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House File 655 - EnrolledAn Actproviding for business organizations, including limited
liability companies, providing penalties, and including
effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
LIMITED LIABILITY COMPANIES
Section 1. Section 489.101, Code 2023, is amended to read
as follows:
489.101 Short title.
1. This chapter may be cited as the “Revised Uniform
“Uniform Limited Liability Company Act”.
2. In addition, article 14 subchapter XIV of this chapter
may be cited as provided in section 489.14101.
Sec. 2. Section 489.102, Code 2023, is amended to read as
follows:
489.102 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Certificate of organization” means the certificate
required by section 489.201. The term includes the certificate
as amended or restated.
2. “Contribution” means any benefit provided by a person to
a limited liability company that is any of the following:
a. In order to become a member upon formation of the company
and in accordance with an agreement between or among the
persons that have agreed to become the initial members of the
company.
b. In order to become a member after formation of the
company and in accordance with an agreement between the person
and the company.
c. In the person’s capacity as a member and in accordance
with the operating agreement or an agreement between the member
and the company.
2. “Contribution”, except in the phrase “right of
contribution”, means property or a benefit described in section
489.402 which is provided by a person to a limited liability
company to become a member or in the person’s capacity as a
member.
3. “Debtor in bankruptcy” means a person that is the subject
-1-of any of the following:
a. An order for relief under Tit.11 of the United States
Code or a comparable order under a successor statute of general
application.
b. A comparable order under federal, state, or foreign law
governing insolvency.
4. “Deliver” or “delivery” means any method of delivery
used in conventional commercial practice, including delivery in
person, by hand, mail, commercial delivery, and if authorized
in accordance with section 489.120, by electronic transmission.
5. “Distribution”, except as otherwise provided in section
489.405, subsection 6, means a transfer of money or other
property from a limited liability company to another a person
on account of a transferable interest or in the person’s
capacity as a member.
a. “Distribution” includes all of the following:
(1) A redemption or other purchase by a limited liability
company of a transferable interest.
(2) A transfer to a member in return for the member’s
relinquishment of any right to participate as a member in
the management or conduct of the limited liability company’s
activities and affairs or to have access to records or other
information concerning the company’s activities and affairs.
b. “Distribution” does not include amounts constituting
reasonable compensation for present or past service or payments
made in the ordinary course of business under a bona fide
retirement plan or other bona fide benefits program.
6. “Domestic cooperative” means an entity organized on a
cooperative basis under chapter 497, 498, or 499, a cooperative
organized under chapter 499A, or a cooperative organized under
chapter 501 or 501A.
7. “Effective”, with respect to a record required or
permitted to be delivered to the secretary of state for filing
under this chapter, means effective under section 489.205,
subsection 3.
-2- 7. “Electronic” means relating to technology having
electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities.
8. “Electronic transmission” or “electronically transmitted”
means any form or process of communication not directly
involving the physical transfer of paper that is suitable for
the retention, retrieval, and reproduction of information by
the recipient. or another tangible medium that is all of the
following:
a. Suitable for the retention, retrieval, and reproduction
of information by the recipient.
b. Retrievable in paper form by the recipient through an
automated process used in conventional commercial practice.
9. “Filing entity” means an unincorporated entity, other
than a limited liability partnership, that is of a type that
is created by filing a public organic record or is required to
file a public organic record that evidences its creation.
9. 10. “Foreign limited liability company” means an
unincorporated entity formed under the law of a jurisdiction
other than this state and denominated by that law as a limited
liability company which would be a limited liability company if
formed under the law of this state.
11. “Jurisdiction”, used to refer to a political entity,
means the United States, a state, a foreign country, or a
political subdivision of a foreign country.
12. “Jurisdiction of formation” means the jurisdiction whose
law governs the internal affairs of an entity.
10. 13. “Limited liability company”, except in the phrase
“foreign limited liability company”, and in subchapter X means
an entity formed under this chapter or which becomes subject to
this chapter under subchapter X or section 489.110.
11. 14. “Manager” means a person that under the operating
agreement of a manager-managed limited liability company is
responsible, alone or in concert with others, for performing
the management functions stated in section 489.407, subsection
-3-3.
12. 15. “Manager-managed limited liability company” means a
limited liability company that qualifies under section 489.407,
subsection 1.
13. 16. “Member” means a person that has become a member
of a limited liability company under section 489.401 and has
not dissociated under section 489.602. for whom all of the
following are true:
a. The person has become a member of a limited liability
company under section 489.401 or was a member in a limited
liability company when the company became subject to this
chapter under section 489.110.
b. The person is not dissociated under section 489.602.
14. 17. “Member-managed limited liability company” means a
limited liability company that is not a manager-managed limited
liability company.
18. “Nonfiling entity” means an unincorporated entity that
is of a type that is not created by filing a public organic
record.
15. 19. “Operating agreement” means the agreement, whether
or not referred to as an operating agreement and whether oral,
implied, in a record, implied, or in any combination thereof,
of all the members of a limited liability company, including
a sole member, concerning the matters described in section
489.110, subsection 1. The term includes the agreement as
amended or restated.
16. 20. “Organizer” means a person that acts under section
489.201 to form a limited liability company.
17. 21. a. “Person” means an individual, business
corporation, business trust, estate, trust, nonprofit
corporation, partnership, limited partnership, limited
liability company, domestic cooperative, unincorporated
nonprofit association, statutory trust, business trust,
common-law business trust, estate, trust, association, joint
venture, public corporation, government or governmental
-4-subdivision, agency, or instrumentality, or any other legal or
commercial entity.
b. “Person” includes a protected series, however
denominated, of an entity if the protected series is
established under law that limits, or limits if conditions
specified under law are satisfied, the ability of a creditor
of the entity or of any other protected series of the entity to
satisfy a claim from assets of the protected series.
18. 22. “Principal office” means the principal executive
office of a limited liability company or foreign limited
liability company, whether or not the office is located in this
state.
23. “Property” means all property, whether real, personal,
or mixed or tangible or intangible, or any right or interest
therein.
19. 24. “Record”, used as a noun, means information that
is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
20. “Registered office” means the office that a limited
liability company or foreign limited liability company is
required to designate and maintain under section 489.113.
25. “Registered agent” means an agent of a limited
liability company or foreign limited liability company which is
authorized to receive service of any process, notice, or demand
required or permitted by law to be served on the company.
26. “Registered foreign limited liability company” means
a foreign limited liability company that is registered to do
business in this state pursuant to a statement of registration
filed by the secretary of state.
21. 27. “Sign” means, with the present intent to
authenticate or adopt a record, to do any of the following:
a. Execute or adopt a tangible symbol.
b. Attach to or logically associate with the record an
electronic symbol, sound, or process.
-5- 22. 28. “State” means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
23. 29. “Transfer” includes an assignment, conveyance,
deed, bill of sale, lease, mortgage, security interest,
encumbrance, gift, or transfer by operation of law. any of the
following:
a. An assignment.
b. A conveyance.
c. A sale.
d. A lease.
e. An encumbrance, including a mortgage or security
interest.
f. A gift.
g. A transfer by operation of law.
24. 30. a. “Transferable interest” means the right, as
originally associated with initially owned by a person in the
person’s capacity as a member, to receive distributions from
a limited liability company, in accordance with the operating
agreement, whether or not the person remains a member or
continues to own any part of the right.
b. “Transferable interest” applies to any fraction of the
interest, by whomever owned.
25. 31. a. “Transferee” means a person to which all or
part of a transferable interest has been transferred, whether
or not the transferor is a member.
b. “Transferee” includes a person that owns a transferable
interest under section 489.603, subsection 1, paragraph “c”.
Sec. 3. Section 489.103, Code 2023, is amended to read as
follows:
489.103 Knowledge — notice.
1. A person knows a fact when if the person has or is any
of the following:
a. Has actual knowledge of it.
-6- b. Is deemed to know it under subsection 4, paragraph “a”,
or law other than this chapter.
2. A person has notice of a fact when if the person has or
is any of the following:
a. Has reason to know the fact from all of the facts known
to the person at the time in question.
b. Is deemed to have notice of the fact under subsection 4,
paragraph “b”.
3. A Subject to section 489.210, subsection 6, a person
notifies another person of a fact by taking steps reasonably
required to inform the other person in ordinary course, whether
or not those steps cause the other person knows to know the
fact.
4. A person that is not a member is deemed both all of the
following:
a. To know of a limitation on authority to transfer real
property as provided in section 489.302, subsection 7.
b. To have notice of all of the following regarding a
limited liability company’s:
(1) Dissolution, The limited liability company’s
dissolution, ninety days after a statement of dissolution under
section 489.702, subsection 2, paragraph “b”, subparagraph (1),
becomes effective.
(2) Termination, The limited liability company’s
termination, ninety days after a statement of termination under
section 489.702, subsection 2, paragraph “b”, subparagraph (6),
becomes effective.
(3) Merger, The limited liability company’s participation
in a merger, interest exchange, conversion, or domestication,
ninety days after articles of merger, interest exchange,
conversion, or domestication under article 10 subchapter X
become effective.
Sec. 4. Section 489.104, Code 2023, is amended to read as
follows:
489.104 Nature, purpose, and duration of limited liability
-7-company.
1. A limited liability company is an entity distinct from
its member or members.
2. A limited liability company may have any lawful purpose,
regardless of whether for profit.
3. A limited liability company has perpetual duration.
Sec. 5. Section 489.105, Code 2023, is amended to read as
follows:
489.105 Powers.
1. Except as otherwise provided in subsection 2, a limited
liability company has the capacity to sue and be sued in its
own name and the power to do all things necessary or convenient
to carry on its activities and affairs.
2. Until a limited liability company has or has had at
least one member, the limited liability company lacks the
capacity to do any act or carry on any activity except all of
the following:
a. Delivering to the secretary of state for filing a
statement of change under section 489.114, an amendment to the
certificate under section 489.202, a statement of correction
under section 489.206, a biennial report under section 489.209,
a statement of withdrawal or a statement of rescission under
section 489.701A, or a statement of termination under section
489.702, subsection 2, paragraph “b”, subparagraph (6).
b. Admitting a member under section 489.401.
c. Dissolving under section 489.701.
3. A limited liability company that has or has had at least
one member may ratify an act or activity that occurred when the
company lacked capacity under subsection 2.
Sec. 6. Section 489.106, Code 2023, is amended to read as
follows:
489.106 Governing law.
The law of this state governs all of the following:
1. The internal affairs of a limited liability company.
2. The liability of a member as member and a manager as
-8-manager for the debts, obligations, a debt, obligation, or
other liabilities liability of a limited liability company.
Sec. 7. Section 489.108, Code 2023, is amended to read as
follows:
489.108 Name Permitted names.
1. The name of a limited liability company must contain
the words phrase “limited liability company” or “limited
company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
“Limited” may be abbreviated as “Ltd.”, and “company” may be
abbreviated as “Co.”.
2. Unless authorized by Except as otherwise provided in
subsection 3, the name of a limited liability company, and
the name under which a foreign limited liability company may
register to do business in this state, must be distinguishable
in on the records of the secretary of state from all any of the
following:
a. The name of each person that is not an individual and
that is incorporated, organized, or authorized to transact
business in this state.
b. Each name reserved under section 489.109.
a. The name of an existing person whose formation required
the filing of a record by the secretary of state and which is
not at the time administratively dissolved, or if such person
has been administratively dissolved, within five years of the
effective date of dissolution.
b. The name of a limited liability partnership whose
statement of qualification is in effect.
c. The name under which a person is registered to do
business in this state by the filing of a record by the
secretary of state.
d. The name reserved under section 489.109 or other law
of this state providing for the reservation of a name by the
filing of a record by the secretary of state.
e. The name registered under section 489.114 or other law
of this state providing for the registration of a name by the
-9-filing of a record by the secretary of state.
f. The name registered with the secretary of state as a
fictitious name.
3. A limited liability company may apply to the secretary of
state for authorization to use a name that does not comply with
subsection 2. The secretary of state shall authorize use of
the name applied for if either of the following applies: If a
person consents in a record to the use of its name and submits
an undertaking in a form satisfactory to the secretary of state
to change its name to a name that is distinguishable on the
records of the secretary of state from any name in any category
of names in subsection 2, the name of the consenting person may
be used by the person to which the consent was given.
a. The present user, registrant, or owner of the
noncomplying name consents in a signed record to the use
and submits an undertaking in a form satisfactory to the
secretary of state to change the noncomplying name to a name
that complies with subsection 2 and is distinguishable in the
records of the secretary of state from the name applied for.
b. The applicant delivers to the secretary of state a
certified copy of the final judgment of a court establishing
the applicant’s right to use in this state the name applied
for.
4. A limited liability company may use the name, including
the fictitious name, of another entity that is used in this
state if the other entity is formed under the law of this
state or is authorized to transact business in this state
and the proposed user limited liability company meets any
of the following conditions: In determining whether a name
is the same as or not distinguishable on the records of the
secretary of state from the name of another person, words,
phrases, or abbreviations indicating a type of person, such as
“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
-10-“limited liability partnership”, “L.L.P.”, “LLP”, “registered
limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
“coop”, or “CP” shall not be taken into account.
a. Has merged with the other entity.
b. Has been formed by reorganization of the other entity.
c. Has acquired all or substantially all of the assets,
including the name, of the other entity.
5. This article does not control the use of fictitious
names. However, if a limited liability company uses a
fictitious name in this state, it shall deliver to the
secretary of state for filing a certified copy of the
resolution of its members if it is member-managed or its
managers if it is manager-managed, adopting the fictitious
name. The name of a limited liability company or foreign
limited liability company shall not contain words that may be
used only with approval by another state department or state
agency unless the company obtains the approval of such other
state department or agency and delivers to the secretary of
state for filing a record certifying such approval.
6. Subject to section 489.805, this section applies to
a foreign limited liability company transacting business in
this state which has a certificate of authority to transact
business in this state or which has applied for a certificate
of authority. A limited liability company or foreign limited
liability company may use a name that is not distinguishable
from a name described in subsection 2, paragraphs “a” through
“f”, if the company delivers to the secretary of state a
certified copy of a final judgment of a court of competent
jurisdiction establishing the right of the company to use the
name in this state.
7. A limited liability company may use the name, including
the fictitious name, of another entity that is used in this
-11-state if the other entity is formed under the law of this
state or is authorized to transact business in this state and
the proposed user limited liability company meets any of the
following conditions:
a. Has merged with the other entity.
b. Has been formed by reorganization of the other entity.
c. Has acquired all or substantially all of the assets,
including the name, of the other entity.
8. This subchapter does not control the use of fictitious
names. However, if a limited liability company uses a
fictitious name in this state, it shall deliver to the
secretary of state for filing a certified copy of the
resolution of its members if it is member-managed or its
managers if it is manager-managed, adopting the fictitious
name.
Sec. 8. Section 489.109, Code 2023, is amended to read as
follows:
489.109 Reservation of name.
1. A person may reserve the exclusive use of the a name
of a limited liability company, including a fictitious or
assumed name for a foreign limited liability company whose
name is not available, by delivering an application to the
secretary of state for filing that complies with section
489.112 by delivering an application to the secretary of state
for filing. The application must state the name and address
of the applicant and the name proposed to be reserved. If
the secretary of state finds that the name applied for is
available, it must be reserved the secretary of state shall
reserve the name for the applicant’s exclusive use for a
one-hundred-twenty-day period one hundred and twenty days.
2. The owner of a reserved name reserved for a limited
liability company may transfer the reservation to another
person by delivering to the secretary of state for filing a
signed notice in a record of the transfer which states the name
and address of the transferee person to which the reservation
-12-is being transferred.
Sec. 9. Section 489.110, Code 2023, is amended to read as
follows:
489.110 Operating agreement — scope, function, and
limitations.
1. Except as otherwise provided in subsections 2 3 and 3 4,
the operating agreement governs all of the following:
a. Relations among the members as members and between the
members and the limited liability company.
b. The rights and duties under this chapter of a person in
the capacity of manager.
c. The activities and affairs of the company and the conduct
of those activities and affairs.
d. The means and conditions for amending the operating
agreement.
2. To the extent the operating agreement does not otherwise
provide for a matter described in subsection 1, this chapter
governs the matter.
3. An operating agreement shall not do any of the following:
a. Vary a limited liability company’s capacity under section
489.105 to sue and be sued in its own name the law applicable
under section 489.104.
b. Vary the law applicable under section 489.106 a limited
liability company’s capacity under section 489.109 to sue and
be sued in its own name.
c. Vary the power of the court under section 489.204. any
requirement, procedure, or other provision of this chapter
pertaining to any of the following:
(1) Registered agents.
(2) The secretary of state, including provisions pertaining
to records authorized or required to be delivered to the
secretary of state for filing under this chapter.
d. Subject to subsections 4 through 7, eliminate the duty of
loyalty, the duty of care, or any other fiduciary duty Vary the
provisions of section 489.204.
-13- e. Subject to subsections 4 through 7, eliminate the
contractual obligation of good faith and fair dealing under
section 489.409, subsection 4 Alter or eliminate the duty of
loyalty or the duty of care, except as otherwise provided in
subsection 4.
f. Unreasonably restrict the duties and rights stated in
section 489.410 Eliminate the contractual obligation of good
faith and fair dealing under section 489.409, subsection 4,
but the operating agreement may prescribe the standards, if
not manifestly unreasonable, by which the performance of the
obligation is to be measured.
g. Vary the power of a court to decree dissolution in
the circumstances specified in section 489.701, subsection
1, paragraphs “d” and “e” Relieve or exonerate a person from
liability for conduct except as provided in subsection 6.
h. Vary the requirement to wind up a limited liability
company’s business as specified in section 489.702,
subsection 1, and section 489.702, subsection 2, paragraph
“a” Unreasonably restrict the duties and rights under section
489.410, but the operating agreement may impose reasonable
restrictions on the availability and use of information
obtained under that section and may define appropriate
remedies, including liquidated damages, for a breach of any
reasonable restriction on use.
i. Unreasonably restrict the right of a member to maintain
an action under article 9 Vary the causes of dissolution
specified in section 489.701, subsection 1, paragraph “d”.
j. Restrict the right to approve a merger, conversion, or
domestication under section 489.1014 to a member that will have
personal liability with respect to a surviving, converted, or
domesticated organization Vary the requirement to wind up the
limited liability company’s activities and affairs as specified
in section 489.702, subsection 1; subsection 2, paragraph “a”;
and subsection 5.
k. Except as otherwise provided in section 489.112,
-14-subsection 2, restrict the rights under this chapter of a
person other than a member or manager Unreasonably restrict the
right of a member to maintain an action under subchapter VIII.
l. Vary the provisions of section 489.805A, but the
operating agreement may provide that the limited liability
company shall not have a special litigation committee.
m. Vary the right of a member to approve a merger, interest
exchange, conversion, or domestication under section 489.1023,
subsection 1, paragraph “b”; section 489.1033, subsection 1,
paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
section 489.1053, subsection 1, paragraph “b”.
n. Vary the required contents of a plan of merger under
section 489.1022, subsection 1; plan of interest exchange
under section 489.1032, subsection 1; plan of conversion under
section 489.1042, subsection 1; or plan of domestication under
section 489.1052, subsection 1.
o. Except as otherwise provided in sections 489.111 and
489.112, subsection 2, restrict the rights under this chapter
of a person other than a member or manager.
4. If not manifestly unreasonable, the operating agreement
may do any of the following: Subject to subsection 3,
paragraph “g”, without limiting other terms that may be included
in an operating agreement, all the following rules apply:
a. Restrict or eliminate the duty to do any The operating
agreement may do all of the following:
(1) As required in section 489.409, subsection 2, paragraph
“a”, and section 489.409, subsection 8, to account to the
limited liability company and to hold as trustee for it any
property, profit, or benefit derived by the member in the
conduct or winding up of the company’s business, from a use by
the member of the company’s property, or from the appropriation
of a limited liability company opportunity Specify the method
by which a specific act or transaction that would otherwise
violate the duty of loyalty may be authorized or ratified by
one or more disinterested and independent persons after full
-15-disclosure of all material facts.
(2) As required in section 489.409, subsection 2, paragraph
“b”, and section 489.409, subsection 8, to refrain from dealing
with the company in the conduct or winding up of the company’s
business as or on behalf of a party having an interest adverse
to the company Alter the prohibition in section 489.405,
subsection 1, paragraph “b”, so that the prohibition requires
only that the limited liability company’s total assets not be
less than the sum of its total liabilities.
(3) As required by section 489.409, subsection 2, paragraph
“c”, and section 489.409, subsection 8, to refrain from
competing with the company in the conduct of the company’s
business before the dissolution of the company.
b. Identify specific types or categories of activities
that do not violate the duty of loyalty To the extent the
operating agreement of a member-managed limited liability
company expressly relieves a member of a responsibility that
the member otherwise would have under this chapter and imposes
the responsibility on one or more other members, the agreement
also may eliminate or limit any fiduciary duty of the member
relieved of the responsibility which would have pertained to
the responsibility.
c. Alter the duty of care, except to authorize intentional
misconduct or knowing violation of law. If not manifestly
unreasonable, the operating agreement may do all of the
following:
(1) Alter or eliminate the aspects of the duty of loyalty
stated in section 489.409, subsections 2 and 9.
(2) Identify specific types or categories of activities
that do not violate the duty of loyalty.
(3) Alter the duty of care, but may not authorize conduct
involving bad faith, willful or intentional misconduct, or
knowing violation of law.
(4) Alter or eliminate any other fiduciary duty.
d. Alter any other fiduciary duty, including eliminating
-16-particular aspects of that duty.
e. Prescribe the standards by which to measure the
performance of the contractual obligation of good faith and
fair dealing under section 489.409, subsection 4.
5. The operating agreement may specify the method by which
a specific act or transaction that would otherwise violate the
duty of loyalty may be authorized or ratified by one or more
disinterested and independent persons after full disclosure
of all material facts The court shall decide as a matter of
law whether a term of an operating agreement is manifestly
unreasonable under subsection 3, paragraph “f”, or subsection
4, paragraph “c”. All of the following shall apply:
a. The court shall make its determination as of the time the
challenged term became part of the operating agreement and by
considering only circumstances existing at that time.
b. The court may invalidate the term only if, in light of
the purposes, activities, and affairs of the limited liability
company, it is readily apparent that any of the following
apply:
(1) The objective of the term is unreasonable.
(2) The term is an unreasonable means to achieve the term’s
objective.
6. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of a
responsibility that the member would otherwise have under
this chapter and imposes the responsibility on one or more
other members, the operating agreement may, to the benefit
of the member that the operating agreement relieves of the
responsibility, also eliminate or limit any fiduciary duty that
would have pertained to the responsibility.
7. 6. The An operating agreement may alter or eliminate
the indemnification for a member or manager provided by section
489.408, subsection 1, and may eliminate or limit a member’s
or manager’s liability to the limited liability company and
members for money damages, except for any of the following:
-17- a. A breach of the duty of loyalty.
b. A financial benefit received by the member or manager to
which the member or manager is not entitled.
c. A breach of a duty under section 489.406.
d. Intentional infliction of harm on the company or a
member.
e. An intentional violation of criminal law.
8. The court shall decide any claim under subsection 4 that
a term of an operating agreement is manifestly unreasonable.
All of the following apply:
a. The court shall make its determination as of the time the
challenged term became part of the operating agreement and by
considering only circumstances existing at that time.
b. The court may invalidate the term only if, in light of
the purposes and activities of the limited liability company,
it is readily apparent that any of the following applies:
(1) The objective of the term is unreasonable.
(2) The term is an unreasonable means to achieve the
provision’s objective.
Sec. 10. Section 489.111, Code 2023, is amended to read as
follows:
489.111 Operating agreement — effect on limited liability
company and persons becoming members — preformation agreement.
1. A limited liability company is bound by and may enforce
the operating agreement, whether or not the company has itself
manifested assent to the operating agreement.
2. A person that becomes a member of a limited liability
company is deemed to assent to the operating agreement.
3. Two or more persons intending to become the initial
members of a limited liability company may make an agreement
providing that upon the formation of the company the agreement
will become the operating agreement. One person intending
to become the initial member of a limited liability company
may assent to terms providing that upon the formation of the
company the terms will become the operating agreement.
-18- 4. An operating agreement in a signed record that excludes
modification or rescission except by a signed record cannot be
otherwise modified or rescinded.
Sec. 11. Section 489.112, Code 2023, is amended to read as
follows:
489.112 Operating agreement — effect on third parties and
relationship to records effective on behalf of limited liability
company.
1. An operating agreement may specify that its amendment
requires the approval of a person that is not a party to the
operating agreement or the satisfaction of a condition. An
amendment is ineffective if its adoption does not include the
required approval or satisfy the specified condition.
2. The obligations of a limited liability company and its
members to a person in the person’s capacity as a transferee or
a person dissociated as a member are governed by the operating
agreement. Subject only to any a court order issued under
section 489.503, subsection 2, paragraph “b”, to effectuate a
charging order, an amendment to the operating agreement made
after a person becomes a transferee or is dissociated as a
member is or is not effective as follows:
a. Is effectivewith regard to any debt, obligation, or
other liability of the limited liability company or its members
to the person in the person’s capacity as a transferee or
person dissociated as a member.
b. Is not effective to the extent the amendment imposes a
new debt, obligation, or other liability on the transferee or
person dissociated as a member.
3. If a record that has been delivered by a limited
liability company to the secretary of state for filing and
has become becomes effective under this chapter and contains
a provision that would be ineffective under section 489.110,
subsection 3 or subsection 4, paragraph “c”, if contained in
the operating agreement, the provision is likewise ineffective
in the record.
-19- 4. Subject to subsection 3, if a record that has been
delivered by a limited liability company to the secretary
of state for filing and has become becomes effective under
this chapter and conflicts with a provision of the operating
agreement, all of the following rules apply:
a. The operating agreement prevails as to members, persons
dissociated as members, transferees, and managers.
b. The record prevails as to other persons to the extent
they reasonably rely on the record.
Sec. 12. Section 489.114, Code 2023, is amended to read as
follows:
489.114 Change of registered office or registered agent for
service of process or address for registered agency by limited
liability company.
1. A limited liability company or registered foreign
limited liability company may change its registered office
or its registered agent for service of process agent or the
address of its registered agent by delivering to the secretary
of state for filing a statement of change that sets forth
states all of the following:
a. The name of the limited liability company or foreign
limited liability company.
b. If the current registered office is to be changed, the
street and mailing addresses of the new registered office The
information that is to be in effect as a result of the filing of
the statement of change.
c. If the current registered agent is to be changed, the
name of the new registered agent and the new agent’s consent to
the appointment. The agent’s consent may be on the statement
or attached to it.
d. That after the change or changes are made, the street
address of its registered office and the business office of its
registered agent will be identical.
2. If a registered agent changes the street address of
the registered agent’s business office, the registered agent
-20-may change the street address of the registered office of any
limited liability company or foreign limited liability company
for which the person is the registered agent by notifying the
limited liability company or foreign limited liability company
in writing of the change and signing, either manually or in
facsimile, and delivering to the secretary of state for filing
a statement that complies with the requirements of subsection
1 and recites that the limited liability company or foreign
limited liability company has been notified of the change. The
members or managers of a limited liability company need not
approve the delivery to the secretary of state for filing of
any of the following:
a. A statement of change under this section.
b. A similar filing changing the registered agent or
registered office, if any, of the limited liability company in
any other jurisdiction.
3. If a registered agent changes the registered agent’s
business address to another place, the registered agent may
change the business address and the address of the registered
agent by filing a statement as required by subsection 2 for
each limited liability company or foreign limited liability
company, or a single statement of all limited liability
companies or all foreign limited liability companies named
in the notice, except that it need be signed only by the
registered agent and need not be responsive to subsection 1,
paragraph “c”, and must recite that a copy of the statement
has been mailed to each limited liability company or foreign
limited liability company named in the notice A statement of
change under this section designating a new registered agent
is an affirmation of fact by the limited liability company or
registered foreign limited liability company that the agent has
consented to serve.
4. A limited liability company or foreign limited liability
company may also change its registered office or registered
agent in its biennial report as provided in section 489.209
-21-As an alternative to using the procedure in this section,
a limited liability company may amend its certificate of
organization.
5. Subject to section 489.205, subsection 3, a statement of
change is effective when filed by the secretary of state.
Sec. 13. NEW SECTION. 489.114A Registration of name.
1. A foreign limited liability company not registered to
do business in this state under subchapter IX may register
its name, or an alternate name adopted pursuant to section
489.906A, if the name is distinguishable on the records of the
secretary of state from the names that are not available under
section 489.108.
2. To register its name or an alternate name adopted
pursuant to section 489.906A, a foreign limited liability
company must deliver to the secretary of state for filing an
application stating the company’s name, the jurisdiction and
date of its formation, and any alternate name adopted pursuant
to section 489.906A. If the secretary of state finds that the
name applied for is available, the secretary of state shall
register the name for the applicant’s exclusive use.
3. The registration of a name under this section is
effective for one year after the date of registration.
4. A foreign limited liability company whose name
registration is effective may renew the registration for
successive one-year periods by delivering, not earlier than
three months before the expiration of the registration,
to the secretary of state for filing a renewal application
that complies with this section. When filed, the renewal
application renews the registration for a succeeding one-year
period.
5. A foreign limited liability company whose name
registration is effective may register as a foreign limited
liability company under the registered name or consent in a
signed record to the use of that name by another person that is
not an individual.
-22- Sec. 14. Section 489.115, Code 2023, is amended to read as
follows:
489.115 Resignation of registered agent for service of
process.
1. A registered agent may resign the agent’s agency
appointment by signing and as an agent for a limited liability
company or registered foreign limited liability company by
delivering to the secretary of state for filing the signed
original a statement of resignation. The statement of
resignation may include a statement that the registered office
is also discontinued. The registered agent shall send a copy
of the statement of resignation by certified mail, return
receipt requested, to the limited liability company or foreign
limited liability company at its principal office and to the
registered office, if not discontinued. The registered agent
shall certify to the secretary of state that the copies have
been sent to the limited liability company or foreign limited
liability company, including the date the copies were sent.
that states all of the following:
a. The name of the limited liability company or foreign
limited liability company.
b. The name of the agent.
c. That the agent resigns from serving as registered agent
for the limited liability company or foreign limited liability
company.
d. The address of the limited liability company or foreign
limited liability company to which the agent will send the
notice required by subsection 3.
2. A statement of resignation takes effect on the earlier
of the following:
a. 12:01 a.m.on the The thirty-first day after the day on
which it is filed with the secretary of state.
b. The designation of a new registered agent for the limited
liability company or registered foreign limited liability
company.
-23- 3. A registered agent promptly shall furnish to the limited
liability company or registered foreign limited liability
company notice in a record of the date on which a statement of
resignation was filed.
4. When a statement of resignation takes effect, the
registered agent ceases to have responsibility under this
chapter for any matter thereafter tendered to it as agent for
the limited liability company or registered foreign limited
liability company. The resignation does not affect any
contractual rights the company or foreign company has against
the agent or that the agent has against the company or foreign
company.
5. A registered agent may resign with respect to a limited
liability company or registered foreign limited liability
company whether or not the company or foreign company is in
good standing.
Sec. 15. NEW SECTION. 489.115A Registered agent.
1. Each limited liability company and each registered
foreign limited liability company shall designate and maintain
a registered agent in this state. The designation of a
registered agent is an affirmation of fact by the limited
liability company or registered foreign limited liability
company that the agent has consented to serve.
2. A registered agent for a limited liability company or
registered foreign limited liability company must have a place
of business in this state.
3. The only duties under this chapter of a registered agent
that has complied with this chapter are as follows:
a. To forward to the limited liability company or registered
foreign limited liability company at the address most recently
supplied to the agent by the limited liability company or
registered foreign limited liability company any process,
notice, or demand pertaining to the company or foreign company
which is served on or received by the agent.
b. If the registered agent resigns, to provide the notice
-24-required by section 489.115, subsection 3, to the limited
liability company or registered foreign limited liability
company at the address most recently supplied to the agent by
the limited liability company or registered foreign limited
liability company.
c. To keep current the information with respect to the agent
in the certificate of organization or foreign registration
statement.
Sec. 16. Section 489.116, Code 2023, is amended to read as
follows:
489.116 Service of process, notice, or demand.
1. A limited liability company’s company or registered
foreign limited liability company’s registered agent is the
company’s agent for service of process, notice, or demand
required or permitted by law to company may be served on
the company with any process, notice, or demand required or
permitted by law by serving its registered agent.
2. If a limited liability company or registered foreign
limited liability company has no ceases to have a registered
agent, or the if its registered agent cannot with reasonable
diligence be served, the limited liability company or
registered foreign limited liability company may be served by
registered or certified mail, return receipt requested, or by
similar commercial delivery service, addressed to the limited
liability company or registered foreign limited liability
company at its principal office. The address of the principal
office must be as shown on the limited liability company’s or
registered foreign limited liability company’s most recent
biennial report filed with the secretary of state pursuant to
section 489.209. Service is perfected effected under this
subsection at on the earliest of any of the following:
a. The date the limited liability company or registered
foreign limited liability company receives the mail or delivery
by the commercial delivery service.
b. The date shown on the return receipt, if signed on behalf
-25-of by the limited liability company or registered foreign
limited liability company.
c. Five days after its deposit in with the United States
mail, as evidenced by the postmark, if mailed postpaid and
postal service or with the commercial delivery service, if
correctly addressed and with sufficient postage or payment.
3. A limited liability company or foreign limited liability
company may be served pursuant to this section, as provided
in another provision of this chapter, or as provided in
sections 617.3 through 617.6, unless the manner of service is
otherwise specifically provided for by another provision of law
If process, notice, or demand cannot be served on a limited
liability company or registered foreign limited liability
company pursuant to subsection 1 or 2, service may be made by
handing a copy to the individual in charge of any regular place
of business or activity of the limited liability company or
registered foreign company if the individual served is not a
plaintiff in the action.
4. Service of process, notice, or demand on a registered
agent must be in a written record.
5. Service of process, notice, or demand may be made by
other means under law other than this chapter, including as
provided in sections 617.3 through 617.6 unless specifically
provided for by another provision of law.
Sec. 17. Section 489.117, Code 2023, is amended to read as
follows:
489.117 Fees.
1. The secretary of state shall collect the following fees
when documents described in this subsection are delivered to
the secretary’s office for filing:
a. Statement of rescission No fee
b. Statement of withdrawal No fee
c. Certificate of organization $ 50
d. Application for use of
indistinguishable name $ 10
-26- e. Application for reserved name $ 10
f. Notice of transfer of reserved name $ 10
g. Statement of change of registered
agent or registered office or both No fee
h. Registered agent’s statement of
change of registered office for each
affected limited liability company No fee
i. Registered agent’s statement
of resignation No fee
j. Amendment to certificate of
organization $ 50
k. Restatement of certificate of
organization with amendment
of certificate $ 50
l. Articles of merger $ 50
m. Statement of dissolution $ 5
n. Declaration of administrative
dissolution No fee
o. Application for reinstatement
following administrative dissolution $ 5
p. Certificate of reinstatement No fee
q. Application for certificate
of authority registration $100
r. Application for amended
certificate of authority registration $100
s. Statement of cancellation $ 10
t. Certificate of revocation
of authority to transact business No fee
u. Statement of correction $ 5
v. Application for certificate of
existence or authorization registration $ 5
w. Any other document required or
permitted to be filed by this chapter $ 5
2. The secretary of state shall collect a fee of five
dollars each time process is served on the secretary under this
-27-chapter. The party to a proceeding causing service of process
is entitled to recover this fee as costs if the party prevails
in the proceeding.
3. The secretary of state shall collect the following fees
for copying and certifying the copy of any filed document
relating to a domestic limited liability company or foreign
limited liability company as follows:
a. One dollar a page for copying.
b. Five dollars for the certificate.
4. The secretary of state may impose, assess, and collect
a filing fee as a condition to accepting a biennial report as
provided in section 489.209.
Sec. 18. NEW SECTION. 489.118 Change of name or address by
registered agent.
1. If a registered agent changes its name or address,
the agent may deliver to the secretary of state for filing a
statement of change that states all of the following:
a. The name of the limited liability company or registered
foreign limited liability company represented by the registered
agent.
b. The name of the agent as currently shown in the records
of the secretary of state for the limited liability company or
registered foreign limited liability company.
c. If the name of the agent has changed, its new name.
d. If the address of the agent has changed, its new address.
2. A registered agent promptly shall furnish notice to the
represented limited liability company or registered foreign
limited liability company of the filing by the secretary of
state of the statement of change and the changes made by the
statement.
Sec. 19. NEW SECTION. 489.120 Delivery of record.
1. Except as otherwise provided in this chapter,
permissible means of delivery of a record include delivery by
hand, mail, conventional commercial practice, and electronic
transmission.
-28- 2. Delivery to the secretary of state is effective only when
a record is received by the secretary of state.
Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
or repeal.
The general assembly has power to amend or repeal all or
part of this chapter at any time, and all limited liability
companies and foreign limited liability companies subject to
this chapter are governed by the amendment or repeal.
Sec. 21. Section 489.201, Code 2023, is amended to read as
follows:
489.201 Formation of limited liability company — certificate
of organization.
1. One or more persons may act as organizers to form a
limited liability company by signing and delivering to the
secretary of state for filing a certificate of organization.
2. A certificate of organization must state all of the
following:
a. The name of the limited liability company, which must
comply with section 489.108.
b. The street address and mailing addresses of the initial
registered office and the name of the initial registered
agent for service of process on the company limited liability
company’s principal office.
c. The name and street and mailing addresses in this state
of the limited liability company’s registered agent.
3. Subject to section 489.112, subsection 3, a A certificate
of organization may also contain statements as to matters other
than those required by subsection 2, but shall not vary or
otherwise affect the provisions specified in section 489.110,
subsections 3 and 4, in a manner inconsistent with that
section. However, a statement in a certificate of organization
is not effective as a statement of authority.
4. A limited liability company is formed when the secretary
of state has filed the certificate of organization, unless the
certificate states a delayed becomes effective date pursuant
-29-to section 489.205, subsection 3. If the certificate states
a delayed effective date, a limited liability company is not
formed if, before the certificate takes effect, a statement of
cancellation is signed and delivered to the secretary of state
for filing and the secretary of state files the certificate.
5. Subject to any delayed effective date and except in
a proceeding by this state to dissolve a limited liability
company, the filing of the certificate of organization by the
secretary of state is conclusive proof that the organizer
satisfied all conditions to the formation of a limited
liability company.
Sec. 22. Section 489.202, Code 2023, is amended to read as
follows:
489.202 Amendment or restatement of certificate of
organization.
1. A certificate of organization may be amended or restated
at any time.
2. To amend its certificate of organization, a limited
liability company must deliver to the secretary of state for
filing an amendment stating all of the following:
a. The name of the limited liability company.
b. The date of filing of its initial certificate of
organization.
c. The changes the amendment makes to the certificate as
most recently amended or restated text of the amendment.
3. To restate its certificate of organization, a limited
liability company must deliver to the secretary of state for
filing a restatement, designated as such in its heading,
stating and setting forth all of the following:
a. In the heading or an introductory paragraph, the
company’s present name and the date of the filing of the
company’s initial certificate of organization The name of the
limited liability company.
b. If the company’s name has been changed at any time since
the company’s formation, each of the company’s former names The
-30-text of the restated certificate of organization.
c. The changes the restatement makes to the certificate as
most recently amended or restated A statement that the restated
certificate consolidates all amendments into a single document.
d. If a new amendment is included in the restated
certificate of organization, the statements required under
subsection 2 with respect to the new amendment if not otherwise
provided.
4. Subject to section 489.112, subsection 3, and section
489.205, subsection 3, an amendment to or restatement of a
certificate of organization is effective when filed by the
secretary of state. If a member of a member-managed limited
liability company, or a manager of a manager-managed limited
liability company, knows that any information in a filed
certificate of organization was inaccurate when the certificate
of organization was filed or has become inaccurate due to
changed circumstances, the member or manager shall promptly do
any of the following:
a. Cause the certificate of organization to be amended.
b. If appropriate, deliver to the secretary of state
for filing a statement of change under section 489.114 or a
statement of correction under section 489.206.
5. If a member of a member-managed limited liability
company, or a manager of a manager-managed limited liability
company, knows that any information in a filed certificate of
organization was inaccurate when the certificate was filed
or has become inaccurate owing to changed circumstances, the
member or manager shall promptly do any of the following:
a. Cause the certificate to be amended.
b. If appropriate, deliver to the secretary of state
for filing a statement of change under section 489.114 or a
statement of correction under section 489.206.
Sec. 23. Section 489.203, Code 2023, is amended to read as
follows:
489.203 Signing of records to be delivered for filing to
-31-secretary of state.
1. A record delivered to the secretary of state for filing
pursuant to this chapter must be signed as follows:
a. Except as otherwise provided in paragraphs “b” and “c”, a
record signed on behalf of by a limited liability company must
be signed by a person authorized by the company.
b. A limited liability company’s initial certificate of
organization must be signed by at least one person acting as
an organizer.
c. A record filed delivered on behalf of a dissolved limited
liability company that does not have or has not had at least
one has no member must be signed by an organizer the person
winding up the company’s activities and affairs under section
489.702, subsection 3, or a person appointed under section
489.702, subsection 4, to wind up the activities and affairs.
d. A record filed on behalf of a dissolved limited liability
company that has no members must be signed by the person
winding up the company’s activities under section 489.702,
subsection 3, or a person appointed under section 489.702,
subsection 4, to wind up those activities A statement of denial
by a person under section 489.303 must be signed by that
person.
e. A statement of cancellation under section 489.201,
subsection 4, must be signed by each organizer that signed
the initial certificate of organization, but a personal
representative of a deceased or incompetent organizer may sign
in the place of the decedent or incompetent Any other record
delivered on behalf of a person to the secretary of state for
filing must be signed by that person.
f. A statement of denial by a person under section 489.303
must be signed by that person.
g. Any other record must be signed by the person on whose
behalf the record is delivered to the secretary of state.
2. Any A record filed delivered for filing under this
chapter may be signed by an agent. Whenever this chapter
-32-requires a particular individual to sign a record and the
individual is deceased or incompetent, the record may be signed
by a legal representative of the individual.
3. A person that signs a record as an agent or legal
representative affirms as a fact that the person is authorized
to sign the record.
Sec. 24. Section 489.204, Code 2023, is amended to read as
follows:
489.204 Signing and filing pursuant to judicial order.
1. If a person required by this chapter to sign a record
or deliver a record to the secretary of state for filing under
this chapter does not do so, any other person that is aggrieved
may petition the district court to order one or more of the
following:
a. The person to sign the record.
b. The person to deliver the record to the secretary of
state for filing.
c. The secretary of state to file the record unsigned.
2. If a petitioner under subsection 1 is not the limited
liability company or foreign limited liability company to which
the record pertains, the petitioner shall make the limited
liability company or foreign limited liability company a party
to the action.
3. If a district court orders an unsigned record to be
delivered to the secretary of state, the secretary of state
shall file the record and the court order upon receipt A record
filed under subsection 1, paragraph “c”, is effective without
being signed.
Sec. 25. Section 489.205, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.205 Liability for inaccurate information in filed
records.
1. If a record delivered to the secretary of state for
filing under this chapter and filed by the secretary of state
contains inaccurate information, a person that suffers loss by
-33-reliance on the information may recover damages for the loss
from all of the following:
a. A person that signed the record, or caused another to
sign it on the person’s behalf, and knew the information to be
inaccurate at the time the record was signed.
b. Subject to subsection 2, a member of a member-managed
limited liability company or a manager of a manager-managed
limited liability company if all of the following apply:
(1) The record was delivered for filing on behalf of the
limited liability company.
(2) The member or manager knew or had notice of the
inaccuracy for a reasonably sufficient time before the
information was relied upon so that, before the reliance,
the member or manager reasonably could have done any of the
following:
(a) Effected an amendment under section 489.202.
(b) Filed a petition under section 489.204.
(c) Delivered to the secretary of state for filing a
statement of change under section 489.114 or a statement of
correction under section 489.206.
2. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of
responsibility for maintaining the accuracy of information
contained in records delivered on behalf of the limited
liability company to the secretary of state for filing under
this chapter and imposes that responsibility on one or more
other members, the liability stated in subsection 1, paragraph
“b”, applies to those other members and not to the member that
the operating agreement relieves of the responsibility.
3. A person commits a serious misdemeanor if that person
signs a record the person knows is false in any material
respect with intent that the record be delivered to the
secretary of state for filing.
Sec. 26. Section 489.206, Code 2023, is amended to read as
follows:
-34- 489.206 Correcting filed record.
1. A limited liability company or foreign limited liability
company may deliver to the secretary of state for filing
a statement of correction to correct a record previously
delivered by the company to the secretary of state and filed
by the secretary of state, if at the time of filing the record
contained inaccurate information or was defectively signed.
A person on whose behalf a filed record was delivered to the
secretary of state for filing may correct the record if any of
the following apply:
a. The record at the time of filing was inaccurate.
b. The record was defectively signed.
c. The electronic transmission of the record to the
secretary of state was defective.
2. A statement of correction under subsection 1 shall not
have a delayed effective date and must do all of the following:
To correct a filed record, a person on whose behalf the record
was delivered to the secretary of state must deliver to the
secretary of state for filing a statement of correction.
a. Describe the record to be corrected, including its filing
date, or attach a copy of the record as filed.
b. Specify the inaccurate information and the reason it is
inaccurate or the manner in which the signing was defective.
c. Correct the defective signature or inaccurate
information.
3. When filed by the secretary of state, a statement of
correction under subsection 1 is effective retroactively as
of the effective date of the record the statement corrects,
but the statement is effective when filed as to A statement of
correction shall comply with all of the following:
a. For the purposes of section 489.103, subsection 4 It must
not state a delayed effective date.
b. As to persons that previously relied on the uncorrected
record and would be adversely affected by the retroactive
effect It must be signed by the person correcting the filed
-35-record.
c. It must describe the record to be corrected including its
filing date or attach a copy of the record as filed.
d. It must specify the inaccuracy or defect to be corrected.
e. It must correct the inaccuracy or defect.
4. A statement of correction is effective as of the
effective date of the filed record that it corrects except for
purposes of section 489.103, subsection 4, and as to persons
relying on the uncorrected filed record and adversely affected
by the correction. For those purposes and as to those persons,
the statement of correction is effective when filed.
Sec. 27. NEW SECTION. 489.206A Filing requirements.
1. To be filed by the secretary of state pursuant to
this chapter, a record must be captioned to describe the
record’s purpose, must be received by the secretary of state,
must comply with this chapter, and must satisfy all of the
following:
a. The filing of the record must be required or permitted by
this chapter.
b. The record must be physically delivered in written
form unless and to the extent the secretary of state permits
electronic delivery of records.
c. The words in the record must be in English, and numbers
must be in Arabic or Roman numerals, but the name of an entity
need not be in English if written in English letters or Arabic
or Roman numerals.
d. The record must be signed by a person authorized or
required under this chapter to sign the record.
e. The record must state the name and capacity, if
any, of each individual who signed it, either on behalf
of the individual or the person authorized or required to
sign the record, but need not contain a seal, attestation,
acknowledgment, or verification.
2. If law other than this chapter prohibits the disclosure
by the secretary of state of information contained in a record
-36-delivered to the secretary of state for filing, the secretary
of state shall file the record if the record otherwise complies
with this chapter but may redact the information.
3. When a record is delivered to the secretary of state for
filing, any fee required under this chapter and any fee, tax,
interest, or penalty required to be paid under this chapter or
law other than this chapter must be paid in a manner permitted
by the secretary of state or by that law.
4. The secretary of state may require that a record
delivered in written form be accompanied by an identical or
conformed copy.
5. The secretary of state may provide forms for filings
required or permitted to be made by this chapter, but, except
as otherwise provided in subsection 6, their use is not
required.
6. The secretary of state may prescribe, and furnish on
request and require any of the following forms:
a. A cover sheet for a filing.
b. An application for a certificate of existence or
certificate of registration.
c. A foreign corporation’s registration statement.
d. A foreign corporation’s statement of withdrawal.
e. A foreign corporation’s transfer of registration
statement.
f. The biennial report required by section 489.209.
7. Upon request and payment of the requisite fee, the
secretary of state shall send the requester a certified copy
of a requested record.
Sec. 28. Section 489.207, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.207 Effective date and time.
Except as otherwise provided in section 489.115 and section
489.208A and subject to section 489.206, subsection 4, a record
filed under this chapter is effective as follows:
1. On the date and at the time of its filing by the
-37-secretary of state, as provided in section 489.210, subsection
2.
2. On the date of filing and at the time specified in the
record as its effective time, if later than the time under
subsection 1.
3. At a specified delayed effective date and time, which may
not be more than ninety days after the date of filing.
4. If a delayed effective date is specified, but no time is
specified, at 12:01 a.m.on the date specified, which shall not
be more than ninety days after the date of filing.
Sec. 29. Section 489.208, Code 2023, is amended to read as
follows:
489.208 Certificate of existence or authorization
registration.
1. Any person may apply to On request of any person, the
secretary of state to be furnished shall issue a certificate
of existence for a domestic limited liability company or a
certificate of authorization registration for a registered
foreign limited liability company.
2. A certificate of existence or certificate of
authorization registration under subsection 1 must set forth
state all of the following:
a. The domestic limited liability company’s name or the
registered foreign limited liability company’s name used in
this state.
b. One In the case of a limited liability company, all of
the following:
(1) If it is a domestic limited liability company, that
the company is duly formed under the laws of this state, the
date of its formation, and the period of its duration That
a certificate of organization has been filed and has taken
effect.
(2) If it is a foreign limited liability company, that the
company is authorized to transact business in this state The
date the certificate became effective.
-38- (3) The period of the limited liability company’s duration
if the records of the secretary of state reflect that its
period of duration is less than perpetual.
(4) That all of the following apply:
(a) No statement of dissolution, statement of
administrative dissolution, or statement of termination has
been filed.
(b) The records of the secretary of state do not otherwise
reflect that the limited liability company has been dissolved
or terminated.
(c) A proceeding is not pending under section 489.705.
c. That all fees, taxes, and penalties due under this
chapter or other law to the secretary of state have been paid
In the case of a registered foreign limited liability company,
that it is registered to do business in this state.
d. That the company’s most recent biennial report required
by this chapter has been filed by the secretary of state That
all fees, taxes, interest, and penalties owed to this state
by the limited liability company or foreign limited liability
company and collected through the secretary of state have been
paid, if all of the following apply:
(1) Payment is reflected in the records of the secretary of
state.
(2) Nonpayment affects the good standing or registration
of the limited liability company or foreign limited liability
company.
e. If it is a domestic limited liability company, that a
statement of dissolution or statement of termination has not
been filed That the most recent biennial report required by
section 489.209 has been delivered to the secretary of state
for filing.
f. Other facts of record in the office reflected in the
records of the secretary of state that may be requested by
the applicant pertaining to the limited liability company or
foreign limited liability company which the person requesting
-39-the certificate reasonably requests.
3. Subject to any qualification stated in the certificate, a
certificate of existence or certificate of authorization issued
by the secretary of state is under subsection 1 may be relied
on as conclusive evidence that the domestic limited liability
company is in existence or the foreign limited liability
company is authorized to transact business in this state of the
facts stated in the certificate.
Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
before effectiveness.
1. Except as otherwise provided in sections 489.1024,
489.1034, 489.1044, and 489.1054, a record delivered to the
secretary of state for filing may be withdrawn before it takes
effect by delivering to the secretary of state for filing a
statement of withdrawal.
2. A statement of withdrawal must comply with all of the
following:
a. Be signed by each person that signed the record being
withdrawn, except as otherwise agreed by those persons.
b. Identify the record to be withdrawn.
c. If signed by fewer than all the persons that signed the
record being withdrawn, state that the record is withdrawn in
accordance with the agreement of all the persons that signed
the record.
3. On filing by the secretary of state of a statement of
withdrawal, the action or transaction evidenced by the original
record does not take effect.
Sec. 31. Section 489.209, Code 2023, is amended to read as
follows:
489.209 Biennial report for secretary of state.
1. A limited liability company or a foreign limited
liability company authorized registered to transact do business
in this state shall deliver to the secretary of state for
filing a biennial report that states all of the following:
a. The name of the company.
-40- b. The street address of the company’s registered office,
the name of its registered agent at that office, and the
consent of any new registered agent.
c. The street address of its principal office.
d. In the case of a foreign limited liability company, the
state or other jurisdiction under whose law the foreign company
is formed and any alternate name adopted under section 489.805,
subsection 1.
2. Information in a biennial report under this section
must be current as of the date the report is delivered to the
secretary of state for filing. The report shall be executed
on behalf of the limited liability company or foreign limited
liability company and signed as provided in section 489.203.
3. The first biennial report under this section in this
state must be delivered to the secretary of state between
January 1 and April 1 of the first odd-numbered year following
the calendar year in which a limited liability company was
formed or a foreign limited liability company was authorized
registered to transact do business. A subsequent biennial
report must be delivered to the secretary of state between
January 1 and April 1 of each following odd-numbered calendar
year. A filing fee for the biennial report shall be determined
by the secretary of state pursuant to section 489.117. Each
biennial report shall contain information related to the
two-year period immediately preceding the calendar year in
which the report is filed.
4. If a biennial report does not contain the information
required in this section, the secretary of state shall promptly
notify the reporting limited liability company or foreign
limited liability company in writing and return the report to
it for correction.
5. The secretary of state may provide for the change of
registered office or registered agent on the form prescribed by
the secretary of state for the biennial report, provided that
the form contains the information required in section 489.114.
-41-If the secretary of state determines that a biennial report
does not contain the information required in this section but
otherwise meets the requirements of section 489.114 for the
purpose of changing the registered office or registered agent,
the secretary of state shall file the statement of change
for the registered office or registered agent, effective as
provided in section 489.205 489.207, subsection 3, before
returning the biennial report to the limited liability
company as provided in this section. A statement of change of
registered office or registered agent accomplished pursuant to
this subsection shall be executed by a person authorized to
execute the biennial report.
Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
to file — review of refusal to file — delivery of record by
secretary of state.
1. The secretary of state shall file a record delivered
to the secretary of state for filing which satisfies this
chapter. The duty of the secretary of state under this section
is ministerial.
2. When the secretary of state files a record, the secretary
of state shall record it as filed on the date and at the time of
its delivery. After filing a record, the secretary of state
shall deliver to the person that submitted the record a copy
of the record with an acknowledgment of the date and time of
filing and, in the case of a statement of denial, also to the
limited liability company to which the statement pertains.
3. If the secretary of state refuses to file a record, the
secretary of state shall, not later than fifteen business days
after the record is delivered, do all of the following:
a. Return the record or notify the person that submitted the
record of the refusal.
b. Provide a brief explanation in a record of the reason for
the refusal.
4. If the secretary of state refuses to file a record, the
person that submitted the record may petition the district
-42-court of Polk county to compel filing of the record. The
record and the explanation of the secretary of state of
the refusal to file must be attached to the petition. The
court may decide the matter in a summary proceeding. If the
court orders the record to be filed, the court may order it
filed with an effective date that is the date on which it was
submitted to the secretary of state for filing.
5. The filing of or refusal to file a record does not do any
of the following:
a. Affect the validity or invalidity of the record in whole
or in part.
b. Create a presumption that the information contained in
the record is correct or incorrect.
6. Except as otherwise provided by section 489.116 or by law
other than this chapter, the secretary of state may deliver any
record to a person by delivering it by any of the following:
a. In person to the person that submitted it.
b. To the address of the person’s registered agent.
c. To the principal office of the person.
d. To another address the person provides to the secretary
of state for delivery.
Sec. 33. Section 489.302, Code 2023, is amended to read as
follows:
489.302 Statement of limited liability company authority.
1. A limited liability company may deliver to the secretary
of state for filing a statement of authority. All of the
following apply to the statement:
a. It must include the name of the limited liability company
and the name and street address and mailing addresses of its
principal office registered agent.
b. With respect to any position that exists in or with
respect to the limited liability company, it may state the
authority, or limitations on the authority, of all persons
holding the position to do any of the following:
(1) Execute Sign an instrument transferring real property
-43-held in the name of the limited liability company.
(2) Enter into other transactions on behalf of, or otherwise
act for or bind, the limited liability company.
c. It may state the authority, or limitations on the
authority, of a specific person to do any of the following:
(1) Execute Sign an instrument transferring real property
held in the name of the limited liability company.
(2) Enter into other transactions on behalf of, or otherwise
act for or bind, the limited liability company.
2. To amend or cancel a statement of authority filed by
the secretary of state under section 489.205, subsection 1,
a limited liability company must deliver to the secretary of
state for filing an amendment or cancellation stating all of
the following:
a. The name of the limited liability company.
b. The name and street address and mailing addresses of the
limited liability company’s principal office registered agent.
c. The caption of the statement being amended or canceled
and the date the statement being affected became effective.
d. The contents of the amendment or a declaration that the
statement being affected is canceled.
3. A statement of authority affects only the power of a
person to bind a limited liability company to persons that are
not members.
4. Subject to subsection 3 and section 489.103, subsection
4, and except as otherwise provided in subsections 6, 7, and
8, a limitation on the authority of a person or a position
contained in an effective statement of authority is not by
itself evidence of any person’s knowledge or notice of the
limitation by any person.
5. Subject to subsection 3, a grant of authority not
pertaining to a transfer of real property and contained in an
effective statement of authority is conclusive in favor of a
person that gives value in reliance on the grant, except to the
extent that when the person gives value, any of the following
-44-applies:
a. The person has knowledge to the contrary.
b. The statement has been canceled or restrictively amended
under subsection 2.
c. A limitation on the grant is contained in another
statement of authority that became effective after the
statement containing the grant became effective.
6. Subject to subsection 3, an effective statement of
authority that grants authority to transfer real property
held in the name of the limited liability company and that, a
certified copy of which statement is recorded by certified copy
in the office for recording transfers of the real property, is
conclusive in favor of a person that gives value in reliance
on the grant without knowledge to the contrary, except to the
extent that when the person gives value, any of the following
applies:
a. The statement has been canceled or restrictively amended
under subsection 2 and a certified copy of the cancellation
or restrictive amendment has been recorded in the office for
recording transfers of the real property.
b. A limitation on the grant is contained in another
statement of authority that became effective after the
statement containing the grant became effective, and a
certified copy of the later-effective statement is recorded in
the office for recording transfers of the real property.
7. Subject to subsection 3, if a certified copy of an
effective statement containing a limitation on the authority to
transfer real property held in the name of a limited liability
company is recorded in the office for recording transfers of
that real property, all persons are deemed to know of the
limitation.
8. Subject to subsection 9, an effective statement of
dissolution or a statement of termination is a cancellation
of any filed statement of authority for the purposes of
subsection 6 and is a limitation on authority for the purposes
-45-of subsection 7.
9. After a statement of dissolution becomes effective,
a limited liability company may deliver to the secretary of
state for filing and, if appropriate, the secretary of state
may record a statement of authority that is designated as
a post-dissolution statement of authority. The statement
operates as provided in subsections 6 and 7.
10. A statement of authority filed by the secretary of
state under section 489.205 489.207, subsection 1, is effective
until amended or canceled as provided in subsection 2, unless
an earlier cancellation date is specified in the statement.
11. An effective statement of denial operates as a
restrictive amendment under this section and may be recorded by
certified copy for the purposes of subsection 6, paragraph “a”.
Sec. 34. Section 489.304, Code 2023, is amended to read as
follows:
489.304 Liability of members and managers.
1. For debts, obligations, or other liabilities A debt,
obligation, or other liability of a limited liability
company, whether arising in contract, tort, or otherwise
all of the following apply: is solely the debt, obligation,
or other liability of the company. A member or manager is
not personally liable, directly or indirectly, by way of
contribution or otherwise, for a debt, obligation, or other
liability of the company solely by reason of being or acting
as a member or manager. This subsection applies regardless of
the dissolution of the company.
a. They are solely the debts, obligations, or other
liabilities of the company.
b. They do not become the debts, obligations, or other
liabilities of a member or manager solely by reason of the
member acting as a member or manager acting as a manager.
2. The failure of a limited liability company to observe any
particular formalities relating to the exercise of its powers
or management of its activities and affairs is not a ground
-46-for imposing liability on the members a member or managers
manager for the debts, obligations, a debt, obligation, or
other liabilities liability of the company.
Sec. 35. Section 489.401, Code 2023, is amended to read as
follows:
489.401 Becoming member.
1. If a limited liability company is to have only one member
upon formation, a the person becomes the a member as agreed by
that person and the organizer of the company or a majority of
organizers if more than one. That person and the organizer
may be, but need not be, different persons. If different, the
organizer acts on behalf of the initial member.
2. If a limited liability company is to have more than
one member upon formation, those persons become members as
agreed by the persons before the formation of the company. The
organizer acts on behalf of the persons in forming the company
and may be, but need not be, one of the persons.
3. If a limited liability company has no members upon
formation, a person becomes a member of the limited liability
company with the consent of the organizer or a majority of
the organizers if more than one. The organizers may consent
to more than one person simultaneously becoming the company’s
initial members After formation of a limited liability company,
a person becomes a member according to any of the following:
a. As provided in the operating agreement.
b. As the result of a transaction effective under subchapter
X.
c. With the affirmative vote or consent of all the members.
d. As provided in section 489.701, subsection 1, paragraph
“c”.
4. After formation of a limited liability company, a person
becomes a member upon A person may become a member without any
of the following:
a. As provided in the operating agreement Acquiring a
transferable interest.
-47- b. As the result of a transaction effective under article 10
Making or being obligated to make a contribution to the limited
liability company.
c. With the consent of all the members.
d. If, within ninety consecutive days after the company
ceases to have any members, all of the following occur:
(1) The last person to have been a member, or the legal
representative of that person, designates a person to become a
member.
(2) The designated person consents to become a member.
5. A person may become a member without acquiring a
transferable interest and without making or being obligated to
make a contribution to the limited liability company.
Sec. 36. Section 489.402, Code 2023, is amended to read as
follows:
489.402 Form of contribution.
A contribution may consist of tangible or intangible
property or other benefit to a limited liability company,
including money, services performed, promissory notes, other
agreements to contribute money or property, and contracts for
services to be performed property transferred to, services
performed for, or another benefit provided to the limited
liability company or an agreement to transfer property to,
perform services for, or provide another benefit to the
company.
Sec. 37. Section 489.403, Code 2023, is amended to read as
follows:
489.403 Liability for contributions.
1. A person’s obligation to make a contribution to a
limited liability company is not excused by the person’s
death, disability, termination, or other inability to perform
personally. If a person does not make a required contribution,
the person or the person’s estate is obligated to contribute
money equal to the value of the part of the contribution which
has not been made, at the option of the company.
-48- 2. A creditor of a limited liability company which extends
credit or otherwise acts in reliance on an obligation described
in subsection 1 may enforce the obligation If a person does not
fulfill an obligation to make a contribution other than money,
the person is obligated at the option of the limited liability
company to contribute money equal to the value of the part of
the contribution which has not been made.
3. An operating agreement may provide that the interest of
any member who fails to make a contribution that the member
is obligated to make is subject to specified penalties for,
or specified consequences of, such failure. The penalty or
consequence may take the form of reducing or eliminating
the defaulting member’s proportionate interest in a limited
liability company, subordinating the member’s interest to
that of a nondefaulting member, a forced sale of the member’s
interest, forfeiture of the member’s interest, the lending by
other members of the amount necessary to meet the member’s
commitment, a fixing of the value of the member’s interest
by appraisal or by formula and redemption, or sale of the
member’s interest at such value or other penalty or consequence
The obligation of a person to make a contribution may be
compromised only by the affirmative vote or consent of all the
members. If a creditor of a limited liability company extends
credit or otherwise acts in reliance on an obligation described
in subsection 1 without knowledge or notice of a compromise
under this subsection, the creditor may enforce the obligation.
4. An operating agreement may provide that the interest of
any member who fails to make a contribution that the member
is obligated to make is subject to specified penalties for,
or specified consequences of, such failure. The penalty or
consequence may take the form of reducing or eliminating
the defaulting member’s proportionate interest in a limited
liability company, subordinating the member’s interest to
that of a nondefaulting member, a forced sale of the member’s
interest, forfeiture of the member’s interest, the lending by
-49-other members of the amount necessary to meet the member’s
commitment, a fixing of the value of the member’s interest by
appraisal or by formula and redemption, or sale of the member’s
interest at such value or other penalty or consequence.
Sec. 38. Section 489.404, Code 2023, is amended to read as
follows:
489.404 Sharing of and right to distributions before
dissolution.
1. Any distributions distribution made by a limited
liability company before its dissolution and winding up must
be in equal shares among members and persons dissociated as
members, except to the extent necessary to comply with any a
transfer effective under section 489.502 and any charging order
in effect under section 489.503.
2. A person has a right to a distribution before the
dissolution and winding up of a limited liability company only
if the limited liability company decides to make an interim
distribution. A person’s dissociation does not entitle the
person to a distribution.
3. A person does not have a right to demand or receive a
distribution from a limited liability company in any form other
than money. Except as otherwise provided in section 489.708,
subsection 3 4, a limited liability company may distribute an
asset in kind only if each part of the asset is fungible with
each other part and each person receives a percentage of the
asset equal in value to the person’s share of distributions.
4. If a member or transferee becomes entitled to receive a
distribution, the member or transferee has the status of, and
is entitled to all remedies available to, a creditor of the
limited liability company with respect to the distribution.
However, the company’s obligation to make a distribution is
subject to offset for any amount owed to the company by the
member or a person dissociated as a member on whose account the
distribution is made.
Sec. 39. Section 489.405, Code 2023, is amended to read as
-50-follows:
489.405 Limitations on distribution.
1. A limited liability company shall not make a
distribution, including a distribution under section 489.708,
if after the distribution any of the following applies:
a. The limited liability company would not be able to pay
its debts as they become due in the ordinary course of the
company’s activities and affairs.
b. The limited liability company’s total assets would be
less than the sum of its total liabilities plus the amount that
would be needed, if the company were to be dissolved, and wound
up, and terminated at the time of the distribution, to satisfy
the preferential rights upon dissolution, and winding up, and
termination of members up of members and transferees whose
preferential rights are superior to those the rights of persons
receiving the distribution.
2. A limited liability company may base a determination
that a distribution is not prohibited under subsection 1 on
financial statements prepared on the basis of accounting
practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is
reasonable under the circumstances any of the following:
a. Financial statements prepared on the basis of
accounting practices and principles that are reasonable in the
circumstances.
b. A fair valuation or other method that is reasonable under
the circumstances.
3. Except as otherwise provided in subsection 5, the effect
of a distribution under subsection 1 is measured as follows:
a. In the case of a distribution by purchase, redemption, or
other acquisition of a transferable interest in the company,
as of the date money or other property is transferred or
debt incurred by the company as defined in section 489.102,
subsection 5, paragraph “a”, as of the earlier of any of the
following:
-51- (1) The date money or other property is transferred or debt
is incurred by the limited liability company.
(2) The date the person entitled to the distribution ceases
to own the interest or right being acquired by the limited
liability company in return for the distribution.
b. In the case of any other distribution of indebtedness, as
of the date the indebtedness is distributed.
b. c. In all other cases, as follows any of the following:
(1) The date that the distribution is authorized, if the
payment occurs within not later than one hundred twenty days
after that date.
(2) The date that the payment is made, if the payment occurs
more than one hundred twenty days after the distribution is
authorized.
4. A limited liability company’s indebtedness to a member
or transferee incurred by reason of a distribution made in
accordance with this section is at parity with the company’s
indebtedness to its general, unsecured creditors, except to the
extent subordinated by agreement.
5. A limited liability company’s indebtedness, including
indebtedness issued in connection with or as part of as a
distribution, is not a liability for purposes of subsection
1 if the terms of the indebtedness provide that payment of
principal and interest are is made only if and to the extent
that payment of a distribution could then be made to members
under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest on the
indebtedness is treated as a distribution, the effect of which
is measured on the date the payment is made.
6. In subsection 1, “distribution” does not include amounts
constituting reasonable compensation for present or past
services or reasonable payments made in the ordinary course of
business under a bona fide retirement plan or other benefits
program In measuring the effect of a distribution under section
489.708, the liabilities of a dissolved limited liability
-52-company do not include any claim that has been disposed of
under section 489.703, 489.704, or 489.706A.
Sec. 40. Section 489.406, Code 2023, is amended to read as
follows:
489.406 Liability for improper distributions.
1. Except as otherwise provided in subsection 2, if a member
of a member-managed limited liability company or a manager
of a manager-managed limited liability company consents to
a distribution made in violation of section 489.405 and in
consenting to the distribution fails to comply with section
489.409, the member or manager is personally liable to the
company for the amount of the distribution that which exceeds
the amount that could have been distributed without the
violation of section 489.405.
2. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of the
authority and responsibility to consent to distributions and
imposes that authority and responsibility on one or more other
members, the liability stated in subsection 1 applies to the
other members and not the member that the operating agreement
relieves of the authority and responsibility.
3. A person that receives a distribution knowing that the
distribution to that person was made in violation of violated
section 489.405 is personally liable to the limited liability
company but only to the extent that the distribution received
by the person exceeded the amount that could have been properly
paid under section 489.405.
4. A person against which an action is commenced because
the person is liable under subsection 1 may do all of the
following:
a. Implead any other person that is subject to liability
liable under subsection 1 and seek to compel enforce a right of
contribution from the person.
b. Implead any person that received a distribution in
violation of subsection 3 and seek to compel enforce a right of
-53- contribution from the person in the amount the person received
in violation of subsection 3.
5. An action under this section is barred if not
unless commenced within not later than two years after the
distribution.
Sec. 41. Section 489.407, Code 2023, is amended to read as
follows:
489.407 Management of limited liability company.
1. A limited liability company is a member-managed limited
liability company unless the operating agreement does any of
the following:
a. Expressly provides that any of the following apply:
(1) The limited liability company is or will be
“manager-managed”.
(2) The limited liability company is or will be “managed by
managers”.
(3) Management of the limited liability company is or will
be “vested in managers”.
b. Includes words of similar import.
2. In a member-managed limited liability company, all of the
following rules apply:
a. The Except as expressly provided in this chapter, the
management and conduct of the limited liability company are
vested in the members.
b. Each member has equal rights in the management and
conduct of the limited liability company’s activities and
affairs.
c. A difference arising among members as to a matter in the
ordinary course of the activities and affairs of the limited
liability company may be decided by a majority of the members.
d. An act outside the ordinary course of the activities
of the company, including selling, leasing, exchanging, or
otherwise disposing of all, or substantially all, of the
company’s property, with or without the goodwill, may be
undertaken only with the consent of all members The affirmative
-54-vote or consent of all the members is required to do any of the
following:
(1) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of the limited liability company’s property,
with or without good will, outside the ordinary course of the
company’s activities.
(2) Undertake an act outside the ordinary course of the
activities and affairs of the limited liability company.
(3) Approve a merger, interest exchange, conversion, or
domestication under subchapter X.
(4) Amend the operating agreement.
e. The operating agreement may be amended only with the
consent of all members.
3. In a manager-managed limited liability company, all of
the following rules apply:
a. Except as otherwise expressly provided in this chapter,
any matter relating to the activities and affairs of the
limited liability company is decided exclusively by the
managers manager, or, if there is more than one manager, by a
majority of the managers.
b. Each manager has equal rights in the management and
conduct of the activities and affairs of the limited liability
company.
c. A difference arising among managers as to a matter in the
ordinary course of the activities of the company may be decided
by a majority of the managers.
d. c. The affirmative vote or consent of all members is
required to do any of the following:
(1) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of the limited liability company’s property,
with or without the goodwill, outside the ordinary course of
the company’s activities.
(2) Approve a merger, conversion, or domestication under
article 10 Undertake any other act outside the ordinary course
of the limited liability company’s activities and affairs.
-55- (3) Undertake any other act outside the ordinary course of
the company’s activities Approve a merger, interest exchange,
conversion, or domestication under subchapter X.
(4) Amend the operating agreement.
e. d. A manager may be chosen at any time by the
affirmative vote or consent of a majority of the members and
remains a manager until a successor has been chosen, unless the
manager at an earlier time resigns, is removed, or dies, or, in
the case of a manager that is not an individual, terminates. A
manager may be removed at any time by the affirmative vote or
consent of a majority of the members without notice or cause.
f. e. A person need not be a member to be a manager, but
the dissociation of a member that is also a manager removes the
person as a manager. If a person that is both a manager and
a member ceases to be a manager, that cessation does not by
itself dissociate the person as a member.
g. f. A person’s ceasing to be a manager does not discharge
any debt, obligation, or other liability to the limited
liability company or members which the person incurred while
a manager.
4. An action requiring the vote or consent of members under
this chapter may be taken without a meeting, and a member may
appoint a proxy or other agent to vote, consent, or otherwise
act for the member by signing an appointing record, personally
or by the member’s agent.
5. The dissolution of a limited liability company does not
affect the applicability of this section. However, a person
that wrongfully causes dissolution of the company loses the
right to participate in management as a member and a manager.
6. This chapter does not entitle a member to remuneration
for services performed for a member-managed limited liability
company, except for reasonable compensation for services
rendered in winding up the activities of the company A limited
liability company shall reimburse a member for an advance to
the company beyond the amount of capital the member agreed to
-56-contribute.
7. A payment or advance made by a member which gives rise
to a limited liability company obligation under subsection 6
or section 489.408, subsection 1, constitutes a loan to the
company which accrues interest from the date of the payment or
advance.
8. A member is not entitled to remuneration for services
performed for a member-managed limited liability company,
except for reasonable compensation for services rendered in
winding up the activities of the company.
Sec. 42. Section 489.407A, Code 2023, is amended to read as
follows:
489.407A Real estate interest transferred by limited
liability company or foreign limited liability company.
1. A transfer of an interest in real estate situated in
this state held by a limited liability company or a registered
foreign limited liability company authorized to transact do
business in this state is subject to the provisions of this
section.
2. a. In a member-managed limited liability company, a
transfer of an interest in real estate held by the company may
be undertaken by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of all members.
(2) As provided in a statement of authority filed by the
limited liability company with the secretary of state and
the recorder of the county where the real estate is situated
pursuant to section 489.302.
b. A requirement of paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state
held by a member-managed limited liability company, whether or
not the transfer is in the ordinary course of the company’s
business.
3. a. In a manager-managed limited liability company, a
-57-transfer of an interest in real estate held by the company may
be undertaken by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of a majority of all managers.
(2) As provided in a statement of authority filed by the
limited liability company with the secretary of state and
the recorder of the county where the real estate is situated
pursuant to section 489.302.
b. A requirement in paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state
held by a manager-managed limited liability company, whether
or not the transfer is in the ordinary course of the company’s
business.
Sec. 43. Section 489.408, Code 2023, is amended to read as
follows:
489.408 Indemnification Reimbursement, indemnification,
advancement, and insurance.
1. A limited liability company shall reimburse a member of
a member-managed limited liability company or the manager of
a manager-managed limited liability company for any payment
made and indemnify for any debt, obligation, or other liability
incurred by a member of a member-managed company or the manager
of a manager-managed company in the course of the member’s
or manager’s activities on behalf of the company, if, in
making the payment or incurring the debt, obligation, or other
liability, the member or manager complied with the duties
stated in sections 489.405 and 489.409 by the member or manager
in the course of the member’s or manager’s activities on behalf
of the company, if the member or manager complied with sections
489.405, 489.407, and 489.409 in making the payment.
2. A limited liability company may purchase and maintain
insurance on behalf of a member or manager of the company
against liability asserted against or incurred by the member or
manager in that capacity or arising from that status even if,
-58-under section 489.110, subsection 7, the operating agreement
could not eliminate or limit the person’s liability to the
company for the conduct giving rise to the liability A limited
liability company shall indemnify and hold harmless a person
with respect to any claim or demand against the person and any
debt, obligation, or other liability incurred by the person by
reason of the person’s former or present capacity as a member
or manager, if the claim, demand, debt, obligation, or other
liability does not arise from the person’s breach of section
489.405, 489.407, or 489.409.
3. In the ordinary course of its activities and affairs,
a limited liability company may advance reasonable expenses,
including attorney’s fees and costs, incurred by a person
in connection with a claim or demand against the person by
reason of the person’s former or present capacity as a member
or manager, if the person promises to repay the company if
the person ultimately is determined not to be entitled to be
indemnified under subsection 2.
4. A limited liability company may purchase and maintain
insurance on behalf of a member or manager against liability
asserted against or incurred by the member or manager in that
capacity or arising from that status even if, under section
489.110, subsection 3, paragraph “g”, the operating agreement
could not eliminate or limit the person’s liability to the
company for the conduct giving rise to the liability.
Sec. 44. Section 489.409, Code 2023, is amended to read as
follows:
489.409 Standards of conduct for members and managers.
1. A member of a member-managed limited liability company
owes to the company and, subject to section 489.901, subsection
2, the other members the fiduciary duties of loyalty and care
stated in subsections 2 and 3.
2. The fiduciary duty of loyalty of a member in a
member-managed limited liability company includes all of the
following duties:
-59- a. To account to the limited liability company and to hold
as trustee for it any property, profit, or benefit derived by
the member regarding any of the following:
(1) In the conduct or winding up of the limited liability
company’s activities and affairs.
(2) From a use by the member of the limited liability
company’s property.
(3) From the appropriation of a limited liability company
opportunity.
b. To refrain from dealing with the limited liability
company in the conduct or winding up of the company’s
activities and affairs as or on behalf of a person having an
interest adverse to the company.
c. To refrain from competing with the limited liability
company in the conduct of the company’s activities and affairs
before the dissolution of the company.
3. Subject to the business judgment rule as stated in
subsection 7, the duty of care of a member of a member-managed
limited liability company in the conduct and winding up of the
company’s activities is to act with the care that a person
in a like position would reasonably exercise under similar
circumstances and in a manner the member reasonably believes to
be in the best interests of the company. In discharging this
duty, a member may rely in good faith upon opinions, reports,
statements, or other information provided by another person
that the member reasonably believes is a competent and reliable
source for the information The duty of care of a member of
a member-managed limited liability company in the conduct
or winding up of the company’s activities and affairs is to
refrain from engaging in grossly negligent or reckless conduct,
willful or intentional misconduct, or knowing violation of law.
4. A member in a member-managed limited liability company
or a manager-managed limited liability company shall discharge
the duties under this chapter or under the operating agreement
and exercise any rights consistently with the contractual
-60-obligation of good faith and fair dealing A member shall
discharge the duties and obligations under this chapter
or under the operating agreement and exercise any rights
consistently with the contractual obligation of good faith and
fair dealing.
5. It is a defense to a claim under subsection 2, paragraph
“b”, and any comparable claim in equity or at common law that
the transaction was fair to the limited liability company A
member does not violate a duty or obligation under this chapter
or under the operating agreement solely because the member’s
conduct furthers the member’s own interest.
6. All of the members of a member-managed limited liability
company or a manager-managed limited liability company may
authorize or ratify, after full disclosure of all material
facts, a specific act or transaction that otherwise would
violate the duty of loyalty.
7. a. A member satisfies the duty of care in subsection 3
if all of the following apply: It is a defense to a claim under
subsection 2, paragraph “b”, and any comparable claim in equity
or at common law that the transaction was fair to the limited
liability company.
(1) The member is not interested in the subject matter of
the business judgment.
(2) The member is informed with respect to the subject
of the business judgment to the extent the member reasonably
believes to be appropriate in the circumstances.
(3) The member has a rational basis for believing that
the business judgment is in the best interests of the limited
liability company.
b. A person challenging the business judgment of a member
has the burden of proving a breach of the duty of care, and
in a damage action, the burden of proving that the breach was
the legal cause of damage suffered by the limited liability
company.
8. In a manager-managed limited liability company, all of
-61-the following rules apply: If, as permitted by subsection 6
or subsection 9, paragraph “f”, or the operating agreement, a
member enters into a transaction with the limited liability
company which otherwise would be prohibited by subsection 2,
paragraph “b”, the member’s rights and obligations arising from
the transaction are the same as those of a person that is not a
member.
a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
managers and not the members.
b. The duty stated under subsection 2, paragraph “c”,
continues until winding up is completed.
c. Subsection 4 applies to the members and managers.
d. Subsection 6 applies only to the members.
e. A member does not have any fiduciary duty to the company
or to any other member solely by reason of being a member.
9. In a manager-managed limited liability company, all of
the following rules apply:
a. Subsections 1, 2, 3, and 7 apply to the manager or
managers and not the members.
b. The duty stated under subsection 2, paragraph “c”,
continues until winding up is completed.
c. Subsection 4 applies to managers and members.
d. Subsection 5 applies only to members.
e. The power to ratify under subsection 6 may be exercised
only by the members.
f. Subject to subsection 4, a member does not have any duty
to the limited liability company or to any other member solely
by reason of being a member.
Sec. 45. Section 489.410, Code 2023, is amended to read as
follows:
489.410 Right of members, managers, and dissociated members
to information Rights to information of member, manager, and
person dissociated as member.
1. In a member-managed limited liability company, all of the
following rules apply:
-62- a. On reasonable notice, a member may inspect and copy
during regular business hours, at a reasonable location
specified by the limited liability company, any record
maintained by the company regarding the company’s activities,
affairs, financial condition, and other circumstances, to the
extent the information is material to the member’s rights and
duties under the operating agreement or this chapter.
b. The limited liability company shall furnish to each
member all of the following:
(1) Without demand, any information concerning the limited
liability company’s activities, affairs, financial condition,
and other circumstances which the company knows and is material
to the proper exercise of the member’s rights and duties under
the operating agreement or this chapter, except to the extent
the company can establish that it reasonably believes the
member already knows the information.
(2) On demand, any other information concerning the limited
liability company’s activities, affairs, financial condition,
and other circumstances, except to the extent the demand or for
the information demanded is unreasonable or otherwise improper
under the circumstances.
c. The duty to furnish information under paragraph “b” also
applies to each member to the extent the member knows any of
the information described in paragraph “b”.
2. In a manager-managed limited liability company, all of
the following rules apply:
a. The informational rights stated in subsection 1 and
the duty stated in subsection 1, paragraph “c”, apply to the
managers and not the members.
b. During regular business hours and at a reasonable
location specified by the limited liability company, a
member may obtain from the company and inspect and copy full
information regarding the activities, affairs, financial
condition, and other circumstances of the company as is just
and reasonable if all of the following apply:
-63- (1) The member seeks the information for a purpose material
reasonably related to the member’s interest as a member.
(2) The member makes a demand in a record received by
the limited liability company, describing with reasonable
particularity the information sought and the purpose for
seeking the information.
(3) The information sought is directly connected to the
member’s purpose.
c. Within Not later than ten days after receiving a demand
pursuant to paragraph “b”, subparagraph (2), the limited
liability company shall in a record inform in a record the
member that made the demand that includes all of the following:
(1) Of the What information that the limited liability
company will provide in response to the demand and when and
where the company will provide the information.
(2) If the company declines to provide any demanded
information, the company’s reasons for declining The limited
liability company’s reasons for declining, if the company
declines to provide any demanded information.
d. Whenever this chapter or an operating agreement provides
for a member to vote on or give or withhold consent to a matter,
before the vote is cast or consent is given or withheld, the
limited liability company shall, without demand, provide the
member with all information that is known to the company and is
material to the member’s decision.
3. On ten days’ demand made in a record received by a
limited liability company, a dissociated member may have access
to information to which the person was entitled while a member
if the information pertains to the period during which the
person was a member, the person seeks the information in good
faith, and the person satisfies the requirements imposed on
a member by subsection 2, paragraph “b”. The company shall
respond to a demand made pursuant to this subsection in the
manner provided in subsection 2, paragraph “c” Subject to
subsection 8, on ten days’ demand made in a record received by
-64-a limited liability company, a person dissociated as a member
may have access to the information to which the person was
entitled while a member if all of the following apply:
a. The information pertains to the period during which the
person was a member.
b. The person seeks the information in good faith.
c. The person satisfies the requirements imposed on a member
by subsection 2, paragraph “b”.
4. A limited liability company may charge a person that
makes a demand under this section the reasonable costs of
copying, limited to the costs of labor and material shall
respond to a demand made pursuant to subsection 3 in the manner
provided in subsection 2, paragraph “c”.
5. A member or dissociated member may exercise rights
under this section through an agent or, in the case of an
individual under legal disability, a legal representative. Any
restriction or condition imposed by the operating agreement
or under subsection 7 applies both to the agent or legal
representative and the member or dissociated member A limited
liability company may charge a person that makes a demand under
this section the reasonable costs of copying, limited to the
costs of labor and material.
6. The rights under this section do not extend to a person
as transferee A member or person dissociated as a member may
exercise the rights under this section through an agent or,
in the case of an individual under legal disability, a legal
representative. Any restriction or condition imposed by the
operating agreement or under subsection 8 applies both to the
agent or legal representative and to the member or person
dissociated as a member.
7. In addition to any restriction or condition stated
in its operating agreement, a limited liability company, as
a matter within the ordinary course of its activities, may
impose reasonable restrictions and conditions on access to
and use of information to be furnished under this section,
-65-including designating information confidential and imposing
nondisclosure and safeguarding obligations on the recipient.
In a dispute concerning the reasonableness of a restriction
under this subsection, the company has the burden of proving
reasonableness Subject to section 489.504, the rights under
this section do not extend to a person as transferee.
8. In addition to any restriction or condition stated in its
operating agreement, a limited liability company, as a matter
within the ordinary course of its activities and affairs, may
impose reasonable restrictions and conditions on access to
and use of information to be furnished under this section,
including designating information confidential and imposing
nondisclosure and safeguarding obligations on the recipient.
In a dispute concerning the reasonableness of a restriction
under this subsection, the company has the burden of proving
reasonableness.
Sec. 46. Section 489.502, Code 2023, is amended to read as
follows:
489.502 Transfer of transferable interest.
1. For Subject to section 489.503, subsection 6, for a
transfer, in whole or in part, all of the following applies to
a transferable interest:
a. It is permissible.
b. It does not by itself cause a member’s person’s
dissociation as a member or a dissolution and winding up of the
limited liability company’s activities and affairs.
c. Subject to section 489.504, it does not entitle the
transferee to do any of the following:
(1) Participate in the management or conduct of the limited
liability company’s activities and affairs.
(2) Except as otherwise provided in subsection 3, have
access to records or other information concerning the limited
liability company’s activities and affairs.
2. A transferee has the right to receive, in accordance
with the transfer, distributions to which the transferor would
-66-otherwise be entitled.
3. In a dissolution and winding up of a limited liability
company, a transferee is entitled to an account of the
company’s transactions only from the date of dissolution.
4. A transferable interest may be evidenced by a certificate
of the interest issued by the a limited liability company in a
record, and, subject to this section, the interest represented
by the certificate may be transferred by a transfer of the
certificate.
5. A limited liability company need not give effect to a
transferee’s rights under this section until the company knows
or has notice of the transfer.
6. A transfer of a transferable interest in violation of a
restriction on transfer contained in the operating agreement
or another agreement to which the transferor is a party is
ineffective as to a person having notice of the restriction at
the time of transfer if the intended transferee has knowledge
or notice of the restriction at the time of transfer.
7. Except as otherwise provided in section 489.602,
subsection 4 5, paragraph “b”, when if a member transfers a
transferable interest, the transferor retains the rights of a
member other than the transferable interest in distributions
transferred and retains all duties and obligations of a member.
8. When If a member transfers a transferable interest to a
person that becomes a member with respect to the transferred
interest, the transferee is liable for the member’s obligations
under section sections 489.403 and section 489.406, subsection
3, 489.406 known to the transferee when the transferee becomes
a member.
Sec. 47. Section 489.503, Code 2023, is amended to read as
follows:
489.503 Charging order.
1. On application by a judgment creditor of a member
or transferee, a court may enter a charging order against
the transferable interest of the judgment debtor for the
-67-unsatisfied amount of the judgment. A Except as otherwise
provided in subsection 6, a charging order constitutes a lien
on a judgment debtor’s transferable interest and requires the
limited liability company to pay over to the person to which
the charging order was issued any distribution that would
otherwise would be paid to the judgment debtor.
2. To the extent necessary to effectuate the collection
of distributions pursuant to a charging order in effect under
subsection 1, the court may do all of the following:
a. Appoint a receiver of the distributions subject to
the charging order, with the power to make all inquiries the
judgment debtor might have made.
b. Make all other orders necessary to give effect to the
charging order.
3. Upon a showing that distributions under a charging
order will not pay the judgment debt within a reasonable
time, the court may foreclose the lien and order the sale of
the transferable interest. The Except as otherwise provided
in subsection 6, the purchaser at the foreclosure sale only
obtains only the transferable interest, does not thereby become
a member, and is subject to section 489.502.
4. At any time before foreclosure under subsection 3, the
member or transferee whose transferable interest is subject to
a charging order under subsection 1 may extinguish the charging
order by satisfying the judgment and filing a certified copy of
the satisfaction with the court that issued the charging order.
5. At any time before foreclosure under subsection 3,
a limited liability company or one or more members whose
transferable interests are not subject to the charging order
may pay to the judgment creditor the full amount due under the
judgment and thereby succeed to the rights of the judgment
creditor, including the charging order.
6. This chapter does not deprive any member or transferee of
the benefit of any exemption laws applicable to the member’s
or transferee’s transferable interest If a court orders
-68-foreclosure of a charging order lien against the sole member of
a limited liability company all of the following apply:
a. The court shall confirm the sale.
b. The purchaser at the sale obtains the member’s entire
interest, not only the member’s transferable interest.
c. The purchaser thereby becomes a member.
d. The person whose interest was subject to the foreclosed
charging order is dissociated as a member.
7. This section provides the exclusive remedy by which
a person seeking to enforce a judgment against a member or
transferee may, in the capacity of judgment creditor, satisfy
the judgment from the judgment debtor’s transferable interest
This chapter does not deprive any member or transferee of the
benefit of any exemption law applicable to the transferable
interest of the member or transferee.
8. This section provides the exclusive remedy by which a
person seeking in the capacity of judgment creditor to enforce
a judgment against a member or transferee may satisfy the
judgment from the judgment debtor’s transferable interest.
Sec. 48. Section 489.504, Code 2023, is amended to read as
follows:
489.504 Power of personal representative of deceased member.
If a member dies, the deceased member’s personal legal
representative or other legal representative may exercise all
of the following:
1. Therights of a transferee provided in section 489.502,
subsection 3, and, for.
2. Forthe purposes of settling the estate, the rights of a
current the deceased member had under section 489.410.
Sec. 49. Section 489.601, Code 2023, is amended to read as
follows:
489.601 Member’s power Power to dissociate as a member —
wrongful dissociation.
1. A person has the power to dissociate as a member at any
time, rightfully or wrongfully, by withdrawing as a member by
-69-express will under section 489.602, subsection 1.
2. A person’s dissociation from a limited liability company
as a member is wrongful only if any of the following applies to
the dissociation:
a. It is in breach of an express provision of the operating
agreement.
b. It occurs before the termination completion of the
winding up of the limited liability company and any of the
following applies:
(1) The person withdraws as a member by express will.
(2) The person is expelled as a member by judicial order
under section 489.602, subsection 5 6.
(3) The person is dissociated under section 489.602,
subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
8.
(4) In the case of a person that is not a trust other than
a business trust, an estate, or an individual, the person
is expelled or otherwise dissociated as a member because it
willfully dissolved or terminated.
3. A person that wrongfully dissociates as a member is
liable to the limited liability company and, subject to
section 489.901, to the other members for damages caused by the
dissociation. The liability is in addition to any other debt,
obligation, or other liability of the member to the company or
the other members.
Sec. 50. Section 489.602, Code 2023, is amended to read as
follows:
489.602 Events causing dissociation.
A person is dissociated as a member from a limited liability
company when any of the following applies:
1. The limited liability company knows or has notice of
the person’s express will to withdraw as a member, but, if the
person specified a withdrawal date later than the date the
limited liability company knew or had notice, on that later
date.
-70- 2. An event stated in the operating agreement as causing the
person’s dissociation occurs.
3. The person is expelled as a member pursuant to the
operating agreement The person’s entire interest is transferred
in a foreclosure sale under section 489.503, subsection 6.
4. The person is expelled as a member by the unanimous
consent of the other members if any of the following applies:
pursuant to the operating agreement.
a. It is unlawful to carry on the company’s activities with
the person as a member.
b. There has been a transfer of all of the person’s
transferable interest in the company, other than any of the
following:
(1) A transfer for security purposes.
(2) A charging order in effect under section 489.503 which
has not been foreclosed.
c. The person is a corporation and, within ninety days
after the company notifies the person that it will be expelled
as a member because the person has filed a certificate of
dissolution or the equivalent, its charter has been revoked,
or its right to conduct business has been suspended by
the jurisdiction of its incorporation, the certificate of
dissolution has not been revoked or its charter or right to
conduct business has not been reinstated.
d. The person is a limited liability company or partnership
that has been dissolved and whose business is being wound up.
5. On application by the company, the person is expelled
as a member by judicial order because the person has done any
of the following The person is expelled as a member by the
affirmative vote or consent of all the other members if any of
the following apply:
a. Has engaged, or is engaging, in wrongful conduct that
has adversely and materially affected, or will adversely and
materially affect, the company’s activities It is unlawful to
carry on the limited liability company’s activities and affairs
-71-with the person as a member.
b. Has willfully or persistently committed, or is willfully
and persistently committing, a material breach of the
operating agreement or the person’s duties or obligations under
section 489.409 There has been a transfer of all the person’s
transferable interest in the limited liability company, other
than any of the following:
(1) A transfer for security purposes.
(2) A charging order in effect under section 489.503 which
has not been foreclosed.
c. Has engaged in, or is engaging in, conduct relating
to the company’s activities which makes it not reasonably
practicable to carry on the activities with the person as a
member The person is an entity and all of the following apply:
(1) The limited liability company notifies the person that
it will be expelled as a member because the person has filed
a statement of dissolution or the equivalent, the person has
been administratively dissolved, the person’s charter or the
equivalent has been revoked, or the person’s right to conduct
business has been suspended by the person’s jurisdiction of
formation.
(2) Not later than ninety days after the notification,
the statement of dissolution or the equivalent has not been
withdrawn, rescinded, or revoked, the person has not been
reinstated, or the person’s charter or the equivalent or right
to conduct business has not been reinstated.
d. The person is an unincorporated entity that has been
dissolved and whose activities and affairs are being wound up.
6. In the case of a person who is an individual, any of
the following applies On application by the limited liability
company or a member in a direct action under section 489.901,
the person is expelled as a member by judicial order because
any of the following apply:
a. The person dies has engaged or is engaging in wrongful
conduct that has affected adversely and materially, or will
-72-affect adversely and materially, the company’s activities and
affairs.
b. In a member-managed limited liability company, any of
the following applies: The person has committed willfully or
persistently, or is committing willfully or persistently,
a material breach of the operating agreement or a duty or
obligation under section 489.409.
(1) A guardian or general conservator for the person is
appointed.
(2) There is a judicial order that the person has otherwise
become incapable of performing the person’s duties as a member
under this chapter or the operating agreement.
c. The person has engaged or is engaging in conduct relating
to the limited liability company’s activities and affairs which
makes it not reasonably practicable to carry on the activities
and affairs with the person as a member.
7. In a member-managed limited liability company, the
person does any of the following In the case of an individual
any of the following apply:
a. Becomes a debtor in bankruptcy The individual dies.
b. Executes an assignment for the benefit of creditors In a
member-managed limited liability company any of the following
apply:
(1) A guardian or general conservator for the individual is
appointed.
(2) A court orders that the individual has otherwise become
incapable of performing the individual’s duties as a member
under this chapter or the operating agreement.
c. Seeks, consents to, or acquiesces in the appointment of
a trustee, receiver, or liquidator of the person or of all or
substantially all of the person’s property.
8. In the case of a person that is a trust or is acting as
a member by virtue of being a trustee of a trust, the trust’s
entire transferable interest in the company is distributed In a
member-managed limited liability company, any of the following
-73-apply:
a. The person becomes a debtor in bankruptcy.
b. The person signs an assignment for the benefit of
creditors.
c. The person seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the person
or of all or substantially all the person’s property.
9. In the case of a person that is an estate or is acting
as a member by virtue of being a personal representative of
an estate, the estate’s entire transferable interest in the
company is distributed In the case of a person that is a
testamentary or inter vivos trust or is acting as a member by
virtue of being a trustee of such a trust, the trust’s entire
transferable interest in the limited liability company is
distributed.
10. In the case of a member that is not an individual,
partnership, limited liability company, corporation, trust, or
estate, the termination of the member In the case of a person
that is an estate or is acting as a member by virtue of being
a personal representative of an estate, the estate’s entire
transferable interest in the limited liability company is
distributed.
11. The company participates in a merger under article 10,
if any of the following applies: In the case of a person that
is not an individual, the existence of the person terminates.
a. The company is not the surviving entity.
b. Otherwise as a result of the merger, the person ceases
to be a member.
12. The company participates in a conversion under article
10 The limited liability company participates in a merger under
subchapter X and any of the following apply:
a. The limited liability company is not the surviving
entity.
b. Otherwise as a result of the merger, the person ceases
to be a member.
-74- 13. The company participates in a domestication under
article 10, if, as a result of the domestication, the
person ceases to be a member The limited liability company
participates in an interest exchange under subchapter X and,
as a result of the interest exchange, the person ceases to be a
member.
14. The limited liability company terminates participates
in a conversion under subchapter X.
15. The limited liability company participates in a
domestication under subchapter X and, as a result of the
domestication, the person ceases to be a member.
16. The limited liability company dissolves and completes
winding up.
Sec. 51. Section 489.603, Code 2023, is amended to read as
follows:
489.603 Effect of person’s dissociation as member.
1. When If a person is dissociated as a member, of a limited
liability company, all of the following apply:
a. The person’s right to participate as a member in the
management and conduct of the limited liability company’s
activities and affairs terminates.
b. If the company is member-managed, the person’s fiduciary
duties as a member end with regard to matters arising and
events occurring after the person’s dissociation The person’s
duties and obligations under section 489.409 as a member end
with regard to matters arising and events occurring after the
person’s dissociation.
c. Subject to section 489.504 and article 10 subchapter X,
any transferable interest owned by the person in the person’s
capacity as a member immediately before dissociation in the
person’s capacity as a member is owned by the person solely as
a transferee.
2. A person’s dissociation as a member of a limited
liability company does not of itself discharge the person from
any debt, obligation, or other liability to the company or the
-75-other members which the person incurred while a member.
Sec. 52. Section 489.604, Code 2023, is amended to read as
follows:
489.604 Member’s power to dissociate under certain
circumstances.
1. If the certificate of organization or an operating
agreement does not specify the time or the events upon the
happening of which a member may dissociate from a limited
liability company, a member may dissociate from the limited
liability company in the event any amendment to the certificate
of organization or operating agreement that is adopted over
the member’s written dissent adversely affects the rights or
preferences of the dissenting member’s transferable interest
in any of the ways described in paragraphs “a” through “f”.
A dissociation in the event of such dissent and adverse
effect is deemed to have occurred as of the effective date
of the amendment, if the member gives notice to the limited
liability company not more than sixty days after the date of
the amendment. In valuing the member’s distribution pursuant
to this subsection, any depreciation in anticipation of the
amendment shall be excluded. An amendment that does any of the
following is subject to this section:
a. Alters or abolishes a member’s right to receive a
distribution.
b. Alters or abolishes a member’s right to voluntarily
dissociate.
c. Alters or abolishes a member’s right to vote on any
matter, except as the rights may be altered or abolished
through the acceptance of contributions or the making of
contribution agreements.
d. Alters or abolishes a member’s preemptive right to make
contributions.
e. Establishes or changes the conditions for or consequences
of expulsion.
f. Waives the application of this section to the limited
-76-liability company.
2. A member dissociating from a limited liability company
under this section is not liable for damages for the breach of
any agreement not to withdraw.
3. This section applies to a limited liability company
whose original articles of organization or certificate of
organization is filed with the secretary of state on or after
July 1, 1997.
4. This section applies to a limited liability company whose
original articles of organization are filed with the secretary
of state and effective on or prior to June 30, 1997, if such
company’s operating agreement provides that it is subject to
this section.
5. The operating agreement of a limited liability company
may waive the applicability of this section to the company and
its members.
Sec. 53. Section 489.701, Code 2023, is amended to read as
follows:
489.701 Events causing dissolution.
1. A limited liability company is dissolved, and its
activities and affairs must be wound up, upon the occurrence
of any of the following:
a. An event or circumstance that the operating agreement
states causes dissolution.
b. The affirmative vote or consent of all the members.
c. Once After the limited liability company has at least
one member, the passage of that member and any other member
dissociate, and ninety consecutive days pass during which the
company has no members., unless before the end of the period
all of the following apply:
(1) Consent to admit at least one specified person as a
member is given by transferees owning the rights to receive
a majority of distributions as transferees at the time the
consent is to be effective.
(2) At least one person becomes a member in accordance with
-77-the consent.
d. On application by a member, the entry by a the district
court of an order dissolving the limited liability company on
the grounds that any of the following applies:
(1) The conduct of all or substantially all of the limited
liability company’s activities and affairs is unlawful.
(2) It is not reasonably practicable to carry on the limited
liability company’s activities and affairs in conformity with
the certificate of organization and the operating agreement.
(3) The managers or those members in control of the limited
liability company conduct themselves according to any of the
following:
(a) Have acted, are acting, or will act in a manner that is
illegal or fraudulent.
(b) Have acted or are acting in a manner that is oppressive
and was, is, or will be directly harmful to the applicant.
e. On application by a member or transferee, the entry by
a district court of an order dissolving the company on the
grounds that the managers or those members in control of the
company have done any of the following: The signing and filing
of a statement of administrative dissolution by the secretary
of state under section 489.705.
(1) Have acted, are acting, or will act in a manner that is
illegal or fraudulent.
(2) Have acted or are acting in a manner that is oppressive
and was, is, or will be directly harmful to the applicant.
2. In a proceeding brought under subsection 1, paragraph
“e”, “d”, subparagraph (3), the district court may order a
remedy other than dissolution.
Sec. 54. Section 489.701A, Code 2023, is amended to read as
follows:
489.701A Rescinding dissolution.
1. A limited liability company may rescind its dissolution,
unless a statement of termination applicable to the company has
become effective, a the district court has entered an order
-78-under section 489.701, subsection 1, paragraph “d”, dissolving
the company, or the secretary of state has dissolved the
company under section 489.705.
2. Rescinding dissolution under this section requires all
of the following:
a. The affirmative vote or consent of each member.
b. If the limited liability company has delivered to the
secretary of state for filing a statement of dissolution and
any of the following applies apply:
(1) If the statement has not become effective, delivery to
the secretary of state for filing of a statement of withdrawal
under section 489.205 489.208A applicable to the statement of
dissolution.
(2) If the statement of dissolution has become effective,
delivery to the secretary of state for filing of a statement of
rescission stating the name of the limited liability company
and that dissolution has been rescinded under this section.
3. If a limited liability company rescinds its dissolution
all of the following apply:
a. The limited liability company shall resume resumes
carrying on its activities and affairs as if the dissolution
had never occurred.
b. Subject to paragraph “c”, any liability incurred by the
limited liability company after the dissolution and before
the rescission has become effective shall be determined as if
dissolution had never occurred.
c. The rights of a third party arising out of conduct in
reliance on the dissolution before the third party knew or had
notice of the rescission must not be adversely affected.
Sec. 55. Section 489.702, Code 2023, is amended to read as
follows:
489.702 Winding up.
1. A dissolved limited liability company shall wind up its
activities and affairs, and except as otherwise provided in
section 489.701A, the company continues after dissolution only
-79-for the purpose of winding up.
2. In winding up its activities and affairs, all of the
following apply to a limited liability company:
a. It shall discharge the limited liability company’s debts,
obligations, or and other liabilities, settle and close the
company’s activities and affairs, and marshal and distribute
the assets of the company.
b. It may do all of the following:
(1) Deliver to the secretary of state for filing a statement
of dissolution stating the name of the limited liability
company and that the company is dissolved.
(2) Preserve the limited liability company activities,
affairs, and property as a going concern for a reasonable time.
(3) Prosecute and defend actions and proceedings, whether
civil, criminal, or administrative.
(4) Transfer the limited liability company’s property.
(5) Settle disputes by mediation or arbitration.
(6) Deliver to the secretary of state for filing a statement
of termination stating the name of the limited liability
company and that the company is terminated.
(7) Perform other acts necessary or appropriate to the
winding up.
3. If a dissolved limited liability company has no members,
the legal representative of the last person to have been a
member may wind up the activities and affairs of the company.
If the person does so, the person has the powers of a sole
manager under section 489.407, subsection 3, and is deemed to
be a manager for the purposes of section 489.304, subsection
1, paragraph “b”.
4. If the legal representative under subsection 3 declines
or fails to wind up the limited liability company’s activities
and affairs, a person may be appointed to do so by the consent
of transferees owning a majority of the rights to receive
distributions as transferees at the time the consent is to be
effective. All of the following apply to a person appointed
-80-under this subsection:
a. The person has the powers of a sole manager under section
489.407, subsection 3, and is deemed to be a manager for the
purposes of section 489.304, subsection 1, paragraph “b”.
b. The person shall deliver promptly deliver to the
secretary of state for filing an amendment to the limited
liability company’s certificate of organization to do stating
all of the following:
(1) State that That the limited liability company has no
members.
(2) State that the person has been appointed pursuant to
this subsection to wind up the company The name and street and
mailing addresses of the person.
(3) Provide the street and mailing addresses of the person
That the person has been appointed pursuant to this subsection
to wind up the limited liability company’s activities and
affairs.
5. The district court may order judicial supervision of the
winding up of a dissolved limited liability company, including
the appointment of a person to wind up the company’s activities
and affairs pursuant to any of the following:
a. On application of a member, if the applicant establishes
good cause.
b. On the application of a transferee, if all of the
following apply:
(1) The limited liability company does not have any members.
(2) The legal representative of the last person to have been
a member declines or fails to wind up the limited liability
company’s activities and affairs.
(3) Within a reasonable time following the dissolution a
person has not been appointed pursuant to subsection 4 3.
c. In connection with a proceeding under section 489.701,
subsection 1, paragraph “d” or “e”.
Sec. 56. Section 489.703, Code 2023, is amended to read as
follows:
-81- 489.703 Known claims against dissolved limited liability
company.
1. Except as otherwise provided in subsection 4, a dissolved
limited liability company may give notice of a known claim
under subsection 2, which has the effect as provided in
subsection 3.
2. A dissolved limited liability company may in a record
notify its known claimants of the dissolution. The notice must
do all of the following:
a. Specify the information required to be included in a
claim.
b. Provide State that a claim must be in writing and provide
a mailing address to which the claim is to be sent.
c. State the deadline for receipt of the a claim, which may
not be less than one hundred twenty days after the date the
notice is received by the claimant.
d. State that the claim will be barred if not received by
the deadline.
3. A claim against a dissolved limited liability company is
barred if the requirements of subsection 2 are met and any of
the following applies:
a. The claim is not received by the specified deadline.
b. If the claim is timely received but rejected by the
limited liability company, all of the following must apply:
(1) The limited liability company causes the claimant to
receive a notice in a record stating that the claim is rejected
and will be barred unless the claimant commences an action
against the company to enforce the claim within not later than
ninety days after the claimant receives the notice.
(2) The claimant does not commence the required action
within not later than the ninety days after the claimant
receives the notice.
4. This section does not apply to a claim based on an
event occurring after the effective date of dissolution or a
liability that on that date is contingent.
-82- Sec. 57. Section 489.704, Code 2023, is amended to read as
follows:
489.704 Other claims against dissolved limited liability
company.
1. A dissolved limited liability company may publish notice
of its dissolution and request persons having claims against
the company to present them in accordance with the notice.
2. The notice authorized by under subsection 1 must do all
of the following meet all of the following requirements:
a. Be published at least once in a newspaper of general
circulation in the county in this state in which the dissolved
limited liability company’s principal office is located or, if
it has none in this state, in the county in which the company’s
registered office is or was last located Comply with any of the
following:
(1) Publication of the notice one time in a newspaper of
general circulation in the county in this state in which the
dissolved limited liability company’s principal office is
located or, if the principal office is not located in this
state, in the county in which the office of the company’s
registered agent is or was last located.
(2) Publication by posting the notice conspicuously for at
least thirty days on the dissolved limited liability company’s
internet site.
b. Describe the information required to be contained in a
claim, state that the claim must be in writing, and provide a
mailing address to which the claim is to be sent.
c. State that a claim against the limited liability company
is barred unless an action to enforce the claim is commenced
within five not later than three years after publication of the
notice.
3. If a dissolved limited liability company publishes a
notice in accordance with subsection 2, unless the claimant
commences an action to enforce the claim against the company
within five years after the publication date of the notice, the
-83-claim of each of the following claimants is barred of each of
the following claimants is barred unless the claimant commences
an action to enforce the claim against the company not later
than three years after the publication date of the notice:
a. A claimant that did not receive notice in a record under
section 489.703.
b. A claimant whose claim was timely sent to the limited
liability company but not acted on.
c. A claimant whose claim is contingent at, or based on an
event occurring after, the effective date of dissolution.
4. A claim not barred under this section or section 489.703
may be enforced as follows:
a. Against a dissolved limited liability company, to the
extent of its undistributed assets.
b. If Except as otherwise provided in section 489.706A, if
assets of the limited liability company have been distributed
after dissolution, against a member or transferee to the extent
of that person’s proportionate share of the claim or of the
company’s assets distributed to the member or transferee after
dissolution, whichever is less, but a person’s total liability
for all claims under this paragraph does not exceed the total
amount of assets distributed to the person after dissolution.
Sec. 58. Section 489.705, Code 2023, is amended to read as
follows:
489.705 Administrative Grounds for administrative
dissolution.
1. The secretary of state may commence a proceeding under
this section 489.709 to administratively dissolve a limited
liability company administratively, if any of the following
apply:
a. 1. The limited liability company has not delivered a
biennial report to the secretary of state in a form that meets
the requirements of section 489.209 within sixty days after
it is due, or has not paid within sixty days after the due
date, any fee, tax, or penalty due to the secretary of state
-84-under this chapter or law other than this chapter The limited
liability company does not pay within sixty days after they are
due any fees, taxes, interest, or penalties imposed by this
chapter or other laws of this state.
b. The limited liability company is without a registered
office or registered agent in this state for sixty days or
more.
c. The limited liability company does not notify the
secretary of state within sixty days that its registered agent
or registered office has been changed, that its registered
agent has resigned, or that its registered office has been
discontinued.
d. The limited liability company’s period of duration stated
in its certificate of organization has expired.
2. If the secretary of state determines that a ground exists
for administratively dissolving a limited liability company,
the secretary of state shall file a record of the determination
and serve the company with a copy of the filed record The
limited liability company does not deliver its biennial report
required by section 489.209 to the secretary of state within
sixty days after it is due.
3. If within sixty days after service of the copy pursuant
to subsection 2 a limited liability company does not correct
each ground for dissolution or demonstrate to the reasonable
satisfaction of the secretary of state that each ground
determined by the secretary of state does not exist, the
secretary of state shall dissolve the company administratively
by preparing, signing, and filing a declaration of dissolution
that states the grounds for dissolution. The secretary
of state shall serve the company with a copy of the filed
declaration The limited liability company is without a
registered agent or the registered agent does not have a place
of business in this state for sixty days or more.
4. A limited liability company that has been
administratively dissolved continues in existence but, subject
-85-to section 489.706, may carry on only activities necessary to
wind up its activities and liquidate its assets under sections
489.702 and 489.708 and to notify claimants under sections
489.703 and 489.704 The secretary of state has not been
notified within sixty days that the limited liability company’s
registered agent or place of business of the registered agent
has been changed, or that its registered agent has resigned, or
that its registered office has been discontinued.
5. The administrative dissolution of a limited liability
company does not terminate the authority of its registered
agent for service of process The limited liability company’s
period of duration stated in its certificate of organization
expires.
Sec. 59. Section 489.706, Code 2023, is amended to read as
follows:
489.706 Reinstatement following administrative dissolution.
1. A limited liability company administratively dissolved
under section 489.705 may apply to the secretary of state
for reinstatement at any time after the effective date
of dissolution. The application must be delivered to the
secretary of state and meet all of the following requirements:
a. Recite State the name of the limited liability company
at its date of dissolution and the effective date of its
administrative dissolution.
b. State that the ground or grounds for dissolution as
provided in section 489.705 either did not exist or have been
eliminated.
c. If the application is received more than five years after
the effective date of the administrative dissolution, state a
name that satisfies the requirements of section 489.108.
d. State the federal tax identification number of the
limited liability company.
2. a. The secretary of state shall refer the federal
tax identification number contained in the application for
reinstatement to the department of workforce development.
-86-The department of workforce development shall report to the
secretary of state the tax status of the limited liability
company. If the department reports to the secretary of state
that a filing delinquency or liability exists against the
limited liability company, the secretary of state shall not
cancel the declaration certificate of dissolution until the
filing delinquency or liability is satisfied.
3. b. (1) If the secretary of state determines that the
application contains the information required by subsection
1, and that a delinquency or liability reported pursuant to
subsection 2 paragraph “a” has been satisfied, and that the
information is correct, the secretary of state shall cancel
the declaration certificate of dissolution and prepare a
certificate of reinstatement that recites the secretary of
state’s determination and the effective date of reinstatement,
file the original of the certificate of reinstatement, and
serve deliver a copy on to the limited liability company under
section 489.116.
(2) If the limited liability company’s name in subsection
1, paragraph “c”, is different than from the name in subsection
1, paragraph “a”, the certificate of reinstatement shall
constitute an amendment to the limited liability company’s
certificate of organization insofar as it pertains to its
name. A limited liability company shall not relinquish the
right to retain its name as provided in section 489.108, if the
reinstatement is effective within five years of the effective
date of the limited liability company’s dissolution.
4. 3. When the reinstatement is effective, it relates
back to and takes effect as of the effective date of the
administrative dissolution as if the administrative dissolution
had never occurred.
Sec. 60. NEW SECTION. 489.706A Court proceedings.
1. A dissolved limited liability company that has published
a notice under section 489.704 may file an application with
the district court in the county where the company’s principal
-87-office is located or, if the principal office is not located
in this state, where the office of its registered agent is
or was last located, for a determination of the amount and
form of security to be provided for payment of claims that are
reasonably expected to arise after the date of dissolution
based on facts known to the company and any of the following
apply:
a. At the time of application any of the following apply:
(1) The facts are contingent.
(2) The facts have not been made known to the limited
liability company.
b. The facts are based on an event occurring after the date
of dissolution.
2. Security is not required for any claim that is or is
reasonably anticipated to be barred under section 489.704.
3. Not later than ten days after the filing of an
application under subsection 1, the dissolved limited liability
company shall give notice of the proceeding to each claimant
holding a contingent claim known to the company.
4. In a proceeding under this section, the court may appoint
a guardian ad litem to represent all claimants whose identities
are unknown. The reasonable fees and expenses of the guardian,
including all reasonable expert witness fees, must be paid by
the dissolved limited liability company.
5. A dissolved limited liability company that provides
security in the amount and form ordered by the court under
subsection 1 satisfies the company’s obligations with respect
to claims that are contingent, have not been made known to
the company, or are based on an event occurring after the
date of dissolution, and such claims may not be enforced
against a member or transferee on account of assets received
in liquidation.
Sec. 61. Section 489.707, Code 2023, is amended to read as
follows:
489.707 Appeal from rejection denial of reinstatement.
-88- 1. If the secretary of state rejects denies a limited
liability company’s application for reinstatement following
administrative dissolution, the secretary of state shall
prepare, sign, and file a notice that explains the reason for
rejection and serve the company under section 489.116 with a
copy of the written notice that explains the reason or reasons
for denial.
2. Within thirty days after service of a notice of rejection
of reinstatement under subsection 1, a limited liability
company may appeal from the rejection by petitioning the
district court to set aside the dissolution. The petition
must be served on the secretary of state and contain a copy
of the secretary of state’s declaration of dissolution, the
company’s application for reinstatement, and the secretary
of state’s notice of rejection The limited liability company
may appeal the denial of reinstatement to the district court
of the county where the company’s principal office or, if none
in this state, where its registered office is located within
thirty days after service of the notice of denial is effected.
The company appeals by petitioning the court to set aside
the dissolution and attaching to the petition copies of the
secretary of state’s certificate of dissolution, the company’s
application for reinstatement, and the secretary of state’s
notice of denial.
3. The court may summarily order the secretary of state to
reinstate a the dissolved limited liability company or may take
other action the court considers appropriate.
4. The court’s final decision may be appealed as in other
civil proceedings.
Sec. 62. Section 489.708, Code 2023, is amended to read as
follows:
489.708 Distribution Disposition of assets in winding up
limited liability company’s activities.
1. In winding up its activities and affairs, a limited
liability company must shall apply its assets to discharge its
-89- the company’s obligations to creditors, including members that
are creditors.
2. After a limited liability company complies with
subsection 1, any surplus must be distributed in the following
order, subject to any charging order in effect under section
489.503:
a. To each person owning a transferable interest that
reflects contributions made by a member and not previously
returned, an amount equal to the value of the unreturned
contributions and not previously returned, an amount equal to
the value of the unreturned contributions.
b. In equal shares among members and dissociated members,
except to the extent necessary to comply with any transfer
effective under section 489.502 Among persons owning
transferable interests in proportion to their respective rights
to share in distributions immediately before the dissolution of
the limited liability company.
3. If a limited liability company does not have sufficient
surplus to comply with subsection 2, paragraph “a”, any surplus
must be distributed among the owners of transferable interests
in proportion to the value of their the respective unreturned
contributions.
4. All distributions made under subsections 2 and 3 must be
paid in money.
Sec. 63. NEW SECTION. 489.709 Procedure for and effect of
administrative dissolution.
1. If the secretary of state determines that one or more
grounds exist under section 489.705 for dissolving a limited
liability company, the secretary of state shall serve the
company with written notice of such determination under section
489.116.
2. If the limited liability company does not correct
each ground for dissolution or demonstrate to the reasonable
satisfaction of the secretary of state that each ground
determined by the secretary of state does not exist within
-90-sixty days after service of the notice under section 489.116,
the secretary of state shall administratively dissolve the
company by signing a certificate of dissolution that recites
the ground or grounds for dissolution and its effective
date. The secretary of state shall file the original of the
certificate and serve a copy on the company under section
489.116.
3. A limited liability company administratively dissolved
continues its existence but shall not carry on any business
except that necessary to wind up and liquidate its business
and affairs under section 489.702 and notify claimants under
sections 489.703 and 489.704.
4. The administrative dissolution of a limited liability
company does not terminate the authority of its registered
agent.
Sec. 64. Section 489.801, Code 2023, is amended to read as
follows:
489.801 Governing law.
1. Subject to sections 489.14402 and 489.14404, the law
of the state or other jurisdiction under which The law of
the jurisdiction of formation of a foreign limited liability
company is formed governs all of the following:
a. The internal affairs of the foreign limited liability
company.
b. The liability of a member as member and a manager as
manager for the debts, obligations, or other liabilities a
debt, obligation, or other liability of the foreign limited
liability company.
c. The liability of a series of the foreign limited
liability company.
2. A foreign limited liability company shall not be denied
a certificate of authority by reason of any difference between
the law of the jurisdiction under which the company is formed
is not precluded from registering to do business in this state
because of any difference between the law of the foreign
-91-limited liability company’s jurisdiction of formation and the
law of this state.
3. A certificate of authority does not authorize a
foreign limited liability company to engage in any business
or exercise any power that a limited liability company shall
not Registration of a foreign limited liability company to do
business in this state does not permit the foreign limited
liability company to engage in any business or affairs or
exercise any power that a limited liability company cannot
lawfully engage in or exercise in this state.
Sec. 65. NEW SECTION. 489.805A Special litigation
committee.
1. If a limited liability company is named as or made a
party in a derivative proceeding, the company may appoint a
special litigation committee to investigate the claims asserted
in the proceeding and determine whether pursuing the action is
in the best interests of the company. If the company appoints
a special litigation committee, on motion by the committee made
in the name of the company, except for good cause shown, the
court shall stay discovery for the time reasonably necessary
to permit the committee to make its investigation. This
subsection does not prevent the court from doing any of the
following:
a. Enforcing a person’s right to information under section
489.410.
b. Granting extraordinary relief in the form of a temporary
restraining order or preliminary injunction.
2. A special litigation committee must be composed of one
or more disinterested and independent individuals, who may be
members.
3. A special litigation committee may be appointed as
follows:
a. In a member-managed limited liability company, any of the
following:
(1) By the affirmative vote or consent of a majority of the
-92-members not named as parties in the proceeding.
(2) If all members are named as parties in the proceeding,
by a majority of the members named as defendants.
b. In a manager-managed limited liability company, any of
the following:
(1) By a majority of the managers not named as parties in
the proceeding.
(2) If all managers are named as parties in the proceeding,
by a majority of the managers named as defendants.
4. After appropriate investigation, a special litigation
committee may determine that it is in the best interests of the
limited liability company that the proceeding comply with any
of the following:
a. Continue under the control of the plaintiff.
b. Continue under the control of the committee.
c. Be settled on terms approved by the committee.
d. Be dismissed.
5. After making a determination under subsection 4, a
special litigation committee shall file with the court a
statement of its determination and its report supporting its
determination and shall serve each party with a copy of the
determination and report. The court shall determine whether
the members of the committee were disinterested and independent
and whether the committee conducted its investigation and made
its recommendation in good faith, independently, and with
reasonable care, with the committee having the burden of proof.
If the court finds that the members of the committee were
disinterested and independent and that the committee acted in
good faith, independently, and with reasonable care, the court
shall enforce the determination of the committee. Otherwise,
the court shall dissolve the stay of discovery entered under
subsection 1 and allow the action to continue under the control
of the plaintiff.
Sec. 66. Section 489.809, Code 2023, is amended to read as
follows:
-93- 489.809 Action by attorney general.
The attorney general may maintain an action to enjoin a
foreign limited liability company from transacting doing
business in this state in violation of this article chapter.
Sec. 67. Section 489.902, Code 2023, is amended to read as
follows:
489.902 Derivative action.
A member may maintain a derivative action to enforce a right
of a limited liability company as follows:
1. The A member may maintain a derivative action to enforce
a right of a limited liability company, if the member first
makes a demand on the other members in a member-managed limited
liability company, or the managers of a manager-managed limited
liability company, requesting that they cause the company to
bring an action to enforce the right, and the managers or other
members do not bring the action within ninety days from the
date the demand was made unless the member has earlier been
notified that the demand has been rejected by the company
or unless irreparable injury to the company would result by
waiting for the expiration of the ninety-day period.
2. A demand under subsection 1 would be futile.
Sec. 68. Section 489.904, Code 2023, is amended to read as
follows:
489.904 Pleading.
In a derivative action under section 489.902, the complaint
must state with particularity any of the following:
1. The date and content of the plaintiff’s demand and the
response to the demand by the managers or other members.
2. If a demand has not been made, the reasons a demand under
section 489.902, subsection 1, would be Why demand should be
excused as futile.
Sec. 69. NEW SECTION. 489.905 Activities not constituting
doing business in this state.
1. Activities of a foreign limited liability company that
do not constitute doing business in this state for purposes of
-94-this subchapter include all of the following:
a. Maintaining, defending, mediating, arbitrating, or
settling a proceeding.
b. Carrying on any activity concerning the internal affairs
of the foreign limited liability company, including holding
meetings of its members or managers.
c. Maintaining accounts in financial institutions.
d. Maintaining offices or agencies for the transfer,
exchange, and registration of securities of the foreign limited
liability company or maintaining trustees or depositories with
respect to those securities.
e. Selling through independent contractors.
f. Soliciting or obtaining orders by any means if the
orders require acceptance outside this state before they become
contracts.
g. Creating or acquiring indebtedness, mortgages, or
security interests in property.
h. Securing or collecting debts or enforcing mortgages or
other security interests in property securing the debts and
holding, protecting, or maintaining property so acquired.
i. Conducting an isolated transaction that is not in the
course of similar transactions.
j. Owning, protecting, and maintaining property.
k. Doing business in interstate commerce.
2. This section does not apply in determining the contacts
or activities that may subject a foreign limited liability
company to service of process, taxation, or regulation under
the laws of this state other than this chapter.
Sec. 70. Section 489.906, Code 2023, is amended to read as
follows:
489.906 Proceeds and expenses.
1. Except as otherwise provided in subsection 2, all of the
following apply:
a. Any proceeds or other benefits of a derivative action
under section 489.902, whether by judgment, compromise, or
-95-settlement, belong to the limited liability company and not to
the plaintiff.
b. If the plaintiff receives any proceeds, the plaintiff
shall remit them immediately to the limited liability company.
2. If a derivative action under section 489.902 is
successful in whole or in part, the court may award the
plaintiff reasonable expenses, including reasonable attorney
fees and costs, from the recovery of the limited liability
company.
3. A derivative action on behalf of a limited liability
company shall not be voluntarily dismissed or settled without
the court’s approval.
Sec. 71. NEW SECTION. 489.906A Noncomplying name of foreign
limited liability company.
1. A foreign limited liability company whose name does
not comply with section 489.108 shall not register to do
business in this state until it adopts, for the purpose of
doing business in this state, an alternate name that complies
with section 489.108 by filing a foreign registration statement
under section 489.911B, or if applicable, a transfer of
registration statement under section 489.910, setting forth
that alternate name. After registering to do business in this
state with an alternate name, a foreign limited liability
company shall do business in this state under any of the
following:
a. The alternate name.
b. The foreign limited liability company’s name, with the
addition of its jurisdiction of formation.
2. If a registered foreign limited liability company
changes its name after registration to a name that does not
comply with section 489.108, it shall not do business in this
state until it complies with subsection 1 by amending its
registration statement to adopt an alternate name that complies
with section 489.108.
Sec. 72. NEW SECTION. 489.907 Withdrawal of registration of
-96-registered foreign limited liability company.
1. A registered foreign limited liability company may
withdraw its registration by delivering a statement of
withdrawal to the secretary of state for filing. The statement
of withdrawal must be signed by the foreign limited liability
company and state all of the following:
a. The name of the foreign limited liability company and its
jurisdiction of formation.
b. That the foreign limited liability company is not doing
business in this state and that it withdraws its registration
to do business in this state.
c. That the foreign limited liability company revokes the
authority of its registered agent in this state.
d. An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
2. After the withdrawal of the registration of a foreign
limited liability company, service of process in any proceeding
based on a cause of action arising during the time the entity
was registered to do business in this state may be made as
provided in section 489.116.
Sec. 73. NEW SECTION. 489.908 Deemed withdrawal upon
domestication or conversion to certain domestic entities.
A registered foreign limited liability company that
domesticates to a domestic limited liability company or
converts to a domestic business corporation or domestic
nonprofit corporation or any type of domestic filing entity or
to a domestic limited liability partnership is deemed to have
withdrawn its registration on the effectiveness of such event.
Sec. 74. NEW SECTION. 489.909 Withdrawal upon dissolution
or conversion to certain nonfiling entities.
1. A registered foreign limited liability company that
has dissolved and completed winding up or has converted to
a domestic or foreign nonfiling entity other than a limited
liability partnership shall deliver to the secretary of state
-97-for filing a statement of withdrawal. The statement must be
signed by the dissolved foreign limited liability company or
the converted domestic or foreign nonfiling entity and state:
a. In the case of a foreign limited liability company that
has completed winding up all of the following:
(1) Its name and jurisdiction of formation.
(2) That the foreign limited liability company withdraws
its registration to do business in this state and revokes the
authority of its registered agent to accept service on its
behalf.
(3) An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
b. In the case of a foreign limited liability company that
has converted to a domestic or foreign nonfiling entity other
than a limited liability partnership, all of the following:
(1) The name of the converting foreign limited liability
company and its jurisdiction of formation.
(2) The type of the nonfiling entity to which it has
converted and its name and jurisdiction of formation.
(3) That it withdraws its registration to do business in
this state and revokes the authority of its registered agent to
accept service on its behalf.
(4) An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
2. After the withdrawal of the registration of a foreign
limited liability company, service of process in any proceeding
based on a cause of action arising during the time the entity
was registered to do business in this state may be made as
provided in section 489.116.
Sec. 75. NEW SECTION. 489.910 Transfer of registration.
1. If a registered foreign limited liability company merges
into a nonregistered foreign entity or converts to a foreign
entity required to register with the secretary of state to do
-98-business in this state, the foreign entity shall deliver to
the secretary of state for filing a transfer of registration
statement. The transfer of registration statement must be
signed by the surviving or converted foreign entity and state
all of the following:
a. The name of the registered foreign limited liability
company and its jurisdiction of formation before the merger or
conversion.
b. The name and type of the surviving or converted foreign
entity and its jurisdiction of formation after the merger
or conversion and, if the name does not comply with section
489.108, an alternate name adopted pursuant to section
489.906A.
c. All of the following information regarding the surviving
or converted foreign entity after the merger or conversion:
(1) The street and mailing addresses of the principal office
of the foreign entity and, if the law of the foreign entity’s
jurisdiction of formation requires it to maintain an office in
that jurisdiction, the street and mailing addresses of that
office.
(2) The street and mailing addresses of the place of
business of the foreign entity’s registered agent in this state
and the name of its registered agent.
2. On the effective date of a transfer of registration
statement as determined in accordance with section 489.207,
the registration of the registered foreign limited liability
company to do business in this state is transferred without
interruption to the foreign entity into which it has merged or
to which it has been converted.
Sec. 76. NEW SECTION. 489.911 Administrative termination of
registration.
1. The secretary of state may terminate the registration of
a registered foreign limited liability company in the manner
provided in subsections 2 and 3, if any of the following
applies:
-99- a. The foreign limited liability company does not pay within
sixty days after they are due any fees, taxes, interest, or
penalties imposed by this chapter or other laws of this state.
b. The foreign limited liability company does not deliver
its biennial report to the secretary of state within sixty days
after it is due.
c. The foreign limited liability company is without a
registered agent or its registered agent has no place of
business in this state for sixty days or more.
d. The secretary of state has not been notified within sixty
days that the foreign limited liability company’s registered
agent or the registered agent’s place of business has been
changed, that its registered agent has resigned, or that its
registered office has been discontinued.
2. The secretary of state may terminate the registration of
a registered foreign limited liability company by doing all of
the following:
a. Filing a certificate of termination.
b. Delivering a copy of the certificate of termination
to the foreign company’s registered agent or, if the foreign
company does not have a registered agent, to the foreign
company’s principal office.
3. The certificate of termination must state all of the
following:
a. The effective date of the termination, which must be
not less than sixty days after the secretary of state delivers
the copy of the certificate of termination as prescribed in
subsection 2, paragraph “b”.
b. The grounds for termination under subsection 1.
4. The registration of a registered foreign limited
liability company to do business in this state ceases on
the effective date of the termination as set forth in the
certificate of termination, unless before that date the
foreign company cures each ground for termination stated in the
certificate of termination. If the foreign company cures each
-100-ground, the secretary of state shall file a statement that the
certificate of termination is withdrawn.
5. After the effective date of the termination as set forth
in the certificate of termination, service of process in any
proceeding based on a cause of action arising during the time
the entity was registered to do business in this state may be
made as provided in section 489.116.
Sec. 77. NEW SECTION. 489.911A Registration to do business
in this state.
1. A foreign limited liability company shall not do business
in this state until it registers with the secretary of state
under this chapter.
2. A foreign limited liability company doing business in
this state shall not maintain a proceeding in any court of this
state until it is registered to do business in this state.
3. The failure of a foreign limited liability company
to register to do business in this state does not impair
the validity of a contract or act of the foreign company or
preclude it from defending a proceeding in this state.
4. A limitation on the liability of a member or manager
of a foreign limited liability company is not waived solely
because the foreign company does business in this state without
registering.
5. Section 489.801, subsection 1, applies even if a
foreign limited liability company fails to register under this
subchapter.
Sec. 78. NEW SECTION. 489.911B Foreign registration
statement.
1. To register to do business in this state, a foreign
limited liability company shall deliver a foreign registration
statement to the secretary of state for filing. The
registration statement must be signed by the foreign company
and state all of the following:
a. The name of the foreign limited liability company and,
if the name does not comply with section 489.108, an alternate
-101-name as required by section 489.906A.
b. The foreign limited liability company’s jurisdiction of
formation.
c. The street and mailing addresses of the foreign limited
liability company’s principal office and, if the law of the
foreign company’s jurisdiction of formation requires the
foreign company to maintain an office in that jurisdiction, the
street and mailing addresses of that required office.
d. The street and mailing addresses of the place of business
of the foreign limited liability company’s registered agent in
this state and the name of its registered agent.
2. The foreign limited liability company shall deliver the
completed foreign registration statement to the secretary of
state, and also deliver to the secretary of state a certificate
of existence or a document of similar import duly authenticated
by the secretary of state or other official having custody of
corporate records in the state or country under whose law it is
incorporated which is dated no earlier than ninety days prior
to the date the application is filed by the secretary of state.
Sec. 79. NEW SECTION. 489.911C Amendment of foreign
registration statement.
A registered foreign limited liability company shall sign
and deliver to the secretary of state for filing an amendment
to its foreign registration statement if there is a change in
any of the following:
1. Its name or alternate name.
2. Its jurisdiction of formation, unless its registration
is deemed to have been withdrawn under section 489.908 or
transferred under section 489.910.
3. An address required by section 489.911B, subsection 1,
paragraph “c”.
4. The information required by section 489.911B, subsection
1, paragraph “d”.
Sec. 80. Section 489.1001, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
-102- 489.1001 Definitions.
As used in this subchapter, unless the context otherwise
requires:
1. “Acquired entity” means the entity, all of one or more
classes or series of interests of which are acquired in an
interest exchange.
2. “Acquiring entity” means the entity that acquires all
of one or more classes or series of interests of the acquired
entity in an interest exchange.
3. “Conversion” means a transaction authorized by part 4.
4. “Converted entity” means the converting entity as it
continues in existence after a conversion.
5. “Converting entity” means the domestic entity that
approves a plan of conversion pursuant to section 489.1043 or
the foreign entity that approves a conversion pursuant to the
law of its jurisdiction of formation.
6. “Distributional interest” means the right under an
unincorporated entity’s organic law and organic rules to
receive distributions from the entity.
7. “Domestic”, with respect to an entity, means governed as
to its internal affairs by the law of this state.
8. “Domesticated limited liability company” means the
domesticating limited liability company as it continues in
existence after a domestication.
9. “Domesticating limited liability company” means the
domestic limited liability company that approves a plan of
domestication pursuant to section 489.1053 or the foreign
limited liability company that approves a domestication
pursuant to the law of its jurisdiction of formation.
10. “Domestication” means a transaction authorized by part
5.
11. a. “Entity” means any of the following:
(1) A business corporation.
(2) A nonprofit corporation.
(3) A general partnership, including a limited liability
-103-partnership.
(4) A limited partnership, including a limited liability
limited partnership.
(5) A limited liability company.
(6) A domestic cooperative.
(7) An unincorporated nonprofit association.
(8) A statutory trust, business trust, or common-law
business trust.
(9) Any other person that has any of the following:
(a) A legal existence separate from any interest holder of
that person.
(b) The power to acquire an interest in real property in
its own name.
b. “Entity” does not include any of the following:
(1) An individual.
(2) A trust with a predominantly donative purpose or a
charitable trust.
(3) An association or relationship that is not an entity
listed in paragraph “a” and is not a partnership under the
rules stated in section 486A.202, subsection 3, or a similar
provision of the law of another jurisdiction.
(4) A decedent’s estate.
(5) A government or a governmental subdivision, agency, or
instrumentality.
12. “Filing entity” means an entity whose formation requires
the filing of a public organic record. The term does not
include a limited liability partnership.
13. “Foreign”, with respect to an entity, means an
entity governed as to its internal affairs by the law of a
jurisdiction other than this state.
14. “Governance interest” means a right under the organic
law or organic rules of an unincorporated entity, other than as
a governor, agent, assignee, or proxy, to any of the following:
a. Receive or demand access to information concerning, or
the books and records of, the entity.
-104- b. Vote for or consent to the election of the governors of
the entity.
c. Receive notice of or vote on or consent to an issue
involving the internal affairs of the entity.
15. “Governor” means any of the following:
a. A director of a business corporation.
b. A director or trustee of a nonprofit corporation.
c. A general partner of a general partnership.
d. A general partner of a limited partnership.
e. A manager of a manager-managed limited liability company.
f. A member of a member-managed limited liability company.
g. A director of a domestic cooperative.
h. A manager of an unincorporated nonprofit association.
i. A trustee of a statutory trust, business trust, or
common-law business trust.
j. Any other person under whose authority the powers of an
entity are exercised and under whose direction the activities
and affairs of the entity are managed pursuant to the organic
law and organic rules of the entity.
16. “Interest” means any of the following:
a. A share in a business corporation.
b. A membership in a nonprofit corporation.
c. A partnership interest in a general partnership.
d. A partnership interest in a limited partnership.
e. A membership interest in a limited liability company.
f. A share in a domestic cooperative.
g. A membership in an unincorporated nonprofit association.
h. A beneficial interest in a statutory trust, business
trust, or common-law business trust.
i. A governance interest or distributional interest in any
other type of unincorporated entity.
17. “Interest exchange” means a transaction authorized by
part 3.
18. “Interest holder” means any of the following:
a. A shareholder of a business corporation.
-105- b. A member of a nonprofit corporation.
c. A general partner of a general partnership.
d. A general partner of a limited partnership.
e. A limited partner of a limited partnership.
f. A member of a limited liability company.
g. A shareholder of a domestic cooperative.
h. A member of an unincorporated nonprofit association.
i. A beneficiary or beneficial owner of a statutory trust,
business trust, or common-law business trust.
j. Any other direct holder of an interest.
19. “Interest holder liability” means any of the following:
a. Personal liability for a liability of an entity which is
imposed on a person due to any of the following:
(1) Solely by reason of the status of the person as an
interest holder.
(2) By the organic rules of the entity which make one or
more specified interest holders or categories of interest
holders liable in their capacity as interest holders for all or
specified liabilities of the entity.
b. An obligation of an interest holder under the organic
rules of an entity to contribute to the entity.
20. “Merger” means a transaction authorized by part 2.
21. “Merging entity” means an entity that is a party to
a merger and exists immediately before the merger becomes
effective.
22. “Organic law” means the law of an entity’s jurisdiction
of formation governing the internal affairs of the entity.
23. “Organic rules” means the public organic record and
private organic rules of an entity.
24. “Plan” means a plan of merger, plan of interest
exchange, plan of conversion, or plan of domestication.
25. “Plan of conversion” means a plan under section
489.1042.
26. “Plan of domestication” means a plan under section
489.1052.
-106- 27. “Plan of interest exchange” means a plan under section
489.1032.
28. “Plan of merger” means a plan under section 489.1022.
29. a. “Private organic rules” means the rules, whether or
not in a record, that govern the internal affairs of an entity,
are binding on all its interest holders, and are not part of
its public organic record, if any.
b. “Private organic rules” includes all of the following:
(1) The bylaws of a business corporation.
(2) The bylaws of a nonprofit corporation.
(3) The partnership agreement of a general partnership.
(4) The partnership agreement of a limited partnership.
(5) The operating agreement of a limited liability company.
(6) The bylaws of a domestic cooperative.
(7) The governing principles of an unincorporated nonprofit
association.
(8) The trust instrument of a statutory trust or similar
rules of a business trust or common-law business trust.
30. “Protected agreement” means any of the following:
a. A record evidencing indebtedness and any related
agreement in effect on January 1, 2009.
b. An agreement that is binding on an entity on January 1,
2009.
c. The organic rules of an entity in effect on January 1,
2009.
d. An agreement that is binding on any of the governors or
interest holders of an entity on January 1, 2009.
31. a. “Public organic record” means the record the filing
of which by the secretary of state is required to form an
entity and any amendment to or restatement of that record.
b. “Public organic record” includes any of the following:
(1) The articles of incorporation of a business
corporation.
(2) The articles of incorporation of a nonprofit
corporation.
-107- (3) The certificate of limited partnership of a limited
partnership.
(4) The certificate of organization of a limited liability
company.
(5) The articles of incorporation of a domestic
cooperative.
(6) The certificate of trust of a statutory trust or similar
record of a business trust.
32. “Registered foreign entity” means a foreign entity that
is registered to do business in this state pursuant to a record
filed by the secretary of state.
33. “Statement of conversion” means a statement under
section 489.1045.
34. “Statement of domestication” means a statement under
section 489.1055.
35. “Statement of interest exchange” means a statement under
section 489.1035.
36. “Statement of merger” means a statement under section
489.1025.
37. “Surviving entity” means the entity that continues in
existence after or is created by a merger.
38. “Type of entity” means a generic form of entity that is
any of the following:
a. Recognized at common law.
b. Formed under an organic law, whether or not some entities
formed under that organic law are subject to provisions of that
law that create different categories of the form of entity.
Sec. 81. Section 489.1002, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1002 Relationship of subchapter to other laws.
1. This subchapter does not authorize an act prohibited by,
and does not affect the application or requirements of, law
other than this subchapter.
2. A transaction effected under this subchapter shall
not create or impair a right, duty, or obligation of a
-108-person under the statutory law of this state other than this
subchapter relating to a change in control, takeover, business
combination, control-share acquisition, or similar transaction
involving a domestic merging, acquired, converting, or
domesticating business corporation unless any of the following
applies:
a. If the corporation does not survive the transaction, the
transaction satisfies any requirements of the law.
b. If the corporation survives the transaction, the approval
of the plan is by a vote of the shareholders or directors which
would be sufficient to create or impair the right, duty, or
obligation directly under the law.
Sec. 82. Section 489.1003, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1003 Required notice or approval.
1. A domestic or foreign entity that is required to give
notice to, or obtain the approval of, a governmental agency
or officer of this state to be a party to a merger must give
the notice or obtain the approval to be a party to an interest
exchange, conversion, or domestication.
2. Property held for a charitable purpose under the law of
this state by a domestic or foreign entity immediately before
a transaction under this subchapter becomes effective may be
diverted from the objects for which it was donated, granted,
devised, or otherwise transferred only to the extent a public
benefit corporation is able to divert from such objects under
chapter 504.
3. A bequest, devise, gift, grant, or promise contained
in a will or other instrument of donation, subscription, or
conveyance which is made to a merging entity that is not the
surviving entity and which takes effect or remains payable
after the merger inures to the surviving entity.
4. A trust obligation that would govern property if
transferred to a nonsurviving entity applies to property that
is transferred to the surviving entity under this section.
-109- Sec. 83. Section 489.1004, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1004 Nonexclusivity.
The fact that a transaction under this subchapter produces
a certain result does not preclude the same result from being
accomplished in any other manner permitted by law other than
this subchapter.
Sec. 84. Section 489.1005, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1005 Reference to external facts.
1. A plan may refer to facts ascertainable outside the plan
if the manner in which the facts will operate upon the plan is
specified in the plan. The facts may include the occurrence of
an event or a determination or action by a person, whether or
not the event, determination, or action is within the control
of a party to the transaction.
2. The following provisions of a record delivered to the
secretary of state for filing under this chapter or a plan
delivered for filing in lieu of a statement shall not be made
dependent on facts outside the record or plan:
a. The name and address of any person.
b. The registered office of any entity.
c. The registered agent of any entity.
d. The number of authorized interests and designation of
each class or series of interests.
e. The effective date of a record delivered to the secretary
of state for filing.
f. Any required statement in a record delivered to the
secretary of state for filing of the date on which the
underlying transaction was approved or the manner in which that
approval was given.
Sec. 85. Section 489.1006, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1006 Appraisal rights.
An interest holder of a domestic merging, acquired,
-110-converting, or domesticating limited liability company is
entitled to contractual appraisal rights in connection with a
transaction under this subchapter to the extent provided in any
of the following:
1. The operating agreement.
2. The plan.
Sec. 86. Section 489.1007, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1007 Excluded entities and transactions.
This subchapter shall not be used to effect a transaction
involving a bank, insurance company, or public utility where
any chapter governing the regulation of such entity does not
permit the transaction.
Sec. 87. NEW SECTION. 489.1021 Merger authorized.
1. By complying with this part, all of the following apply:
a. One or more domestic limited liability companies may
merge with one or more domestic or foreign entities into a
domestic or foreign surviving entity.
b. Two or more foreign entities may merge into a domestic
limited liability company.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity may be a party to a
merger under this part or may be the surviving entity in such
a merger if the merger is authorized by the law of the foreign
entity’s jurisdiction of formation.
Sec. 88. NEW SECTION. 489.1022 Plan of merger.
1. A domestic limited liability company may become a party
to a merger under this part by approving a plan of merger. The
plan must be in a record and contain all of the following:
a. As to each merging entity, its name, jurisdiction of
formation, and type of entity.
b. If the surviving entity is to be created in the merger, a
statement to that effect and the entity’s name, jurisdiction of
formation, and type of entity.
c. The manner of converting the interests in each party
-111-to the merger into interests, securities, obligations, money,
other property, rights to acquire interests or securities, or
any combination of the foregoing.
d. If the surviving entity exists before the merger, any
proposed amendments to all of the following:
(1) Its public organic record, if any.
(2) Its private organic rules that are, or are proposed to
be, in a record.
e. If the surviving entity is to be created in the merger,
all of the following:
(1) Its proposed public organic record, if any.
(2) The full text of its private organic rules that are
proposed to be in a record.
f. The other terms and conditions of the merger.
g. Any other provision required by the law of a merging
entity’s jurisdiction of formation or the organic rules of a
merging entity.
2. In addition to the requirements of subsection 1, a plan
of merger may contain any other provision not prohibited by
law.
Sec. 89. NEW SECTION. 489.1023 Approval of merger.
1. A plan of merger is not effective unless it has been
approved according to all of the following:
a. By a domestic merging limited liability company, by all
the members of the company entitled to vote on or consent to
any matter.
b. In a record, by each member of a domestic merging limited
liability company which will have interest holder liability for
debts, obligations, and other liabilities that are incurred
after the merger becomes effective, unless all of the following
apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of a merger in
which some or all of its members become subject to interest
holder liability by the affirmative vote or consent of fewer
-112-than all the members.
(2) The member consented in a record to or voted for that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A merger involving a domestic merging entity that is not
a limited liability company is not effective unless the merger
is approved by that entity in accordance with its organic law.
3. A merger involving a foreign merging entity is not
effective unless the merger is approved by the foreign entity
in accordance with the law of the foreign entity’s jurisdiction
of formation.
Sec. 90. NEW SECTION. 489.1024 Amendment or abandonment
of plan of merger.
1. A plan of merger may be amended only with the consent
of each party to the plan, except as otherwise provided in the
plan.
2. A domestic merging limited liability company may approve
an amendment of a plan of merger according to any of the
following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in the
plan, but a member that was entitled to vote on or consent to
approval of the merger is entitled to vote on or consent to any
amendment of the plan that will change any of the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by the interest holders of any party to the plan.
(2) The public organic record, if any, or private
organic rules of the surviving entity that will be in effect
immediately after the merger becomes effective, except for
changes that do not require approval of the interest holders of
the surviving entity under its organic law or organic rules.
(3) Any other terms or conditions of the plan, if the change
-113-would adversely affect the member in any material respect.
3. After a plan of merger has been approved and before
a statement of merger becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic merging limited liability company may abandon
the plan in the same manner as the plan was approved.
4. If a plan of merger is abandoned after a statement of
merger has been delivered to the secretary of state for filing
and before the statement becomes effective, a statement of
abandonment, signed by a party to the plan, must be delivered
to the secretary of state for filing before the statement of
merger becomes effective. The statement of abandonment takes
effect on filing, and the merger is abandoned and does not
become effective. The statement of abandonment must contain
all of the following:
a. The name of each party to the plan of merger.
b. The date on which the statement of merger was filed by
the secretary of state.
c. A statement that the merger has been abandoned in
accordance with this section.
Sec. 91. NEW SECTION. 489.1025 Statement of merger —
effective date of merger.
1. A statement of merger must be signed by each merging
entity and delivered to the secretary of state for filing.
2. A statement of merger must contain all of the following:
a. The name, jurisdiction of formation, and type of entity
of each merging entity that is not the surviving entity.
b. The name, jurisdiction of formation, and type of entity
of the surviving entity, and if the surviving entity is a
foreign entity, the street and mailing addresses of an office
of the surviving entity that the secretary of state may use for
purposes of section 489.1026, subsection 5.
c. A statement that the merger was approved by each domestic
merging entity, if any, in accordance with this part and by
each foreign merging entity, if any, in accordance with the law
-114-of its jurisdiction of formation.
d. If the surviving entity exists before the merger and is
a domestic filing entity, any amendment to its public organic
record approved as part of the plan of merger.
e. If the surviving entity is created by the merger and
is a domestic filing entity, its public organic record, as an
attachment.
f. If the surviving entity is created by the merger and
is a domestic limited liability partnership, its statement of
qualification, as an attachment.
3. In addition to the requirements of subsection 2, a
statement of merger may contain any other provision not
prohibited by law.
4. If the surviving entity is a domestic entity, its public
organic record, if any, must satisfy the requirements of the
law of this state, except that the public organic record does
not need to be signed.
5. If the surviving entity is a domestic limited liability
company, the merger becomes effective when the statement of
merger is effective. In all other cases, the merger becomes
effective on the later of the following:
a. The date and time provided by the organic law of the
surviving entity.
b. When the statement is effective.
Sec. 92. NEW SECTION. 489.1026 Effect of merger.
1. When a merger becomes effective, all of the following
apply:
a. The surviving entity continues or comes into existence.
b. Each merging entity that is not the surviving entity
ceases to exist.
c. All property of each merging entity vests in the
surviving entity without transfer, reversion, or impairment.
d. All debts, obligations, and other liabilities of each
merging entity are debts, obligations, and other liabilities
of the surviving entity.
-115- e. Except as otherwise provided by law or the plan of
merger, all the rights, privileges, immunities, powers, and
purposes of each merging entity vest in the surviving entity.
f. If the surviving entity exists before the merger, all of
the following apply:
(1) All its property continues to be vested in it without
transfer, reversion, or impairment.
(2) It remains subject to all its debts, obligations, and
other liabilities.
(3) All its rights, privileges, immunities, powers, and
purposes continue to be vested in it.
g. The name of the surviving entity may be substituted for
the name of any merging entity that is a party to any pending
action or proceeding.
h. If the surviving entity exists before the merger, all of
the following apply:
(1) Its public organic record, if any, is amended to the
extent provided in the statement of merger.
(2) Its private organic rules that are to be in a record, if
any, are amended to the extent provided in the plan of merger.
i. If the surviving entity is created by the merger, its
private organic rules are effective and all of the following
apply:
(1) If it is a filing entity, its public organic record
becomes effective.
(2) If it is a limited liability partnership, its statement
of qualification becomes effective.
j. The interests in each merging entity which are to be
converted in the merger are converted, and the interest holders
of those interests are entitled only to the rights provided to
them under the plan of merger and to any appraisal rights they
have under section 489.1006 and the merging entity’s organic
law.
2. Except as otherwise provided in the organic law or
organic rules of a merging entity, the merger does not give
-116-rise to any rights that an interest holder, governor, or third
party would have upon a dissolution, liquidation, or winding up
of the merging entity.
3. When a merger becomes effective, a person that did
not have interest holder liability with respect to any of
the merging entities and becomes subject to interest holder
liability with respect to a domestic entity as a result of
the merger has interest holder liability only to the extent
provided by the organic law of that entity and only for those
debts, obligations, and other liabilities that are incurred
after the merger becomes effective.
4. When a merger becomes effective, the interest holder
liability of a person that ceases to hold an interest in a
domestic merging limited liability company with respect to
which the person had interest holder liability is subject to
the following rules:
a. The merger does not discharge any interest holder
liability under this chapter to the extent the interest holder
liability was incurred before the merger became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the merger becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the merger had not occurred.
d. The person has whatever rights of contribution from
any other person as are provided by this chapter, law other
than this chapter, or the operating agreement of the domestic
merging limited liability company with respect to any interest
holder liability preserved under paragraph “a” as if the merger
had not occurred.
5. When a merger becomes effective, a foreign entity that is
the surviving entity may be served with process in this state
for the collection and enforcement of any debts, obligations,
or other liabilities of a domestic merging limited liability
-117-company as provided in section 489.116.
6. When a merger becomes effective, the registration to do
business in this state of any foreign merging entity that is
not the surviving entity is canceled.
Sec. 93. NEW SECTION. 489.1031 Interest exchange
authorized.
1. By complying with this part, any of the following apply:
a. A domestic limited liability company may acquire all
of one or more classes or series of interests of another
domestic entity or a foreign entity in exchange for interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
b. All of one or more classes or series of interests of a
domestic limited liability company may be acquired by another
domestic entity or a foreign entity in exchange for interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity may be the acquiring or
acquired entity in an interest exchange under this part if
the interest exchange is authorized by the law of the foreign
entity’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company but
does not refer to an interest exchange, the provision applies
to an interest exchange in which the domestic limited liability
company is the acquired entity as if the interest exchange were
a merger until the provision is amended on or after January 1,
2009.
Sec. 94. NEW SECTION. 489.1032 Plan of interest exchange.
1. A domestic limited liability company may be the acquired
entity in an interest exchange under this part by approving a
plan of interest exchange. The plan must be in a record and
-118-contain all of the following:
a. The name of the acquired entity.
b. The name, jurisdiction of formation, and type of entity
of the acquiring entity.
c. The manner of converting the interests in the acquired
entity into interests, securities, obligations, money, other
property, rights to acquire interests or securities, or any
combination of the foregoing.
d. Any proposed amendments to all of the following:
(1) The certificate of organization of the acquired entity.
(2) The operating agreement of the acquired entity that are,
or are proposed to be, in a record.
e. The other terms and conditions of the interest exchange.
f. Any other provision required by the law of this state or
the operating agreement of the acquired entity.
2. In addition to the requirements of subsection 1, a
plan of interest exchange may contain any other provision not
prohibited by law.
Sec. 95. NEW SECTION. 489.1033 Approval of interest
exchange.
1. A plan of interest exchange is not effective unless it
has been approved according to all of the following:
a. By all the members of a domestic acquired limited
liability company entitled to vote on or consent to any matter.
b. In a record, by each member of the domestic acquired
limited liability company that will have interest holder
liability for debts, obligations, and other liabilities that
are incurred after the interest exchange becomes effective,
unless all of the following apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of an interest
exchange or a merger in which some or all of its members become
subject to interest holder liability by the affirmative vote or
consent of fewer than all the members.
(2) The member consented in a record to or voted for that
-119-provision of the operating agreement or became a member after
the adoption of that provision.
2. An interest exchange involving a domestic acquired
entity that is not a limited liability company is not effective
unless it is approved by the domestic entity in accordance with
its organic law.
3. An interest exchange involving a foreign acquired entity
is not effective unless it is approved by the foreign entity in
accordance with the law of the foreign entity’s jurisdiction
of formation.
4. Except as otherwise provided in its organic law or
organic rules, the interest holders of the acquiring entity are
not required to approve the interest exchange.
Sec. 96. NEW SECTION. 489.1034 Amendment or abandonment
of plan of interest exchange.
1. A plan of interest exchange may be amended only with the
consent of each party to the plan, except as otherwise provided
in the plan.
2. A domestic acquired limited liability company may
approve an amendment of a plan of interest exchange according
to any of the following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in
the plan, but a member that was entitled to vote on or consent
to approval of the interest exchange is entitled to vote on or
consent to any amendment of the plan that will change any of
the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the acquired company under
the plan.
(2) The certificate of organization or operating agreement
of the acquired company that will be in effect immediately
-120-after the interest exchange becomes effective, except for
changes that do not require approval of the members of the
acquired company under this chapter or the operating agreement.
(3) Any other terms or conditions of the plan, if the change
would adversely affect the member in any material respect.
3. After a plan of interest exchange has been approved and
before a statement of interest exchange becomes effective,
the plan may be abandoned as provided in the plan. Unless
prohibited by the plan, a domestic acquired limited liability
company may abandon the plan in the same manner as the plan was
approved.
4. If a plan of interest exchange is abandoned after a
statement of interest exchange has been delivered to the
secretary of state for filing and before the statement becomes
effective, a statement of abandonment, signed by the acquired
limited liability company, must be delivered to the secretary
of state for filing before the statement of interest exchange
becomes effective. The statement of abandonment takes effect
on filing, and the interest exchange is abandoned and does not
become effective. The statement of abandonment must contain
all of the following:
a. The name of the acquired limited liability company.
b. The date on which the statement of interest exchange was
filed by the secretary of state.
c. A statement that the interest exchange has been abandoned
in accordance with this section.
Sec. 97. NEW SECTION. 489.1035 Statement of interest
exchange — effective date of interest exchange.
1. A statement of interest exchange must be signed by a
domestic acquired limited liability company and delivered to
the secretary of state for filing.
2. A statement of interest exchange must contain all of the
following:
a. The name of the acquired limited liability company.
b. The name, jurisdiction of formation, and type of entity
-121-of the acquiring entity.
c. A statement that the plan of interest exchange was
approved by the acquired company in accordance with this part.
d. Any amendments to the acquired company’s certificate of
organization approved as part of the plan of interest exchange.
3. In addition to the requirements of subsection 2, a
statement of interest exchange may contain any other provision
not prohibited by law.
4. An interest exchange becomes effective when the
statement of interest exchange is effective.
Sec. 98. NEW SECTION. 489.1036 Effect of interest exchange.
1. When an interest exchange in which the acquired entity
is a domestic limited liability company becomes effective, all
of the following apply:
a. The interests in the acquired limited liability company
which are the subject of the interest exchange are converted,
and the members holding those interests are entitled only to
the rights provided to them under the plan of interest exchange
and to any appraisal rights they have under section 486.1006.
b. The acquiring entity becomes the interest holder of the
interests in the acquired limited liability company stated in
the plan of interest exchange to be acquired by the acquiring
entity.
c. The certificate of organization of the acquired limited
liability company is amended to the extent provided in the
statement of interest exchange.
d. The provisions of the operating agreement of the acquired
limited liability company that are to be in a record, if any,
are amended to the extent provided in the plan of interest
exchange.
2. Except as otherwise provided in the operating agreement
of a domestic acquired limited liability company, the interest
exchange does not give rise to any rights that a member,
manager, or third party would have upon a dissolution,
liquidation, or winding up of the acquired limited liability
-122-company.
3. When an interest exchange becomes effective, a person
that did not have interest holder liability with respect to
a domestic acquired limited liability company and becomes
subject to interest holder liability with respect to a domestic
entity as a result of the interest exchange has interest holder
liability only to the extent provided by the organic law of
the entity and only for those debts, obligations, and other
liabilities that are incurred after the interest exchange
becomes effective.
4. When an interest exchange becomes effective, the
interest holder liability of a person that ceases to hold an
interest in a domestic acquired limited liability company with
respect to which the person had interest holder liability is
subject to all of the following rules:
a. The interest exchange does not discharge any interest
holder liability under this chapter to the extent the interest
holder liability was incurred before the interest exchange
became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the interest exchange becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the interest exchange had
not occurred.
d. The person has whatever rights of contribution from
any other person as are provided by this chapter, law other
than this chapter, or the operating agreement of the acquired
limited liability company with respect to any interest holder
liability preserved under paragraph “a” as if the interest
exchange had not occurred.
Sec. 99. NEW SECTION. 489.1041 Conversion authorized.
1. By complying with this part, a domestic limited liability
company may become any of the following:
-123- a. A domestic entity that is a different type of entity.
b. A foreign entity that is a different type of entity, if
the conversion is authorized by the law of the foreign entity’s
jurisdiction of formation.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity that is not a foreign
limited liability company may become a domestic limited
liability company if the conversion is authorized by the law of
the foreign entity’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company
but does not refer to a conversion, the provision applies
to a conversion of the limited liability company as if the
conversion were a merger until the provision is amended on or
after January 1, 2009.
4. A domestic entity that is not a limited liability company
may become a domestic limited liability company if all of the
following apply:
a. The domestic converting entity complies with section
489.1043.
b. The domestic converting entity files a statement of
conversion in accordance with section 489.1045.
Sec. 100. NEW SECTION. 489.1042 Plan of conversion.
1. A domestic limited liability company may convert to a
different type of entity under this part by approving a plan
of conversion. The plan must be in a record and contain all of
the following:
a. The name of the converting limited liability company.
b. The name, jurisdiction of formation, and type of entity
of the converted entity.
c. The manner of converting the interests in the converting
limited liability company into interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing.
d. The proposed public organic record of the converted
-124-entity if it will be a filing entity.
e. The full text of the private organic rules of the
converted entity which are proposed to be in a record.
f. The other terms and conditions of the conversion.
g. Any other provision required by the law of this state
or the operating agreement of the converting limited liability
company.
2. In addition to the requirements of subsection 1, a plan
of conversion may contain any other provision not prohibited
by law.
Sec. 101. NEW SECTION. 489.1043 Approval of conversion.
1. A plan of conversion is not effective unless it has been
approved according to all of the following:
a. By a domestic converting limited liability company, by
all the members of the limited liability company entitled to
vote on or consent to any matter.
b. In a record, by each member of a domestic converting
limited liability company which will have interest holder
liability for debts, obligations, and other liabilities that
are incurred after the conversion becomes effective, unless all
of the following apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of a conversion
or a merger in which some or all of its members become subject
to interest holder liability by the affirmative vote or consent
of fewer than all the members.
(2) The member voted for or consented in a record to that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A conversion involving a domestic converting entity that
is not a limited liability company is not effective unless it
is approved by the domestic converting entity in accordance
with its organic law.
3. A conversion of a foreign converting entity is not
effective unless it is approved by the foreign entity in
-125-accordance with the law of the foreign entity’s jurisdiction
of formation.
Sec. 102. NEW SECTION. 489.1044 Amendment or abandonment of
plan of conversion.
1. A plan of conversion of a domestic converting limited
liability company may be amended according to any of the
following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in the
plan, but a member that was entitled to vote on or consent to
approval of the conversion is entitled to vote on or consent
to any amendment of the plan that will change any of the
following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the converting limited
liability company under the plan.
(2) The public organic record, if any, or private organic
rules of the converted entity which will be in effect
immediately after the conversion becomes effective, except for
changes that do not require approval of the interest holders of
the converted entity under its organic law or organic rules.
(3) Any other terms or conditions of the plan, if the change
would adversely affect the member in any material respect.
2. After a plan of conversion has been approved by a
domestic converting limited liability company and before a
statement of conversion becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic converting limited liability company may
abandon the plan in the same manner as the plan was approved.
3. If a plan of conversion is abandoned after a statement
of conversion has been delivered to the secretary of state
for filing and before the statement becomes effective, a
-126-statement of abandonment, signed by the converting entity,
must be delivered to the secretary of state for filing before
the statement of conversion becomes effective. The statement
of abandonment takes effect on filing, and the conversion is
abandoned and does not become effective. The statement of
abandonment must contain all of the following:
a. The name of the converting limited liability company.
b. The date on which the statement of conversion was filed
by the secretary of state.
c. A statement that the conversion has been abandoned in
accordance with this section.
Sec. 103. NEW SECTION. 489.1045 Statement of conversion —
effective date of conversion.
1. A statement of conversion must be signed by the
converting entity and delivered to the secretary of state for
filing.
2. A statement of conversion must contain all of the
following:
a. The name, jurisdiction of formation, and type of entity
of the converting entity.
b. The name, jurisdiction of formation, and type of entity
of the converted entity and if the converted entity is a
foreign entity, the street and mailing addresses of an office
of the converted entity that the secretary of state may use for
purposes of section 489.1046, subsection 5.
c. If the converting entity is a domestic limited liability
company, a statement that the plan of conversion was approved
in accordance with this part or, if the converting entity is a
foreign entity, a statement that the conversion was approved
by the foreign entity in accordance with the law of its
jurisdiction of formation.
d. If the converted entity is a domestic filing entity, its
public organic record, as an attachment.
e. If the converted entity is a domestic limited liability
partnership, its statement of qualification, as an attachment.
-127- 3. In addition to the requirements of subsection 2, a
statement of conversion may contain any other provision not
prohibited by law.
4. If the converted entity is a domestic entity, its public
organic record, if any, must satisfy the requirements of the
law of this state, except that the public organic record does
not need to be signed.
5. If the converted entity is a domestic limited liability
company, the conversion becomes effective when the statement of
conversion is effective. In all other cases, the conversion
becomes effective on the later of the following:
a. The date and time provided by the organic law of the
converted entity.
b. When the statement is effective.
Sec. 104. NEW SECTION. 489.1046 Effect of conversion.
1. When a conversion becomes effective all of the following
apply:
a. The converted entity is any of the following:
(1) Organized under and subject to the organic law of the
converted entity.
(2) The same entity without interruption as the converting
entity.
b. All property of the converting entity continues to be
vested in the converted entity without transfer, reversion, or
impairment.
c. All debts, obligations, and other liabilities of the
converting entity continue as debts, obligations, and other
liabilities of the converted entity.
d. Except as otherwise provided by law or the plan of
conversion, all the rights, privileges, immunities, powers,
and purposes of the converting entity remain in the converted
entity.
e. The name of the converted entity may be substituted for
the name of the converting entity in any pending action or
proceeding.
-128- f. The certificate of organization of the converted entity
becomes effective.
g. The provisions of the operating agreement of the
converted entity which are to be in a record, if any, approved
as part of the plan of conversion become effective.
h. The interests in the converting entity are converted, and
the interest holders of the converting entity are entitled only
to the rights provided to them under the plan of conversion and
to any appraisal rights they have under section 489.1006.
2. Except as otherwise provided in the operating agreement
of a domestic converting limited liability company, the
conversion does not give rise to any rights that a member,
manager, or third party would have upon a dissolution,
liquidation, or winding up of the converting entity.
3. When a conversion becomes effective, a person that
did not have interest holder liability with respect to the
converting entity and becomes subject to interest holder
liability with respect to a domestic entity as a result of the
conversion has interest holder liability only to the extent
provided by the organic law of the entity and only for those
debts, obligations, and other liabilities that are incurred
after the conversion becomes effective.
4. When a conversion becomes effective, the interest holder
liability of a person that ceases to hold an interest in a
domestic converting limited liability company with respect to
which the person had interest holder liability is subject to
all of the following rules:
a. The conversion does not discharge any interest holder
liability under this chapter to the extent the interest holder
liability was incurred before the conversion became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
arises after the conversion becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
-129-preserved under paragraph “a” as if the conversion had not
occurred.
d. The person has whatever rights of contribution from any
other person as are provided by this chapter, law other than
this chapter, or the organic rules of the converting entity
with respect to any interest holder liability preserved under
paragraph “a” as if the conversion had not occurred.
5. When a conversion becomes effective, a foreign entity
that is the converted entity may be served with process in this
state for the collection and enforcement of any of its debts,
obligations, and other liabilities as provided in section
489.116.
6. If the converting entity is a registered foreign entity,
its registration to do business in this state is canceled when
the conversion becomes effective.
7. A conversion does not require the entity to wind up its
affairs and does not constitute or cause the dissolution of the
entity.
Sec. 105. NEW SECTION. 489.1051 Domestication authorized.
1. By complying with this part, a domestic limited liability
company may become a foreign limited liability company if
the domestication is authorized by the law of the foreign
jurisdiction.
2. By complying with the provisions of this part applicable
to foreign limited liability companies, a foreign limited
liability company may become a domestic limited liability
company if the domestication is authorized by the law of the
foreign limited liability company’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company
but does not refer to a domestication, the provision applies
to a domestication of the limited liability company as if the
domestication were a merger until the provision is amended on
or after January 1, 2009.
Sec. 106. NEW SECTION. 489.1052 Plan of domestication.
-130- 1. A domestic limited liability company may become a foreign
limited liability company in a domestication by approving
a plan of domestication. The plan must be in a record and
contain all of the following:
a. The name of the domesticating limited liability company.
b. The name and jurisdiction of formation of the
domesticated limited liability company.
c. The manner of converting the interests in the
domesticating limited liability company into interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
d. The proposed certificate of organization of the
domesticated limited liability company.
e. The full text of the provisions of the operating
agreement of the domesticated limited liability company that
are proposed to be in a record.
f. The other terms and conditions of the domestication.
g. Any other provision required by the law of this state or
the operating agreement of the domesticating limited liability
company.
2. In addition to the requirements of subsection 1, a plan
of domestication may contain any other provision not prohibited
by law.
Sec. 107. NEW SECTION. 489.1053 Approval of domestication.
1. A plan of domestication of a domestic domesticating
limited liability company is not effective unless it has been
approved according to any of the following:
a. By all the members entitled to vote on or consent to any
matter.
b. In a record, by each member that will have interest
holder liability for debts, obligations, and other liabilities
that are incurred after the domestication becomes effective,
unless all of the following apply:
(1) The operating agreement of the domesticating limited
-131-liability company in a record provides for the approval of a
domestication or merger in which some or all of its members
become subject to interest holder liability by the affirmative
vote or consent of fewer than all the members.
(2) The member voted for or consented in a record to that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A domestication of a foreign domesticating limited
liability company is not effective unless it is approved in
accordance with the law of the foreign limited liability
company’s jurisdiction of formation.
Sec. 108. NEW SECTION. 489.1054 Amendment or abandonment
of plan of domestication.
1. A plan of domestication of a domestic domesticating
limited liability company may be amended according to any of
the following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in
the plan, but a member that was entitled to vote on or consent
to approval of the domestication is entitled to vote on or
consent to any amendment of the plan that will change any of
the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the domesticating limited
liability company under the plan.
(2) The certificate of organization or operating agreement
of the domesticated limited liability company that will be in
effect immediately after the domestication becomes effective,
except for changes that do not require approval of the members
of the domesticated limited liability company under its organic
law or operating agreement.
(3) Any other terms or conditions of the plan, if the change
-132-would adversely affect the member in any material respect.
2. After a plan of domestication has been approved by a
domestic domesticating limited liability company and before a
statement of domestication becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic domesticating limited liability company may
abandon the plan in the same manner as the plan was approved.
3. If a plan of domestication is abandoned after a statement
of domestication has been delivered to the secretary of state
for filing and before the statement becomes effective, a
statement of abandonment, signed by the domesticating limited
liability company, must be delivered to the secretary of state
for filing before the statement of domestication becomes
effective. The statement of abandonment takes effect on
filing, and the domestication is abandoned and does not become
effective. The statement of abandonment must contain all of
the following:
a. The name of the domesticating limited liability company.
b. The date on which the statement of domestication was
filed by the secretary of state.
c. A statement that the domestication has been abandoned in
accordance with this section.
Sec. 109. NEW SECTION. 489.1055 Statement of domestication
— effective date of domestication.
1. A statement of domestication must be signed by the
domesticating limited liability company and delivered to the
secretary of state for filing.
2. A statement of domestication must contain all of the
following:
a. The name and jurisdiction of formation of the
domesticating limited liability company.
b. The name and jurisdiction of formation of the
domesticated limited liability company and the street and
mailing addresses of an office of the domesticated limited
liability company that the secretary of state may use for
-133-purposes of section 489.1056, subsection 5.
c. If the domesticating limited liability company is a
domestic limited liability company, a statement that the plan
of domestication was approved in accordance with this part or,
if the domesticating limited liability company is a foreign
limited liability company, a statement that the domestication
was approved in accordance with the law of its jurisdiction of
formation.
d. The certificate of organization of the domesticated
limited liability company, as an attachment.
3. In addition to the requirements of subsection 2, a
statement of domestication may contain any other provision not
prohibited by law.
4. The certificate of organization of a domestic
domesticated limited liability company must satisfy the
requirements of this chapter, but the certificate does not need
to be signed.
5. If the domesticated entity is a domestic limited
liability company, the domestication becomes effective
when the statement of domestication is effective. If the
domesticated entity is a foreign limited liability company,
the domestication becomes effective on the later of all of the
following:
a. The date and time provided by the organic law of the
domesticated entity.
b. When the statement is effective.
Sec. 110. NEW SECTION. 489.1056 Effect of domestication.
1. When a domestication becomes effective, all of the
following apply:
a. The domesticated entity is all of the following:
(1) Organized under and subject to the organic law of the
domesticated entity.
(2) The same entity without interruption as the
domesticating entity.
b. All property of the domesticating entity continues to be
-134-vested in the domesticated entity without transfer, reversion,
or impairment.
c. All debts, obligations, and other liabilities of the
domesticating entity continue as debts, obligations, and other
liabilities of the domesticated entity.
d. Except as otherwise provided by law or the plan of
domestication, all the rights, privileges, immunities,
powers, and purposes of the domesticating entity remain in the
domesticated entity.
e. The name of the domesticated entity may be substituted
for the name of the domesticating entity in any pending action
or proceeding.
f. The certificate of organization of the domesticated
entity becomes effective.
g. The provisions of the operating agreement of the
domesticated entity that are to be in a record, if any,
approved as part of the plan of domestication become effective.
h. The interests in the domesticating entity are converted
to the extent and as approved in connection with the
domestication, and the members of the domesticating entity are
entitled only to the rights provided to them under the plan
of domestication and to any appraisal rights they have under
section 489.1006.
2. Except as otherwise provided in the organic law or
operating agreement of the domesticating limited liability
company, the domestication does not give rise to any rights
that a member, manager, or third party would otherwise
have upon a dissolution, liquidation, or winding up of the
domesticating company.
3. When a domestication becomes effective, a person that
did not have interest holder liability with respect to the
domesticating limited liability company and becomes subject to
interest holder liability with respect to a domestic limited
liability company as a result of the domestication has interest
holder liability only to the extent provided by this chapter
-135-and only for those debts, obligations, and other liabilities
that are incurred after the domestication becomes effective.
4. When a domestication becomes effective, the interest
holder liability of a person that ceases to hold an interest in
a domestic domesticating limited liability company with respect
to which the person had interest holder liability is subject
to all of the following rules:
a. The domestication does not discharge any interest
holder liability under this chapter to the extent the interest
holder liability was incurred before the domestication became
effective.
b. A person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the domestication becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the domestication had not
occurred.
d. A person has whatever rights of contribution from any
other person as are provided by this chapter, law other than
this chapter, or the operating agreement of the domestic
domesticating limited liability company with respect to any
interest holder liability preserved under paragraph “a” as if
the domestication had not occurred.
5. When a domestication becomes effective, a foreign
limited liability company that is the domesticated company
may be served with process in this state for the collection
and enforcement of any of its debts, obligations, and other
liabilities as provided in section 489.116.
6. If the domesticating limited liability company is a
registered foreign entity, the registration of the limited
liability company is canceled when the domestication becomes
effective.
7. A domestication does not require a domestic
domesticating limited liability company to wind up its affairs
-136-and does not constitute or cause the dissolution of the limited
liability company.
Sec. 111. Section 489.1101, Code 2023, is amended to read
as follows:
489.1101 Definitions.
As used in this article subchapter, unless the context
otherwise requires:
1. “Employee” or “agent” does not include a clerk,
stenographer, secretary, bookkeeper, technician, or other
person who is not usually and ordinarily considered by custom
and practice to be practicing a profession nor any other person
who performs all that person’s duties for the professional
limited liability company under the direct supervision and
control of one or more managers, employees, or agents of the
professional limited liability company who are duly licensed in
this state to practice a profession which the limited liability
company is authorized to practice in this state. This article
subchapter does not require any such persons to be licensed to
practice a profession if they are not required to be licensed
under any other law of this state.
2. “Foreign professional limited liability company” means
a limited liability company organized under laws other than
the laws of this state for a purpose for which a professional
limited liability company may be organized under this article
subchapter.
3. “Licensed” includes registered, certified, admitted to
practice, or otherwise legally authorized under the laws of
this state.
4. “Profession” means the following professions:
a. Certified public accountancy.
b. Architecture.
c. Chiropractic.
d. Dentistry.
e. Physical therapy.
f. Practice as a physician assistant.
-137- g. Psychology.
h. Professional engineering.
i. Land surveying.
j. Landscape architecture.
k. Law.
l. Medicine and surgery.
m. Optometry.
n. Osteopathic medicine and surgery.
o. Accounting practitioner.
p. Podiatry.
q. Real estate brokerage.
r. Speech pathology.
s. Audiology.
t. Veterinary medicine.
u. Pharmacy.
v. Nursing.
w. Marital and family therapy or mental health counseling,
provided that the marital and family therapist or mental health
counselor is licensed under chapters 147 and 154D.
x. Social work, provided that the social worker is licensed
pursuant to chapter 147 and section 154C.3, subsection 1,
paragraph “c”.
5. “Professional limited liability company” means a limited
liability company subject to this article subchapter, except a
foreign professional limited liability company.
6. “Regulating board” means any board, commission, court,
or governmental authority which, under the laws of this state,
is charged with the licensing, registration, certification,
admission to practice, or other legal authorization of the
practitioners of any profession.
7. a. “Voluntary transfer” includes a sale, voluntary
assignment, gift, pledge, or encumbrance; a voluntary change
of legal or equitable ownership or beneficial interest; or a
voluntary change of persons having voting rights with respect
to any transferable interest, except as proxies.
-138- b. “Voluntary transfer” does not include a transfer of
an individual’s interest in a limited liability company or
other property to a guardian or conservator appointed for that
individual or the individual’s property.
Sec. 112. Section 489.1106, Code 2023, is amended to read
as follows:
489.1106 Professional regulation.
A professional limited liability company shall not
be required to register with or to obtain any license,
registration, certificate, or other legal authorization from
a regulating board in order to practice a profession. Except
as provided in this section, this article subchapter does not
restrict or limit in any manner the authority or duties of any
regulating board with respect to individuals an individual
practicing a profession which is within the jurisdiction of the
regulating board, even if the individual is a member, manager,
employee, or agent of a professional limited liability company
or foreign professional limited liability company and practices
the individual’s profession through such professional limited
liability company.
Sec. 113. Section 489.1107, Code 2023, is amended to read
as follows:
489.1107 Relationship and liability to persons served.
This article subchapter does not modify any law applicable
to the relationship between an individual practicing a
profession and a person receiving professional services,
including but not limited to any liability arising out of such
practice or any law respecting privileged communications.
This article subchapter does not modify or affect the ethical
standards or standards of conduct of any profession, including
but not limited to any standards prohibiting or limiting the
practice of the profession by a limited liability company or
prohibiting or limiting the practice of two or more professions
in combination. All such standards shall apply to the members,
managers, employees, and agents through whom a professional
-139-limited liability company practices any profession in this
state, to the same extent that the standards apply to an
individual practitioner.
Sec. 114. Section 489.1110, Code 2023, is amended to read
as follows:
489.1110 Convertible interests — rights and options.
A professional limited liability company shall not create
or issue any interest convertible into an interest of the
professional limited liability company. The provisions of this
article subchapter with respect to the issuance and transfer
of interests apply to the creation, issuance, and transfer
of any right or option entitling the holder to purchase from
a professional limited liability company any interest of the
professional limited liability company. A right or option
shall not be transferable, whether voluntarily, involuntarily,
by operation of law, or in any other manner. Upon the death
of the holder, or when the holder ceases to be licensed to
practice a profession in this state which the professional
limited liability company is authorized to practice, the right
or option shall expire.
Sec. 115. Section 489.1112, subsections 4, 5, and 6, Code
2023, are amended to read as follows:
4. When a person other than a member of record becomes
entitled to have interests of a professional limited liability
company transferred into that person’s name or to exercise
voting rights, except as a proxy, with respect to interests of
the professional limited liability company, the professional
limited liability company shall immediately purchase the
interests. Without limiting the generality of the foregoing,
this section shall be applicable whether the event occurs
as a result of appointment of a guardian or conservator for
a member or the member’s property, transfer of interests
by operation of law, involuntary transfer of interests,
judicial proceeding, execution, levy, bankruptcy proceeding,
receivership proceeding, foreclosure or enforcement of a pledge
-140-or encumbrance, or any other situation or occurrence. However,
this section does not apply to any voluntary transfer of
interests as defined in this article subchapter.
5. Interests purchased by a professional limited liability
company under this section shall be transferred to the
professional limited liability company as of the close
of business on the date of the death or other event which
requires purchase. The member and the member’s executors,
administrators, legal representatives, or successors in
interest, shall promptly do all things which may be necessary
or convenient to cause transfer to be made as of the transfer
date. However, the interests shall promptly be transferred on
the books and records of the professional limited liability
company as of the transfer date, notwithstanding any delay in
transferring or surrendering the interests or certificates
representing the interests, and the transfer shall be valid and
effective for all purposes as of the close of business on the
transfer date. The purchase price for such interests shall be
paid as provided in this article subchapter, but the transfer
of interests to the professional limited liability company as
provided in this section shall not be delayed or affected by
any delay or default in making payment.
6. a. Notwithstanding subsections 1 through 5, purchase by
the professional limited liability company is not required upon
the occurrence of any event other than death of a member, if
the professional limited liability company is dissolved within
sixty days after the occurrence of the event or voluntarily
elects to no longer be a professional limited liability company
but continue its existence as a limited liability company
pursuant to section 489.1119A within sixty days after the
occurrence of the event. The certificate of organization or
operating agreement of the professional limited liability
company may provide that purchase is not required upon the
death of a member, if the professional limited liability
company is dissolved within sixty days after the date of the
-141-member’s death.
b. Notwithstanding sections 1 through 5, purchase by the
professional limited liability company is not required upon the
death of a member if the professional limited liability company
voluntarily elects to no longer be a professional limited
liability company but continue its existence as a limited
liability company pursuant to section 489.1119A within sixty
days after death.
Sec. 116. Section 489.1113, Code 2023, is amended to read
as follows:
489.1113 Certificates representing interests.
Each certificate representing an interest of a professional
limited liability company shall state in substance that the
certificate represents an interest in a professional limited
liability company and is not transferable except as expressly
provided in this article subchapter and in the certificate of
organization or an operating agreement of the professional
limited liability company.
Sec. 117. Section 489.1114, Code 2023, is amended to read
as follows:
489.1114 Management.
1. All managers of a professional limited liability
company shall at all times be individuals who are licensed to
practice a profession in this state or a lawful combination of
professions pursuant to section 489.1102, which the limited
liability company is authorized to practice. A person who
is not licensed shall have no authority or duties in the
management or control of the professional limited liability
company. If a manager ceases to have this qualification, the
manager shall immediately and automatically cease to hold such
management position.
2. Notwithstanding subsection 1, upon the occurrence of
any event that requires the professional limited liability
company either to be dissolved or to elect to no longer be
a professional limited liability company but continue its
-142-existence as a limited liability company, as provided in
section 489.1119A, all of the following apply:
a. The professional limited liability company ceases to
practice the profession that the professional limited liability
company is authorized to practice, as provided in section
489.1119A.
b. The individuals who are not licensed to practice in this
state a profession that the professional limited liability
company is authorized to practice may be appointed as officers
and directors for the sole purpose of doing any of the
following:
(1) Carrying out the dissolution of the professional
limited liability company.
(2) If applicable, carrying out the voluntary election
of the professional limited liability company to no longer
be a professional limited liability company but continue its
existence as a limited liability company, as provided in
section 489.1119A.
Sec. 118. Section 489.1115, Code 2023, is amended to read
as follows:
489.1115 Merger.
A professional limited liability company shall not merge
with any entity except another professional limited liability
company subject to this article subchapter or a professional
corporation subject to chapter 496C. Merger is not permitted
unless the surviving or new professional limited liability
company is a professional limited liability company which that
complies with all requirements of this article subchapter.
Sec. 119. Section 489.1116, Code 2023, is amended to read
as follows:
489.1116 Dissolution or liquidation.
A violation of any provision of this article subchapter by a
professional limited liability company or any of its members
or managers shall be cause for its involuntary dissolution, or
liquidation of its assets and business by the district court.
-143-Upon the death of the last remaining member of a professional
limited liability company, or when the last remaining member is
not licensed or ceases to be licensed to practice a profession
in this state which the professional limited liability company
is authorized to practice, or when any person other than
the member of record becomes entitled to have all interests
of the last remaining member of the professional limited
liability company transferred into that person’s name or to
exercise voting rights, except as a proxy, with respect to such
interests, the professional limited liability company shall not
practice any profession and it. In that case, the professional
limited liability company shall either be promptly dissolved
or shall promptly elect to no longer be a professional limited
liability company but continue its existence as a limited
liability company as provided in section 489.1119A. However,
if prior to dissolution all outstanding interests of the
professional limited liability company are acquired by two
or more persons licensed to practice a profession in this
state which the professional limited liability company is
authorized to practice, the professional limited liability
company need not be dissolved nor elect to no longer be a
professional limited liability company and may instead practice
the profession as provided in this article subchapter.
Sec. 120. Section 489.1117, Code 2023, is amended to read
as follows:
489.1117 Foreign professional limited liability company.
1. A foreign professional limited liability company may
practice a profession in this state if it complies with the
provisions of this article subchapter. The secretary of state
may prescribe forms for this purpose. A foreign professional
limited liability company may practice a profession in this
state only through members, managers, employees, and agents
who are licensed to practice the profession in this state.
The provisions of this article subchapter with respect to the
practice of a profession by a professional limited liability
-144-company apply to a foreign professional limited liability
company.
2. This article subchapter does not prohibit the practice
of a profession in this state by an individual who is a member,
manager, employee, or agent of a foreign professional limited
liability company, if the individual could lawfully practice
the profession in this state in the absence of any relationship
to a foreign professional limited liability company. This
subsection applies regardless of whether or not the foreign
professional limited liability company is authorized to
practice a profession in this state.
Sec. 121. Section 489.1118, Code 2023, is amended to read
as follows:
489.1118 Limited liability companies organized under the
other laws.
This article subchapter does not apply to or interfere with
the practice of any profession by or through any professional
limited liability company organized after July 1, 1992, under
any other law of this state or any other state or country, if
the practice is lawful under any other statute or rule of law
of this state. Any such professional limited liability company
may voluntarily elect to adopt this article subchapter and
become subject to its provisions, by amending its certificate
of organization to be consistent with all provisions of this
article subchapter and by stating in its amended certificate
of organization that the limited liability company has
voluntarily elected to adopt this article subchapter. Any
limited liability company organized under any law of any other
state or country may become subject to the provisions of this
article subchapter by complying with all provisions of this
article subchapter with respect to foreign professional limited
liability companies.
Sec. 122. Section 489.1119, Code 2023, is amended to read
as follows:
489.1119 Conflicts with other provisions of this chapter.
-145- The provisions of this article subchapter shall prevail over
any inconsistent provisions of this chapter.
Sec. 123. NEW SECTION. 489.1119A Election to no longer be
a professional limited liability company.
A professional limited liability company may elect to no
longer be a professional limited liability company but continue
its existence as a limited liability company by filing with
the secretary of state an amendment to or restatement of its
certificate of organization that states that the limited
liability company is no longer a professional limited liability
company and amending its name to no longer indicate it is a
professional limited liability company.
Sec. 124. NEW SECTION. 489.1204 Severability clause.
If any provision of this chapter or its application to any
person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this chapter
which can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.
Sec. 125. NEW SECTION. 489.1207 Application to existing
relationships.
1. For purposes of applying this chapter to a limited
liability company formed before the effective date of this
Act, references in the limited liability company’s operating
agreement to provisions in this chapter in effect before the
effective date of this Act are deemed to be references to the
comparable provision in this chapter after the effective date
of this Act.
2. A limited liability company that has published notice of
its dissolution and requested persons having claims against the
limited liability company to present them in accordance with
the notice pursuant to section 489.703 as that section existed
immediately prior to the effective date of this Act shall be
subject to the requirements set forth in that section as it
existed immediately prior to the effective date of this Act,
-146-including the right of a claim by a person that is commenced
within five years after publication of the notice.
3. For the purposes of applying this chapter to a limited
liability company formed before January 1, 2009, all of the
following apply:
a. The limited liability company’s articles of organization
are deemed to be the company’s certificate of organization.
b. For the purposes of applying section 489.102, subsection
15, and subject to section 489.112, subsection 4, language
in the limited liability company’s articles of organization
designating the limited liability company’s management
structure operates as if that language were in the operating
agreement.
c. If a professional limited liability company’s name
complied with section 490A.1503 as that section existed on
December 30, 2010, that company’s name shall also be deemed to
comply with the name requirements of section 489.1103 of the
2011 edition of the Iowa Code.
Sec. 126. Section 489.14101, Code 2023, is amended to read
as follows:
489.14101 Short title.
This article subchapter may be cited as the “Uniform
Protected Series Act”.
Sec. 127. Section 489.14102, unnumbered paragraph 1, Code
2023, is amended to read as follows:
As used in this article subchapter, unless the context
otherwise requires:
Sec. 128. Section 489.14102, subsections 4 and 9, Code 2023,
are amended to read as follows:
4. “Foreign protected series” means an arrangement,
configuration, or other structure established by a foreign
limited liability company which has attributes comparable to
a protected series established under this article subchapter.
The term applies whether or not the law under which the foreign
company is organized refers to “protected series”.
-147- 9. “Protected-series manager” means a person under whose
authority the powers of a protected series are exercised
and under whose direction the activities and affairs of the
protected series are managed under the operating agreement,
this article subchapter, and this chapter.
Sec. 129. Section 489.14104, subsection 4, paragraph c,
Code 2023, is amended to read as follows:
c. Except as permitted by law of this state other than
this article subchapter, have a purpose or power that the law
of this state other than this article subchapter prohibits a
limited liability company from doing or having.
Sec. 130. Section 489.14106, subsections 2, 3, and 4, Code
2023, are amended to read as follows:
2. If this chapter otherwise restricts the power of an
operating agreement to affect a matter, the restriction applies
to a matter under this article subchapter in accordance with
section 489.14108.
3. If law of this state other than this article subchapter
imposes a prohibition, limitation, requirement, condition,
obligation, liability, or other restriction on a limited
liability company, a member, manager, or other agent of the
company, or a transferee of the company, except as otherwise
provided in law of this state other than this article
subchapter, the restriction applies in accordance with section
489.14108.
4. Except as otherwise provided in section 489.14107, if the
operating agreement of a series limited liability company does
not provide for a matter described in subsection 1 in a manner
permitted by this article subchapter, the matter is determined
in accordance with the following rules:
a. To the extent this article subchapter addresses the
matter, this article subchapter governs.
b. To the extent this article subchapter does not address
the matter, the other articles subchapters of this chapter
govern the matter in accordance with section 489.14108.
-148- Sec. 131. Section 489.14107, subsection 1, paragraphs v, w,
x, and y, Code 2023, are amended to read as follows:
v. Article 6 Subchapter VI.
w. Article 7 Subchapter VII.
x. Article 8 Subchapter VIII.
y. A provision of this article subchapter pertaining to any
of the following:
(1) Registered agents.
(2) The secretary of state, including provisions pertaining
to records authorized or required to be delivered to the
secretary of state for filing under this article subchapter.
Sec. 132. Section 489.14108, subsection 2, paragraph b,
subparagraphs (1) and (2), Code 2023, are amended to read as
follows:
(1) Accept for filing a type of record that neither this
article subchapter nor any of the other articles subchapters of
this chapter authorizes or requires a person to deliver to the
secretary of state for filing.
(2) Make or deliver a record that neither this article
subchapter nor the other articles subchapters of this chapter
authorizes or requires the secretary of state to make or
deliver.
Sec. 133. Section 489.14204, subsection 1, paragraph c,
Code 2023, is amended to read as follows:
c. Other means authorized by law of this state other than
the other articles subchapters of this chapter.
Sec. 134. Section 489.14301, subsection 5, unnumbered
paragraph 1, Code 2023, is amended to read as follows:
To the extent permitted by this section and law of this
state other than this article subchapter, a series limited
liability company or protected series of the company may
hold an associated asset directly or indirectly, through a
representative, nominee, or similar arrangement, except that
all of the following applies:
Sec. 135. Section 489.14303, subsection 4, Code 2023, is
-149-amended to read as follows:
4. Except for section 489.14108, subsection 1, paragraph
“c”, a provision of this article subchapter which applies
to a protected-series transferee of a protected series of a
series limited liability company applies to the company in
its capacity as an owner of a protected-series transferable
interest of the protected series. A provision of the operating
agreement of a series limited liability company which applies
to a protected-series transferee of a protected series of the
company applies to the company in its capacity as an owner of a
protected-series transferable interest of the protected series.
Sec. 136. Section 489.14304, subsection 6, Code 2023, is
amended to read as follows:
6. Article 9 Subchapter IX applies to a protected series in
accordance with section 489.14108.
Sec. 137. Section 489.14402, subsection 3, paragraph b,
Code 2023, is amended to read as follows:
b. The claim is to establish or enforce a liability arising
under law of this state other than this article subchapter or
from an act or omission in this state.
Sec. 138. Section 489.14404, subsection 3, Code 2023, is
amended to read as follows:
3. In addition to any other remedy provided by law or
equity, if a claim against a series limited liability company
or a protected series has not been reduced to a judgment and
law other than this article subchapter permits a prejudgment
remedy by attachment, levy, or the like, the court may apply
subsection 2 as a prejudgment remedy.
Sec. 139. Section 489.14404, subsection 5, paragraph b,
Code 2023, is amended to read as follows:
b. The claimant is a resident of this state or doing
business or authorized to do business in this state, or the
claim under section 489.14404 is to enforce a judgment, or to
seek a prejudgment remedy, pertaining to a liability arising
from law of this state other than this article subchapter or an
-150-act or omission in this state.
Sec. 140. Section 489.14801, Code 2023, is amended to read
as follows:
489.14801 Uniformity of application and construction.
In applying and construing this article subchapter,
consideration shall be given to the need to promote uniformity
of the law with respect to its subject matter among states
that enact the uniform protected series Act as approved and
recommended by the national conference of commissioners on
uniform state laws.
Sec. 141. Section 489.14804, Code 2023, is amended to read
as follows:
489.14804 Savings clause.
This article subchapter does not affect an action commenced,
proceeding brought, or right accrued before July 1, 2020.
Sec. 142. REPEAL. Sections 489.113, 489.802, 489.803,
489.804, 489.805, 489.806, 489.807, 489.808, 489.1008,
489.1009, 489.1010, 489.1011, 489.1012, 489.1013, 489.1014,
489.1015, 489.1016, and 489.1304, Code 2023, are repealed.
Sec. 143. CODE EDITOR DIRECTIVE.
1. The Code editor is directed to make the following
transfers:
a. Section 489.104 to section 489.108.
b. Section 489.105 to section 489.109.
c. Section 489.106 to section 489.104.
d. Section 489.107 to section 489.111.
e. Section 489.108 to section 489.112.
f. Section 489.109 to section 489.113.
g. Section 489.110 to section 489.105.
h. Section 489.111 to section 489.106.
i. Section 489.112 to section 489.107.
j. Section 489.114 to section 489.116.
k. Section 489.114A, as enacted by this Act, to section
489.114.
l. Section 489.115 to section 489.117.
-151- m. Section 489.115A, as enacted by this Act, to section
489.115.
n. Section 489.116 to section 489.119.
o. Section 489.117 to section 489.122.
p. Section 489.205A to section 489.122A.
q. Section 489.206 to section 489.209.
r. Section 489.206A, as enacted by this Act, to section
489.206.
s. Section 489.208 to section 489.211.
t. Section 489.208A, as enacted by this Act, to section
489.208.
u. Section 489.209 to section 489.211A.
v. Section 489.701A to section 489.703.
w. Section 489.703 to section 489.704.
x. Section 489.704 to section 489.705.
y. Section 489.705 to section 489.708.
z. Section 489.706 to section 489.710.
aa. Section 489.706A, as enacted by this Act, to section
489.706.
ab. Section 489.707 to section 489.711.
ac. Section 489.708 to section 489.707.
ad. Section 489.801 to section 489.901.
ae. Section 489.805A, as enacted by this Act, to section
489.805.
af. Section 489.809 to section 489.912.
ag. Section 489.901 to section 489.801.
ah. Section 489.902 to section 489.802.
ai. Section 489.903 to section 489.803.
aj. Section 489.904 to section 489.804.
ak. Section 489.906 to section 489.806.
al. Section 489.906A, as enacted by this Act, to section
489.906.
am. Section 489.911A to section 489.902.
an. Section 489.911B to section 489.903.
ao. Section 489.911C to section 489.904.
-152- ap. Section 489.1119 to section 489.1120.
aq. Section 489.1119A to section 489.1119.
ar. Section 489.1301 to section 489.1201.
as. Section 489.1302 to section 489.1202.
at. Section 489.1303 to section 489.1203.
2. The Code editor shall correct internal references in the
Code and in any enacted legislation as necessary due to the
enactment of this section.
Sec. 144. DIRECTIONS TO THE CODE EDITOR — DIVIDING
SUBCHAPTER X INTO PARTS. The Code editor is directed to divide
the provisions of chapter 489, subchapter X, as amended or
enacted in this division of this Act, into parts as follows:
1. Part 1, including sections 489.1001 through 489.1007.
2. Part 2, including sections 489.1021 through 489.1026.
3. Part 3, including sections 489.1031 through 489.1036.
4. Part 4, including sections 489.1041 through 489.1046.
5. Part 5, including sections 489.1051 through 489.1056.
DIVISION II
COORDINATING AMENDMENTS
Sec. 145. Section 9.11, subsection 1, paragraph c, Code
2023, is amended to read as follows:
c. Chapter 489, including as provided in section 489.205,
489.205A and as stated in section 489.117 or as otherwise
described in sections 489.112, 489.302, 489.702, 489.1008,
489.1012, and 489.14502 section 489.210.
Sec. 146. Section 10.1, subsection 9, paragraph b, Code
2023, is amended to read as follows:
b. As used in paragraph “a”, a type of membership interest
in a limited liability company includes a protected series as
provided in chapter 489, article 14 subchapter XIV.
Sec. 147. Section 10.1, subsection 17, paragraph b, Code
2023, is amended to read as follows:
b. As used in paragraph “a”, a type of membership interest
in a limited liability company includes a protected series of a
series limited liability company as provided in chapter 489,
-153-article 14 subchapter XIV.
Sec. 148. Section 10.10, subsection 1, paragraph c,
subparagraph (2), Code 2023, is amended to read as follows:
(2) As used in subparagraph (1), a type of membership
interest in a limited liability company includes a protected
series of a series limited liability company as provided in
chapter 489, article 14 subchapter XIV.
Sec. 149. Section 488.108, subsection 4, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 150. Section 490.401, subsection 2, paragraph h,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 151. Section 501A.102, subsection 13, Code 2023, is
amended by striking the subsection.
Sec. 152. Section 501A.1101, subsections 1, 2, and 5, Code
2023, are amended to read as follows:
1. Authorization. Unless otherwise prohibited, cooperatives
organized under the laws of this state, including cooperatives
organized under this chapter or traditional cooperatives, may
merge or consolidate with each other, an Iowa limited liability
company under the provisions of section 489.1015, or other
another business entities entity organized under the laws
of another state, by complying with the provisions of this
section and the law of the state where the surviving or new
business entity will exist. A cooperative shall not merge or
consolidate with a business entity organized under the laws
of this state, other than a traditional cooperative, unless
the law governing the business entity expressly authorizes
merger or consolidation with a cooperative. This subsection
does not authorize a foreign business entity to do any act not
authorized by the law governing the foreign business entity.
2. Plan. To initiate a merger or consolidation of a
-154-cooperative, a written plan of merger or consolidation shall be
prepared by the board or by a committee selected by the board
to prepare a plan. The plan shall state all of the following:
a. The names of the each constituent domestic cooperative,
the name of any Iowa limited liability company that is a party
to the merger, to the extent authorized under section 489.1015,
and any foreign business entities entity that is a party to the
merger.
b. The name of the surviving or new domestic cooperative,
Iowa limited liability company as required by section 489.1015,
or other foreign business entity.
c. The manner and basis of converting membership or
ownership interests of the constituent domestic cooperative,
the Iowa limited liability company that is a party as provided
in section 489.1015, or foreign business entity into membership
or ownership interests in the surviving or new domestic
cooperative, the surviving Iowa limited liability company as
authorized in section 489.1015, or foreign business entity.
d. The terms of the merger or consolidation.
e. The proposed effect of the merger or consolidation on
the members and patron members of each constituent domestic
cooperative.
f. For a consolidation, the plan shall contain the articles
of the entity or organizational documents to be filed with the
state in which the entity is organized or, if the surviving
organization is an Iowa limited liability company, the articles
of organization.
5. Effect of merger or consolidation. For a merger that does
not involve an Iowa limited liability company, the following
shall apply to the The effect of a merger or consolidation
shall be as follows:
a. After the effective date, the each domestic cooperative,
Iowa limited liability company, if party to the plan,
cooperatives and any foreign business entity that is a party to
the plan become a single entity. For a merger, the surviving
-155-business entity is the business entity designated in the plan.
For a consolidation, the new domestic cooperative, the Iowa
limited liability company, if any, and any or new foreign
business entity is the business entity provided for in the
plan. Except for the surviving or new domestic cooperative,
Iowa limited liability company, or foreign business entity, the
separate existence of each merged or consolidated domestic or
foreign business entity that is a party to the plan ceases on
the effective date of the merger or consolidation.
b. The surviving or new domestic cooperative, Iowa limited
liability company, or foreign business entity possesses all of
the rights and property of each of the merged or consolidated
business entities and is responsible for all their obligations.
The title to property of the merged or consolidated domestic
cooperative, Iowa limited liability company, or foreign
business entity, is vested in the surviving or new domestic
cooperative, Iowa limited liability company, or foreign
business entity without reversion or impairment of the title
caused by the merger or consolidation.
c. If a merger involves an Iowa limited liability company,
this subsection is subject to the provisions of section
489.1015.
Sec. 153. Section 501A.1102, subsection 1, Code 2023, is
amended to read as follows:
1. Definition. For purposes of this section, “subsidiary”
means a domestic cooperative, an Iowa limited liability
company, or a foreign cooperative.
Sec. 154. Section 501A.1102, subsection 2, unnumbered
paragraph 1, Code 2023, is amended to read as follows:
An Iowa limited liability company may only participate
in a merger under this section to the extent authorized
under section 489.1015. A parent domestic cooperative or
a subsidiary that is a domestic cooperative may complete
the merger of a subsidiary as provided in this section.
However, if either the parent cooperative or the subsidiary
-156-is a business entity organized under the laws of this state,
the merger of the subsidiary is not authorized under this
section unless the law governing the business entity expressly
authorizes merger with a cooperative.
Sec. 155. Section 501A.1103, subsection 2, paragraph a,
Code 2023, is amended to read as follows:
a. A merger may be abandoned upon any of the following:
(1) The members of each of the constituent domestic
cooperatives entitled to vote on the approval of the plan
have approved the abandonment at a meeting by the affirmative
vote of the holders of a majority of the voting power of the
membership interests entitled to vote.
(2) The merger is with a domestic cooperative and an Iowa
limited liability company or foreign business entity.
(3) (2) The abandonment is approved in such manner as may
be required by section 489.1015 for the involvement of an Iowa
limited liability company, or for a foreign business entity by
under the laws of the state under which the foreign business
entity is organized.
(4) (3) The members of a constituent domestic cooperative
are not entitled to vote on the approval of the plan, and the
board of the constituent domestic cooperative has approved
the abandonment by the affirmative vote of a majority of the
directors present.
(5) (4) The plan provides for abandonment and all
conditions for abandonment set forth in the plan are met.
(6) (5) The plan is abandoned before the effective date
of the plan by a resolution of the board of any constituent
domestic cooperative abandoning the plan of merger approved by
the affirmative vote of a majority of the directors present,
subject to the contract rights of any other person under the
plan. If a plan of merger is with a domestic business entity or
foreign business entity, the plan of merger may be abandoned
before the effective date of the plan by a resolution of the
foreign business entity adopted according to the laws of the
-157-state under which the foreign business entity is organized,
subject to the contract rights of any other person under the
plan. If the plan of merger is with an Iowa limited liability
company, the plan of merger may be abandoned by the Iowa
limited liability company as provided in section 489.1015,
subject to the contractual rights of any other person under the
plan.
Sec. 156. Section 504.401, subsection 2, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 157. Section 504.403, subsection 1, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 158. Section 524.303, subsection 2, Code 2023, is
amended to read as follows:
2. Applicable fees, payable to the secretary of state as
specified in section 489.117 or section 490.122, for the filing
of the articles of incorporation or section 489.117 for filing
a certificate of organization.
Sec. 159. Section 524.310, subsection 5, paragraph b, Code
2023, is amended to read as follows:
b. A corporate or company name reserved, registered, or
protected as provided in section 489.109, 489.114A, 489.706,
490.402, 490.403, 504.402, or 504.403.
Sec. 160. Section 542.7, subsection 3, paragraph c,
subparagraph (2), Code 2023, is amended to read as follows:
(2) Notwithstanding chapter 489, article 11 subchapter XI,
or any other provision of law to the contrary, a certified
public accounting firm organized as a professional limited
liability company under chapter 489, article 11 subchapter XI,
may have nonlicensee members provided that the professional
limited liability company complies with the requirements of
this section.
-158-DIVISION III
EFFECTIVE DATE
Sec. 161. EFFECTIVE DATE. This Act takes effect January 1,
2024.
______________________________
PAT GRASSLEYSpeaker of the House______________________________
AMY SINCLAIRPresident of the Senate I hereby certify that this bill originated in the House and is known as House File 655, Ninetieth General Assembly.______________________________
MEGHAN NELSONChief Clerk of the HouseApproved _______________, 2023______________________________
KIM REYNOLDSGovernorda/jh/md
liability companies, providing penalties, and including
effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
LIMITED LIABILITY COMPANIES
Section 1. Section 489.101, Code 2023, is amended to read
as follows:
489.101 Short title.
1. This chapter may be cited as the “Revised Uniform
“Uniform Limited Liability Company Act”.
2. In addition, article 14 subchapter XIV of this chapter
may be cited as provided in section 489.14101.
Sec. 2. Section 489.102, Code 2023, is amended to read as
follows:
489.102 Definitions.
As used in this chapter, unless the context otherwise
requires:
1. “Certificate of organization” means the certificate
required by section 489.201. The term includes the certificate
as amended or restated.
2. “Contribution” means any benefit provided by a person to
a limited liability company that is any of the following:
a. In order to become a member upon formation of the company
and in accordance with an agreement between or among the
persons that have agreed to become the initial members of the
company.
b. In order to become a member after formation of the
company and in accordance with an agreement between the person
and the company.
c. In the person’s capacity as a member and in accordance
with the operating agreement or an agreement between the member
and the company.
2. “Contribution”, except in the phrase “right of
contribution”, means property or a benefit described in section
489.402 which is provided by a person to a limited liability
company to become a member or in the person’s capacity as a
member.
3. “Debtor in bankruptcy” means a person that is the subject
-1-of any of the following:
a. An order for relief under Tit.11 of the United States
Code or a comparable order under a successor statute of general
application.
b. A comparable order under federal, state, or foreign law
governing insolvency.
4. “Deliver” or “delivery” means any method of delivery
used in conventional commercial practice, including delivery in
person, by hand, mail, commercial delivery, and if authorized
in accordance with section 489.120, by electronic transmission.
5. “Distribution”, except as otherwise provided in section
489.405, subsection 6, means a transfer of money or other
property from a limited liability company to another a person
on account of a transferable interest or in the person’s
capacity as a member.
a. “Distribution” includes all of the following:
(1) A redemption or other purchase by a limited liability
company of a transferable interest.
(2) A transfer to a member in return for the member’s
relinquishment of any right to participate as a member in
the management or conduct of the limited liability company’s
activities and affairs or to have access to records or other
information concerning the company’s activities and affairs.
b. “Distribution” does not include amounts constituting
reasonable compensation for present or past service or payments
made in the ordinary course of business under a bona fide
retirement plan or other bona fide benefits program.
6. “Domestic cooperative” means an entity organized on a
cooperative basis under chapter 497, 498, or 499, a cooperative
organized under chapter 499A, or a cooperative organized under
chapter 501 or 501A.
7. “Effective”, with respect to a record required or
permitted to be delivered to the secretary of state for filing
under this chapter, means effective under section 489.205,
subsection 3.
-2- 7. “Electronic” means relating to technology having
electrical, digital, magnetic, wireless, optical,
electromagnetic, or similar capabilities.
8. “Electronic transmission” or “electronically transmitted”
means any form or process of communication not directly
involving the physical transfer of paper that is suitable for
the retention, retrieval, and reproduction of information by
the recipient. or another tangible medium that is all of the
following:
a. Suitable for the retention, retrieval, and reproduction
of information by the recipient.
b. Retrievable in paper form by the recipient through an
automated process used in conventional commercial practice.
9. “Filing entity” means an unincorporated entity, other
than a limited liability partnership, that is of a type that
is created by filing a public organic record or is required to
file a public organic record that evidences its creation.
9. 10. “Foreign limited liability company” means an
unincorporated entity formed under the law of a jurisdiction
other than this state and denominated by that law as a limited
liability company which would be a limited liability company if
formed under the law of this state.
11. “Jurisdiction”, used to refer to a political entity,
means the United States, a state, a foreign country, or a
political subdivision of a foreign country.
12. “Jurisdiction of formation” means the jurisdiction whose
law governs the internal affairs of an entity.
10. 13. “Limited liability company”, except in the phrase
“foreign limited liability company”, and in subchapter X means
an entity formed under this chapter or which becomes subject to
this chapter under subchapter X or section 489.110.
11. 14. “Manager” means a person that under the operating
agreement of a manager-managed limited liability company is
responsible, alone or in concert with others, for performing
the management functions stated in section 489.407, subsection
-3-3.
12. 15. “Manager-managed limited liability company” means a
limited liability company that qualifies under section 489.407,
subsection 1.
13. 16. “Member” means a person that has become a member
of a limited liability company under section 489.401 and has
not dissociated under section 489.602. for whom all of the
following are true:
a. The person has become a member of a limited liability
company under section 489.401 or was a member in a limited
liability company when the company became subject to this
chapter under section 489.110.
b. The person is not dissociated under section 489.602.
14. 17. “Member-managed limited liability company” means a
limited liability company that is not a manager-managed limited
liability company.
18. “Nonfiling entity” means an unincorporated entity that
is of a type that is not created by filing a public organic
record.
15. 19. “Operating agreement” means the agreement, whether
or not referred to as an operating agreement and whether oral,
implied, in a record, implied, or in any combination thereof,
of all the members of a limited liability company, including
a sole member, concerning the matters described in section
489.110, subsection 1. The term includes the agreement as
amended or restated.
16. 20. “Organizer” means a person that acts under section
489.201 to form a limited liability company.
17. 21. a. “Person” means an individual, business
corporation, business trust, estate, trust, nonprofit
corporation, partnership, limited partnership, limited
liability company, domestic cooperative, unincorporated
nonprofit association, statutory trust, business trust,
common-law business trust, estate, trust, association, joint
venture, public corporation, government or governmental
-4-subdivision, agency, or instrumentality, or any other legal or
commercial entity.
b. “Person” includes a protected series, however
denominated, of an entity if the protected series is
established under law that limits, or limits if conditions
specified under law are satisfied, the ability of a creditor
of the entity or of any other protected series of the entity to
satisfy a claim from assets of the protected series.
18. 22. “Principal office” means the principal executive
office of a limited liability company or foreign limited
liability company, whether or not the office is located in this
state.
23. “Property” means all property, whether real, personal,
or mixed or tangible or intangible, or any right or interest
therein.
19. 24. “Record”, used as a noun, means information that
is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable
form.
20. “Registered office” means the office that a limited
liability company or foreign limited liability company is
required to designate and maintain under section 489.113.
25. “Registered agent” means an agent of a limited
liability company or foreign limited liability company which is
authorized to receive service of any process, notice, or demand
required or permitted by law to be served on the company.
26. “Registered foreign limited liability company” means
a foreign limited liability company that is registered to do
business in this state pursuant to a statement of registration
filed by the secretary of state.
21. 27. “Sign” means, with the present intent to
authenticate or adopt a record, to do any of the following:
a. Execute or adopt a tangible symbol.
b. Attach to or logically associate with the record an
electronic symbol, sound, or process.
-5- 22. 28. “State” means a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin
Islands, or any territory or insular possession subject to the
jurisdiction of the United States.
23. 29. “Transfer” includes an assignment, conveyance,
deed, bill of sale, lease, mortgage, security interest,
encumbrance, gift, or transfer by operation of law. any of the
following:
a. An assignment.
b. A conveyance.
c. A sale.
d. A lease.
e. An encumbrance, including a mortgage or security
interest.
f. A gift.
g. A transfer by operation of law.
24. 30. a. “Transferable interest” means the right, as
originally associated with initially owned by a person in the
person’s capacity as a member, to receive distributions from
a limited liability company, in accordance with the operating
agreement, whether or not the person remains a member or
continues to own any part of the right.
b. “Transferable interest” applies to any fraction of the
interest, by whomever owned.
25. 31. a. “Transferee” means a person to which all or
part of a transferable interest has been transferred, whether
or not the transferor is a member.
b. “Transferee” includes a person that owns a transferable
interest under section 489.603, subsection 1, paragraph “c”.
Sec. 3. Section 489.103, Code 2023, is amended to read as
follows:
489.103 Knowledge — notice.
1. A person knows a fact when if the person has or is any
of the following:
a. Has actual knowledge of it.
-6- b. Is deemed to know it under subsection 4, paragraph “a”,
or law other than this chapter.
2. A person has notice of a fact when if the person has or
is any of the following:
a. Has reason to know the fact from all of the facts known
to the person at the time in question.
b. Is deemed to have notice of the fact under subsection 4,
paragraph “b”.
3. A Subject to section 489.210, subsection 6, a person
notifies another person of a fact by taking steps reasonably
required to inform the other person in ordinary course, whether
or not those steps cause the other person knows to know the
fact.
4. A person that is not a member is deemed both all of the
following:
a. To know of a limitation on authority to transfer real
property as provided in section 489.302, subsection 7.
b. To have notice of all of the following regarding a
limited liability company’s:
(1) Dissolution, The limited liability company’s
dissolution, ninety days after a statement of dissolution under
section 489.702, subsection 2, paragraph “b”, subparagraph (1),
becomes effective.
(2) Termination, The limited liability company’s
termination, ninety days after a statement of termination under
section 489.702, subsection 2, paragraph “b”, subparagraph (6),
becomes effective.
(3) Merger, The limited liability company’s participation
in a merger, interest exchange, conversion, or domestication,
ninety days after articles of merger, interest exchange,
conversion, or domestication under article 10 subchapter X
become effective.
Sec. 4. Section 489.104, Code 2023, is amended to read as
follows:
489.104 Nature, purpose, and duration of limited liability
-7-company.
1. A limited liability company is an entity distinct from
its member or members.
2. A limited liability company may have any lawful purpose,
regardless of whether for profit.
3. A limited liability company has perpetual duration.
Sec. 5. Section 489.105, Code 2023, is amended to read as
follows:
489.105 Powers.
1. Except as otherwise provided in subsection 2, a limited
liability company has the capacity to sue and be sued in its
own name and the power to do all things necessary or convenient
to carry on its activities and affairs.
2. Until a limited liability company has or has had at
least one member, the limited liability company lacks the
capacity to do any act or carry on any activity except all of
the following:
a. Delivering to the secretary of state for filing a
statement of change under section 489.114, an amendment to the
certificate under section 489.202, a statement of correction
under section 489.206, a biennial report under section 489.209,
a statement of withdrawal or a statement of rescission under
section 489.701A, or a statement of termination under section
489.702, subsection 2, paragraph “b”, subparagraph (6).
b. Admitting a member under section 489.401.
c. Dissolving under section 489.701.
3. A limited liability company that has or has had at least
one member may ratify an act or activity that occurred when the
company lacked capacity under subsection 2.
Sec. 6. Section 489.106, Code 2023, is amended to read as
follows:
489.106 Governing law.
The law of this state governs all of the following:
1. The internal affairs of a limited liability company.
2. The liability of a member as member and a manager as
-8-manager for the debts, obligations, a debt, obligation, or
other liabilities liability of a limited liability company.
Sec. 7. Section 489.108, Code 2023, is amended to read as
follows:
489.108 Name Permitted names.
1. The name of a limited liability company must contain
the words phrase “limited liability company” or “limited
company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”.
“Limited” may be abbreviated as “Ltd.”, and “company” may be
abbreviated as “Co.”.
2. Unless authorized by Except as otherwise provided in
subsection 3, the name of a limited liability company, and
the name under which a foreign limited liability company may
register to do business in this state, must be distinguishable
in on the records of the secretary of state from all any of the
following:
a. The name of each person that is not an individual and
that is incorporated, organized, or authorized to transact
business in this state.
b. Each name reserved under section 489.109.
a. The name of an existing person whose formation required
the filing of a record by the secretary of state and which is
not at the time administratively dissolved, or if such person
has been administratively dissolved, within five years of the
effective date of dissolution.
b. The name of a limited liability partnership whose
statement of qualification is in effect.
c. The name under which a person is registered to do
business in this state by the filing of a record by the
secretary of state.
d. The name reserved under section 489.109 or other law
of this state providing for the reservation of a name by the
filing of a record by the secretary of state.
e. The name registered under section 489.114 or other law
of this state providing for the registration of a name by the
-9-filing of a record by the secretary of state.
f. The name registered with the secretary of state as a
fictitious name.
3. A limited liability company may apply to the secretary of
state for authorization to use a name that does not comply with
subsection 2. The secretary of state shall authorize use of
the name applied for if either of the following applies: If a
person consents in a record to the use of its name and submits
an undertaking in a form satisfactory to the secretary of state
to change its name to a name that is distinguishable on the
records of the secretary of state from any name in any category
of names in subsection 2, the name of the consenting person may
be used by the person to which the consent was given.
a. The present user, registrant, or owner of the
noncomplying name consents in a signed record to the use
and submits an undertaking in a form satisfactory to the
secretary of state to change the noncomplying name to a name
that complies with subsection 2 and is distinguishable in the
records of the secretary of state from the name applied for.
b. The applicant delivers to the secretary of state a
certified copy of the final judgment of a court establishing
the applicant’s right to use in this state the name applied
for.
4. A limited liability company may use the name, including
the fictitious name, of another entity that is used in this
state if the other entity is formed under the law of this
state or is authorized to transact business in this state
and the proposed user limited liability company meets any
of the following conditions: In determining whether a name
is the same as or not distinguishable on the records of the
secretary of state from the name of another person, words,
phrases, or abbreviations indicating a type of person, such as
“corporation”, “corp.”, “incorporated”, “Inc.”, “professional
corporation”, “P.C.”, “PC”, “professional association”, “P.A.”,
“PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”,
-10-“limited liability partnership”, “L.L.P.”, “LLP”, “registered
limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited
liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered
limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”,
“limited liability company”, “L.L.C.”, “LLC”, “cooperative”,
“coop”, or “CP” shall not be taken into account.
a. Has merged with the other entity.
b. Has been formed by reorganization of the other entity.
c. Has acquired all or substantially all of the assets,
including the name, of the other entity.
5. This article does not control the use of fictitious
names. However, if a limited liability company uses a
fictitious name in this state, it shall deliver to the
secretary of state for filing a certified copy of the
resolution of its members if it is member-managed or its
managers if it is manager-managed, adopting the fictitious
name. The name of a limited liability company or foreign
limited liability company shall not contain words that may be
used only with approval by another state department or state
agency unless the company obtains the approval of such other
state department or agency and delivers to the secretary of
state for filing a record certifying such approval.
6. Subject to section 489.805, this section applies to
a foreign limited liability company transacting business in
this state which has a certificate of authority to transact
business in this state or which has applied for a certificate
of authority. A limited liability company or foreign limited
liability company may use a name that is not distinguishable
from a name described in subsection 2, paragraphs “a” through
“f”, if the company delivers to the secretary of state a
certified copy of a final judgment of a court of competent
jurisdiction establishing the right of the company to use the
name in this state.
7. A limited liability company may use the name, including
the fictitious name, of another entity that is used in this
-11-state if the other entity is formed under the law of this
state or is authorized to transact business in this state and
the proposed user limited liability company meets any of the
following conditions:
a. Has merged with the other entity.
b. Has been formed by reorganization of the other entity.
c. Has acquired all or substantially all of the assets,
including the name, of the other entity.
8. This subchapter does not control the use of fictitious
names. However, if a limited liability company uses a
fictitious name in this state, it shall deliver to the
secretary of state for filing a certified copy of the
resolution of its members if it is member-managed or its
managers if it is manager-managed, adopting the fictitious
name.
Sec. 8. Section 489.109, Code 2023, is amended to read as
follows:
489.109 Reservation of name.
1. A person may reserve the exclusive use of the a name
of a limited liability company, including a fictitious or
assumed name for a foreign limited liability company whose
name is not available, by delivering an application to the
secretary of state for filing that complies with section
489.112 by delivering an application to the secretary of state
for filing. The application must state the name and address
of the applicant and the name proposed to be reserved. If
the secretary of state finds that the name applied for is
available, it must be reserved the secretary of state shall
reserve the name for the applicant’s exclusive use for a
one-hundred-twenty-day period one hundred and twenty days.
2. The owner of a reserved name reserved for a limited
liability company may transfer the reservation to another
person by delivering to the secretary of state for filing a
signed notice in a record of the transfer which states the name
and address of the transferee person to which the reservation
-12-is being transferred.
Sec. 9. Section 489.110, Code 2023, is amended to read as
follows:
489.110 Operating agreement — scope, function, and
limitations.
1. Except as otherwise provided in subsections 2 3 and 3 4,
the operating agreement governs all of the following:
a. Relations among the members as members and between the
members and the limited liability company.
b. The rights and duties under this chapter of a person in
the capacity of manager.
c. The activities and affairs of the company and the conduct
of those activities and affairs.
d. The means and conditions for amending the operating
agreement.
2. To the extent the operating agreement does not otherwise
provide for a matter described in subsection 1, this chapter
governs the matter.
3. An operating agreement shall not do any of the following:
a. Vary a limited liability company’s capacity under section
489.105 to sue and be sued in its own name the law applicable
under section 489.104.
b. Vary the law applicable under section 489.106 a limited
liability company’s capacity under section 489.109 to sue and
be sued in its own name.
c. Vary the power of the court under section 489.204. any
requirement, procedure, or other provision of this chapter
pertaining to any of the following:
(1) Registered agents.
(2) The secretary of state, including provisions pertaining
to records authorized or required to be delivered to the
secretary of state for filing under this chapter.
d. Subject to subsections 4 through 7, eliminate the duty of
loyalty, the duty of care, or any other fiduciary duty Vary the
provisions of section 489.204.
-13- e. Subject to subsections 4 through 7, eliminate the
contractual obligation of good faith and fair dealing under
section 489.409, subsection 4 Alter or eliminate the duty of
loyalty or the duty of care, except as otherwise provided in
subsection 4.
f. Unreasonably restrict the duties and rights stated in
section 489.410 Eliminate the contractual obligation of good
faith and fair dealing under section 489.409, subsection 4,
but the operating agreement may prescribe the standards, if
not manifestly unreasonable, by which the performance of the
obligation is to be measured.
g. Vary the power of a court to decree dissolution in
the circumstances specified in section 489.701, subsection
1, paragraphs “d” and “e” Relieve or exonerate a person from
liability for conduct except as provided in subsection 6.
h. Vary the requirement to wind up a limited liability
company’s business as specified in section 489.702,
subsection 1, and section 489.702, subsection 2, paragraph
“a” Unreasonably restrict the duties and rights under section
489.410, but the operating agreement may impose reasonable
restrictions on the availability and use of information
obtained under that section and may define appropriate
remedies, including liquidated damages, for a breach of any
reasonable restriction on use.
i. Unreasonably restrict the right of a member to maintain
an action under article 9 Vary the causes of dissolution
specified in section 489.701, subsection 1, paragraph “d”.
j. Restrict the right to approve a merger, conversion, or
domestication under section 489.1014 to a member that will have
personal liability with respect to a surviving, converted, or
domesticated organization Vary the requirement to wind up the
limited liability company’s activities and affairs as specified
in section 489.702, subsection 1; subsection 2, paragraph “a”;
and subsection 5.
k. Except as otherwise provided in section 489.112,
-14-subsection 2, restrict the rights under this chapter of a
person other than a member or manager Unreasonably restrict the
right of a member to maintain an action under subchapter VIII.
l. Vary the provisions of section 489.805A, but the
operating agreement may provide that the limited liability
company shall not have a special litigation committee.
m. Vary the right of a member to approve a merger, interest
exchange, conversion, or domestication under section 489.1023,
subsection 1, paragraph “b”; section 489.1033, subsection 1,
paragraph “b”; section 489.1043, subsection 1, paragraph “b”; or
section 489.1053, subsection 1, paragraph “b”.
n. Vary the required contents of a plan of merger under
section 489.1022, subsection 1; plan of interest exchange
under section 489.1032, subsection 1; plan of conversion under
section 489.1042, subsection 1; or plan of domestication under
section 489.1052, subsection 1.
o. Except as otherwise provided in sections 489.111 and
489.112, subsection 2, restrict the rights under this chapter
of a person other than a member or manager.
4. If not manifestly unreasonable, the operating agreement
may do any of the following: Subject to subsection 3,
paragraph “g”, without limiting other terms that may be included
in an operating agreement, all the following rules apply:
a. Restrict or eliminate the duty to do any The operating
agreement may do all of the following:
(1) As required in section 489.409, subsection 2, paragraph
“a”, and section 489.409, subsection 8, to account to the
limited liability company and to hold as trustee for it any
property, profit, or benefit derived by the member in the
conduct or winding up of the company’s business, from a use by
the member of the company’s property, or from the appropriation
of a limited liability company opportunity Specify the method
by which a specific act or transaction that would otherwise
violate the duty of loyalty may be authorized or ratified by
one or more disinterested and independent persons after full
-15-disclosure of all material facts.
(2) As required in section 489.409, subsection 2, paragraph
“b”, and section 489.409, subsection 8, to refrain from dealing
with the company in the conduct or winding up of the company’s
business as or on behalf of a party having an interest adverse
to the company Alter the prohibition in section 489.405,
subsection 1, paragraph “b”, so that the prohibition requires
only that the limited liability company’s total assets not be
less than the sum of its total liabilities.
(3) As required by section 489.409, subsection 2, paragraph
“c”, and section 489.409, subsection 8, to refrain from
competing with the company in the conduct of the company’s
business before the dissolution of the company.
b. Identify specific types or categories of activities
that do not violate the duty of loyalty To the extent the
operating agreement of a member-managed limited liability
company expressly relieves a member of a responsibility that
the member otherwise would have under this chapter and imposes
the responsibility on one or more other members, the agreement
also may eliminate or limit any fiduciary duty of the member
relieved of the responsibility which would have pertained to
the responsibility.
c. Alter the duty of care, except to authorize intentional
misconduct or knowing violation of law. If not manifestly
unreasonable, the operating agreement may do all of the
following:
(1) Alter or eliminate the aspects of the duty of loyalty
stated in section 489.409, subsections 2 and 9.
(2) Identify specific types or categories of activities
that do not violate the duty of loyalty.
(3) Alter the duty of care, but may not authorize conduct
involving bad faith, willful or intentional misconduct, or
knowing violation of law.
(4) Alter or eliminate any other fiduciary duty.
d. Alter any other fiduciary duty, including eliminating
-16-particular aspects of that duty.
e. Prescribe the standards by which to measure the
performance of the contractual obligation of good faith and
fair dealing under section 489.409, subsection 4.
5. The operating agreement may specify the method by which
a specific act or transaction that would otherwise violate the
duty of loyalty may be authorized or ratified by one or more
disinterested and independent persons after full disclosure
of all material facts The court shall decide as a matter of
law whether a term of an operating agreement is manifestly
unreasonable under subsection 3, paragraph “f”, or subsection
4, paragraph “c”. All of the following shall apply:
a. The court shall make its determination as of the time the
challenged term became part of the operating agreement and by
considering only circumstances existing at that time.
b. The court may invalidate the term only if, in light of
the purposes, activities, and affairs of the limited liability
company, it is readily apparent that any of the following
apply:
(1) The objective of the term is unreasonable.
(2) The term is an unreasonable means to achieve the term’s
objective.
6. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of a
responsibility that the member would otherwise have under
this chapter and imposes the responsibility on one or more
other members, the operating agreement may, to the benefit
of the member that the operating agreement relieves of the
responsibility, also eliminate or limit any fiduciary duty that
would have pertained to the responsibility.
7. 6. The An operating agreement may alter or eliminate
the indemnification for a member or manager provided by section
489.408, subsection 1, and may eliminate or limit a member’s
or manager’s liability to the limited liability company and
members for money damages, except for any of the following:
-17- a. A breach of the duty of loyalty.
b. A financial benefit received by the member or manager to
which the member or manager is not entitled.
c. A breach of a duty under section 489.406.
d. Intentional infliction of harm on the company or a
member.
e. An intentional violation of criminal law.
8. The court shall decide any claim under subsection 4 that
a term of an operating agreement is manifestly unreasonable.
All of the following apply:
a. The court shall make its determination as of the time the
challenged term became part of the operating agreement and by
considering only circumstances existing at that time.
b. The court may invalidate the term only if, in light of
the purposes and activities of the limited liability company,
it is readily apparent that any of the following applies:
(1) The objective of the term is unreasonable.
(2) The term is an unreasonable means to achieve the
provision’s objective.
Sec. 10. Section 489.111, Code 2023, is amended to read as
follows:
489.111 Operating agreement — effect on limited liability
company and persons becoming members — preformation agreement.
1. A limited liability company is bound by and may enforce
the operating agreement, whether or not the company has itself
manifested assent to the operating agreement.
2. A person that becomes a member of a limited liability
company is deemed to assent to the operating agreement.
3. Two or more persons intending to become the initial
members of a limited liability company may make an agreement
providing that upon the formation of the company the agreement
will become the operating agreement. One person intending
to become the initial member of a limited liability company
may assent to terms providing that upon the formation of the
company the terms will become the operating agreement.
-18- 4. An operating agreement in a signed record that excludes
modification or rescission except by a signed record cannot be
otherwise modified or rescinded.
Sec. 11. Section 489.112, Code 2023, is amended to read as
follows:
489.112 Operating agreement — effect on third parties and
relationship to records effective on behalf of limited liability
company.
1. An operating agreement may specify that its amendment
requires the approval of a person that is not a party to the
operating agreement or the satisfaction of a condition. An
amendment is ineffective if its adoption does not include the
required approval or satisfy the specified condition.
2. The obligations of a limited liability company and its
members to a person in the person’s capacity as a transferee or
a person dissociated as a member are governed by the operating
agreement. Subject only to any a court order issued under
section 489.503, subsection 2, paragraph “b”, to effectuate a
charging order, an amendment to the operating agreement made
after a person becomes a transferee or is dissociated as a
member is or is not effective as follows:
a. Is effectivewith regard to any debt, obligation, or
other liability of the limited liability company or its members
to the person in the person’s capacity as a transferee or
person dissociated as a member.
b. Is not effective to the extent the amendment imposes a
new debt, obligation, or other liability on the transferee or
person dissociated as a member.
3. If a record that has been delivered by a limited
liability company to the secretary of state for filing and
has become becomes effective under this chapter and contains
a provision that would be ineffective under section 489.110,
subsection 3 or subsection 4, paragraph “c”, if contained in
the operating agreement, the provision is likewise ineffective
in the record.
-19- 4. Subject to subsection 3, if a record that has been
delivered by a limited liability company to the secretary
of state for filing and has become becomes effective under
this chapter and conflicts with a provision of the operating
agreement, all of the following rules apply:
a. The operating agreement prevails as to members, persons
dissociated as members, transferees, and managers.
b. The record prevails as to other persons to the extent
they reasonably rely on the record.
Sec. 12. Section 489.114, Code 2023, is amended to read as
follows:
489.114 Change of registered office or registered agent for
service of process or address for registered agency by limited
liability company.
1. A limited liability company or registered foreign
limited liability company may change its registered office
or its registered agent for service of process agent or the
address of its registered agent by delivering to the secretary
of state for filing a statement of change that sets forth
states all of the following:
a. The name of the limited liability company or foreign
limited liability company.
b. If the current registered office is to be changed, the
street and mailing addresses of the new registered office The
information that is to be in effect as a result of the filing of
the statement of change.
c. If the current registered agent is to be changed, the
name of the new registered agent and the new agent’s consent to
the appointment. The agent’s consent may be on the statement
or attached to it.
d. That after the change or changes are made, the street
address of its registered office and the business office of its
registered agent will be identical.
2. If a registered agent changes the street address of
the registered agent’s business office, the registered agent
-20-may change the street address of the registered office of any
limited liability company or foreign limited liability company
for which the person is the registered agent by notifying the
limited liability company or foreign limited liability company
in writing of the change and signing, either manually or in
facsimile, and delivering to the secretary of state for filing
a statement that complies with the requirements of subsection
1 and recites that the limited liability company or foreign
limited liability company has been notified of the change. The
members or managers of a limited liability company need not
approve the delivery to the secretary of state for filing of
any of the following:
a. A statement of change under this section.
b. A similar filing changing the registered agent or
registered office, if any, of the limited liability company in
any other jurisdiction.
3. If a registered agent changes the registered agent’s
business address to another place, the registered agent may
change the business address and the address of the registered
agent by filing a statement as required by subsection 2 for
each limited liability company or foreign limited liability
company, or a single statement of all limited liability
companies or all foreign limited liability companies named
in the notice, except that it need be signed only by the
registered agent and need not be responsive to subsection 1,
paragraph “c”, and must recite that a copy of the statement
has been mailed to each limited liability company or foreign
limited liability company named in the notice A statement of
change under this section designating a new registered agent
is an affirmation of fact by the limited liability company or
registered foreign limited liability company that the agent has
consented to serve.
4. A limited liability company or foreign limited liability
company may also change its registered office or registered
agent in its biennial report as provided in section 489.209
-21-As an alternative to using the procedure in this section,
a limited liability company may amend its certificate of
organization.
5. Subject to section 489.205, subsection 3, a statement of
change is effective when filed by the secretary of state.
Sec. 13. NEW SECTION. 489.114A Registration of name.
1. A foreign limited liability company not registered to
do business in this state under subchapter IX may register
its name, or an alternate name adopted pursuant to section
489.906A, if the name is distinguishable on the records of the
secretary of state from the names that are not available under
section 489.108.
2. To register its name or an alternate name adopted
pursuant to section 489.906A, a foreign limited liability
company must deliver to the secretary of state for filing an
application stating the company’s name, the jurisdiction and
date of its formation, and any alternate name adopted pursuant
to section 489.906A. If the secretary of state finds that the
name applied for is available, the secretary of state shall
register the name for the applicant’s exclusive use.
3. The registration of a name under this section is
effective for one year after the date of registration.
4. A foreign limited liability company whose name
registration is effective may renew the registration for
successive one-year periods by delivering, not earlier than
three months before the expiration of the registration,
to the secretary of state for filing a renewal application
that complies with this section. When filed, the renewal
application renews the registration for a succeeding one-year
period.
5. A foreign limited liability company whose name
registration is effective may register as a foreign limited
liability company under the registered name or consent in a
signed record to the use of that name by another person that is
not an individual.
-22- Sec. 14. Section 489.115, Code 2023, is amended to read as
follows:
489.115 Resignation of registered agent for service of
process.
1. A registered agent may resign the agent’s agency
appointment by signing and as an agent for a limited liability
company or registered foreign limited liability company by
delivering to the secretary of state for filing the signed
original a statement of resignation. The statement of
resignation may include a statement that the registered office
is also discontinued. The registered agent shall send a copy
of the statement of resignation by certified mail, return
receipt requested, to the limited liability company or foreign
limited liability company at its principal office and to the
registered office, if not discontinued. The registered agent
shall certify to the secretary of state that the copies have
been sent to the limited liability company or foreign limited
liability company, including the date the copies were sent.
that states all of the following:
a. The name of the limited liability company or foreign
limited liability company.
b. The name of the agent.
c. That the agent resigns from serving as registered agent
for the limited liability company or foreign limited liability
company.
d. The address of the limited liability company or foreign
limited liability company to which the agent will send the
notice required by subsection 3.
2. A statement of resignation takes effect on the earlier
of the following:
a. 12:01 a.m.on the The thirty-first day after the day on
which it is filed with the secretary of state.
b. The designation of a new registered agent for the limited
liability company or registered foreign limited liability
company.
-23- 3. A registered agent promptly shall furnish to the limited
liability company or registered foreign limited liability
company notice in a record of the date on which a statement of
resignation was filed.
4. When a statement of resignation takes effect, the
registered agent ceases to have responsibility under this
chapter for any matter thereafter tendered to it as agent for
the limited liability company or registered foreign limited
liability company. The resignation does not affect any
contractual rights the company or foreign company has against
the agent or that the agent has against the company or foreign
company.
5. A registered agent may resign with respect to a limited
liability company or registered foreign limited liability
company whether or not the company or foreign company is in
good standing.
Sec. 15. NEW SECTION. 489.115A Registered agent.
1. Each limited liability company and each registered
foreign limited liability company shall designate and maintain
a registered agent in this state. The designation of a
registered agent is an affirmation of fact by the limited
liability company or registered foreign limited liability
company that the agent has consented to serve.
2. A registered agent for a limited liability company or
registered foreign limited liability company must have a place
of business in this state.
3. The only duties under this chapter of a registered agent
that has complied with this chapter are as follows:
a. To forward to the limited liability company or registered
foreign limited liability company at the address most recently
supplied to the agent by the limited liability company or
registered foreign limited liability company any process,
notice, or demand pertaining to the company or foreign company
which is served on or received by the agent.
b. If the registered agent resigns, to provide the notice
-24-required by section 489.115, subsection 3, to the limited
liability company or registered foreign limited liability
company at the address most recently supplied to the agent by
the limited liability company or registered foreign limited
liability company.
c. To keep current the information with respect to the agent
in the certificate of organization or foreign registration
statement.
Sec. 16. Section 489.116, Code 2023, is amended to read as
follows:
489.116 Service of process, notice, or demand.
1. A limited liability company’s company or registered
foreign limited liability company’s registered agent is the
company’s agent for service of process, notice, or demand
required or permitted by law to company may be served on
the company with any process, notice, or demand required or
permitted by law by serving its registered agent.
2. If a limited liability company or registered foreign
limited liability company has no ceases to have a registered
agent, or the if its registered agent cannot with reasonable
diligence be served, the limited liability company or
registered foreign limited liability company may be served by
registered or certified mail, return receipt requested, or by
similar commercial delivery service, addressed to the limited
liability company or registered foreign limited liability
company at its principal office. The address of the principal
office must be as shown on the limited liability company’s or
registered foreign limited liability company’s most recent
biennial report filed with the secretary of state pursuant to
section 489.209. Service is perfected effected under this
subsection at on the earliest of any of the following:
a. The date the limited liability company or registered
foreign limited liability company receives the mail or delivery
by the commercial delivery service.
b. The date shown on the return receipt, if signed on behalf
-25-of by the limited liability company or registered foreign
limited liability company.
c. Five days after its deposit in with the United States
mail, as evidenced by the postmark, if mailed postpaid and
postal service or with the commercial delivery service, if
correctly addressed and with sufficient postage or payment.
3. A limited liability company or foreign limited liability
company may be served pursuant to this section, as provided
in another provision of this chapter, or as provided in
sections 617.3 through 617.6, unless the manner of service is
otherwise specifically provided for by another provision of law
If process, notice, or demand cannot be served on a limited
liability company or registered foreign limited liability
company pursuant to subsection 1 or 2, service may be made by
handing a copy to the individual in charge of any regular place
of business or activity of the limited liability company or
registered foreign company if the individual served is not a
plaintiff in the action.
4. Service of process, notice, or demand on a registered
agent must be in a written record.
5. Service of process, notice, or demand may be made by
other means under law other than this chapter, including as
provided in sections 617.3 through 617.6 unless specifically
provided for by another provision of law.
Sec. 17. Section 489.117, Code 2023, is amended to read as
follows:
489.117 Fees.
1. The secretary of state shall collect the following fees
when documents described in this subsection are delivered to
the secretary’s office for filing:
a. Statement of rescission No fee
b. Statement of withdrawal No fee
c. Certificate of organization $ 50
d. Application for use of
indistinguishable name $ 10
-26- e. Application for reserved name $ 10
f. Notice of transfer of reserved name $ 10
g. Statement of change of registered
agent or registered office or both No fee
h. Registered agent’s statement of
change of registered office for each
affected limited liability company No fee
i. Registered agent’s statement
of resignation No fee
j. Amendment to certificate of
organization $ 50
k. Restatement of certificate of
organization with amendment
of certificate $ 50
l. Articles of merger $ 50
m. Statement of dissolution $ 5
n. Declaration of administrative
dissolution No fee
o. Application for reinstatement
following administrative dissolution $ 5
p. Certificate of reinstatement No fee
q. Application for certificate
of authority registration $100
r. Application for amended
certificate of authority registration $100
s. Statement of cancellation $ 10
t. Certificate of revocation
of authority to transact business No fee
u. Statement of correction $ 5
v. Application for certificate of
existence or authorization registration $ 5
w. Any other document required or
permitted to be filed by this chapter $ 5
2. The secretary of state shall collect a fee of five
dollars each time process is served on the secretary under this
-27-chapter. The party to a proceeding causing service of process
is entitled to recover this fee as costs if the party prevails
in the proceeding.
3. The secretary of state shall collect the following fees
for copying and certifying the copy of any filed document
relating to a domestic limited liability company or foreign
limited liability company as follows:
a. One dollar a page for copying.
b. Five dollars for the certificate.
4. The secretary of state may impose, assess, and collect
a filing fee as a condition to accepting a biennial report as
provided in section 489.209.
Sec. 18. NEW SECTION. 489.118 Change of name or address by
registered agent.
1. If a registered agent changes its name or address,
the agent may deliver to the secretary of state for filing a
statement of change that states all of the following:
a. The name of the limited liability company or registered
foreign limited liability company represented by the registered
agent.
b. The name of the agent as currently shown in the records
of the secretary of state for the limited liability company or
registered foreign limited liability company.
c. If the name of the agent has changed, its new name.
d. If the address of the agent has changed, its new address.
2. A registered agent promptly shall furnish notice to the
represented limited liability company or registered foreign
limited liability company of the filing by the secretary of
state of the statement of change and the changes made by the
statement.
Sec. 19. NEW SECTION. 489.120 Delivery of record.
1. Except as otherwise provided in this chapter,
permissible means of delivery of a record include delivery by
hand, mail, conventional commercial practice, and electronic
transmission.
-28- 2. Delivery to the secretary of state is effective only when
a record is received by the secretary of state.
Sec. 20. NEW SECTION. 489.121 Reservation of power to amend
or repeal.
The general assembly has power to amend or repeal all or
part of this chapter at any time, and all limited liability
companies and foreign limited liability companies subject to
this chapter are governed by the amendment or repeal.
Sec. 21. Section 489.201, Code 2023, is amended to read as
follows:
489.201 Formation of limited liability company — certificate
of organization.
1. One or more persons may act as organizers to form a
limited liability company by signing and delivering to the
secretary of state for filing a certificate of organization.
2. A certificate of organization must state all of the
following:
a. The name of the limited liability company, which must
comply with section 489.108.
b. The street address and mailing addresses of the initial
registered office and the name of the initial registered
agent for service of process on the company limited liability
company’s principal office.
c. The name and street and mailing addresses in this state
of the limited liability company’s registered agent.
3. Subject to section 489.112, subsection 3, a A certificate
of organization may also contain statements as to matters other
than those required by subsection 2, but shall not vary or
otherwise affect the provisions specified in section 489.110,
subsections 3 and 4, in a manner inconsistent with that
section. However, a statement in a certificate of organization
is not effective as a statement of authority.
4. A limited liability company is formed when the secretary
of state has filed the certificate of organization, unless the
certificate states a delayed becomes effective date pursuant
-29-to section 489.205, subsection 3. If the certificate states
a delayed effective date, a limited liability company is not
formed if, before the certificate takes effect, a statement of
cancellation is signed and delivered to the secretary of state
for filing and the secretary of state files the certificate.
5. Subject to any delayed effective date and except in
a proceeding by this state to dissolve a limited liability
company, the filing of the certificate of organization by the
secretary of state is conclusive proof that the organizer
satisfied all conditions to the formation of a limited
liability company.
Sec. 22. Section 489.202, Code 2023, is amended to read as
follows:
489.202 Amendment or restatement of certificate of
organization.
1. A certificate of organization may be amended or restated
at any time.
2. To amend its certificate of organization, a limited
liability company must deliver to the secretary of state for
filing an amendment stating all of the following:
a. The name of the limited liability company.
b. The date of filing of its initial certificate of
organization.
c. The changes the amendment makes to the certificate as
most recently amended or restated text of the amendment.
3. To restate its certificate of organization, a limited
liability company must deliver to the secretary of state for
filing a restatement, designated as such in its heading,
stating and setting forth all of the following:
a. In the heading or an introductory paragraph, the
company’s present name and the date of the filing of the
company’s initial certificate of organization The name of the
limited liability company.
b. If the company’s name has been changed at any time since
the company’s formation, each of the company’s former names The
-30-text of the restated certificate of organization.
c. The changes the restatement makes to the certificate as
most recently amended or restated A statement that the restated
certificate consolidates all amendments into a single document.
d. If a new amendment is included in the restated
certificate of organization, the statements required under
subsection 2 with respect to the new amendment if not otherwise
provided.
4. Subject to section 489.112, subsection 3, and section
489.205, subsection 3, an amendment to or restatement of a
certificate of organization is effective when filed by the
secretary of state. If a member of a member-managed limited
liability company, or a manager of a manager-managed limited
liability company, knows that any information in a filed
certificate of organization was inaccurate when the certificate
of organization was filed or has become inaccurate due to
changed circumstances, the member or manager shall promptly do
any of the following:
a. Cause the certificate of organization to be amended.
b. If appropriate, deliver to the secretary of state
for filing a statement of change under section 489.114 or a
statement of correction under section 489.206.
5. If a member of a member-managed limited liability
company, or a manager of a manager-managed limited liability
company, knows that any information in a filed certificate of
organization was inaccurate when the certificate was filed
or has become inaccurate owing to changed circumstances, the
member or manager shall promptly do any of the following:
a. Cause the certificate to be amended.
b. If appropriate, deliver to the secretary of state
for filing a statement of change under section 489.114 or a
statement of correction under section 489.206.
Sec. 23. Section 489.203, Code 2023, is amended to read as
follows:
489.203 Signing of records to be delivered for filing to
-31-secretary of state.
1. A record delivered to the secretary of state for filing
pursuant to this chapter must be signed as follows:
a. Except as otherwise provided in paragraphs “b” and “c”, a
record signed on behalf of by a limited liability company must
be signed by a person authorized by the company.
b. A limited liability company’s initial certificate of
organization must be signed by at least one person acting as
an organizer.
c. A record filed delivered on behalf of a dissolved limited
liability company that does not have or has not had at least
one has no member must be signed by an organizer the person
winding up the company’s activities and affairs under section
489.702, subsection 3, or a person appointed under section
489.702, subsection 4, to wind up the activities and affairs.
d. A record filed on behalf of a dissolved limited liability
company that has no members must be signed by the person
winding up the company’s activities under section 489.702,
subsection 3, or a person appointed under section 489.702,
subsection 4, to wind up those activities A statement of denial
by a person under section 489.303 must be signed by that
person.
e. A statement of cancellation under section 489.201,
subsection 4, must be signed by each organizer that signed
the initial certificate of organization, but a personal
representative of a deceased or incompetent organizer may sign
in the place of the decedent or incompetent Any other record
delivered on behalf of a person to the secretary of state for
filing must be signed by that person.
f. A statement of denial by a person under section 489.303
must be signed by that person.
g. Any other record must be signed by the person on whose
behalf the record is delivered to the secretary of state.
2. Any A record filed delivered for filing under this
chapter may be signed by an agent. Whenever this chapter
-32-requires a particular individual to sign a record and the
individual is deceased or incompetent, the record may be signed
by a legal representative of the individual.
3. A person that signs a record as an agent or legal
representative affirms as a fact that the person is authorized
to sign the record.
Sec. 24. Section 489.204, Code 2023, is amended to read as
follows:
489.204 Signing and filing pursuant to judicial order.
1. If a person required by this chapter to sign a record
or deliver a record to the secretary of state for filing under
this chapter does not do so, any other person that is aggrieved
may petition the district court to order one or more of the
following:
a. The person to sign the record.
b. The person to deliver the record to the secretary of
state for filing.
c. The secretary of state to file the record unsigned.
2. If a petitioner under subsection 1 is not the limited
liability company or foreign limited liability company to which
the record pertains, the petitioner shall make the limited
liability company or foreign limited liability company a party
to the action.
3. If a district court orders an unsigned record to be
delivered to the secretary of state, the secretary of state
shall file the record and the court order upon receipt A record
filed under subsection 1, paragraph “c”, is effective without
being signed.
Sec. 25. Section 489.205, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.205 Liability for inaccurate information in filed
records.
1. If a record delivered to the secretary of state for
filing under this chapter and filed by the secretary of state
contains inaccurate information, a person that suffers loss by
-33-reliance on the information may recover damages for the loss
from all of the following:
a. A person that signed the record, or caused another to
sign it on the person’s behalf, and knew the information to be
inaccurate at the time the record was signed.
b. Subject to subsection 2, a member of a member-managed
limited liability company or a manager of a manager-managed
limited liability company if all of the following apply:
(1) The record was delivered for filing on behalf of the
limited liability company.
(2) The member or manager knew or had notice of the
inaccuracy for a reasonably sufficient time before the
information was relied upon so that, before the reliance,
the member or manager reasonably could have done any of the
following:
(a) Effected an amendment under section 489.202.
(b) Filed a petition under section 489.204.
(c) Delivered to the secretary of state for filing a
statement of change under section 489.114 or a statement of
correction under section 489.206.
2. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of
responsibility for maintaining the accuracy of information
contained in records delivered on behalf of the limited
liability company to the secretary of state for filing under
this chapter and imposes that responsibility on one or more
other members, the liability stated in subsection 1, paragraph
“b”, applies to those other members and not to the member that
the operating agreement relieves of the responsibility.
3. A person commits a serious misdemeanor if that person
signs a record the person knows is false in any material
respect with intent that the record be delivered to the
secretary of state for filing.
Sec. 26. Section 489.206, Code 2023, is amended to read as
follows:
-34- 489.206 Correcting filed record.
1. A limited liability company or foreign limited liability
company may deliver to the secretary of state for filing
a statement of correction to correct a record previously
delivered by the company to the secretary of state and filed
by the secretary of state, if at the time of filing the record
contained inaccurate information or was defectively signed.
A person on whose behalf a filed record was delivered to the
secretary of state for filing may correct the record if any of
the following apply:
a. The record at the time of filing was inaccurate.
b. The record was defectively signed.
c. The electronic transmission of the record to the
secretary of state was defective.
2. A statement of correction under subsection 1 shall not
have a delayed effective date and must do all of the following:
To correct a filed record, a person on whose behalf the record
was delivered to the secretary of state must deliver to the
secretary of state for filing a statement of correction.
a. Describe the record to be corrected, including its filing
date, or attach a copy of the record as filed.
b. Specify the inaccurate information and the reason it is
inaccurate or the manner in which the signing was defective.
c. Correct the defective signature or inaccurate
information.
3. When filed by the secretary of state, a statement of
correction under subsection 1 is effective retroactively as
of the effective date of the record the statement corrects,
but the statement is effective when filed as to A statement of
correction shall comply with all of the following:
a. For the purposes of section 489.103, subsection 4 It must
not state a delayed effective date.
b. As to persons that previously relied on the uncorrected
record and would be adversely affected by the retroactive
effect It must be signed by the person correcting the filed
-35-record.
c. It must describe the record to be corrected including its
filing date or attach a copy of the record as filed.
d. It must specify the inaccuracy or defect to be corrected.
e. It must correct the inaccuracy or defect.
4. A statement of correction is effective as of the
effective date of the filed record that it corrects except for
purposes of section 489.103, subsection 4, and as to persons
relying on the uncorrected filed record and adversely affected
by the correction. For those purposes and as to those persons,
the statement of correction is effective when filed.
Sec. 27. NEW SECTION. 489.206A Filing requirements.
1. To be filed by the secretary of state pursuant to
this chapter, a record must be captioned to describe the
record’s purpose, must be received by the secretary of state,
must comply with this chapter, and must satisfy all of the
following:
a. The filing of the record must be required or permitted by
this chapter.
b. The record must be physically delivered in written
form unless and to the extent the secretary of state permits
electronic delivery of records.
c. The words in the record must be in English, and numbers
must be in Arabic or Roman numerals, but the name of an entity
need not be in English if written in English letters or Arabic
or Roman numerals.
d. The record must be signed by a person authorized or
required under this chapter to sign the record.
e. The record must state the name and capacity, if
any, of each individual who signed it, either on behalf
of the individual or the person authorized or required to
sign the record, but need not contain a seal, attestation,
acknowledgment, or verification.
2. If law other than this chapter prohibits the disclosure
by the secretary of state of information contained in a record
-36-delivered to the secretary of state for filing, the secretary
of state shall file the record if the record otherwise complies
with this chapter but may redact the information.
3. When a record is delivered to the secretary of state for
filing, any fee required under this chapter and any fee, tax,
interest, or penalty required to be paid under this chapter or
law other than this chapter must be paid in a manner permitted
by the secretary of state or by that law.
4. The secretary of state may require that a record
delivered in written form be accompanied by an identical or
conformed copy.
5. The secretary of state may provide forms for filings
required or permitted to be made by this chapter, but, except
as otherwise provided in subsection 6, their use is not
required.
6. The secretary of state may prescribe, and furnish on
request and require any of the following forms:
a. A cover sheet for a filing.
b. An application for a certificate of existence or
certificate of registration.
c. A foreign corporation’s registration statement.
d. A foreign corporation’s statement of withdrawal.
e. A foreign corporation’s transfer of registration
statement.
f. The biennial report required by section 489.209.
7. Upon request and payment of the requisite fee, the
secretary of state shall send the requester a certified copy
of a requested record.
Sec. 28. Section 489.207, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.207 Effective date and time.
Except as otherwise provided in section 489.115 and section
489.208A and subject to section 489.206, subsection 4, a record
filed under this chapter is effective as follows:
1. On the date and at the time of its filing by the
-37-secretary of state, as provided in section 489.210, subsection
2.
2. On the date of filing and at the time specified in the
record as its effective time, if later than the time under
subsection 1.
3. At a specified delayed effective date and time, which may
not be more than ninety days after the date of filing.
4. If a delayed effective date is specified, but no time is
specified, at 12:01 a.m.on the date specified, which shall not
be more than ninety days after the date of filing.
Sec. 29. Section 489.208, Code 2023, is amended to read as
follows:
489.208 Certificate of existence or authorization
registration.
1. Any person may apply to On request of any person, the
secretary of state to be furnished shall issue a certificate
of existence for a domestic limited liability company or a
certificate of authorization registration for a registered
foreign limited liability company.
2. A certificate of existence or certificate of
authorization registration under subsection 1 must set forth
state all of the following:
a. The domestic limited liability company’s name or the
registered foreign limited liability company’s name used in
this state.
b. One In the case of a limited liability company, all of
the following:
(1) If it is a domestic limited liability company, that
the company is duly formed under the laws of this state, the
date of its formation, and the period of its duration That
a certificate of organization has been filed and has taken
effect.
(2) If it is a foreign limited liability company, that the
company is authorized to transact business in this state The
date the certificate became effective.
-38- (3) The period of the limited liability company’s duration
if the records of the secretary of state reflect that its
period of duration is less than perpetual.
(4) That all of the following apply:
(a) No statement of dissolution, statement of
administrative dissolution, or statement of termination has
been filed.
(b) The records of the secretary of state do not otherwise
reflect that the limited liability company has been dissolved
or terminated.
(c) A proceeding is not pending under section 489.705.
c. That all fees, taxes, and penalties due under this
chapter or other law to the secretary of state have been paid
In the case of a registered foreign limited liability company,
that it is registered to do business in this state.
d. That the company’s most recent biennial report required
by this chapter has been filed by the secretary of state That
all fees, taxes, interest, and penalties owed to this state
by the limited liability company or foreign limited liability
company and collected through the secretary of state have been
paid, if all of the following apply:
(1) Payment is reflected in the records of the secretary of
state.
(2) Nonpayment affects the good standing or registration
of the limited liability company or foreign limited liability
company.
e. If it is a domestic limited liability company, that a
statement of dissolution or statement of termination has not
been filed That the most recent biennial report required by
section 489.209 has been delivered to the secretary of state
for filing.
f. Other facts of record in the office reflected in the
records of the secretary of state that may be requested by
the applicant pertaining to the limited liability company or
foreign limited liability company which the person requesting
-39-the certificate reasonably requests.
3. Subject to any qualification stated in the certificate, a
certificate of existence or certificate of authorization issued
by the secretary of state is under subsection 1 may be relied
on as conclusive evidence that the domestic limited liability
company is in existence or the foreign limited liability
company is authorized to transact business in this state of the
facts stated in the certificate.
Sec. 30. NEW SECTION. 489.208A Withdrawal of filed record
before effectiveness.
1. Except as otherwise provided in sections 489.1024,
489.1034, 489.1044, and 489.1054, a record delivered to the
secretary of state for filing may be withdrawn before it takes
effect by delivering to the secretary of state for filing a
statement of withdrawal.
2. A statement of withdrawal must comply with all of the
following:
a. Be signed by each person that signed the record being
withdrawn, except as otherwise agreed by those persons.
b. Identify the record to be withdrawn.
c. If signed by fewer than all the persons that signed the
record being withdrawn, state that the record is withdrawn in
accordance with the agreement of all the persons that signed
the record.
3. On filing by the secretary of state of a statement of
withdrawal, the action or transaction evidenced by the original
record does not take effect.
Sec. 31. Section 489.209, Code 2023, is amended to read as
follows:
489.209 Biennial report for secretary of state.
1. A limited liability company or a foreign limited
liability company authorized registered to transact do business
in this state shall deliver to the secretary of state for
filing a biennial report that states all of the following:
a. The name of the company.
-40- b. The street address of the company’s registered office,
the name of its registered agent at that office, and the
consent of any new registered agent.
c. The street address of its principal office.
d. In the case of a foreign limited liability company, the
state or other jurisdiction under whose law the foreign company
is formed and any alternate name adopted under section 489.805,
subsection 1.
2. Information in a biennial report under this section
must be current as of the date the report is delivered to the
secretary of state for filing. The report shall be executed
on behalf of the limited liability company or foreign limited
liability company and signed as provided in section 489.203.
3. The first biennial report under this section in this
state must be delivered to the secretary of state between
January 1 and April 1 of the first odd-numbered year following
the calendar year in which a limited liability company was
formed or a foreign limited liability company was authorized
registered to transact do business. A subsequent biennial
report must be delivered to the secretary of state between
January 1 and April 1 of each following odd-numbered calendar
year. A filing fee for the biennial report shall be determined
by the secretary of state pursuant to section 489.117. Each
biennial report shall contain information related to the
two-year period immediately preceding the calendar year in
which the report is filed.
4. If a biennial report does not contain the information
required in this section, the secretary of state shall promptly
notify the reporting limited liability company or foreign
limited liability company in writing and return the report to
it for correction.
5. The secretary of state may provide for the change of
registered office or registered agent on the form prescribed by
the secretary of state for the biennial report, provided that
the form contains the information required in section 489.114.
-41-If the secretary of state determines that a biennial report
does not contain the information required in this section but
otherwise meets the requirements of section 489.114 for the
purpose of changing the registered office or registered agent,
the secretary of state shall file the statement of change
for the registered office or registered agent, effective as
provided in section 489.205 489.207, subsection 3, before
returning the biennial report to the limited liability
company as provided in this section. A statement of change of
registered office or registered agent accomplished pursuant to
this subsection shall be executed by a person authorized to
execute the biennial report.
Sec. 32. NEW SECTION. 489.210 Duty of secretary of state
to file — review of refusal to file — delivery of record by
secretary of state.
1. The secretary of state shall file a record delivered
to the secretary of state for filing which satisfies this
chapter. The duty of the secretary of state under this section
is ministerial.
2. When the secretary of state files a record, the secretary
of state shall record it as filed on the date and at the time of
its delivery. After filing a record, the secretary of state
shall deliver to the person that submitted the record a copy
of the record with an acknowledgment of the date and time of
filing and, in the case of a statement of denial, also to the
limited liability company to which the statement pertains.
3. If the secretary of state refuses to file a record, the
secretary of state shall, not later than fifteen business days
after the record is delivered, do all of the following:
a. Return the record or notify the person that submitted the
record of the refusal.
b. Provide a brief explanation in a record of the reason for
the refusal.
4. If the secretary of state refuses to file a record, the
person that submitted the record may petition the district
-42-court of Polk county to compel filing of the record. The
record and the explanation of the secretary of state of
the refusal to file must be attached to the petition. The
court may decide the matter in a summary proceeding. If the
court orders the record to be filed, the court may order it
filed with an effective date that is the date on which it was
submitted to the secretary of state for filing.
5. The filing of or refusal to file a record does not do any
of the following:
a. Affect the validity or invalidity of the record in whole
or in part.
b. Create a presumption that the information contained in
the record is correct or incorrect.
6. Except as otherwise provided by section 489.116 or by law
other than this chapter, the secretary of state may deliver any
record to a person by delivering it by any of the following:
a. In person to the person that submitted it.
b. To the address of the person’s registered agent.
c. To the principal office of the person.
d. To another address the person provides to the secretary
of state for delivery.
Sec. 33. Section 489.302, Code 2023, is amended to read as
follows:
489.302 Statement of limited liability company authority.
1. A limited liability company may deliver to the secretary
of state for filing a statement of authority. All of the
following apply to the statement:
a. It must include the name of the limited liability company
and the name and street address and mailing addresses of its
principal office registered agent.
b. With respect to any position that exists in or with
respect to the limited liability company, it may state the
authority, or limitations on the authority, of all persons
holding the position to do any of the following:
(1) Execute Sign an instrument transferring real property
-43-held in the name of the limited liability company.
(2) Enter into other transactions on behalf of, or otherwise
act for or bind, the limited liability company.
c. It may state the authority, or limitations on the
authority, of a specific person to do any of the following:
(1) Execute Sign an instrument transferring real property
held in the name of the limited liability company.
(2) Enter into other transactions on behalf of, or otherwise
act for or bind, the limited liability company.
2. To amend or cancel a statement of authority filed by
the secretary of state under section 489.205, subsection 1,
a limited liability company must deliver to the secretary of
state for filing an amendment or cancellation stating all of
the following:
a. The name of the limited liability company.
b. The name and street address and mailing addresses of the
limited liability company’s principal office registered agent.
c. The caption of the statement being amended or canceled
and the date the statement being affected became effective.
d. The contents of the amendment or a declaration that the
statement being affected is canceled.
3. A statement of authority affects only the power of a
person to bind a limited liability company to persons that are
not members.
4. Subject to subsection 3 and section 489.103, subsection
4, and except as otherwise provided in subsections 6, 7, and
8, a limitation on the authority of a person or a position
contained in an effective statement of authority is not by
itself evidence of any person’s knowledge or notice of the
limitation by any person.
5. Subject to subsection 3, a grant of authority not
pertaining to a transfer of real property and contained in an
effective statement of authority is conclusive in favor of a
person that gives value in reliance on the grant, except to the
extent that when the person gives value, any of the following
-44-applies:
a. The person has knowledge to the contrary.
b. The statement has been canceled or restrictively amended
under subsection 2.
c. A limitation on the grant is contained in another
statement of authority that became effective after the
statement containing the grant became effective.
6. Subject to subsection 3, an effective statement of
authority that grants authority to transfer real property
held in the name of the limited liability company and that, a
certified copy of which statement is recorded by certified copy
in the office for recording transfers of the real property, is
conclusive in favor of a person that gives value in reliance
on the grant without knowledge to the contrary, except to the
extent that when the person gives value, any of the following
applies:
a. The statement has been canceled or restrictively amended
under subsection 2 and a certified copy of the cancellation
or restrictive amendment has been recorded in the office for
recording transfers of the real property.
b. A limitation on the grant is contained in another
statement of authority that became effective after the
statement containing the grant became effective, and a
certified copy of the later-effective statement is recorded in
the office for recording transfers of the real property.
7. Subject to subsection 3, if a certified copy of an
effective statement containing a limitation on the authority to
transfer real property held in the name of a limited liability
company is recorded in the office for recording transfers of
that real property, all persons are deemed to know of the
limitation.
8. Subject to subsection 9, an effective statement of
dissolution or a statement of termination is a cancellation
of any filed statement of authority for the purposes of
subsection 6 and is a limitation on authority for the purposes
-45-of subsection 7.
9. After a statement of dissolution becomes effective,
a limited liability company may deliver to the secretary of
state for filing and, if appropriate, the secretary of state
may record a statement of authority that is designated as
a post-dissolution statement of authority. The statement
operates as provided in subsections 6 and 7.
10. A statement of authority filed by the secretary of
state under section 489.205 489.207, subsection 1, is effective
until amended or canceled as provided in subsection 2, unless
an earlier cancellation date is specified in the statement.
11. An effective statement of denial operates as a
restrictive amendment under this section and may be recorded by
certified copy for the purposes of subsection 6, paragraph “a”.
Sec. 34. Section 489.304, Code 2023, is amended to read as
follows:
489.304 Liability of members and managers.
1. For debts, obligations, or other liabilities A debt,
obligation, or other liability of a limited liability
company, whether arising in contract, tort, or otherwise
all of the following apply: is solely the debt, obligation,
or other liability of the company. A member or manager is
not personally liable, directly or indirectly, by way of
contribution or otherwise, for a debt, obligation, or other
liability of the company solely by reason of being or acting
as a member or manager. This subsection applies regardless of
the dissolution of the company.
a. They are solely the debts, obligations, or other
liabilities of the company.
b. They do not become the debts, obligations, or other
liabilities of a member or manager solely by reason of the
member acting as a member or manager acting as a manager.
2. The failure of a limited liability company to observe any
particular formalities relating to the exercise of its powers
or management of its activities and affairs is not a ground
-46-for imposing liability on the members a member or managers
manager for the debts, obligations, a debt, obligation, or
other liabilities liability of the company.
Sec. 35. Section 489.401, Code 2023, is amended to read as
follows:
489.401 Becoming member.
1. If a limited liability company is to have only one member
upon formation, a the person becomes the a member as agreed by
that person and the organizer of the company or a majority of
organizers if more than one. That person and the organizer
may be, but need not be, different persons. If different, the
organizer acts on behalf of the initial member.
2. If a limited liability company is to have more than
one member upon formation, those persons become members as
agreed by the persons before the formation of the company. The
organizer acts on behalf of the persons in forming the company
and may be, but need not be, one of the persons.
3. If a limited liability company has no members upon
formation, a person becomes a member of the limited liability
company with the consent of the organizer or a majority of
the organizers if more than one. The organizers may consent
to more than one person simultaneously becoming the company’s
initial members After formation of a limited liability company,
a person becomes a member according to any of the following:
a. As provided in the operating agreement.
b. As the result of a transaction effective under subchapter
X.
c. With the affirmative vote or consent of all the members.
d. As provided in section 489.701, subsection 1, paragraph
“c”.
4. After formation of a limited liability company, a person
becomes a member upon A person may become a member without any
of the following:
a. As provided in the operating agreement Acquiring a
transferable interest.
-47- b. As the result of a transaction effective under article 10
Making or being obligated to make a contribution to the limited
liability company.
c. With the consent of all the members.
d. If, within ninety consecutive days after the company
ceases to have any members, all of the following occur:
(1) The last person to have been a member, or the legal
representative of that person, designates a person to become a
member.
(2) The designated person consents to become a member.
5. A person may become a member without acquiring a
transferable interest and without making or being obligated to
make a contribution to the limited liability company.
Sec. 36. Section 489.402, Code 2023, is amended to read as
follows:
489.402 Form of contribution.
A contribution may consist of tangible or intangible
property or other benefit to a limited liability company,
including money, services performed, promissory notes, other
agreements to contribute money or property, and contracts for
services to be performed property transferred to, services
performed for, or another benefit provided to the limited
liability company or an agreement to transfer property to,
perform services for, or provide another benefit to the
company.
Sec. 37. Section 489.403, Code 2023, is amended to read as
follows:
489.403 Liability for contributions.
1. A person’s obligation to make a contribution to a
limited liability company is not excused by the person’s
death, disability, termination, or other inability to perform
personally. If a person does not make a required contribution,
the person or the person’s estate is obligated to contribute
money equal to the value of the part of the contribution which
has not been made, at the option of the company.
-48- 2. A creditor of a limited liability company which extends
credit or otherwise acts in reliance on an obligation described
in subsection 1 may enforce the obligation If a person does not
fulfill an obligation to make a contribution other than money,
the person is obligated at the option of the limited liability
company to contribute money equal to the value of the part of
the contribution which has not been made.
3. An operating agreement may provide that the interest of
any member who fails to make a contribution that the member
is obligated to make is subject to specified penalties for,
or specified consequences of, such failure. The penalty or
consequence may take the form of reducing or eliminating
the defaulting member’s proportionate interest in a limited
liability company, subordinating the member’s interest to
that of a nondefaulting member, a forced sale of the member’s
interest, forfeiture of the member’s interest, the lending by
other members of the amount necessary to meet the member’s
commitment, a fixing of the value of the member’s interest
by appraisal or by formula and redemption, or sale of the
member’s interest at such value or other penalty or consequence
The obligation of a person to make a contribution may be
compromised only by the affirmative vote or consent of all the
members. If a creditor of a limited liability company extends
credit or otherwise acts in reliance on an obligation described
in subsection 1 without knowledge or notice of a compromise
under this subsection, the creditor may enforce the obligation.
4. An operating agreement may provide that the interest of
any member who fails to make a contribution that the member
is obligated to make is subject to specified penalties for,
or specified consequences of, such failure. The penalty or
consequence may take the form of reducing or eliminating
the defaulting member’s proportionate interest in a limited
liability company, subordinating the member’s interest to
that of a nondefaulting member, a forced sale of the member’s
interest, forfeiture of the member’s interest, the lending by
-49-other members of the amount necessary to meet the member’s
commitment, a fixing of the value of the member’s interest by
appraisal or by formula and redemption, or sale of the member’s
interest at such value or other penalty or consequence.
Sec. 38. Section 489.404, Code 2023, is amended to read as
follows:
489.404 Sharing of and right to distributions before
dissolution.
1. Any distributions distribution made by a limited
liability company before its dissolution and winding up must
be in equal shares among members and persons dissociated as
members, except to the extent necessary to comply with any a
transfer effective under section 489.502 and any charging order
in effect under section 489.503.
2. A person has a right to a distribution before the
dissolution and winding up of a limited liability company only
if the limited liability company decides to make an interim
distribution. A person’s dissociation does not entitle the
person to a distribution.
3. A person does not have a right to demand or receive a
distribution from a limited liability company in any form other
than money. Except as otherwise provided in section 489.708,
subsection 3 4, a limited liability company may distribute an
asset in kind only if each part of the asset is fungible with
each other part and each person receives a percentage of the
asset equal in value to the person’s share of distributions.
4. If a member or transferee becomes entitled to receive a
distribution, the member or transferee has the status of, and
is entitled to all remedies available to, a creditor of the
limited liability company with respect to the distribution.
However, the company’s obligation to make a distribution is
subject to offset for any amount owed to the company by the
member or a person dissociated as a member on whose account the
distribution is made.
Sec. 39. Section 489.405, Code 2023, is amended to read as
-50-follows:
489.405 Limitations on distribution.
1. A limited liability company shall not make a
distribution, including a distribution under section 489.708,
if after the distribution any of the following applies:
a. The limited liability company would not be able to pay
its debts as they become due in the ordinary course of the
company’s activities and affairs.
b. The limited liability company’s total assets would be
less than the sum of its total liabilities plus the amount that
would be needed, if the company were to be dissolved, and wound
up, and terminated at the time of the distribution, to satisfy
the preferential rights upon dissolution, and winding up, and
termination of members up of members and transferees whose
preferential rights are superior to those the rights of persons
receiving the distribution.
2. A limited liability company may base a determination
that a distribution is not prohibited under subsection 1 on
financial statements prepared on the basis of accounting
practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is
reasonable under the circumstances any of the following:
a. Financial statements prepared on the basis of
accounting practices and principles that are reasonable in the
circumstances.
b. A fair valuation or other method that is reasonable under
the circumstances.
3. Except as otherwise provided in subsection 5, the effect
of a distribution under subsection 1 is measured as follows:
a. In the case of a distribution by purchase, redemption, or
other acquisition of a transferable interest in the company,
as of the date money or other property is transferred or
debt incurred by the company as defined in section 489.102,
subsection 5, paragraph “a”, as of the earlier of any of the
following:
-51- (1) The date money or other property is transferred or debt
is incurred by the limited liability company.
(2) The date the person entitled to the distribution ceases
to own the interest or right being acquired by the limited
liability company in return for the distribution.
b. In the case of any other distribution of indebtedness, as
of the date the indebtedness is distributed.
b. c. In all other cases, as follows any of the following:
(1) The date that the distribution is authorized, if the
payment occurs within not later than one hundred twenty days
after that date.
(2) The date that the payment is made, if the payment occurs
more than one hundred twenty days after the distribution is
authorized.
4. A limited liability company’s indebtedness to a member
or transferee incurred by reason of a distribution made in
accordance with this section is at parity with the company’s
indebtedness to its general, unsecured creditors, except to the
extent subordinated by agreement.
5. A limited liability company’s indebtedness, including
indebtedness issued in connection with or as part of as a
distribution, is not a liability for purposes of subsection
1 if the terms of the indebtedness provide that payment of
principal and interest are is made only if and to the extent
that payment of a distribution could then be made to members
under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest on the
indebtedness is treated as a distribution, the effect of which
is measured on the date the payment is made.
6. In subsection 1, “distribution” does not include amounts
constituting reasonable compensation for present or past
services or reasonable payments made in the ordinary course of
business under a bona fide retirement plan or other benefits
program In measuring the effect of a distribution under section
489.708, the liabilities of a dissolved limited liability
-52-company do not include any claim that has been disposed of
under section 489.703, 489.704, or 489.706A.
Sec. 40. Section 489.406, Code 2023, is amended to read as
follows:
489.406 Liability for improper distributions.
1. Except as otherwise provided in subsection 2, if a member
of a member-managed limited liability company or a manager
of a manager-managed limited liability company consents to
a distribution made in violation of section 489.405 and in
consenting to the distribution fails to comply with section
489.409, the member or manager is personally liable to the
company for the amount of the distribution that which exceeds
the amount that could have been distributed without the
violation of section 489.405.
2. To the extent the operating agreement of a member-managed
limited liability company expressly relieves a member of the
authority and responsibility to consent to distributions and
imposes that authority and responsibility on one or more other
members, the liability stated in subsection 1 applies to the
other members and not the member that the operating agreement
relieves of the authority and responsibility.
3. A person that receives a distribution knowing that the
distribution to that person was made in violation of violated
section 489.405 is personally liable to the limited liability
company but only to the extent that the distribution received
by the person exceeded the amount that could have been properly
paid under section 489.405.
4. A person against which an action is commenced because
the person is liable under subsection 1 may do all of the
following:
a. Implead any other person that is subject to liability
liable under subsection 1 and seek to compel enforce a right of
contribution from the person.
b. Implead any person that received a distribution in
violation of subsection 3 and seek to compel enforce a right of
-53- contribution from the person in the amount the person received
in violation of subsection 3.
5. An action under this section is barred if not
unless commenced within not later than two years after the
distribution.
Sec. 41. Section 489.407, Code 2023, is amended to read as
follows:
489.407 Management of limited liability company.
1. A limited liability company is a member-managed limited
liability company unless the operating agreement does any of
the following:
a. Expressly provides that any of the following apply:
(1) The limited liability company is or will be
“manager-managed”.
(2) The limited liability company is or will be “managed by
managers”.
(3) Management of the limited liability company is or will
be “vested in managers”.
b. Includes words of similar import.
2. In a member-managed limited liability company, all of the
following rules apply:
a. The Except as expressly provided in this chapter, the
management and conduct of the limited liability company are
vested in the members.
b. Each member has equal rights in the management and
conduct of the limited liability company’s activities and
affairs.
c. A difference arising among members as to a matter in the
ordinary course of the activities and affairs of the limited
liability company may be decided by a majority of the members.
d. An act outside the ordinary course of the activities
of the company, including selling, leasing, exchanging, or
otherwise disposing of all, or substantially all, of the
company’s property, with or without the goodwill, may be
undertaken only with the consent of all members The affirmative
-54-vote or consent of all the members is required to do any of the
following:
(1) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of the limited liability company’s property,
with or without good will, outside the ordinary course of the
company’s activities.
(2) Undertake an act outside the ordinary course of the
activities and affairs of the limited liability company.
(3) Approve a merger, interest exchange, conversion, or
domestication under subchapter X.
(4) Amend the operating agreement.
e. The operating agreement may be amended only with the
consent of all members.
3. In a manager-managed limited liability company, all of
the following rules apply:
a. Except as otherwise expressly provided in this chapter,
any matter relating to the activities and affairs of the
limited liability company is decided exclusively by the
managers manager, or, if there is more than one manager, by a
majority of the managers.
b. Each manager has equal rights in the management and
conduct of the activities and affairs of the limited liability
company.
c. A difference arising among managers as to a matter in the
ordinary course of the activities of the company may be decided
by a majority of the managers.
d. c. The affirmative vote or consent of all members is
required to do any of the following:
(1) Sell, lease, exchange, or otherwise dispose of all, or
substantially all, of the limited liability company’s property,
with or without the goodwill, outside the ordinary course of
the company’s activities.
(2) Approve a merger, conversion, or domestication under
article 10 Undertake any other act outside the ordinary course
of the limited liability company’s activities and affairs.
-55- (3) Undertake any other act outside the ordinary course of
the company’s activities Approve a merger, interest exchange,
conversion, or domestication under subchapter X.
(4) Amend the operating agreement.
e. d. A manager may be chosen at any time by the
affirmative vote or consent of a majority of the members and
remains a manager until a successor has been chosen, unless the
manager at an earlier time resigns, is removed, or dies, or, in
the case of a manager that is not an individual, terminates. A
manager may be removed at any time by the affirmative vote or
consent of a majority of the members without notice or cause.
f. e. A person need not be a member to be a manager, but
the dissociation of a member that is also a manager removes the
person as a manager. If a person that is both a manager and
a member ceases to be a manager, that cessation does not by
itself dissociate the person as a member.
g. f. A person’s ceasing to be a manager does not discharge
any debt, obligation, or other liability to the limited
liability company or members which the person incurred while
a manager.
4. An action requiring the vote or consent of members under
this chapter may be taken without a meeting, and a member may
appoint a proxy or other agent to vote, consent, or otherwise
act for the member by signing an appointing record, personally
or by the member’s agent.
5. The dissolution of a limited liability company does not
affect the applicability of this section. However, a person
that wrongfully causes dissolution of the company loses the
right to participate in management as a member and a manager.
6. This chapter does not entitle a member to remuneration
for services performed for a member-managed limited liability
company, except for reasonable compensation for services
rendered in winding up the activities of the company A limited
liability company shall reimburse a member for an advance to
the company beyond the amount of capital the member agreed to
-56-contribute.
7. A payment or advance made by a member which gives rise
to a limited liability company obligation under subsection 6
or section 489.408, subsection 1, constitutes a loan to the
company which accrues interest from the date of the payment or
advance.
8. A member is not entitled to remuneration for services
performed for a member-managed limited liability company,
except for reasonable compensation for services rendered in
winding up the activities of the company.
Sec. 42. Section 489.407A, Code 2023, is amended to read as
follows:
489.407A Real estate interest transferred by limited
liability company or foreign limited liability company.
1. A transfer of an interest in real estate situated in
this state held by a limited liability company or a registered
foreign limited liability company authorized to transact do
business in this state is subject to the provisions of this
section.
2. a. In a member-managed limited liability company, a
transfer of an interest in real estate held by the company may
be undertaken by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of all members.
(2) As provided in a statement of authority filed by the
limited liability company with the secretary of state and
the recorder of the county where the real estate is situated
pursuant to section 489.302.
b. A requirement of paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state
held by a member-managed limited liability company, whether or
not the transfer is in the ordinary course of the company’s
business.
3. a. In a manager-managed limited liability company, a
-57-transfer of an interest in real estate held by the company may
be undertaken by any of the following:
(1) As provided in the operating agreement, or if the
operating agreement does not so provide, only with the consent
of a majority of all managers.
(2) As provided in a statement of authority filed by the
limited liability company with the secretary of state and
the recorder of the county where the real estate is situated
pursuant to section 489.302.
b. A requirement in paragraph “a” is applicable to every
transfer of an interest in real estate situated in this state
held by a manager-managed limited liability company, whether
or not the transfer is in the ordinary course of the company’s
business.
Sec. 43. Section 489.408, Code 2023, is amended to read as
follows:
489.408 Indemnification Reimbursement, indemnification,
advancement, and insurance.
1. A limited liability company shall reimburse a member of
a member-managed limited liability company or the manager of
a manager-managed limited liability company for any payment
made and indemnify for any debt, obligation, or other liability
incurred by a member of a member-managed company or the manager
of a manager-managed company in the course of the member’s
or manager’s activities on behalf of the company, if, in
making the payment or incurring the debt, obligation, or other
liability, the member or manager complied with the duties
stated in sections 489.405 and 489.409 by the member or manager
in the course of the member’s or manager’s activities on behalf
of the company, if the member or manager complied with sections
489.405, 489.407, and 489.409 in making the payment.
2. A limited liability company may purchase and maintain
insurance on behalf of a member or manager of the company
against liability asserted against or incurred by the member or
manager in that capacity or arising from that status even if,
-58-under section 489.110, subsection 7, the operating agreement
could not eliminate or limit the person’s liability to the
company for the conduct giving rise to the liability A limited
liability company shall indemnify and hold harmless a person
with respect to any claim or demand against the person and any
debt, obligation, or other liability incurred by the person by
reason of the person’s former or present capacity as a member
or manager, if the claim, demand, debt, obligation, or other
liability does not arise from the person’s breach of section
489.405, 489.407, or 489.409.
3. In the ordinary course of its activities and affairs,
a limited liability company may advance reasonable expenses,
including attorney’s fees and costs, incurred by a person
in connection with a claim or demand against the person by
reason of the person’s former or present capacity as a member
or manager, if the person promises to repay the company if
the person ultimately is determined not to be entitled to be
indemnified under subsection 2.
4. A limited liability company may purchase and maintain
insurance on behalf of a member or manager against liability
asserted against or incurred by the member or manager in that
capacity or arising from that status even if, under section
489.110, subsection 3, paragraph “g”, the operating agreement
could not eliminate or limit the person’s liability to the
company for the conduct giving rise to the liability.
Sec. 44. Section 489.409, Code 2023, is amended to read as
follows:
489.409 Standards of conduct for members and managers.
1. A member of a member-managed limited liability company
owes to the company and, subject to section 489.901, subsection
2, the other members the fiduciary duties of loyalty and care
stated in subsections 2 and 3.
2. The fiduciary duty of loyalty of a member in a
member-managed limited liability company includes all of the
following duties:
-59- a. To account to the limited liability company and to hold
as trustee for it any property, profit, or benefit derived by
the member regarding any of the following:
(1) In the conduct or winding up of the limited liability
company’s activities and affairs.
(2) From a use by the member of the limited liability
company’s property.
(3) From the appropriation of a limited liability company
opportunity.
b. To refrain from dealing with the limited liability
company in the conduct or winding up of the company’s
activities and affairs as or on behalf of a person having an
interest adverse to the company.
c. To refrain from competing with the limited liability
company in the conduct of the company’s activities and affairs
before the dissolution of the company.
3. Subject to the business judgment rule as stated in
subsection 7, the duty of care of a member of a member-managed
limited liability company in the conduct and winding up of the
company’s activities is to act with the care that a person
in a like position would reasonably exercise under similar
circumstances and in a manner the member reasonably believes to
be in the best interests of the company. In discharging this
duty, a member may rely in good faith upon opinions, reports,
statements, or other information provided by another person
that the member reasonably believes is a competent and reliable
source for the information The duty of care of a member of
a member-managed limited liability company in the conduct
or winding up of the company’s activities and affairs is to
refrain from engaging in grossly negligent or reckless conduct,
willful or intentional misconduct, or knowing violation of law.
4. A member in a member-managed limited liability company
or a manager-managed limited liability company shall discharge
the duties under this chapter or under the operating agreement
and exercise any rights consistently with the contractual
-60-obligation of good faith and fair dealing A member shall
discharge the duties and obligations under this chapter
or under the operating agreement and exercise any rights
consistently with the contractual obligation of good faith and
fair dealing.
5. It is a defense to a claim under subsection 2, paragraph
“b”, and any comparable claim in equity or at common law that
the transaction was fair to the limited liability company A
member does not violate a duty or obligation under this chapter
or under the operating agreement solely because the member’s
conduct furthers the member’s own interest.
6. All of the members of a member-managed limited liability
company or a manager-managed limited liability company may
authorize or ratify, after full disclosure of all material
facts, a specific act or transaction that otherwise would
violate the duty of loyalty.
7. a. A member satisfies the duty of care in subsection 3
if all of the following apply: It is a defense to a claim under
subsection 2, paragraph “b”, and any comparable claim in equity
or at common law that the transaction was fair to the limited
liability company.
(1) The member is not interested in the subject matter of
the business judgment.
(2) The member is informed with respect to the subject
of the business judgment to the extent the member reasonably
believes to be appropriate in the circumstances.
(3) The member has a rational basis for believing that
the business judgment is in the best interests of the limited
liability company.
b. A person challenging the business judgment of a member
has the burden of proving a breach of the duty of care, and
in a damage action, the burden of proving that the breach was
the legal cause of damage suffered by the limited liability
company.
8. In a manager-managed limited liability company, all of
-61-the following rules apply: If, as permitted by subsection 6
or subsection 9, paragraph “f”, or the operating agreement, a
member enters into a transaction with the limited liability
company which otherwise would be prohibited by subsection 2,
paragraph “b”, the member’s rights and obligations arising from
the transaction are the same as those of a person that is not a
member.
a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
managers and not the members.
b. The duty stated under subsection 2, paragraph “c”,
continues until winding up is completed.
c. Subsection 4 applies to the members and managers.
d. Subsection 6 applies only to the members.
e. A member does not have any fiduciary duty to the company
or to any other member solely by reason of being a member.
9. In a manager-managed limited liability company, all of
the following rules apply:
a. Subsections 1, 2, 3, and 7 apply to the manager or
managers and not the members.
b. The duty stated under subsection 2, paragraph “c”,
continues until winding up is completed.
c. Subsection 4 applies to managers and members.
d. Subsection 5 applies only to members.
e. The power to ratify under subsection 6 may be exercised
only by the members.
f. Subject to subsection 4, a member does not have any duty
to the limited liability company or to any other member solely
by reason of being a member.
Sec. 45. Section 489.410, Code 2023, is amended to read as
follows:
489.410 Right of members, managers, and dissociated members
to information Rights to information of member, manager, and
person dissociated as member.
1. In a member-managed limited liability company, all of the
following rules apply:
-62- a. On reasonable notice, a member may inspect and copy
during regular business hours, at a reasonable location
specified by the limited liability company, any record
maintained by the company regarding the company’s activities,
affairs, financial condition, and other circumstances, to the
extent the information is material to the member’s rights and
duties under the operating agreement or this chapter.
b. The limited liability company shall furnish to each
member all of the following:
(1) Without demand, any information concerning the limited
liability company’s activities, affairs, financial condition,
and other circumstances which the company knows and is material
to the proper exercise of the member’s rights and duties under
the operating agreement or this chapter, except to the extent
the company can establish that it reasonably believes the
member already knows the information.
(2) On demand, any other information concerning the limited
liability company’s activities, affairs, financial condition,
and other circumstances, except to the extent the demand or for
the information demanded is unreasonable or otherwise improper
under the circumstances.
c. The duty to furnish information under paragraph “b” also
applies to each member to the extent the member knows any of
the information described in paragraph “b”.
2. In a manager-managed limited liability company, all of
the following rules apply:
a. The informational rights stated in subsection 1 and
the duty stated in subsection 1, paragraph “c”, apply to the
managers and not the members.
b. During regular business hours and at a reasonable
location specified by the limited liability company, a
member may obtain from the company and inspect and copy full
information regarding the activities, affairs, financial
condition, and other circumstances of the company as is just
and reasonable if all of the following apply:
-63- (1) The member seeks the information for a purpose material
reasonably related to the member’s interest as a member.
(2) The member makes a demand in a record received by
the limited liability company, describing with reasonable
particularity the information sought and the purpose for
seeking the information.
(3) The information sought is directly connected to the
member’s purpose.
c. Within Not later than ten days after receiving a demand
pursuant to paragraph “b”, subparagraph (2), the limited
liability company shall in a record inform in a record the
member that made the demand that includes all of the following:
(1) Of the What information that the limited liability
company will provide in response to the demand and when and
where the company will provide the information.
(2) If the company declines to provide any demanded
information, the company’s reasons for declining The limited
liability company’s reasons for declining, if the company
declines to provide any demanded information.
d. Whenever this chapter or an operating agreement provides
for a member to vote on or give or withhold consent to a matter,
before the vote is cast or consent is given or withheld, the
limited liability company shall, without demand, provide the
member with all information that is known to the company and is
material to the member’s decision.
3. On ten days’ demand made in a record received by a
limited liability company, a dissociated member may have access
to information to which the person was entitled while a member
if the information pertains to the period during which the
person was a member, the person seeks the information in good
faith, and the person satisfies the requirements imposed on
a member by subsection 2, paragraph “b”. The company shall
respond to a demand made pursuant to this subsection in the
manner provided in subsection 2, paragraph “c” Subject to
subsection 8, on ten days’ demand made in a record received by
-64-a limited liability company, a person dissociated as a member
may have access to the information to which the person was
entitled while a member if all of the following apply:
a. The information pertains to the period during which the
person was a member.
b. The person seeks the information in good faith.
c. The person satisfies the requirements imposed on a member
by subsection 2, paragraph “b”.
4. A limited liability company may charge a person that
makes a demand under this section the reasonable costs of
copying, limited to the costs of labor and material shall
respond to a demand made pursuant to subsection 3 in the manner
provided in subsection 2, paragraph “c”.
5. A member or dissociated member may exercise rights
under this section through an agent or, in the case of an
individual under legal disability, a legal representative. Any
restriction or condition imposed by the operating agreement
or under subsection 7 applies both to the agent or legal
representative and the member or dissociated member A limited
liability company may charge a person that makes a demand under
this section the reasonable costs of copying, limited to the
costs of labor and material.
6. The rights under this section do not extend to a person
as transferee A member or person dissociated as a member may
exercise the rights under this section through an agent or,
in the case of an individual under legal disability, a legal
representative. Any restriction or condition imposed by the
operating agreement or under subsection 8 applies both to the
agent or legal representative and to the member or person
dissociated as a member.
7. In addition to any restriction or condition stated
in its operating agreement, a limited liability company, as
a matter within the ordinary course of its activities, may
impose reasonable restrictions and conditions on access to
and use of information to be furnished under this section,
-65-including designating information confidential and imposing
nondisclosure and safeguarding obligations on the recipient.
In a dispute concerning the reasonableness of a restriction
under this subsection, the company has the burden of proving
reasonableness Subject to section 489.504, the rights under
this section do not extend to a person as transferee.
8. In addition to any restriction or condition stated in its
operating agreement, a limited liability company, as a matter
within the ordinary course of its activities and affairs, may
impose reasonable restrictions and conditions on access to
and use of information to be furnished under this section,
including designating information confidential and imposing
nondisclosure and safeguarding obligations on the recipient.
In a dispute concerning the reasonableness of a restriction
under this subsection, the company has the burden of proving
reasonableness.
Sec. 46. Section 489.502, Code 2023, is amended to read as
follows:
489.502 Transfer of transferable interest.
1. For Subject to section 489.503, subsection 6, for a
transfer, in whole or in part, all of the following applies to
a transferable interest:
a. It is permissible.
b. It does not by itself cause a member’s person’s
dissociation as a member or a dissolution and winding up of the
limited liability company’s activities and affairs.
c. Subject to section 489.504, it does not entitle the
transferee to do any of the following:
(1) Participate in the management or conduct of the limited
liability company’s activities and affairs.
(2) Except as otherwise provided in subsection 3, have
access to records or other information concerning the limited
liability company’s activities and affairs.
2. A transferee has the right to receive, in accordance
with the transfer, distributions to which the transferor would
-66-otherwise be entitled.
3. In a dissolution and winding up of a limited liability
company, a transferee is entitled to an account of the
company’s transactions only from the date of dissolution.
4. A transferable interest may be evidenced by a certificate
of the interest issued by the a limited liability company in a
record, and, subject to this section, the interest represented
by the certificate may be transferred by a transfer of the
certificate.
5. A limited liability company need not give effect to a
transferee’s rights under this section until the company knows
or has notice of the transfer.
6. A transfer of a transferable interest in violation of a
restriction on transfer contained in the operating agreement
or another agreement to which the transferor is a party is
ineffective as to a person having notice of the restriction at
the time of transfer if the intended transferee has knowledge
or notice of the restriction at the time of transfer.
7. Except as otherwise provided in section 489.602,
subsection 4 5, paragraph “b”, when if a member transfers a
transferable interest, the transferor retains the rights of a
member other than the transferable interest in distributions
transferred and retains all duties and obligations of a member.
8. When If a member transfers a transferable interest to a
person that becomes a member with respect to the transferred
interest, the transferee is liable for the member’s obligations
under section sections 489.403 and section 489.406, subsection
3, 489.406 known to the transferee when the transferee becomes
a member.
Sec. 47. Section 489.503, Code 2023, is amended to read as
follows:
489.503 Charging order.
1. On application by a judgment creditor of a member
or transferee, a court may enter a charging order against
the transferable interest of the judgment debtor for the
-67-unsatisfied amount of the judgment. A Except as otherwise
provided in subsection 6, a charging order constitutes a lien
on a judgment debtor’s transferable interest and requires the
limited liability company to pay over to the person to which
the charging order was issued any distribution that would
otherwise would be paid to the judgment debtor.
2. To the extent necessary to effectuate the collection
of distributions pursuant to a charging order in effect under
subsection 1, the court may do all of the following:
a. Appoint a receiver of the distributions subject to
the charging order, with the power to make all inquiries the
judgment debtor might have made.
b. Make all other orders necessary to give effect to the
charging order.
3. Upon a showing that distributions under a charging
order will not pay the judgment debt within a reasonable
time, the court may foreclose the lien and order the sale of
the transferable interest. The Except as otherwise provided
in subsection 6, the purchaser at the foreclosure sale only
obtains only the transferable interest, does not thereby become
a member, and is subject to section 489.502.
4. At any time before foreclosure under subsection 3, the
member or transferee whose transferable interest is subject to
a charging order under subsection 1 may extinguish the charging
order by satisfying the judgment and filing a certified copy of
the satisfaction with the court that issued the charging order.
5. At any time before foreclosure under subsection 3,
a limited liability company or one or more members whose
transferable interests are not subject to the charging order
may pay to the judgment creditor the full amount due under the
judgment and thereby succeed to the rights of the judgment
creditor, including the charging order.
6. This chapter does not deprive any member or transferee of
the benefit of any exemption laws applicable to the member’s
or transferee’s transferable interest If a court orders
-68-foreclosure of a charging order lien against the sole member of
a limited liability company all of the following apply:
a. The court shall confirm the sale.
b. The purchaser at the sale obtains the member’s entire
interest, not only the member’s transferable interest.
c. The purchaser thereby becomes a member.
d. The person whose interest was subject to the foreclosed
charging order is dissociated as a member.
7. This section provides the exclusive remedy by which
a person seeking to enforce a judgment against a member or
transferee may, in the capacity of judgment creditor, satisfy
the judgment from the judgment debtor’s transferable interest
This chapter does not deprive any member or transferee of the
benefit of any exemption law applicable to the transferable
interest of the member or transferee.
8. This section provides the exclusive remedy by which a
person seeking in the capacity of judgment creditor to enforce
a judgment against a member or transferee may satisfy the
judgment from the judgment debtor’s transferable interest.
Sec. 48. Section 489.504, Code 2023, is amended to read as
follows:
489.504 Power of personal representative of deceased member.
If a member dies, the deceased member’s personal legal
representative or other legal representative may exercise all
of the following:
1. Therights of a transferee provided in section 489.502,
subsection 3, and, for.
2. Forthe purposes of settling the estate, the rights of a
current the deceased member had under section 489.410.
Sec. 49. Section 489.601, Code 2023, is amended to read as
follows:
489.601 Member’s power Power to dissociate as a member —
wrongful dissociation.
1. A person has the power to dissociate as a member at any
time, rightfully or wrongfully, by withdrawing as a member by
-69-express will under section 489.602, subsection 1.
2. A person’s dissociation from a limited liability company
as a member is wrongful only if any of the following applies to
the dissociation:
a. It is in breach of an express provision of the operating
agreement.
b. It occurs before the termination completion of the
winding up of the limited liability company and any of the
following applies:
(1) The person withdraws as a member by express will.
(2) The person is expelled as a member by judicial order
under section 489.602, subsection 5 6.
(3) The person is dissociated under section 489.602,
subsection 7, paragraph “a”, by becoming a debtor in bankruptcy
8.
(4) In the case of a person that is not a trust other than
a business trust, an estate, or an individual, the person
is expelled or otherwise dissociated as a member because it
willfully dissolved or terminated.
3. A person that wrongfully dissociates as a member is
liable to the limited liability company and, subject to
section 489.901, to the other members for damages caused by the
dissociation. The liability is in addition to any other debt,
obligation, or other liability of the member to the company or
the other members.
Sec. 50. Section 489.602, Code 2023, is amended to read as
follows:
489.602 Events causing dissociation.
A person is dissociated as a member from a limited liability
company when any of the following applies:
1. The limited liability company knows or has notice of
the person’s express will to withdraw as a member, but, if the
person specified a withdrawal date later than the date the
limited liability company knew or had notice, on that later
date.
-70- 2. An event stated in the operating agreement as causing the
person’s dissociation occurs.
3. The person is expelled as a member pursuant to the
operating agreement The person’s entire interest is transferred
in a foreclosure sale under section 489.503, subsection 6.
4. The person is expelled as a member by the unanimous
consent of the other members if any of the following applies:
pursuant to the operating agreement.
a. It is unlawful to carry on the company’s activities with
the person as a member.
b. There has been a transfer of all of the person’s
transferable interest in the company, other than any of the
following:
(1) A transfer for security purposes.
(2) A charging order in effect under section 489.503 which
has not been foreclosed.
c. The person is a corporation and, within ninety days
after the company notifies the person that it will be expelled
as a member because the person has filed a certificate of
dissolution or the equivalent, its charter has been revoked,
or its right to conduct business has been suspended by
the jurisdiction of its incorporation, the certificate of
dissolution has not been revoked or its charter or right to
conduct business has not been reinstated.
d. The person is a limited liability company or partnership
that has been dissolved and whose business is being wound up.
5. On application by the company, the person is expelled
as a member by judicial order because the person has done any
of the following The person is expelled as a member by the
affirmative vote or consent of all the other members if any of
the following apply:
a. Has engaged, or is engaging, in wrongful conduct that
has adversely and materially affected, or will adversely and
materially affect, the company’s activities It is unlawful to
carry on the limited liability company’s activities and affairs
-71-with the person as a member.
b. Has willfully or persistently committed, or is willfully
and persistently committing, a material breach of the
operating agreement or the person’s duties or obligations under
section 489.409 There has been a transfer of all the person’s
transferable interest in the limited liability company, other
than any of the following:
(1) A transfer for security purposes.
(2) A charging order in effect under section 489.503 which
has not been foreclosed.
c. Has engaged in, or is engaging in, conduct relating
to the company’s activities which makes it not reasonably
practicable to carry on the activities with the person as a
member The person is an entity and all of the following apply:
(1) The limited liability company notifies the person that
it will be expelled as a member because the person has filed
a statement of dissolution or the equivalent, the person has
been administratively dissolved, the person’s charter or the
equivalent has been revoked, or the person’s right to conduct
business has been suspended by the person’s jurisdiction of
formation.
(2) Not later than ninety days after the notification,
the statement of dissolution or the equivalent has not been
withdrawn, rescinded, or revoked, the person has not been
reinstated, or the person’s charter or the equivalent or right
to conduct business has not been reinstated.
d. The person is an unincorporated entity that has been
dissolved and whose activities and affairs are being wound up.
6. In the case of a person who is an individual, any of
the following applies On application by the limited liability
company or a member in a direct action under section 489.901,
the person is expelled as a member by judicial order because
any of the following apply:
a. The person dies has engaged or is engaging in wrongful
conduct that has affected adversely and materially, or will
-72-affect adversely and materially, the company’s activities and
affairs.
b. In a member-managed limited liability company, any of
the following applies: The person has committed willfully or
persistently, or is committing willfully or persistently,
a material breach of the operating agreement or a duty or
obligation under section 489.409.
(1) A guardian or general conservator for the person is
appointed.
(2) There is a judicial order that the person has otherwise
become incapable of performing the person’s duties as a member
under this chapter or the operating agreement.
c. The person has engaged or is engaging in conduct relating
to the limited liability company’s activities and affairs which
makes it not reasonably practicable to carry on the activities
and affairs with the person as a member.
7. In a member-managed limited liability company, the
person does any of the following In the case of an individual
any of the following apply:
a. Becomes a debtor in bankruptcy The individual dies.
b. Executes an assignment for the benefit of creditors In a
member-managed limited liability company any of the following
apply:
(1) A guardian or general conservator for the individual is
appointed.
(2) A court orders that the individual has otherwise become
incapable of performing the individual’s duties as a member
under this chapter or the operating agreement.
c. Seeks, consents to, or acquiesces in the appointment of
a trustee, receiver, or liquidator of the person or of all or
substantially all of the person’s property.
8. In the case of a person that is a trust or is acting as
a member by virtue of being a trustee of a trust, the trust’s
entire transferable interest in the company is distributed In a
member-managed limited liability company, any of the following
-73-apply:
a. The person becomes a debtor in bankruptcy.
b. The person signs an assignment for the benefit of
creditors.
c. The person seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the person
or of all or substantially all the person’s property.
9. In the case of a person that is an estate or is acting
as a member by virtue of being a personal representative of
an estate, the estate’s entire transferable interest in the
company is distributed In the case of a person that is a
testamentary or inter vivos trust or is acting as a member by
virtue of being a trustee of such a trust, the trust’s entire
transferable interest in the limited liability company is
distributed.
10. In the case of a member that is not an individual,
partnership, limited liability company, corporation, trust, or
estate, the termination of the member In the case of a person
that is an estate or is acting as a member by virtue of being
a personal representative of an estate, the estate’s entire
transferable interest in the limited liability company is
distributed.
11. The company participates in a merger under article 10,
if any of the following applies: In the case of a person that
is not an individual, the existence of the person terminates.
a. The company is not the surviving entity.
b. Otherwise as a result of the merger, the person ceases
to be a member.
12. The company participates in a conversion under article
10 The limited liability company participates in a merger under
subchapter X and any of the following apply:
a. The limited liability company is not the surviving
entity.
b. Otherwise as a result of the merger, the person ceases
to be a member.
-74- 13. The company participates in a domestication under
article 10, if, as a result of the domestication, the
person ceases to be a member The limited liability company
participates in an interest exchange under subchapter X and,
as a result of the interest exchange, the person ceases to be a
member.
14. The limited liability company terminates participates
in a conversion under subchapter X.
15. The limited liability company participates in a
domestication under subchapter X and, as a result of the
domestication, the person ceases to be a member.
16. The limited liability company dissolves and completes
winding up.
Sec. 51. Section 489.603, Code 2023, is amended to read as
follows:
489.603 Effect of person’s dissociation as member.
1. When If a person is dissociated as a member, of a limited
liability company, all of the following apply:
a. The person’s right to participate as a member in the
management and conduct of the limited liability company’s
activities and affairs terminates.
b. If the company is member-managed, the person’s fiduciary
duties as a member end with regard to matters arising and
events occurring after the person’s dissociation The person’s
duties and obligations under section 489.409 as a member end
with regard to matters arising and events occurring after the
person’s dissociation.
c. Subject to section 489.504 and article 10 subchapter X,
any transferable interest owned by the person in the person’s
capacity as a member immediately before dissociation in the
person’s capacity as a member is owned by the person solely as
a transferee.
2. A person’s dissociation as a member of a limited
liability company does not of itself discharge the person from
any debt, obligation, or other liability to the company or the
-75-other members which the person incurred while a member.
Sec. 52. Section 489.604, Code 2023, is amended to read as
follows:
489.604 Member’s power to dissociate under certain
circumstances.
1. If the certificate of organization or an operating
agreement does not specify the time or the events upon the
happening of which a member may dissociate from a limited
liability company, a member may dissociate from the limited
liability company in the event any amendment to the certificate
of organization or operating agreement that is adopted over
the member’s written dissent adversely affects the rights or
preferences of the dissenting member’s transferable interest
in any of the ways described in paragraphs “a” through “f”.
A dissociation in the event of such dissent and adverse
effect is deemed to have occurred as of the effective date
of the amendment, if the member gives notice to the limited
liability company not more than sixty days after the date of
the amendment. In valuing the member’s distribution pursuant
to this subsection, any depreciation in anticipation of the
amendment shall be excluded. An amendment that does any of the
following is subject to this section:
a. Alters or abolishes a member’s right to receive a
distribution.
b. Alters or abolishes a member’s right to voluntarily
dissociate.
c. Alters or abolishes a member’s right to vote on any
matter, except as the rights may be altered or abolished
through the acceptance of contributions or the making of
contribution agreements.
d. Alters or abolishes a member’s preemptive right to make
contributions.
e. Establishes or changes the conditions for or consequences
of expulsion.
f. Waives the application of this section to the limited
-76-liability company.
2. A member dissociating from a limited liability company
under this section is not liable for damages for the breach of
any agreement not to withdraw.
3. This section applies to a limited liability company
whose original articles of organization or certificate of
organization is filed with the secretary of state on or after
July 1, 1997.
4. This section applies to a limited liability company whose
original articles of organization are filed with the secretary
of state and effective on or prior to June 30, 1997, if such
company’s operating agreement provides that it is subject to
this section.
5. The operating agreement of a limited liability company
may waive the applicability of this section to the company and
its members.
Sec. 53. Section 489.701, Code 2023, is amended to read as
follows:
489.701 Events causing dissolution.
1. A limited liability company is dissolved, and its
activities and affairs must be wound up, upon the occurrence
of any of the following:
a. An event or circumstance that the operating agreement
states causes dissolution.
b. The affirmative vote or consent of all the members.
c. Once After the limited liability company has at least
one member, the passage of that member and any other member
dissociate, and ninety consecutive days pass during which the
company has no members., unless before the end of the period
all of the following apply:
(1) Consent to admit at least one specified person as a
member is given by transferees owning the rights to receive
a majority of distributions as transferees at the time the
consent is to be effective.
(2) At least one person becomes a member in accordance with
-77-the consent.
d. On application by a member, the entry by a the district
court of an order dissolving the limited liability company on
the grounds that any of the following applies:
(1) The conduct of all or substantially all of the limited
liability company’s activities and affairs is unlawful.
(2) It is not reasonably practicable to carry on the limited
liability company’s activities and affairs in conformity with
the certificate of organization and the operating agreement.
(3) The managers or those members in control of the limited
liability company conduct themselves according to any of the
following:
(a) Have acted, are acting, or will act in a manner that is
illegal or fraudulent.
(b) Have acted or are acting in a manner that is oppressive
and was, is, or will be directly harmful to the applicant.
e. On application by a member or transferee, the entry by
a district court of an order dissolving the company on the
grounds that the managers or those members in control of the
company have done any of the following: The signing and filing
of a statement of administrative dissolution by the secretary
of state under section 489.705.
(1) Have acted, are acting, or will act in a manner that is
illegal or fraudulent.
(2) Have acted or are acting in a manner that is oppressive
and was, is, or will be directly harmful to the applicant.
2. In a proceeding brought under subsection 1, paragraph
“e”, “d”, subparagraph (3), the district court may order a
remedy other than dissolution.
Sec. 54. Section 489.701A, Code 2023, is amended to read as
follows:
489.701A Rescinding dissolution.
1. A limited liability company may rescind its dissolution,
unless a statement of termination applicable to the company has
become effective, a the district court has entered an order
-78-under section 489.701, subsection 1, paragraph “d”, dissolving
the company, or the secretary of state has dissolved the
company under section 489.705.
2. Rescinding dissolution under this section requires all
of the following:
a. The affirmative vote or consent of each member.
b. If the limited liability company has delivered to the
secretary of state for filing a statement of dissolution and
any of the following applies apply:
(1) If the statement has not become effective, delivery to
the secretary of state for filing of a statement of withdrawal
under section 489.205 489.208A applicable to the statement of
dissolution.
(2) If the statement of dissolution has become effective,
delivery to the secretary of state for filing of a statement of
rescission stating the name of the limited liability company
and that dissolution has been rescinded under this section.
3. If a limited liability company rescinds its dissolution
all of the following apply:
a. The limited liability company shall resume resumes
carrying on its activities and affairs as if the dissolution
had never occurred.
b. Subject to paragraph “c”, any liability incurred by the
limited liability company after the dissolution and before
the rescission has become effective shall be determined as if
dissolution had never occurred.
c. The rights of a third party arising out of conduct in
reliance on the dissolution before the third party knew or had
notice of the rescission must not be adversely affected.
Sec. 55. Section 489.702, Code 2023, is amended to read as
follows:
489.702 Winding up.
1. A dissolved limited liability company shall wind up its
activities and affairs, and except as otherwise provided in
section 489.701A, the company continues after dissolution only
-79-for the purpose of winding up.
2. In winding up its activities and affairs, all of the
following apply to a limited liability company:
a. It shall discharge the limited liability company’s debts,
obligations, or and other liabilities, settle and close the
company’s activities and affairs, and marshal and distribute
the assets of the company.
b. It may do all of the following:
(1) Deliver to the secretary of state for filing a statement
of dissolution stating the name of the limited liability
company and that the company is dissolved.
(2) Preserve the limited liability company activities,
affairs, and property as a going concern for a reasonable time.
(3) Prosecute and defend actions and proceedings, whether
civil, criminal, or administrative.
(4) Transfer the limited liability company’s property.
(5) Settle disputes by mediation or arbitration.
(6) Deliver to the secretary of state for filing a statement
of termination stating the name of the limited liability
company and that the company is terminated.
(7) Perform other acts necessary or appropriate to the
winding up.
3. If a dissolved limited liability company has no members,
the legal representative of the last person to have been a
member may wind up the activities and affairs of the company.
If the person does so, the person has the powers of a sole
manager under section 489.407, subsection 3, and is deemed to
be a manager for the purposes of section 489.304, subsection
1, paragraph “b”.
4. If the legal representative under subsection 3 declines
or fails to wind up the limited liability company’s activities
and affairs, a person may be appointed to do so by the consent
of transferees owning a majority of the rights to receive
distributions as transferees at the time the consent is to be
effective. All of the following apply to a person appointed
-80-under this subsection:
a. The person has the powers of a sole manager under section
489.407, subsection 3, and is deemed to be a manager for the
purposes of section 489.304, subsection 1, paragraph “b”.
b. The person shall deliver promptly deliver to the
secretary of state for filing an amendment to the limited
liability company’s certificate of organization to do stating
all of the following:
(1) State that That the limited liability company has no
members.
(2) State that the person has been appointed pursuant to
this subsection to wind up the company The name and street and
mailing addresses of the person.
(3) Provide the street and mailing addresses of the person
That the person has been appointed pursuant to this subsection
to wind up the limited liability company’s activities and
affairs.
5. The district court may order judicial supervision of the
winding up of a dissolved limited liability company, including
the appointment of a person to wind up the company’s activities
and affairs pursuant to any of the following:
a. On application of a member, if the applicant establishes
good cause.
b. On the application of a transferee, if all of the
following apply:
(1) The limited liability company does not have any members.
(2) The legal representative of the last person to have been
a member declines or fails to wind up the limited liability
company’s activities and affairs.
(3) Within a reasonable time following the dissolution a
person has not been appointed pursuant to subsection 4 3.
c. In connection with a proceeding under section 489.701,
subsection 1, paragraph “d” or “e”.
Sec. 56. Section 489.703, Code 2023, is amended to read as
follows:
-81- 489.703 Known claims against dissolved limited liability
company.
1. Except as otherwise provided in subsection 4, a dissolved
limited liability company may give notice of a known claim
under subsection 2, which has the effect as provided in
subsection 3.
2. A dissolved limited liability company may in a record
notify its known claimants of the dissolution. The notice must
do all of the following:
a. Specify the information required to be included in a
claim.
b. Provide State that a claim must be in writing and provide
a mailing address to which the claim is to be sent.
c. State the deadline for receipt of the a claim, which may
not be less than one hundred twenty days after the date the
notice is received by the claimant.
d. State that the claim will be barred if not received by
the deadline.
3. A claim against a dissolved limited liability company is
barred if the requirements of subsection 2 are met and any of
the following applies:
a. The claim is not received by the specified deadline.
b. If the claim is timely received but rejected by the
limited liability company, all of the following must apply:
(1) The limited liability company causes the claimant to
receive a notice in a record stating that the claim is rejected
and will be barred unless the claimant commences an action
against the company to enforce the claim within not later than
ninety days after the claimant receives the notice.
(2) The claimant does not commence the required action
within not later than the ninety days after the claimant
receives the notice.
4. This section does not apply to a claim based on an
event occurring after the effective date of dissolution or a
liability that on that date is contingent.
-82- Sec. 57. Section 489.704, Code 2023, is amended to read as
follows:
489.704 Other claims against dissolved limited liability
company.
1. A dissolved limited liability company may publish notice
of its dissolution and request persons having claims against
the company to present them in accordance with the notice.
2. The notice authorized by under subsection 1 must do all
of the following meet all of the following requirements:
a. Be published at least once in a newspaper of general
circulation in the county in this state in which the dissolved
limited liability company’s principal office is located or, if
it has none in this state, in the county in which the company’s
registered office is or was last located Comply with any of the
following:
(1) Publication of the notice one time in a newspaper of
general circulation in the county in this state in which the
dissolved limited liability company’s principal office is
located or, if the principal office is not located in this
state, in the county in which the office of the company’s
registered agent is or was last located.
(2) Publication by posting the notice conspicuously for at
least thirty days on the dissolved limited liability company’s
internet site.
b. Describe the information required to be contained in a
claim, state that the claim must be in writing, and provide a
mailing address to which the claim is to be sent.
c. State that a claim against the limited liability company
is barred unless an action to enforce the claim is commenced
within five not later than three years after publication of the
notice.
3. If a dissolved limited liability company publishes a
notice in accordance with subsection 2, unless the claimant
commences an action to enforce the claim against the company
within five years after the publication date of the notice, the
-83-claim of each of the following claimants is barred of each of
the following claimants is barred unless the claimant commences
an action to enforce the claim against the company not later
than three years after the publication date of the notice:
a. A claimant that did not receive notice in a record under
section 489.703.
b. A claimant whose claim was timely sent to the limited
liability company but not acted on.
c. A claimant whose claim is contingent at, or based on an
event occurring after, the effective date of dissolution.
4. A claim not barred under this section or section 489.703
may be enforced as follows:
a. Against a dissolved limited liability company, to the
extent of its undistributed assets.
b. If Except as otherwise provided in section 489.706A, if
assets of the limited liability company have been distributed
after dissolution, against a member or transferee to the extent
of that person’s proportionate share of the claim or of the
company’s assets distributed to the member or transferee after
dissolution, whichever is less, but a person’s total liability
for all claims under this paragraph does not exceed the total
amount of assets distributed to the person after dissolution.
Sec. 58. Section 489.705, Code 2023, is amended to read as
follows:
489.705 Administrative Grounds for administrative
dissolution.
1. The secretary of state may commence a proceeding under
this section 489.709 to administratively dissolve a limited
liability company administratively, if any of the following
apply:
a. 1. The limited liability company has not delivered a
biennial report to the secretary of state in a form that meets
the requirements of section 489.209 within sixty days after
it is due, or has not paid within sixty days after the due
date, any fee, tax, or penalty due to the secretary of state
-84-under this chapter or law other than this chapter The limited
liability company does not pay within sixty days after they are
due any fees, taxes, interest, or penalties imposed by this
chapter or other laws of this state.
b. The limited liability company is without a registered
office or registered agent in this state for sixty days or
more.
c. The limited liability company does not notify the
secretary of state within sixty days that its registered agent
or registered office has been changed, that its registered
agent has resigned, or that its registered office has been
discontinued.
d. The limited liability company’s period of duration stated
in its certificate of organization has expired.
2. If the secretary of state determines that a ground exists
for administratively dissolving a limited liability company,
the secretary of state shall file a record of the determination
and serve the company with a copy of the filed record The
limited liability company does not deliver its biennial report
required by section 489.209 to the secretary of state within
sixty days after it is due.
3. If within sixty days after service of the copy pursuant
to subsection 2 a limited liability company does not correct
each ground for dissolution or demonstrate to the reasonable
satisfaction of the secretary of state that each ground
determined by the secretary of state does not exist, the
secretary of state shall dissolve the company administratively
by preparing, signing, and filing a declaration of dissolution
that states the grounds for dissolution. The secretary
of state shall serve the company with a copy of the filed
declaration The limited liability company is without a
registered agent or the registered agent does not have a place
of business in this state for sixty days or more.
4. A limited liability company that has been
administratively dissolved continues in existence but, subject
-85-to section 489.706, may carry on only activities necessary to
wind up its activities and liquidate its assets under sections
489.702 and 489.708 and to notify claimants under sections
489.703 and 489.704 The secretary of state has not been
notified within sixty days that the limited liability company’s
registered agent or place of business of the registered agent
has been changed, or that its registered agent has resigned, or
that its registered office has been discontinued.
5. The administrative dissolution of a limited liability
company does not terminate the authority of its registered
agent for service of process The limited liability company’s
period of duration stated in its certificate of organization
expires.
Sec. 59. Section 489.706, Code 2023, is amended to read as
follows:
489.706 Reinstatement following administrative dissolution.
1. A limited liability company administratively dissolved
under section 489.705 may apply to the secretary of state
for reinstatement at any time after the effective date
of dissolution. The application must be delivered to the
secretary of state and meet all of the following requirements:
a. Recite State the name of the limited liability company
at its date of dissolution and the effective date of its
administrative dissolution.
b. State that the ground or grounds for dissolution as
provided in section 489.705 either did not exist or have been
eliminated.
c. If the application is received more than five years after
the effective date of the administrative dissolution, state a
name that satisfies the requirements of section 489.108.
d. State the federal tax identification number of the
limited liability company.
2. a. The secretary of state shall refer the federal
tax identification number contained in the application for
reinstatement to the department of workforce development.
-86-The department of workforce development shall report to the
secretary of state the tax status of the limited liability
company. If the department reports to the secretary of state
that a filing delinquency or liability exists against the
limited liability company, the secretary of state shall not
cancel the declaration certificate of dissolution until the
filing delinquency or liability is satisfied.
3. b. (1) If the secretary of state determines that the
application contains the information required by subsection
1, and that a delinquency or liability reported pursuant to
subsection 2 paragraph “a” has been satisfied, and that the
information is correct, the secretary of state shall cancel
the declaration certificate of dissolution and prepare a
certificate of reinstatement that recites the secretary of
state’s determination and the effective date of reinstatement,
file the original of the certificate of reinstatement, and
serve deliver a copy on to the limited liability company under
section 489.116.
(2) If the limited liability company’s name in subsection
1, paragraph “c”, is different than from the name in subsection
1, paragraph “a”, the certificate of reinstatement shall
constitute an amendment to the limited liability company’s
certificate of organization insofar as it pertains to its
name. A limited liability company shall not relinquish the
right to retain its name as provided in section 489.108, if the
reinstatement is effective within five years of the effective
date of the limited liability company’s dissolution.
4. 3. When the reinstatement is effective, it relates
back to and takes effect as of the effective date of the
administrative dissolution as if the administrative dissolution
had never occurred.
Sec. 60. NEW SECTION. 489.706A Court proceedings.
1. A dissolved limited liability company that has published
a notice under section 489.704 may file an application with
the district court in the county where the company’s principal
-87-office is located or, if the principal office is not located
in this state, where the office of its registered agent is
or was last located, for a determination of the amount and
form of security to be provided for payment of claims that are
reasonably expected to arise after the date of dissolution
based on facts known to the company and any of the following
apply:
a. At the time of application any of the following apply:
(1) The facts are contingent.
(2) The facts have not been made known to the limited
liability company.
b. The facts are based on an event occurring after the date
of dissolution.
2. Security is not required for any claim that is or is
reasonably anticipated to be barred under section 489.704.
3. Not later than ten days after the filing of an
application under subsection 1, the dissolved limited liability
company shall give notice of the proceeding to each claimant
holding a contingent claim known to the company.
4. In a proceeding under this section, the court may appoint
a guardian ad litem to represent all claimants whose identities
are unknown. The reasonable fees and expenses of the guardian,
including all reasonable expert witness fees, must be paid by
the dissolved limited liability company.
5. A dissolved limited liability company that provides
security in the amount and form ordered by the court under
subsection 1 satisfies the company’s obligations with respect
to claims that are contingent, have not been made known to
the company, or are based on an event occurring after the
date of dissolution, and such claims may not be enforced
against a member or transferee on account of assets received
in liquidation.
Sec. 61. Section 489.707, Code 2023, is amended to read as
follows:
489.707 Appeal from rejection denial of reinstatement.
-88- 1. If the secretary of state rejects denies a limited
liability company’s application for reinstatement following
administrative dissolution, the secretary of state shall
prepare, sign, and file a notice that explains the reason for
rejection and serve the company under section 489.116 with a
copy of the written notice that explains the reason or reasons
for denial.
2. Within thirty days after service of a notice of rejection
of reinstatement under subsection 1, a limited liability
company may appeal from the rejection by petitioning the
district court to set aside the dissolution. The petition
must be served on the secretary of state and contain a copy
of the secretary of state’s declaration of dissolution, the
company’s application for reinstatement, and the secretary
of state’s notice of rejection The limited liability company
may appeal the denial of reinstatement to the district court
of the county where the company’s principal office or, if none
in this state, where its registered office is located within
thirty days after service of the notice of denial is effected.
The company appeals by petitioning the court to set aside
the dissolution and attaching to the petition copies of the
secretary of state’s certificate of dissolution, the company’s
application for reinstatement, and the secretary of state’s
notice of denial.
3. The court may summarily order the secretary of state to
reinstate a the dissolved limited liability company or may take
other action the court considers appropriate.
4. The court’s final decision may be appealed as in other
civil proceedings.
Sec. 62. Section 489.708, Code 2023, is amended to read as
follows:
489.708 Distribution Disposition of assets in winding up
limited liability company’s activities.
1. In winding up its activities and affairs, a limited
liability company must shall apply its assets to discharge its
-89- the company’s obligations to creditors, including members that
are creditors.
2. After a limited liability company complies with
subsection 1, any surplus must be distributed in the following
order, subject to any charging order in effect under section
489.503:
a. To each person owning a transferable interest that
reflects contributions made by a member and not previously
returned, an amount equal to the value of the unreturned
contributions and not previously returned, an amount equal to
the value of the unreturned contributions.
b. In equal shares among members and dissociated members,
except to the extent necessary to comply with any transfer
effective under section 489.502 Among persons owning
transferable interests in proportion to their respective rights
to share in distributions immediately before the dissolution of
the limited liability company.
3. If a limited liability company does not have sufficient
surplus to comply with subsection 2, paragraph “a”, any surplus
must be distributed among the owners of transferable interests
in proportion to the value of their the respective unreturned
contributions.
4. All distributions made under subsections 2 and 3 must be
paid in money.
Sec. 63. NEW SECTION. 489.709 Procedure for and effect of
administrative dissolution.
1. If the secretary of state determines that one or more
grounds exist under section 489.705 for dissolving a limited
liability company, the secretary of state shall serve the
company with written notice of such determination under section
489.116.
2. If the limited liability company does not correct
each ground for dissolution or demonstrate to the reasonable
satisfaction of the secretary of state that each ground
determined by the secretary of state does not exist within
-90-sixty days after service of the notice under section 489.116,
the secretary of state shall administratively dissolve the
company by signing a certificate of dissolution that recites
the ground or grounds for dissolution and its effective
date. The secretary of state shall file the original of the
certificate and serve a copy on the company under section
489.116.
3. A limited liability company administratively dissolved
continues its existence but shall not carry on any business
except that necessary to wind up and liquidate its business
and affairs under section 489.702 and notify claimants under
sections 489.703 and 489.704.
4. The administrative dissolution of a limited liability
company does not terminate the authority of its registered
agent.
Sec. 64. Section 489.801, Code 2023, is amended to read as
follows:
489.801 Governing law.
1. Subject to sections 489.14402 and 489.14404, the law
of the state or other jurisdiction under which The law of
the jurisdiction of formation of a foreign limited liability
company is formed governs all of the following:
a. The internal affairs of the foreign limited liability
company.
b. The liability of a member as member and a manager as
manager for the debts, obligations, or other liabilities a
debt, obligation, or other liability of the foreign limited
liability company.
c. The liability of a series of the foreign limited
liability company.
2. A foreign limited liability company shall not be denied
a certificate of authority by reason of any difference between
the law of the jurisdiction under which the company is formed
is not precluded from registering to do business in this state
because of any difference between the law of the foreign
-91-limited liability company’s jurisdiction of formation and the
law of this state.
3. A certificate of authority does not authorize a
foreign limited liability company to engage in any business
or exercise any power that a limited liability company shall
not Registration of a foreign limited liability company to do
business in this state does not permit the foreign limited
liability company to engage in any business or affairs or
exercise any power that a limited liability company cannot
lawfully engage in or exercise in this state.
Sec. 65. NEW SECTION. 489.805A Special litigation
committee.
1. If a limited liability company is named as or made a
party in a derivative proceeding, the company may appoint a
special litigation committee to investigate the claims asserted
in the proceeding and determine whether pursuing the action is
in the best interests of the company. If the company appoints
a special litigation committee, on motion by the committee made
in the name of the company, except for good cause shown, the
court shall stay discovery for the time reasonably necessary
to permit the committee to make its investigation. This
subsection does not prevent the court from doing any of the
following:
a. Enforcing a person’s right to information under section
489.410.
b. Granting extraordinary relief in the form of a temporary
restraining order or preliminary injunction.
2. A special litigation committee must be composed of one
or more disinterested and independent individuals, who may be
members.
3. A special litigation committee may be appointed as
follows:
a. In a member-managed limited liability company, any of the
following:
(1) By the affirmative vote or consent of a majority of the
-92-members not named as parties in the proceeding.
(2) If all members are named as parties in the proceeding,
by a majority of the members named as defendants.
b. In a manager-managed limited liability company, any of
the following:
(1) By a majority of the managers not named as parties in
the proceeding.
(2) If all managers are named as parties in the proceeding,
by a majority of the managers named as defendants.
4. After appropriate investigation, a special litigation
committee may determine that it is in the best interests of the
limited liability company that the proceeding comply with any
of the following:
a. Continue under the control of the plaintiff.
b. Continue under the control of the committee.
c. Be settled on terms approved by the committee.
d. Be dismissed.
5. After making a determination under subsection 4, a
special litigation committee shall file with the court a
statement of its determination and its report supporting its
determination and shall serve each party with a copy of the
determination and report. The court shall determine whether
the members of the committee were disinterested and independent
and whether the committee conducted its investigation and made
its recommendation in good faith, independently, and with
reasonable care, with the committee having the burden of proof.
If the court finds that the members of the committee were
disinterested and independent and that the committee acted in
good faith, independently, and with reasonable care, the court
shall enforce the determination of the committee. Otherwise,
the court shall dissolve the stay of discovery entered under
subsection 1 and allow the action to continue under the control
of the plaintiff.
Sec. 66. Section 489.809, Code 2023, is amended to read as
follows:
-93- 489.809 Action by attorney general.
The attorney general may maintain an action to enjoin a
foreign limited liability company from transacting doing
business in this state in violation of this article chapter.
Sec. 67. Section 489.902, Code 2023, is amended to read as
follows:
489.902 Derivative action.
A member may maintain a derivative action to enforce a right
of a limited liability company as follows:
1. The A member may maintain a derivative action to enforce
a right of a limited liability company, if the member first
makes a demand on the other members in a member-managed limited
liability company, or the managers of a manager-managed limited
liability company, requesting that they cause the company to
bring an action to enforce the right, and the managers or other
members do not bring the action within ninety days from the
date the demand was made unless the member has earlier been
notified that the demand has been rejected by the company
or unless irreparable injury to the company would result by
waiting for the expiration of the ninety-day period.
2. A demand under subsection 1 would be futile.
Sec. 68. Section 489.904, Code 2023, is amended to read as
follows:
489.904 Pleading.
In a derivative action under section 489.902, the complaint
must state with particularity any of the following:
1. The date and content of the plaintiff’s demand and the
response to the demand by the managers or other members.
2. If a demand has not been made, the reasons a demand under
section 489.902, subsection 1, would be Why demand should be
excused as futile.
Sec. 69. NEW SECTION. 489.905 Activities not constituting
doing business in this state.
1. Activities of a foreign limited liability company that
do not constitute doing business in this state for purposes of
-94-this subchapter include all of the following:
a. Maintaining, defending, mediating, arbitrating, or
settling a proceeding.
b. Carrying on any activity concerning the internal affairs
of the foreign limited liability company, including holding
meetings of its members or managers.
c. Maintaining accounts in financial institutions.
d. Maintaining offices or agencies for the transfer,
exchange, and registration of securities of the foreign limited
liability company or maintaining trustees or depositories with
respect to those securities.
e. Selling through independent contractors.
f. Soliciting or obtaining orders by any means if the
orders require acceptance outside this state before they become
contracts.
g. Creating or acquiring indebtedness, mortgages, or
security interests in property.
h. Securing or collecting debts or enforcing mortgages or
other security interests in property securing the debts and
holding, protecting, or maintaining property so acquired.
i. Conducting an isolated transaction that is not in the
course of similar transactions.
j. Owning, protecting, and maintaining property.
k. Doing business in interstate commerce.
2. This section does not apply in determining the contacts
or activities that may subject a foreign limited liability
company to service of process, taxation, or regulation under
the laws of this state other than this chapter.
Sec. 70. Section 489.906, Code 2023, is amended to read as
follows:
489.906 Proceeds and expenses.
1. Except as otherwise provided in subsection 2, all of the
following apply:
a. Any proceeds or other benefits of a derivative action
under section 489.902, whether by judgment, compromise, or
-95-settlement, belong to the limited liability company and not to
the plaintiff.
b. If the plaintiff receives any proceeds, the plaintiff
shall remit them immediately to the limited liability company.
2. If a derivative action under section 489.902 is
successful in whole or in part, the court may award the
plaintiff reasonable expenses, including reasonable attorney
fees and costs, from the recovery of the limited liability
company.
3. A derivative action on behalf of a limited liability
company shall not be voluntarily dismissed or settled without
the court’s approval.
Sec. 71. NEW SECTION. 489.906A Noncomplying name of foreign
limited liability company.
1. A foreign limited liability company whose name does
not comply with section 489.108 shall not register to do
business in this state until it adopts, for the purpose of
doing business in this state, an alternate name that complies
with section 489.108 by filing a foreign registration statement
under section 489.911B, or if applicable, a transfer of
registration statement under section 489.910, setting forth
that alternate name. After registering to do business in this
state with an alternate name, a foreign limited liability
company shall do business in this state under any of the
following:
a. The alternate name.
b. The foreign limited liability company’s name, with the
addition of its jurisdiction of formation.
2. If a registered foreign limited liability company
changes its name after registration to a name that does not
comply with section 489.108, it shall not do business in this
state until it complies with subsection 1 by amending its
registration statement to adopt an alternate name that complies
with section 489.108.
Sec. 72. NEW SECTION. 489.907 Withdrawal of registration of
-96-registered foreign limited liability company.
1. A registered foreign limited liability company may
withdraw its registration by delivering a statement of
withdrawal to the secretary of state for filing. The statement
of withdrawal must be signed by the foreign limited liability
company and state all of the following:
a. The name of the foreign limited liability company and its
jurisdiction of formation.
b. That the foreign limited liability company is not doing
business in this state and that it withdraws its registration
to do business in this state.
c. That the foreign limited liability company revokes the
authority of its registered agent in this state.
d. An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
2. After the withdrawal of the registration of a foreign
limited liability company, service of process in any proceeding
based on a cause of action arising during the time the entity
was registered to do business in this state may be made as
provided in section 489.116.
Sec. 73. NEW SECTION. 489.908 Deemed withdrawal upon
domestication or conversion to certain domestic entities.
A registered foreign limited liability company that
domesticates to a domestic limited liability company or
converts to a domestic business corporation or domestic
nonprofit corporation or any type of domestic filing entity or
to a domestic limited liability partnership is deemed to have
withdrawn its registration on the effectiveness of such event.
Sec. 74. NEW SECTION. 489.909 Withdrawal upon dissolution
or conversion to certain nonfiling entities.
1. A registered foreign limited liability company that
has dissolved and completed winding up or has converted to
a domestic or foreign nonfiling entity other than a limited
liability partnership shall deliver to the secretary of state
-97-for filing a statement of withdrawal. The statement must be
signed by the dissolved foreign limited liability company or
the converted domestic or foreign nonfiling entity and state:
a. In the case of a foreign limited liability company that
has completed winding up all of the following:
(1) Its name and jurisdiction of formation.
(2) That the foreign limited liability company withdraws
its registration to do business in this state and revokes the
authority of its registered agent to accept service on its
behalf.
(3) An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
b. In the case of a foreign limited liability company that
has converted to a domestic or foreign nonfiling entity other
than a limited liability partnership, all of the following:
(1) The name of the converting foreign limited liability
company and its jurisdiction of formation.
(2) The type of the nonfiling entity to which it has
converted and its name and jurisdiction of formation.
(3) That it withdraws its registration to do business in
this state and revokes the authority of its registered agent to
accept service on its behalf.
(4) An address to which process on the foreign limited
liability company may be sent by the secretary of state under
section 489.116, subsection 3.
2. After the withdrawal of the registration of a foreign
limited liability company, service of process in any proceeding
based on a cause of action arising during the time the entity
was registered to do business in this state may be made as
provided in section 489.116.
Sec. 75. NEW SECTION. 489.910 Transfer of registration.
1. If a registered foreign limited liability company merges
into a nonregistered foreign entity or converts to a foreign
entity required to register with the secretary of state to do
-98-business in this state, the foreign entity shall deliver to
the secretary of state for filing a transfer of registration
statement. The transfer of registration statement must be
signed by the surviving or converted foreign entity and state
all of the following:
a. The name of the registered foreign limited liability
company and its jurisdiction of formation before the merger or
conversion.
b. The name and type of the surviving or converted foreign
entity and its jurisdiction of formation after the merger
or conversion and, if the name does not comply with section
489.108, an alternate name adopted pursuant to section
489.906A.
c. All of the following information regarding the surviving
or converted foreign entity after the merger or conversion:
(1) The street and mailing addresses of the principal office
of the foreign entity and, if the law of the foreign entity’s
jurisdiction of formation requires it to maintain an office in
that jurisdiction, the street and mailing addresses of that
office.
(2) The street and mailing addresses of the place of
business of the foreign entity’s registered agent in this state
and the name of its registered agent.
2. On the effective date of a transfer of registration
statement as determined in accordance with section 489.207,
the registration of the registered foreign limited liability
company to do business in this state is transferred without
interruption to the foreign entity into which it has merged or
to which it has been converted.
Sec. 76. NEW SECTION. 489.911 Administrative termination of
registration.
1. The secretary of state may terminate the registration of
a registered foreign limited liability company in the manner
provided in subsections 2 and 3, if any of the following
applies:
-99- a. The foreign limited liability company does not pay within
sixty days after they are due any fees, taxes, interest, or
penalties imposed by this chapter or other laws of this state.
b. The foreign limited liability company does not deliver
its biennial report to the secretary of state within sixty days
after it is due.
c. The foreign limited liability company is without a
registered agent or its registered agent has no place of
business in this state for sixty days or more.
d. The secretary of state has not been notified within sixty
days that the foreign limited liability company’s registered
agent or the registered agent’s place of business has been
changed, that its registered agent has resigned, or that its
registered office has been discontinued.
2. The secretary of state may terminate the registration of
a registered foreign limited liability company by doing all of
the following:
a. Filing a certificate of termination.
b. Delivering a copy of the certificate of termination
to the foreign company’s registered agent or, if the foreign
company does not have a registered agent, to the foreign
company’s principal office.
3. The certificate of termination must state all of the
following:
a. The effective date of the termination, which must be
not less than sixty days after the secretary of state delivers
the copy of the certificate of termination as prescribed in
subsection 2, paragraph “b”.
b. The grounds for termination under subsection 1.
4. The registration of a registered foreign limited
liability company to do business in this state ceases on
the effective date of the termination as set forth in the
certificate of termination, unless before that date the
foreign company cures each ground for termination stated in the
certificate of termination. If the foreign company cures each
-100-ground, the secretary of state shall file a statement that the
certificate of termination is withdrawn.
5. After the effective date of the termination as set forth
in the certificate of termination, service of process in any
proceeding based on a cause of action arising during the time
the entity was registered to do business in this state may be
made as provided in section 489.116.
Sec. 77. NEW SECTION. 489.911A Registration to do business
in this state.
1. A foreign limited liability company shall not do business
in this state until it registers with the secretary of state
under this chapter.
2. A foreign limited liability company doing business in
this state shall not maintain a proceeding in any court of this
state until it is registered to do business in this state.
3. The failure of a foreign limited liability company
to register to do business in this state does not impair
the validity of a contract or act of the foreign company or
preclude it from defending a proceeding in this state.
4. A limitation on the liability of a member or manager
of a foreign limited liability company is not waived solely
because the foreign company does business in this state without
registering.
5. Section 489.801, subsection 1, applies even if a
foreign limited liability company fails to register under this
subchapter.
Sec. 78. NEW SECTION. 489.911B Foreign registration
statement.
1. To register to do business in this state, a foreign
limited liability company shall deliver a foreign registration
statement to the secretary of state for filing. The
registration statement must be signed by the foreign company
and state all of the following:
a. The name of the foreign limited liability company and,
if the name does not comply with section 489.108, an alternate
-101-name as required by section 489.906A.
b. The foreign limited liability company’s jurisdiction of
formation.
c. The street and mailing addresses of the foreign limited
liability company’s principal office and, if the law of the
foreign company’s jurisdiction of formation requires the
foreign company to maintain an office in that jurisdiction, the
street and mailing addresses of that required office.
d. The street and mailing addresses of the place of business
of the foreign limited liability company’s registered agent in
this state and the name of its registered agent.
2. The foreign limited liability company shall deliver the
completed foreign registration statement to the secretary of
state, and also deliver to the secretary of state a certificate
of existence or a document of similar import duly authenticated
by the secretary of state or other official having custody of
corporate records in the state or country under whose law it is
incorporated which is dated no earlier than ninety days prior
to the date the application is filed by the secretary of state.
Sec. 79. NEW SECTION. 489.911C Amendment of foreign
registration statement.
A registered foreign limited liability company shall sign
and deliver to the secretary of state for filing an amendment
to its foreign registration statement if there is a change in
any of the following:
1. Its name or alternate name.
2. Its jurisdiction of formation, unless its registration
is deemed to have been withdrawn under section 489.908 or
transferred under section 489.910.
3. An address required by section 489.911B, subsection 1,
paragraph “c”.
4. The information required by section 489.911B, subsection
1, paragraph “d”.
Sec. 80. Section 489.1001, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
-102- 489.1001 Definitions.
As used in this subchapter, unless the context otherwise
requires:
1. “Acquired entity” means the entity, all of one or more
classes or series of interests of which are acquired in an
interest exchange.
2. “Acquiring entity” means the entity that acquires all
of one or more classes or series of interests of the acquired
entity in an interest exchange.
3. “Conversion” means a transaction authorized by part 4.
4. “Converted entity” means the converting entity as it
continues in existence after a conversion.
5. “Converting entity” means the domestic entity that
approves a plan of conversion pursuant to section 489.1043 or
the foreign entity that approves a conversion pursuant to the
law of its jurisdiction of formation.
6. “Distributional interest” means the right under an
unincorporated entity’s organic law and organic rules to
receive distributions from the entity.
7. “Domestic”, with respect to an entity, means governed as
to its internal affairs by the law of this state.
8. “Domesticated limited liability company” means the
domesticating limited liability company as it continues in
existence after a domestication.
9. “Domesticating limited liability company” means the
domestic limited liability company that approves a plan of
domestication pursuant to section 489.1053 or the foreign
limited liability company that approves a domestication
pursuant to the law of its jurisdiction of formation.
10. “Domestication” means a transaction authorized by part
5.
11. a. “Entity” means any of the following:
(1) A business corporation.
(2) A nonprofit corporation.
(3) A general partnership, including a limited liability
-103-partnership.
(4) A limited partnership, including a limited liability
limited partnership.
(5) A limited liability company.
(6) A domestic cooperative.
(7) An unincorporated nonprofit association.
(8) A statutory trust, business trust, or common-law
business trust.
(9) Any other person that has any of the following:
(a) A legal existence separate from any interest holder of
that person.
(b) The power to acquire an interest in real property in
its own name.
b. “Entity” does not include any of the following:
(1) An individual.
(2) A trust with a predominantly donative purpose or a
charitable trust.
(3) An association or relationship that is not an entity
listed in paragraph “a” and is not a partnership under the
rules stated in section 486A.202, subsection 3, or a similar
provision of the law of another jurisdiction.
(4) A decedent’s estate.
(5) A government or a governmental subdivision, agency, or
instrumentality.
12. “Filing entity” means an entity whose formation requires
the filing of a public organic record. The term does not
include a limited liability partnership.
13. “Foreign”, with respect to an entity, means an
entity governed as to its internal affairs by the law of a
jurisdiction other than this state.
14. “Governance interest” means a right under the organic
law or organic rules of an unincorporated entity, other than as
a governor, agent, assignee, or proxy, to any of the following:
a. Receive or demand access to information concerning, or
the books and records of, the entity.
-104- b. Vote for or consent to the election of the governors of
the entity.
c. Receive notice of or vote on or consent to an issue
involving the internal affairs of the entity.
15. “Governor” means any of the following:
a. A director of a business corporation.
b. A director or trustee of a nonprofit corporation.
c. A general partner of a general partnership.
d. A general partner of a limited partnership.
e. A manager of a manager-managed limited liability company.
f. A member of a member-managed limited liability company.
g. A director of a domestic cooperative.
h. A manager of an unincorporated nonprofit association.
i. A trustee of a statutory trust, business trust, or
common-law business trust.
j. Any other person under whose authority the powers of an
entity are exercised and under whose direction the activities
and affairs of the entity are managed pursuant to the organic
law and organic rules of the entity.
16. “Interest” means any of the following:
a. A share in a business corporation.
b. A membership in a nonprofit corporation.
c. A partnership interest in a general partnership.
d. A partnership interest in a limited partnership.
e. A membership interest in a limited liability company.
f. A share in a domestic cooperative.
g. A membership in an unincorporated nonprofit association.
h. A beneficial interest in a statutory trust, business
trust, or common-law business trust.
i. A governance interest or distributional interest in any
other type of unincorporated entity.
17. “Interest exchange” means a transaction authorized by
part 3.
18. “Interest holder” means any of the following:
a. A shareholder of a business corporation.
-105- b. A member of a nonprofit corporation.
c. A general partner of a general partnership.
d. A general partner of a limited partnership.
e. A limited partner of a limited partnership.
f. A member of a limited liability company.
g. A shareholder of a domestic cooperative.
h. A member of an unincorporated nonprofit association.
i. A beneficiary or beneficial owner of a statutory trust,
business trust, or common-law business trust.
j. Any other direct holder of an interest.
19. “Interest holder liability” means any of the following:
a. Personal liability for a liability of an entity which is
imposed on a person due to any of the following:
(1) Solely by reason of the status of the person as an
interest holder.
(2) By the organic rules of the entity which make one or
more specified interest holders or categories of interest
holders liable in their capacity as interest holders for all or
specified liabilities of the entity.
b. An obligation of an interest holder under the organic
rules of an entity to contribute to the entity.
20. “Merger” means a transaction authorized by part 2.
21. “Merging entity” means an entity that is a party to
a merger and exists immediately before the merger becomes
effective.
22. “Organic law” means the law of an entity’s jurisdiction
of formation governing the internal affairs of the entity.
23. “Organic rules” means the public organic record and
private organic rules of an entity.
24. “Plan” means a plan of merger, plan of interest
exchange, plan of conversion, or plan of domestication.
25. “Plan of conversion” means a plan under section
489.1042.
26. “Plan of domestication” means a plan under section
489.1052.
-106- 27. “Plan of interest exchange” means a plan under section
489.1032.
28. “Plan of merger” means a plan under section 489.1022.
29. a. “Private organic rules” means the rules, whether or
not in a record, that govern the internal affairs of an entity,
are binding on all its interest holders, and are not part of
its public organic record, if any.
b. “Private organic rules” includes all of the following:
(1) The bylaws of a business corporation.
(2) The bylaws of a nonprofit corporation.
(3) The partnership agreement of a general partnership.
(4) The partnership agreement of a limited partnership.
(5) The operating agreement of a limited liability company.
(6) The bylaws of a domestic cooperative.
(7) The governing principles of an unincorporated nonprofit
association.
(8) The trust instrument of a statutory trust or similar
rules of a business trust or common-law business trust.
30. “Protected agreement” means any of the following:
a. A record evidencing indebtedness and any related
agreement in effect on January 1, 2009.
b. An agreement that is binding on an entity on January 1,
2009.
c. The organic rules of an entity in effect on January 1,
2009.
d. An agreement that is binding on any of the governors or
interest holders of an entity on January 1, 2009.
31. a. “Public organic record” means the record the filing
of which by the secretary of state is required to form an
entity and any amendment to or restatement of that record.
b. “Public organic record” includes any of the following:
(1) The articles of incorporation of a business
corporation.
(2) The articles of incorporation of a nonprofit
corporation.
-107- (3) The certificate of limited partnership of a limited
partnership.
(4) The certificate of organization of a limited liability
company.
(5) The articles of incorporation of a domestic
cooperative.
(6) The certificate of trust of a statutory trust or similar
record of a business trust.
32. “Registered foreign entity” means a foreign entity that
is registered to do business in this state pursuant to a record
filed by the secretary of state.
33. “Statement of conversion” means a statement under
section 489.1045.
34. “Statement of domestication” means a statement under
section 489.1055.
35. “Statement of interest exchange” means a statement under
section 489.1035.
36. “Statement of merger” means a statement under section
489.1025.
37. “Surviving entity” means the entity that continues in
existence after or is created by a merger.
38. “Type of entity” means a generic form of entity that is
any of the following:
a. Recognized at common law.
b. Formed under an organic law, whether or not some entities
formed under that organic law are subject to provisions of that
law that create different categories of the form of entity.
Sec. 81. Section 489.1002, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1002 Relationship of subchapter to other laws.
1. This subchapter does not authorize an act prohibited by,
and does not affect the application or requirements of, law
other than this subchapter.
2. A transaction effected under this subchapter shall
not create or impair a right, duty, or obligation of a
-108-person under the statutory law of this state other than this
subchapter relating to a change in control, takeover, business
combination, control-share acquisition, or similar transaction
involving a domestic merging, acquired, converting, or
domesticating business corporation unless any of the following
applies:
a. If the corporation does not survive the transaction, the
transaction satisfies any requirements of the law.
b. If the corporation survives the transaction, the approval
of the plan is by a vote of the shareholders or directors which
would be sufficient to create or impair the right, duty, or
obligation directly under the law.
Sec. 82. Section 489.1003, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1003 Required notice or approval.
1. A domestic or foreign entity that is required to give
notice to, or obtain the approval of, a governmental agency
or officer of this state to be a party to a merger must give
the notice or obtain the approval to be a party to an interest
exchange, conversion, or domestication.
2. Property held for a charitable purpose under the law of
this state by a domestic or foreign entity immediately before
a transaction under this subchapter becomes effective may be
diverted from the objects for which it was donated, granted,
devised, or otherwise transferred only to the extent a public
benefit corporation is able to divert from such objects under
chapter 504.
3. A bequest, devise, gift, grant, or promise contained
in a will or other instrument of donation, subscription, or
conveyance which is made to a merging entity that is not the
surviving entity and which takes effect or remains payable
after the merger inures to the surviving entity.
4. A trust obligation that would govern property if
transferred to a nonsurviving entity applies to property that
is transferred to the surviving entity under this section.
-109- Sec. 83. Section 489.1004, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1004 Nonexclusivity.
The fact that a transaction under this subchapter produces
a certain result does not preclude the same result from being
accomplished in any other manner permitted by law other than
this subchapter.
Sec. 84. Section 489.1005, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1005 Reference to external facts.
1. A plan may refer to facts ascertainable outside the plan
if the manner in which the facts will operate upon the plan is
specified in the plan. The facts may include the occurrence of
an event or a determination or action by a person, whether or
not the event, determination, or action is within the control
of a party to the transaction.
2. The following provisions of a record delivered to the
secretary of state for filing under this chapter or a plan
delivered for filing in lieu of a statement shall not be made
dependent on facts outside the record or plan:
a. The name and address of any person.
b. The registered office of any entity.
c. The registered agent of any entity.
d. The number of authorized interests and designation of
each class or series of interests.
e. The effective date of a record delivered to the secretary
of state for filing.
f. Any required statement in a record delivered to the
secretary of state for filing of the date on which the
underlying transaction was approved or the manner in which that
approval was given.
Sec. 85. Section 489.1006, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1006 Appraisal rights.
An interest holder of a domestic merging, acquired,
-110-converting, or domesticating limited liability company is
entitled to contractual appraisal rights in connection with a
transaction under this subchapter to the extent provided in any
of the following:
1. The operating agreement.
2. The plan.
Sec. 86. Section 489.1007, Code 2023, is amended by striking
the section and inserting in lieu thereof the following:
489.1007 Excluded entities and transactions.
This subchapter shall not be used to effect a transaction
involving a bank, insurance company, or public utility where
any chapter governing the regulation of such entity does not
permit the transaction.
Sec. 87. NEW SECTION. 489.1021 Merger authorized.
1. By complying with this part, all of the following apply:
a. One or more domestic limited liability companies may
merge with one or more domestic or foreign entities into a
domestic or foreign surviving entity.
b. Two or more foreign entities may merge into a domestic
limited liability company.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity may be a party to a
merger under this part or may be the surviving entity in such
a merger if the merger is authorized by the law of the foreign
entity’s jurisdiction of formation.
Sec. 88. NEW SECTION. 489.1022 Plan of merger.
1. A domestic limited liability company may become a party
to a merger under this part by approving a plan of merger. The
plan must be in a record and contain all of the following:
a. As to each merging entity, its name, jurisdiction of
formation, and type of entity.
b. If the surviving entity is to be created in the merger, a
statement to that effect and the entity’s name, jurisdiction of
formation, and type of entity.
c. The manner of converting the interests in each party
-111-to the merger into interests, securities, obligations, money,
other property, rights to acquire interests or securities, or
any combination of the foregoing.
d. If the surviving entity exists before the merger, any
proposed amendments to all of the following:
(1) Its public organic record, if any.
(2) Its private organic rules that are, or are proposed to
be, in a record.
e. If the surviving entity is to be created in the merger,
all of the following:
(1) Its proposed public organic record, if any.
(2) The full text of its private organic rules that are
proposed to be in a record.
f. The other terms and conditions of the merger.
g. Any other provision required by the law of a merging
entity’s jurisdiction of formation or the organic rules of a
merging entity.
2. In addition to the requirements of subsection 1, a plan
of merger may contain any other provision not prohibited by
law.
Sec. 89. NEW SECTION. 489.1023 Approval of merger.
1. A plan of merger is not effective unless it has been
approved according to all of the following:
a. By a domestic merging limited liability company, by all
the members of the company entitled to vote on or consent to
any matter.
b. In a record, by each member of a domestic merging limited
liability company which will have interest holder liability for
debts, obligations, and other liabilities that are incurred
after the merger becomes effective, unless all of the following
apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of a merger in
which some or all of its members become subject to interest
holder liability by the affirmative vote or consent of fewer
-112-than all the members.
(2) The member consented in a record to or voted for that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A merger involving a domestic merging entity that is not
a limited liability company is not effective unless the merger
is approved by that entity in accordance with its organic law.
3. A merger involving a foreign merging entity is not
effective unless the merger is approved by the foreign entity
in accordance with the law of the foreign entity’s jurisdiction
of formation.
Sec. 90. NEW SECTION. 489.1024 Amendment or abandonment
of plan of merger.
1. A plan of merger may be amended only with the consent
of each party to the plan, except as otherwise provided in the
plan.
2. A domestic merging limited liability company may approve
an amendment of a plan of merger according to any of the
following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in the
plan, but a member that was entitled to vote on or consent to
approval of the merger is entitled to vote on or consent to any
amendment of the plan that will change any of the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by the interest holders of any party to the plan.
(2) The public organic record, if any, or private
organic rules of the surviving entity that will be in effect
immediately after the merger becomes effective, except for
changes that do not require approval of the interest holders of
the surviving entity under its organic law or organic rules.
(3) Any other terms or conditions of the plan, if the change
-113-would adversely affect the member in any material respect.
3. After a plan of merger has been approved and before
a statement of merger becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic merging limited liability company may abandon
the plan in the same manner as the plan was approved.
4. If a plan of merger is abandoned after a statement of
merger has been delivered to the secretary of state for filing
and before the statement becomes effective, a statement of
abandonment, signed by a party to the plan, must be delivered
to the secretary of state for filing before the statement of
merger becomes effective. The statement of abandonment takes
effect on filing, and the merger is abandoned and does not
become effective. The statement of abandonment must contain
all of the following:
a. The name of each party to the plan of merger.
b. The date on which the statement of merger was filed by
the secretary of state.
c. A statement that the merger has been abandoned in
accordance with this section.
Sec. 91. NEW SECTION. 489.1025 Statement of merger —
effective date of merger.
1. A statement of merger must be signed by each merging
entity and delivered to the secretary of state for filing.
2. A statement of merger must contain all of the following:
a. The name, jurisdiction of formation, and type of entity
of each merging entity that is not the surviving entity.
b. The name, jurisdiction of formation, and type of entity
of the surviving entity, and if the surviving entity is a
foreign entity, the street and mailing addresses of an office
of the surviving entity that the secretary of state may use for
purposes of section 489.1026, subsection 5.
c. A statement that the merger was approved by each domestic
merging entity, if any, in accordance with this part and by
each foreign merging entity, if any, in accordance with the law
-114-of its jurisdiction of formation.
d. If the surviving entity exists before the merger and is
a domestic filing entity, any amendment to its public organic
record approved as part of the plan of merger.
e. If the surviving entity is created by the merger and
is a domestic filing entity, its public organic record, as an
attachment.
f. If the surviving entity is created by the merger and
is a domestic limited liability partnership, its statement of
qualification, as an attachment.
3. In addition to the requirements of subsection 2, a
statement of merger may contain any other provision not
prohibited by law.
4. If the surviving entity is a domestic entity, its public
organic record, if any, must satisfy the requirements of the
law of this state, except that the public organic record does
not need to be signed.
5. If the surviving entity is a domestic limited liability
company, the merger becomes effective when the statement of
merger is effective. In all other cases, the merger becomes
effective on the later of the following:
a. The date and time provided by the organic law of the
surviving entity.
b. When the statement is effective.
Sec. 92. NEW SECTION. 489.1026 Effect of merger.
1. When a merger becomes effective, all of the following
apply:
a. The surviving entity continues or comes into existence.
b. Each merging entity that is not the surviving entity
ceases to exist.
c. All property of each merging entity vests in the
surviving entity without transfer, reversion, or impairment.
d. All debts, obligations, and other liabilities of each
merging entity are debts, obligations, and other liabilities
of the surviving entity.
-115- e. Except as otherwise provided by law or the plan of
merger, all the rights, privileges, immunities, powers, and
purposes of each merging entity vest in the surviving entity.
f. If the surviving entity exists before the merger, all of
the following apply:
(1) All its property continues to be vested in it without
transfer, reversion, or impairment.
(2) It remains subject to all its debts, obligations, and
other liabilities.
(3) All its rights, privileges, immunities, powers, and
purposes continue to be vested in it.
g. The name of the surviving entity may be substituted for
the name of any merging entity that is a party to any pending
action or proceeding.
h. If the surviving entity exists before the merger, all of
the following apply:
(1) Its public organic record, if any, is amended to the
extent provided in the statement of merger.
(2) Its private organic rules that are to be in a record, if
any, are amended to the extent provided in the plan of merger.
i. If the surviving entity is created by the merger, its
private organic rules are effective and all of the following
apply:
(1) If it is a filing entity, its public organic record
becomes effective.
(2) If it is a limited liability partnership, its statement
of qualification becomes effective.
j. The interests in each merging entity which are to be
converted in the merger are converted, and the interest holders
of those interests are entitled only to the rights provided to
them under the plan of merger and to any appraisal rights they
have under section 489.1006 and the merging entity’s organic
law.
2. Except as otherwise provided in the organic law or
organic rules of a merging entity, the merger does not give
-116-rise to any rights that an interest holder, governor, or third
party would have upon a dissolution, liquidation, or winding up
of the merging entity.
3. When a merger becomes effective, a person that did
not have interest holder liability with respect to any of
the merging entities and becomes subject to interest holder
liability with respect to a domestic entity as a result of
the merger has interest holder liability only to the extent
provided by the organic law of that entity and only for those
debts, obligations, and other liabilities that are incurred
after the merger becomes effective.
4. When a merger becomes effective, the interest holder
liability of a person that ceases to hold an interest in a
domestic merging limited liability company with respect to
which the person had interest holder liability is subject to
the following rules:
a. The merger does not discharge any interest holder
liability under this chapter to the extent the interest holder
liability was incurred before the merger became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the merger becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the merger had not occurred.
d. The person has whatever rights of contribution from
any other person as are provided by this chapter, law other
than this chapter, or the operating agreement of the domestic
merging limited liability company with respect to any interest
holder liability preserved under paragraph “a” as if the merger
had not occurred.
5. When a merger becomes effective, a foreign entity that is
the surviving entity may be served with process in this state
for the collection and enforcement of any debts, obligations,
or other liabilities of a domestic merging limited liability
-117-company as provided in section 489.116.
6. When a merger becomes effective, the registration to do
business in this state of any foreign merging entity that is
not the surviving entity is canceled.
Sec. 93. NEW SECTION. 489.1031 Interest exchange
authorized.
1. By complying with this part, any of the following apply:
a. A domestic limited liability company may acquire all
of one or more classes or series of interests of another
domestic entity or a foreign entity in exchange for interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
b. All of one or more classes or series of interests of a
domestic limited liability company may be acquired by another
domestic entity or a foreign entity in exchange for interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity may be the acquiring or
acquired entity in an interest exchange under this part if
the interest exchange is authorized by the law of the foreign
entity’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company but
does not refer to an interest exchange, the provision applies
to an interest exchange in which the domestic limited liability
company is the acquired entity as if the interest exchange were
a merger until the provision is amended on or after January 1,
2009.
Sec. 94. NEW SECTION. 489.1032 Plan of interest exchange.
1. A domestic limited liability company may be the acquired
entity in an interest exchange under this part by approving a
plan of interest exchange. The plan must be in a record and
-118-contain all of the following:
a. The name of the acquired entity.
b. The name, jurisdiction of formation, and type of entity
of the acquiring entity.
c. The manner of converting the interests in the acquired
entity into interests, securities, obligations, money, other
property, rights to acquire interests or securities, or any
combination of the foregoing.
d. Any proposed amendments to all of the following:
(1) The certificate of organization of the acquired entity.
(2) The operating agreement of the acquired entity that are,
or are proposed to be, in a record.
e. The other terms and conditions of the interest exchange.
f. Any other provision required by the law of this state or
the operating agreement of the acquired entity.
2. In addition to the requirements of subsection 1, a
plan of interest exchange may contain any other provision not
prohibited by law.
Sec. 95. NEW SECTION. 489.1033 Approval of interest
exchange.
1. A plan of interest exchange is not effective unless it
has been approved according to all of the following:
a. By all the members of a domestic acquired limited
liability company entitled to vote on or consent to any matter.
b. In a record, by each member of the domestic acquired
limited liability company that will have interest holder
liability for debts, obligations, and other liabilities that
are incurred after the interest exchange becomes effective,
unless all of the following apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of an interest
exchange or a merger in which some or all of its members become
subject to interest holder liability by the affirmative vote or
consent of fewer than all the members.
(2) The member consented in a record to or voted for that
-119-provision of the operating agreement or became a member after
the adoption of that provision.
2. An interest exchange involving a domestic acquired
entity that is not a limited liability company is not effective
unless it is approved by the domestic entity in accordance with
its organic law.
3. An interest exchange involving a foreign acquired entity
is not effective unless it is approved by the foreign entity in
accordance with the law of the foreign entity’s jurisdiction
of formation.
4. Except as otherwise provided in its organic law or
organic rules, the interest holders of the acquiring entity are
not required to approve the interest exchange.
Sec. 96. NEW SECTION. 489.1034 Amendment or abandonment
of plan of interest exchange.
1. A plan of interest exchange may be amended only with the
consent of each party to the plan, except as otherwise provided
in the plan.
2. A domestic acquired limited liability company may
approve an amendment of a plan of interest exchange according
to any of the following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in
the plan, but a member that was entitled to vote on or consent
to approval of the interest exchange is entitled to vote on or
consent to any amendment of the plan that will change any of
the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the acquired company under
the plan.
(2) The certificate of organization or operating agreement
of the acquired company that will be in effect immediately
-120-after the interest exchange becomes effective, except for
changes that do not require approval of the members of the
acquired company under this chapter or the operating agreement.
(3) Any other terms or conditions of the plan, if the change
would adversely affect the member in any material respect.
3. After a plan of interest exchange has been approved and
before a statement of interest exchange becomes effective,
the plan may be abandoned as provided in the plan. Unless
prohibited by the plan, a domestic acquired limited liability
company may abandon the plan in the same manner as the plan was
approved.
4. If a plan of interest exchange is abandoned after a
statement of interest exchange has been delivered to the
secretary of state for filing and before the statement becomes
effective, a statement of abandonment, signed by the acquired
limited liability company, must be delivered to the secretary
of state for filing before the statement of interest exchange
becomes effective. The statement of abandonment takes effect
on filing, and the interest exchange is abandoned and does not
become effective. The statement of abandonment must contain
all of the following:
a. The name of the acquired limited liability company.
b. The date on which the statement of interest exchange was
filed by the secretary of state.
c. A statement that the interest exchange has been abandoned
in accordance with this section.
Sec. 97. NEW SECTION. 489.1035 Statement of interest
exchange — effective date of interest exchange.
1. A statement of interest exchange must be signed by a
domestic acquired limited liability company and delivered to
the secretary of state for filing.
2. A statement of interest exchange must contain all of the
following:
a. The name of the acquired limited liability company.
b. The name, jurisdiction of formation, and type of entity
-121-of the acquiring entity.
c. A statement that the plan of interest exchange was
approved by the acquired company in accordance with this part.
d. Any amendments to the acquired company’s certificate of
organization approved as part of the plan of interest exchange.
3. In addition to the requirements of subsection 2, a
statement of interest exchange may contain any other provision
not prohibited by law.
4. An interest exchange becomes effective when the
statement of interest exchange is effective.
Sec. 98. NEW SECTION. 489.1036 Effect of interest exchange.
1. When an interest exchange in which the acquired entity
is a domestic limited liability company becomes effective, all
of the following apply:
a. The interests in the acquired limited liability company
which are the subject of the interest exchange are converted,
and the members holding those interests are entitled only to
the rights provided to them under the plan of interest exchange
and to any appraisal rights they have under section 486.1006.
b. The acquiring entity becomes the interest holder of the
interests in the acquired limited liability company stated in
the plan of interest exchange to be acquired by the acquiring
entity.
c. The certificate of organization of the acquired limited
liability company is amended to the extent provided in the
statement of interest exchange.
d. The provisions of the operating agreement of the acquired
limited liability company that are to be in a record, if any,
are amended to the extent provided in the plan of interest
exchange.
2. Except as otherwise provided in the operating agreement
of a domestic acquired limited liability company, the interest
exchange does not give rise to any rights that a member,
manager, or third party would have upon a dissolution,
liquidation, or winding up of the acquired limited liability
-122-company.
3. When an interest exchange becomes effective, a person
that did not have interest holder liability with respect to
a domestic acquired limited liability company and becomes
subject to interest holder liability with respect to a domestic
entity as a result of the interest exchange has interest holder
liability only to the extent provided by the organic law of
the entity and only for those debts, obligations, and other
liabilities that are incurred after the interest exchange
becomes effective.
4. When an interest exchange becomes effective, the
interest holder liability of a person that ceases to hold an
interest in a domestic acquired limited liability company with
respect to which the person had interest holder liability is
subject to all of the following rules:
a. The interest exchange does not discharge any interest
holder liability under this chapter to the extent the interest
holder liability was incurred before the interest exchange
became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the interest exchange becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the interest exchange had
not occurred.
d. The person has whatever rights of contribution from
any other person as are provided by this chapter, law other
than this chapter, or the operating agreement of the acquired
limited liability company with respect to any interest holder
liability preserved under paragraph “a” as if the interest
exchange had not occurred.
Sec. 99. NEW SECTION. 489.1041 Conversion authorized.
1. By complying with this part, a domestic limited liability
company may become any of the following:
-123- a. A domestic entity that is a different type of entity.
b. A foreign entity that is a different type of entity, if
the conversion is authorized by the law of the foreign entity’s
jurisdiction of formation.
2. By complying with the provisions of this part applicable
to foreign entities, a foreign entity that is not a foreign
limited liability company may become a domestic limited
liability company if the conversion is authorized by the law of
the foreign entity’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company
but does not refer to a conversion, the provision applies
to a conversion of the limited liability company as if the
conversion were a merger until the provision is amended on or
after January 1, 2009.
4. A domestic entity that is not a limited liability company
may become a domestic limited liability company if all of the
following apply:
a. The domestic converting entity complies with section
489.1043.
b. The domestic converting entity files a statement of
conversion in accordance with section 489.1045.
Sec. 100. NEW SECTION. 489.1042 Plan of conversion.
1. A domestic limited liability company may convert to a
different type of entity under this part by approving a plan
of conversion. The plan must be in a record and contain all of
the following:
a. The name of the converting limited liability company.
b. The name, jurisdiction of formation, and type of entity
of the converted entity.
c. The manner of converting the interests in the converting
limited liability company into interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing.
d. The proposed public organic record of the converted
-124-entity if it will be a filing entity.
e. The full text of the private organic rules of the
converted entity which are proposed to be in a record.
f. The other terms and conditions of the conversion.
g. Any other provision required by the law of this state
or the operating agreement of the converting limited liability
company.
2. In addition to the requirements of subsection 1, a plan
of conversion may contain any other provision not prohibited
by law.
Sec. 101. NEW SECTION. 489.1043 Approval of conversion.
1. A plan of conversion is not effective unless it has been
approved according to all of the following:
a. By a domestic converting limited liability company, by
all the members of the limited liability company entitled to
vote on or consent to any matter.
b. In a record, by each member of a domestic converting
limited liability company which will have interest holder
liability for debts, obligations, and other liabilities that
are incurred after the conversion becomes effective, unless all
of the following apply:
(1) The operating agreement of the limited liability
company provides in a record for the approval of a conversion
or a merger in which some or all of its members become subject
to interest holder liability by the affirmative vote or consent
of fewer than all the members.
(2) The member voted for or consented in a record to that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A conversion involving a domestic converting entity that
is not a limited liability company is not effective unless it
is approved by the domestic converting entity in accordance
with its organic law.
3. A conversion of a foreign converting entity is not
effective unless it is approved by the foreign entity in
-125-accordance with the law of the foreign entity’s jurisdiction
of formation.
Sec. 102. NEW SECTION. 489.1044 Amendment or abandonment of
plan of conversion.
1. A plan of conversion of a domestic converting limited
liability company may be amended according to any of the
following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in the
plan, but a member that was entitled to vote on or consent to
approval of the conversion is entitled to vote on or consent
to any amendment of the plan that will change any of the
following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the converting limited
liability company under the plan.
(2) The public organic record, if any, or private organic
rules of the converted entity which will be in effect
immediately after the conversion becomes effective, except for
changes that do not require approval of the interest holders of
the converted entity under its organic law or organic rules.
(3) Any other terms or conditions of the plan, if the change
would adversely affect the member in any material respect.
2. After a plan of conversion has been approved by a
domestic converting limited liability company and before a
statement of conversion becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic converting limited liability company may
abandon the plan in the same manner as the plan was approved.
3. If a plan of conversion is abandoned after a statement
of conversion has been delivered to the secretary of state
for filing and before the statement becomes effective, a
-126-statement of abandonment, signed by the converting entity,
must be delivered to the secretary of state for filing before
the statement of conversion becomes effective. The statement
of abandonment takes effect on filing, and the conversion is
abandoned and does not become effective. The statement of
abandonment must contain all of the following:
a. The name of the converting limited liability company.
b. The date on which the statement of conversion was filed
by the secretary of state.
c. A statement that the conversion has been abandoned in
accordance with this section.
Sec. 103. NEW SECTION. 489.1045 Statement of conversion —
effective date of conversion.
1. A statement of conversion must be signed by the
converting entity and delivered to the secretary of state for
filing.
2. A statement of conversion must contain all of the
following:
a. The name, jurisdiction of formation, and type of entity
of the converting entity.
b. The name, jurisdiction of formation, and type of entity
of the converted entity and if the converted entity is a
foreign entity, the street and mailing addresses of an office
of the converted entity that the secretary of state may use for
purposes of section 489.1046, subsection 5.
c. If the converting entity is a domestic limited liability
company, a statement that the plan of conversion was approved
in accordance with this part or, if the converting entity is a
foreign entity, a statement that the conversion was approved
by the foreign entity in accordance with the law of its
jurisdiction of formation.
d. If the converted entity is a domestic filing entity, its
public organic record, as an attachment.
e. If the converted entity is a domestic limited liability
partnership, its statement of qualification, as an attachment.
-127- 3. In addition to the requirements of subsection 2, a
statement of conversion may contain any other provision not
prohibited by law.
4. If the converted entity is a domestic entity, its public
organic record, if any, must satisfy the requirements of the
law of this state, except that the public organic record does
not need to be signed.
5. If the converted entity is a domestic limited liability
company, the conversion becomes effective when the statement of
conversion is effective. In all other cases, the conversion
becomes effective on the later of the following:
a. The date and time provided by the organic law of the
converted entity.
b. When the statement is effective.
Sec. 104. NEW SECTION. 489.1046 Effect of conversion.
1. When a conversion becomes effective all of the following
apply:
a. The converted entity is any of the following:
(1) Organized under and subject to the organic law of the
converted entity.
(2) The same entity without interruption as the converting
entity.
b. All property of the converting entity continues to be
vested in the converted entity without transfer, reversion, or
impairment.
c. All debts, obligations, and other liabilities of the
converting entity continue as debts, obligations, and other
liabilities of the converted entity.
d. Except as otherwise provided by law or the plan of
conversion, all the rights, privileges, immunities, powers,
and purposes of the converting entity remain in the converted
entity.
e. The name of the converted entity may be substituted for
the name of the converting entity in any pending action or
proceeding.
-128- f. The certificate of organization of the converted entity
becomes effective.
g. The provisions of the operating agreement of the
converted entity which are to be in a record, if any, approved
as part of the plan of conversion become effective.
h. The interests in the converting entity are converted, and
the interest holders of the converting entity are entitled only
to the rights provided to them under the plan of conversion and
to any appraisal rights they have under section 489.1006.
2. Except as otherwise provided in the operating agreement
of a domestic converting limited liability company, the
conversion does not give rise to any rights that a member,
manager, or third party would have upon a dissolution,
liquidation, or winding up of the converting entity.
3. When a conversion becomes effective, a person that
did not have interest holder liability with respect to the
converting entity and becomes subject to interest holder
liability with respect to a domestic entity as a result of the
conversion has interest holder liability only to the extent
provided by the organic law of the entity and only for those
debts, obligations, and other liabilities that are incurred
after the conversion becomes effective.
4. When a conversion becomes effective, the interest holder
liability of a person that ceases to hold an interest in a
domestic converting limited liability company with respect to
which the person had interest holder liability is subject to
all of the following rules:
a. The conversion does not discharge any interest holder
liability under this chapter to the extent the interest holder
liability was incurred before the conversion became effective.
b. The person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
arises after the conversion becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
-129-preserved under paragraph “a” as if the conversion had not
occurred.
d. The person has whatever rights of contribution from any
other person as are provided by this chapter, law other than
this chapter, or the organic rules of the converting entity
with respect to any interest holder liability preserved under
paragraph “a” as if the conversion had not occurred.
5. When a conversion becomes effective, a foreign entity
that is the converted entity may be served with process in this
state for the collection and enforcement of any of its debts,
obligations, and other liabilities as provided in section
489.116.
6. If the converting entity is a registered foreign entity,
its registration to do business in this state is canceled when
the conversion becomes effective.
7. A conversion does not require the entity to wind up its
affairs and does not constitute or cause the dissolution of the
entity.
Sec. 105. NEW SECTION. 489.1051 Domestication authorized.
1. By complying with this part, a domestic limited liability
company may become a foreign limited liability company if
the domestication is authorized by the law of the foreign
jurisdiction.
2. By complying with the provisions of this part applicable
to foreign limited liability companies, a foreign limited
liability company may become a domestic limited liability
company if the domestication is authorized by the law of the
foreign limited liability company’s jurisdiction of formation.
3. If a protected agreement contains a provision that
applies to a merger of a domestic limited liability company
but does not refer to a domestication, the provision applies
to a domestication of the limited liability company as if the
domestication were a merger until the provision is amended on
or after January 1, 2009.
Sec. 106. NEW SECTION. 489.1052 Plan of domestication.
-130- 1. A domestic limited liability company may become a foreign
limited liability company in a domestication by approving
a plan of domestication. The plan must be in a record and
contain all of the following:
a. The name of the domesticating limited liability company.
b. The name and jurisdiction of formation of the
domesticated limited liability company.
c. The manner of converting the interests in the
domesticating limited liability company into interests,
securities, obligations, money, other property, rights to
acquire interests or securities, or any combination of the
foregoing.
d. The proposed certificate of organization of the
domesticated limited liability company.
e. The full text of the provisions of the operating
agreement of the domesticated limited liability company that
are proposed to be in a record.
f. The other terms and conditions of the domestication.
g. Any other provision required by the law of this state or
the operating agreement of the domesticating limited liability
company.
2. In addition to the requirements of subsection 1, a plan
of domestication may contain any other provision not prohibited
by law.
Sec. 107. NEW SECTION. 489.1053 Approval of domestication.
1. A plan of domestication of a domestic domesticating
limited liability company is not effective unless it has been
approved according to any of the following:
a. By all the members entitled to vote on or consent to any
matter.
b. In a record, by each member that will have interest
holder liability for debts, obligations, and other liabilities
that are incurred after the domestication becomes effective,
unless all of the following apply:
(1) The operating agreement of the domesticating limited
-131-liability company in a record provides for the approval of a
domestication or merger in which some or all of its members
become subject to interest holder liability by the affirmative
vote or consent of fewer than all the members.
(2) The member voted for or consented in a record to that
provision of the operating agreement or became a member after
the adoption of that provision.
2. A domestication of a foreign domesticating limited
liability company is not effective unless it is approved in
accordance with the law of the foreign limited liability
company’s jurisdiction of formation.
Sec. 108. NEW SECTION. 489.1054 Amendment or abandonment
of plan of domestication.
1. A plan of domestication of a domestic domesticating
limited liability company may be amended according to any of
the following:
a. In the same manner as the plan was approved, if the plan
does not provide for the manner in which it may be amended.
b. By its managers or members in the manner provided in
the plan, but a member that was entitled to vote on or consent
to approval of the domestication is entitled to vote on or
consent to any amendment of the plan that will change any of
the following:
(1) The amount or kind of interests, securities,
obligations, money, other property, rights to acquire interests
or securities, or any combination of the foregoing, to be
received by any of the members of the domesticating limited
liability company under the plan.
(2) The certificate of organization or operating agreement
of the domesticated limited liability company that will be in
effect immediately after the domestication becomes effective,
except for changes that do not require approval of the members
of the domesticated limited liability company under its organic
law or operating agreement.
(3) Any other terms or conditions of the plan, if the change
-132-would adversely affect the member in any material respect.
2. After a plan of domestication has been approved by a
domestic domesticating limited liability company and before a
statement of domestication becomes effective, the plan may be
abandoned as provided in the plan. Unless prohibited by the
plan, a domestic domesticating limited liability company may
abandon the plan in the same manner as the plan was approved.
3. If a plan of domestication is abandoned after a statement
of domestication has been delivered to the secretary of state
for filing and before the statement becomes effective, a
statement of abandonment, signed by the domesticating limited
liability company, must be delivered to the secretary of state
for filing before the statement of domestication becomes
effective. The statement of abandonment takes effect on
filing, and the domestication is abandoned and does not become
effective. The statement of abandonment must contain all of
the following:
a. The name of the domesticating limited liability company.
b. The date on which the statement of domestication was
filed by the secretary of state.
c. A statement that the domestication has been abandoned in
accordance with this section.
Sec. 109. NEW SECTION. 489.1055 Statement of domestication
— effective date of domestication.
1. A statement of domestication must be signed by the
domesticating limited liability company and delivered to the
secretary of state for filing.
2. A statement of domestication must contain all of the
following:
a. The name and jurisdiction of formation of the
domesticating limited liability company.
b. The name and jurisdiction of formation of the
domesticated limited liability company and the street and
mailing addresses of an office of the domesticated limited
liability company that the secretary of state may use for
-133-purposes of section 489.1056, subsection 5.
c. If the domesticating limited liability company is a
domestic limited liability company, a statement that the plan
of domestication was approved in accordance with this part or,
if the domesticating limited liability company is a foreign
limited liability company, a statement that the domestication
was approved in accordance with the law of its jurisdiction of
formation.
d. The certificate of organization of the domesticated
limited liability company, as an attachment.
3. In addition to the requirements of subsection 2, a
statement of domestication may contain any other provision not
prohibited by law.
4. The certificate of organization of a domestic
domesticated limited liability company must satisfy the
requirements of this chapter, but the certificate does not need
to be signed.
5. If the domesticated entity is a domestic limited
liability company, the domestication becomes effective
when the statement of domestication is effective. If the
domesticated entity is a foreign limited liability company,
the domestication becomes effective on the later of all of the
following:
a. The date and time provided by the organic law of the
domesticated entity.
b. When the statement is effective.
Sec. 110. NEW SECTION. 489.1056 Effect of domestication.
1. When a domestication becomes effective, all of the
following apply:
a. The domesticated entity is all of the following:
(1) Organized under and subject to the organic law of the
domesticated entity.
(2) The same entity without interruption as the
domesticating entity.
b. All property of the domesticating entity continues to be
-134-vested in the domesticated entity without transfer, reversion,
or impairment.
c. All debts, obligations, and other liabilities of the
domesticating entity continue as debts, obligations, and other
liabilities of the domesticated entity.
d. Except as otherwise provided by law or the plan of
domestication, all the rights, privileges, immunities,
powers, and purposes of the domesticating entity remain in the
domesticated entity.
e. The name of the domesticated entity may be substituted
for the name of the domesticating entity in any pending action
or proceeding.
f. The certificate of organization of the domesticated
entity becomes effective.
g. The provisions of the operating agreement of the
domesticated entity that are to be in a record, if any,
approved as part of the plan of domestication become effective.
h. The interests in the domesticating entity are converted
to the extent and as approved in connection with the
domestication, and the members of the domesticating entity are
entitled only to the rights provided to them under the plan
of domestication and to any appraisal rights they have under
section 489.1006.
2. Except as otherwise provided in the organic law or
operating agreement of the domesticating limited liability
company, the domestication does not give rise to any rights
that a member, manager, or third party would otherwise
have upon a dissolution, liquidation, or winding up of the
domesticating company.
3. When a domestication becomes effective, a person that
did not have interest holder liability with respect to the
domesticating limited liability company and becomes subject to
interest holder liability with respect to a domestic limited
liability company as a result of the domestication has interest
holder liability only to the extent provided by this chapter
-135-and only for those debts, obligations, and other liabilities
that are incurred after the domestication becomes effective.
4. When a domestication becomes effective, the interest
holder liability of a person that ceases to hold an interest in
a domestic domesticating limited liability company with respect
to which the person had interest holder liability is subject
to all of the following rules:
a. The domestication does not discharge any interest
holder liability under this chapter to the extent the interest
holder liability was incurred before the domestication became
effective.
b. A person does not have interest holder liability under
this chapter for any debt, obligation, or other liability that
is incurred after the domestication becomes effective.
c. This chapter continues to apply to the release,
collection, or discharge of any interest holder liability
preserved under paragraph “a” as if the domestication had not
occurred.
d. A person has whatever rights of contribution from any
other person as are provided by this chapter, law other than
this chapter, or the operating agreement of the domestic
domesticating limited liability company with respect to any
interest holder liability preserved under paragraph “a” as if
the domestication had not occurred.
5. When a domestication becomes effective, a foreign
limited liability company that is the domesticated company
may be served with process in this state for the collection
and enforcement of any of its debts, obligations, and other
liabilities as provided in section 489.116.
6. If the domesticating limited liability company is a
registered foreign entity, the registration of the limited
liability company is canceled when the domestication becomes
effective.
7. A domestication does not require a domestic
domesticating limited liability company to wind up its affairs
-136-and does not constitute or cause the dissolution of the limited
liability company.
Sec. 111. Section 489.1101, Code 2023, is amended to read
as follows:
489.1101 Definitions.
As used in this article subchapter, unless the context
otherwise requires:
1. “Employee” or “agent” does not include a clerk,
stenographer, secretary, bookkeeper, technician, or other
person who is not usually and ordinarily considered by custom
and practice to be practicing a profession nor any other person
who performs all that person’s duties for the professional
limited liability company under the direct supervision and
control of one or more managers, employees, or agents of the
professional limited liability company who are duly licensed in
this state to practice a profession which the limited liability
company is authorized to practice in this state. This article
subchapter does not require any such persons to be licensed to
practice a profession if they are not required to be licensed
under any other law of this state.
2. “Foreign professional limited liability company” means
a limited liability company organized under laws other than
the laws of this state for a purpose for which a professional
limited liability company may be organized under this article
subchapter.
3. “Licensed” includes registered, certified, admitted to
practice, or otherwise legally authorized under the laws of
this state.
4. “Profession” means the following professions:
a. Certified public accountancy.
b. Architecture.
c. Chiropractic.
d. Dentistry.
e. Physical therapy.
f. Practice as a physician assistant.
-137- g. Psychology.
h. Professional engineering.
i. Land surveying.
j. Landscape architecture.
k. Law.
l. Medicine and surgery.
m. Optometry.
n. Osteopathic medicine and surgery.
o. Accounting practitioner.
p. Podiatry.
q. Real estate brokerage.
r. Speech pathology.
s. Audiology.
t. Veterinary medicine.
u. Pharmacy.
v. Nursing.
w. Marital and family therapy or mental health counseling,
provided that the marital and family therapist or mental health
counselor is licensed under chapters 147 and 154D.
x. Social work, provided that the social worker is licensed
pursuant to chapter 147 and section 154C.3, subsection 1,
paragraph “c”.
5. “Professional limited liability company” means a limited
liability company subject to this article subchapter, except a
foreign professional limited liability company.
6. “Regulating board” means any board, commission, court,
or governmental authority which, under the laws of this state,
is charged with the licensing, registration, certification,
admission to practice, or other legal authorization of the
practitioners of any profession.
7. a. “Voluntary transfer” includes a sale, voluntary
assignment, gift, pledge, or encumbrance; a voluntary change
of legal or equitable ownership or beneficial interest; or a
voluntary change of persons having voting rights with respect
to any transferable interest, except as proxies.
-138- b. “Voluntary transfer” does not include a transfer of
an individual’s interest in a limited liability company or
other property to a guardian or conservator appointed for that
individual or the individual’s property.
Sec. 112. Section 489.1106, Code 2023, is amended to read
as follows:
489.1106 Professional regulation.
A professional limited liability company shall not
be required to register with or to obtain any license,
registration, certificate, or other legal authorization from
a regulating board in order to practice a profession. Except
as provided in this section, this article subchapter does not
restrict or limit in any manner the authority or duties of any
regulating board with respect to individuals an individual
practicing a profession which is within the jurisdiction of the
regulating board, even if the individual is a member, manager,
employee, or agent of a professional limited liability company
or foreign professional limited liability company and practices
the individual’s profession through such professional limited
liability company.
Sec. 113. Section 489.1107, Code 2023, is amended to read
as follows:
489.1107 Relationship and liability to persons served.
This article subchapter does not modify any law applicable
to the relationship between an individual practicing a
profession and a person receiving professional services,
including but not limited to any liability arising out of such
practice or any law respecting privileged communications.
This article subchapter does not modify or affect the ethical
standards or standards of conduct of any profession, including
but not limited to any standards prohibiting or limiting the
practice of the profession by a limited liability company or
prohibiting or limiting the practice of two or more professions
in combination. All such standards shall apply to the members,
managers, employees, and agents through whom a professional
-139-limited liability company practices any profession in this
state, to the same extent that the standards apply to an
individual practitioner.
Sec. 114. Section 489.1110, Code 2023, is amended to read
as follows:
489.1110 Convertible interests — rights and options.
A professional limited liability company shall not create
or issue any interest convertible into an interest of the
professional limited liability company. The provisions of this
article subchapter with respect to the issuance and transfer
of interests apply to the creation, issuance, and transfer
of any right or option entitling the holder to purchase from
a professional limited liability company any interest of the
professional limited liability company. A right or option
shall not be transferable, whether voluntarily, involuntarily,
by operation of law, or in any other manner. Upon the death
of the holder, or when the holder ceases to be licensed to
practice a profession in this state which the professional
limited liability company is authorized to practice, the right
or option shall expire.
Sec. 115. Section 489.1112, subsections 4, 5, and 6, Code
2023, are amended to read as follows:
4. When a person other than a member of record becomes
entitled to have interests of a professional limited liability
company transferred into that person’s name or to exercise
voting rights, except as a proxy, with respect to interests of
the professional limited liability company, the professional
limited liability company shall immediately purchase the
interests. Without limiting the generality of the foregoing,
this section shall be applicable whether the event occurs
as a result of appointment of a guardian or conservator for
a member or the member’s property, transfer of interests
by operation of law, involuntary transfer of interests,
judicial proceeding, execution, levy, bankruptcy proceeding,
receivership proceeding, foreclosure or enforcement of a pledge
-140-or encumbrance, or any other situation or occurrence. However,
this section does not apply to any voluntary transfer of
interests as defined in this article subchapter.
5. Interests purchased by a professional limited liability
company under this section shall be transferred to the
professional limited liability company as of the close
of business on the date of the death or other event which
requires purchase. The member and the member’s executors,
administrators, legal representatives, or successors in
interest, shall promptly do all things which may be necessary
or convenient to cause transfer to be made as of the transfer
date. However, the interests shall promptly be transferred on
the books and records of the professional limited liability
company as of the transfer date, notwithstanding any delay in
transferring or surrendering the interests or certificates
representing the interests, and the transfer shall be valid and
effective for all purposes as of the close of business on the
transfer date. The purchase price for such interests shall be
paid as provided in this article subchapter, but the transfer
of interests to the professional limited liability company as
provided in this section shall not be delayed or affected by
any delay or default in making payment.
6. a. Notwithstanding subsections 1 through 5, purchase by
the professional limited liability company is not required upon
the occurrence of any event other than death of a member, if
the professional limited liability company is dissolved within
sixty days after the occurrence of the event or voluntarily
elects to no longer be a professional limited liability company
but continue its existence as a limited liability company
pursuant to section 489.1119A within sixty days after the
occurrence of the event. The certificate of organization or
operating agreement of the professional limited liability
company may provide that purchase is not required upon the
death of a member, if the professional limited liability
company is dissolved within sixty days after the date of the
-141-member’s death.
b. Notwithstanding sections 1 through 5, purchase by the
professional limited liability company is not required upon the
death of a member if the professional limited liability company
voluntarily elects to no longer be a professional limited
liability company but continue its existence as a limited
liability company pursuant to section 489.1119A within sixty
days after death.
Sec. 116. Section 489.1113, Code 2023, is amended to read
as follows:
489.1113 Certificates representing interests.
Each certificate representing an interest of a professional
limited liability company shall state in substance that the
certificate represents an interest in a professional limited
liability company and is not transferable except as expressly
provided in this article subchapter and in the certificate of
organization or an operating agreement of the professional
limited liability company.
Sec. 117. Section 489.1114, Code 2023, is amended to read
as follows:
489.1114 Management.
1. All managers of a professional limited liability
company shall at all times be individuals who are licensed to
practice a profession in this state or a lawful combination of
professions pursuant to section 489.1102, which the limited
liability company is authorized to practice. A person who
is not licensed shall have no authority or duties in the
management or control of the professional limited liability
company. If a manager ceases to have this qualification, the
manager shall immediately and automatically cease to hold such
management position.
2. Notwithstanding subsection 1, upon the occurrence of
any event that requires the professional limited liability
company either to be dissolved or to elect to no longer be
a professional limited liability company but continue its
-142-existence as a limited liability company, as provided in
section 489.1119A, all of the following apply:
a. The professional limited liability company ceases to
practice the profession that the professional limited liability
company is authorized to practice, as provided in section
489.1119A.
b. The individuals who are not licensed to practice in this
state a profession that the professional limited liability
company is authorized to practice may be appointed as officers
and directors for the sole purpose of doing any of the
following:
(1) Carrying out the dissolution of the professional
limited liability company.
(2) If applicable, carrying out the voluntary election
of the professional limited liability company to no longer
be a professional limited liability company but continue its
existence as a limited liability company, as provided in
section 489.1119A.
Sec. 118. Section 489.1115, Code 2023, is amended to read
as follows:
489.1115 Merger.
A professional limited liability company shall not merge
with any entity except another professional limited liability
company subject to this article subchapter or a professional
corporation subject to chapter 496C. Merger is not permitted
unless the surviving or new professional limited liability
company is a professional limited liability company which that
complies with all requirements of this article subchapter.
Sec. 119. Section 489.1116, Code 2023, is amended to read
as follows:
489.1116 Dissolution or liquidation.
A violation of any provision of this article subchapter by a
professional limited liability company or any of its members
or managers shall be cause for its involuntary dissolution, or
liquidation of its assets and business by the district court.
-143-Upon the death of the last remaining member of a professional
limited liability company, or when the last remaining member is
not licensed or ceases to be licensed to practice a profession
in this state which the professional limited liability company
is authorized to practice, or when any person other than
the member of record becomes entitled to have all interests
of the last remaining member of the professional limited
liability company transferred into that person’s name or to
exercise voting rights, except as a proxy, with respect to such
interests, the professional limited liability company shall not
practice any profession and it. In that case, the professional
limited liability company shall either be promptly dissolved
or shall promptly elect to no longer be a professional limited
liability company but continue its existence as a limited
liability company as provided in section 489.1119A. However,
if prior to dissolution all outstanding interests of the
professional limited liability company are acquired by two
or more persons licensed to practice a profession in this
state which the professional limited liability company is
authorized to practice, the professional limited liability
company need not be dissolved nor elect to no longer be a
professional limited liability company and may instead practice
the profession as provided in this article subchapter.
Sec. 120. Section 489.1117, Code 2023, is amended to read
as follows:
489.1117 Foreign professional limited liability company.
1. A foreign professional limited liability company may
practice a profession in this state if it complies with the
provisions of this article subchapter. The secretary of state
may prescribe forms for this purpose. A foreign professional
limited liability company may practice a profession in this
state only through members, managers, employees, and agents
who are licensed to practice the profession in this state.
The provisions of this article subchapter with respect to the
practice of a profession by a professional limited liability
-144-company apply to a foreign professional limited liability
company.
2. This article subchapter does not prohibit the practice
of a profession in this state by an individual who is a member,
manager, employee, or agent of a foreign professional limited
liability company, if the individual could lawfully practice
the profession in this state in the absence of any relationship
to a foreign professional limited liability company. This
subsection applies regardless of whether or not the foreign
professional limited liability company is authorized to
practice a profession in this state.
Sec. 121. Section 489.1118, Code 2023, is amended to read
as follows:
489.1118 Limited liability companies organized under the
other laws.
This article subchapter does not apply to or interfere with
the practice of any profession by or through any professional
limited liability company organized after July 1, 1992, under
any other law of this state or any other state or country, if
the practice is lawful under any other statute or rule of law
of this state. Any such professional limited liability company
may voluntarily elect to adopt this article subchapter and
become subject to its provisions, by amending its certificate
of organization to be consistent with all provisions of this
article subchapter and by stating in its amended certificate
of organization that the limited liability company has
voluntarily elected to adopt this article subchapter. Any
limited liability company organized under any law of any other
state or country may become subject to the provisions of this
article subchapter by complying with all provisions of this
article subchapter with respect to foreign professional limited
liability companies.
Sec. 122. Section 489.1119, Code 2023, is amended to read
as follows:
489.1119 Conflicts with other provisions of this chapter.
-145- The provisions of this article subchapter shall prevail over
any inconsistent provisions of this chapter.
Sec. 123. NEW SECTION. 489.1119A Election to no longer be
a professional limited liability company.
A professional limited liability company may elect to no
longer be a professional limited liability company but continue
its existence as a limited liability company by filing with
the secretary of state an amendment to or restatement of its
certificate of organization that states that the limited
liability company is no longer a professional limited liability
company and amending its name to no longer indicate it is a
professional limited liability company.
Sec. 124. NEW SECTION. 489.1204 Severability clause.
If any provision of this chapter or its application to any
person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this chapter
which can be given effect without the invalid provision or
application, and to this end the provisions of this chapter are
severable.
Sec. 125. NEW SECTION. 489.1207 Application to existing
relationships.
1. For purposes of applying this chapter to a limited
liability company formed before the effective date of this
Act, references in the limited liability company’s operating
agreement to provisions in this chapter in effect before the
effective date of this Act are deemed to be references to the
comparable provision in this chapter after the effective date
of this Act.
2. A limited liability company that has published notice of
its dissolution and requested persons having claims against the
limited liability company to present them in accordance with
the notice pursuant to section 489.703 as that section existed
immediately prior to the effective date of this Act shall be
subject to the requirements set forth in that section as it
existed immediately prior to the effective date of this Act,
-146-including the right of a claim by a person that is commenced
within five years after publication of the notice.
3. For the purposes of applying this chapter to a limited
liability company formed before January 1, 2009, all of the
following apply:
a. The limited liability company’s articles of organization
are deemed to be the company’s certificate of organization.
b. For the purposes of applying section 489.102, subsection
15, and subject to section 489.112, subsection 4, language
in the limited liability company’s articles of organization
designating the limited liability company’s management
structure operates as if that language were in the operating
agreement.
c. If a professional limited liability company’s name
complied with section 490A.1503 as that section existed on
December 30, 2010, that company’s name shall also be deemed to
comply with the name requirements of section 489.1103 of the
2011 edition of the Iowa Code.
Sec. 126. Section 489.14101, Code 2023, is amended to read
as follows:
489.14101 Short title.
This article subchapter may be cited as the “Uniform
Protected Series Act”.
Sec. 127. Section 489.14102, unnumbered paragraph 1, Code
2023, is amended to read as follows:
As used in this article subchapter, unless the context
otherwise requires:
Sec. 128. Section 489.14102, subsections 4 and 9, Code 2023,
are amended to read as follows:
4. “Foreign protected series” means an arrangement,
configuration, or other structure established by a foreign
limited liability company which has attributes comparable to
a protected series established under this article subchapter.
The term applies whether or not the law under which the foreign
company is organized refers to “protected series”.
-147- 9. “Protected-series manager” means a person under whose
authority the powers of a protected series are exercised
and under whose direction the activities and affairs of the
protected series are managed under the operating agreement,
this article subchapter, and this chapter.
Sec. 129. Section 489.14104, subsection 4, paragraph c,
Code 2023, is amended to read as follows:
c. Except as permitted by law of this state other than
this article subchapter, have a purpose or power that the law
of this state other than this article subchapter prohibits a
limited liability company from doing or having.
Sec. 130. Section 489.14106, subsections 2, 3, and 4, Code
2023, are amended to read as follows:
2. If this chapter otherwise restricts the power of an
operating agreement to affect a matter, the restriction applies
to a matter under this article subchapter in accordance with
section 489.14108.
3. If law of this state other than this article subchapter
imposes a prohibition, limitation, requirement, condition,
obligation, liability, or other restriction on a limited
liability company, a member, manager, or other agent of the
company, or a transferee of the company, except as otherwise
provided in law of this state other than this article
subchapter, the restriction applies in accordance with section
489.14108.
4. Except as otherwise provided in section 489.14107, if the
operating agreement of a series limited liability company does
not provide for a matter described in subsection 1 in a manner
permitted by this article subchapter, the matter is determined
in accordance with the following rules:
a. To the extent this article subchapter addresses the
matter, this article subchapter governs.
b. To the extent this article subchapter does not address
the matter, the other articles subchapters of this chapter
govern the matter in accordance with section 489.14108.
-148- Sec. 131. Section 489.14107, subsection 1, paragraphs v, w,
x, and y, Code 2023, are amended to read as follows:
v. Article 6 Subchapter VI.
w. Article 7 Subchapter VII.
x. Article 8 Subchapter VIII.
y. A provision of this article subchapter pertaining to any
of the following:
(1) Registered agents.
(2) The secretary of state, including provisions pertaining
to records authorized or required to be delivered to the
secretary of state for filing under this article subchapter.
Sec. 132. Section 489.14108, subsection 2, paragraph b,
subparagraphs (1) and (2), Code 2023, are amended to read as
follows:
(1) Accept for filing a type of record that neither this
article subchapter nor any of the other articles subchapters of
this chapter authorizes or requires a person to deliver to the
secretary of state for filing.
(2) Make or deliver a record that neither this article
subchapter nor the other articles subchapters of this chapter
authorizes or requires the secretary of state to make or
deliver.
Sec. 133. Section 489.14204, subsection 1, paragraph c,
Code 2023, is amended to read as follows:
c. Other means authorized by law of this state other than
the other articles subchapters of this chapter.
Sec. 134. Section 489.14301, subsection 5, unnumbered
paragraph 1, Code 2023, is amended to read as follows:
To the extent permitted by this section and law of this
state other than this article subchapter, a series limited
liability company or protected series of the company may
hold an associated asset directly or indirectly, through a
representative, nominee, or similar arrangement, except that
all of the following applies:
Sec. 135. Section 489.14303, subsection 4, Code 2023, is
-149-amended to read as follows:
4. Except for section 489.14108, subsection 1, paragraph
“c”, a provision of this article subchapter which applies
to a protected-series transferee of a protected series of a
series limited liability company applies to the company in
its capacity as an owner of a protected-series transferable
interest of the protected series. A provision of the operating
agreement of a series limited liability company which applies
to a protected-series transferee of a protected series of the
company applies to the company in its capacity as an owner of a
protected-series transferable interest of the protected series.
Sec. 136. Section 489.14304, subsection 6, Code 2023, is
amended to read as follows:
6. Article 9 Subchapter IX applies to a protected series in
accordance with section 489.14108.
Sec. 137. Section 489.14402, subsection 3, paragraph b,
Code 2023, is amended to read as follows:
b. The claim is to establish or enforce a liability arising
under law of this state other than this article subchapter or
from an act or omission in this state.
Sec. 138. Section 489.14404, subsection 3, Code 2023, is
amended to read as follows:
3. In addition to any other remedy provided by law or
equity, if a claim against a series limited liability company
or a protected series has not been reduced to a judgment and
law other than this article subchapter permits a prejudgment
remedy by attachment, levy, or the like, the court may apply
subsection 2 as a prejudgment remedy.
Sec. 139. Section 489.14404, subsection 5, paragraph b,
Code 2023, is amended to read as follows:
b. The claimant is a resident of this state or doing
business or authorized to do business in this state, or the
claim under section 489.14404 is to enforce a judgment, or to
seek a prejudgment remedy, pertaining to a liability arising
from law of this state other than this article subchapter or an
-150-act or omission in this state.
Sec. 140. Section 489.14801, Code 2023, is amended to read
as follows:
489.14801 Uniformity of application and construction.
In applying and construing this article subchapter,
consideration shall be given to the need to promote uniformity
of the law with respect to its subject matter among states
that enact the uniform protected series Act as approved and
recommended by the national conference of commissioners on
uniform state laws.
Sec. 141. Section 489.14804, Code 2023, is amended to read
as follows:
489.14804 Savings clause.
This article subchapter does not affect an action commenced,
proceeding brought, or right accrued before July 1, 2020.
Sec. 142. REPEAL. Sections 489.113, 489.802, 489.803,
489.804, 489.805, 489.806, 489.807, 489.808, 489.1008,
489.1009, 489.1010, 489.1011, 489.1012, 489.1013, 489.1014,
489.1015, 489.1016, and 489.1304, Code 2023, are repealed.
Sec. 143. CODE EDITOR DIRECTIVE.
1. The Code editor is directed to make the following
transfers:
a. Section 489.104 to section 489.108.
b. Section 489.105 to section 489.109.
c. Section 489.106 to section 489.104.
d. Section 489.107 to section 489.111.
e. Section 489.108 to section 489.112.
f. Section 489.109 to section 489.113.
g. Section 489.110 to section 489.105.
h. Section 489.111 to section 489.106.
i. Section 489.112 to section 489.107.
j. Section 489.114 to section 489.116.
k. Section 489.114A, as enacted by this Act, to section
489.114.
l. Section 489.115 to section 489.117.
-151- m. Section 489.115A, as enacted by this Act, to section
489.115.
n. Section 489.116 to section 489.119.
o. Section 489.117 to section 489.122.
p. Section 489.205A to section 489.122A.
q. Section 489.206 to section 489.209.
r. Section 489.206A, as enacted by this Act, to section
489.206.
s. Section 489.208 to section 489.211.
t. Section 489.208A, as enacted by this Act, to section
489.208.
u. Section 489.209 to section 489.211A.
v. Section 489.701A to section 489.703.
w. Section 489.703 to section 489.704.
x. Section 489.704 to section 489.705.
y. Section 489.705 to section 489.708.
z. Section 489.706 to section 489.710.
aa. Section 489.706A, as enacted by this Act, to section
489.706.
ab. Section 489.707 to section 489.711.
ac. Section 489.708 to section 489.707.
ad. Section 489.801 to section 489.901.
ae. Section 489.805A, as enacted by this Act, to section
489.805.
af. Section 489.809 to section 489.912.
ag. Section 489.901 to section 489.801.
ah. Section 489.902 to section 489.802.
ai. Section 489.903 to section 489.803.
aj. Section 489.904 to section 489.804.
ak. Section 489.906 to section 489.806.
al. Section 489.906A, as enacted by this Act, to section
489.906.
am. Section 489.911A to section 489.902.
an. Section 489.911B to section 489.903.
ao. Section 489.911C to section 489.904.
-152- ap. Section 489.1119 to section 489.1120.
aq. Section 489.1119A to section 489.1119.
ar. Section 489.1301 to section 489.1201.
as. Section 489.1302 to section 489.1202.
at. Section 489.1303 to section 489.1203.
2. The Code editor shall correct internal references in the
Code and in any enacted legislation as necessary due to the
enactment of this section.
Sec. 144. DIRECTIONS TO THE CODE EDITOR — DIVIDING
SUBCHAPTER X INTO PARTS. The Code editor is directed to divide
the provisions of chapter 489, subchapter X, as amended or
enacted in this division of this Act, into parts as follows:
1. Part 1, including sections 489.1001 through 489.1007.
2. Part 2, including sections 489.1021 through 489.1026.
3. Part 3, including sections 489.1031 through 489.1036.
4. Part 4, including sections 489.1041 through 489.1046.
5. Part 5, including sections 489.1051 through 489.1056.
DIVISION II
COORDINATING AMENDMENTS
Sec. 145. Section 9.11, subsection 1, paragraph c, Code
2023, is amended to read as follows:
c. Chapter 489, including as provided in section 489.205,
489.205A and as stated in section 489.117 or as otherwise
described in sections 489.112, 489.302, 489.702, 489.1008,
489.1012, and 489.14502 section 489.210.
Sec. 146. Section 10.1, subsection 9, paragraph b, Code
2023, is amended to read as follows:
b. As used in paragraph “a”, a type of membership interest
in a limited liability company includes a protected series as
provided in chapter 489, article 14 subchapter XIV.
Sec. 147. Section 10.1, subsection 17, paragraph b, Code
2023, is amended to read as follows:
b. As used in paragraph “a”, a type of membership interest
in a limited liability company includes a protected series of a
series limited liability company as provided in chapter 489,
-153-article 14 subchapter XIV.
Sec. 148. Section 10.10, subsection 1, paragraph c,
subparagraph (2), Code 2023, is amended to read as follows:
(2) As used in subparagraph (1), a type of membership
interest in a limited liability company includes a protected
series of a series limited liability company as provided in
chapter 489, article 14 subchapter XIV.
Sec. 149. Section 488.108, subsection 4, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 150. Section 490.401, subsection 2, paragraph h,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 151. Section 501A.102, subsection 13, Code 2023, is
amended by striking the subsection.
Sec. 152. Section 501A.1101, subsections 1, 2, and 5, Code
2023, are amended to read as follows:
1. Authorization. Unless otherwise prohibited, cooperatives
organized under the laws of this state, including cooperatives
organized under this chapter or traditional cooperatives, may
merge or consolidate with each other, an Iowa limited liability
company under the provisions of section 489.1015, or other
another business entities entity organized under the laws
of another state, by complying with the provisions of this
section and the law of the state where the surviving or new
business entity will exist. A cooperative shall not merge or
consolidate with a business entity organized under the laws
of this state, other than a traditional cooperative, unless
the law governing the business entity expressly authorizes
merger or consolidation with a cooperative. This subsection
does not authorize a foreign business entity to do any act not
authorized by the law governing the foreign business entity.
2. Plan. To initiate a merger or consolidation of a
-154-cooperative, a written plan of merger or consolidation shall be
prepared by the board or by a committee selected by the board
to prepare a plan. The plan shall state all of the following:
a. The names of the each constituent domestic cooperative,
the name of any Iowa limited liability company that is a party
to the merger, to the extent authorized under section 489.1015,
and any foreign business entities entity that is a party to the
merger.
b. The name of the surviving or new domestic cooperative,
Iowa limited liability company as required by section 489.1015,
or other foreign business entity.
c. The manner and basis of converting membership or
ownership interests of the constituent domestic cooperative,
the Iowa limited liability company that is a party as provided
in section 489.1015, or foreign business entity into membership
or ownership interests in the surviving or new domestic
cooperative, the surviving Iowa limited liability company as
authorized in section 489.1015, or foreign business entity.
d. The terms of the merger or consolidation.
e. The proposed effect of the merger or consolidation on
the members and patron members of each constituent domestic
cooperative.
f. For a consolidation, the plan shall contain the articles
of the entity or organizational documents to be filed with the
state in which the entity is organized or, if the surviving
organization is an Iowa limited liability company, the articles
of organization.
5. Effect of merger or consolidation. For a merger that does
not involve an Iowa limited liability company, the following
shall apply to the The effect of a merger or consolidation
shall be as follows:
a. After the effective date, the each domestic cooperative,
Iowa limited liability company, if party to the plan,
cooperatives and any foreign business entity that is a party to
the plan become a single entity. For a merger, the surviving
-155-business entity is the business entity designated in the plan.
For a consolidation, the new domestic cooperative, the Iowa
limited liability company, if any, and any or new foreign
business entity is the business entity provided for in the
plan. Except for the surviving or new domestic cooperative,
Iowa limited liability company, or foreign business entity, the
separate existence of each merged or consolidated domestic or
foreign business entity that is a party to the plan ceases on
the effective date of the merger or consolidation.
b. The surviving or new domestic cooperative, Iowa limited
liability company, or foreign business entity possesses all of
the rights and property of each of the merged or consolidated
business entities and is responsible for all their obligations.
The title to property of the merged or consolidated domestic
cooperative, Iowa limited liability company, or foreign
business entity, is vested in the surviving or new domestic
cooperative, Iowa limited liability company, or foreign
business entity without reversion or impairment of the title
caused by the merger or consolidation.
c. If a merger involves an Iowa limited liability company,
this subsection is subject to the provisions of section
489.1015.
Sec. 153. Section 501A.1102, subsection 1, Code 2023, is
amended to read as follows:
1. Definition. For purposes of this section, “subsidiary”
means a domestic cooperative, an Iowa limited liability
company, or a foreign cooperative.
Sec. 154. Section 501A.1102, subsection 2, unnumbered
paragraph 1, Code 2023, is amended to read as follows:
An Iowa limited liability company may only participate
in a merger under this section to the extent authorized
under section 489.1015. A parent domestic cooperative or
a subsidiary that is a domestic cooperative may complete
the merger of a subsidiary as provided in this section.
However, if either the parent cooperative or the subsidiary
-156-is a business entity organized under the laws of this state,
the merger of the subsidiary is not authorized under this
section unless the law governing the business entity expressly
authorizes merger with a cooperative.
Sec. 155. Section 501A.1103, subsection 2, paragraph a,
Code 2023, is amended to read as follows:
a. A merger may be abandoned upon any of the following:
(1) The members of each of the constituent domestic
cooperatives entitled to vote on the approval of the plan
have approved the abandonment at a meeting by the affirmative
vote of the holders of a majority of the voting power of the
membership interests entitled to vote.
(2) The merger is with a domestic cooperative and an Iowa
limited liability company or foreign business entity.
(3) (2) The abandonment is approved in such manner as may
be required by section 489.1015 for the involvement of an Iowa
limited liability company, or for a foreign business entity by
under the laws of the state under which the foreign business
entity is organized.
(4) (3) The members of a constituent domestic cooperative
are not entitled to vote on the approval of the plan, and the
board of the constituent domestic cooperative has approved
the abandonment by the affirmative vote of a majority of the
directors present.
(5) (4) The plan provides for abandonment and all
conditions for abandonment set forth in the plan are met.
(6) (5) The plan is abandoned before the effective date
of the plan by a resolution of the board of any constituent
domestic cooperative abandoning the plan of merger approved by
the affirmative vote of a majority of the directors present,
subject to the contract rights of any other person under the
plan. If a plan of merger is with a domestic business entity or
foreign business entity, the plan of merger may be abandoned
before the effective date of the plan by a resolution of the
foreign business entity adopted according to the laws of the
-157-state under which the foreign business entity is organized,
subject to the contract rights of any other person under the
plan. If the plan of merger is with an Iowa limited liability
company, the plan of merger may be abandoned by the Iowa
limited liability company as provided in section 489.1015,
subject to the contractual rights of any other person under the
plan.
Sec. 156. Section 504.401, subsection 2, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 157. Section 504.403, subsection 1, paragraph b,
subparagraph (4), Code 2023, is amended to read as follows:
(4) For a limited liability company under chapter 489,
section 489.108, 489.109, 489.114A, or 489.706.
Sec. 158. Section 524.303, subsection 2, Code 2023, is
amended to read as follows:
2. Applicable fees, payable to the secretary of state as
specified in section 489.117 or section 490.122, for the filing
of the articles of incorporation or section 489.117 for filing
a certificate of organization.
Sec. 159. Section 524.310, subsection 5, paragraph b, Code
2023, is amended to read as follows:
b. A corporate or company name reserved, registered, or
protected as provided in section 489.109, 489.114A, 489.706,
490.402, 490.403, 504.402, or 504.403.
Sec. 160. Section 542.7, subsection 3, paragraph c,
subparagraph (2), Code 2023, is amended to read as follows:
(2) Notwithstanding chapter 489, article 11 subchapter XI,
or any other provision of law to the contrary, a certified
public accounting firm organized as a professional limited
liability company under chapter 489, article 11 subchapter XI,
may have nonlicensee members provided that the professional
limited liability company complies with the requirements of
this section.
-158-DIVISION III
EFFECTIVE DATE
Sec. 161. EFFECTIVE DATE. This Act takes effect January 1,
2024.
______________________________
PAT GRASSLEYSpeaker of the House______________________________
AMY SINCLAIRPresident of the Senate I hereby certify that this bill originated in the House and is known as House File 655, Ninetieth General Assembly.______________________________
MEGHAN NELSONChief Clerk of the HouseApproved _______________, 2023______________________________
KIM REYNOLDSGovernorda/jh/md