perpetual.
4(4) That all of the following apply:
5(a) No statement of dissolution, statement of
6administrative dissolution, or statement of termination has
7been filed.
8(b) The records of the secretary of state do not otherwise
9reflect that the limited liability company has been dissolved
10or terminated.
11(c) A proceeding is not pending under section 489.705.
12c. That all fees, taxes, and penalties due under this
13chapter or other law to the secretary of state have been paid
14 In the case of a registered foreign limited liability company,
15that it is registered to do business in this state.
16d. That the company’s most recent biennial report required
17by this chapter has been filed by the secretary of state That
18all fees, taxes, interest, and penalties owed to this state
19by the limited liability company or foreign limited liability
20company and collected through the secretary of state have been
21paid, if all of the following apply:
22(1) Payment is reflected in the records of the secretary of
23state.
24(2) Nonpayment affects the good standing or registration
25of the limited liability company or foreign limited liability
26company.
27e. If it is a domestic limited liability company, that a
28statement of dissolution or statement of termination has not
29been filed That the most recent biennial report required by
30section 489.209 has been delivered to the secretary of state
31for filing.
32f. Other facts of record in the office reflected in the
33records of the secretary of state that may be requested by
34the applicant pertaining to the limited liability company or
35foreign limited liability company which the person requesting
-39-1the certificate reasonably requests.
23. Subject to any qualification stated in the certificate, a
3certificate of existence or certificate of authorization issued
4by the secretary of state is under subsection 1 may be relied
5on as conclusive evidence that the domestic limited liability
6company is in existence or the foreign limited liability
7company is authorized to transact business in this state of the
8facts stated in the certificate.
9 Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
10before effectiveness.
111. Except as otherwise provided in sections 489.1024,
12489.1034, 489.1044, and 489.1054, a record delivered to the
13secretary of state for filing may be withdrawn before it takes
14effect by delivering to the secretary of state for filing a
15statement of withdrawal.
162. A statement of withdrawal must comply with all of the
17following:
18a. Be signed by each person that signed the record being
19withdrawn, except as otherwise agreed by those persons.
20b. Identify the record to be withdrawn.
21c. If signed by fewer than all the persons that signed the
22record being withdrawn, state that the record is withdrawn in
23accordance with the agreement of all the persons that signed
24the record.
253. On filing by the secretary of state of a statement of
26withdrawal, the action or transaction evidenced by the original
27record does not take effect.
28 Sec. 31. Section 489.209, Code 2023, is amended to read as
29follows:
30489.209 Biennial report for secretary of state.
311. A limited liability company or a foreign limited
32liability company authorized registered to transact do business
33in this state shall deliver to the secretary of state for
34filing a biennial report that states all of the following:
35a. The name of the company.
-40- 1b. The street address of the company’s registered office,
2the name of its registered agent at that office, and the
3consent of any new registered agent.
4c. The street address of its principal office.
5d. In the case of a foreign limited liability company, the
6state or other jurisdiction under whose law the foreign company
7is formed and any alternate name adopted under section 489.805,
8subsection 1.
92. Information in a biennial report under this section
10must be current as of the date the report is delivered to the
11secretary of state for filing. The report shall be executed
12on behalf of the limited liability company or foreign limited
13liability company and signed as provided in section 489.203.
143. The first biennial report under this section in this
15state must be delivered to the secretary of state between
16January 1 and April 1 of the first odd-numbered year following
17the calendar year in which a limited liability company was
18formed or a foreign limited liability company was authorized
19 registered to transact do business. A subsequent biennial
20report must be delivered to the secretary of state between
21January 1 and April 1 of each following odd-numbered calendar
22year. A filing fee for the biennial report shall be determined
23by the secretary of state pursuant to section 489.117. Each
24biennial report shall contain information related to the
25two-year period immediately preceding the calendar year in
26which the report is filed.
274. If a biennial report does not contain the information
28required in this section, the secretary of state shall promptly
29notify the reporting limited liability company or foreign
30limited liability company in writing and return the report to
31it for correction.
325. The secretary of state may provide for the change of
33registered office or registered agent on the form prescribed by
34the secretary of state for the biennial report, provided that
35the form contains the information required in section 489.114.
-41-1If the secretary of state determines that a biennial report
2does not contain the information required in this section but
3otherwise meets the requirements of section 489.114 for the
4purpose of changing the registered office or registered agent,
5the secretary of state shall file the statement of change
6for the registered office or registered agent, effective as
7provided in section 489.205 489.207, subsection 3, before
8returning the biennial report to the limited liability
9company as provided in this section. A statement of change of
10registered office or registered agent accomplished pursuant to
11this subsection shall be executed by a person authorized to
12execute the biennial report.
13 Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
14to file — review of refusal to file — delivery of record by
15secretary of state.
161. The secretary of state shall file a record delivered
17to the secretary of state for filing which satisfies this
18chapter. The duty of the secretary of state under this section
19is ministerial.
202. When the secretary of state files a record, the secretary
21of state shall record it as filed on the date and at the time of
22its delivery. After filing a record, the secretary of state
23shall deliver to the person that submitted the record a copy
24of the record with an acknowledgment of the date and time of
25filing and, in the case of a statement of denial, also to the
26limited liability company to which the statement pertains.
273. If the secretary of state refuses to file a record, the
28secretary of state shall, not later than fifteen business days
29after the record is delivered, do all of the following:
30a. Return the record or notify the person that submitted the
31record of the refusal.
32b. Provide a brief explanation in a record of the reason for
33the refusal.
344. If the secretary of state refuses to file a record, the
35person that submitted the record may petition the district
-42-1court of Polk county to compel filing of the record. The
2record and the explanation of the secretary of state of
3the refusal to file must be attached to the petition. The
4court may decide the matter in a summary proceeding. If the
5court orders the record to be filed, the court may order it
6filed with an effective date that is the date on which it was
7submitted to the secretary of state for filing.
85. The filing of or refusal to file a record does not do any
9of the following:
10a. Affect the validity or invalidity of the record in whole
11or in part.
12b. Create a presumption that the information contained in
13the record is correct or incorrect.
146. Except as otherwise provided by section 489.116 or by law
15other than this chapter, the secretary of state may deliver any
16record to a person by delivering it by any of the following:
17a. In person to the person that submitted it.
18b. To the address of the person’s registered agent.
19c. To the principal office of the person.
20d. To another address the person provides to the secretary
21of state for delivery.
22 Sec. 33. Section 489.302, Code 2023, is amended to read as
23follows:
24489.302 Statement of limited liability company authority.
251. A limited liability company may deliver to the secretary
26of state for filing a statement of authority. All of the
27following apply to the statement:
28a. It must include the name of the limited liability company
29and the name and street address and mailing addresses of its
30principal office registered agent.
31b. With respect to any position that exists in or with
32respect to the limited liability company, it may state the
33authority, or limitations on the authority, of all persons
34holding the position to do any of the following:
35(1) Execute Sign an instrument transferring real property
-43-1held in the name of the limited liability company.
2(2) Enter into other transactions on behalf of, or otherwise
3act for or bind, the limited liability company.
4c. It may state the authority, or limitations on the
5authority, of a specific person to do any of the following:
6(1) Execute Sign an instrument transferring real property
7held in the name of the limited liability company.
8(2) Enter into other transactions on behalf of, or otherwise
9act for or bind, the limited liability company.
102. To amend or cancel a statement of authority filed by
11the secretary of state under section 489.205, subsection 1,
12a limited liability company must deliver to the secretary of
13state for filing an amendment or cancellation stating all of
14the following:
15a. The name of the limited liability company.
16b. The name and street address and mailing addresses of the
17limited liability company’s principal office registered agent.
18c. The caption of the statement being amended or canceled
19and the date the statement being affected became effective.
20d. The contents of the amendment or a declaration that the
21statement being affected is canceled.
223. A statement of authority affects only the power of a
23person to bind a limited liability company to persons that are
24not members.
254. Subject to subsection 3 and section 489.103, subsection
264, and except as otherwise provided in subsections 6, 7, and
278, a limitation on the authority of a person or a position
28contained in an effective statement of authority is not by
29itself evidence of any person’s knowledge or notice of the
30limitation by any person.
315. Subject to subsection 3, a grant of authority not
32pertaining to a transfer of real property and contained in an
33effective statement of authority is conclusive in favor of a
34person that gives value in reliance on the grant, except to the
35extent that when the person gives value, any of the following
-44-1applies:
2a. The person has knowledge to the contrary.
3b. The statement has been canceled or restrictively amended
4under subsection 2.
5c. A limitation on the grant is contained in another
6statement of authority that became effective after the
7statement containing the grant became effective.
86. Subject to subsection 3, an effective statement of
9authority that grants authority to transfer real property
10held in the name of the limited liability company and that, a
11certified copy of which statement is recorded by certified copy
12 in the office for recording transfers of the real property, is
13conclusive in favor of a person that gives value in reliance
14on the grant without knowledge to the contrary, except to the
15extent that when the person gives value, any of the following
16applies:
17a. The statement has been canceled or restrictively amended
18under subsection 2 and a certified copy of the cancellation
19or restrictive amendment has been recorded in the office for
20recording transfers of the real property.
21b. A limitation on the grant is contained in another
22statement of authority that became effective after the
23statement containing the grant became effective, and a
24certified copy of the later-effective statement is recorded in
25the office for recording transfers of the real property.
267. Subject to subsection 3, if a certified copy of an
27effective statement containing a limitation on the authority to
28transfer real property held in the name of a limited liability
29company is recorded in the office for recording transfers of
30that real property, all persons are deemed to know of the
31limitation.
328. Subject to subsection 9, an effective statement of
33dissolution or a statement of termination is a cancellation
34of any filed statement of authority for the purposes of
35subsection 6 and is a limitation on authority for the purposes
-45-1of subsection 7.
29. After a statement of dissolution becomes effective,
3a limited liability company may deliver to the secretary of
4state for filing and, if appropriate, the secretary of state
5 may record a statement of authority that is designated as
6a post-dissolution statement of authority. The statement
7operates as provided in subsections 6 and 7.
810. A statement of authority filed by the secretary of
9state under section 489.205 489.207, subsection 1, is effective
10until amended or canceled as provided in subsection 2, unless
11an earlier cancellation date is specified in the statement.
1211. An effective statement of denial operates as a
13restrictive amendment under this section and may be recorded by
14certified copy for the purposes of subsection 6, paragraph “a”.
15 Sec. 34. Section 489.304, Code 2023, is amended to read as
16follows:
17489.304 Liability of members and managers.
181. For debts, obligations, or other liabilities A debt,
19obligation, or other liability of a limited liability
20company, whether arising in contract, tort, or otherwise
21all of the following apply: is solely the debt, obligation,
22or other liability of the company. A member or manager is
23not personally liable, directly or indirectly, by way of
24contribution or otherwise, for a debt, obligation, or other
25liability of the company solely by reason of being or acting
26as a member or manager. This subsection applies regardless of
27the dissolution of the company.
28a. They are solely the debts, obligations, or other
29liabilities of the company.
30b. They do not become the debts, obligations, or other
31liabilities of a member or manager solely by reason of the
32member acting as a member or manager acting as a manager.
332. The failure of a limited liability company to observe any
34particular formalities relating to the exercise of its powers
35or management of its activities and affairs is not a ground
-46-1for imposing liability on the members a member or managers
2 manager for the debts, obligations, a debt, obligation, or
3other liabilities liability of the company.
4 Sec. 35. Section 489.401, Code 2023, is amended to read as
5follows:
6489.401 Becoming member.
71. If a limited liability company is to have only one member
8upon formation, a the person becomes the a member as agreed by
9that person and the organizer of the company or a majority of
10organizers if more than one. That person and the organizer
11may be, but need not be, different persons. If different, the
12organizer acts on behalf of the initial member.
132. If a limited liability company is to have more than
14one member upon formation, those persons become members as
15agreed by the persons before the formation of the company. The
16organizer acts on behalf of the persons in forming the company
17and may be, but need not be, one of the persons.
183. If a limited liability company has no members upon
19formation, a person becomes a member of the limited liability
20company with the consent of the organizer or a majority of
21the organizers if more than one. The organizers may consent
22to more than one person simultaneously becoming the company’s
23initial members After formation of a limited liability company,
24a person becomes a member according to any of the following:
25a. As provided in the operating agreement.
26b. As the result of a transaction effective under subchapter
27X.
28c. With the affirmative vote or consent of all the members.
29d. As provided in section 489.701, subsection 1, paragraph
30“c”.
314. After formation of a limited liability company, a person
32becomes a member upon A person may become a member without any
33of the following:
34a. As provided in the operating agreement Acquiring a
35transferable interest.
-47- 1b. As the result of a transaction effective under article 10
2 Making or being obligated to make a contribution to the limited
3liability company.
4c. With the consent of all the members.
5d. If, within ninety consecutive days after the company
6ceases to have any members, all of the following occur:
7(1) The last person to have been a member, or the legal
8representative of that person, designates a person to become a
9member.
10(2) The designated person consents to become a member.
115. A person may become a member without acquiring a
12transferable interest and without making or being obligated to
13make a contribution to the limited liability company.
14 Sec. 36. Section 489.402, Code 2023, is amended to read as
15follows:
16489.402 Form of contribution.
17A contribution may consist of tangible or intangible
18property or other benefit to a limited liability company,
19including money, services performed, promissory notes, other
20agreements to contribute money or property, and contracts for
21services to be performed property transferred to, services
22performed for, or another benefit provided to the limited
23liability company or an agreement to transfer property to,
24perform services for, or provide another benefit to the
25company.
26 Sec. 37. Section 489.403, Code 2023, is amended to read as
27follows:
28489.403 Liability for contributions.
291. A person’s obligation to make a contribution to a
30limited liability company is not excused by the person’s
31death, disability, termination, or other inability to perform
32personally. If a person does not make a required contribution,
33the person or the person’s estate is obligated to contribute
34money equal to the value of the part of the contribution which
35has not been made, at the option of the company.
-48- 12. A creditor of a limited liability company which extends
2credit or otherwise acts in reliance on an obligation described
3in subsection 1 may enforce the obligation If a person does not
4fulfill an obligation to make a contribution other than money,
5the person is obligated at the option of the limited liability
6company to contribute money equal to the value of the part of
7the contribution which has not been made.
83. An operating agreement may provide that the interest of
9any member who fails to make a contribution that the member
10is obligated to make is subject to specified penalties for,
11or specified consequences of, such failure. The penalty or
12consequence may take the form of reducing or eliminating
13the defaulting member’s proportionate interest in a limited
14liability company, subordinating the member’s interest to
15that of a nondefaulting member, a forced sale of the member’s
16interest, forfeiture of the member’s interest, the lending by
17other members of the amount necessary to meet the member’s
18commitment, a fixing of the value of the member’s interest
19by appraisal or by formula and redemption, or sale of the
20member’s interest at such value or other penalty or consequence
21 The obligation of a person to make a contribution may be
22compromised only by the affirmative vote or consent of all the
23members. If a creditor of a limited liability company extends
24credit or otherwise acts in reliance on an obligation described
25in subsection 1 without knowledge or notice of a compromise
26under this subsection, the creditor may enforce the obligation.
274. An operating agreement may provide that the interest of
28any member who fails to make a contribution that the member
29is obligated to make is subject to specified penalties for,
30or specified consequences of, such failure. The penalty or
31consequence may take the form of reducing or eliminating
32the defaulting member’s proportionate interest in a limited
33liability company, subordinating the member’s interest to
34that of a nondefaulting member, a forced sale of the member’s
35interest, forfeiture of the member’s interest, the lending by
-49-1other members of the amount necessary to meet the member’s
2commitment, a fixing of the value of the member’s interest by
3appraisal or by formula and redemption, or sale of the member’s
4interest at such value or other penalty or consequence.
5 Sec. 38. Section 489.404, Code 2023, is amended to read as
6follows:
7489.404 Sharing of and right to distributions before
8dissolution.
91. Any distributions distribution made by a limited
10liability company before its dissolution and winding up must
11be in equal shares among members and persons dissociated as
12 members, except to the extent necessary to comply with any a
13 transfer effective under section 489.502 and any charging order
14in effect under section 489.503.
152. A person has a right to a distribution before the
16dissolution and winding up of a limited liability company only
17if the limited liability company decides to make an interim
18distribution. A person’s dissociation does not entitle the
19person to a distribution.
203. A person does not have a right to demand or receive a
21distribution from a limited liability company in any form other
22than money. Except as otherwise provided in section 489.708,
23subsection 3 4, a limited liability company may distribute an
24asset in kind only if each part of the asset is fungible with
25each other part and each person receives a percentage of the
26asset equal in value to the person’s share of distributions.
274. If a member or transferee becomes entitled to receive a
28distribution, the member or transferee has the status of, and
29is entitled to all remedies available to, a creditor of the
30limited liability company with respect to the distribution.
31However, the company’s obligation to make a distribution is
32subject to offset for any amount owed to the company by the
33member or a person dissociated as a member on whose account the
34distribution is made.
35 Sec. 39. Section 489.405, Code 2023, is amended to read as
-50-1follows:
2489.405 Limitations on distribution.
31. A limited liability company shall not make a
4distribution, including a distribution under section 489.708,
5 if after the distribution any of the following applies:
6a. The limited liability company would not be able to pay
7its debts as they become due in the ordinary course of the
8company’s activities and affairs.
9b. The limited liability company’s total assets would be
10less than the sum of its total liabilities plus the amount that
11would be needed, if the company were to be dissolved, and wound
12up, and terminated at the time of the distribution, to satisfy
13the preferential rights upon dissolution, and winding up, and
14termination of members up of members and transferees whose
15preferential rights are superior to those the rights of persons
16receiving the distribution.
172. A limited liability company may base a determination
18that a distribution is not prohibited under subsection 1 on
19financial statements prepared on the basis of accounting
20practices and principles that are reasonable in the
21circumstances or on a fair valuation or other method that is
22reasonable under the circumstances any of the following:
23a. Financial statements prepared on the basis of
24accounting practices and principles that are reasonable in the
25circumstances.
26b. A fair valuation or other method that is reasonable under
27the circumstances.
283. Except as otherwise provided in subsection 5, the effect
29of a distribution under subsection 1 is measured as follows:
30a. In the case of a distribution by purchase, redemption, or
31other acquisition of a transferable interest in the company,
32as of the date money or other property is transferred or
33debt incurred by the company as defined in section 489.102,
34subsection 5, paragraph “a”, as of the earlier of any of the
35following:
-51- 1(1) The date money or other property is transferred or debt
2is incurred by the limited liability company.
3(2) The date the person entitled to the distribution ceases
4to own the interest or right being acquired by the limited
5liability company in return for the distribution.
6b. In the case of any other distribution of indebtedness, as
7of the date the indebtedness is distributed.
8b. c. In all other cases, as follows any of the following:
9(1) The date that the distribution is authorized, if the
10payment occurs within not later than one hundred twenty days
11after that date.
12(2) The date that the payment is made, if the payment occurs
13more than one hundred twenty days after the distribution is
14authorized.
154. A limited liability company’s indebtedness to a member
16or transferee incurred by reason of a distribution made in
17accordance with this section is at parity with the company’s
18indebtedness to its general, unsecured creditors, except to the
19extent subordinated by agreement.
205. A limited liability company’s indebtedness, including
21indebtedness issued in connection with or as part of as a
22distribution, is not a liability for purposes of subsection
231 if the terms of the indebtedness provide that payment of
24principal and interest are is made only if and to the extent
25that payment of a distribution could then be made to members
26 under this section. If the indebtedness is issued as a
27distribution, each payment of principal or interest on the
28indebtedness is treated as a distribution, the effect of which
29is measured on the date the payment is made.
306. In subsection 1, “distribution” does not include amounts
31constituting reasonable compensation for present or past
32services or reasonable payments made in the ordinary course of
33business under a bona fide retirement plan or other benefits
34program In measuring the effect of a distribution under section
35489.708, the liabilities of a dissolved limited liability
-52-1company do not include any claim that has been disposed of
2under section 489.703, 489.704, or 489.706A.
3 Sec. 40. Section 489.406, Code 2023, is amended to read as
4follows:
5489.406 Liability for improper distributions.
61. Except as otherwise provided in subsection 2, if a member
7of a member-managed limited liability company or a manager
8of a manager-managed limited liability company consents to
9a distribution made in violation of section 489.405 and in
10consenting to the distribution fails to comply with section
11489.409, the member or manager is personally liable to the
12company for the amount of the distribution that which exceeds
13the amount that could have been distributed without the
14violation of section 489.405.
152. To the extent the operating agreement of a member-managed
16limited liability company expressly relieves a member of the
17authority and responsibility to consent to distributions and
18imposes that authority and responsibility on one or more other
19members, the liability stated in subsection 1 applies to the
20other members and not the member that the operating agreement
21relieves of the authority and responsibility.
223. A person that receives a distribution knowing that the
23distribution to that person was made in violation of violated
24 section 489.405 is personally liable to the limited liability
25company but only to the extent that the distribution received
26by the person exceeded the amount that could have been properly
27paid under section 489.405.
284. A person against which an action is commenced because
29the person is liable under subsection 1 may do all of the
30following:
31a. Implead any other person that is subject to liability
32 liable under subsection 1 and seek to compel enforce a right of
33 contribution from the person.
34b. Implead any person that received a distribution in
35violation of subsection 3 and seek to compel enforce a right of
-53-1 contribution from the person in the amount the person received
2in violation of subsection 3.
35. An action under this section is barred if not
4 unless commenced within not later than two years after the
5distribution.
6 Sec. 41. Section 489.407, Code 2023, is amended to read as
7follows:
8489.407 Management of limited liability company.
91. A limited liability company is a member-managed limited
10liability company unless the operating agreement does any of
11the following:
12a. Expressly provides that any of the following apply:
13(1) The limited liability company is or will be
14“manager-managed”.
15(2) The limited liability company is or will be “managed by
16managers”.
17(3) Management of the limited liability company is or will
18be “vested in managers”.
19b. Includes words of similar import.
202. In a member-managed limited liability company, all of the
21following rules apply:
22a. The Except as expressly provided in this chapter, the
23 management and conduct of the limited liability company are
24vested in the members.
25b. Each member has equal rights in the management and
26conduct of the limited liability company’s activities and
27affairs.
28c. A difference arising among members as to a matter in the
29ordinary course of the activities and affairs of the limited
30liability company may be decided by a majority of the members.
31d. An act outside the ordinary course of the activities
32of the company, including selling, leasing, exchanging, or
33otherwise disposing of all, or substantially all, of the
34company’s property, with or without the goodwill, may be
35undertaken only with the consent of all members The affirmative
-54-1vote or consent of all the members is required to do any of the
2following:
3(1) Sell, lease, exchange, or otherwise dispose of all, or
4substantially all, of the limited liability company’s property,
5with or without good will, outside the ordinary course of the
6company’s activities.
7(2) Undertake an act outside the ordinary course of the
8activities and affairs of the limited liability company.
9(3) Approve a merger, interest exchange, conversion, or
10domestication under subchapter X.
11(4) Amend the operating agreement.
12e. The operating agreement may be amended only with the
13consent of all members.
143. In a manager-managed limited liability company, all of
15the following rules apply:
16a. Except as otherwise expressly provided in this chapter,
17any matter relating to the activities and affairs of the
18limited liability company is decided exclusively by the
19managers manager, or, if there is more than one manager, by a
20majority of the managers.
21b. Each manager has equal rights in the management and
22conduct of the activities and affairs of the limited liability
23 company.
24c. A difference arising among managers as to a matter in the
25ordinary course of the activities of the company may be decided
26by a majority of the managers.
27d. c. The affirmative vote or consent of all members is
28required to do any of the following:
29(1) Sell, lease, exchange, or otherwise dispose of all, or
30substantially all, of the limited liability company’s property,
31with or without the goodwill, outside the ordinary course of
32the company’s activities.
33(2) Approve a merger, conversion, or domestication under
34article 10 Undertake any other act outside the ordinary course
35of the limited liability company’s activities and affairs.
-55- 1(3) Undertake any other act outside the ordinary course of
2the company’s activities Approve a merger, interest exchange,
3conversion, or domestication under subchapter X.
4(4) Amend the operating agreement.
5e. d. A manager may be chosen at any time by the
6affirmative vote or consent of a majority of the members and
7remains a manager until a successor has been chosen, unless the
8manager at an earlier time resigns, is removed, or dies, or, in
9the case of a manager that is not an individual, terminates. A
10manager may be removed at any time by the affirmative vote or
11 consent of a majority of the members without notice or cause.
12f. e. A person need not be a member to be a manager, but
13the dissociation of a member that is also a manager removes the
14person as a manager. If a person that is both a manager and
15a member ceases to be a manager, that cessation does not by
16itself dissociate the person as a member.
17g. f. A person’s ceasing to be a manager does not discharge
18any debt, obligation, or other liability to the limited
19liability company or members which the person incurred while
20a manager.
214. An action requiring the vote or consent of members under
22this chapter may be taken without a meeting, and a member may
23appoint a proxy or other agent to vote, consent, or otherwise
24act for the member by signing an appointing record, personally
25or by the member’s agent.
265. The dissolution of a limited liability company does not
27affect the applicability of this section. However, a person
28that wrongfully causes dissolution of the company loses the
29right to participate in management as a member and a manager.
306. This chapter does not entitle a member to remuneration
31for services performed for a member-managed limited liability
32company, except for reasonable compensation for services
33rendered in winding up the activities of the company A limited
34liability company shall reimburse a member for an advance to
35the company beyond the amount of capital the member agreed to
-56-1contribute.
27. A payment or advance made by a member which gives rise
3to a limited liability company obligation under subsection 6
4or section 489.408, subsection 1, constitutes a loan to the
5company which accrues interest from the date of the payment or
6advance.
78. A member is not entitled to remuneration for services
8performed for a member-managed limited liability company,
9except for reasonable compensation for services rendered in
10winding up the activities of the company.
11 Sec. 42. Section 489.407A, Code 2023, is amended to read as
12follows:
13489.407A Real estate interest transferred by limited
14liability company or foreign limited liability company.
151. A transfer of an interest in real estate situated in
16this state held by a limited liability company or a registered
17 foreign limited liability company authorized to transact do
18 business in this state is subject to the provisions of this
19section.
202. a. In a member-managed limited liability company, a
21transfer of an interest in real estate held by the company may
22be undertaken by any of the following:
23(1) As provided in the operating agreement, or if the
24operating agreement does not so provide, only with the consent
25of all members.
26(2) As provided in a statement of authority filed by the
27limited liability company with the secretary of state and
28the recorder of the county where the real estate is situated
29pursuant to section 489.302.
30b. A requirement of paragraph “a” is applicable to every
31transfer of an interest in real estate situated in this state
32held by a member-managed limited liability company, whether or
33not the transfer is in the ordinary course of the company’s
34business.
353. a. In a manager-managed limited liability company, a
-57-1transfer of an interest in real estate held by the company may
2be undertaken by any of the following:
3(1) As provided in the operating agreement, or if the
4operating agreement does not so provide, only with the consent
5of a majority of all managers.
6(2) As provided in a statement of authority filed by the
7limited liability company with the secretary of state and
8the recorder of the county where the real estate is situated
9pursuant to section 489.302.
10b. A requirement in paragraph “a” is applicable to every
11transfer of an interest in real estate situated in this state
12held by a manager-managed limited liability company, whether
13or not the transfer is in the ordinary course of the company’s
14business.
15 Sec. 43. Section 489.408, Code 2023, is amended to read as
16follows:
17489.408 Indemnification Reimbursement, indemnification,
18advancement, and insurance.
191. A limited liability company shall reimburse a member of
20a member-managed limited liability company or the manager of
21a manager-managed limited liability company for any payment
22made and indemnify for any debt, obligation, or other liability
23incurred by a member of a member-managed company or the manager
24of a manager-managed company in the course of the member’s
25or manager’s activities on behalf of the company, if, in
26making the payment or incurring the debt, obligation, or other
27liability, the member or manager complied with the duties
28stated in sections 489.405 and 489.409 by the member or manager
29in the course of the member’s or manager’s activities on behalf
30of the company, if the member or manager complied with sections
31489.405, 489.407, and 489.409 in making the payment.
322. A limited liability company may purchase and maintain
33insurance on behalf of a member or manager of the company
34against liability asserted against or incurred by the member or
35manager in that capacity or arising from that status even if,
-58-1under section 489.110, subsection 7, the operating agreement
2could not eliminate or limit the person’s liability to the
3company for the conduct giving rise to the liability A limited
4liability company shall indemnify and hold harmless a person
5with respect to any claim or demand against the person and any
6debt, obligation, or other liability incurred by the person by
7reason of the person’s former or present capacity as a member
8or manager, if the claim, demand, debt, obligation, or other
9liability does not arise from the person’s breach of section
10489.405, 489.407, or 489.409.
113. In the ordinary course of its activities and affairs,
12a limited liability company may advance reasonable expenses,
13including attorney’s fees and costs, incurred by a person
14in connection with a claim or demand against the person by
15reason of the person’s former or present capacity as a member
16or manager, if the person promises to repay the company if
17the person ultimately is determined not to be entitled to be
18indemnified under subsection 2.
194. A limited liability company may purchase and maintain
20insurance on behalf of a member or manager against liability
21asserted against or incurred by the member or manager in that
22capacity or arising from that status even if, under section
23489.110, subsection 3, paragraph “g”, the operating agreement
24could not eliminate or limit the person’s liability to the
25company for the conduct giving rise to the liability.
26 Sec. 44. Section 489.409, Code 2023, is amended to read as
27follows:
28489.409 Standards of conduct for members and managers.
291. A member of a member-managed limited liability company
30owes to the company and, subject to section 489.901, subsection
312, the other members the fiduciary duties of loyalty and care
32stated in subsections 2 and 3.
332. The fiduciary duty of loyalty of a member in a
34member-managed limited liability company includes all of the
35following duties:
-59- 1a. To account to the limited liability company and to hold
2as trustee for it any property, profit, or benefit derived by
3the member regarding any of the following:
4(1) In the conduct or winding up of the limited liability
5 company’s activities and affairs.
6(2) From a use by the member of the limited liability
7 company’s property.
8(3) From the appropriation of a limited liability company
9opportunity.
10b. To refrain from dealing with the limited liability
11 company in the conduct or winding up of the company’s
12activities and affairs as or on behalf of a person having an
13interest adverse to the company.
14c. To refrain from competing with the limited liability
15 company in the conduct of the company’s activities and affairs
16 before the dissolution of the company.
173. Subject to the business judgment rule as stated in
18subsection 7, the duty of care of a member of a member-managed
19limited liability company in the conduct and winding up of the
20company’s activities is to act with the care that a person
21in a like position would reasonably exercise under similar
22circumstances and in a manner the member reasonably believes to
23be in the best interests of the company. In discharging this
24duty, a member may rely in good faith upon opinions, reports,
25statements, or other information provided by another person
26that the member reasonably believes is a competent and reliable
27source for the information The duty of care of a member of
28a member-managed limited liability company in the conduct
29or winding up of the company’s activities and affairs is to
30refrain from engaging in grossly negligent or reckless conduct,
31willful or intentional misconduct, or knowing violation of law.
324. A member in a member-managed limited liability company
33or a manager-managed limited liability company shall discharge
34the duties under this chapter or under the operating agreement
35and exercise any rights consistently with the contractual
-60-1obligation of good faith and fair dealing A member shall
2discharge the duties and obligations under this chapter
3or under the operating agreement and exercise any rights
4consistently with the contractual obligation of good faith and
5fair dealing.
65. It is a defense to a claim under subsection 2, paragraph
7“b”, and any comparable claim in equity or at common law that
8the transaction was fair to the limited liability company A
9member does not violate a duty or obligation under this chapter
10or under the operating agreement solely because the member’s
11conduct furthers the member’s own interest.
126. All of the members of a member-managed limited liability
13company or a manager-managed limited liability company may
14authorize or ratify, after full disclosure of all material
15facts, a specific act or transaction that otherwise would
16violate the duty of loyalty.
177. a. A member satisfies the duty of care in subsection 3
18 if all of the following apply: It is a defense to a claim under
19subsection 2, paragraph “b”, and any comparable claim in equity
20or at common law that the transaction was fair to the limited
21liability company.
22(1) The member is not interested in the subject matter of
23the business judgment.
24(2) The member is informed with respect to the subject
25of the business judgment to the extent the member reasonably
26believes to be appropriate in the circumstances.
27(3) The member has a rational basis for believing that
28the business judgment is in the best interests of the limited
29liability company.
30b. A person challenging the business judgment of a member
31has the burden of proving a breach of the duty of care, and
32in a damage action, the burden of proving that the breach was
33the legal cause of damage suffered by the limited liability
34company.
358. In a manager-managed limited liability company, all of
-61-1the following rules apply: If, as permitted by subsection 6
2or subsection 9, paragraph “f”, or the operating agreement, a
3member enters into a transaction with the limited liability
4company which otherwise would be prohibited by subsection 2,
5paragraph “b”, the member’s rights and obligations arising from
6the transaction are the same as those of a person that is not a
7member.
8a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
9managers and not the members.
10b. The duty stated under subsection 2, paragraph “c”,
11continues until winding up is completed.
12c. Subsection 4 applies to the members and managers.
13d. Subsection 6 applies only to the members.
14e. A member does not have any fiduciary duty to the company
15or to any other member solely by reason of being a member.
169. In a manager-managed limited liability company, all of
17the following rules apply:
18a. Subsections 1, 2, 3, and 7 apply to the manager or
19managers and not the members.
20b. The duty stated under subsection 2, paragraph “c”,
21continues until winding up is completed.
22c. Subsection 4 applies to managers and members.
23d. Subsection 5 applies only to members.
24e. The power to ratify under subsection 6 may be exercised
25only by the members.
26f. Subject to subsection 4, a member does not have any duty
27to the limited liability company or to any other member solely
28by reason of being a member.
29 Sec. 45. Section 489.410, Code 2023, is amended to read as
30follows:
31489.410 Right of members, managers, and dissociated members
32to information Rights to information of member, manager, and
33person dissociated as member.
341. In a member-managed limited liability company, all of the
35following rules apply:
-62- 1a. On reasonable notice, a member may inspect and copy
2during regular business hours, at a reasonable location
3specified by the limited liability company, any record
4maintained by the company regarding the company’s activities,
5affairs, financial condition, and other circumstances, to the
6extent the information is material to the member’s rights and
7duties under the operating agreement or this chapter.
8b. The limited liability company shall furnish to each
9member all of the following:
10(1) Without demand, any information concerning the limited
11liability company’s activities, affairs, financial condition,
12and other circumstances which the company knows and is material
13to the proper exercise of the member’s rights and duties under
14the operating agreement or this chapter, except to the extent
15the company can establish that it reasonably believes the
16member already knows the information.
17(2) On demand, any other information concerning the limited
18liability company’s activities, affairs, financial condition,
19and other circumstances, except to the extent the demand or for
20the information demanded is unreasonable or otherwise improper
21under the circumstances.
22c. The duty to furnish information under paragraph “b” also
23applies to each member to the extent the member knows any of
24the information described in paragraph “b”.
252. In a manager-managed limited liability company, all of
26the following rules apply:
27a. The informational rights stated in subsection 1 and
28the duty stated in subsection 1, paragraph “c”, apply to the
29managers and not the members.
30b. During regular business hours and at a reasonable
31location specified by the limited liability company, a
32member may obtain from the company and inspect and copy full
33 information regarding the activities, affairs, financial
34condition, and other circumstances of the company as is just
35and reasonable if all of the following apply:
-63- 1(1) The member seeks the information for a purpose material
2 reasonably related to the member’s interest as a member.
3(2) The member makes a demand in a record received by
4the limited liability company, describing with reasonable
5particularity the information sought and the purpose for
6seeking the information.
7(3) The information sought is directly connected to the
8member’s purpose.
9c. Within Not later than ten days after receiving a demand
10pursuant to paragraph “b”, subparagraph (2), the limited
11liability company shall in a record inform in a record the
12member that made the demand that includes all of the following:
13(1) Of the What information that the limited liability
14 company will provide in response to the demand and when and
15where the company will provide the information.
16(2) If the company declines to provide any demanded
17information, the company’s reasons for declining The limited
18liability company’s reasons for declining, if the company
19declines to provide any demanded information.
20d. Whenever this chapter or an operating agreement provides
21for a member to vote on or give or withhold consent to a matter,
22before the vote is cast or consent is given or withheld, the
23limited liability company shall, without demand, provide the
24member with all information that is known to the company and is
25material to the member’s decision.
263. On ten days’ demand made in a record received by a
27limited liability company, a dissociated member may have access
28to information to which the person was entitled while a member
29if the information pertains to the period during which the
30person was a member, the person seeks the information in good
31faith, and the person satisfies the requirements imposed on
32a member by subsection 2, paragraph “b”. The company shall
33respond to a demand made pursuant to this subsection in the
34manner provided in subsection 2, paragraph “c” Subject to
35subsection 8, on ten days’ demand made in a record received by
-64-1a limited liability company, a person dissociated as a member
2may have access to the information to which the person was
3entitled while a member if all of the following apply:
4a. The information pertains to the period during which the
5person was a member.
6b. The person seeks the information in good faith.
7c. The person satisfies the requirements imposed on a member
8by subsection 2, paragraph “b”.
94. A limited liability company may charge a person that
10makes a demand under this section the reasonable costs of
11copying, limited to the costs of labor and material shall
12respond to a demand made pursuant to subsection 3 in the manner
13provided in subsection 2, paragraph “c”.
145. A member or dissociated member may exercise rights
15under this section through an agent or, in the case of an
16individual under legal disability, a legal representative. Any
17restriction or condition imposed by the operating agreement
18or under subsection 7 applies both to the agent or legal
19representative and the member or dissociated member A limited
20liability company may charge a person that makes a demand under
21this section the reasonable costs of copying, limited to the
22costs of labor and material.
236. The rights under this section do not extend to a person
24as transferee A member or person dissociated as a member may
25exercise the rights under this section through an agent or,
26in the case of an individual under legal disability, a legal
27representative. Any restriction or condition imposed by the
28operating agreement or under subsection 8 applies both to the
29agent or legal representative and to the member or person
30dissociated as a member.
317. In addition to any restriction or condition stated
32in its operating agreement, a limited liability company, as
33a matter within the ordinary course of its activities, may
34impose reasonable restrictions and conditions on access to
35and use of information to be furnished under this section,
-65-1including designating information confidential and imposing
2nondisclosure and safeguarding obligations on the recipient.
3In a dispute concerning the reasonableness of a restriction
4under this subsection, the company has the burden of proving
5reasonableness Subject to section 489.504, the rights under
6this section do not extend to a person as transferee.
78. In addition to any restriction or condition stated in its
8operating agreement, a limited liability company, as a matter
9within the ordinary course of its activities and affairs, may
10impose reasonable restrictions and conditions on access to
11and use of information to be furnished under this section,
12including designating information confidential and imposing
13nondisclosure and safeguarding obligations on the recipient.
14In a dispute concerning the reasonableness of a restriction
15under this subsection, the company has the burden of proving
16reasonableness.
17 Sec. 46. Section 489.502, Code 2023, is amended to read as
18follows:
19489.502 Transfer of transferable interest.
201. For Subject to section 489.503, subsection 6, for a
21transfer, in whole or in part, all of the following applies to
22a transferable interest:
23a. It is permissible.
24b. It does not by itself cause a member’s person’s
25 dissociation as a member or a dissolution and winding up of the
26limited liability company’s activities and affairs.
27c. Subject to section 489.504, it does not entitle the
28transferee to do any of the following:
29(1) Participate in the management or conduct of the limited
30liability company’s activities and affairs.
31(2) Except as otherwise provided in subsection 3, have
32access to records or other information concerning the limited
33liability company’s activities and affairs.
342. A transferee has the right to receive, in accordance
35with the transfer, distributions to which the transferor would
-66-1otherwise be entitled.
23. In a dissolution and winding up of a limited liability
3company, a transferee is entitled to an account of the
4company’s transactions only from the date of dissolution.
54. A transferable interest may be evidenced by a certificate
6of the interest issued by the a limited liability company in a
7record, and, subject to this section, the interest represented
8by the certificate may be transferred by a transfer of the
9certificate.
105. A limited liability company need not give effect to a
11transferee’s rights under this section until the company knows
12or has notice of the transfer.
136. A transfer of a transferable interest in violation of a
14restriction on transfer contained in the operating agreement
15or another agreement to which the transferor is a party is
16ineffective as to a person having notice of the restriction at
17the time of transfer if the intended transferee has knowledge
18or notice of the restriction at the time of transfer.
197. Except as otherwise provided in section 489.602,
20subsection 4 5, paragraph “b”, when if a member transfers a
21transferable interest, the transferor retains the rights of a
22member other than the transferable interest in distributions
23 transferred and retains all duties and obligations of a member.
248. When If a member transfers a transferable interest to a
25person that becomes a member with respect to the transferred
26interest, the transferee is liable for the member’s obligations
27under section sections 489.403 and section 489.406, subsection
283, 489.406 known to the transferee when the transferee becomes
29a member.
30 Sec. 47. Section 489.503, Code 2023, is amended to read as
31follows:
32489.503 Charging order.
331. On application by a judgment creditor of a member
34or transferee, a court may enter a charging order against
35the transferable interest of the judgment debtor for the
-67-1unsatisfied amount of the judgment. A Except as otherwise
2provided in subsection 6, a charging order constitutes a lien
3on a judgment debtor’s transferable interest and requires the
4limited liability company to pay over to the person to which
5the charging order was issued any distribution that would
6 otherwise would be paid to the judgment debtor.
72. To the extent necessary to effectuate the collection
8of distributions pursuant to a charging order in effect under
9subsection 1, the court may do all of the following:
10a. Appoint a receiver of the distributions subject to
11the charging order, with the power to make all inquiries the
12judgment debtor might have made.
13b. Make all other orders necessary to give effect to the
14charging order.
153. Upon a showing that distributions under a charging
16order will not pay the judgment debt within a reasonable
17time, the court may foreclose the lien and order the sale of
18the transferable interest. The Except as otherwise provided
19in subsection 6, the purchaser at the foreclosure sale only
20 obtains only the transferable interest, does not thereby become
21a member, and is subject to section 489.502.
224. At any time before foreclosure under subsection 3, the
23member or transferee whose transferable interest is subject to
24a charging order under subsection 1 may extinguish the charging
25order by satisfying the judgment and filing a certified copy of
26the satisfaction with the court that issued the charging order.
275. At any time before foreclosure under subsection 3,
28a limited liability company or one or more members whose
29transferable interests are not subject to the charging order
30may pay to the judgment creditor the full amount due under the
31judgment and thereby succeed to the rights of the judgment
32creditor, including the charging order.
336. This chapter does not deprive any member or transferee of
34the benefit of any exemption laws applicable to the member’s
35or transferee’s transferable interest If a court orders
-68-1foreclosure of a charging order lien against the sole member of
2a limited liability company all of the following apply:
3a. The court shall confirm the sale.
4b. The purchaser at the sale obtains the member’s entire
5interest, not only the member’s transferable interest.
6c. The purchaser thereby becomes a member.
7d. The person whose interest was subject to the foreclosed
8charging order is dissociated as a member.
97. This section provides the exclusive remedy by which
10a person seeking to enforce a judgment against a member or
11transferee may, in the capacity of judgment creditor, satisfy
12the judgment from the judgment debtor’s transferable interest
13 This chapter does not deprive any member or transferee of the
14benefit of any exemption law applicable to the transferable
15interest of the member or transferee.
168. This section provides the exclusive remedy by which a
17person seeking in the capacity of judgment creditor to enforce
18a judgment against a member or transferee may satisfy the
19judgment from the judgment debtor’s transferable interest.
20 Sec. 48. Section 489.504, Code 2023, is amended to read as
21follows:
22489.504 Power of personal representative of deceased member.
23If a member dies, the deceased member’s personal legal
24 representative or other legal representative may exercise all
25of the following:
261. Therights of a transferee provided in section 489.502,
27subsection 3, and, for.
282. Forthe purposes of settling the estate, the rights of a
29current the deceased member had under section 489.410.
30 Sec. 49. Section 489.601, Code 2023, is amended to read as
31follows:
32489.601 Member’s power Power to dissociate as a member —
33wrongful dissociation.
341. A person has the power to dissociate as a member at any
35time, rightfully or wrongfully, by withdrawing as a member by
-69-1express will under section 489.602, subsection 1.
22. A person’s dissociation from a limited liability company
3 as a member is wrongful only if any of the following applies to
4the dissociation:
5a. It is in breach of an express provision of the operating
6agreement.
7b. It occurs before the termination completion of the
8winding up of the limited liability company and any of the
9following applies:
10(1) The person withdraws as a member by express will.
11(2) The person is expelled as a member by judicial order
12under section 489.602, subsection 5 6.
13(3) The person is dissociated under section 489.602,
14subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
15 8.
16(4) In the case of a person that is not a trust other than
17a business trust, an estate, or an individual, the person
18is expelled or otherwise dissociated as a member because it
19willfully dissolved or terminated.
203. A person that wrongfully dissociates as a member is
21liable to the limited liability company and, subject to
22section 489.901, to the other members for damages caused by the
23dissociation. The liability is in addition to any other debt,
24obligation, or other liability of the member to the company or
25the other members.
26 Sec. 50. Section 489.602, Code 2023, is amended to read as
27follows:
28489.602 Events causing dissociation.
29A person is dissociated as a member from a limited liability
30company when any of the following applies:
311. The limited liability company knows or has notice of
32the person’s express will to withdraw as a member, but, if the
33person specified a withdrawal date later than the date the
34limited liability company knew or had notice, on that later
35date.
-70- 12. An event stated in the operating agreement as causing the
2person’s dissociation occurs.
33. The person is expelled as a member pursuant to the
4operating agreement The person’s entire interest is transferred
5in a foreclosure sale under section 489.503, subsection 6.
64. The person is expelled as a member by the unanimous
7consent of the other members if any of the following applies:
8 pursuant to the operating agreement.
9a. It is unlawful to carry on the company’s activities with
10the person as a member.
11b. There has been a transfer of all of the person’s
12transferable interest in the company, other than any of the
13following:
14(1) A transfer for security purposes.
15(2) A charging order in effect under section 489.503 which
16has not been foreclosed.
17c. The person is a corporation and, within ninety days
18after the company notifies the person that it will be expelled
19as a member because the person has filed a certificate of
20dissolution or the equivalent, its charter has been revoked,
21or its right to conduct business has been suspended by
22the jurisdiction of its incorporation, the certificate of
23dissolution has not been revoked or its charter or right to
24conduct business has not been reinstated.
25d. The person is a limited liability company or partnership
26that has been dissolved and whose business is being wound up.
275. On application by the company, the person is expelled
28as a member by judicial order because the person has done any
29of the following The person is expelled as a member by the
30affirmative vote or consent of all the other members if any of
31the following apply:
32a. Has engaged, or is engaging, in wrongful conduct that
33has adversely and materially affected, or will adversely and
34materially affect, the company’s activities It is unlawful to
35carry on the limited liability company’s activities and affairs
-71-1with the person as a member.
2b. Has willfully or persistently committed, or is willfully
3and persistently committing, a material breach of the
4operating agreement or the person’s duties or obligations under
5section 489.409 There has been a transfer of all the person’s
6transferable interest in the limited liability company, other
7than any of the following:
8(1) A transfer for security purposes.
9(2) A charging order in effect under section 489.503 which
10has not been foreclosed.
11c. Has engaged in, or is engaging in, conduct relating
12to the company’s activities which makes it not reasonably
13practicable to carry on the activities with the person as a
14member The person is an entity and all of the following apply:
15(1) The limited liability company notifies the person that
16it will be expelled as a member because the person has filed
17a statement of dissolution or the equivalent, the person has
18been administratively dissolved, the person’s charter or the
19equivalent has been revoked, or the person’s right to conduct
20business has been suspended by the person’s jurisdiction of
21formation.
22(2) Not later than ninety days after the notification,
23the statement of dissolution or the equivalent has not been
24withdrawn, rescinded, or revoked, the person has not been
25reinstated, or the person’s charter or the equivalent or right
26to conduct business has not been reinstated.
27d. The person is an unincorporated entity that has been
28dissolved and whose activities and affairs are being wound up.
296. In the case of a person who is an individual, any of
30the following applies On application by the limited liability
31company or a member in a direct action under section 489.901,
32the person is expelled as a member by judicial order because
33any of the following apply:
34a. The person dies has engaged or is engaging in wrongful
35conduct that has affected adversely and materially, or will
-72-1affect adversely and materially, the company’s activities and
2affairs.
3b. In a member-managed limited liability company, any of
4the following applies: The person has committed willfully or
5persistently, or is committing willfully or persistently,
6a material breach of the operating agreement or a duty or
7obligation under section 489.409.
8(1) A guardian or general conservator for the person is
9appointed.
10(2) There is a judicial order that the person has otherwise
11become incapable of performing the person’s duties as a member
12under this chapter or the operating agreement.
13c. The person has engaged or is engaging in conduct relating
14to the limited liability company’s activities and affairs which
15makes it not reasonably practicable to carry on the activities
16and affairs with the person as a member.
177. In a member-managed limited liability company, the
18person does any of the following In the case of an individual
19any of the following apply:
20a. Becomes a debtor in bankruptcy The individual dies.
21b. Executes an assignment for the benefit of creditors In a
22member-managed limited liability company any of the following
23apply:
24(1) A guardian or general conservator for the individual is
25appointed.
26(2) A court orders that the individual has otherwise become
27incapable of performing the individual’s duties as a member
28under this chapter or the operating agreement.
29c. Seeks, consents to, or acquiesces in the appointment of
30a trustee, receiver, or liquidator of the person or of all or
31substantially all of the person’s property.
328. In the case of a person that is a trust or is acting as
33a member by virtue of being a trustee of a trust, the trust’s
34entire transferable interest in the company is distributed In a
35member-managed limited liability company, any of the following
-73-1apply:
2a. The person becomes a debtor in bankruptcy.
3b. The person signs an assignment for the benefit of
4creditors.
5c. The person seeks, consents to, or acquiesces in the
6appointment of a trustee, receiver, or liquidator of the person
7or of all or substantially all the person’s property.
89. In the case of a person that is an estate or is acting
9as a member by virtue of being a personal representative of
10an estate, the estate’s entire transferable interest in the
11company is distributed In the case of a person that is a
12testamentary or inter vivos trust or is acting as a member by
13virtue of being a trustee of such a trust, the trust’s entire
14transferable interest in the limited liability company is
15distributed.
1610. In the case of a member that is not an individual,
17partnership, limited liability company, corporation, trust, or
18estate, the termination of the member In the case of a person
19that is an estate or is acting as a member by virtue of being
20a personal representative of an estate, the estate’s entire
21transferable interest in the limited liability company is
22distributed.
2311. The company participates in a merger under article 10,
24if any of the following applies: In the case of a person that
25is not an individual, the existence of the person terminates.
26a. The company is not the surviving entity.
27b. Otherwise as a result of the merger, the person ceases
28to be a member.
2912. The company participates in a conversion under article
3010 The limited liability company participates in a merger under
31subchapter X and any of the following apply:
32a. The limited liability company is not the surviving
33entity.
34b. Otherwise as a result of the merger, the person ceases
35to be a member.
-74- 113. The company participates in a domestication under
2article 10, if, as a result of the domestication, the
3person ceases to be a member The limited liability company
4participates in an interest exchange under subchapter X and,
5as a result of the interest exchange, the person ceases to be a
6member.
714. The limited liability company terminates participates
8in a conversion under subchapter X.
915. The limited liability company participates in a
10domestication under subchapter X and, as a result of the
11domestication, the person ceases to be a member.
1216. The limited liability company dissolves and completes
13winding up.
14 Sec. 51. Section 489.603, Code 2023, is amended to read as
15follows:
16489.603 Effect of person’s dissociation as member.
171. When If a person is dissociated as a member, of a limited
18liability company, all of the following apply:
19a. The person’s right to participate as a member in the
20management and conduct of the limited liability company’s
21activities and affairs terminates.
22b. If the company is member-managed, the person’s fiduciary
23duties as a member end with regard to matters arising and
24events occurring after the person’s dissociation The person’s
25duties and obligations under section 489.409 as a member end
26with regard to matters arising and events occurring after the
27person’s dissociation.
28c. Subject to section 489.504 and article 10 subchapter X,
29any transferable interest owned by the person in the person’s
30capacity as a member immediately before dissociation in the
31person’s capacity as a member is owned by the person solely as
32a transferee.
332. A person’s dissociation as a member of a limited
34liability company does not of itself discharge the person from
35any debt, obligation, or other liability to the company or the
-75-1other members which the person incurred while a member.
2 Sec. 52. Section 489.604, Code 2023, is amended to read as
3follows:
4489.604 Member’s power to dissociate under certain
5circumstances.
61. If the certificate of organization or an operating
7agreement does not specify the time or the events upon the
8happening of which a member may dissociate from a limited
9liability company, a member may dissociate from the limited
10liability company in the event any amendment to the certificate
11of organization or operating agreement that is adopted over
12the member’s written dissent adversely affects the rights or
13preferences of the dissenting member’s transferable interest
14in any of the ways described in paragraphs “a” through “f”.
15A dissociation in the event of such dissent and adverse
16effect is deemed to have occurred as of the effective date
17of the amendment, if the member gives notice to the limited
18liability company not more than sixty days after the date of
19the amendment. In valuing the member’s distribution pursuant
20to this subsection, any depreciation in anticipation of the
21amendment shall be excluded. An amendment that does any of the
22following is subject to this section:
23a. Alters or abolishes a member’s right to receive a
24distribution.
25b. Alters or abolishes a member’s right to voluntarily
26dissociate.
27c. Alters or abolishes a member’s right to vote on any
28matter, except as the rights may be altered or abolished
29through the acceptance of contributions or the making of
30contribution agreements.
31d. Alters or abolishes a member’s preemptive right to make
32contributions.
33e. Establishes or changes the conditions for or consequences
34of expulsion.
35f. Waives the application of this section to the limited
-76-1liability company.
22. A member dissociating from a limited liability company
3 under this section is not liable for damages for the breach of
4any agreement not to withdraw.
53. This section applies to a limited liability company
6whose original articles of organization or certificate of
7organization is filed with the secretary of state on or after
8July 1, 1997.
94. This section applies to a limited liability company whose
10original articles of organization are filed with the secretary
11of state and effective on or prior to June 30, 1997, if such
12company’s operating agreement provides that it is subject to
13this section.
145. The operating agreement of a limited liability company
15may waive the applicability of this section to the company and
16its members.
17 Sec. 53. Section 489.701, Code 2023, is amended to read as
18follows:
19489.701 Events causing dissolution.
201. A limited liability company is dissolved, and its
21activities and affairs must be wound up, upon the occurrence
22of any of the following:
23a. An event or circumstance that the operating agreement
24states causes dissolution.
25b. The affirmative vote or consent of all the members.
26c. Once After the limited liability company has at least
27one member, the passage of that member and any other member
28dissociate, and ninety consecutive days pass during which the
29company has no members., unless before the end of the period
30all 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 resume resumes
21 carrying on its activities and affairs as if the dissolution
22had never occurred.
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 right
9of a limited liability company as follows:
101. The A member may maintain a derivative action to enforce
11a right of a limited liability company, if the member first
12makes a demand on the other members in a member-managed limited
13liability company, or the managers of a manager-managed limited
14liability company, requesting that they cause the company to
15bring an action to enforce the right, and the managers or other
16members do not bring the action within ninety days from the
17date the demand was made unless the member has earlier been
18notified that the demand has been rejected by the company
19or unless irreparable injury to the company would result by
20waiting for the expiration of the ninety-day period.
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 member if the professional limited liability company
5voluntarily elects to no longer be a professional limited
6liability company but continue its existence as a limited
7liability company pursuant to section 489.1119A within sixty
8days 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 524.303, subsection 2, Code 2023, is
17amended to read as follows:
182. Applicable fees, payable to the secretary of state as
19specified in section 489.117 or section 490.122, for the filing
20of the articles of incorporation or section 489.117 for filing
21a certificate of organization.
22 Sec. 159. Section 524.310, subsection 5, paragraph b, Code
232023, is amended to read as follows:
24b. A corporate or company name reserved, registered, or
25protected as provided in section 489.109, 489.114A, 489.706,
26 490.402, 490.403, 504.402, or 504.403.
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.
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