House File 2633 - Enrolled
PAG LIN
1 1 HOUSE FILE 2633
1 2
1 3 AN ACT
1 4 RELATING TO BUSINESS ASSOCIATIONS, BY PROVIDING FOR LIMITED
1 5 LIABILITY COMPANIES AND CONVERSION INVOLVING CORPORATIONS,
1 6 PROVIDING FEES AND PENALTIES, AND PROVIDING AN EFFECTIVE
1 7 DATE.
1 8
1 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 10
1 11 DIVISION I
1 12 UNIFORM ACT PROVISIONS
1 13 ARTICLE 1
1 14 GENERAL PROVISIONS
1 15 Section 1. NEW SECTION. 489.101 SHORT TITLE.
1 16 This chapter may be cited as the "Revised Uniform Limited
1 17 Liability Company Act".
1 18 Sec. 2. NEW SECTION. 489.102 DEFINITIONS.
1 19 As used in this chapter:
1 20 1. "Certificate of organization" means the certificate
1 21 required by section 489.201. The term includes the
1 22 certificate as amended or restated.
1 23 2. "Contribution" means any benefit provided by a person
1 24 to a limited liability company that is any of the following:
1 25 a. In order to become a member upon formation of the
1 26 company and in accordance with an agreement between or among
1 27 the persons that have agreed to become the initial members of
1 28 the company.
1 29 b. In order to become a member after formation of the
1 30 company and in accordance with an agreement between the person
1 31 and the company.
1 32 c. In the person's capacity as a member and in accordance
1 33 with the operating agreement or an agreement between the
1 34 member and the company.
1 35 3. "Debtor in bankruptcy" means a person that is the
2 1 subject of any of the following:
2 2 a. An order for relief under Title 11 of the United States
2 3 Code or a successor statute of general application.
2 4 b. A comparable order under federal, state, or foreign law
2 5 governing insolvency.
2 6 4. "Deliver" or "delivery" means any method of delivery
2 7 used in conventional commercial practice, including delivery
2 8 in person, by mail, commercial delivery, and electronic
2 9 transmission.
2 10 5. "Distribution", except as otherwise provided in section
2 11 489.405, subsection 6, means a transfer of money or other
2 12 property from a limited liability company to another person on
2 13 account of a transferable interest.
2 14 6. "Domestic cooperative" means an entity organized on a
2 15 cooperative basis under chapter 497, 498, or 499 or a
2 16 cooperative organized under chapter 501 or 501A.
2 17 7. "Effective", with respect to a record required or
2 18 permitted to be delivered to the secretary of state for filing
2 19 under this chapter, means effective under section 489.205,
2 20 subsection 3.
2 21 8. "Electronic transmission" means any process of
2 22 communication not directly involving the physical transfer of
2 23 paper that is suitable for the retention, retrieval, and
2 24 reproduction of information by the recipient.
2 25 9. "Foreign limited liability company" means an
2 26 unincorporated entity formed under the law of a jurisdiction
2 27 other than this state and denominated by that law as a limited
2 28 liability company.
2 29 10. "Limited liability company", except in the phrase
2 30 "foreign limited liability company", means an entity formed
2 31 under this chapter.
2 32 11. "Manager" means a person that under the operating
2 33 agreement of a manager=managed limited liability company is
2 34 responsible, alone or in concert with others, for performing
2 35 the management functions stated in section 489.407, subsection
3 1 3.
3 2 12. "Manager=managed limited liability company" means a
3 3 limited liability company that qualifies under section
3 4 489.407, subsection 1.
3 5 13. "Member" means a person that has become a member of a
3 6 limited liability company under section 489.401 and has not
3 7 dissociated under section 489.602.
3 8 14. "Member=managed limited liability company" means a
3 9 limited liability company that is not a manager=managed
3 10 limited liability company.
3 11 15. "Operating agreement" means the agreement, whether or
3 12 not referred to as an operating agreement and whether oral, in
3 13 a record, implied, or in any combination thereof, of all the
3 14 members of a limited liability company, including a sole
3 15 member, concerning the matters described in section 489.110,
3 16 subsection 1. The term includes the agreement as amended or
3 17 restated.
3 18 16. "Organizer" means a person that acts under section
3 19 489.201 to form a limited liability company.
3 20 17. "Person" means an individual, corporation, business
3 21 trust, estate, trust, partnership, limited liability company,
3 22 association, joint venture, public corporation, government or
3 23 governmental subdivision, agency, or instrumentality, or any
3 24 other legal or commercial entity.
3 25 18. "Principal office" means the principal executive
3 26 office of a limited liability company or foreign limited
3 27 liability company, whether or not the office is located in
3 28 this state.
3 29 19. "Record" means information that is inscribed on a
3 30 tangible medium or that is stored in an electronic or other
3 31 medium and is retrievable in perceivable form.
3 32 20. "Registered office" means any of the following:
3 33 a. The office that a limited liability company is required
3 34 to designate and maintain under section 489.113.
3 35 b. The principal office of a foreign limited liability
4 1 company.
4 2 21. "Sign" means, with the present intent to authenticate
4 3 or adopt a record to do any of the following:
4 4 a. Execute or adopt a tangible symbol.
4 5 b. Attach to or logically associate with the record an
4 6 electronic symbol, sound, or process.
4 7 22. "State" means a state of the United States, the
4 8 District of Columbia, Puerto Rico, the United States Virgin
4 9 Islands, or any territory or insular possession subject to the
4 10 jurisdiction of the United States.
4 11 23. "Transfer" includes an assignment, conveyance, deed,
4 12 bill of sale, lease, mortgage, security interest, encumbrance,
4 13 gift, or transfer by operation of law.
4 14 24. "Transferable interest" means the right, as originally
4 15 associated with a person's capacity as a member, to receive
4 16 distributions from a limited liability company in accordance
4 17 with the operating agreement, whether or not the person
4 18 remains a member or continues to own any part of the right.
4 19 25. "Transferee" means a person to which all or part of a
4 20 transferable interest has been transferred, whether or not the
4 21 transferor is a member.
4 22 Sec. 3. NEW SECTION. 489.103 KNOWLEDGE == NOTICE.
4 23 1. A person knows a fact when the person has or is any of
4 24 the following:
4 25 a. Has actual knowledge of it.
4 26 b. Is deemed to know it under subsection 4, paragraph "a",
4 27 or law other than this chapter.
4 28 2. A person has notice of a fact when the person has or is
4 29 any of the following:
4 30 a. Has reason to know the fact from all of the facts known
4 31 to the person at the time in question.
4 32 b. Is deemed to have notice of the fact under subsection
4 33 4, paragraph "b".
4 34 3. A person notifies another of a fact by taking steps
4 35 reasonably required to inform the other person in ordinary
5 1 course, whether or not the other person knows the fact.
5 2 4. A person that is not a member is deemed both of the
5 3 following:
5 4 a. To know of a limitation on authority to transfer real
5 5 property as provided in section 489.302, subsection 7.
5 6 b. To have notice of all of the following regarding a
5 7 limited liability company's:
5 8 (1) Dissolution, ninety days after a statement of
5 9 dissolution under section 489.702, subsection 2, paragraph
5 10 "b", subparagraph (1), becomes effective.
5 11 (2) Termination, ninety days after a statement of
5 12 termination under section 489.702, subsection 2, paragraph
5 13 "b", subparagraph (6), becomes effective.
5 14 (3) Merger, conversion, or domestication, ninety days
5 15 after articles of merger, conversion, or domestication under
5 16 article 10 become effective.
5 17 Sec. 4. NEW SECTION. 489.104 NATURE, PURPOSE, AND
5 18 DURATION OF LIMITED LIABILITY COMPANY.
5 19 1. A limited liability company is an entity distinct from
5 20 its members.
5 21 2. A limited liability company may have any lawful
5 22 purpose, regardless of whether for profit.
5 23 3. A limited liability company has perpetual duration.
5 24 Sec. 5. NEW SECTION. 489.105 POWERS.
5 25 1. Except as otherwise provided in subsection 2, a limited
5 26 liability company has the capacity to sue and be sued in its
5 27 own name and the power to do all things necessary or
5 28 convenient to carry on its activities.
5 29 2. Until a limited liability company has or has had at
5 30 least one member, the company lacks the capacity to do any act
5 31 or carry on any activity except all of the following:
5 32 a. Delivering to the secretary of state for filing a
5 33 statement of change under section 489.114, an amendment to the
5 34 certificate under section 489.202, a statement of correction
5 35 under section 489.206, a biennial report under section
6 1 489.209, or a statement of termination under section 489.702,
6 2 subsection 2, paragraph "b", subparagraph (6).
6 3 b. Admitting a member under section 489.401.
6 4 c. Dissolving under section 489.701.
6 5 3. A limited liability company that has or has had at
6 6 least one member may ratify an act or activity that occurred
6 7 when the company lacked capacity under subsection 2.
6 8 Sec. 6. NEW SECTION. 489.106 GOVERNING LAW.
6 9 The law of this state governs all of the following:
6 10 1. The internal affairs of a limited liability company.
6 11 2. The liability of a member as member and a manager as
6 12 manager for the debts, obligations, or other liabilities of a
6 13 limited liability company.
6 14 Sec. 7. NEW SECTION. 489.107 SUPPLEMENTAL PRINCIPLES OF
6 15 LAW.
6 16 Unless displaced by particular provisions of this chapter,
6 17 the principles of law and equity supplement this chapter.
6 18 Sec. 8. NEW SECTION. 489.108 NAME.
6 19 1. The name of a limited liability company must contain
6 20 the words "limited liability company" or "limited company" or
6 21 the abbreviation "L.L.C.", "LLC", "L.C.", or "LC". "Limited"
6 22 may be abbreviated as "Ltd.", and "company" may be abbreviated
6 23 as "Co.".
6 24 2. Unless authorized by subsection 3, the name of a
6 25 limited liability company must be distinguishable in the
6 26 records of the secretary of state from all of the following:
6 27 a. The name of each person that is not an individual and
6 28 that is incorporated, organized, or authorized to transact
6 29 business in this state.
6 30 b. Each name reserved under section 489.109.
6 31 3. A limited liability company may apply to the secretary
6 32 of state for authorization to use a name that does not comply
6 33 with subsection 2. The secretary of state shall authorize use
6 34 of the name applied for if, as to each of the following
6 35 noncomplying names:
7 1 a. The present user, registrant, or owner of the
7 2 noncomplying name consents in a signed record to the use and
7 3 submits an undertaking in a form satisfactory to the secretary
7 4 of state to change the noncomplying name to a name that
7 5 complies with subsection 2 and is distinguishable in the
7 6 records of the secretary of state from the name applied for.
7 7 b. The applicant delivers to the secretary of state a
7 8 certified copy of the final judgment of a court establishing
7 9 the applicant's right to use in this state the name applied
7 10 for.
7 11 4. A limited liability company may use the name, including
7 12 the fictitious name, of another entity that is used in this
7 13 state if the other entity is formed under the law of this
7 14 state or is authorized to transact business in this state and
7 15 the proposed user limited liability company meets any of the
7 16 following conditions:
7 17 a. Has merged with the other entity.
7 18 b. Has been formed by reorganization of the other entity.
7 19 c. Has acquired all or substantially all of the assets,
7 20 including the name, of the other entity.
7 21 5. This article does not control the use of fictitious
7 22 names. However, if a limited liability company uses a
7 23 fictitious name in this state, it shall deliver to the
7 24 secretary of state for filing a certified copy of the
7 25 resolution of its members if it is member=managed or its
7 26 managers if it is manager=managed, adopting the fictitious
7 27 name.
7 28 6. Subject to section 489.805, this section applies to a
7 29 foreign limited liability company transacting business in this
7 30 state which has a certificate of authority to transact
7 31 business in this state or which has applied for a certificate
7 32 of authority.
7 33 Sec. 9. NEW SECTION. 489.109 RESERVATION OF NAME.
7 34 1. A person may reserve the exclusive use of the name of a
7 35 limited liability company, including a fictitious or assumed
8 1 name for a foreign limited liability company whose name is not
8 2 available, by delivering an application to the secretary of
8 3 state for filing. The application must state the name and
8 4 address of the applicant and the name proposed to be reserved.
8 5 If the secretary of state finds that the name applied for is
8 6 available, it must be reserved for the applicant's exclusive
8 7 use for a one=hundred=twenty=day period.
8 8 2. The owner of a name reserved for a limited liability
8 9 company may transfer the reservation to another person by
8 10 delivering to the secretary of state for filing a signed
8 11 notice of the transfer which states the name and address of
8 12 the transferee.
8 13 Sec. 10. NEW SECTION. 489.110 OPERATING AGREEMENT ==
8 14 SCOPE, FUNCTION, AND LIMITATIONS.
8 15 1. Except as otherwise provided in subsections 2 and 3,
8 16 the operating agreement governs all of the following:
8 17 a. Relations among the members as members and between the
8 18 members and the limited liability company.
8 19 b. The rights and duties under this chapter of a person in
8 20 the capacity of manager.
8 21 c. The activities of the company and the conduct of those
8 22 activities.
8 23 d. The means and conditions for amending the operating
8 24 agreement.
8 25 2. To the extent the operating agreement does not
8 26 otherwise provide for a matter described in subsection 1, this
8 27 chapter governs the matter.
8 28 3. An operating agreement shall not do any of the
8 29 following:
8 30 a. Vary a limited liability company's capacity under
8 31 section 489.105 to sue and be sued in its own name.
8 32 b. Vary the law applicable under section 489.106.
8 33 c. Vary the power of the court under section 489.204.
8 34 d. Subject to subsections 4 through 7, eliminate the duty
8 35 of loyalty, the duty of care, or any other fiduciary duty.
9 1 e. Subject to subsections 4 through 7, eliminate the
9 2 contractual obligation of good faith and fair dealing under
9 3 section 489.409, subsection 4.
9 4 f. Unreasonably restrict the duties and rights stated in
9 5 section 489.410.
9 6 g. Vary the power of a court to decree dissolution in the
9 7 circumstances specified in section 489.701, subsection 1,
9 8 paragraphs "d" and "e".
9 9 h. Vary the requirement to wind up a limited liability
9 10 company's business as specified in section 489.702, subsection
9 11 1, and subsection 2, paragraph "a".
9 12 i. Unreasonably restrict the right of a member to maintain
9 13 an action under article 9.
9 14 j. Restrict the right to approve a merger, conversion, or
9 15 domestication under section 489.1014 to a member that will
9 16 have personal liability with respect to a surviving,
9 17 converted, or domesticated organization.
9 18 k. Except as otherwise provided in section 489.112,
9 19 subsection 2, restrict the rights under this chapter of a
9 20 person other than a member or manager.
9 21 4. If not manifestly unreasonable, the operating agreement
9 22 may do any of the following:
9 23 a. Restrict or eliminate the duty to do any of the
9 24 following:
9 25 (1) As required in section 489.409, subsection 2,
9 26 paragraph "a", and subsection 8, to account to the limited
9 27 liability company and to hold as trustee for it any property,
9 28 profit, or benefit derived by the member in the conduct or
9 29 winding up of the company's business, from a use by the member
9 30 of the company's property, or from the appropriation of a
9 31 limited liability company opportunity.
9 32 (2) As required in section 489.409, subsection 2,
9 33 paragraph "b", and subsection 8, to refrain from dealing with
9 34 the company in the conduct or winding up of the company's
9 35 business as or on behalf of a party having an interest adverse
10 1 to the company.
10 2 (3) As required by section 489.409, subsection 2,
10 3 paragraph "c", and subsection 8, to refrain from competing
10 4 with the company in the conduct of the company's business
10 5 before the dissolution of the company.
10 6 b. Identify specific types or categories of activities
10 7 that do not violate the duty of loyalty.
10 8 c. Alter the duty of care, except to authorize intentional
10 9 misconduct or knowing violation of law.
10 10 d. Alter any other fiduciary duty, including eliminating
10 11 particular aspects of that duty.
10 12 e. Prescribe the standards by which to measure the
10 13 performance of the contractual obligation of good faith and
10 14 fair dealing under section 489.409, subsection 4.
10 15 5. The operating agreement may specify the method by which
10 16 a specific act or transaction that would otherwise violate the
10 17 duty of loyalty may be authorized or ratified by one or more
10 18 disinterested and independent persons after full disclosure of
10 19 all material facts.
10 20 6. To the extent the operating agreement of a
10 21 member=managed limited liability company expressly relieves a
10 22 member of a responsibility that the member would otherwise
10 23 have under this chapter and imposes the responsibility on one
10 24 or more other members, the operating agreement may, to the
10 25 benefit of the member that the operating agreement relieves of
10 26 the responsibility, also eliminate or limit any fiduciary duty
10 27 that would have pertained to the responsibility.
10 28 7. The operating agreement may alter or eliminate the
10 29 indemnification for a member or manager provided by section
10 30 489.408, subsection 1, and may eliminate or limit a member's
10 31 or manager's liability to the limited liability company and
10 32 members for money damages, except for any of the following:
10 33 a. A breach of the duty of loyalty.
10 34 b. A financial benefit received by the member or manager
10 35 to which the member or manager is not entitled.
11 1 c. A breach of a duty under section 489.406.
11 2 d. Intentional infliction of harm on the company or a
11 3 member.
11 4 e. An intentional violation of criminal law.
11 5 8. The court shall decide any claim under subsection 4
11 6 that a term of an operating agreement is manifestly
11 7 unreasonable. All of the following apply:
11 8 a. The court shall make its determination as of the time
11 9 the challenged term became part of the operating agreement and
11 10 by considering only circumstances existing at that time.
11 11 b. The court may invalidate the term only if, in light of
11 12 the purposes and activities of the limited liability company,
11 13 it is readily apparent that any of the following applies:
11 14 (1) The objective of the term is unreasonable.
11 15 (2) The term is an unreasonable means to achieve the
11 16 provision's objective.
11 17 Sec. 11. NEW SECTION. 489.111 OPERATING AGREEMENT ==
11 18 EFFECT ON LIMITED LIABILITY COMPANY AND PERSONS BECOMING
11 19 MEMBERS == PREFORMATION AGREEMENT.
11 20 1. A limited liability company is bound by and may enforce
11 21 the operating agreement, whether or not the company has itself
11 22 manifested assent to the operating agreement.
11 23 2. A person that becomes a member of a limited liability
11 24 company is deemed to assent to the operating agreement.
11 25 3. Two or more persons intending to become the initial
11 26 members of a limited liability company may make an agreement
11 27 providing that upon the formation of the company the agreement
11 28 will become the operating agreement. One person intending to
11 29 become the initial member of a limited liability company may
11 30 assent to terms providing that upon the formation of the
11 31 company the terms will become the operating agreement.
11 32 4. An operating agreement in a signed record that excludes
11 33 modification or recision except by a signed record cannot be
11 34 otherwise modified or rescinded.
11 35 Sec. 12. NEW SECTION. 489.112 OPERATING AGREEMENT ==
12 1 EFFECT ON THIRD PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE
12 2 ON BEHALF OF LIMITED LIABILITY COMPANY.
12 3 1. An operating agreement may specify that its amendment
12 4 requires the approval of a person that is not a party to the
12 5 operating agreement or the satisfaction of a condition. An
12 6 amendment is ineffective if its adoption does not include the
12 7 required approval or satisfy the specified condition.
12 8 2. The obligations of a limited liability company and its
12 9 members to a person in the person's capacity as a transferee
12 10 or dissociated member are governed by the operating agreement.
12 11 Subject only to any court order issued under section 489.503,
12 12 subsection 2, paragraph "b", to effectuate a charging order,
12 13 an amendment to the operating agreement made after a person
12 14 becomes a transferee or dissociated member is effective with
12 15 regard to any debt, obligation, or other liability of the
12 16 limited liability company or its members to the person in the
12 17 person's capacity as a transferee or dissociated member.
12 18 3. If a record that has been delivered by a limited
12 19 liability company to the secretary of state for filing and has
12 20 become effective under this chapter contains a provision that
12 21 would be ineffective under section 489.110, subsection 3, if
12 22 contained in the operating agreement, the provision is
12 23 likewise ineffective in the record.
12 24 4. Subject to subsection 3, if a record that has been
12 25 delivered by a limited liability company to the secretary of
12 26 state for filing and has become effective under this chapter
12 27 conflicts with a provision of the operating agreement, the
12 28 following rules apply:
12 29 a. The operating agreement prevails as to members,
12 30 dissociated members, transferees, and managers.
12 31 b. The record prevails as to other persons to the extent
12 32 they reasonably rely on the record.
12 33 Sec. 13. NEW SECTION. 489.113 REGISTERED OFFICE AND
12 34 REGISTERED AGENT FOR SERVICE OF PROCESS.
12 35 1. A limited liability company shall designate and
13 1 continuously maintain in this state all of the following:
13 2 a. A registered office, which need not be a place of its
13 3 activity in this state.
13 4 b. A registered agent for service of process.
13 5 2. A foreign limited liability company that has a
13 6 certificate of authority under section 489.802 shall designate
13 7 and continuously maintain in this state a registered agent for
13 8 service of process.
13 9 3. A registered agent for service of process of a limited
13 10 liability company or foreign limited liability company must be
13 11 an individual who is a resident of this state or other person
13 12 with authority to transact business in this state.
13 13 Sec. 14. NEW SECTION. 489.114 CHANGE OF REGISTERED
13 14 OFFICE OR REGISTERED AGENT FOR SERVICE OF PROCESS.
13 15 1. A limited liability company or foreign limited
13 16 liability company may change its registered office, its
13 17 registered agent for service of process, or the address of its
13 18 registered agent for service of process by delivering to the
13 19 secretary of state for filing a statement of change containing
13 20 all of the following:
13 21 a. The name of the company.
13 22 b. The street and mailing addresses of its current
13 23 registered office.
13 24 c. If the current registered office is to be changed, the
13 25 street and mailing addresses of the new registered office.
13 26 d. The name and street and mailing addresses of its
13 27 current registered agent for service of process.
13 28 e. If the current registered agent for service of process
13 29 or an address of the registered agent is to be changed, the
13 30 new information.
13 31 2. Subject to section 489.205, subsection 3, a statement
13 32 of change is effective when filed by the secretary of state.
13 33 Sec. 15. NEW SECTION. 489.115 RESIGNATION OF REGISTERED
13 34 AGENT FOR SERVICE OF PROCESS.
13 35 1. To resign as a registered agent for service of process
14 1 of a limited liability company or foreign limited liability
14 2 company, the registered agent must deliver to the secretary of
14 3 state for filing a statement of resignation containing the
14 4 company name and stating that the registered agent is
14 5 resigning.
14 6 2. The secretary of state shall file a statement of
14 7 resignation delivered under subsection 1 and mail or otherwise
14 8 provide or deliver a copy to the registered office of the
14 9 limited liability company or foreign limited liability company
14 10 and another copy to the principal office of the company if the
14 11 mailing address of the principal office appears in the records
14 12 of the secretary of state and is different from the mailing
14 13 address of the registered office.
14 14 3. An agency for service of process terminates on the
14 15 earlier of the following:
14 16 a. The thirty=first day after the secretary of state files
14 17 the statement of resignation.
14 18 b. When a record designating a new registered agent for
14 19 service of process is delivered to the secretary of state for
14 20 filing on behalf of the limited liability company and becomes
14 21 effective.
14 22 Sec. 16. NEW SECTION. 489.116 SERVICE OF PROCESS.
14 23 1. A registered agent for service of process appointed by
14 24 a limited liability company or foreign limited liability
14 25 company is an agent of the company for service of any process,
14 26 notice, or demand required or permitted by law to be served on
14 27 the company.
14 28 2. If a limited liability company has no registered agent,
14 29 or the agent cannot with reasonable diligence be served, the
14 30 limited liability company may be served by registered or
14 31 certified mail, return receipt requested, addressed to the
14 32 limited liability company at its principal office.
14 33 3. Service is effected under subsection 2 at the earliest
14 34 of any of the following:
14 35 a. The date the limited liability company or foreign
15 1 limited liability company receives the process, notice, or
15 2 demand.
15 3 b. The date shown on the return receipt, if signed on
15 4 behalf of the company.
15 5 c. Five days after the process, notice, or demand is
15 6 deposited with the United States postal service, if correctly
15 7 addressed and with sufficient postage.
15 8 4. This section does not affect the right to serve
15 9 process, notice, or demand in any other manner provided by
15 10 law.
15 11 Sec. 17. NEW SECTION. 489.117 FEES.
15 12 1. The secretary of state shall collect the following fees
15 13 when documents described in this subsection are delivered to
15 14 the secretary's office for filing:
15 15 a. Certificate of organization ......................... $ 50
15 16 b. Application for use of indistinguishable name ....... $ 10
15 17 c. Application for reserved name ....................... $ 10
15 18 d. Notice of transfer of reserved name ................. $ 10
15 19 e. Application for registered name per month or
15 20 part thereof ............................................. No fee
15 21 f. Application for renewal of registered name ........ No fee
15 22 g. Statement of change of registered agent or
15 23 registered office or both ................................ No fee
15 24 h. Registered agent's statement of change of
15 25 registered office for each affected limited
15 26 liability company ........................................ No fee
15 27 i. Registered agent's statement of resignation ....... No fee
15 28 j. Amendment to certificate of organization ............ $ 50
15 29 k. Restatement of certificate of organization
15 30 with amendment of certificate .............................. $ 50
15 31 l. Articles of merger .................................. $ 50
15 32 m. Statement of dissolution ............................ $ 5
15 33 n. Declaration of administrative dissolution ......... No fee
15 34 o. Application for reinstatement following
15 35 administrative dissolution ................................. $ 5
16 1 p. Certificate of reinstatement ...................... No fee
16 2 q. Application for certificate of authority ............ $100
16 3 r. Application for amended certificate of
16 4 authority .................................................. $100
16 5 s. Statement of cancellation ........................... $ 10
16 6 t. Certificate of revocation of authority
16 7 to transact business ..................................... No fee
16 8 u. Statement of correction ............................. $ 5
16 9 v. Application for certificate of existence
16 10 or authorization ........................................... $ 5
16 11 w. Any other document required or permitted
16 12 to be filed by this chapter ................................ $ 5
16 13 2. The secretary of state shall collect a fee of five
16 14 dollars each time process is served on the secretary under
16 15 this chapter. The party to a proceeding causing service of
16 16 process is entitled to recover this fee as costs if the party
16 17 prevails in the proceeding.
16 18 3. The secretary of state shall collect the following fees
16 19 for copying and certifying the copy of any filed document
16 20 relating to a domestic or foreign limited liability company:
16 21 a. One dollar a page for copying.
16 22 b. Five dollars for the certificate.
16 23 ARTICLE 2
16 24 FORMATION == CERTIFICATE OF ORGANIZATION
16 25 AND OTHER FILINGS
16 26 Sec. 18. NEW SECTION. 489.201 FORMATION OF LIMITED
16 27 LIABILITY COMPANY == CERTIFICATE OF ORGANIZATION.
16 28 1. One or more persons may act as organizers to form a
16 29 limited liability company by signing and delivering to the
16 30 secretary of state for filing a certificate of organization.
16 31 2. A certificate of organization must state all of the
16 32 following:
16 33 a. The name of the limited liability company, which must
16 34 comply with section 489.108.
16 35 b. The street and mailing addresses of the initial
17 1 registered office and the name and street and mailing
17 2 addresses of the initial registered agent for service of
17 3 process of the company.
17 4 3. Subject to section 489.112, subsection 3, a certificate
17 5 of organization may also contain statements as to matters
17 6 other than those required by subsection 2. However, a
17 7 statement in a certificate of organization is not effective as
17 8 a statement of authority.
17 9 4. A limited liability company is formed when the
17 10 secretary of state has filed the certificate of organization,
17 11 unless the certificate states a delayed effective date
17 12 pursuant to section 489.205, subsection 3. If the certificate
17 13 states a delayed effective date, a limited liability company
17 14 is not formed if, before the certificate takes effect, a
17 15 statement of cancellation is signed and delivered to the
17 16 secretary of state for filing and the secretary of state files
17 17 the certificate.
17 18 5. Subject to any delayed effective date and except in a
17 19 proceeding by this state to dissolve a limited liability
17 20 company, the filing of the certificate of organization by the
17 21 secretary of state is conclusive proof that the organizer
17 22 satisfied all conditions to the formation of a limited
17 23 liability company.
17 24 Sec. 19. NEW SECTION. 489.202 AMENDMENT OR RESTATEMENT
17 25 OF CERTIFICATE OF ORGANIZATION.
17 26 1. A certificate of organization may be amended or
17 27 restated at any time.
17 28 2. To amend its certificate of organization, a limited
17 29 liability company must deliver to the secretary of state for
17 30 filing an amendment stating all of the following:
17 31 a. The name of the company.
17 32 b. The date of filing of its certificate of organization.
17 33 c. The changes the amendment makes to the certificate as
17 34 most recently amended or restated.
17 35 3. To restate its certificate of organization, a limited
18 1 liability company must deliver to the secretary of state for
18 2 filing a restatement, designated as such in its heading,
18 3 stating all of the following:
18 4 a. In the heading or an introductory paragraph, the
18 5 company's present name and the date of the filing of the
18 6 company's initial certificate of organization.
18 7 b. If the company's name has been changed at any time
18 8 since the company's formation, each of the company's former
18 9 names.
18 10 c. The changes the restatement makes to the certificate as
18 11 most recently amended or restated.
18 12 4. Subject to section 489.112, subsection 3, and section
18 13 489.205, subsection 3, an amendment to or restatement of a
18 14 certificate of organization is effective when filed by the
18 15 secretary of state.
18 16 5. If a member of a member=managed limited liability
18 17 company, or a manager of a manager=managed limited liability
18 18 company, knows that any information in a filed certificate of
18 19 organization was inaccurate when the certificate was filed or
18 20 has become inaccurate owing to changed circumstances, the
18 21 member or manager shall promptly do any of the following:
18 22 a. Cause the certificate to be amended.
18 23 b. If appropriate, deliver to the secretary of state for
18 24 filing a statement of change under section 489.114 or a
18 25 statement of correction under section 489.206.
18 26 Sec. 20. NEW SECTION. 489.203 SIGNING OF RECORDS TO BE
18 27 DELIVERED FOR FILING TO SECRETARY OF STATE.
18 28 1. A record delivered to the secretary of state for filing
18 29 pursuant to this chapter must be signed as follows:
18 30 a. Except as otherwise provided in paragraphs "b" and "c",
18 31 a record signed on behalf of a limited liability company must
18 32 be signed by a person authorized by the company.
18 33 b. A limited liability company's initial certificate of
18 34 organization must be signed by at least one person acting as
18 35 an organizer.
19 1 c. A record filed on behalf of a limited liability company
19 2 that does not have or has not had at least one member must be
19 3 signed by an organizer.
19 4 d. A record filed on behalf of a dissolved limited
19 5 liability company that has no members must be signed by the
19 6 person winding up the company's activities under section
19 7 489.702, subsection 3, or a person appointed under section
19 8 489.702, subsection 4, to wind up those activities.
19 9 e. A statement of cancellation under section 489.201,
19 10 subsection 4, must be signed by each organizer that signed the
19 11 initial certificate of organization, but a personal
19 12 representative of a deceased or incompetent organizer may sign
19 13 in the place of the decedent or incompetent.
19 14 f. A statement of denial by a person under section 489.303
19 15 must be signed by that person.
19 16 g. Any other record must be signed by the person on whose
19 17 behalf the record is delivered to the secretary of state.
19 18 2. Any record filed under this chapter may be signed by an
19 19 agent.
19 20 Sec. 21. NEW SECTION. 489.204 SIGNING AND FILING
19 21 PURSUANT TO JUDICIAL ORDER.
19 22 1. If a person required by this chapter to sign a record
19 23 or deliver a record to the secretary of state for filing under
19 24 this chapter does not do so, any other person that is
19 25 aggrieved may petition the district court to order one or more
19 26 of the following:
19 27 a. The person to sign the record.
19 28 b. The person to deliver the record to the secretary of
19 29 state for filing.
19 30 c. The secretary of state to file the record unsigned.
19 31 2. If a petitioner under subsection 1 is not the limited
19 32 liability company or foreign limited liability company to
19 33 which the record pertains, the petitioner shall make the
19 34 company a party to the action.
19 35 3. If a district court orders an unsigned record to be
20 1 delivered to the secretary of state, the secretary of state
20 2 shall file the record and the court order upon receipt.
20 3 Sec. 22. NEW SECTION. 489.205 DELIVERY TO AND FILING OF
20 4 RECORDS BY SECRETARY OF STATE == EFFECTIVE TIME AND DATE.
20 5 1. A record authorized or required to be delivered to the
20 6 secretary of state for filing under this chapter must be
20 7 captioned to describe the record's purpose, be in a medium
20 8 permitted by the secretary of state, and be delivered to the
20 9 secretary of state. If the filing fees have been paid, unless
20 10 the secretary of state determines that a record does not
20 11 comply with the filing requirements of this chapter, the
20 12 secretary of state shall file the record and any of the
20 13 following applies:
20 14 a. For a statement of denial under section 489.303, send a
20 15 copy of the filed statement and a receipt for the fees to the
20 16 person on whose behalf the statement was delivered for filing
20 17 and to the limited liability company.
20 18 b. For all other records, send a copy of the filed record
20 19 and a receipt for the fees to the person on whose behalf the
20 20 record was filed.
20 21 2. Upon request and payment of the requisite fee, the
20 22 secretary of state shall send to the requester a certified
20 23 copy of a requested record.
20 24 3. Except as otherwise provided in sections 489.115 and
20 25 489.206, and except for a certificate of organization that
20 26 contains a statement as provided in section 489.201,
20 27 subsection 4, a record delivered to the secretary of state for
20 28 filing under this chapter may specify an effective time and a
20 29 delayed effective date. Subject to section 489.115, section
20 30 489.201, subsection 4, and section 489.206, a record filed by
20 31 the secretary of state is effective as follows:
20 32 a. If the record does not specify either an effective time
20 33 or a delayed effective date, on the date and at the time the
20 34 record is filed as evidenced by the secretary of state's
20 35 endorsement of the date and time on the record.
21 1 b. If the record specifies an effective time but not a
21 2 delayed effective date, on the date the record is filed at the
21 3 time specified in the record.
21 4 c. If the record specifies a delayed effective date but
21 5 not an effective time, at 12:01 a.m. on the earlier of any of
21 6 the following:
21 7 (1) The specified date.
21 8 (2) The ninetieth day after the record is filed.
21 9 d. If the record specifies an effective time and a delayed
21 10 effective date, at the specified time on the earlier of any of
21 11 the following:
21 12 (1) The specified date.
21 13 (2) The ninetieth day after the record is filed.
21 14 e. A delayed effective date for a record shall not be
21 15 later than the ninetieth day after the date on which it is
21 16 filed.
21 17 Sec. 23. NEW SECTION. 489.206 CORRECTING FILED RECORD.
21 18 1. A limited liability company or foreign limited
21 19 liability company may deliver to the secretary of state for
21 20 filing a statement of correction to correct a record
21 21 previously delivered by the company to the secretary of state
21 22 and filed by the secretary of state, if at the time of filing
21 23 the record contained inaccurate information or was defectively
21 24 signed.
21 25 2. A statement of correction under subsection 1 shall not
21 26 have a delayed effective date and must do all of the
21 27 following:
21 28 a. Describe the record to be corrected, including its
21 29 filing date, or attach a copy of the record as filed.
21 30 b. Specify the inaccurate information and the reason it is
21 31 inaccurate or the manner in which the signing was defective.
21 32 c. Correct the defective signature or inaccurate
21 33 information.
21 34 3. When filed by the secretary of state, a statement of
21 35 correction under subsection 1 is effective retroactively as of
22 1 the effective date of the record the statement corrects, but
22 2 the statement is effective when filed as to all of the
22 3 following:
22 4 a. For the purposes of section 489.103, subsection 4.
22 5 b. As to persons that previously relied on the uncorrected
22 6 record and would be adversely affected by the retroactive
22 7 effect.
22 8 Sec. 24. NEW SECTION. 489.207 PENALTY FOR SIGNING FALSE
22 9 RECORD.
22 10 1. A person commits an offense if that person signs a
22 11 record the person knows is false in any material respect with
22 12 intent that the record be delivered to the secretary of state
22 13 for filing.
22 14 2. An offense under this section is a serious misdemeanor
22 15 punishable by a fine not to exceed one thousand dollars.
22 16 Sec. 25. NEW SECTION. 489.208 CERTIFICATE OF EXISTENCE
22 17 OR AUTHORIZATION.
22 18 1. The secretary of state, upon request and payment of the
22 19 requisite fee, shall furnish to any person a certificate of
22 20 existence for a limited liability company if the records filed
22 21 in the office of the secretary of state show that the company
22 22 has been formed under section 489.201 and the secretary of
22 23 state has not filed a statement of termination pertaining to
22 24 the company. A certificate of existence must state all of the
22 25 following:
22 26 a. The company's name.
22 27 b. That the company was duly formed under the laws of this
22 28 state and the date of formation.
22 29 c. Whether all fees, taxes, and penalties due under this
22 30 chapter or other law to the secretary of state have been paid.
22 31 d. Whether the company's most recent biennial report
22 32 required by section 489.209 has been filed by the secretary of
22 33 state.
22 34 e. Whether the secretary of state has administratively
22 35 dissolved the company.
23 1 f. Whether the company has delivered to the secretary of
23 2 state for filing a statement of dissolution.
23 3 g. That a statement of termination has not been filed by
23 4 the secretary of state.
23 5 h. Other facts of record in the office of the secretary of
23 6 state which are specified by the person requesting the
23 7 certificate.
23 8 2. The secretary of state, upon request and payment of the
23 9 requisite fee, shall furnish to any person a certificate of
23 10 authorization for a foreign limited liability company if the
23 11 records filed in the office of the secretary of state show
23 12 that the secretary of state has filed a certificate of
23 13 authority, has not revoked the certificate of authority, and
23 14 has not filed a notice of cancellation. A certificate of
23 15 authorization must state all of the following:
23 16 a. The company's name and any alternate name adopted under
23 17 section 489.805, subsection 1, for use in this state.
23 18 b. That the company is authorized to transact business in
23 19 this state.
23 20 c. Whether all fees, taxes, and penalties due under this
23 21 chapter or other law to the secretary of state have been paid.
23 22 d. Whether the company's most recent biennial report
23 23 required by section 489.209 has been filed by the secretary of
23 24 state.
23 25 e. That the secretary of state has not revoked the
23 26 company's certificate of authority and has not filed a notice
23 27 of cancellation.
23 28 f. Other facts of record in the office of the secretary of
23 29 state which are specified by the person requesting the
23 30 certificate.
23 31 3. Subject to any qualification stated in the certificate,
23 32 a certificate of existence or certificate of authorization
23 33 issued by the secretary of state is conclusive evidence that
23 34 the limited liability company is in existence or the foreign
23 35 limited liability company is authorized to transact business
24 1 in this state.
24 2 Sec. 26. NEW SECTION. 489.209 BIENNIAL REPORT FOR
24 3 SECRETARY OF STATE.
24 4 1. A limited liability company or a foreign limited
24 5 liability company authorized to transact business in this
24 6 state shall deliver to the secretary of state for filing a
24 7 biennial report that states all of the following:
24 8 a. The name of the company.
24 9 b. The street and mailing addresses of the company's
24 10 registered office and the name and street and mailing
24 11 addresses of its registered agent for service of process in
24 12 this state.
24 13 c. The street and mailing addresses of its principal
24 14 office.
24 15 d. In the case of a foreign limited liability company, the
24 16 state or other jurisdiction under whose law the company is
24 17 formed and any alternate name adopted under section 489.805,
24 18 subsection 1.
24 19 2. Information in a biennial report under this section
24 20 must be current as of the date the report is delivered to the
24 21 secretary of state for filing.
24 22 3. The first biennial report under this section must be
24 23 delivered to the secretary of state between January 1 and
24 24 April 1 of the first odd=numbered year following the calendar
24 25 year in which a limited liability company was formed or a
24 26 foreign limited liability company was authorized to transact
24 27 business. A subsequent biennial report must be delivered to
24 28 the secretary of state between January 1 and April 1 of each
24 29 following odd=numbered calendar year.
24 30 4. If a biennial report under this section does not
24 31 contain the information required in subsection 1, the
24 32 secretary of state shall promptly notify the reporting limited
24 33 liability company or foreign limited liability company and
24 34 return the report to it for correction. If the report is
24 35 corrected to contain the information required in subsection 1
25 1 and delivered to the secretary of state within thirty days
25 2 after the effective date of the notice, it is timely
25 3 delivered.
25 4 5. If a biennial report under this section contains an
25 5 address of a registered office or the name or address of a
25 6 registered agent for service of process which differs from the
25 7 information shown in the records of the secretary of state
25 8 immediately before the biennial report becomes effective, the
25 9 differing information in the biennial report is considered a
25 10 statement of change under section 489.114.
25 11 ARTICLE 3
25 12 RELATIONS OF MEMBERS AND MANAGERS
25 13 TO PERSONS DEALING WITH LIMITED LIABILITY COMPANY
25 14 Sec. 27. NEW SECTION. 489.301 NO AGENCY POWER OF MEMBER
25 15 AS MEMBER.
25 16 1. A member is not an agent of a limited liability company
25 17 solely by reason of being a member.
25 18 2. A person's status as a member does not prevent or
25 19 restrict law other than this chapter from imposing liability
25 20 on a limited liability company because of the person's
25 21 conduct.
25 22 Sec. 28. NEW SECTION. 489.302 STATEMENT OF AUTHORITY.
25 23 1. A limited liability company may deliver to the
25 24 secretary of state for filing a statement of authority. All
25 25 of the following apply to the statement:
25 26 a. It must include the name of the company and the street
25 27 and mailing addresses of its registered office.
25 28 b. With respect to any position that exists in or with
25 29 respect to the company, it may state the authority, or
25 30 limitations on the authority, of all persons holding the
25 31 position to do any of the following:
25 32 (1) Execute an instrument transferring real property held
25 33 in the name of the company.
25 34 (2) Enter into other transactions on behalf of, or
25 35 otherwise act for or bind, the company.
26 1 c. It may state the authority, or limitations on the
26 2 authority, of a specific person to do any of the following:
26 3 (1) Execute an instrument transferring real property held
26 4 in the name of the company.
26 5 (2) Enter into other transactions on behalf of, or
26 6 otherwise act for or bind, the company.
26 7 2. To amend or cancel a statement of authority filed by
26 8 the secretary of state under section 489.205, subsection 1, a
26 9 limited liability company must deliver to the secretary of
26 10 state for filing an amendment or cancellation stating all of
26 11 the following:
26 12 a. The name of the company.
26 13 b. The street and mailing addresses of the company's
26 14 registered office.
26 15 c. The caption of the statement being amended or canceled
26 16 and the date the statement being affected became effective.
26 17 d. The contents of the amendment or a declaration that the
26 18 statement being affected is canceled.
26 19 3. A statement of authority affects only the power of a
26 20 person to bind a limited liability company to persons that are
26 21 not members.
26 22 4. Subject to subsection 3 and section 489.103, subsection
26 23 4, and except as otherwise provided in subsections 6, 7, and
26 24 8, a limitation on the authority of a person or a position
26 25 contained in an effective statement of authority is not by
26 26 itself evidence of knowledge or notice of the limitation by
26 27 any person.
26 28 5. Subject to subsection 3, a grant of authority not
26 29 pertaining to a transfer of real property and contained in an
26 30 effective statement of authority is conclusive in favor of a
26 31 person that gives value in reliance on the grant, except to
26 32 the extent that when the person gives value and any of the
26 33 following applies:
26 34 a. The person has knowledge to the contrary.
26 35 b. The statement has been canceled or restrictively
27 1 amended under subsection 2.
27 2 c. A limitation on the grant is contained in another
27 3 statement of authority that became effective after the
27 4 statement containing the grant became effective.
27 5 6. Subject to subsection 3, an effective statement of
27 6 authority that grants authority to transfer real property held
27 7 in the name of the limited liability company and that is
27 8 recorded by certified copy in the office for recording
27 9 transfers of the real property is conclusive in favor of a
27 10 person that gives value in reliance on the grant without
27 11 knowledge to the contrary, except to the extent that when the
27 12 person gives value and any of the following applies:
27 13 a. The statement has been canceled or restrictively
27 14 amended under subsection 2 and a certified copy of the
27 15 cancellation or restrictive amendment has been recorded in the
27 16 office for recording transfers of the real property.
27 17 b. A limitation on the grant is contained in another
27 18 statement of authority that became effective after the
27 19 statement containing the grant became effective and a
27 20 certified copy of the later=effective statement is recorded in
27 21 the office for recording transfers of the real property.
27 22 7. Subject to subsection 3, if a certified copy of an
27 23 effective statement containing a limitation on the authority
27 24 to transfer real property held in the name of a limited
27 25 liability company is recorded in the office for recording
27 26 transfers of that real property, all persons are deemed to
27 27 know of the limitation.
27 28 8. Subject to subsection 9, an effective statement of
27 29 dissolution or statement of termination is a cancellation of
27 30 any filed statement of authority for the purposes of
27 31 subsection 6 and is a limitation on authority for the purposes
27 32 of subsection 7.
27 33 9. After a statement of dissolution becomes effective, a
27 34 limited liability company may deliver to the secretary of
27 35 state for filing and, if appropriate, may record a statement
28 1 of authority that is designated as a post=dissolution
28 2 statement of authority. The statement operates as provided in
28 3 subsections 6 and 7.
28 4 10. Unless earlier canceled, an effective statement of
28 5 authority is canceled by operation of law five years after the
28 6 date on which the statement, or its most recent amendment,
28 7 becomes effective. This cancellation operates without need
28 8 for any recording under subsection 6 or 7.
28 9 11. An effective statement of denial operates as a
28 10 restrictive amendment under this section and may be recorded
28 11 by certified copy for the purposes of subsection 6, paragraph
28 12 "a".
28 13 Sec. 29. NEW SECTION. 489.303 STATEMENT OF DENIAL.
28 14 A person named in a filed statement of authority granting
28 15 that person authority may deliver to the secretary of state
28 16 for filing a statement of denial that does all of the
28 17 following:
28 18 1. Provides the name of the limited liability company and
28 19 the caption of the statement of authority to which the
28 20 statement of denial pertains.
28 21 2. Denies the grant of authority.
28 22 Sec. 30. NEW SECTION. 489.304 LIABILITY OF MEMBERS AND
28 23 MANAGERS.
28 24 1. For debts, obligations, or other liabilities of a
28 25 limited liability company, whether arising in contract, tort,
28 26 or otherwise all of the following apply:
28 27 a. They are solely the debts, obligations, or other
28 28 liabilities of the company.
28 29 b. They do not become the debts, obligations, or other
28 30 liabilities of a member or manager solely by reason of the
28 31 member acting as a member or manager acting as a manager.
28 32 2. The failure of a limited liability company to observe
28 33 any particular formalities relating to the exercise of its
28 34 powers or management of its activities is not a ground for
28 35 imposing liability on the members or managers for the debts,
29 1 obligations, or other liabilities of the company.
29 2 ARTICLE 4
29 3 RELATIONS OF MEMBERS TO EACH OTHER AND
29 4 TO LIMITED LIABILITY COMPANY
29 5 Sec. 31. NEW SECTION. 489.401 BECOMING MEMBER.
29 6 1. If a limited liability company is to have only one
29 7 member upon formation, a person becomes the member as agreed
29 8 by that person and the organizer of the company or a majority
29 9 of organizers if more than one. That person and the organizer
29 10 may be, but need not be, different persons. If different, the
29 11 organizer acts on behalf of the initial member.
29 12 2. If a limited liability company is to have more than one
29 13 member upon formation, those persons become members as agreed
29 14 by the persons before the formation of the company. The
29 15 organizer acts on behalf of the persons in forming the company
29 16 and may be, but need not be, one of the persons.
29 17 3. If a limited liability company has no members upon
29 18 formation, a person becomes a member of the limited liability
29 19 company with the consent of the organizer or a majority of the
29 20 organizers if more than one. The organizers may consent to
29 21 more than one person simultaneously becoming the company's
29 22 initial members.
29 23 4. After formation of a limited liability company, a
29 24 person becomes a member upon any of the following:
29 25 a. As provided in the operating agreement.
29 26 b. As the result of a transaction effective under article
29 27 10.
29 28 c. With the consent of all the members.
29 29 d. If, within ninety consecutive days after the company
29 30 ceases to have any members and all of the following occur:
29 31 (1) The last person to have been a member, or the legal
29 32 representative of that person, designates a person to become a
29 33 member.
29 34 (2) The designated person consents to become a member.
29 35 5. A person may become a member without acquiring a
30 1 transferable interest and without making or being obligated to
30 2 make a contribution to the limited liability company.
30 3 Sec. 32. NEW SECTION. 489.402 FORM OF CONTRIBUTION.
30 4 A contribution may consist of tangible or intangible
30 5 property or other benefit to a limited liability company,
30 6 including money, services performed, promissory notes, other
30 7 agreements to contribute money or property, and contracts for
30 8 services to be performed.
30 9 Sec. 33. NEW SECTION. 489.403 LIABILITY FOR
30 10 CONTRIBUTIONS.
30 11 1. A person's obligation to make a contribution to a
30 12 limited liability company is not excused by the person's
30 13 death, disability, or other inability to perform personally.
30 14 If a person does not make a required contribution, the person
30 15 or the person's estate is obligated to contribute money equal
30 16 to the value of the part of the contribution which has not
30 17 been made, at the option of the company.
30 18 2. A creditor of a limited liability company which extends
30 19 credit or otherwise acts in reliance on an obligation
30 20 described in subsection 1 may enforce the obligation.
30 21 3. An operating agreement may provide that the interest of
30 22 any member who fails to make a contribution that the member is
30 23 obligated to make is subject to specified penalties for, or
30 24 specified consequences of, such failure. The penalty or
30 25 consequence may take the form of reducing or eliminating the
30 26 defaulting member's proportionate interest in a limited
30 27 liability company, subordinating the member's interest to that
30 28 of a nondefaulting member, a forced sale of the member's
30 29 interest, forfeiture of the member's interest, the lending by
30 30 other members of the amount necessary to meet the member's
30 31 commitment, a fixing of the value of the member's interest by
30 32 appraisal or by formula and redemption, or sale of the
30 33 member's interest at such value or other penalty or
30 34 consequence.
30 35 Sec. 34. NEW SECTION. 489.404 SHARING OF AND RIGHT TO
31 1 DISTRIBUTIONS BEFORE DISSOLUTION.
31 2 1. Any distributions made by a limited liability company
31 3 before its dissolution and winding up must be in equal shares
31 4 among members and dissociated members, except to the extent
31 5 necessary to comply with any transfer effective under section
31 6 489.502 and any charging order in effect under section
31 7 489.503.
31 8 2. A person has a right to a distribution before the
31 9 dissolution and winding up of a limited liability company only
31 10 if the company decides to make an interim distribution. A
31 11 person's dissociation does not entitle the person to a
31 12 distribution.
31 13 3. A person does not have a right to demand or receive a
31 14 distribution from a limited liability company in any form
31 15 other than money. Except as otherwise provided in section
31 16 489.708, subsection 3, a limited liability company may
31 17 distribute an asset in kind if each part of the asset is
31 18 fungible with each other part and each person receives a
31 19 percentage of the asset equal in value to the person's share
31 20 of distributions.
31 21 4. If a member or transferee becomes entitled to receive a
31 22 distribution, the member or transferee has the status of, and
31 23 is entitled to all remedies available to, a creditor of the
31 24 limited liability company with respect to the distribution.
31 25 Sec. 35. NEW SECTION. 489.405 LIMITATIONS ON
31 26 DISTRIBUTION.
31 27 1. A limited liability company shall not make a
31 28 distribution if after the distribution any of the following
31 29 applies:
31 30 a. The company would not be able to pay its debts as they
31 31 become due in the ordinary course of the company's activities.
31 32 b. The company's total assets would be less than the sum
31 33 of its total liabilities plus the amount that would be needed,
31 34 if the company were to be dissolved, wound up, and terminated
31 35 at the time of the distribution, to satisfy the preferential
32 1 rights upon dissolution, winding up, and termination of
32 2 members whose preferential rights are superior to those of
32 3 persons receiving the distribution.
32 4 2. A limited liability company may base a determination
32 5 that a distribution is not prohibited under subsection 1 on
32 6 financial statements prepared on the basis of accounting
32 7 practices and principles that are reasonable in the
32 8 circumstances or on a fair valuation or other method that is
32 9 reasonable under the circumstances.
32 10 3. Except as otherwise provided in subsection 5, the
32 11 effect of a distribution under subsection 1 is measured as
32 12 follows:
32 13 a. In the case of a distribution by purchase, redemption,
32 14 or other acquisition of a transferable interest in the
32 15 company, as of the date money or other property is transferred
32 16 or debt incurred by the company.
32 17 b. In all other cases, as follows:
32 18 (1) The date that distribution is authorized, if the
32 19 payment occurs within one hundred twenty days after that date.
32 20 (2) The date that payment is made, if the payment occurs
32 21 more than one hundred twenty days after the distribution is
32 22 authorized.
32 23 4. A limited liability company's indebtedness to a member
32 24 incurred by reason of a distribution made in accordance with
32 25 this section is at parity with the company's indebtedness to
32 26 its general, unsecured creditors.
32 27 5. A limited liability company's indebtedness, including
32 28 indebtedness issued in connection with or as part of a
32 29 distribution, is not a liability for purposes of subsection 1
32 30 if the terms of the indebtedness provide that payment of
32 31 principal and interest are made only to the extent that a
32 32 distribution could be made to members under this section. If
32 33 indebtedness is issued as a distribution, each payment of
32 34 principal or interest on the indebtedness is treated as a
32 35 distribution, the effect of which is measured on the date the
33 1 payment is made.
33 2 6. In subsection 1, "distribution" does not include
33 3 amounts constituting reasonable compensation for present or
33 4 past services or reasonable payments made in the ordinary
33 5 course of business under a bona fide retirement plan or other
33 6 benefits program.
33 7 Sec. 36. NEW SECTION. 489.406 LIABILITY FOR IMPROPER
33 8 DISTRIBUTIONS.
33 9 1. Except as otherwise provided in subsection 2, if a
33 10 member of a member=managed limited liability company or
33 11 manager of a manager=managed limited liability company
33 12 consents to a distribution made in violation of section
33 13 489.405 and in consenting to the distribution fails to comply
33 14 with section 489.409, the member or manager is personally
33 15 liable to the company for the amount of the distribution that
33 16 exceeds the amount that could have been distributed without
33 17 the violation of section 489.405.
33 18 2. To the extent the operating agreement of a
33 19 member=managed limited liability company expressly relieves a
33 20 member of the authority and responsibility to consent to
33 21 distributions and imposes that authority and responsibility on
33 22 one or more other members, the liability stated in subsection
33 23 1 applies to the other members and not the member that the
33 24 operating agreement relieves of authority and responsibility.
33 25 3. A person that receives a distribution knowing that the
33 26 distribution to that person was made in violation of section
33 27 489.405 is personally liable to the limited liability company
33 28 but only to the extent that the distribution received by the
33 29 person exceeded the amount that could have been properly paid
33 30 under section 489.405.
33 31 4. A person against which an action is commenced because
33 32 the person is liable under subsection 1 may do all of the
33 33 following:
33 34 a. Implead any other person that is subject to liability
33 35 under subsection 1 and seek to compel contribution from the
34 1 person.
34 2 b. Implead any person that received a distribution in
34 3 violation of subsection 3 and seek to compel contribution from
34 4 the person in the amount the person received in violation of
34 5 subsection 3.
34 6 5. An action under this section is barred if not commenced
34 7 within two years after the distribution.
34 8 Sec. 37. NEW SECTION. 489.407 MANAGEMENT OF LIMITED
34 9 LIABILITY COMPANY.
34 10 1. A limited liability company is a member=managed limited
34 11 liability company unless the operating agreement does any of
34 12 the following:
34 13 a. Expressly provides that any of the following apply:
34 14 (1) The company is or will be "manager=managed".
34 15 (2) The company is or will be "managed by managers".
34 16 (3) Management of the company is or will be "vested in
34 17 managers".
34 18 b. Includes words of similar import.
34 19 2. In a member=managed limited liability company, all of
34 20 the following rules apply:
34 21 a. The management and conduct of the company are vested in
34 22 the members.
34 23 b. Each member has equal rights in the management and
34 24 conduct of the company's activities.
34 25 c. A difference arising among members as to a matter in
34 26 the ordinary course of the activities of the company may be
34 27 decided by a majority of the members.
34 28 d. An act outside the ordinary course of the activities of
34 29 the company, including selling, leasing, exchanging, or
34 30 otherwise disposing of all, or substantially all, of the
34 31 company's property, with or without the goodwill, may be
34 32 undertaken only with the consent of all members.
34 33 e. The operating agreement may be amended only with the
34 34 consent of all members.
34 35 f. Approve a merger, conversion, or domestication under
35 1 article 10.
35 2 3. In a manager=managed limited liability company, all of
35 3 the following rules apply:
35 4 a. Except as otherwise expressly provided in this chapter,
35 5 any matter relating to the activities of the company is
35 6 decided exclusively by the managers.
35 7 b. Each manager has equal rights in the management and
35 8 conduct of the activities of the company.
35 9 c. A difference arising among managers as to a matter in
35 10 the ordinary course of the activities of the company may be
35 11 decided by a majority of the managers.
35 12 d. The consent of all members is required to do any of the
35 13 following:
35 14 (1) Sell, lease, exchange, or otherwise dispose of all, or
35 15 substantially all, of the company's property, with or without
35 16 the goodwill, outside the ordinary course of the company's
35 17 activities.
35 18 (2) Approve a merger, conversion, or domestication under
35 19 article 10.
35 20 (3) Undertake any other act outside the ordinary course of
35 21 the company's activities.
35 22 (4) Amend the operating agreement.
35 23 e. A manager may be chosen at any time by the consent of a
35 24 majority of the members and remains a manager until a
35 25 successor has been chosen, unless the manager at an earlier
35 26 time resigns, is removed, or dies, or, in the case of a
35 27 manager that is not an individual, terminates. A manager may
35 28 be removed at any time by the consent of a majority of the
35 29 members without notice or cause.
35 30 f. A person need not be a member to be a manager, but the
35 31 dissociation of a member that is also a manager removes the
35 32 person as a manager. If a person that is both a manager and a
35 33 member ceases to be a manager, that cessation does not by
35 34 itself dissociate the person as a member.
35 35 g. A person's ceasing to be a manager does not discharge
36 1 any debt, obligation, or other liability to the limited
36 2 liability company or members which the person incurred while a
36 3 manager.
36 4 4. An action requiring the consent of members under this
36 5 chapter may be taken without a meeting, and a member may
36 6 appoint a proxy or other agent to consent or otherwise act for
36 7 the member by signing an appointing record, personally or by
36 8 the member's agent.
36 9 5. The dissolution of a limited liability company does not
36 10 affect the applicability of this section. However, a person
36 11 that wrongfully causes dissolution of the company loses the
36 12 right to participate in management as a member and a manager.
36 13 6. This chapter does not entitle a member to remuneration
36 14 for services performed for a member=managed limited liability
36 15 company, except for reasonable compensation for services
36 16 rendered in winding up the activities of the company.
36 17 Sec. 38. NEW SECTION. 489.408 INDEMNIFICATION AND
36 18 INSURANCE.
36 19 1. A limited liability company shall reimburse for any
36 20 payment made and indemnify for any debt, obligation, or other
36 21 liability incurred by a member of a member=managed company or
36 22 the manager of a manager=managed company in the course of the
36 23 member's or manager's activities on behalf of the company, if,
36 24 in making the payment or incurring the debt, obligation, or
36 25 other liability, the member or manager complied with the
36 26 duties stated in sections 489.405 and 489.409.
36 27 2. A limited liability company may purchase and maintain
36 28 insurance on behalf of a member or manager of the company
36 29 against liability asserted against or incurred by the member
36 30 or manager in that capacity or arising from that status even
36 31 if, under section 489.110, subsection 7, the operating
36 32 agreement could not eliminate or limit the person's liability
36 33 to the company for the conduct giving rise to the liability.
36 34 Sec. 39. NEW SECTION. 489.409 STANDARDS OF CONDUCT FOR
36 35 MEMBERS AND MANAGERS.
37 1 1. A member of a member=managed limited liability company
37 2 owes to the company and, subject to section 489.901,
37 3 subsection 2, the other members the fiduciary duties of
37 4 loyalty and care stated in subsections 2 and 3.
37 5 2. The duty of loyalty of a member in a member=managed
37 6 limited liability company includes all of the following
37 7 duties:
37 8 a. To account to the company and to hold as trustee for it
37 9 any property, profit, or benefit derived by the member
37 10 regarding any of the following:
37 11 (1) In the conduct or winding up of the company's
37 12 activities.
37 13 (2) From a use by the member of the company's property.
37 14 (3) From the appropriation of a limited liability company
37 15 opportunity.
37 16 b. To refrain from dealing with the company in the conduct
37 17 or winding up of the company's activities as or on behalf of a
37 18 person having an interest adverse to the company.
37 19 c. To refrain from competing with the company in the
37 20 conduct of the company's activities before the dissolution of
37 21 the company.
37 22 3. Subject to the business judgment rule as stated in
37 23 subsection 7, the duty of care of a member of a member=managed
37 24 limited liability company in the conduct and winding up of the
37 25 company's activities is to act with the care that a person in
37 26 a like position would reasonably exercise under similar
37 27 circumstances and in a manner the member reasonably believes
37 28 to be in the best interests of the company. In discharging
37 29 this duty, a member may rely in good faith upon opinions,
37 30 reports, statements, or other information provided by another
37 31 person that the member reasonably believes is a competent and
37 32 reliable source for the information.
37 33 4. A member in a member=managed limited liability company
37 34 or a manager=managed limited liability company shall discharge
37 35 the duties under this chapter or under the operating agreement
38 1 and exercise any rights consistently with the contractual
38 2 obligation of good faith and fair dealing.
38 3 5. It is a defense to a claim under subsection 2,
38 4 paragraph "b", and any comparable claim in equity or at common
38 5 law that the transaction was fair to the limited liability
38 6 company.
38 7 6. All of the members of a member=managed limited
38 8 liability company or a manager=managed limited liability
38 9 company may authorize or ratify, after full disclosure of all
38 10 material facts, a specific act or transaction that otherwise
38 11 would violate the duty of loyalty.
38 12 7. a. A member satisfies the duty of care in subsection 3
38 13 if all of the following apply:
38 14 (1) The member is not interested in the subject matter of
38 15 the business judgment.
38 16 (2) The member is informed with respect to the subject of
38 17 the business judgment to the extent the member reasonably
38 18 believes to be appropriate in the circumstances.
38 19 (3) The member has a rational basis for believing that the
38 20 business judgment is in the best interests of the limited
38 21 liability company.
38 22 b. A person challenging the business judgment of a member
38 23 has the burden of proving a breach of the duty of care, and in
38 24 a damage action, the burden of proving that the breach was the
38 25 legal cause of damage suffered by the limited liability
38 26 company.
38 27 8. In a manager=managed limited liability company, all of
38 28 the following rules apply:
38 29 a. Subsections 1, 2, 3, 5, and 7 apply to the manager or
38 30 managers and not the members.
38 31 b. The duty stated under subsection 2, paragraph "c",
38 32 continues until winding up is completed.
38 33 c. Subsection 4 applies to the members and managers.
38 34 d. Subsection 6 applies only to the members.
38 35 e. A member does not have any fiduciary duty to the
39 1 company or to any other member solely by reason of being a
39 2 member.
39 3 Sec. 40. NEW SECTION. 489.410 RIGHT OF MEMBERS,
39 4 MANAGERS, AND DISSOCIATED MEMBERS TO INFORMATION.
39 5 1. In a member=managed limited liability company, all of
39 6 the following rules apply:
39 7 a. On reasonable notice, a member may inspect and copy
39 8 during regular business hours, at a reasonable location
39 9 specified by the company, any record maintained by the company
39 10 regarding the company's activities, financial condition, and
39 11 other circumstances, to the extent the information is material
39 12 to the member's rights and duties under the operating
39 13 agreement or this chapter.
39 14 b. The company shall furnish to each member all of the
39 15 following:
39 16 (1) Without demand, any information concerning the
39 17 company's activities, financial condition, and other
39 18 circumstances which the company knows and is material to the
39 19 proper exercise of the member's rights and duties under the
39 20 operating agreement or this chapter, except to the extent the
39 21 company can establish that it reasonably believes the member
39 22 already knows the information.
39 23 (2) On demand, any other information concerning the
39 24 company's activities, financial condition, and other
39 25 circumstances, except to the extent the demand or information
39 26 demanded is unreasonable or otherwise improper under the
39 27 circumstances.
39 28 c. The duty to furnish information under paragraph "b"
39 29 also applies to each member to the extent the member knows any
39 30 of the information described in paragraph "b".
39 31 2. In a manager=managed limited liability company, all of
39 32 the following rules apply:
39 33 a. The informational rights stated in subsection 1 and the
39 34 duty stated in subsection 1, paragraph "c", apply to the
39 35 managers and not the members.
40 1 b. During regular business hours and at a reasonable
40 2 location specified by the company, a member may obtain from
40 3 the company and inspect and copy full information regarding
40 4 the activities, financial condition, and other circumstances
40 5 of the company as is just and reasonable if all of the
40 6 following apply:
40 7 (1) The member seeks the information for a purpose
40 8 material to the member's interest as a member.
40 9 (2) The member makes a demand in a record received by the
40 10 company, describing with reasonable particularity the
40 11 information sought and the purpose for seeking the
40 12 information.
40 13 (3) The information sought is directly connected to the
40 14 member's purpose.
40 15 c. Within ten days after receiving a demand pursuant to
40 16 paragraph "b", subparagraph (2), the company shall in a record
40 17 inform the member that made the demand all of the following:
40 18 (1) Of the information that the company will provide in
40 19 response to the demand and when and where the company will
40 20 provide the information.
40 21 (2) If the company declines to provide any demanded
40 22 information, the company's reasons for declining.
40 23 d. Whenever this chapter or an operating agreement
40 24 provides for a member to give or withhold consent to a matter,
40 25 before the consent is given or withheld, the company shall,
40 26 without demand, provide the member with all information that
40 27 is known to the company and is material to the member's
40 28 decision.
40 29 3. On ten days' demand made in a record received by a
40 30 limited liability company, a dissociated member may have
40 31 access to information to which the person was entitled while a
40 32 member if the information pertains to the period during which
40 33 the person was a member, the person seeks the information in
40 34 good faith, and the person satisfies the requirements imposed
40 35 on a member by subsection 2, paragraph "b". The company shall
41 1 respond to a demand made pursuant to this subsection in the
41 2 manner provided in subsection 2, paragraph "c".
41 3 4. A limited liability company may charge a person that
41 4 makes a demand under this section the reasonable costs of
41 5 copying, limited to the costs of labor and material.
41 6 5. A member or dissociated member may exercise rights
41 7 under this section through an agent or, in the case of an
41 8 individual under legal disability, a legal representative.
41 9 Any restriction or condition imposed by the operating
41 10 agreement or under subsection 7 applies both to the agent or
41 11 legal representative and the member or dissociated member.
41 12 6. The rights under this section do not extend to a person
41 13 as transferee.
41 14 7. In addition to any restriction or condition stated in
41 15 its operating agreement, a limited liability company, as a
41 16 matter within the ordinary course of its activities, may
41 17 impose reasonable restrictions and conditions on access to and
41 18 use of information to be furnished under this section,
41 19 including designating information confidential and imposing
41 20 nondisclosure and safeguarding obligations on the recipient.
41 21 In a dispute concerning the reasonableness of a restriction
41 22 under this subsection, the company has the burden of proving
41 23 reasonableness.
41 24 ARTICLE 5
41 25 TRANSFERABLE INTERESTS AND RIGHTS OF TRANSFEREES AND CREDITORS
41 26 Sec. 41. NEW SECTION. 489.501 NATURE OF TRANSFERABLE
41 27 INTEREST.
41 28 A transferable interest is personal property.
41 29 Sec. 42. NEW SECTION. 489.502 TRANSFER OF TRANSFERABLE
41 30 INTEREST.
41 31 1. For a transfer, in whole or in part, all of the
41 32 following applies to a transferable interest:
41 33 a. It is permissible.
41 34 b. It does not by itself cause a member's dissociation or
41 35 a dissolution and winding up of the limited liability
42 1 company's activities.
42 2 c. Subject to section 489.504, it does not entitle the
42 3 transferee to do any of the following:
42 4 (1) Participate in the management or conduct of the
42 5 company's activities.
42 6 (2) Except as otherwise provided in subsection 3, have
42 7 access to records or other information concerning the
42 8 company's activities.
42 9 2. A transferee has the right to receive, in accordance
42 10 with the transfer, distributions to which the transferor would
42 11 otherwise be entitled.
42 12 3. In a dissolution and winding up of a limited liability
42 13 company, a transferee is entitled to an account of the
42 14 company's transactions only from the date of dissolution.
42 15 4. A transferable interest may be evidenced by a
42 16 certificate of the interest issued by the limited liability
42 17 company in a record, and, subject to this section, the
42 18 interest represented by the certificate may be transferred by
42 19 a transfer of the certificate.
42 20 5. A limited liability company need not give effect to a
42 21 transferee's rights under this section until the company has
42 22 notice of the transfer.
42 23 6. A transfer of a transferable interest in violation of a
42 24 restriction on transfer contained in the operating agreement
42 25 or another agreement to which the transferor is a party is
42 26 ineffective as to a person having notice of the restriction at
42 27 the time of transfer.
42 28 7. Except as otherwise provided in section 489.602,
42 29 subsection 4, paragraph "b", when a member transfers a
42 30 transferable interest, the transferor retains the rights of a
42 31 member other than the interest in distributions transferred
42 32 and retains all duties and obligations of a member.
42 33 8. When a member transfers a transferable interest to a
42 34 person that becomes a member with respect to the transferred
42 35 interest, the transferee is liable for the member's
43 1 obligations under section 489.403 and section 489.406,
43 2 subsection 3, known to the transferee when the transferee
43 3 becomes a member.
43 4 Sec. 43. NEW SECTION. 489.503 CHARGING ORDER.
43 5 1. On application by a judgment creditor of a member or
43 6 transferee, a court may enter a charging order against the
43 7 transferable interest of the judgment debtor for the
43 8 unsatisfied amount of the judgment. A charging order
43 9 constitutes a lien on a judgment debtor's transferable
43 10 interest and requires the limited liability company to pay
43 11 over to the person to which the charging order was issued any
43 12 distribution that would otherwise be paid to the judgment
43 13 debtor.
43 14 2. To the extent necessary to effectuate the collection of
43 15 distributions pursuant to a charging order in effect under
43 16 subsection 1, the court may do all of the following:
43 17 a. Appoint a receiver of the distributions subject to the
43 18 charging order, with the power to make all inquiries the
43 19 judgment debtor might have made.
43 20 b. Make all other orders necessary to give effect to the
43 21 charging order.
43 22 3. Upon a showing that distributions under a charging
43 23 order will not pay the judgment debt within a reasonable time,
43 24 the court may foreclose the lien and order the sale of the
43 25 transferable interest. The purchaser at the foreclosure sale
43 26 only obtains the transferable interest, does not thereby
43 27 become a member, and is subject to section 489.502.
43 28 4. At any time before foreclosure under subsection 3, the
43 29 member or transferee whose transferable interest is subject to
43 30 a charging order under subsection 1 may extinguish the
43 31 charging order by satisfying the judgment and filing a
43 32 certified copy of the satisfaction with the court that issued
43 33 the charging order.
43 34 5. At any time before foreclosure under subsection 3, a
43 35 limited liability company or one or more members whose
44 1 transferable interests are not subject to the charging order
44 2 may pay to the judgment creditor the full amount due under the
44 3 judgment and thereby succeed to the rights of the judgment
44 4 creditor, including the charging order.
44 5 6. This chapter does not deprive any member or transferee
44 6 of the benefit of any exemption laws applicable to the
44 7 member's or transferee's transferable interest.
44 8 7. This section provides the exclusive remedy by which a
44 9 person seeking to enforce a judgment against a member or
44 10 transferee may, in the capacity of judgment creditor, satisfy
44 11 the judgment from the judgment debtor's transferable interest.
44 12 Sec. 44. NEW SECTION. 489.504 POWER OF PERSONAL
44 13 REPRESENTATIVE OF DECEASED MEMBER.
44 14 If a member dies, the deceased member's personal
44 15 representative or other legal representative may exercise the
44 16 rights of a transferee provided in section 489.502, subsection
44 17 3, and, for the purposes of settling the estate, the rights of
44 18 a current member under section 489.410.
44 19 ARTICLE 6
44 20 MEMBER'S DISSOCIATION
44 21 Sec. 45. NEW SECTION. 489.601 MEMBER'S POWER TO
44 22 DISSOCIATE == WRONGFUL DISSOCIATION.
44 23 1. A person has the power to dissociate as a member at any
44 24 time, rightfully or wrongfully, by withdrawing as a member by
44 25 express will under section 489.602, subsection 1.
44 26 2. A person's dissociation from a limited liability
44 27 company is wrongful only if any of the following applies to
44 28 the dissociation:
44 29 a. It is in breach of an express provision of the
44 30 operating agreement.
44 31 b. It occurs before the termination of the company and any
44 32 of the following applies:
44 33 (1) The person withdraws as a member by express will.
44 34 (2) The person is expelled as a member by judicial order
44 35 under section 489.602, subsection 5.
45 1 (3) The person is dissociated under section 489.602,
45 2 subsection 7, paragraph "a", by becoming a debtor in
45 3 bankruptcy.
45 4 (4) In the case of a person that is not a trust other than
45 5 a business trust, an estate, or an individual, the person is
45 6 expelled or otherwise dissociated as a member because it
45 7 willfully dissolved or terminated.
45 8 3. A person that wrongfully dissociates as a member is
45 9 liable to the limited liability company and, subject to
45 10 section 489.901, to the other members for damages caused by
45 11 the dissociation. The liability is in addition to any other
45 12 debt, obligation, or other liability of the member to the
45 13 company or the other members.
45 14 Sec. 46. NEW SECTION. 489.602 EVENTS CAUSING
45 15 DISSOCIATION.
45 16 A person is dissociated as a member from a limited
45 17 liability company when any of the following applies:
45 18 1. The company has notice of the person's express will to
45 19 withdraw as a member, but, if the person specified a
45 20 withdrawal date later than the date the company had notice, on
45 21 that later date.
45 22 2. An event stated in the operating agreement as causing
45 23 the person's dissociation occurs.
45 24 3. The person is expelled as a member pursuant to the
45 25 operating agreement.
45 26 4. The person is expelled as a member by the unanimous
45 27 consent of the other members if any of the following applies:
45 28 a. It is unlawful to carry on the company's activities
45 29 with the person as a member.
45 30 b. There has been a transfer of all of the person's
45 31 transferable interest in the company, other than any of the
45 32 following:
45 33 (1) A transfer for security purposes.
45 34 (2) A charging order in effect under section 489.503 which
45 35 has not been foreclosed.
46 1 c. The person is a corporation and, within ninety days
46 2 after the company notifies the person that it will be expelled
46 3 as a member because the person has filed a certificate of
46 4 dissolution or the equivalent, its charter has been revoked,
46 5 or its right to conduct business has been suspended by the
46 6 jurisdiction of its incorporation, the certificate of
46 7 dissolution has not been revoked or its charter or right to
46 8 conduct business has not been reinstated.
46 9 d. The person is a limited liability company or
46 10 partnership that has been dissolved and whose business is
46 11 being wound up.
46 12 5. On application by the company, the person is expelled
46 13 as a member by judicial order because the person has done any
46 14 of the following:
46 15 a. Has engaged, or is engaging, in wrongful conduct that
46 16 has adversely and materially affected, or will adversely and
46 17 materially affect, the company's activities.
46 18 b. Has willfully or persistently committed, or is
46 19 willfully and persistently committing, a material breach of
46 20 the operating agreement or the person's duties or obligations
46 21 under section 489.409.
46 22 c. Has engaged in, or is engaging in, conduct relating to
46 23 the company's activities which makes it not reasonably
46 24 practicable to carry on the activities with the person as a
46 25 member.
46 26 6. In the case of a person who is an individual, any of
46 27 the following applies:
46 28 a. The person dies.
46 29 b. In a member=managed limited liability company any of
46 30 the following applies:
46 31 (1) A guardian or general conservator for the person is
46 32 appointed.
46 33 (2) There is a judicial order that the person has
46 34 otherwise become incapable of performing the person's duties
46 35 as a member under this chapter or the operating agreement.
47 1 7. In a member=managed limited liability company, the
47 2 person does any of the following:
47 3 a. Becomes a debtor in bankruptcy.
47 4 b. Executes an assignment for the benefit of creditors.
47 5 c. Seeks, consents to, or acquiesces in the appointment of
47 6 a trustee, receiver, or liquidator of the person or of all or
47 7 substantially all of the person's property.
47 8 8. In the case of a person that is a trust or is acting as
47 9 a member by virtue of being a trustee of a trust, the trust's
47 10 entire transferable interest in the company is distributed.
47 11 9. In the case of a person that is an estate or is acting
47 12 as a member by virtue of being a personal representative of an
47 13 estate, the estate's entire transferable interest in the
47 14 company is distributed.
47 15 10. In the case of a member that is not an individual,
47 16 partnership, limited liability company, corporation, trust, or
47 17 estate, the termination of the member.
47 18 11. The company participates in a merger under article 10,
47 19 if any of the following applies:
47 20 a. The company is not the surviving entity.
47 21 b. Otherwise as a result of the merger, the person ceases
47 22 to be a member.
47 23 12. The company participates in a conversion under article
47 24 10.
47 25 13. The company participates in a domestication under
47 26 article 10, if, as a result of the domestication, the person
47 27 ceases to be a member.
47 28 14. The company terminates.
47 29 Sec. 47. NEW SECTION. 489.603 EFFECT OF PERSON'S
47 30 DISSOCIATION AS MEMBER.
47 31 1. When a person is dissociated as a member of a limited
47 32 liability company, all of the following apply:
47 33 a. The person's right to participate as a member in the
47 34 management and conduct of the company's activities terminates.
47 35 b. If the company is member=managed, the person's
48 1 fiduciary duties as a member end with regard to matters
48 2 arising and events occurring after the person's dissociation.
48 3 c. Subject to section 489.504 and article 10, any
48 4 transferable interest owned by the person immediately before
48 5 dissociation in the person's capacity as a member is owned by
48 6 the person solely as a transferee.
48 7 2. A person's dissociation as a member of a limited
48 8 liability company does not of itself discharge the person from
48 9 any debt, obligation, or other liability to the company or the
48 10 other members which the person incurred while a member.
48 11 Sec. 48. NEW SECTION. 489.604 MEMBER'S POWER TO
48 12 DISSOCIATE UNDER CERTAIN CIRCUMSTANCES.
48 13 1. If the certificate of organization or an operating
48 14 agreement does not specify the time or the events upon the
48 15 happening of which a member may dissociate, a member may
48 16 dissociate from the limited liability company in the event any
48 17 amendment to the certificate of organization or operating
48 18 agreement that is adopted over the member's written dissent
48 19 adversely affects the rights or preferences of the dissenting
48 20 member's transferable interest in any of the ways described in
48 21 paragraphs "a" through "f". A dissociation in the event of
48 22 such dissent and adverse effect is deemed to have occurred as
48 23 of the effective date of the amendment, if the member gives
48 24 notice to the limited liability company not more than sixty
48 25 days after the date of the amendment. In valuing the member's
48 26 distribution pursuant to this subsection, any depreciation in
48 27 anticipation of the amendment shall be excluded. An amendment
48 28 that does any of the following is subject to this section:
48 29 a. Alters or abolishes a member's right to receive a
48 30 distribution.
48 31 b. Alters or abolishes a member's right to voluntarily
48 32 dissociate.
48 33 c. Alters or abolishes a member's right to vote on any
48 34 matter, except as the rights may be altered or abolished
48 35 through the acceptance of contributions or the making of
49 1 contribution agreements.
49 2 d. Alters or abolishes a member's preemptive right to make
49 3 contributions.
49 4 e. Establishes or changes the conditions for or
49 5 consequences of expulsion.
49 6 f. Waives the application of this section to the limited
49 7 liability company.
49 8 2. A member dissociating under this section is not liable
49 9 for damages for the breach of any agreement not to withdraw.
49 10 3. This section applies to a limited liability company
49 11 whose original articles of organization or certificate of
49 12 organization is filed with the secretary of state on or after
49 13 July 1, 1997.
49 14 4. This section applies to a limited liability company
49 15 whose original articles of organization are filed with the
49 16 secretary of state and effective on or prior to June 30, 1997,
49 17 if such company's operating agreement provides that it is
49 18 subject to this section.
49 19 5. The operating agreement of a limited liability company
49 20 may waive the applicability of this section to the company and
49 21 its members.
49 22 ARTICLE 7
49 23 DISSOLUTION AND WINDING UP
49 24 Sec. 49. NEW SECTION. 489.701 EVENTS CAUSING
49 25 DISSOLUTION.
49 26 1. A limited liability company is dissolved, and its
49 27 activities must be wound up, upon the occurrence of any of the
49 28 following:
49 29 a. An event or circumstance that the operating agreement
49 30 states causes dissolution.
49 31 b. The consent of all the members.
49 32 c. Once the company has at least one member, the passage
49 33 of ninety consecutive days during which the company has no
49 34 members.
49 35 d. On application by a member, the entry by a district
50 1 court of an order dissolving the company on the grounds that
50 2 any of the following applies:
50 3 (1) The conduct of all or substantially all of the
50 4 company's activities is unlawful.
50 5 (2) It is not reasonably practicable to carry on the
50 6 company's activities in conformity with the certificate of
50 7 organization and the operating agreement.
50 8 e. On application by a member or transferee, the entry by
50 9 a district court of an order dissolving the company on the
50 10 grounds that the managers or those members in control of the
50 11 company have done any of the following:
50 12 (1) Have acted, are acting, or will act in a manner that
50 13 is illegal or fraudulent.
50 14 (2) Have acted or are acting in a manner that is
50 15 oppressive and was, is, or will be directly harmful to the
50 16 applicant.
50 17 2. In a proceeding brought under subsection 1, paragraph
50 18 "e", the court may order a remedy other than dissolution.
50 19 Sec. 50. NEW SECTION. 489.702 WINDING UP.
50 20 1. A dissolved limited liability company shall wind up its
50 21 activities, and the company continues after dissolution only
50 22 for the purpose of winding up.
50 23 2. In winding up its activities, all of the following
50 24 apply to a limited liability company:
50 25 a. It shall discharge the company's debts, obligations, or
50 26 other liabilities, settle and close the company's activities,
50 27 and marshal and distribute the assets of the company.
50 28 b. It may do all of the following:
50 29 (1) Deliver to the secretary of state for filing a
50 30 statement of dissolution stating the name of the company and
50 31 that the company is dissolved.
50 32 (2) Preserve the company activities and property as a
50 33 going concern for a reasonable time.
50 34 (3) Prosecute and defend actions and proceedings, whether
50 35 civil, criminal, or administrative.
51 1 (4) Transfer the company's property.
51 2 (5) Settle disputes by mediation or arbitration.
51 3 (6) Deliver to the secretary of state for filing a
51 4 statement of termination stating the name of the company and
51 5 that the company is terminated.
51 6 (7) Perform other acts necessary or appropriate to the
51 7 winding up.
51 8 3. If a dissolved limited liability company has no
51 9 members, the legal representative of the last person to have
51 10 been a member may wind up the activities of the company. If
51 11 the person does so, the person has the powers of a sole
51 12 manager under section 489.407, subsection 3, and is deemed to
51 13 be a manager for the purposes of section 489.304, subsection
51 14 1, paragraph "b".
51 15 4. If the legal representative under subsection 3 declines
51 16 or fails to wind up the company's activities, a person may be
51 17 appointed to do so by the consent of transferees owning a
51 18 majority of the rights to receive distributions as transferees
51 19 at the time the consent is to be effective. All of the
51 20 following apply to a person appointed under this subsection:
51 21 a. The person has the powers of a sole manager under
51 22 section 489.407, subsection 3, and is deemed to be a manager
51 23 for the purposes of section 489.304, subsection 1, paragraph
51 24 "b".
51 25 b. The person shall promptly deliver to the secretary of
51 26 state for filing an amendment to the company's certificate of
51 27 organization to do all of the following:
51 28 (1) State that the company has no members.
51 29 (2) State that the person has been appointed pursuant to
51 30 this subsection to wind up the company.
51 31 (3) Provide the street and mailing addresses of the
51 32 person.
51 33 5. The district court may order judicial supervision of
51 34 the winding up of a dissolved limited liability company,
51 35 including the appointment of a person to wind up the company's
52 1 activities pursuant to any of the following:
52 2 a. On application of a member, if the applicant
52 3 establishes good cause.
52 4 b. On the application of a transferee, if all of the
52 5 following apply:
52 6 (1) The company does not have any members.
52 7 (2) The legal representative of the last person to have
52 8 been a member declines or fails to wind up the company's
52 9 activities.
52 10 (3) Within a reasonable time following the dissolution a
52 11 person has not been appointed pursuant to subsection 3.
52 12 c. In connection with a proceeding under section 489.701,
52 13 subsection 1, paragraph "d" or "e".
52 14 Sec. 51. NEW SECTION. 489.703 KNOWN CLAIMS AGAINST
52 15 DISSOLVED LIMITED LIABILITY COMPANY.
52 16 1. Except as otherwise provided in subsection 4, a
52 17 dissolved limited liability company may give notice of a known
52 18 claim under subsection 2, which has the effect as provided in
52 19 subsection 3.
52 20 2. A dissolved limited liability company may in a record
52 21 notify its known claimants of the dissolution. The notice
52 22 must do all of the following:
52 23 a. Specify the information required to be included in a
52 24 claim.
52 25 b. Provide a mailing address to which the claim is to be
52 26 sent.
52 27 c. State the deadline for receipt of the claim, which may
52 28 not be less than one hundred twenty days after the date the
52 29 notice is received by the claimant.
52 30 d. State that the claim will be barred if not received by
52 31 the deadline.
52 32 3. A claim against a dissolved limited liability company
52 33 is barred if the requirements of subsection 2 are met and any
52 34 of the following applies:
52 35 a. The claim is not received by the specified deadline.
53 1 b. If the claim is timely received but rejected by the
53 2 company, all of the following apply:
53 3 (1) The company causes the claimant to receive a notice in
53 4 a record stating that the claim is rejected and will be barred
53 5 unless the claimant commences an action against the company to
53 6 enforce the claim within ninety days after the claimant
53 7 receives the notice.
53 8 (2) The claimant does not commence the required action
53 9 within the ninety days.
53 10 4. This section does not apply to a claim based on an
53 11 event occurring after the effective date of dissolution or a
53 12 liability that on that date is contingent.
53 13 Sec. 52. NEW SECTION. 489.704 OTHER CLAIMS AGAINST
53 14 DISSOLVED LIMITED LIABILITY COMPANY.
53 15 1. A dissolved limited liability company may publish
53 16 notice of its dissolution and request persons having claims
53 17 against the company to present them in accordance with the
53 18 notice.
53 19 2. The notice authorized by subsection 1 must do all of
53 20 the following:
53 21 a. Be published at least once in a newspaper of general
53 22 circulation in the county in this state in which the dissolved
53 23 limited liability company's principal office is located or, if
53 24 it has none in this state, in the county in which the
53 25 company's registered office is or was last located.
53 26 b. Describe the information required to be contained in a
53 27 claim and provide a mailing address to which the claim is to
53 28 be sent.
53 29 c. State that a claim against the company is barred unless
53 30 an action to enforce the claim is commenced within five years
53 31 after publication of the notice.
53 32 3. If a dissolved limited liability company publishes a
53 33 notice in accordance with subsection 2, unless the claimant
53 34 commences an action to enforce the claim against the company
53 35 within five years after the publication date of the notice,
54 1 the claim of each of the following claimants is barred:
54 2 a. A claimant that did not receive notice in a record
54 3 under section 489.703.
54 4 b. A claimant whose claim was timely sent to the company
54 5 but not acted on.
54 6 c. A claimant whose claim is contingent at, or based on an
54 7 event occurring after, the effective date of dissolution.
54 8 4. A claim not barred under this section may be enforced
54 9 as follows:
54 10 a. Against a dissolved limited liability company, to the
54 11 extent of its undistributed assets.
54 12 b. If assets of the company have been distributed after
54 13 dissolution, against a member or transferee to the extent of
54 14 that person's proportionate share of the claim or of the
54 15 assets distributed to the member or transferee after
54 16 dissolution, whichever is less, but a person's total liability
54 17 for all claims under this paragraph does not exceed the total
54 18 amount of assets distributed to the person after dissolution.
54 19 Sec. 53. NEW SECTION. 489.705 ADMINISTRATIVE
54 20 DISSOLUTION.
54 21 1. The secretary of state may dissolve a limited liability
54 22 company administratively if the company does not do any of the
54 23 following:
54 24 a. Pay, within sixty days after the due date, any fee,
54 25 tax, or penalty due to the secretary of state under this
54 26 chapter or law other than this chapter.
54 27 b. Deliver, within sixty days after the due date, its
54 28 biennial report to the secretary of state.
54 29 2. If the secretary of state determines that a ground
54 30 exists for administratively dissolving a limited liability
54 31 company, the secretary of state shall file a record of the
54 32 determination and serve the company with a copy of the filed
54 33 record.
54 34 3. If within sixty days after service of the copy pursuant
54 35 to subsection 2 a limited liability company does not correct
55 1 each ground for dissolution or demonstrate to the reasonable
55 2 satisfaction of the secretary of state that each ground
55 3 determined by the secretary of state does not exist, the
55 4 secretary of state shall dissolve the company administratively
55 5 by preparing, signing, and filing a declaration of dissolution
55 6 that states the grounds for dissolution. The secretary of
55 7 state shall serve the company with a copy of the filed
55 8 declaration.
55 9 4. A limited liability company that has been
55 10 administratively dissolved continues in existence but, subject
55 11 to section 489.706, may carry on only activities necessary to
55 12 wind up its activities and liquidate its assets under sections
55 13 489.702 and 489.708 and to notify claimants under sections
55 14 489.703 and 489.704.
55 15 5. The administrative dissolution of a limited liability
55 16 company does not terminate the authority of its registered
55 17 agent for service of process.
55 18 Sec. 54. NEW SECTION. 489.706 REINSTATEMENT FOLLOWING
55 19 ADMINISTRATIVE DISSOLUTION.
55 20 1. A limited liability company administratively dissolved
55 21 under section 489.705 may apply to the secretary of state for
55 22 reinstatement at any time after the effective date of
55 23 dissolution. The application must be delivered to the
55 24 secretary of state and meet all of the following requirements:
55 25 a. Recite the name of the limited liability company at its
55 26 date of dissolution and the effective date of its
55 27 administrative dissolution.
55 28 b. State that the ground or grounds for dissolution as
55 29 provided in section 489.705 have been eliminated.
55 30 c. If the application is received more than five years
55 31 after the effective date of the administrative dissolution,
55 32 state a name that satisfies the requirements of section
55 33 489.108.
55 34 d. State the federal tax identification number of the
55 35 limited liability company.
56 1 2. The secretary of state shall refer the federal tax
56 2 identification number contained in the application for
56 3 reinstatement to the department of revenue. The department of
56 4 revenue shall report to the secretary of state the tax status
56 5 of the limited liability company. If the department reports
56 6 to the secretary of state that a filing delinquency or
56 7 liability exists against the limited liability company, the
56 8 secretary of state shall not cancel the declaration of
56 9 dissolution until the filing delinquency or liability is
56 10 satisfied.
56 11 3. If the secretary of state determines that the
56 12 application contains the information required by subsection 1,
56 13 and that a delinquency or liability reported pursuant to
56 14 subsection 2 has been satisfied, and that the information is
56 15 correct, the secretary of state shall cancel the declaration
56 16 of dissolution and prepare a certificate of reinstatement that
56 17 recites the secretary of state's determination and the
56 18 effective date of reinstatement, file the original of the
56 19 certificate, and serve a copy on the limited liability company
56 20 under section 489.116. If the limited liability company's
56 21 name in subsection 1, paragraph "c", is different than the
56 22 name in subsection 1, paragraph "a", the certificate of
56 23 reinstatement shall constitute an amendment to the limited
56 24 liability company's certificate of organization insofar as it
56 25 pertains to its name. A limited liability company shall not
56 26 relinquish the right to retain its name as provided in section
56 27 489.108, if the reinstatement is effective within five years
56 28 of the effective date of the limited liability company's
56 29 dissolution.
56 30 4. When the reinstatement is effective, it relates back to
56 31 and takes effect as of the effective date of the
56 32 administrative dissolution as if the administrative
56 33 dissolution had never occurred.
56 34 Sec. 55. NEW SECTION. 489.707 APPEAL FROM REJECTION OF
56 35 REINSTATEMENT.
57 1 1. If the secretary of state rejects a limited liability
57 2 company's application for reinstatement following
57 3 administrative dissolution, the secretary of state shall
57 4 prepare, sign, and file a notice that explains the reason for
57 5 rejection and serve the company with a copy of the notice.
57 6 2. Within thirty days after service of a notice of
57 7 rejection of reinstatement under subsection 1, a limited
57 8 liability company may appeal from the rejection by petitioning
57 9 the district court to set aside the dissolution. The petition
57 10 must be served on the secretary of state and contain a copy of
57 11 the secretary of state's declaration of dissolution, the
57 12 company's application for reinstatement, and the secretary of
57 13 state's notice of rejection.
57 14 3. The court may order the secretary of state to reinstate
57 15 a dissolved limited liability company or take other action the
57 16 court considers appropriate.
57 17 Sec. 56. NEW SECTION. 489.708 DISTRIBUTION OF ASSETS IN
57 18 WINDING UP LIMITED LIABILITY COMPANY'S ACTIVITIES.
57 19 1. In winding up its activities, a limited liability
57 20 company must apply its assets to discharge its obligations to
57 21 creditors, including members that are creditors.
57 22 2. After a limited liability company complies with
57 23 subsection 1, any surplus must be distributed in the following
57 24 order, subject to any charging order in effect under section
57 25 489.503:
57 26 a. To each person owning a transferable interest that
57 27 reflects contributions made by a member and not previously
57 28 returned, an amount equal to the value of the unreturned
57 29 contributions.
57 30 b. In equal shares among members and dissociated members,
57 31 except to the extent necessary to comply with any transfer
57 32 effective under section 489.502.
57 33 3. If a limited liability company does not have sufficient
57 34 surplus to comply with subsection 2, paragraph "a", any
57 35 surplus must be distributed among the owners of transferable
58 1 interests in proportion to the value of their respective
58 2 unreturned contributions.
58 3 4. All distributions made under subsections 2 and 3 must
58 4 be paid in money.
58 5 ARTICLE 8
58 6 FOREIGN LIMITED LIABILITY COMPANIES
58 7 Sec. 57. NEW SECTION. 489.801 GOVERNING LAW.
58 8 1. The law of the state or other jurisdiction under which
58 9 a foreign limited liability company is formed governs all of
58 10 the following:
58 11 a. The internal affairs of the company.
58 12 b. The liability of a member as member and a manager as
58 13 manager for the debts, obligations, or other liabilities of
58 14 the company.
58 15 2. A foreign limited liability company shall not be denied
58 16 a certificate of authority by reason of any difference between
58 17 the law of the jurisdiction under which the company is formed
58 18 and the law of this state.
58 19 3. A certificate of authority does not authorize a foreign
58 20 limited liability company to engage in any business or
58 21 exercise any power that a limited liability company shall not
58 22 engage in or exercise in this state.
58 23 Sec. 58. NEW SECTION. 489.802 APPLICATION FOR
58 24 CERTIFICATE OF AUTHORITY.
58 25 1. A foreign limited liability company may apply for a
58 26 certificate of authority to transact business in this state by
58 27 delivering an application to the secretary of state for
58 28 filing. The application must state all of the following:
58 29 a. The name of the company and, if the name does not
58 30 comply with section 489.108, an alternate name adopted
58 31 pursuant to section 489.805, subsection 1.
58 32 b. The name of the state or other jurisdiction under whose
58 33 law the company is formed.
58 34 c. The street and mailing addresses of the company's
58 35 principal office and, if the law of the jurisdiction under
59 1 which the company is formed require the company to maintain an
59 2 office in that jurisdiction, the street and mailing addresses
59 3 of the required office.
59 4 d. The name and street and mailing addresses of the
59 5 company's initial registered agent for service of process in
59 6 this state.
59 7 2. A foreign limited liability company shall deliver with
59 8 a completed application under subsection 1 a certificate of
59 9 existence or a record of similar import signed by the
59 10 secretary of state or other official having custody of the
59 11 company's publicly filed records in the state or other
59 12 jurisdiction under whose law the company is formed.
59 13 Sec. 59. NEW SECTION. 489.803 ACTIVITIES NOT
59 14 CONSTITUTING TRANSACTING BUSINESS.
59 15 1. Activities of a foreign limited liability company which
59 16 do not constitute transacting business in this state within
59 17 the meaning of this article include all of the following:
59 18 a. Maintaining, defending, or settling an action or
59 19 proceeding.
59 20 b. Carrying on any activity concerning its internal
59 21 affairs, including holding meetings of its members or
59 22 managers.
59 23 c. Maintaining accounts in financial institutions.
59 24 d. Maintaining offices or agencies for the transfer,
59 25 exchange, and registration of the company's own securities or
59 26 maintaining trustees or depositories with respect to those
59 27 securities.
59 28 e. Selling through independent contractors.
59 29 f. Soliciting or obtaining orders, whether by mail or
59 30 electronic means or through employees or agents or otherwise,
59 31 if the orders require acceptance outside this state before
59 32 they become contracts.
59 33 g. Creating or acquiring indebtedness, mortgages, or
59 34 security interests in real or personal property.
59 35 h. Securing or collecting debts or enforcing mortgages or
60 1 other security interests in property securing the debts and
60 2 holding, protecting, or maintaining property so acquired.
60 3 i. Conducting an isolated transaction that is completed
60 4 within thirty days and is not in the course of similar
60 5 transactions.
60 6 j. Transacting business in interstate commerce.
60 7 2. For purposes of this article, the ownership in this
60 8 state of income=producing real property or tangible personal
60 9 property, other than property excluded under subsection 1,
60 10 constitutes transacting business in this state.
60 11 3. This section does not apply in determining the contacts
60 12 or activities that may subject a foreign limited liability
60 13 company to service of process, taxation, or regulation under
60 14 law of this state other than this chapter.
60 15 Sec. 60. NEW SECTION. 489.804 FILING OF CERTIFICATE OF
60 16 AUTHORITY.
60 17 Unless the secretary of state determines that an
60 18 application for a certificate of authority does not comply
60 19 with the filing requirements of this chapter, the secretary of
60 20 state, upon payment of all filing fees, shall file the
60 21 application of a foreign limited liability company, prepare,
60 22 sign, and file a certificate of authority to transact business
60 23 in this state, and send a copy of the filed certificate,
60 24 together with a receipt for the fees, to the company or its
60 25 representative.
60 26 Sec. 61. NEW SECTION. 489.805 NONCOMPLYING NAME OF
60 27 FOREIGN LIMITED LIABILITY COMPANY.
60 28 1. A foreign limited liability company whose name does not
60 29 comply with section 489.108 shall not obtain a certificate of
60 30 authority until it adopts, for the purpose of transacting
60 31 business in this state, an alternate name that complies with
60 32 section 489.108. After obtaining a certificate of authority
60 33 with an alternate name, a foreign limited liability company
60 34 shall transact business in this state under the alternate
60 35 name.
61 1 2. If a foreign limited liability company authorized to
61 2 transact business in this state changes its name to one that
61 3 does not comply with section 489.108, it may not thereafter
61 4 transact business in this state until it complies with
61 5 subsection 1 and obtains an amended certificate of authority.
61 6 Sec. 62. NEW SECTION. 489.806 REVOCATION OF CERTIFICATE
61 7 OF AUTHORITY.
61 8 1. A certificate of authority of a foreign limited
61 9 liability company to transact business in this state may be
61 10 revoked by the secretary of state in the manner provided in
61 11 subsections 2 and 3 if the company does not do any of the
61 12 following:
61 13 a. Pay, within sixty days after the due date, any fee,
61 14 tax, or penalty due the secretary of state under this chapter
61 15 or law other than this chapter.
61 16 b. Deliver, within sixty days after the due date, its
61 17 biennial report required under section 489.209.
61 18 c. Appoint and maintain a registered agent for service of
61 19 process as required by section 489.113, subsection 2.
61 20 d. Deliver for filing a statement of a change under
61 21 section 489.114 within thirty days after a change has occurred
61 22 in the name or address of the registered agent.
61 23 2. To revoke a certificate of authority of a foreign
61 24 limited liability company, the secretary of state must
61 25 prepare, sign, and file a notice of revocation and send a copy
61 26 to the company's registered agent for service of process in
61 27 this state, or if the company does not appoint and maintain a
61 28 proper registered agent in this state, to the company's
61 29 registered office. The notice must state all of the
61 30 following:
61 31 a. The revocation's effective date, which must be at least
61 32 sixty days after the date the secretary of state sends the
61 33 copy.
61 34 b. The grounds for revocation under subsection 1.
61 35 3. The authority of a foreign limited liability company to
62 1 transact business in this state ceases on the effective date
62 2 in the notice of revocation unless before that date the
62 3 company cures each ground for revocation stated in the notice
62 4 filed under subsection 2. If the company cures each ground,
62 5 the secretary of state shall file a record so stating.
62 6 Sec. 63. NEW SECTION. 489.807 CANCELLATION OF
62 7 CERTIFICATE OF AUTHORITY.
62 8 1. To cancel its certificate of authority to transact
62 9 business in this state, a foreign limited liability company
62 10 must deliver to the secretary of state for filing a notice of
62 11 cancellation stating all of the following:
62 12 a. The name of the foreign limited liability company and
62 13 that the company desires to cancel its certificate of
62 14 authority.
62 15 b. That the foreign limited liability company revokes the
62 16 authority of its registered agent to accept service on its
62 17 behalf and appoints the secretary of state as its agent for
62 18 service of process in any proceeding based on a cause of
62 19 action arising during the time it was authorized to transact
62 20 business in this state.
62 21 c. A mailing address to which the secretary of state may
62 22 mail a copy of any process served on the secretary of state
62 23 under paragraph "b".
62 24 d. A commitment to notify the secretary of state in the
62 25 future of any change in the mailing address of the foreign
62 26 limited liability company.
62 27 2. The certificate is canceled when the notice becomes
62 28 effective.
62 29 Sec. 64. NEW SECTION. 489.808 EFFECT OF FAILURE TO HAVE
62 30 CERTIFICATE OF AUTHORITY.
62 31 1. A foreign limited liability company transacting
62 32 business in this state shall not maintain an action or
62 33 proceeding in this state unless it has a certificate of
62 34 authority to transact business in this state.
62 35 2. The failure of a foreign limited liability company to
63 1 have a certificate of authority to transact business in this
63 2 state does not impair the validity of a contract or act of the
63 3 company or prevent the company from defending an action or
63 4 proceeding in this state.
63 5 3. The successor to a foreign limited liability company
63 6 that transacted business in this state without a certificate
63 7 of authority and the assignee of a cause of action arising out
63 8 of that business shall not maintain a proceeding based on that
63 9 cause of action in any court in this state until the foreign
63 10 limited liability company or its successor obtains a
63 11 certificate of authority.
63 12 4. A district court may stay a proceeding commenced by a
63 13 foreign limited liability company, its successor, or assignee
63 14 until it determines whether the foreign limited liability
63 15 company or its successor or assignee requires a certificate of
63 16 authority. If it so determines, the district court may
63 17 further stay the proceeding until the foreign limited
63 18 liability company or its successor or assignee obtains the
63 19 certificate.
63 20 5. A foreign limited liability company is liable for a
63 21 civil penalty not to exceed a total of one thousand dollars if
63 22 it transacts business in this state without a certificate of
63 23 authority. The attorney general may collect penalties due
63 24 under this subsection.
63 25 6. A member or manager of a foreign limited liability
63 26 company is not liable for the debts, obligations, or other
63 27 liabilities of the company solely because the company
63 28 transacted business in this state without a certificate of
63 29 authority.
63 30 7. If a foreign limited liability company transacts
63 31 business in this state without a certificate of authority or
63 32 cancels its certificate of authority, it appoints the
63 33 secretary of state as its registered agent for service of
63 34 process for rights of action arising out of the transaction of
63 35 business in this state.
64 1 Sec. 65. NEW SECTION. 489.809 ACTION BY ATTORNEY
64 2 GENERAL.
64 3 The attorney general may maintain an action to enjoin a
64 4 foreign limited liability company from transacting business in
64 5 this state in violation of this article.
64 6 ARTICLE 9
64 7 ACTIONS BY MEMBERS
64 8 Sec. 66. NEW SECTION. 489.901 DIRECT ACTION BY MEMBER.
64 9 1. Subject to subsection 2, a member may maintain a direct
64 10 action against another member, a manager, or the limited
64 11 liability company to enforce the member's rights and otherwise
64 12 protect the member's interests, including rights and interests
64 13 under the operating agreement or this chapter or arising
64 14 independently of the membership relationship.
64 15 2. A member maintaining a direct action under this section
64 16 must plead and prove an actual or threatened injury that is
64 17 not solely the result of an injury suffered or threatened to
64 18 be suffered by the limited liability company.
64 19 Sec. 67. NEW SECTION. 489.902 DERIVATIVE ACTION.
64 20 A member may maintain a derivative action to enforce a
64 21 right of a limited liability company as follows:
64 22 1. The member first makes a demand on the other members in
64 23 a member=managed limited liability company, or the managers of
64 24 a manager=managed limited liability company, requesting that
64 25 they cause the company to bring an action to enforce the
64 26 right, and the managers or other members do not bring the
64 27 action within ninety days from the date the demand was made
64 28 unless the member has earlier been notified that the demand
64 29 has been rejected by the company or unless irreparable injury
64 30 to the company would result by waiting for the expiration of
64 31 the ninety=day period.
64 32 2. A demand under subsection 1 would be futile.
64 33 Sec. 68. NEW SECTION. 489.903 PROPER PLAINTIFF.
64 34 1. Except as otherwise provided in subsection 2, a
64 35 derivative action under section 489.902 may be maintained only
65 1 by a person that is a member at the time the action is
65 2 commenced and remains a member while the action continues.
65 3 2. If the sole plaintiff in a derivative action dies while
65 4 the action is pending, the court may permit another member of
65 5 the limited liability company to be substituted as plaintiff.
65 6 Sec. 69. NEW SECTION. 489.904 PLEADING.
65 7 In a derivative action under section 489.902, the complaint
65 8 must state with particularity any of the following:
65 9 1. The date and content of the plaintiff's demand and the
65 10 response to the demand by the managers or other members.
65 11 2. If a demand has not been made, the reasons a demand
65 12 under section 489.902, subsection 1, would be futile.
65 13 Sec. 70. NEW SECTION. 489.906 PROCEEDS AND EXPENSES.
65 14 1. Except as otherwise provided in subsection 2, all of
65 15 the following apply:
65 16 a. Any proceeds or other benefits of a derivative action
65 17 under section 489.902, whether by judgment, compromise, or
65 18 settlement, belong to the limited liability company and not to
65 19 the plaintiff.
65 20 b. If the plaintiff receives any proceeds, the plaintiff
65 21 shall remit them immediately to the company.
65 22 2. If a derivative action under section 489.902 is
65 23 successful in whole or in part, the court may award the
65 24 plaintiff reasonable expenses, including reasonable attorney
65 25 fees and costs, from the recovery of the limited liability
65 26 company.
65 27 ARTICLE 10
65 28 MERGER, CONVERSION, AND DOMESTICATION
65 29 Sec. 71. NEW SECTION. 489.1001 DEFINITIONS.
65 30 As used in this article:
65 31 1. "Constituent limited liability company" means a
65 32 constituent organization that is a limited liability company.
65 33 2. "Constituent organization" means an organization that
65 34 is party to a merger.
65 35 3. "Converted organization" means the organization into
66 1 which a converting organization converts pursuant to sections
66 2 489.1006 through 489.1009.
66 3 4. "Converting limited liability company" means a
66 4 converting organization that is a limited liability company.
66 5 5. "Converting organization" means an organization that
66 6 converts into another organization pursuant to section
66 7 489.1006.
66 8 6. "Domesticated company" means the company that exists
66 9 after a domesticating foreign limited liability company or
66 10 limited liability company effects a domestication pursuant to
66 11 sections 489.1010 through 489.1013.
66 12 7. "Domesticating company" means the company that effects
66 13 a domestication pursuant to sections 489.1010 through
66 14 489.1013.
66 15 8. "Governing statute" means the statute that governs an
66 16 organization's internal affairs.
66 17 9. "Organization" means a general partnership, including a
66 18 limited liability partnership, limited partnership, including
66 19 a limited liability limited partnership, limited liability
66 20 company, business trust, corporation, or any other person
66 21 having a governing statute. The term includes a domestic or
66 22 foreign organization regardless of whether organized for
66 23 profit.
66 24 10. "Organizational documents" means all of the following:
66 25 a. For a domestic or foreign general partnership, its
66 26 partnership agreement.
66 27 b. For a limited partnership or foreign limited
66 28 partnership, its certificate of limited partnership and
66 29 partnership agreement.
66 30 c. For a domestic or foreign limited liability company,
66 31 its certificate or articles of organization and operating
66 32 agreement, or comparable records as provided in its governing
66 33 statute.
66 34 d. For a business trust, its agreement of trust and
66 35 declaration of trust.
67 1 e. For a domestic or foreign corporation for profit, its
67 2 articles of incorporation, bylaws, and other agreements among
67 3 its shareholders which are authorized by its governing
67 4 statute, or comparable records as provided in its governing
67 5 statute.
67 6 f. For any other organization, the basic records that
67 7 create the organization and determine its internal governance
67 8 and the relations among the persons that own it, have an
67 9 interest in it, or are members of it.
67 10 11. "Personal liability" means liability for a debt,
67 11 obligation, or other liability of an organization which is
67 12 imposed on a person that co=owns, has an interest in, or is a
67 13 member of the organization by any of the following:
67 14 a. The governing statute solely by reason of the person
67 15 co=owning, having an interest in, or being a member of the
67 16 organization.
67 17 b. The organization's organizational documents under a
67 18 provision of the governing statute authorizing those documents
67 19 to make one or more specified persons liable for all or
67 20 specified debts, obligations, or other liabilities of the
67 21 organization solely by reason of the person or persons
67 22 co=owning, having an interest in, or being a member of the
67 23 organization.
67 24 12. "Surviving organization" means an organization into
67 25 which one or more other organizations are merged whether the
67 26 organization preexisted the merger or was created by the
67 27 merger.
67 28 Sec. 72. NEW SECTION. 489.1002 MERGER.
67 29 1. A limited liability company may merge with one or more
67 30 other constituent organizations pursuant to this section,
67 31 sections 489.1003 through 489.1005, and a plan of merger, if
67 32 all of the following apply:
67 33 a. The governing statute of each of the other
67 34 organizations authorizes the merger.
67 35 b. The merger is not prohibited by the law of a
68 1 jurisdiction that enacted any of the governing statutes.
68 2 c. Each of the other organizations complies with its
68 3 governing statute in effecting the merger.
68 4 2. A plan of merger must be in a record and must include
68 5 all of the following:
68 6 a. The name and form of each constituent organization.
68 7 b. The name and form of the surviving organization and, if
68 8 the surviving organization is to be created by the merger, a
68 9 statement to that effect.
68 10 c. The terms and conditions of the merger, including the
68 11 manner and basis for converting the interests in each
68 12 constituent organization into any combination of money,
68 13 interests in the surviving organization, and other
68 14 consideration.
68 15 d. If the surviving organization is to be created by the
68 16 merger, the surviving organization's organizational documents
68 17 that are proposed to be in a record.
68 18 e. If the surviving organization is not to be created by
68 19 the merger, any amendments to be made by the merger to the
68 20 surviving organization's organizational documents that are, or
68 21 are proposed to be, in a record.
68 22 Sec. 73. NEW SECTION. 489.1003 ACTION ON PLAN OF MERGER
68 23 BY CONSTITUENT LIMITED LIABILITY COMPANY.
68 24 1. Subject to section 489.1014, a plan of merger must be
68 25 consented to by all the members of a constituent limited
68 26 liability company.
68 27 2. Subject to section 489.1014 and any contractual rights,
68 28 after a merger is approved, and at any time before articles of
68 29 merger are delivered to the secretary of state for filing
68 30 under section 489.1004, a constituent limited liability
68 31 company may amend the plan or abandon the merger as follows:
68 32 a. As provided in the plan.
68 33 b. Except as otherwise prohibited in the plan, with the
68 34 same consent as was required to approve the plan.
68 35 Sec. 74. NEW SECTION. 489.1004 FILINGS REQUIRED FOR
69 1 MERGER == EFFECTIVE DATE.
69 2 1. After each constituent organization has approved a
69 3 merger, articles of merger must be signed on behalf of all of
69 4 the following:
69 5 a. Each constituent limited liability company, as provided
69 6 in section 489.203, subsection 1.
69 7 b. Each other constituent organization, as provided in its
69 8 governing statute.
69 9 2. Articles of merger under this section must include all
69 10 of the following:
69 11 a. The name and form of each constituent organization and
69 12 the jurisdiction of its governing statute.
69 13 b. The name and form of the surviving organization, the
69 14 jurisdiction of its governing statute, and, if the surviving
69 15 organization is created by the merger, a statement to that
69 16 effect.
69 17 c. The date the merger is effective under the governing
69 18 statute of the surviving organization.
69 19 d. If the surviving organization is to be created by the
69 20 merger as follows:
69 21 (1) If it will be a limited liability company, the
69 22 company's certificate of organization.
69 23 (2) If it will be an organization other than a limited
69 24 liability company, the organizational document that creates
69 25 the organization that is in a public record.
69 26 e. If the surviving organization preexists the merger, any
69 27 amendments provided for in the plan of merger for the
69 28 organizational document that created the organization that are
69 29 in a public record.
69 30 f. A statement as to each constituent organization that
69 31 the merger was approved as required by the organization's
69 32 governing statute.
69 33 g. If the surviving organization is a foreign organization
69 34 not authorized to transact business in this state, the street
69 35 and mailing addresses of an office that the secretary of state
70 1 may use for the purposes of section 489.1005, subsection 2.
70 2 h. Any additional information required by the governing
70 3 statute of any constituent organization.
70 4 3. Each constituent limited liability company shall
70 5 deliver the articles of merger for filing in the office of the
70 6 secretary of state.
70 7 4. A merger becomes effective under this article as
70 8 follows:
70 9 a. If the surviving organization is a limited liability
70 10 company, upon the later of any of the following:
70 11 (1) Compliance with subsection 3.
70 12 (2) Subject to section 489.205, subsection 3, as specified
70 13 in the articles of merger.
70 14 b. If the surviving organization is not a limited
70 15 liability company, as provided by the governing statute of the
70 16 surviving organization.
70 17 Sec. 75. NEW SECTION. 489.1005 EFFECT OF MERGER.
70 18 1. When a merger becomes effective all of the following
70 19 apply:
70 20 a. The surviving organization continues or comes into
70 21 existence.
70 22 b. Each constituent organization that merges into the
70 23 surviving organization ceases to exist as a separate entity.
70 24 c. All property owned by each constituent organization
70 25 that ceases to exist vests in the surviving organization.
70 26 d. All debts, obligations, or other liabilities of each
70 27 constituent organization that ceases to exist continue as
70 28 debts, obligations, or other liabilities of the surviving
70 29 organization.
70 30 e. An action or proceeding pending by or against any
70 31 constituent organization that ceases to exist may be continued
70 32 as if the merger had not occurred.
70 33 f. Except as prohibited by other law, all of the rights,
70 34 privileges, immunities, powers, and purposes of each
70 35 constituent organization that ceases to exist vest in the
71 1 surviving organization.
71 2 g. Except as otherwise provided in the plan of merger, the
71 3 terms and conditions of the plan of merger take effect.
71 4 h. Except as otherwise agreed, if a constituent limited
71 5 liability company ceases to exist, the merger does not
71 6 dissolve the limited liability company for the purposes of
71 7 article 7.
71 8 i. If the surviving organization is created by the merger,
71 9 any of the following applies:
71 10 (1) If it is a limited liability company, the certificate
71 11 of organization becomes effective.
71 12 (2) If it is an organization other than a limited
71 13 liability company, the organizational document that creates
71 14 the organization becomes effective.
71 15 j. If the surviving organization preexisted the merger,
71 16 any amendments provided for in the articles of merger for the
71 17 organizational document that created the organization become
71 18 effective.
71 19 2. A surviving organization that is a foreign organization
71 20 consents to the jurisdiction of the courts of this state to
71 21 enforce any debt, obligation, or other liability owed by a
71 22 constituent organization, if before the merger the constituent
71 23 organization was subject to suit in this state on the debt,
71 24 obligation, or other liability. A surviving organization that
71 25 is a foreign organization and not authorized to transact
71 26 business in this state appoints the secretary of state as its
71 27 registered agent for service of process for the purposes of
71 28 enforcing a debt, obligation, or other liability under this
71 29 subsection. Service on the secretary of state under this
71 30 subsection must be made in the same manner and has the same
71 31 consequences as in section 489.116, subsections 3 and 4.
71 32 Sec. 76. NEW SECTION. 489.1006 CONVERSION.
71 33 1. An organization other than a limited liability company
71 34 or a foreign limited liability company may convert to a
71 35 limited liability company, and a limited liability company may
72 1 convert to an organization other than a foreign limited
72 2 liability company pursuant to this section, sections 489.1007
72 3 through 489.1009, and a plan of conversion, if all of the
72 4 following apply:
72 5 a. The other organization's governing statute authorizes
72 6 the conversion.
72 7 b. The conversion is not prohibited by the law of the
72 8 jurisdiction that enacted the other organization's governing
72 9 statute.
72 10 c. The other organization complies with its governing
72 11 statute in effecting the conversion.
72 12 2. A plan of conversion must be in a record and must
72 13 include all of the following:
72 14 a. The name and form of the organization before
72 15 conversion.
72 16 b. The name and form of the organization after conversion.
72 17 c. The terms and conditions of the conversion, including
72 18 the manner and basis for converting interests in the
72 19 converting organization into any combination of money,
72 20 interests in the converted organization, and other
72 21 consideration.
72 22 d. The organizational documents of the converted
72 23 organization that are, or are proposed to be, in a record.
72 24 Sec. 77. NEW SECTION. 489.1007 ACTION ON PLAN OF
72 25 CONVERSION BY CONVERTING LIMITED LIABILITY COMPANY.
72 26 1. Subject to section 489.1014, a plan of conversion must
72 27 be consented to by all the members of a converting limited
72 28 liability company.
72 29 2. Subject to section 489.1014 and any contractual rights,
72 30 after a conversion is approved, and at any time before
72 31 articles of conversion are delivered to the secretary of state
72 32 for filing under section 489.1008, a converting limited
72 33 liability company may amend the plan or abandon the conversion
72 34 as follows:
72 35 a. As provided in the plan.
73 1 b. Except as otherwise prohibited in the plan, by the same
73 2 consent as was required to approve the plan.
73 3 Sec. 78. NEW SECTION. 489.1008 FILINGS REQUIRED FOR
73 4 CONVERSION == EFFECTIVE DATE.
73 5 1. After a plan of conversion is approved, all of the
73 6 following apply:
73 7 a. A converting limited liability company shall deliver to
73 8 the secretary of state for filing articles of conversion,
73 9 which must be signed as provided in section 489.203,
73 10 subsection 1, and must include all of the following:
73 11 (1) A statement that the limited liability company has
73 12 been converted into another organization.
73 13 (2) The name and form of the organization and the
73 14 jurisdiction of its governing statute.
73 15 (3) The date the conversion is effective under the
73 16 governing statute of the converted organization.
73 17 (4) A statement that the conversion was approved as
73 18 required by this chapter.
73 19 (5) A statement that the conversion was approved as
73 20 required by the governing statute of the converted
73 21 organization.
73 22 (6) All documents required to be filed with the secretary
73 23 of state in accordance with the governing statute of the
73 24 converted organization to effectuate the conversion.
73 25 (7) If the converted organization is a foreign
73 26 organization not authorized to transact business in this
73 27 state, the street and mailing addresses of an office which the
73 28 secretary of state may use for the purposes of section
73 29 489.1009, subsection 3.
73 30 b. If the converting organization is not a converting
73 31 limited liability company, the converting organization shall
73 32 deliver to the secretary of state for filing a certificate of
73 33 organization, which must include, in addition to the
73 34 information required by section 489.201, subsection 2, all of
73 35 the following:
74 1 (1) A statement that the converted organization was
74 2 converted from another organization.
74 3 (2) The name and form of that converting organization and
74 4 the jurisdiction of its governing statute.
74 5 (3) A statement that the conversion was approved in a
74 6 manner that complied with the converting organization's
74 7 governing statute.
74 8 2. A conversion becomes effective as follows:
74 9 a. If the converted organization is a limited liability
74 10 company, when the certificate of organization takes effect.
74 11 b. If the converted organization is not a limited
74 12 liability company, as provided by the governing statute of the
74 13 converted organization.
74 14 Sec. 79. NEW SECTION. 489.1009 EFFECT OF CONVERSION.
74 15 1. An organization that has been converted pursuant to
74 16 this article is for all purposes the same entity that existed
74 17 before the conversion.
74 18 2. When a conversion takes effect all of the following
74 19 apply:
74 20 a. All property owned by the converting organization
74 21 remains vested in the converted organization.
74 22 b. All debts, obligations, or other liabilities of the
74 23 converting organization continue as debts, obligations, or
74 24 other liabilities of the converted organization.
74 25 c. An action or proceeding pending by or against the
74 26 converting organization may be continued as if the conversion
74 27 had not occurred.
74 28 d. Except as prohibited by law other than this chapter,
74 29 all of the rights, privileges, immunities, powers, and
74 30 purposes of the converting organization remain vested in the
74 31 converted organization.
74 32 e. Except as otherwise provided in the plan of conversion,
74 33 the terms and conditions of the plan of conversion take
74 34 effect.
74 35 f. Except as otherwise agreed, the conversion does not
75 1 dissolve a converting limited liability company for the
75 2 purposes of article 7.
75 3 3. A converted organization that is a foreign organization
75 4 consents to the jurisdiction of the courts of this state to
75 5 enforce any debt, obligation, or other liability for which the
75 6 converting limited liability company is liable if, before the
75 7 conversion, the converting limited liability company was
75 8 subject to suit in this state on the debt, obligation, or
75 9 other liability. A converted organization that is a foreign
75 10 organization and not authorized to transact business in this
75 11 state appoints the secretary of state as its registered agent
75 12 for service of process for purposes of enforcing a debt,
75 13 obligation, or other liability under this subsection. Service
75 14 on the secretary of state under this subsection must be made
75 15 in the same manner and has the same consequences as in section
75 16 489.116, subsections 3 and 4.
75 17 Sec. 80. NEW SECTION. 489.1010 DOMESTICATION.
75 18 1. A foreign limited liability company may become a
75 19 limited liability company pursuant to this section, sections
75 20 489.1011 through 489.1013, and a plan of domestication, if all
75 21 of the following apply:
75 22 a. The foreign limited liability company's governing
75 23 statute authorizes the domestication.
75 24 b. The domestication is not prohibited by the law of the
75 25 jurisdiction that enacted the governing statute.
75 26 c. The foreign limited liability company complies with its
75 27 governing statute in effecting the domestication.
75 28 2. A limited liability company may become a foreign
75 29 limited liability company pursuant to this section, sections
75 30 489.1011 through 489.1013, and a plan of domestication, if all
75 31 of the following apply:
75 32 a. The foreign limited liability company's governing
75 33 statute authorizes the domestication.
75 34 b. The domestication is not prohibited by the law of the
75 35 jurisdiction that enacted the governing statute.
76 1 c. The foreign limited liability company complies with its
76 2 governing statute in effecting the domestication.
76 3 3. A plan of domestication must be in a record and must
76 4 include all of the following:
76 5 a. The name of the domesticating company before
76 6 domestication and the jurisdiction of its governing statute.
76 7 b. The name of the domesticated company after
76 8 domestication and the jurisdiction of its governing statute.
76 9 c. The terms and conditions of the domestication,
76 10 including the manner and basis for converting interests in the
76 11 domesticating company into any combination of money, interests
76 12 in the domesticated company, and other consideration.
76 13 d. The organizational documents of the domesticated
76 14 company that are, or are proposed to be, in a record.
76 15 Sec. 81. NEW SECTION. 489.1011 ACTION ON PLAN OF
76 16 DOMESTICATION BY DOMESTICATING LIMITED LIABILITY COMPANY.
76 17 1. A plan of domestication must be consented to as
76 18 follows:
76 19 a. By all the members, subject to section 489.1014, if the
76 20 domesticating company is a limited liability company.
76 21 b. As provided in the domesticating company's governing
76 22 statute, if the company is a foreign limited liability
76 23 company.
76 24 2. Subject to any contractual rights, after a
76 25 domestication is approved, and at any time before articles of
76 26 domestication are delivered to the secretary of state for
76 27 filing under section 489.1012, a domesticating limited
76 28 liability company may amend the plan or abandon the
76 29 domestication as follows:
76 30 a. As provided in the plan.
76 31 b. Except as otherwise prohibited in the plan, by the same
76 32 consent as was required to approve the plan.
76 33 Sec. 82. NEW SECTION. 489.1012 FILINGS REQUIRED FOR
76 34 DOMESTICATION == EFFECTIVE DATE.
76 35 1. After a plan of domestication is approved, a
77 1 domesticating company shall deliver to the secretary of state
77 2 for filing articles of domestication, which must include all
77 3 of the following:
77 4 a. A statement, as the case may be, that the company has
77 5 been domesticated from or into another jurisdiction.
77 6 b. The name of the domesticating company and the
77 7 jurisdiction of its governing statute.
77 8 c. The name of the domesticated company and the
77 9 jurisdiction of its governing statute.
77 10 d. The date the domestication is effective under the
77 11 governing statute of the domesticated company.
77 12 e. If the domesticating company was a limited liability
77 13 company, a statement that the domestication was approved as
77 14 required by this chapter.
77 15 f. If the domesticating company was a foreign limited
77 16 liability company, a statement that the domestication was
77 17 approved as required by the governing statute of the other
77 18 jurisdiction.
77 19 g. If the domesticated company was a foreign limited
77 20 liability company not authorized to transact business in this
77 21 state, the street and mailing addresses of an office that the
77 22 secretary of state may use for the purposes of section
77 23 489.1013, subsection 2.
77 24 2. A domestication becomes effective as follows:
77 25 a. When the certificate of organization takes effect, if
77 26 the domesticated company is a limited liability company.
77 27 b. According to the governing statute of the domesticated
77 28 company, if the domesticated organization is a foreign limited
77 29 liability company.
77 30 Sec. 83. NEW SECTION. 489.1013 EFFECT OF DOMESTICATION.
77 31 1. When a domestication takes effect, all of the following
77 32 apply:
77 33 a. The domesticated company is for all purposes the
77 34 company that existed before the domestication.
77 35 b. All property owned by the domesticating company remains
78 1 vested in the domesticated company.
78 2 c. All debts, obligations, or other liabilities of the
78 3 domesticating company continue as debts, obligations, or other
78 4 liabilities of the domesticated company.
78 5 d. An action or proceeding pending by or against a
78 6 domesticating company may be continued as if the domestication
78 7 had not occurred.
78 8 e. Except as prohibited by other law, all of the rights,
78 9 privileges, immunities, powers, and purposes of the
78 10 domesticating company remain vested in the domesticated
78 11 company.
78 12 f. Except as otherwise provided in the plan of
78 13 domestication, the terms and conditions of the plan of
78 14 domestication take effect.
78 15 g. Except as otherwise agreed, the domestication does not
78 16 dissolve a domesticating limited liability company for the
78 17 purposes of article 7.
78 18 2. A domesticated company that is a foreign limited
78 19 liability company consents to the jurisdiction of the courts
78 20 of this state to enforce any debt, obligation, or other
78 21 liability owed by the domesticating company, if, before the
78 22 domestication, the domesticating company was subject to suit
78 23 in this state on the debt, obligation, or other liability. A
78 24 domesticated company that is a foreign limited liability
78 25 company and not authorized to transact business in this state
78 26 appoints the secretary of state as its registered agent for
78 27 service of process for purposes of enforcing a debt,
78 28 obligation, or other liability under this subsection. Service
78 29 on the secretary of state under this subsection must be made
78 30 in the same manner and has the same consequences as in section
78 31 489.116, subsections 3 and 4.
78 32 3. If a limited liability company has adopted and approved
78 33 a plan of domestication under section 489.1010 providing for
78 34 the company to be domesticated in a foreign jurisdiction, a
78 35 statement surrendering the company's certificate of
79 1 organization must be delivered to the secretary of state for
79 2 filing setting forth all of the following:
79 3 a. The name of the company.
79 4 b. A statement that the certificate of organization is
79 5 being surrendered in connection with the domestication of the
79 6 company in a foreign jurisdiction.
79 7 c. A statement the domestication was approved as required
79 8 by this chapter.
79 9 d. The jurisdiction of formation of the domesticated
79 10 foreign limited liability company.
79 11 Sec. 84. NEW SECTION. 489.1014 RESTRICTIONS ON APPROVAL
79 12 OF MERGERS, CONVERSIONS, AND DOMESTICATIONS.
79 13 1. If a member of a constituent, converting, or
79 14 domesticating limited liability company will have personal
79 15 liability with respect to a surviving, converted, or
79 16 domesticated organization, approval or amendment of a plan of
79 17 merger, conversion, or domestication is ineffective without
79 18 the consent of the member, unless all of the following apply:
79 19 a. The company's operating agreement provides for approval
79 20 of a merger, conversion, or domestication with the consent of
79 21 fewer than all the members.
79 22 b. The member has consented to the provision of the
79 23 operating agreement.
79 24 2. A member does not give the consent required by
79 25 subsection 1 merely by consenting to a provision of the
79 26 operating agreement that permits the operating agreement to be
79 27 amended with the consent of fewer than all the members.
79 28 Sec. 85. NEW SECTION. 489.1015 MERGER OF DOMESTIC
79 29 COOPERATIVE INTO A DOMESTIC LIMITED LIABILITY COMPANY.
79 30 1. A limited liability company may merge with a domestic
79 31 cooperative only as provided by this section. A limited
79 32 liability company may merge with one or more domestic
79 33 cooperatives if all of the following apply:
79 34 a. Only one limited liability company and one or more
79 35 domestic cooperatives are parties to the merger.
80 1 b. When the merger becomes effective, the separate
80 2 existence of each domestic cooperative ceases and the limited
80 3 liability company is the surviving entity per organization.
80 4 c. As to each domestic cooperative, the plan of merger is
80 5 initiated and adopted, and the merger is effectuated, as
80 6 provided in section 501A.1101.
80 7 d. As to the limited liability company, the plan of merger
80 8 complies with section 489.1002, the plan of merger is approved
80 9 as provided in section 489.1003, and the articles of merger
80 10 are prepared, signed, and filed as provided in section
80 11 489.1004.
80 12 e. Notwithstanding section 489.1002 or 489.1005, the
80 13 surviving organization must be the limited liability company.
80 14 2. Section 501A.1103 governs the abandonment by a domestic
80 15 cooperative of a merger authorized by this section. Section
80 16 489.1003, subsection 2, governs the abandonment by a limited
80 17 liability company of a merger authorized by this section.
80 18 Sec. 86. NEW SECTION. 489.1016 ARTICLE NOT EXCLUSIVE.
80 19 This article does not preclude an entity from being merged,
80 20 converted, or domesticated under law other than this chapter.
80 21 ARTICLE 11
80 22 PROFESSIONAL LIMITED LIABILITY COMPANIES
80 23 Sec. 87. NEW SECTION. 489.1101 DEFINITIONS.
80 24 As used in this article, unless the context otherwise
80 25 requires:
80 26 1. "Employee" or "agent" does not include a clerk,
80 27 stenographer, secretary, bookkeeper, technician, or other
80 28 person who is not usually and ordinarily considered by custom
80 29 and practice to be practicing a profession nor any other
80 30 person who performs all that person's duties for the
80 31 professional limited liability company under the direct
80 32 supervision and control of one or more managers, employees, or
80 33 agents of the professional limited liability company who are
80 34 duly licensed in this state to practice a profession which the
80 35 limited liability company is authorized to practice in this
81 1 state. This article does not require any such persons to be
81 2 licensed to practice a profession if they are not required to
81 3 be licensed under any other law of this state.
81 4 2. "Foreign professional limited liability company" means
81 5 a limited liability company organized under laws other than
81 6 the laws of this state for a purpose for which a professional
81 7 limited liability company may be organized under this article.
81 8 3. "Licensed" includes registered, certified, admitted to
81 9 practice, or otherwise legally authorized under the laws of
81 10 this state.
81 11 4. "Profession" means the profession of certified public
81 12 accountancy, architecture, chiropractic, dentistry, physical
81 13 therapy, psychology, professional engineering, land surveying,
81 14 landscape architecture, law, medicine and surgery, optometry,
81 15 osteopathy, osteopathic medicine and surgery, accounting
81 16 practitioner, podiatry, real estate brokerage, speech
81 17 pathology, audiology, veterinary medicine, pharmacy, nursing,
81 18 or marriage and family therapy, provided that the marriage and
81 19 family therapist is licensed under chapters 147 and 154D.
81 20 5. "Professional limited liability company" means a
81 21 limited liability company subject to this article, except a
81 22 foreign professional limited liability company.
81 23 6. "Regulating board" means any board, commission, court,
81 24 or governmental authority which, under the laws of this state,
81 25 is charged with the licensing, registration, certification,
81 26 admission to practice, or other legal authorization of the
81 27 practitioners of any profession.
81 28 7. a. "Voluntary transfer" includes a sale, voluntary
81 29 assignment, gift, pledge, or encumbrance; a voluntary change
81 30 of legal or equitable ownership or beneficial interest; or a
81 31 voluntary change of persons having voting rights with respect
81 32 to any transferable interest, except as proxies.
81 33 b. "Voluntary transfer" does not include a transfer of an
81 34 individual's interest in a limited liability company or other
81 35 property to a guardian or conservator appointed for that
82 1 individual or the individual's property.
82 2 Sec. 88. NEW SECTION. 489.1102 PURPOSES AND POWERS.
82 3 A professional limited liability company shall be organized
82 4 only for the purpose of engaging in the practice of one
82 5 specific profession, or two or more specific professions which
82 6 could lawfully be practiced in combination by a licensed
82 7 individual or a partnership of licensed individuals, and for
82 8 the additional purpose of doing all lawful things which may be
82 9 incidental to or necessary or convenient in connection with
82 10 the practice of the profession or professions. The
82 11 certificate of organization of a professional limited
82 12 liability company shall state in substance that the purposes
82 13 for which the professional limited liability company is
82 14 organized are to engage in the general practice of a specified
82 15 profession or professions, or one or more specified branches
82 16 or divisions thereof, and to do all lawful things which may be
82 17 incidental to or necessary or convenient in connection with
82 18 the practice of the profession or professions.
82 19 Sec. 89. NEW SECTION. 489.1103 NAME.
82 20 The name of a professional limited liability company, the
82 21 name of a foreign professional limited liability company or
82 22 its name as modified for use in this state, and any fictitious
82 23 name or trade name adopted by a professional limited liability
82 24 company or foreign professional limited liability company
82 25 shall contain the words "professional limited liability
82 26 company" or the abbreviation "P.L.L.C." or "PLLC", and except
82 27 for the addition of such words or abbreviation, shall be a
82 28 name which could lawfully be used by a licensed individual or
82 29 by a partnership of licensed individuals in the practice in
82 30 this state of a profession which the professional limited
82 31 liability company is authorized to practice. Each regulating
82 32 board may by rule adopt additional requirements as to the
82 33 corporate names and fictitious or trade names of professional
82 34 limited liability companies and foreign professional limited
82 35 liability companies which are authorized to practice a
83 1 profession which is within the jurisdiction of the regulating
83 2 board.
83 3 Sec. 90. NEW SECTION. 489.1104 WHO MAY ORGANIZE.
83 4 One or more individuals having capacity to contract and
83 5 licensed to practice a profession in this state in which the
83 6 professional limited liability company is to be authorized to
83 7 practice, may organize a professional limited liability
83 8 company.
83 9 Sec. 91. NEW SECTION. 489.1105 PRACTICE BY PROFESSIONAL
83 10 LIMITED LIABILITY COMPANY.
83 11 Notwithstanding any other statute or rule of law, a
83 12 professional limited liability company may practice a
83 13 profession, but may do so in this state only through a member,
83 14 manager, employee, or agent, who is licensed to practice the
83 15 same profession in this state. In its practice of a
83 16 profession, a professional limited liability company shall not
83 17 do any act which could not lawfully be done by an individual
83 18 licensed to practice the profession which the professional
83 19 limited liability company is authorized to practice.
83 20 Sec. 92. NEW SECTION. 489.1106 PROFESSIONAL REGULATION.
83 21 A professional limited liability company shall not be
83 22 required to register with or to obtain any license,
83 23 registration, certificate, or other legal authorization from a
83 24 regulating board in order to practice a profession. Except as
83 25 provided in this section, this article does not restrict or
83 26 limit in any manner the authority or duties of any regulating
83 27 board with respect to individuals practicing a profession
83 28 which is within the jurisdiction of the regulating board, even
83 29 if the individual is a member, manager, employee, or agent of
83 30 a professional limited liability company or foreign
83 31 professional limited liability company and practices the
83 32 individual's profession through such professional limited
83 33 liability company.
83 34 Sec. 93. NEW SECTION. 489.1107 RELATIONSHIP AND
83 35 LIABILITY TO PERSONS SERVED.
84 1 This article does not modify any law applicable to the
84 2 relationship between an individual practicing a profession and
84 3 a person receiving professional services, including but not
84 4 limited to any liability arising out of such practice or any
84 5 law respecting privileged communications. This article does
84 6 not modify or affect the ethical standards or standards of
84 7 conduct of any profession, including but not limited to any
84 8 standards prohibiting or limiting the practice of the
84 9 profession by a limited liability company or prohibiting or
84 10 limiting the practice of two or more professions in
84 11 combination. All such standards shall apply to the members,
84 12 managers, employees, and agents through whom a professional
84 13 limited liability company practices any profession in this
84 14 state, to the same extent that the standards apply to an
84 15 individual practitioner.
84 16 Sec. 94. NEW SECTION. 489.1108 ISSUANCE OF INTERESTS.
84 17 An interest of a professional limited liability company
84 18 shall be issued only to an individual who is licensed to
84 19 practice in any state a profession which the professional
84 20 limited liability company is authorized to practice.
84 21 Interests of a professional limited liability company shall
84 22 not at any time be issued in, transferred into, or held in
84 23 joint tenancy, tenancy in common, or any other form of joint
84 24 ownership or co=ownership. Chapter 502 shall not be
84 25 applicable to nor govern any transaction relating to any
84 26 interests of a professional limited liability company.
84 27 Sec. 95. NEW SECTION. 489.1109 ASSIGNMENT OF INTERESTS.
84 28 A member or other person shall not make a voluntary
84 29 assignment of an interest in a professional limited liability
84 30 company to any person, except to the professional limited
84 31 liability company or to an individual who is licensed to
84 32 practice in this state a profession which the limited
84 33 liability company is authorized to practice. The certificate
84 34 of organization or operating agreement of the professional
84 35 limited liability company may contain any additional
85 1 provisions restricting the assignment of interests. Unless
85 2 the certificate of organization or an operating agreement
85 3 otherwise provides, a voluntary assignment requires the
85 4 unanimous consent of the members.
85 5 Sec. 96. NEW SECTION. 489.1110 CONVERTIBLE INTERESTS ==
85 6 RIGHTS AND OPTIONS.
85 7 A professional limited liability company shall not create
85 8 or issue any interest convertible into an interest of the
85 9 professional limited liability company. The provisions of
85 10 this article with respect to the issuance and transfer of
85 11 interests apply to the creation, issuance, and transfer of any
85 12 right or option entitling the holder to purchase from a
85 13 professional limited liability company any interest of the
85 14 professional limited liability company. A right or option
85 15 shall not be transferable, whether voluntarily, involuntarily,
85 16 by operation of law, or in any other manner. Upon the death
85 17 of the holder, or when the holder ceases to be licensed to
85 18 practice a profession in this state which the professional
85 19 limited liability company is authorized to practice, the right
85 20 or option shall expire.
85 21 Sec. 97. NEW SECTION. 489.1111 VOTING TRUST == PROXY.
85 22 A member of a professional limited liability company shall
85 23 not create or enter into a voting trust or any other agreement
85 24 conferring upon any other person the right to vote or
85 25 otherwise represent any interests of a professional limited
85 26 liability company, and no such voting trust or agreement is
85 27 valid or effective. Any proxy of a member of a professional
85 28 limited liability company shall be an individual licensed to
85 29 practice a profession in this state which the professional
85 30 limited liability company is authorized to practice. Any
85 31 provision in any proxy instrument denying the right of the
85 32 member to revoke the proxy at any time or for any period of
85 33 time is not valid or effective. This section does not
85 34 otherwise limit the right of a member to vote by proxy, but
85 35 the certificate of organization or operating agreement of the
86 1 professional limited liability company may further limit or
86 2 deny the right to vote by proxy.
86 3 Sec. 98. NEW SECTION. 489.1112 REQUIRED PURCHASE BY
86 4 PROFESSIONAL LIMITED LIABILITY COMPANY OF ITS OWN INTERESTS.
86 5 1. Notwithstanding any other statute or rule of law, a
86 6 professional limited liability company shall purchase its own
86 7 interests as provided in this section; and a member of a
86 8 professional limited liability company and the member's
86 9 executor, administrator, legal representative, and successors
86 10 in interest, shall sell and transfer the interests held by
86 11 them as provided in this section.
86 12 2. Upon the death of a member, the professional limited
86 13 liability company shall immediately purchase all interests
86 14 held by the deceased member.
86 15 3. In order to remain a member of a professional limited
86 16 liability company, the member shall at all times be licensed
86 17 to practice in this state a profession which the professional
86 18 limited liability company is authorized to practice. When a
86 19 member does not have or ceases to have this qualification, the
86 20 professional limited liability company shall immediately
86 21 purchase all interests held by that member.
86 22 4. When a person other than a member of record becomes
86 23 entitled to have interests of a professional limited liability
86 24 company transferred into that person's name or to exercise
86 25 voting rights, except as a proxy, with respect to interests of
86 26 the professional limited liability company, the professional
86 27 limited liability company shall immediately purchase the
86 28 interests. Without limiting the generality of the foregoing,
86 29 this section shall be applicable whether the event occurs as a
86 30 result of appointment of a guardian or conservator for a
86 31 member or the member's property, transfer of interests by
86 32 operation of law, involuntary transfer of interests, judicial
86 33 proceeding, execution, levy, bankruptcy proceeding,
86 34 receivership proceeding, foreclosure or enforcement of a
86 35 pledge or encumbrance, or any other situation or occurrence.
87 1 However, this section does not apply to any voluntary transfer
87 2 of interests as defined in this article.
87 3 5. Interests purchased by a professional limited liability
87 4 company under this section shall be transferred to the
87 5 professional limited liability company as of the close of
87 6 business on the date of the death or other event which
87 7 requires purchase. The member and the member's executors,
87 8 administrators, legal representatives, or successors in
87 9 interest, shall promptly do all things which may be necessary
87 10 or convenient to cause transfer to be made as of the transfer
87 11 date. However, the interests shall promptly be transferred on
87 12 the books and records of the professional limited liability
87 13 company as of the transfer date, notwithstanding any delay in
87 14 transferring or surrendering the interests or certificates
87 15 representing the interests, and the transfer shall be valid
87 16 and effective for all purposes as of the close of business on
87 17 the transfer date. The purchase price for such interests
87 18 shall be paid as provided in this article, but the transfer of
87 19 interests to the professional limited liability company as
87 20 provided in this section shall not be delayed or affected by
87 21 any delay or default in making payment.
87 22 6. Notwithstanding subsections 1 through 5, purchase by
87 23 the professional limited liability company is not required
87 24 upon the occurrence of any event other than death of a member,
87 25 if the professional limited liability company is dissolved
87 26 within sixty days after the occurrence of the event. The
87 27 certificate of organization or operating agreement of the
87 28 professional limited liability company may provide that
87 29 purchase is not required upon the death of a member, if the
87 30 professional limited liability company is dissolved within
87 31 sixty days after the date of the member's death.
87 32 7. Unless otherwise provided in the certificate of
87 33 organization or an operating agreement of the professional
87 34 limited liability company or in an agreement among all members
87 35 of the professional limited liability company, all of the
88 1 following apply:
88 2 a. The purchase price for interests shall be its book
88 3 value as of the end of the month immediately preceding the
88 4 death or other event which requires purchase. Book value
88 5 shall be determined from the books and records of the
88 6 professional limited liability company in accordance with the
88 7 regular method of accounting used by the professional limited
88 8 liability company, uniformly and consistently applied.
88 9 Adjustments to book value shall be made, if necessary, to take
88 10 into account work in process and accounts receivable. A final
88 11 determination of book value made in good faith by an
88 12 independent certified public accountant or firm of certified
88 13 public accountants employed by the professional limited
88 14 liability company for the purpose shall be conclusive on all
88 15 persons.
88 16 b. The purchase price shall be paid in cash as follows:
88 17 (1) Upon the death of a member, thirty percent of the
88 18 purchase price shall be paid within ninety days after death,
88 19 and the balance shall be paid in three equal annual
88 20 installments on the first three anniversaries of the death.
88 21 (2) Upon the happening of any other event referred to in
88 22 this section, one=tenth of the purchase price shall be paid
88 23 within ninety days after the date of the event, and the
88 24 balance shall be paid in three equal annual installments on
88 25 the first three anniversaries of the date of the event.
88 26 c. Interest from the date of death or other event shall be
88 27 payable annually on principal payment dates, at the rate of
88 28 six percent per annum on the unpaid balance of the purchase
88 29 price.
88 30 d. All persons who are members of the professional limited
88 31 liability company on the date of death or other event, and
88 32 their executors, administrators, and legal representatives,
88 33 shall, to the extent the professional limited liability
88 34 company fails to meet its obligations under this section, be
88 35 jointly liable for the payment of the purchase price and
89 1 interest in proportion to their percentage of ownership of the
89 2 professional limited liability company's interests,
89 3 disregarding interests of the deceased or withdrawing member.
89 4 e. The part of the purchase price remaining unpaid after
89 5 the initial payment shall be evidenced by a negotiable
89 6 promissory note, which shall be executed by the professional
89 7 limited liability company and all members liable for payment.
89 8 Any person liable on the note shall have the right to prepay
89 9 the note in full or in part at any time.
89 10 f. If the person making any payment is not reasonably able
89 11 to determine which of two or more persons is entitled to
89 12 receive a payment, or if the payment is payable to a person
89 13 who is unknown, or who is under disability and there is no
89 14 person legally competent to receive the payment, or who cannot
89 15 be found after the exercise of reasonable diligence by the
89 16 person making the payment, it shall be deposited with the
89 17 treasurer of state and shall be subject to the provisions of
89 18 section 490.1440 with respect to funds deposited with the
89 19 treasurer of state upon the voluntary or involuntary
89 20 dissolution of a business corporation.
89 21 8. Notwithstanding the other provisions of this section,
89 22 no part of the purchase price shall be required to be paid
89 23 until the certificates, if any, representing the interests
89 24 have been surrendered to the professional limited liability
89 25 company.
89 26 9. Notwithstanding the other provisions of this section,
89 27 payment of any part of the purchase price for interests of a
89 28 deceased member shall not be required until the executor or
89 29 administrator of the deceased member provides any indemnity,
89 30 release, or other document from any taxing authority, which is
89 31 reasonably necessary to protect the professional limited
89 32 liability company against liability for estate, inheritance,
89 33 and death taxes.
89 34 10. The certificate of organization or an operating
89 35 agreement of the professional limited liability company or an
90 1 agreement among all members of a professional limited
90 2 liability company may provide for a different purchase price,
90 3 a different method of determining the purchase price, a
90 4 different interest rate or no interest, and other terms,
90 5 conditions, and schedules of payment.
90 6 11. The certificate of organization or an operating
90 7 agreement of the professional limited liability company or an
90 8 agreement among all members of a professional limited
90 9 liability company may provide for the optional or mandatory
90 10 purchase of its own interests by the professional limited
90 11 liability company in other situations, subject to any
90 12 applicable law regarding such a purchase.
90 13 Sec. 99. NEW SECTION. 489.1113 CERTIFICATES REPRESENTING
90 14 INTERESTS.
90 15 Each certificate representing an interest of a professional
90 16 limited liability company shall state in substance that the
90 17 certificate represents an interest in a professional limited
90 18 liability company and is not transferable except as expressly
90 19 provided in this article and in the certificate of
90 20 organization or an operating agreement of the professional
90 21 limited liability company.
90 22 Sec. 100. NEW SECTION. 489.1114 MANAGEMENT.
90 23 All managers of a professional limited liability company
90 24 shall at all times be individuals who are licensed to practice
90 25 a profession in this state which the limited liability company
90 26 is authorized to practice. A person who is not licensed shall
90 27 have no authority or duties in the management or control of
90 28 the professional limited liability company. If a manager
90 29 ceases to have this qualification, the manager shall
90 30 immediately and automatically cease to hold such management
90 31 position.
90 32 Sec. 101. NEW SECTION. 489.1115 MERGER.
90 33 A professional limited liability company shall not merge
90 34 with any entity except another professional limited liability
90 35 company subject to this article or a professional corporation
91 1 subject to chapter 496C. Merger is not permitted unless the
91 2 surviving or new professional limited liability company is a
91 3 professional limited liability company which complies with all
91 4 requirements of this article.
91 5 Sec. 102. NEW SECTION. 489.1116 DISSOLUTION OR
91 6 LIQUIDATION.
91 7 A violation of any provision of this article by a
91 8 professional limited liability company or any of its members
91 9 or managers shall be cause for its involuntary dissolution, or
91 10 liquidation of its assets and business by the district court.
91 11 Upon the death of the last remaining member of a professional
91 12 limited liability company, or when the last remaining member
91 13 is not licensed or ceases to be licensed to practice a
91 14 profession in this state which the professional limited
91 15 liability company is authorized to practice, or when any
91 16 person other than the member of record becomes entitled to
91 17 have all interests of the last remaining member of the
91 18 professional limited liability company transferred into that
91 19 person's name or to exercise voting rights, except as a proxy,
91 20 with respect to such interests, the professional limited
91 21 liability company shall not practice any profession and it
91 22 shall be promptly dissolved. However, if prior to dissolution
91 23 all outstanding interests of the professional limited
91 24 liability company are acquired by two or more persons licensed
91 25 to practice a profession in this state which the professional
91 26 limited liability company is authorized to practice, the
91 27 professional limited liability company need not be dissolved
91 28 and may practice the profession as provided in this article.
91 29 Sec. 103. NEW SECTION. 489.1117 FOREIGN PROFESSIONAL
91 30 LIMITED LIABILITY COMPANY.
91 31 1. A foreign professional limited liability company may
91 32 practice a profession in this state if it complies with the
91 33 provisions of this article. The secretary of state may
91 34 prescribe forms for this purpose. A foreign professional
91 35 limited liability company may practice a profession in this
92 1 state only through members, managers, employees, and agents
92 2 who are licensed to practice the profession in this state.
92 3 The provisions of this article with respect to the practice of
92 4 a profession by a professional limited liability company apply
92 5 to a foreign professional limited liability company.
92 6 2. This article does not prohibit the practice of a
92 7 profession in this state by an individual who is a member,
92 8 manager, employee, or agent of a foreign professional limited
92 9 liability company, if the individual could lawfully practice
92 10 the profession in this state in the absence of any
92 11 relationship to a foreign professional limited liability
92 12 company. This subsection applies regardless of whether or not
92 13 the foreign professional limited liability company is
92 14 authorized to practice a profession in this state.
92 15 Sec. 104. NEW SECTION. 489.1118 LIMITED LIABILITY
92 16 COMPANIES ORGANIZED UNDER THE OTHER LAWS.
92 17 This article does not apply to or interfere with the
92 18 practice of any profession by or through any professional
92 19 limited liability company organized after July 1, 1992, under
92 20 any other law of this state or any other state or country, if
92 21 the practice is lawful under any other statute or rule of law
92 22 of this state. Any such professional limited liability
92 23 company may voluntarily elect to adopt this article and become
92 24 subject to its provisions, by amending its certificate of
92 25 organization to be consistent with all provisions of this
92 26 article and by stating in its amended certificate of
92 27 organization that the limited liability company has
92 28 voluntarily elected to adopt this article. Any limited
92 29 liability company organized under any law of any other state
92 30 or country may become subject to the provisions of this
92 31 article by complying with all provisions of this article with
92 32 respect to foreign professional limited liability companies.
92 33 Sec. 105. NEW SECTION. 489.1119 CONFLICTS WITH OTHER
92 34 PROVISIONS OF THIS CHAPTER.
92 35 The provisions of this article shall prevail over any
93 1 inconsistent provisions of this chapter.
93 2 ARTICLE 12
93 3 SERIES LIMITED LIABILITY COMPANIES
93 4 Sec. 106. NEW SECTION. 489.1201 SERIES OF TRANSFERABLE
93 5 INTERESTS.
93 6 1. An operating agreement may establish or provide for the
93 7 establishment of a designated series of transferable interests
93 8 having separate rights, powers, or duties with respect to
93 9 specified property or obligations of the limited liability
93 10 company or profits and losses associated with specified
93 11 property or obligations, and, to the extent provided in the
93 12 operating agreement, any such series may have a separate
93 13 business purpose or investment objective. The name of each
93 14 series must contain the name of the limited liability company
93 15 and be distinguishable from the name of any other series set
93 16 forth in the certificate of organization.
93 17 2. Notwithstanding contrary provisions of this chapter,
93 18 the debts, liabilities, and obligations incurred, contracted
93 19 for, or otherwise existing with respect to a particular series
93 20 shall be enforceable against the assets of that series only,
93 21 and not against the assets of the limited liability company
93 22 generally, if all of the following apply:
93 23 a. The operating agreement creates one or more series.
93 24 b. Separate and distinct records are maintained for that
93 25 series and separate and distinct records account for the
93 26 assets associated with that series. The assets associated
93 27 with a series must be accounted for separately from the other
93 28 assets of the limited liability company, including another
93 29 series.
93 30 c. The operating agreement provides for such limitation on
93 31 liabilities.
93 32 d. Notice of the establishment of the series and of the
93 33 limitation on liabilities of the series is set forth in the
93 34 certificate of organization of the limited liability company.
93 35 The filing of the certificate of organization containing a
94 1 notice of the limitation on liabilities of a series in the
94 2 office of the secretary of state constitutes notice of the
94 3 limitation on liabilities of such series.
94 4 3. A series meeting all of the conditions of subsection 2,
94 5 shall be treated as a separate entity to the extent set forth
94 6 in the certificate of organization.
94 7 4. Notwithstanding section 489.304, or a contrary
94 8 provision in an operating agreement, a member or manager may
94 9 agree to be obligated personally for any or all of the debts,
94 10 obligations, or liabilities of one or more series.
94 11 5. An operating agreement may provide for classes or
94 12 groups of members or managers associated with a series having
94 13 such relative rights, powers, and duties as the operating
94 14 agreement may provide. The operating agreement may provide
94 15 for the future creation of additional classes or groups of
94 16 members or managers associated with the series having such
94 17 relative rights, powers, and duties as may from time to time
94 18 be established, including rights, powers, and duties senior to
94 19 existing classes and groups of members or managers associated
94 20 with the series. An operating agreement may provide for the
94 21 taking of an action, including the amendment of the operating
94 22 agreement, without the vote or approval of any member or
94 23 manager or class or group of members or managers, including
94 24 all action to create under the provisions of the operating
94 25 agreement a class or group of the series of membership
94 26 interests that was not previously outstanding. An operating
94 27 agreement may provide that any member or class or group of
94 28 members associated with a series does not have voting rights.
94 29 6. An operating agreement may grant to all or certain
94 30 identified members or managers or a specified class or group
94 31 of the members or managers associated with a series the right
94 32 to vote on any matter separately or with all or any class or
94 33 group of the members or managers associated with the series.
94 34 Voting by members or managers associated with a series may be
94 35 on a per capita, number, financial interest, class, group, or
95 1 other basis.
95 2 7. Except to the extent modified by this article, the
95 3 provisions of this chapter which are generally applicable to a
95 4 limited liability company, and its managers, members and
95 5 transferees, shall be applicable to each series with respect
95 6 to the operations of such series.
95 7 Sec. 107. NEW SECTION. 489.1202 MANAGEMENT OF A SERIES.
95 8 1. A series is member=managed unless the operating
95 9 agreement does any of the following:
95 10 a. Expressly provides any of the following:
95 11 (1) The series is or will be "manager=managed".
95 12 (2) The series is or will be "managed by managers".
95 13 (3) Management of the series is or will be "vested in
95 14 managers".
95 15 b. Includes words of similar import.
95 16 2. In a member=managed series, unless modified pursuant to
95 17 section 489.1201, subsections 5 and 6, all of the following
95 18 rules apply:
95 19 a. The management and conduct of the series are vested in
95 20 the members of the series.
95 21 b. Each series member has equal rights in the management
95 22 and conduct of the series' activities.
95 23 c. A difference arising among series members as to a
95 24 matter in the ordinary course of the activities of the series
95 25 may be decided by a majority of the series members.
95 26 d. An act outside the ordinary course of the activities of
95 27 the series may be undertaken only with the consent of all
95 28 members of the series.
95 29 e. The operating agreement may be amended only with the
95 30 consent of all members of the series.
95 31 3. In a manager=managed series, all of the following rules
95 32 apply:
95 33 a. Except as otherwise expressly provided in this chapter,
95 34 any matter relating to the activities of the series is decided
95 35 exclusively by the managers of the series.
96 1 b. Each series manager has equal rights in the management
96 2 and conduct of the activities of the series.
96 3 c. A difference arising among managers of a series as to a
96 4 matter in the ordinary course of the activities of the series
96 5 may be decided by a majority of the managers of the series.
96 6 d. Unless modified pursuant to section 489.1201,
96 7 subsections 5 and 6, the consent of all members of the series
96 8 is required to do any of the following:
96 9 (1) Sell, lease, exchange, or otherwise dispose of all, or
96 10 substantially all, of the series' property, with or without
96 11 the goodwill, outside the ordinary course of the series'
96 12 activities.
96 13 (2) Approve a merger, conversion, or domestication under
96 14 article 10.
96 15 (3) Undertake any other act outside the ordinary course of
96 16 the series' activities.
96 17 (4) Amend the operating agreement as it pertains to the
96 18 series.
96 19 e. A manager of the series may be chosen at any time by
96 20 the consent of a majority of the members of the series and
96 21 remains a manager of the series until a successor has been
96 22 chosen, unless the series manager at an earlier time resigns,
96 23 is removed, or dies, or, in the case of a series manager that
96 24 is not an individual, terminates. A series manager may be
96 25 removed at any time by the consent of a majority of the
96 26 members without notice or cause.
96 27 f. A person need not be a series member to be a manager of
96 28 a series, but the dissociation of a series member that is also
96 29 a series manager removes the person as a manager of the
96 30 series. If a person that is both a series manager and a
96 31 series member ceases to be a manager of the series, that
96 32 cessation does not by itself dissociate the person as a member
96 33 of the series.
96 34 g. A person's ceasing to be a series manager does not
96 35 discharge any debt, obligation, or other liability to the
97 1 series or members of the series which the person incurred
97 2 while a manager of the series.
97 3 4. An action requiring the consent of members of a series
97 4 under this chapter may be taken without a meeting, and a
97 5 member of a series may appoint a proxy or other agent to
97 6 consent or otherwise act for the series member by signing an
97 7 appointing record, personally or by the series member's agent.
97 8 5. The dissolution of a series does not affect the
97 9 applicability of this section. However, a person that
97 10 wrongfully causes dissolution of the series loses the right to
97 11 participate in management as a series member and a series
97 12 manager.
97 13 6. This chapter does not entitle a series member of a
97 14 series to remuneration for services performed for a
97 15 member=managed series, except for reasonable compensation for
97 16 services rendered in winding up the activities of the series.
97 17 Sec. 108. NEW SECTION. 489.1203 SERIES DISTRIBUTIONS.
97 18 1. Any distribution made by a series before its
97 19 dissolution and winding up must be in equal shares among the
97 20 series members and dissociated series members, except to the
97 21 extent necessary to comply with any transfer effective under
97 22 section 489.502 and any charging order in effect under section
97 23 489.503.
97 24 2. A person has a right to a distribution before the
97 25 dissolution and winding up of a series only if the series
97 26 decides to make an interim distribution. A person's
97 27 dissociation does not entitle the person to a distribution.
97 28 3. A person does not have a right to demand or receive a
97 29 distribution from a series in any form other than money.
97 30 Except as otherwise provided in section 489.708, subsection 3,
97 31 a series may distribute an asset in kind if each part of the
97 32 asset is fungible with each other part and each person
97 33 receives a percentage of the asset equal in value to the
97 34 person's share of distributions.
97 35 4. If a series member or transferee becomes entitled to
98 1 receive a distribution, the series member or transferee has
98 2 the status of, and is entitled to all remedies available to, a
98 3 creditor of the series with respect to the distribution.
98 4 5. a. A series shall not make a distribution if after the
98 5 distribution any of the following occurs:
98 6 (1) The series would not be able to pay its debts as they
98 7 become due in the ordinary course of the series' activities.
98 8 (2) The series' total assets would be less than the sum of
98 9 its total liabilities plus the amount that would be needed, if
98 10 the series were to be dissolved, wound up, and terminated at
98 11 the time of the distribution, to satisfy the preferential
98 12 rights upon dissolution, winding up, and termination of
98 13 members whose preferential rights are superior to those of
98 14 persons receiving the distribution.
98 15 b. As used in paragraph "a", "distribution" does not
98 16 include amounts constituting reasonable compensation for
98 17 present or past services or reasonable payments made in the
98 18 ordinary course of business under a bona fide retirement plan
98 19 or other benefits program.
98 20 6. A series may base a determination that a distribution
98 21 is not prohibited under subsection 1 on financial statements
98 22 prepared on the basis of accounting practices and principles
98 23 that are reasonable in the circumstances or on a fair
98 24 valuation or other method that is reasonable under the
98 25 circumstances.
98 26 7. Except as otherwise provided in subsection 9, the
98 27 effect of a distribution under subsection 1 is measured as
98 28 follows:
98 29 a. In the case of a distribution by purchase, redemption,
98 30 or other acquisition of a transferable interest in the series,
98 31 as of the date money or other property is transferred or debt
98 32 incurred by the series.
98 33 b. In all other cases, as of the date when one of the
98 34 following occurs:
98 35 (1) The distribution is authorized, if the payment occurs
99 1 within one hundred twenty days after that date.
99 2 (2) The payment is made, if the payment occurs more than
99 3 one hundred twenty days after the distribution is authorized.
99 4 8. A series' indebtedness to a series member incurred by
99 5 reason of a distribution made in accordance with this section
99 6 is at parity with the series' indebtedness to its general,
99 7 unsecured creditors.
99 8 9. A series' indebtedness, including indebtedness issued
99 9 in connection with or as part of a distribution, is not a
99 10 liability for purposes of subsection 5 if the terms of the
99 11 indebtedness provide that payment of principal and interest
99 12 are made only to the extent that a distribution could be made
99 13 to members of the series under this section. If such
99 14 indebtedness is issued as a distribution, each payment of
99 15 principal or interest on the indebtedness is treated as a
99 16 distribution, the effect of which is measured on the date the
99 17 payment is made.
99 18 10. a. Except as otherwise provided in paragraph "b", if
99 19 a member of a member=managed series or manager of a
99 20 manager=managed series consents to a distribution made in
99 21 violation of this section and in consenting to the
99 22 distribution fails to comply with section 489.409, the member
99 23 or manager is personally liable to the series for the amount
99 24 of the distribution that exceeds the amount that could have
99 25 been distributed without the violation of section 489.405.
99 26 b. To the extent the operating agreement of a
99 27 member=managed series expressly relieves a series member of
99 28 the authority and responsibility to consent to distributions
99 29 and imposes that authority and responsibility on one or more
99 30 other members of the series, the liability stated in paragraph
99 31 "a" applies to the other members of the series and not the
99 32 member of the series that the operating agreement relieves of
99 33 authority and responsibility.
99 34 11. A person that receives a distribution knowing that the
99 35 distribution to that person was made in violation of section
100 1 489.405 is personally liable to the limited liability company
100 2 but only to the extent that the distribution received by the
100 3 person exceeded the amount that could have been properly paid
100 4 under section 489.405.
100 5 12. A person against which an action is commenced because
100 6 the person is liable under subsection 10 may do any of the
100 7 following:
100 8 a. Implead any other person that is subject to liability
100 9 under subsection 10 and seek to compel contribution from the
100 10 person.
100 11 b. Implead any person that received a distribution in
100 12 violation of subsection 11 and seek to compel contribution
100 13 from the person in the amount the person received in violation
100 14 of that subsection.
100 15 13. An action under this section is barred if not
100 16 commenced within two years after the distribution.
100 17 Sec. 109. NEW SECTION. 489.1204 DISSOCIATION FROM A
100 18 SERIES.
100 19 Unless otherwise provided in the operating agreement, a
100 20 member shall cease to be associated with a series and to have
100 21 the power to exercise any rights or powers of a member with
100 22 respect to such series upon the assignment of all of the
100 23 member's transferable interest with respect to such series.
100 24 Except as otherwise provided in an operating agreement, an
100 25 event under this chapter or identified in an operating
100 26 agreement that causes a member to cease to be associated with
100 27 a series, by itself, shall not cause such member to cease to
100 28 be associated with any other series or terminate the continued
100 29 membership of a member in the limited liability company.
100 30 Sec. 110. NEW SECTION. 489.1205 TERMINATION OF A SERIES.
100 31 1. Except to the extent otherwise provided in the
100 32 operating agreement, a series may be terminated and its
100 33 affairs wound up without causing the dissolution of the
100 34 limited liability company. The termination of a series
100 35 established pursuant to section 489.1201, subsection 1, shall
101 1 not affect the limitation on a liability of such series
101 2 provided by section 489.1201, subsection 2. A series is not
101 3 terminated and its affairs shall continue despite the
101 4 dissolution of the limited liability company under article 7
101 5 but the series shall be terminated and its affairs shall be
101 6 wound up upon the first to occur of any of the events
101 7 described in section 489.701, subsection 1, paragraphs "a"
101 8 through "e", as applied to the series.
101 9 2. Notwithstanding section 489.702, unless otherwise
101 10 provided in the operating agreement, any of the following
101 11 persons may wind up the affairs of a series:
101 12 a. A manager associated with a series who has not
101 13 wrongfully terminated the series.
101 14 b. If there is no manager of a series, the members
101 15 associated with the series or a person approved by the members
101 16 associated with the series.
101 17 c. If there is more than one class or group of members
101 18 associated with the series, then by each class or group of
101 19 members associated with the series, in either case, by members
101 20 who own more than fifty percent of the transferable interests
101 21 of the series owned by all of the members associated with the
101 22 series or by the members of each class or group associated
101 23 with the series.
101 24 3. The persons winding up the affairs of a series, in the
101 25 name of the series and for and on behalf of the series, may
101 26 take all actions with respect to the series as are permitted
101 27 under section 489.702 for a limited liability company. The
101 28 persons winding up the affairs of a series shall provide for
101 29 the claims and obligations of the series as provided in
101 30 section 489.708 for a limited liability company and distribute
101 31 the assets of the series as provided in section 489.708 for a
101 32 limited liability company. An action taken pursuant to this
101 33 subsection shall not affect the liability of a member and
101 34 shall not impose liability on a liquidating trustee.
101 35 Sec. 111. NEW SECTION. 489.1206 FOREIGN SERIES.
102 1 A foreign limited liability company that is authorized to
102 2 do business in this state under article 8 which is governed by
102 3 an operating agreement that establishes or provides for the
102 4 establishment of designated series of transferable interests
102 5 having separate rights, powers, or duties with respect to
102 6 specified property or obligations of the foreign limited
102 7 liability company, or profits and losses associated with the
102 8 specified property or obligations, shall indicate that fact on
102 9 the application for a certificate of authority as a foreign
102 10 limited liability company. In addition, the foreign limited
102 11 liability company shall state on the application whether the
102 12 debts, liabilities, and obligations incurred, contracted for,
102 13 or otherwise existing with respect to a particular series, if
102 14 any, are enforceable against the assets of such series only,
102 15 and not against the assets of the foreign limited liability
102 16 company generally.
102 17 ARTICLE 13
102 18 MISCELLANEOUS PROVISIONS
102 19 Sec. 112. NEW SECTION. 489.1301 UNIFORMITY OF
102 20 APPLICATION AND CONSTRUCTION.
102 21 In applying and construing this chapter, consideration must
102 22 be given to the need to promote uniformity of the law with
102 23 respect to its subject matter among states that enact it.
102 24 Sec. 113. NEW SECTION. 489.1302 RELATION TO ELECTRONIC
102 25 SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.
102 26 This chapter modifies, limits, and supersedes the federal
102 27 Electronic Signatures in Global and National Commerce Act, 15
102 28 U.S.C. } 7001 et seq., but does not modify, limit, or
102 29 supersede section 101(c) of that Act, 15 U.S.C. } 7001(c), or
102 30 authorize electronic delivery of any of the notices described
102 31 in section 103(b) of that Act, 15 U.S.C. } 7003(b).
102 32 Sec. 114. NEW SECTION. 489.1303 SAVINGS CLAUSE.
102 33 This chapter does not affect an action commenced,
102 34 proceeding brought, or right accrued before this chapter takes
102 35 effect.
103 1 Sec. 115. NEW SECTION. 489.1304 APPLICATION TO EXISTING
103 2 RELATIONSHIPS.
103 3 1. Before January 1, 2011, this chapter governs all of the
103 4 following:
103 5 a. A limited liability company formed on or after January
103 6 1, 2009.
103 7 b. Except as otherwise provided in subsection 3, a limited
103 8 liability company formed before January 1, 2009, which elects,
103 9 in the manner provided in its operating agreement or by law
103 10 for amending the operating agreement, to be subject to this
103 11 chapter.
103 12 2. Except as otherwise provided in subsection 3, on and
103 13 after January 1, 2011, this chapter governs all limited
103 14 liability companies.
103 15 3. For the purposes of applying this chapter to a limited
103 16 liability company formed before January 1, 2009, all of the
103 17 following apply:
103 18 a. The limited liability company's articles of
103 19 organization are deemed to be the company's certificate of
103 20 organization.
103 21 b. For the purposes of applying section 489.102,
103 22 subsection 12, and subject to section 489.112, subsection 4,
103 23 language in the limited liability company's articles of
103 24 organization designating the limited liability company's
103 25 management structure operates as if that language were in the
103 26 operating agreement.
103 27 DIVISION II
103 28 CONVERSION FOR CORPORATIONS AND OTHER ENTITIES
103 29 Sec. 116. Section 490.122, subsection 1, paragraph l, Code
103 30 Supplement 2007, is amended to read as follows:
103 31 l. Articles of merger, or share exchange, or
103 32 conversion ....................................... $ 50
103 33 Sec. 117. Section 490.1101, Code 2007, is amended by
103 34 adding the following new subsections:
103 35 NEW SUBSECTION. 0A. "Converted entity" means a
104 1 corporation or other entity into which a converting entity
104 2 converts pursuant to sections 490.1111 through 490.1114.
104 3 NEW SUBSECTION. 0B. "Converting entity" means a
104 4 corporation or other entity that converts into an other entity
104 5 or corporation pursuant to section 490.1101.
104 6 NEW SUBSECTION. 0C. "Governing statute" of a corporation
104 7 or other entity means the statute that governs the corporation
104 8 or other entity's internal affairs.
104 9 Sec. 118. NEW SECTION. 490.1111 CONVERSION.
104 10 1. An other entity may convert to a domestic corporation,
104 11 and a domestic corporation may convert to an other entity
104 12 pursuant to this section and sections 490.1112 through
104 13 490.1114 and a plan of conversion, if all of the following
104 14 apply:
104 15 a. The other entity's governing statute authorizes the
104 16 conversion.
104 17 b. The conversion is not prohibited by the law of the
104 18 jurisdiction that enacted the governing statute.
104 19 c. The other entity complies with its governing statute in
104 20 effecting the conversion.
104 21 2. A plan of conversion must be in a record and must
104 22 include all of the following:
104 23 a. The name and form of the converting entity before
104 24 conversion.
104 25 b. The name and form of the converted entity after
104 26 conversion.
104 27 c. The terms and conditions of the conversion, including
104 28 the manner and basis for converting interests in the
104 29 converting entity into any combination of money, interests in
104 30 the converted entity, and other consideration.
104 31 d. The organizational documents or articles of
104 32 incorporation and bylaws of the converted entity.
104 33 Sec. 119. NEW SECTION. 490.1112 ACTION ON PLAN OF
104 34 CONVERSION BY CONVERTING DOMESTIC CORPORATION.
104 35 1. In the case of a domestic corporation that is being
105 1 converted into an other entity all of the following apply:
105 2 a. The plan of conversion must be adopted by the domestic
105 3 corporation's board of directors.
105 4 b. After adopting the plan of conversion, the domestic
105 5 corporation's board of directors must submit the plan to the
105 6 domestic corporation's shareholders for their approval. The
105 7 board of directors must also transmit to the shareholders a
105 8 recommendation that the shareholders approve the plan, unless
105 9 the board of directors makes a determination that because of
105 10 conflicts of interest or other special circumstances it should
105 11 not make such a recommendation, in which case the board of
105 12 directors must transmit to the shareholders the basis for that
105 13 determination.
105 14 c. The domestic corporation must notify each shareholder
105 15 of the domestic corporation, whether or not entitled to vote,
105 16 of the meeting of shareholders at which the plan is to be
105 17 submitted for approval. The notice must state that the
105 18 purpose, or one of the purposes, of the meeting is to consider
105 19 the plan of conversion and must contain or be accompanied by a
105 20 copy or summary of the plan of conversion. The notice shall
105 21 include or be accompanied by a copy of the organic documents
105 22 as they will be in effect immediately after the conversion.
105 23 d. The domestic corporation's board of directors may
105 24 condition its submission of the plan of conversion to the
105 25 domestic corporation's shareholders on any basis.
105 26 e. Unless the articles of incorporation, bylaws, or the
105 27 board of directors of the domestic corporation require a
105 28 greater vote or a greater number of votes to be present, the
105 29 approval of the plan of conversion shall require the approval
105 30 of the domestic corporation's shareholders at a meeting at
105 31 which a quorum consisting of at least a majority of the votes
105 32 entitled to be cast on the plan exists, and, if any classes or
105 33 series of shares is entitled to vote as a separate group on
105 34 the plan of conversion, the approval of each such separate
105 35 voting group at a meeting at which a quorum of the voting
106 1 group consisting of at least a majority of the votes entitled
106 2 to be cast on the conversion by that voting group is present.
106 3 f. If any provision of the articles of incorporation,
106 4 bylaws or an agreement of the domestic corporation to which
106 5 any of the directors or shareholders of the domestic
106 6 corporation are parties, adopted or entered into before the
106 7 effective date of this section, applies to a merger of the
106 8 corporation and the document does not refer to a conversion of
106 9 the corporation, the provision shall be deemed to apply to a
106 10 conversion of the corporation until such provision is
106 11 subsequently amended.
106 12 g. If as a result of the conversion as provided in this
106 13 subsection, one or more shareholders of the domestic
106 14 corporation would become subject to owner liability for the
106 15 debts, obligations, or liabilities of any other person or
106 16 entity, approval of the plan of conversion shall require the
106 17 execution, by each such shareholder of the domestic
106 18 corporation, of a separate written consent to become so
106 19 subject to such owner liability.
106 20 2. After a conversion is approved as provided in
106 21 subsection 1, and at any time before a filing is made under
106 22 section 490.1113, a domestic corporation that is being
106 23 converted may amend its plan of conversion or abandon the
106 24 planned conversion as follows:
106 25 a. As provided in the plan of conversion.
106 26 b. Except as prohibited by the plan of conversion, by the
106 27 same consent as was required to approve the plan of
106 28 conversion.
106 29 Sec. 120. NEW SECTION. 490.1113 FILINGS REQUIRED FOR
106 30 CONVERSION == EFFECTIVE DATE.
106 31 1. After a plan of conversion is approved, all of the
106 32 following apply:
106 33 a. A domestic corporation that is being converted into an
106 34 other entity shall deliver to the secretary of state for
106 35 filing articles of conversion, which must include all of the
107 1 following:
107 2 (1) A statement that the domestic corporation has been
107 3 converted into an other entity.
107 4 (2) The name and form of the other entity and the
107 5 jurisdiction of its governing statute.
107 6 (3) The date the conversion is effective under the
107 7 governing statute of the converted entity.
107 8 (4) A statement that the conversion was approved as
107 9 required by this chapter.
107 10 (5) A statement that the conversion was approved as
107 11 required by the governing statute of the converted entity.
107 12 (6) If the converted entity is a foreign other entity not
107 13 authorized to transact business in this state, the street and
107 14 mailing address of an office which the secretary of state may
107 15 use for the purposes of section 490.1114, subsection 3.
107 16 b. If the converting entity is not a converting domestic
107 17 corporation, the converting entity shall deliver to the
107 18 secretary of state for filing articles of incorporation, which
107 19 must include, in addition to the information required by
107 20 section 490.202, all of the following:
107 21 (1) A statement that the domestic corporation was
107 22 converted from an other entity.
107 23 (2) The name and form of the other entity and the
107 24 jurisdiction of its governing statute.
107 25 (3) A statement that the conversion was approved in a
107 26 manner that complied with the other entity's governing
107 27 statute.
107 28 2. A conversion becomes effective according to the
107 29 following:
107 30 a. If the converted entity is a domestic corporation, when
107 31 the articles of incorporation are filed.
107 32 b. If the converted entity is not a domestic corporation,
107 33 as provided by the governing statute of the converted other
107 34 entity.
107 35 Sec. 121. NEW SECTION. 490.1114 EFFECT OF CONVERSION.
108 1 1. A domestic corporation or other entity that has been
108 2 converted pursuant to this article is for all purposes the
108 3 same domestic corporation or other entity that existed before
108 4 the conversion.
108 5 2. When a conversion takes effect, all of the following
108 6 apply:
108 7 a. All property owned by the converting entity remains
108 8 vested in the converted entity.
108 9 b. All debts, liabilities, and other obligations of the
108 10 converting entity continue as obligations of the converted
108 11 entity.
108 12 c. An action or proceeding pending by or against the
108 13 converting entity may be continued as if the conversion had
108 14 not occurred.
108 15 d. The shares or interests of the converting entity are
108 16 reclassified into shares, interests, other securities,
108 17 obligations, rights to acquire shares, interests or other
108 18 securities, or into cash or other property in accordance with
108 19 the plan of conversion; and the shareholders or interest
108 20 holders of the converting entity are entitled only to the
108 21 rights provided to them under the terms of the conversion and
108 22 to any appraisal rights they may have under the organic law of
108 23 the converting entity.
108 24 e. Except as prohibited by other law, all of the rights,
108 25 privileges, immunities, powers, and purposes of the converting
108 26 entity remain vested in the converted entity.
108 27 f. Except as otherwise provided in the plan of conversion,
108 28 the terms and conditions of the plan of conversion take
108 29 effect.
108 30 g. Except as otherwise agreed, the conversion does not
108 31 dissolve a converting domestic corporation for the purposes of
108 32 division XIV.
108 33 3. A converted entity that is a foreign other entity
108 34 consents to the jurisdiction of the courts of this state to
108 35 enforce any obligation owed by the converting corporation, if
109 1 before the conversion the converting corporation was subject
109 2 to suit in this state on the obligation. A converted other
109 3 entity that is a foreign other entity and not authorized to
109 4 transact business in this state appoints the secretary of
109 5 state as its agent for service of process for purposes of
109 6 enforcing an obligation under this subsection. Service on the
109 7 secretary of state under this subsection is made in the same
109 8 manner and with the same consequences as in section 490.504.
109 9 Sec. 122. Section 490.1302, subsection 1, Code 2007, is
109 10 amended by adding the following new paragraph:
109 11 NEW PARAGRAPH. f. Consummation of a conversion of the
109 12 corporation to an other entity pursuant to sections 490.1111
109 13 through 490.1114.
109 14 DIVISION III
109 15 CONFORMING AMENDMENTS
109 16 Sec. 123. Section 9H.1, subsection 16, Code 2007, is
109 17 amended to read as follows:
109 18 16. "Limited liability company" means a limited liability
109 19 company as defined in section 489.102 or 490A.102.
109 20 Sec. 124. Section 9H.4, subsection 8, Code 2007, is
109 21 amended to read as follows:
109 22 8. A corporation or its subsidiary organized under chapter
109 23 490 or a limited liability company organized under chapter 489
109 24 or 490A and to which section 312.8 is applicable.
109 25 Sec. 125. Section 10.1, subsection 9, Code 2007, is
109 26 amended to read as follows:
109 27 9. "Farmers cooperative limited liability company" means a
109 28 limited liability company organized under chapter 489 or 490A,
109 29 if cooperative associations hold one hundred percent of all
109 30 membership interests in the limited liability company.
109 31 Farmers cooperative associations must hold at least seventy
109 32 percent of all membership interests in the limited liability
109 33 company. If more than one type of membership interest is
109 34 established, including any series as provided in section
109 35 489.1201 or 490A.305 or any class or group as provided in
110 1 section 489.1201 or 490A.307, farmers cooperative associations
110 2 must hold at least seventy percent of all membership interests
110 3 of that type.
110 4 Sec. 126. Section 10.1, subsection 17, Code 2007, is
110 5 amended to read as follows:
110 6 17. "Networking farmers limited liability company" means a
110 7 limited liability company, other than a family farm limited
110 8 liability company as defined in section 9H.1, organized under
110 9 chapter 489 or 490A if all of the following conditions are
110 10 satisfied:
110 11 a. Qualified farmers must hold at least fifty=one percent
110 12 of all membership interests in the limited liability company.
110 13 If more than one type of membership interest is established,
110 14 including any series as provided in section 489.1201 or
110 15 490A.305 or any class or group as provided in section 489.1201
110 16 or 490A.307, qualified farmers must hold at least fifty=one
110 17 percent of all membership interests of that type.
110 18 b. Qualified persons must hold at least seventy percent of
110 19 all membership interests in the limited liability company. If
110 20 more than one type of membership interest is established,
110 21 including any series as provided in section 489.1201 or
110 22 490A.305 or any class or group as provided in section 489.1201
110 23 or 490A.307, qualified persons must hold at least seventy
110 24 percent of all membership interests of that type.
110 25 Sec. 127. Section 10.10, subsection 1, paragraph c, Code
110 26 2007, is amended to read as follows:
110 27 c. Less than fifty percent of the interest in the farmers
110 28 cooperative limited liability company is held by members which
110 29 are parties to intra=company loan agreements. If more than
110 30 one type of membership interest is established, including any
110 31 series as provided in section 489.1201 or 490A.305 or any
110 32 class or group as provided in section 489.1201 or 490A.307,
110 33 less than fifty percent of the interest in each type of
110 34 membership shall be held by members which are parties to
110 35 intra=company loan agreements.
111 1 Sec. 128. Section 10B.1, subsection 7, Code 2007, is
111 2 amended to read as follows:
111 3 7. "Limited liability company" means a foreign or domestic
111 4 limited liability company, including a limited liability
111 5 company as defined in section 489.102 or 490A.102.
111 6 Sec. 129. Section 10B.4, subsection 1, Code 2007, is
111 7 amended to read as follows:
111 8 1. A biennial report shall be filed by a reporting entity
111 9 with the secretary of state on or before March 31 of each
111 10 odd=numbered year as required by rules adopted by the
111 11 secretary of state pursuant to chapter 17A. However, a
111 12 reporting entity required to file a biennial report pursuant
111 13 to chapter 489 or 490A, 490, 490A, 496C, 497, 498, 499, 501,
111 14 501A, or 504 shall file the report required by this section in
111 15 the same year as required by that chapter. The reporting
111 16 entity may file the report required by this section together
111 17 with the biennial report required to be filed by one of the
111 18 other chapters referred to in this subsection. The reports
111 19 shall be filed on forms prepared and supplied by the secretary
111 20 of state. The secretary of state may provide for combining
111 21 its reporting forms with other biennial reporting forms
111 22 required to be used by the reporting entities.
111 23 Sec. 130. Section 10B.7, unnumbered paragraph 1, Code
111 24 Supplement 2007, is amended to read as follows:
111 25 Lessees of agricultural land under section 9H.4, subsection
111 26 2, paragraph "c", for research or experimental purposes, shall
111 27 file a biennial report with the secretary of state on or
111 28 before March 31 of each odd=numbered year on forms adopted
111 29 pursuant to chapter 17A and supplied by the secretary of
111 30 state. However, a lessee required to file a biennial report
111 31 pursuant to chapter 489 or 490A, 490, 490A, 496C, 497, 498,
111 32 499, 501, 501A, or 504 shall file the report required by this
111 33 section in the same year as required by that chapter. The
111 34 lessee may file the report required by this section together
111 35 with the biennial report required to be filed by one of the
112 1 other chapters referred to in this paragraph. The report
112 2 shall contain the following information for the reporting
112 3 period:
112 4 Sec. 131. Section 10C.1, subsection 11, Code 2007, is
112 5 amended to read as follows:
112 6 11. "Limited liability company" means a limited liability
112 7 company as defined in section 489.102 or 490A.102.
112 8 Sec. 132. Section 10D.1, subsection 3, Code 2007, is
112 9 amended to read as follows:
112 10 3. "Qualified enterprise" or "enterprise" means a limited
112 11 liability company as defined in section 489.102 or 490A.102, a
112 12 domestic or foreign corporation subject to chapter 490, a
112 13 nonprofit corporation organized under chapter 504, a limited
112 14 liability company as defined in section 490A.102, a
112 15 cooperative association as defined in section 10.1, or a
112 16 foreign business as defined in section 9I.1.
112 17 Sec. 133. Section 203.1, subsection 10, paragraph j,
112 18 unnumbered paragraph 1, Code Supplement 2007, is amended to
112 19 read as follows:
112 20 A limited liability company as defined in section 489.102
112 21 or 490A.102 that meets all of the following requirements:
112 22 Sec. 134. Section 421.26, Code Supplement 2007, is amended
112 23 to read as follows:
112 24 421.26 PERSONAL LIABILITY FOR TAX DUE.
112 25 If a licensee or other person under section 452A.65, a
112 26 retailer or purchaser under chapter 423A, 423B, or 423E, or
112 27 section 423.31 or 423.33, or a retailer or purchaser under
112 28 section 423.32, a user under section 423.34, or a permit
112 29 holder or licensee under section 453A.13, 453A.16, or 453A.44
112 30 fails to pay a tax under those sections when due, an officer
112 31 of a corporation or association, notwithstanding sections
112 32 section 489.304 or sections 490A.601 and 490A.602, a member or
112 33 manager of a limited liability company, or a partner of a
112 34 partnership, having control or supervision of or the authority
112 35 for remitting the tax payments and having a substantial legal
113 1 or equitable interest in the ownership of the corporation,
113 2 association, limited liability company, or partnership, who
113 3 has intentionally failed to pay the tax is personally liable
113 4 for the payment of the tax, interest, and penalty due and
113 5 unpaid. However, this section shall not apply to taxes on
113 6 accounts receivable. The dissolution of a corporation,
113 7 association, limited liability company, or partnership shall
113 8 not discharge a person's liability for failure to remit the
113 9 tax due.
113 10 Sec. 135. Section 422.16, subsection 4, Code Supplement
113 11 2007, is amended to read as follows:
113 12 4. Every withholding agent who fails to withhold or pay to
113 13 the department any sums required by this chapter to be
113 14 withheld and paid, shall be personally, individually, and
113 15 corporately liable therefor to the state of Iowa, and any sum
113 16 or sums withheld in accordance with the provisions of
113 17 subsections 1 and 12, shall be deemed to be held in trust for
113 18 the state of Iowa. Notwithstanding sections section 489.304
113 19 or sections 490A.601 and 490A.602, this subsection applies to
113 20 a member or manager of a limited liability company.
113 21 Sec. 136. Section 476C.1, subsection 6, paragraph b,
113 22 subparagraph (6), Code 2007, is amended to read as follows:
113 23 (6) A cooperative corporation organized pursuant to
113 24 chapter 497 or a limited liability corporation company
113 25 organized pursuant to chapter 489 or 490A whose shares and
113 26 membership are held by an entity that is not prohibited from
113 27 owning agricultural land under chapter 9H.
113 28 Sec. 137. Section 488.108, subsection 4, paragraph b,
113 29 subparagraph (4), Code 2007, is amended to read as follows:
113 30 (4) For a limited liability company, under chapter 489,
113 31 section 489.108, 489.109, or 489.706 and for a limited
113 32 liability company under chapter 490A, section 490A.401,
113 33 490A.402, or 490A.1322.
113 34 Sec. 138. Section 490.401, subsection 2, paragraph b,
113 35 subparagraph (4), Code 2007, is amended to read as follows:
114 1 (4) For a limited liability company, under chapter 489,
114 2 section 489.108, 489.109, or 489.706 and for a limited
114 3 liability company under chapter 490A, section 490A.401,
114 4 490A.402, or 490A.1322.
114 5 Sec. 139. Section 501A.102, subsections 9 and 13, Code
114 6 2007, are amended to read as follows:
114 7 9. "Domestic business entity" means a business entity
114 8 organized under the laws of this state, including but not
114 9 limited to a limited liability company as defined in section
114 10 489.102 or 490A.102; a corporation organized pursuant to
114 11 chapter 490; a nonprofit corporation organized under chapter
114 12 504; a limited liability company as defined in section
114 13 490A.102; a partnership, limited partnership, limited
114 14 liability partnership, or limited liability limited
114 15 partnership as provided in chapter 486A or 488; or a
114 16 cooperative association or other cooperative organized under
114 17 this chapter or chapter 497, 498, 499, or 501.
114 18 13. "Iowa limited liability company" means a limited
114 19 liability company governed by chapter 489 or 490A.
114 20 Sec. 140. Section 501A.1101, subsection 1, Code Supplement
114 21 2007, is amended to read as follows:
114 22 1. AUTHORIZATION. Unless otherwise prohibited,
114 23 cooperatives organized under the laws of this state, including
114 24 cooperatives organized under this chapter or traditional
114 25 cooperatives, may merge or consolidate with each other, an
114 26 Iowa limited liability company under the provisions of section
114 27 489.1015 or 490A.1207, or other business entities organized
114 28 under the laws of another state by complying with the
114 29 provisions of this section and the law of the state where the
114 30 surviving or new business entity will exist. A cooperative
114 31 shall not merge or consolidate with a business entity
114 32 organized under the laws of this state, other than a
114 33 traditional cooperative, unless the law governing the business
114 34 entity expressly authorizes merger or consolidation with a
114 35 cooperative. This subsection does not authorize a foreign
115 1 business entity to do any act not authorized by the law
115 2 governing the foreign business entity.
115 3 Sec. 141. Section 501A.1101, subsection 2, paragraphs a
115 4 through c, Code Supplement 2007, are amended to read as
115 5 follows:
115 6 a. The names of the constituent domestic cooperative, the
115 7 name of any Iowa limited liability company that is a party to
115 8 the merger, to the extent authorized under section 489.1015 or
115 9 490A.1207, and any foreign business entities.
115 10 b. The name of the surviving or new domestic cooperative,
115 11 Iowa limited liability company as required by section 489.1015
115 12 or 490A.1207, or other foreign business entity.
115 13 c. The manner and basis of converting membership or
115 14 ownership interests of the constituent domestic cooperative,
115 15 the Iowa limited liability company that is a party as provided
115 16 in section 489.1015 or 490A.1207, or foreign business entity
115 17 into membership or ownership interests in the surviving or new
115 18 domestic cooperative, the surviving Iowa limited liability
115 19 company as authorized in section 489.1015 or 490A.1207, or
115 20 foreign business entity.
115 21 Sec. 142. Section 501A.1101, subsection 5, paragraph c,
115 22 Code Supplement 2007, is amended to read as follows:
115 23 c. If a merger involves an Iowa limited liability company,
115 24 this subsection is subject to the provisions of section
115 25 489.1015 or 490A.1207.
115 26 Sec. 143. Section 501A.1102, subsection 2, unnumbered
115 27 paragraph 1, Code 2007, is amended to read as follows:
115 28 An Iowa limited liability company may only participate in a
115 29 merger under this section to the extent authorized under
115 30 section 489.1015 or 490A.1207. A parent domestic cooperative
115 31 or a subsidiary that is a domestic cooperative may complete
115 32 the merger of a subsidiary as provided in this section.
115 33 However, if either the parent cooperative or the subsidiary is
115 34 a business entity organized under the laws of this state, the
115 35 merger of the subsidiary is not authorized under this section
116 1 unless the law governing the business entity expressly
116 2 authorizes merger with a cooperative.
116 3 Sec. 144. Section 501A.1103, subsection 2, paragraph a,
116 4 subparagraphs (3) and (6), Code 2007, are amended to read as
116 5 follows:
116 6 (3) The abandonment is approved in such manner as may be
116 7 required by section 489.1015 or 490A.1207 for the involvement
116 8 of an Iowa limited liability company, or for a foreign
116 9 business entity by the laws of the state under which the
116 10 foreign business entity is organized.
116 11 (6) The plan is abandoned before the effective date of the
116 12 plan by a resolution of the board of any constituent domestic
116 13 cooperative abandoning the plan of merger approved by the
116 14 affirmative vote of a majority of the directors present,
116 15 subject to the contract rights of any other person under the
116 16 plan. If a plan of merger is with a domestic business entity
116 17 or foreign business entity, the plan of merger may be
116 18 abandoned before the effective date of the plan by a
116 19 resolution of the foreign business entity adopted according to
116 20 the laws of the state under which the foreign business entity
116 21 is organized, subject to the contract rights of any other
116 22 person under the plan. If the plan of merger is with an Iowa
116 23 limited liability company, the plan of merger may be abandoned
116 24 by the Iowa limited liability company as provided in section
116 25 489.1015 or 490A.1207, subject to the contractual rights of
116 26 any other person under the plan.
116 27 Sec. 145. Section 504.401, subsection 2, paragraph b,
116 28 subparagraph (4), Code 2007, is amended to read as follows:
116 29 (4) For a limited liability company, under chapter 489,
116 30 section 489.108, 489.109, or 489.706 and for a limited
116 31 liability company under chapter 490A, section 490A.401,
116 32 490A.402, or 490A.1322.
116 33 Sec. 146. Section 504.403, subsection 1, paragraph b,
116 34 subparagraph (4), Code 2007, is amended to read as follows:
116 35 (4) For a limited liability company, under chapter 489,
117 1 section 489.108, 489.109, or 489.706 and for a limited
117 2 liability company under chapter 490A, section 490A.401,
117 3 490A.402, or 490A.1322.
117 4 Sec. 147. Section 524.303, subsection 2, Code 2007, is
117 5 amended to read as follows:
117 6 2. Applicable fees, payable to the secretary of state as
117 7 specified in section 489.117 or 490A.124 or section 490.122 or
117 8 490A.124, for the filing and recording of the articles of
117 9 incorporation.
117 10 Sec. 148. Section 524.315, subsection 1, Code 2007, is
117 11 amended to read as follows:
117 12 1. A state bank organized as a limited liability company
117 13 under this chapter shall also be subject to chapter 489, the
117 14 revised uniform limited liability company Act or chapter 490A,
117 15 the Iowa limited liability company Act. If a provision of
117 16 chapter 489, the revised uniform limited liability company
117 17 Act, or chapter 490A, the Iowa limited liability company Act
117 18 conflicts with a provision of this chapter or any rule of the
117 19 superintendent adopted pursuant to this chapter, the
117 20 provisions of this chapter or rule of the superintendent shall
117 21 control.
117 22 Sec. 149. Section 524.1309, unnumbered paragraph 1, Code
117 23 2007, is amended to read as follows:
117 24 In lieu of the dissolution procedure prescribed in sections
117 25 524.1303 to 524.1306, a state bank may cease to carry on the
117 26 business of banking and, after compliance with this section,
117 27 continue as a corporation subject to chapter 490; or if the
117 28 state bank is organized as a limited liability company under
117 29 this chapter, continue as a limited liability company subject
117 30 to chapter 489 or 490A.
117 31 Sec. 150. Section 524.1309, subsections 1, 3, 5, 6, 7, 8,
117 32 and 9, Code 2007, are amended to read as follows:
117 33 1. A state bank that has commenced business may propose to
117 34 voluntarily cease to carry on the business of banking and
117 35 become a corporation subject to chapter 490, or a limited
118 1 liability company subject to chapter 489 or 490A, upon the
118 2 affirmative vote of the holders of at least a majority of the
118 3 shares entitled to vote on such proposal, adopting a plan
118 4 involving both a provision for acquisition of its assets and
118 5 assumption of its liabilities by another state bank, national
118 6 bank, or other financial institution insured by the federal
118 7 deposit insurance corporation, and a provision for continuance
118 8 of its business if acquisition of its assets and assumption of
118 9 its liabilities is not effected, or any other plan providing
118 10 for the cessation of banking business and the payment of its
118 11 liabilities.
118 12 3. Immediately upon adoption and approval of a plan to
118 13 voluntarily cease to carry on the business of banking and
118 14 become a corporation subject to chapter 490, or a limited
118 15 liability company subject to chapter 489 or 490A, the state
118 16 bank shall deliver to the superintendent a plan to cease the
118 17 business of banking and become a corporation subject to
118 18 chapter 490, or a limited liability company subject to chapter
118 19 489 or 490A, which shall be signed by two of its duly
118 20 authorized officers and shall contain the name of the state
118 21 bank, the post office address of its principal place of
118 22 business, the name and address of its officers and directors,
118 23 the number of shares entitled to vote on the plan and the
118 24 number of shares voted for or against the plan, respectively,
118 25 the nature of the business to be conducted by the corporation
118 26 under chapter 490, or by the limited liability company subject
118 27 to chapter 489 or 490A, and the general nature of the assets
118 28 to be held by the corporation or company.
118 29 5. The board of directors has full power to complete the
118 30 settlement of the affairs of the state bank. Within thirty
118 31 days after approval by the superintendent of the plan to cease
118 32 the business of banking and become a corporation subject to
118 33 chapter 490, or a limited liability company subject to chapter
118 34 489 or 490A, the state bank shall give notice of its intent to
118 35 persons identified in section 524.1305, subsection 3, in the
119 1 manner provided for in that subsection. In completing the
119 2 settlement of its affairs as a state bank, the state bank
119 3 shall also follow the procedure prescribed in section
119 4 524.1305, subsections 4, 5, and 6.
119 5 6. Upon completion of all the requirements of this
119 6 section, the state bank shall deliver to the superintendent
119 7 articles of intent to be subject to chapter 490 or 489 or
119 8 490A, together with the applicable filing and recording fees,
119 9 which shall set forth that the state bank has complied with
119 10 this section, that it has ceased to carry on the business of
119 11 banking, and the information required by section 490.202
119 12 relative to the contents of articles of incorporation under
119 13 chapter 490, or articles of organization under chapter 489 or
119 14 490A. If the superintendent finds that the state bank has
119 15 complied with this section and that the articles of intent to
119 16 be subject to chapter 490 or 489 or 490A satisfy the
119 17 requirements of this section, the superintendent shall deliver
119 18 them to the secretary of state for filing and recording in the
119 19 secretary of state's office, and the superintendent shall file
119 20 and record them in the office of the county recorder.
119 21 7. Upon the filing of the articles of intent to be subject
119 22 to chapter 490 or 489 or 490A, the state bank shall cease to
119 23 be a state bank subject to this chapter, and shall cease to
119 24 have the powers of a state bank subject to this chapter and
119 25 shall become a corporation subject to chapter 490 or a limited
119 26 liability company subject to chapter 489 or 490A. The
119 27 secretary of state shall issue a certificate as to the filing
119 28 of the articles of intent to be subject to chapter 490 or 489
119 29 or 490A and send the certificate to the corporation or limited
119 30 liability company or its representative. The articles of
119 31 intent to be subject to chapter 490 or 489 or 490A shall be
119 32 the articles of incorporation of the corporation or a limited
119 33 liability company. The provisions of chapter 490 or 489 or
119 34 490A becoming applicable to a corporation or limited liability
119 35 company formerly doing business as a state bank shall not
120 1 affect any right accrued or established, or liability or
120 2 penalty incurred under this chapter prior to the filing with
120 3 the secretary of state of the articles of intent to be subject
120 4 to chapter 490 or 489 or 490A.
120 5 8. A shareholder of a state bank who objects to adoption
120 6 by the state bank of a plan to cease to carry on the business
120 7 of banking and to continue as a corporation subject to chapter
120 8 490, or a limited liability company subject to chapter 489 or
120 9 490A, is entitled to appraisal rights provided for in chapter
120 10 490, division XIII, or in chapter 489, section 489.604 or
120 11 490A, subchapter VII.
120 12 9. A state bank, at any time prior to the approval of the
120 13 articles of intent to become subject to chapter 490 or 489 or
120 14 490A, may revoke the proceedings in the manner prescribed by
120 15 section 524.1306.
120 16 Sec. 151. Section 524.2001, Code 2007, is amended to read
120 17 as follows:
120 18 524.2001 APPLICABILITY OF OTHER CHAPTERS.
120 19 Chapters 489, 490, 490A, 491, 492, and 493 do not apply to
120 20 banks except as provided by this chapter.
120 21 Sec. 152. Section 547.1, Code 2007, is amended to read as
120 22 follows:
120 23 547.1 USE OF TRADE NAME == VERIFIED STATEMENT REQUIRED.
120 24 A person shall not engage in or conduct a business under a
120 25 trade name, or an assumed name of a character other than the
120 26 true surname of each person owning or having an interest in
120 27 the business, unless the person first records with the county
120 28 recorder of the county in which the business is to be
120 29 conducted a verified statement showing the name, post office
120 30 address, and residence address of each person owning or having
120 31 an interest in the business, and the address where the
120 32 business is to be conducted. However, this provision does not
120 33 apply to any person organized or incorporated in this state as
120 34 a domestic entity or authorized to do business in this state
120 35 as a foreign entity, if the person is a limited partnership
121 1 under chapter 488; a corporation under chapter 490; a limited
121 2 liability company under chapter 489 or 490A; a professional
121 3 corporation under chapter 496C; a cooperative or cooperative
121 4 association under chapter 497, 498, 499, 501, or 501A; or a
121 5 nonprofit corporation under chapter 504.
121 6 DIVISION IV
121 7 REPEALS
121 8 SUBCHAPTER XVII
121 9 REPEAL
121 10 Sec. 153. NEW SECTION. 490A.1701 REPEAL.
121 11 This chapter is repealed on December 31, 2010.
121 12 Sec. 154. FUTURE ELIMINATION OF NONCONFORMING REFERENCES.
121 13 The following sections, as amended by this Act, or as amended
121 14 by a subsequent Act, are amended as follows:
121 15 1. Sections 9H.1, 10B.1, 10C.1, 10D.1, 203.1, and
121 16 501A.102, by striking from the sections the word and figure
121 17 "or 490A.102".
121 18 2. Sections 9H.4, 10.1, 10B.4, 10B.7, 476C.1, 501A.102,
121 19 524.1309, and 547.1, by striking from the sections the word
121 20 and figure "or 490A".
121 21 3. Sections 10.1 and 10.10, by striking from the sections
121 22 the word and figure "or 490A.305".
121 23 4. Sections 10.1 and 10.10, by striking from the sections
121 24 the word and figure "or 490A.307".
121 25 5. Sections 421.26 and 422.16, by striking from the
121 26 sections the words and figures "or sections 490A.601 and
121 27 490A.602".
121 28 6. Sections 488.108, 490.401, 504.401, and 504.403, by
121 29 striking from the sections the words and figures "and for a
121 30 limited liability company under chapter 490A, section
121 31 490A.401, 490A.402, or 490A.1322".
121 32 7. Sections 501A.1101, 501A.1102, and 501A.1103, by
121 33 striking from the sections the word and figure "or 490A.1207".
121 34 8. Section 524.303, by striking from the section the word
121 35 and figure "or 490A.124".
122 1 9. Section 524.315, by striking from the section the words
122 2 and figure "or chapter 490A, the Iowa limited liability
122 3 company Act".
122 4 10. Section 524.1309, by striking from the section the
122 5 words and figures "or 490A, subchapter VII".
122 6 11. Section 524.2001, by striking from the section the
122 7 figure "490A,".
122 8 DIVISION V
122 9 EFFECTIVE DATES
122 10 Sec. 155. EFFECTIVE DATES.
122 11 1. Except as provided in subsection 2, this Act takes
122 12 effect on January 1, 2009.
122 13 2. The section of division IV of this Act that provides
122 14 for the future elimination of nonconforming references takes
122 15 effect on December 31, 2010.
122 16
122 17
122 18
122 19 PATRICK J. MURPHY
122 20 Speaker of the House
122 21
122 22
122 23
122 24 JOHN P. KIBBIE
122 25 President of the Senate
122 26
122 27 I hereby certify that this bill originated in the House and
122 28 is known as House File 2633, Eighty=second General Assembly.
122 29
122 30
122 31
122 32 MARK BRANDSGARD
122 33 Chief Clerk of the House
122 34 Approved , 2008
122 35
123 1
123 2
123 3 CHESTER J. CULVER
123 4 Governor