Senate Study Bill 1188 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON ZAUN) A BILL FOR An Act providing for business organizations, including limited 1 liability companies, providing penalties, and including 2 effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1051XC (18) 90 da/jh
S.F. _____ DIVISION I 1 LIMITED LIABILITY COMPANIES 2 Section 1. Section 489.101, Code 2023, is amended to read 3 as follows: 4 489.101 Short title. 5 1. This chapter may be cited as the “Revised Uniform 6 “Uniform Limited Liability Company Act” . 7 2. In addition, article 14 subchapter XIV of this chapter 8 may be cited as provided in section 489.14101 . 9 Sec. 2. Section 489.102, Code 2023, is amended to read as 10 follows: 11 489.102 Definitions. 12 As used in this chapter , unless the context otherwise 13 requires : 14 1. “Certificate of organization” means the certificate 15 required by section 489.201 . The term includes the certificate 16 as amended or restated. 17 2. “Contribution” means any benefit provided by a person to 18 a limited liability company that is any of the following: 19 a. In order to become a member upon formation of the company 20 and in accordance with an agreement between or among the 21 persons that have agreed to become the initial members of the 22 company. 23 b. In order to become a member after formation of the 24 company and in accordance with an agreement between the person 25 and the company. 26 c. In the person’s capacity as a member and in accordance 27 with the operating agreement or an agreement between the member 28 and the company. 29 2. “Contribution” , except in the phrase “right of 30 contribution” , means property or a benefit described in section 31 489.402 which is provided by a person to a limited liability 32 company to become a member or in the person’s capacity as a 33 member. 34 3. “Debtor in bankruptcy” means a person that is the subject 35 -1- LSB 1051XC (18) 90 da/jh 1/ 161
S.F. _____ of any of the following: 1 a. An order for relief under Tit. 11 of the United States 2 Code or a comparable order under a successor statute of general 3 application. 4 b. A comparable order under federal, state, or foreign law 5 governing insolvency. 6 4. “Deliver” or “delivery” means any method of delivery 7 used in conventional commercial practice, including delivery in 8 person, by hand, mail, commercial delivery, and if authorized 9 in accordance with section 489.120, by electronic transmission. 10 5. “Distribution” , except as otherwise provided in section 11 489.405, subsection 6 , means a transfer of money or other 12 property from a limited liability company to another a person 13 on account of a transferable interest or in the person’s 14 capacity as a member . 15 a. “Distribution” includes all of the following: 16 (1) A redemption or other purchase by a limited liability 17 company of a transferable interest. 18 (2) A transfer to a member in return for the member’s 19 relinquishment of any right to participate as a member in 20 the management or conduct of the limited liability company’s 21 activities and affairs or to have access to records or other 22 information concerning the company’s activities and affairs. 23 b. “Distribution” does not include amounts constituting 24 reasonable compensation for present or past service or payments 25 made in the ordinary course of business under a bona fide 26 retirement plan or other bona fide benefits program. 27 6. “Domestic cooperative” means an entity organized on a 28 cooperative basis under chapter 497 , 498 , or 499 , a cooperative 29 organized under chapter 499A , or a cooperative organized under 30 chapter 501 or 501A . 31 7. “Effective” , with respect to a record required or 32 permitted to be delivered to the secretary of state for filing 33 under this chapter , means effective under section 489.205, 34 subsection 3 . 35 -2- LSB 1051XC (18) 90 da/jh 2/ 161
S.F. _____ 7. “Electronic” means relating to technology having 1 electrical, digital, magnetic, wireless, optical, 2 electromagnetic, or similar capabilities. 3 8. “Electronic transmission” or “electronically transmitted” 4 means any form or process of communication not directly 5 involving the physical transfer of paper that is suitable for 6 the retention, retrieval, and reproduction of information by 7 the recipient. or another tangible medium that is all of the 8 following: 9 a. Suitable for the retention, retrieval, and reproduction 10 of information by the recipient. 11 b. Retrievable in paper form by the recipient through an 12 automated process used in conventional commercial practice, 13 unless otherwise authorized in accordance with subsection 15. 14 9. “Filing entity” means an unincorporated entity, other 15 than a limited liability partnership, that is of a type that 16 is created by filing a public organic record or is required to 17 file a public organic record that evidences its creation. 18 9. 10. “Foreign limited liability company” means an 19 unincorporated entity formed under the law of a jurisdiction 20 other than this state and denominated by that law as a limited 21 liability company which would be a limited liability company if 22 formed under the law of this state . 23 11. “Jurisdiction” , used to refer to a political entity, 24 means the United States, a state, a foreign county, or a 25 political subdivision of a foreign country. 26 12. “Jurisdiction of formation” means the jurisdiction whose 27 law governs the internal affairs of an entity. 28 10. 13. “Limited liability company” , except in the phrase 29 “foreign limited liability company” , and in subchapter X means 30 an entity formed under this chapter or which becomes subject to 31 this chapter under subchapter X or section 489.110 . 32 11. 14. “Manager” means a person that under the operating 33 agreement of a manager-managed limited liability company is 34 responsible, alone or in concert with others, for performing 35 -3- LSB 1051XC (18) 90 da/jh 3/ 161
S.F. _____ the management functions stated in section 489.407, subsection 1 3 . 2 12. 15. “Manager-managed limited liability company” means a 3 limited liability company that qualifies under section 489.407, 4 subsection 1 . 5 13. 16. “Member” means a person that has become a member 6 of a limited liability company under section 489.401 and has 7 not dissociated under section 489.602 . for whom all of the 8 following are true: 9 a. The person has become a member of a limited liability 10 company under section 489.401 or was a member in a limited 11 liability company when the company became subject to this 12 chapter under section 489.110. 13 b. The person is not dissociated under section 489.602. 14 14. 17. “Member-managed limited liability company” means a 15 limited liability company that is not a manager-managed limited 16 liability company. 17 18. “Nonfiling entity” means an unincorporated entity that 18 is of a type that is not created by filing a public organic 19 record. 20 15. 19. “Operating agreement” means the agreement, whether 21 or not referred to as an operating agreement and whether oral, 22 implied, in a record, implied, or in any combination thereof, 23 of all the members of a limited liability company, including 24 a sole member, concerning the matters described in section 25 489.110, subsection 1 . The term includes the agreement as 26 amended or restated. 27 16. 20. “Organizer” means a person that acts under section 28 489.201 to form a limited liability company. 29 17. 21. a. “Person” means an individual, business 30 corporation, business trust, estate, trust, nonprofit 31 corporation, partnership, limited partnership, limited 32 liability company, domestic cooperative, unincorporated 33 nonprofit association, statutory trust, business trust, 34 common-law business trust, estate, trust, association, joint 35 -4- LSB 1051XC (18) 90 da/jh 4/ 161
S.F. _____ venture, public corporation, government or governmental 1 subdivision, agency, or instrumentality, or any other legal or 2 commercial entity. 3 b. “Person” includes a protected series, however 4 denominated, of an entity if the protected series is 5 established under law that limits, or limits if conditions 6 specified under law are satisfied, the ability of a creditor 7 of the entity or of any other protected series of the entity to 8 satisfy a claim from assets of the protected series. 9 18. 22. “Principal office” means the principal executive 10 office of a limited liability company or foreign limited 11 liability company, whether or not the office is located in this 12 state. 13 23. “Property” means all property, whether real, personal, 14 or mixed or tangible or intangible, or any right or interest 15 therein. 16 19. 24. “Record” , used as a noun, means information that 17 is inscribed on a tangible medium or that is stored in an 18 electronic or other medium and is retrievable in perceivable 19 form. 20 20. “Registered office” means the office that a limited 21 liability company or foreign limited liability company is 22 required to designate and maintain under section 489.113 . 23 25. “Registered agent” means an agent of a limited 24 liability company or foreign limited liability company which is 25 authorized to receive service of any process, notice, or demand 26 required or permitted by law to be served on the company. 27 26. “Registered foreign limited liability company” means 28 a foreign limited liability company that is registered to do 29 business in this state pursuant to a statement of registration 30 filed by the secretary of state. 31 21. 27. “Sign” means, with the present intent to 32 authenticate or adopt a record, to do any of the following: 33 a. Execute or adopt a tangible symbol. 34 b. Attach to or logically associate with the record an 35 -5- LSB 1051XC (18) 90 da/jh 5/ 161
S.F. _____ electronic symbol, sound, or process. 1 22. 28. “State” means a state of the United States, the 2 District of Columbia, Puerto Rico, the United States Virgin 3 Islands, or any territory or insular possession subject to the 4 jurisdiction of the United States. 5 23. 29. “Transfer” includes an assignment, conveyance, 6 deed, bill of sale, lease, mortgage, security interest, 7 encumbrance, gift, or transfer by operation of law. any of the 8 following: 9 a. An assignment. 10 b. A conveyance. 11 c. A sale. 12 d. A lease. 13 e. An encumbrance, including a mortgage or security 14 interest. 15 f. A gift. 16 g. A transfer by operation of law. 17 24. 30. a. “Transferable interest” means the right, as 18 originally associated with initially owned by a person in the 19 person’s capacity as a member, to receive distributions from 20 a limited liability company , in accordance with the operating 21 agreement, whether or not the person remains a member or 22 continues to own any part of the right. 23 b. “Transferable interest” applies to any fraction of the 24 interest, by whomever owned. 25 25. 31. a. “Transferee” means a person to which all or 26 part of a transferable interest has been transferred, whether 27 or not the transferor is a member. 28 b. “Transferee” includes a person that owns a transferable 29 interest under section 489.603, subsection 1, paragraph “c” . 30 Sec. 3. Section 489.103, Code 2023, is amended to read as 31 follows: 32 489.103 Knowledge —— notice. 33 1. A person knows a fact when if the person has or is any 34 of the following: 35 -6- LSB 1051XC (18) 90 da/jh 6/ 161
S.F. _____ a. Has actual knowledge of it. 1 b. Is deemed to know it under subsection 4 , paragraph “a” , 2 or law other than this chapter . 3 2. A person has notice of a fact when if the person has or 4 is any of the following: 5 a. Has reason to know the fact from all of the facts known 6 to the person at the time in question. 7 b. Is deemed to have notice of the fact under subsection 4 , 8 paragraph “b” . 9 3. A Subject to section 489.210, subsection 6, a person 10 notifies another person of a fact by taking steps reasonably 11 required to inform the other person in ordinary course, whether 12 or not those steps cause the other person knows to know the 13 fact. 14 4. A person that is not a member is deemed both all of the 15 following: 16 a. To know of a limitation on authority to transfer real 17 property as provided in section 489.302, subsection 7 . 18 b. To have notice of all of the following regarding a 19 limited liability company’s : 20 (1) Dissolution, The limited liability company’s 21 dissolution, ninety days after a statement of dissolution under 22 section 489.702, subsection 2 , paragraph “b” , subparagraph (1), 23 becomes effective. 24 (2) Termination, The limited liability company’s 25 termination, ninety days after a statement of termination under 26 section 489.702, subsection 2 , paragraph “b” , subparagraph (6), 27 becomes effective. 28 (3) Merger, The limited liability company’s participation 29 in a merger, interest exchange, conversion, or domestication, 30 ninety days after articles of merger, interest exchange, 31 conversion, or domestication under article 10 subchapter X 32 become effective. 33 Sec. 4. Section 489.104, Code 2023, is amended to read as 34 follows: 35 -7- LSB 1051XC (18) 90 da/jh 7/ 161
S.F. _____ 489.104 Nature, purpose, and duration of limited liability 1 company. 2 1. A limited liability company is an entity distinct from 3 its member or members. 4 2. A limited liability company may have any lawful purpose, 5 regardless of whether for profit. 6 3. A limited liability company has perpetual duration. 7 Sec. 5. Section 489.105, Code 2023, is amended to read as 8 follows: 9 489.105 Powers. 10 1. Except as otherwise provided in subsection 2 , a limited 11 liability company has the capacity to sue and be sued in its 12 own name and the power to do all things necessary or convenient 13 to carry on its activities and affairs . 14 2. Until a limited liability company has or has had at 15 least one member, the limited liability company lacks the 16 capacity to do any act or carry on any activity except all of 17 the following: 18 a. Delivering to the secretary of state for filing a 19 statement of change under section 489.114 , an amendment to the 20 certificate under section 489.202 , a statement of correction 21 under section 489.206 , a biennial report under section 489.209 , 22 a statement of withdrawal or a statement of rescission under 23 section 489.701A , or a statement of termination under section 24 489.702, subsection 2 , paragraph “b” , subparagraph (6). 25 b. Admitting a member under section 489.401 . 26 c. Dissolving under section 489.701 . 27 3. A limited liability company that has or has had at least 28 one member may ratify an act or activity that occurred when the 29 company lacked capacity under subsection 2 . 30 Sec. 6. Section 489.106, Code 2023, is amended to read as 31 follows: 32 489.106 Governing law. 33 The law of this state governs all of the following: 34 1. The internal affairs of a limited liability company. 35 -8- LSB 1051XC (18) 90 da/jh 8/ 161
S.F. _____ 2. The liability of a member as member and a manager as 1 manager for the debts, obligations, a debt, obligation, or 2 other liabilities liability of a limited liability company. 3 Sec. 7. Section 489.108, Code 2023, is amended to read as 4 follows: 5 489.108 Name Permitted names . 6 1. The name of a limited liability company must contain 7 the words phrase “limited liability company” or “limited 8 company” or the abbreviation “L. L. C.”, “LLC”, “L. C.”, or “LC”. 9 “Limited” may be abbreviated as “Ltd.”, and “company” may be 10 abbreviated as “Co.”. 11 2. Unless authorized by Except as otherwise provided in 12 subsection 3 , the name of a limited liability company , and 13 the name under which a foreign limited liability company may 14 register to do business in this state, must be distinguishable 15 in on the records of the secretary of state from all any of the 16 following: 17 a. The name of each person that is not an individual and 18 that is incorporated, organized, or authorized to transact 19 business in this state. 20 b. Each name reserved under section 489.109 . 21 a. The name of an existing person whose formation required 22 the filing of a record by the secretary of state and which is 23 not at the time administratively dissolved, or if such person 24 has been administratively dissolved, within five years of the 25 effective date of dissolution. 26 b. The name of a limited liability partnership whose 27 statement of qualification is in effect. 28 c. The name under which a person is registered to do 29 business in this state by the filing of a record by the 30 secretary of state. 31 d. The name reserved under section 489.109 or other law 32 of this state providing for the reservation of a name by the 33 filing of a record by the secretary of state. 34 e. The name registered under section 489.114 or other law 35 -9- LSB 1051XC (18) 90 da/jh 9/ 161
S.F. _____ of this state providing for the registration of a name by the 1 filing of a record by the secretary of state. 2 f. The name registered with the secretary of state as a 3 fictitious name. 4 3. A limited liability company may apply to the secretary of 5 state for authorization to use a name that does not comply with 6 subsection 2 . The secretary of state shall authorize use of 7 the name applied for if either of the following applies: If a 8 person consents in a record to the use of its name and submits 9 an undertaking in a form satisfactory to the secretary of state 10 to change its name to a name that is distinguishable on the 11 records of the secretary of state from any name in any category 12 of names in subsection 2, the name of the consenting person may 13 be used by the person to which the consent was given. 14 a. The present user, registrant, or owner of the 15 noncomplying name consents in a signed record to the use 16 and submits an undertaking in a form satisfactory to the 17 secretary of state to change the noncomplying name to a name 18 that complies with subsection 2 and is distinguishable in the 19 records of the secretary of state from the name applied for. 20 b. The applicant delivers to the secretary of state a 21 certified copy of the final judgment of a court establishing 22 the applicant’s right to use in this state the name applied 23 for. 24 4. A limited liability company may use the name, including 25 the fictitious name, of another entity that is used in this 26 state if the other entity is formed under the law of this 27 state or is authorized to transact business in this state 28 and the proposed user limited liability company meets any 29 of the following conditions: In determining whether a name 30 is the same as or not distinguishable on the records of the 31 secretary of state from the name of another person, words, 32 phrases, or abbreviations indicating a type of person, such as 33 “corporation”, “corp.”, “incorporated”, “Inc.”, “professional 34 corporation”, “P.C.”, “PC”, “professional association”, “P.A.”, 35 -10- LSB 1051XC (18) 90 da/jh 10/ 161
S.F. _____ “PA”, “Limited”, “Ltd.”, “limited partnership”, “L.P.”, “LP”, 1 “limited liability partnership”, “L.L.P.”, “LLP”, “registered 2 limited liability partnership”, “R.L.L.P.”, “RLLP”, “limited 3 liability limited partnership”, “L.L.L.P.”, “LLLP”, “registered 4 limited liability limited partnership”, “R.L.L.L.P.”, “RLLLP”, 5 “limited liability company”, “L.L.C.”, “LLC”, “cooperative”, 6 “coop”, or “CP” shall not be taken into account. 7 a. Has merged with the other entity. 8 b. Has been formed by reorganization of the other entity. 9 c. Has acquired all or substantially all of the assets, 10 including the name, of the other entity. 11 5. This article does not control the use of fictitious 12 names. However, if a limited liability company uses a 13 fictitious name in this state, it shall deliver to the 14 secretary of state for filing a certified copy of the 15 resolution of its members if it is member-managed or its 16 managers if it is manager-managed, adopting the fictitious 17 name. The name of a limited liability company or foreign 18 limited liability company shall not contain words that may be 19 used only with approval by another state department or state 20 agency unless the company obtains the approval of such other 21 state department or agency and delivers to the secretary of 22 state for filing a record certifying such approval. 23 6. Subject to section 489.805 , this section applies to 24 a foreign limited liability company transacting business in 25 this state which has a certificate of authority to transact 26 business in this state or which has applied for a certificate 27 of authority. A limited liability company or foreign limited 28 liability company may use a name that is not distinguishable 29 from a name described in subsection 2, paragraphs “a” through 30 “f” , if the company delivers to the secretary of state a 31 certified copy of a final judgment of a court of competent 32 jurisdiction establishing the right of the company to use the 33 name in this state. 34 7. A limited liability company may use the name, including 35 -11- LSB 1051XC (18) 90 da/jh 11/ 161
S.F. _____ the fictitious name, of another entity that is used in this 1 state if the other entity is formed under the law of this 2 state or is authorized to transact business in this state and 3 the proposed user limited liability company meets any of the 4 following conditions: 5 a. Has merged with the other entity. 6 b. Has been formed by reorganization of the other entity. 7 c. Has acquired all or substantially all of the assets, 8 including the name, of the other entity. 9 8. This subchapter does not control the use of fictitious 10 names. However, if a limited liability company uses a 11 fictitious name in this state, it shall deliver to the 12 secretary of state for filing a certified copy of the 13 resolution of its members if it is member-managed or its 14 managers if it is manager-managed, adopting the fictitious 15 name. 16 Sec. 8. Section 489.109, Code 2023, is amended to read as 17 follows: 18 489.109 Reservation of name. 19 1. A person may reserve the exclusive use of the a name 20 of a limited liability company, including a fictitious or 21 assumed name for a foreign limited liability company whose 22 name is not available, by delivering an application to the 23 secretary of state for filing that complies with section 24 489.112 by delivering an application to the secretary of state 25 for filing . The application must state the name and address 26 of the applicant and the name proposed to be reserved. If 27 the secretary of state finds that the name applied for is 28 available, it must be reserved the secretary of state shall 29 reserve the name for the applicant’s exclusive use for a 30 one-hundred-twenty-day period one hundred and twenty days . 31 2. The owner of a reserved name reserved for a limited 32 liability company may transfer the reservation to another 33 person by delivering to the secretary of state for filing a 34 signed notice in a record of the transfer which states the name 35 -12- LSB 1051XC (18) 90 da/jh 12/ 161
S.F. _____ and address of the transferee person to which the reservation 1 is being transferred . 2 Sec. 9. Section 489.110, Code 2023, is amended to read as 3 follows: 4 489.110 Operating agreement —— scope, function, and 5 limitations. 6 1. Except as otherwise provided in subsections 2 3 and 3 4 , 7 the operating agreement governs all of the following: 8 a. Relations among the members as members and between the 9 members and the limited liability company. 10 b. The rights and duties under this chapter of a person in 11 the capacity of manager. 12 c. The activities and affairs of the company and the conduct 13 of those activities and affairs . 14 d. The means and conditions for amending the operating 15 agreement. 16 2. To the extent the operating agreement does not otherwise 17 provide for a matter described in subsection 1 , this chapter 18 governs the matter. 19 3. An operating agreement shall not do any of the following: 20 a. Vary a limited liability company’s capacity under section 21 489.105 to sue and be sued in its own name the law applicable 22 under section 489.104 . 23 b. Vary the law applicable under section 489.106 a limited 24 liability company’s capacity under section 489.109 to sue and 25 be sued in its own name . 26 c. Vary the power of the court under section 489.204 . any 27 requirement, procedure, or other provision of this chapter 28 pertaining to any of the following: 29 (1) Registered agents. 30 (2) The secretary of state, including provisions pertaining 31 to records authorized or required to be delivered to the 32 secretary of state for filing under this chapter. 33 d. Subject to subsections 4 through 7 , eliminate the duty of 34 loyalty, the duty of care, or any other fiduciary duty Vary the 35 -13- LSB 1051XC (18) 90 da/jh 13/ 161
S.F. _____ provisions of section 489.204 . 1 e. Subject to subsections 4 through 7 , eliminate the 2 contractual obligation of good faith and fair dealing under 3 section 489.409, subsection 4 Alter or eliminate the duty of 4 loyalty or the duty of care, except as otherwise provided in 5 subsection 4 . 6 f. Unreasonably restrict the duties and rights stated in 7 section 489.410 Eliminate the contractual obligation of good 8 faith and fair dealing under section 489.409, subsection 4, 9 but the operating agreement may prescribe the standards, if 10 not manifestly unreasonable, by which the performance of the 11 obligation is to be measured . 12 g. Vary the power of a court to decree dissolution in 13 the circumstances specified in section 489.701, subsection 14 1 , paragraphs “d” and “e” Relieve or exonerate a person from 15 liability for conduct except as provided in subsection 6 . 16 h. Vary the requirement to wind up a limited liability 17 company’s business as specified in section 489.702, 18 subsection 1 , and section 489.702, subsection 2 , paragraph 19 “a” Unreasonably restrict the duties and rights under section 20 489.410, but the operating agreement may impose reasonable 21 restrictions on the availability and use of information 22 obtained under that section and may define appropriate 23 remedies, including liquidated damages, for a breach of any 24 reasonable restriction on use . 25 i. Unreasonably restrict the right of a member to maintain 26 an action under article 9 Vary the causes of dissolution 27 specified in section 489.701, subsection 1, paragraph “d” . 28 j. Restrict the right to approve a merger, conversion, or 29 domestication under section 489.1014 to a member that will have 30 personal liability with respect to a surviving, converted, or 31 domesticated organization Vary the requirement to wind up the 32 limited liability company’s activities and affairs as specified 33 in section 489.702, subsection 1; subsection 2, paragraph “a” ; 34 and subsection 5 . 35 -14- LSB 1051XC (18) 90 da/jh 14/ 161
S.F. _____ k. Except as otherwise provided in section 489.112, 1 subsection 2 , restrict the rights under this chapter of a 2 person other than a member or manager Unreasonably restrict the 3 right of a member to maintain an action under subchapter VIII . 4 l. Vary the provisions of section 489.805A, but the 5 operating agreement may provide that the limited liability 6 company shall not have a special litigation committee. 7 m. Vary the right of a member to approve a merger, interest 8 exchange, conversion, or domestication under section 489.1023, 9 subsection 1, paragraph “b” ; section 489.1033, subsection 1, 10 paragraph “b” ; section 489.1043, subsection 1, paragraph “b” ; or 11 section 489.1053, subsection 1, paragraph “b” . 12 n. Vary the required contents of a plan of merger under 13 section 489.1022, subsection 1; plan of interest exchange 14 under section 489.1032, subsection 1; plan of conversion under 15 section 489.1042, subsection 1; or plan of domestication under 16 section 489.1052, subsection 1. 17 o. Except as otherwise provided in sections 489.111 and 18 489.112, subsection 2, restrict the rights under this chapter 19 of a person other than a member or manager. 20 4. If not manifestly unreasonable, the operating agreement 21 may do any of the following: Subject to subsection 3, 22 paragraph “g” , without limiting other terms that may be included 23 in an operating agreement, all the following rules apply: 24 a. Restrict or eliminate the duty to do any The operating 25 agreement may do all of the following: 26 (1) As required in section 489.409, subsection 2 , paragraph 27 “a” , and section 489.409, subsection 8 , to account to the 28 limited liability company and to hold as trustee for it any 29 property, profit, or benefit derived by the member in the 30 conduct or winding up of the company’s business, from a use by 31 the member of the company’s property, or from the appropriation 32 of a limited liability company opportunity Specify the method 33 by which a specific act or transaction that would otherwise 34 violate the duty of loyalty may be authorized or ratified by 35 -15- LSB 1051XC (18) 90 da/jh 15/ 161
S.F. _____ one or more disinterested and independent persons after full 1 disclosure of all material facts . 2 (2) As required in section 489.409, subsection 2 , paragraph 3 “b” , and section 489.409, subsection 8 , to refrain from dealing 4 with the company in the conduct or winding up of the company’s 5 business as or on behalf of a party having an interest adverse 6 to the company Alter the prohibition in section 489.405, 7 subsection 1, paragraph “b” , so that the prohibition requires 8 only that the limited liability company’s total assets not be 9 less than the sum of its total liabilities . 10 (3) As required by section 489.409, subsection 2 , paragraph 11 “c” , and section 489.409, subsection 8 , to refrain from 12 competing with the company in the conduct of the company’s 13 business before the dissolution of the company. 14 b. Identify specific types or categories of activities 15 that do not violate the duty of loyalty To the extent the 16 operating agreement of a member-managed limited liability 17 company expressly relieves a member of a responsibility that 18 the member otherwise would have under this chapter and imposes 19 the responsibility on one or more other members, the agreement 20 also may eliminate or limit any fiduciary duty of the member 21 relieved of the responsibility which would have pertained to 22 the responsibility . 23 c. Alter the duty of care, except to authorize intentional 24 misconduct or knowing violation of law. If not manifestly 25 unreasonable, the operating agreement may do all of the 26 following: 27 (1) Alter or eliminate the aspects of the duty of loyalty 28 stated in section 489.409, subsections 2 and 9. 29 (2) Identify specific types or categories of activities 30 that do not violate the duty of loyalty. 31 (3) Alter the duty of care, but may not authorize conduct 32 involving bad faith, willful or intentional misconduct, or 33 knowing violation of law. 34 (4) Alter or eliminate any other fiduciary duty. 35 -16- LSB 1051XC (18) 90 da/jh 16/ 161
S.F. _____ d. Alter any other fiduciary duty, including eliminating 1 particular aspects of that duty. 2 e. Prescribe the standards by which to measure the 3 performance of the contractual obligation of good faith and 4 fair dealing under section 489.409, subsection 4 . 5 5. The operating agreement may specify the method by which 6 a specific act or transaction that would otherwise violate the 7 duty of loyalty may be authorized or ratified by one or more 8 disinterested and independent persons after full disclosure 9 of all material facts The court shall decide as a matter of 10 law whether a term of an operating agreement is manifestly 11 unreasonable under subsection 3, paragraph “f” , or subsection 12 4, paragraph “c” . All of the following shall apply: 13 a. The court shall make its determination as of the time the 14 challenged term became part of the operating agreement and by 15 considering only circumstances existing at that time. 16 b. The court may invalidate the term only if, in light of 17 the purposes, activities, and affairs of the limited liability 18 company, it is readily apparent that any of the following 19 apply: 20 (1) The objective of the term is unreasonable. 21 (2) The term is an unreasonable means to achieve the term’s 22 objective. 23 6. To the extent the operating agreement of a member-managed 24 limited liability company expressly relieves a member of a 25 responsibility that the member would otherwise have under 26 this chapter and imposes the responsibility on one or more 27 other members, the operating agreement may, to the benefit 28 of the member that the operating agreement relieves of the 29 responsibility, also eliminate or limit any fiduciary duty that 30 would have pertained to the responsibility. 31 7. 6. The An operating agreement may alter or eliminate 32 the indemnification for a member or manager provided by section 33 489.408, subsection 1 , and may eliminate or limit a member’s 34 or manager’s liability to the limited liability company and 35 -17- LSB 1051XC (18) 90 da/jh 17/ 161
S.F. _____ members for money damages, except for any of the following: 1 a. A breach of the duty of loyalty. 2 b. A financial benefit received by the member or manager to 3 which the member or manager is not entitled. 4 c. A breach of a duty under section 489.406 . 5 d. Intentional infliction of harm on the company or a 6 member. 7 e. An intentional violation of criminal law. 8 8. The court shall decide any claim under subsection 4 that 9 a term of an operating agreement is manifestly unreasonable. 10 All of the following apply: 11 a. The court shall make its determination as of the time the 12 challenged term became part of the operating agreement and by 13 considering only circumstances existing at that time. 14 b. The court may invalidate the term only if, in light of 15 the purposes and activities of the limited liability company, 16 it is readily apparent that any of the following applies: 17 (1) The objective of the term is unreasonable. 18 (2) The term is an unreasonable means to achieve the 19 provision’s objective. 20 Sec. 10. Section 489.111, Code 2023, is amended to read as 21 follows: 22 489.111 Operating agreement —— effect on limited liability 23 company and persons becoming members —— preformation agreement. 24 1. A limited liability company is bound by and may enforce 25 the operating agreement, whether or not the company has itself 26 manifested assent to the operating agreement. 27 2. A person that becomes a member of a limited liability 28 company is deemed to assent to the operating agreement. 29 3. Two or more persons intending to become the initial 30 members of a limited liability company may make an agreement 31 providing that upon the formation of the company the agreement 32 will become the operating agreement. One person intending 33 to become the initial member of a limited liability company 34 may assent to terms providing that upon the formation of the 35 -18- LSB 1051XC (18) 90 da/jh 18/ 161
S.F. _____ company the terms will become the operating agreement. 1 4. An operating agreement in a signed record that excludes 2 modification or rescission except by a signed record cannot be 3 otherwise modified or rescinded. 4 Sec. 11. Section 489.112, Code 2023, is amended to read as 5 follows: 6 489.112 Operating agreement —— effect on third parties and 7 relationship to records effective on behalf of limited liability 8 company. 9 1. An operating agreement may specify that its amendment 10 requires the approval of a person that is not a party to the 11 operating agreement or the satisfaction of a condition. An 12 amendment is ineffective if its adoption does not include the 13 required approval or satisfy the specified condition. 14 2. The obligations of a limited liability company and its 15 members to a person in the person’s capacity as a transferee or 16 a person dissociated as a member are governed by the operating 17 agreement. Subject only to any a court order issued under 18 section 489.503, subsection 2 , paragraph “b” , to effectuate a 19 charging order, an amendment to the operating agreement made 20 after a person becomes a transferee or is dissociated as a 21 member is or is not effective as follows: 22 a. Is effective with regard to any debt, obligation, or 23 other liability of the limited liability company or its members 24 to the person in the person’s capacity as a transferee or 25 person dissociated as a member. 26 b. Is not effective to the extent the amendment imposes a 27 new debt, obligation, or other liability on the transferee or 28 person dissociated as a member. 29 3. If a record that has been delivered by a limited 30 liability company to the secretary of state for filing and 31 has become becomes effective under this chapter and contains 32 a provision that would be ineffective under section 489.110, 33 subsection 3 or subsection 4, paragraph “c” , if contained in 34 the operating agreement, the provision is likewise ineffective 35 -19- LSB 1051XC (18) 90 da/jh 19/ 161
S.F. _____ in the record. 1 4. Subject to subsection 3 , if a record that has been 2 delivered by a limited liability company to the secretary 3 of state for filing and has become becomes effective under 4 this chapter and conflicts with a provision of the operating 5 agreement, all of the following rules apply: 6 a. The operating agreement prevails as to members, persons 7 dissociated as members, transferees, and managers. 8 b. The record prevails as to other persons to the extent 9 they reasonably rely on the record. 10 Sec. 12. Section 489.114, Code 2023, is amended to read as 11 follows: 12 489.114 Change of registered office or registered agent for 13 service of process or address for registered agency by limited 14 liability company . 15 1. A limited liability company or registered foreign 16 limited liability company may change its registered office 17 or its registered agent for service of process agent or the 18 address of its registered agent by delivering to the secretary 19 of state for filing a statement of change that sets forth 20 states all of the following: 21 a. The name of the limited liability company or foreign 22 limited liability company . 23 b. If the current registered office is to be changed, the 24 street and mailing addresses of the new registered office The 25 information that is to be in effect as a result of the filing of 26 the statement of change . 27 c. If the current registered agent is to be changed, the 28 name of the new registered agent and the new agent’s consent to 29 the appointment. The agent’s consent may be on the statement 30 or attached to it. 31 d. That after the change or changes are made, the street 32 address of its registered office and the business office of its 33 registered agent will be identical. 34 2. If a registered agent changes the street address of 35 -20- LSB 1051XC (18) 90 da/jh 20/ 161
S.F. _____ the registered agent’s business office, the registered agent 1 may change the street address of the registered office of any 2 limited liability company or foreign limited liability company 3 for which the person is the registered agent by notifying the 4 limited liability company or foreign limited liability company 5 in writing of the change and signing, either manually or in 6 facsimile, and delivering to the secretary of state for filing 7 a statement that complies with the requirements of subsection 8 1 and recites that the limited liability company or foreign 9 limited liability company has been notified of the change. The 10 members or managers of a limited liability company need not 11 approve the delivery to the secretary of state filing of any 12 of the following: 13 a. A statement of change under this section. 14 b. A similar filing changing the registered agent or 15 registered office, if any, of the limited liability company in 16 any other jurisdiction. 17 3. If a registered agent changes the registered agent’s 18 business address to another place, the registered agent may 19 change the business address and the address of the registered 20 agent by filing a statement as required by subsection 2 for 21 each limited liability company or foreign limited liability 22 company, or a single statement of all limited liability 23 companies or all foreign limited liability companies named 24 in the notice, except that it need be signed only by the 25 registered agent and need not be responsive to subsection 1 , 26 paragraph “c” , and must recite that a copy of the statement 27 has been mailed to each limited liability company or foreign 28 limited liability company named in the notice A statement of 29 change under this section designating a new registered agent 30 is an affirmation of fact by the limited liability company or 31 registered foreign limited liability company that the agent has 32 consented to serve . 33 4. A limited liability company or foreign limited liability 34 company may also change its registered office or registered 35 -21- LSB 1051XC (18) 90 da/jh 21/ 161
S.F. _____ agent in its biennial report as provided in section 489.209 1 As an alternative to using the procedure in this section, 2 a limited liability company may amend its certificate of 3 organization . 4 5. Subject to section 489.205, subsection 3 , a statement of 5 change is effective when filed by the secretary of state. 6 Sec. 13. NEW SECTION . 489.114A Registration of name. 7 1. A foreign limited liability company not registered to 8 do business in this state under subchapter IX may register 9 its name, or an alternate name adopted pursuant to section 10 489.906A, if the name is distinguishable on the records of the 11 secretary of state from the names that are not available under 12 section 489.108. 13 2. To register its name or an alternate name adopted 14 pursuant to section 489.906A, a foreign limited liability 15 company must deliver to the secretary of state for filing an 16 application stating the company’s name, the jurisdiction and 17 date of its formation, and any alternate name adopted pursuant 18 to section 489.906A. If the secretary of state finds that the 19 name applied for is available, the secretary of state shall 20 register the name for the applicant’s exclusive use. 21 3. The registration of a name under this section is 22 effective for one year after the date of registration. 23 4. A foreign limited liability company whose name 24 registration is effective may renew the registration for 25 successive one-year periods by delivering, not earlier than 26 three months before the expiration of the registration, 27 to the secretary of state for filing a renewal application 28 that complies with this section. When filed, the renewal 29 application renews the registration for a succeeding one-year 30 period. 31 5. A foreign limited liability company whose name 32 registration is effective may register as a foreign limited 33 liability company under the registered name or consent in a 34 signed record to the use of that name by another person that is 35 -22- LSB 1051XC (18) 90 da/jh 22/ 161
S.F. _____ not an individual. 1 Sec. 14. Section 489.115, Code 2023, is amended to read as 2 follows: 3 489.115 Resignation of registered agent for service of 4 process . 5 1. A registered agent may resign the agent’s agency 6 appointment by signing and as an agent for a limited liability 7 company or registered foreign limited liability company by 8 delivering to the secretary of state for filing the signed 9 original a statement of resignation . The statement of 10 resignation may include a statement that the registered office 11 is also discontinued. The registered agent shall send a copy 12 of the statement of resignation by certified mail, return 13 receipt requested, to the limited liability company or foreign 14 limited liability company at its principal office and to the 15 registered office, if not discontinued. The registered agent 16 shall certify to the secretary of state that the copies have 17 been sent to the limited liability company or foreign limited 18 liability company, including the date the copies were sent. 19 that states all of the following: 20 a. The name of the limited liability company or foreign 21 limited liability company. 22 b. The name of the agent. 23 c. That the agent resigns from serving as registered agent 24 for the limited liability company or foreign limited liability 25 company. 26 d. The address of the limited liability company or foreign 27 limited liability company to which the agent will send the 28 notice required by subsection 3. 29 2. A statement of resignation takes effect on the earlier 30 of the following: 31 a. 12:01 a.m. on the The thirty-first day after the day on 32 which it is filed with the secretary of state. 33 b. The designation of a new registered agent for the limited 34 liability company or registered foreign limited liability 35 -23- LSB 1051XC (18) 90 da/jh 23/ 161
S.F. _____ company . 1 3. A registered agent promptly shall furnish to the limited 2 liability company or registered foreign limited liability 3 company notice in a record of the date on which a statement of 4 resignation was filed. 5 4. When a statement of resignation takes effect, the 6 registered agent ceases to have responsibility under this 7 chapter for any matter thereafter tendered to it as agent for 8 the limited liability company or registered foreign limited 9 liability company. The resignation does not affect any 10 contractual rights the company or foreign company has against 11 the agent or that the agent has against the company or foreign 12 company. 13 5. A registered agent may resign with respect to a limited 14 liability company or registered foreign limited liability 15 company whether or not the company or foreign company is in 16 good standing. 17 Sec. 15. NEW SECTION . 489.115A Registered agent. 18 1. Each limited liability company and each registered 19 foreign limited liability company shall designate and maintain 20 a registered agent in this state. The designation of a 21 registered agent is an affirmation of fact by the limited 22 liability company or registered foreign limited liability 23 company that the agent has consented to serve. 24 2. A registered agent for a limited liability company or 25 registered foreign limited liability company must have a place 26 of business in this state. 27 3. The only duties under this chapter of a registered agent 28 that has complied with this chapter are as follows: 29 a. To forward to the limited liability company or registered 30 foreign limited liability company at the address most recently 31 supplied to the agent by the limited liability company or 32 registered foreign limited liability company any process, 33 notice, or demand pertaining to the company or foreign company 34 which is served on or received by the agent. 35 -24- LSB 1051XC (18) 90 da/jh 24/ 161
S.F. _____ b. If the registered agent resigns, to provide the notice 1 required by section 489.115, subsection 3, to the limited 2 liability company or registered foreign limited liability 3 company at the address most recently supplied to the agent by 4 the limited liability company or registered foreign limited 5 liability company. 6 c. To keep current the information with respect to the agent 7 in the certificate of organization or foreign registration 8 statement. 9 Sec. 16. Section 489.116, Code 2023, is amended to read as 10 follows: 11 489.116 Service of process , notice, or demand . 12 1. A limited liability company’s company or registered 13 foreign limited liability company’s registered agent is the 14 company’s agent for service of process, notice, or demand 15 required or permitted by law to company may be served on 16 the company with any process, notice, or demand required or 17 permitted by law by serving its registered agent . 18 2. If a limited liability company or registered foreign 19 limited liability company has no ceases to have a registered 20 agent, or the if its registered agent cannot with reasonable 21 diligence be served, the limited liability company or 22 registered foreign limited liability company may be served by 23 registered or certified mail, return receipt requested, or by 24 similar commercial delivery service, addressed to the limited 25 liability company or registered foreign limited liability 26 company at its principal office. The address of the principal 27 office must be as shown on the limited liability company’s or 28 registered foreign limited liability company’s most recent 29 biennial report filed with the secretary of state pursuant to 30 section 489.209. Service is perfected effected under this 31 subsection at on the earliest of any of the following: 32 a. The date the limited liability company or registered 33 foreign limited liability company receives the mail or delivery 34 by the commercial delivery service . 35 -25- LSB 1051XC (18) 90 da/jh 25/ 161
S.F. _____ b. The date shown on the return receipt, if signed on behalf 1 of by the limited liability company or registered foreign 2 limited liability company . 3 c. Five days after its deposit in with the United States 4 mail, as evidenced by the postmark, if mailed postpaid and 5 postal service or with the commercial delivery service, if 6 correctly addressed and with sufficient postage or payment . 7 3. A limited liability company or foreign limited liability 8 company may be served pursuant to this section , as provided 9 in another provision of this chapter , or as provided in 10 sections 617.3 through 617.6 , unless the manner of service is 11 otherwise specifically provided for by another provision of law 12 If process, notice, or demand cannot be served on a limited 13 liability company or registered foreign limited liability 14 company pursuant to subsection 1 or 2, service may be made by 15 handing a copy to the individual in charge of any regular place 16 of business or activity of the limited liability company or 17 registered foreign company if the individual served is not a 18 plaintiff in the action . 19 4. Service of process, notice, or demand on a registered 20 agent must be in a written record. 21 5. Service of process, notice, or demand may be made by 22 other means under law other than this chapter, including as 23 provided in sections 617.3 through 617.6 unless specifically 24 provided for by another provision of law. 25 Sec. 17. Section 489.117, Code 2023, is amended to read as 26 follows: 27 489.117 Fees. 28 1. The secretary of state shall collect the following fees 29 when documents described in this subsection are delivered to 30 the secretary’s office for filing: 31 a. Statement of rescission . . . . . . . . . . . . . . . . . . . . . No fee 32 b. Statement of withdrawal . . . . . . . . . . . . . . . . . . . . . No fee 33 c. Certificate of organization . . . . . . . . . . . . . . . . . . . $ 50 34 d. Application for use of 35 -26- LSB 1051XC (18) 90 da/jh 26/ 161
S.F. _____ indistinguishable name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 1 e. Application for reserved name . . . . . . . . . . . . . . . . . $ 10 2 f. Notice of transfer of reserved name . . . . . . . . . . . $ 10 3 g. Statement of change of registered 4 agent or registered office or both . . . . . . . . . . . . . . . . . No fee 5 h. Registered agent’s statement of 6 change of registered office for each 7 affected limited liability company . . . . . . . . . . . . . . . . . No fee 8 i. Registered agent’s statement 9 of resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee 10 j. Amendment to certificate of 11 organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 12 k. Restatement of certificate of 13 organization with amendment 14 of certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 15 l. Articles of merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 16 m. Statement of dissolution . . . . . . . . . . . . . . . . . . . . . . $ 5 17 n. Declaration of administrative 18 dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee 19 o. Application for reinstatement 20 following administrative dissolution . . . . . . . . . . . . . . . . . $ 5 21 p. Certificate of reinstatement . . . . . . . . . . . . . . . . No fee 22 q. Application for certificate 23 of authority registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 24 r. Application for amended 25 certificate of authority registration . . . . . . . . . . . . . . . . $100 26 s. Statement of cancellation . . . . . . . . . . . . . . . . . . . . . $ 10 27 t. Certificate of revocation 28 of authority to transact business . . . . . . . . . . . . . . . . . . No fee 29 u. Statement of correction . . . . . . . . . . . . . . . . . . . . . . . $ 5 30 v. Application for certificate of 31 existence or authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 32 w. Any other document required or 33 permitted to be filed by this chapter . . . . . . . . . . . . . . . . . $ 5 34 2. The secretary of state shall collect a fee of five 35 -27- LSB 1051XC (18) 90 da/jh 27/ 161
S.F. _____ dollars each time process is served on the secretary under this 1 chapter . The party to a proceeding causing service of process 2 is entitled to recover this fee as costs if the party prevails 3 in the proceeding. 4 3. The secretary of state shall collect the following fees 5 for copying and certifying the copy of any filed document 6 relating to a domestic limited liability company or foreign 7 limited liability company as follows : 8 a. One dollar a page for copying. 9 b. Five dollars for the certificate. 10 4. The secretary of state may impose, assess, and collect 11 a filing fee as a condition to accepting a biennial report as 12 provided in section 489.209 . 13 Sec. 18. NEW SECTION . 489.118 Change of name or address by 14 registered agent. 15 1. If a registered agent changes its name or address, 16 the agent may deliver to the secretary of state for filing a 17 statement of change that states all of the following: 18 a. The name of the limited liability company or registered 19 foreign limited liability company represented by the registered 20 agent. 21 b. The name of the agent as currently shown in the records 22 of the secretary of state for the limited liability company or 23 registered foreign limited liability company. 24 c. If the name of the agent has changed, its new name. 25 d. If the address of the agent has changed, its new address. 26 2. A registered agent promptly shall furnish notice to the 27 represented limited liability company or registered foreign 28 limited liability company of the filing by the secretary of 29 state of the statement of change and the changes made by the 30 statement. 31 Sec. 19. NEW SECTION . 489.120 Delivery of record. 32 1. Except as otherwise provided in this chapter, 33 permissible means of delivery of a record include delivery by 34 hand, mail, conventional commercial practice, and electronic 35 -28- LSB 1051XC (18) 90 da/jh 28/ 161
S.F. _____ transmission. 1 2. Delivery to the secretary of state is effective only when 2 a record is received by the secretary of state. 3 Sec. 20. NEW SECTION . 489.121 Reservation of power to amend 4 or repeal. 5 The general assembly has power to amend or repeal all or 6 part of this chapter at any time, and all limited liability 7 companies and foreign limited liability companies subject to 8 this chapter are governed by the amendment or repeal. 9 Sec. 21. Section 489.201, Code 2023, is amended to read as 10 follows: 11 489.201 Formation of limited liability company —— certificate 12 of organization. 13 1. One or more persons may act as organizers to form a 14 limited liability company by signing and delivering to the 15 secretary of state for filing a certificate of organization. 16 2. A certificate of organization must state all of the 17 following: 18 a. The name of the limited liability company, which must 19 comply with section 489.108 . 20 b. The street address and mailing addresses of the initial 21 registered office and the name of the initial registered 22 agent for service of process on the company limited liability 23 company’s principal office . 24 c. The name and street and mailing addresses in this state 25 of the limited liability company’s registered agent. 26 3. Subject to section 489.112, subsection 3 , a A certificate 27 of organization may also contain statements as to matters other 28 than those required by subsection 2 , but shall not vary or 29 otherwise affect the provisions specified in section 489.110, 30 subsections 3 and 4, in a manner inconsistent with that 31 section . However, a statement in a certificate of organization 32 is not effective as a statement of authority. 33 4. A limited liability company is formed when the secretary 34 of state has filed the certificate of organization , unless the 35 -29- LSB 1051XC (18) 90 da/jh 29/ 161
S.F. _____ certificate states a delayed becomes effective date pursuant 1 to section 489.205, subsection 3 . If the certificate states 2 a delayed effective date, a limited liability company is not 3 formed if, before the certificate takes effect, a statement of 4 cancellation is signed and delivered to the secretary of state 5 for filing and the secretary of state files the certificate. 6 5. Subject to any delayed effective date and except in 7 a proceeding by this state to dissolve a limited liability 8 company, the filing of the certificate of organization by the 9 secretary of state is conclusive proof that the organizer 10 satisfied all conditions to the formation of a limited 11 liability company. 12 Sec. 22. Section 489.202, Code 2023, is amended to read as 13 follows: 14 489.202 Amendment or restatement of certificate of 15 organization. 16 1. A certificate of organization may be amended or restated 17 at any time. 18 2. To amend its certificate of organization, a limited 19 liability company must deliver to the secretary of state for 20 filing an amendment stating all of the following: 21 a. The name of the limited liability company. 22 b. The date of filing of its initial certificate of 23 organization . 24 c. The changes the amendment makes to the certificate as 25 most recently amended or restated text of the amendment . 26 3. To restate its certificate of organization, a limited 27 liability company must deliver to the secretary of state for 28 filing a restatement, designated as such in its heading, 29 stating and setting forth all of the following: 30 a. In the heading or an introductory paragraph, the 31 company’s present name and the date of the filing of the 32 company’s initial certificate of organization The name of the 33 limited liability company . 34 b. If the company’s name has been changed at any time since 35 -30- LSB 1051XC (18) 90 da/jh 30/ 161
S.F. _____ the company’s formation, each of the company’s former names The 1 text of the restated certificate of organization . 2 c. The changes the restatement makes to the certificate as 3 most recently amended or restated A statement that the restated 4 certificate consolidates all amendments into a single document . 5 d. If a new amendment is included in the restated 6 certificate of organization, the statements required under 7 subsection 2 with respect to the new amendment if not otherwise 8 provided. 9 4. Subject to section 489.112, subsection 3 , and section 10 489.205, subsection 3 , an amendment to or restatement of a 11 certificate of organization is effective when filed by the 12 secretary of state. If a member of a member-managed limited 13 liability company, or a manager of a manager-managed limited 14 liability company, knows that any information in a filed 15 certificate of organization was inaccurate when the certificate 16 of organization was filed or has become inaccurate due to 17 changed circumstances, the member or manager shall promptly do 18 any of the following: 19 a. Cause the certificate of organization to be amended. 20 b. If appropriate, deliver to the secretary of state 21 for filing a statement of change under section 489.114 or a 22 statement of correction under section 489.206. 23 5. If a member of a member-managed limited liability 24 company, or a manager of a manager-managed limited liability 25 company, knows that any information in a filed certificate of 26 organization was inaccurate when the certificate was filed 27 or has become inaccurate owing to changed circumstances, the 28 member or manager shall promptly do any of the following: 29 a. Cause the certificate to be amended. 30 b. If appropriate, deliver to the secretary of state 31 for filing a statement of change under section 489.114 or a 32 statement of correction under section 489.206 . 33 Sec. 23. Section 489.203, Code 2023, is amended to read as 34 follows: 35 -31- LSB 1051XC (18) 90 da/jh 31/ 161
S.F. _____ 489.203 Signing of records to be delivered for filing to 1 secretary of state. 2 1. A record delivered to the secretary of state for filing 3 pursuant to this chapter must be signed as follows: 4 a. Except as otherwise provided in paragraphs “b” and “c” , a 5 record signed on behalf of by a limited liability company must 6 be signed by a person authorized by the company. 7 b. A limited liability company’s initial certificate of 8 organization must be signed by at least one person acting as 9 an organizer. 10 c. A record filed delivered on behalf of a dissolved limited 11 liability company that does not have or has not had at least 12 one has no member must be signed by an organizer the person 13 winding up the company’s activities and affairs under section 14 489.702, subsection 3, or a person appointed under section 15 489.702, subsection 4, to wind up the activities and affairs . 16 d. A record filed on behalf of a dissolved limited liability 17 company that has no members must be signed by the person 18 winding up the company’s activities under section 489.702, 19 subsection 3 , or a person appointed under section 489.702, 20 subsection 4 , to wind up those activities A statement of denial 21 by a person under section 489.303 must be signed by that 22 person . 23 e. A statement of cancellation under section 489.201, 24 subsection 4 , must be signed by each organizer that signed 25 the initial certificate of organization, but a personal 26 representative of a deceased or incompetent organizer may sign 27 in the place of the decedent or incompetent Any other record 28 delivered on behalf of a person to the secretary of state for 29 filing must be signed by that person . 30 f. A statement of denial by a person under section 489.303 31 must be signed by that person. 32 g. Any other record must be signed by the person on whose 33 behalf the record is delivered to the secretary of state. 34 2. Any A record filed delivered for filing under this 35 -32- LSB 1051XC (18) 90 da/jh 32/ 161
S.F. _____ chapter may be signed by an agent. Whenever this chapter 1 requires a particular individual to sign a record and the 2 individual is deceased or incompetent, the record may be signed 3 by a legal representative of the individual. 4 3. A person that signs a record as an agent or legal 5 representative affirms as a fact that the person is authorized 6 to sign the record. 7 Sec. 24. Section 489.204, Code 2023, is amended to read as 8 follows: 9 489.204 Signing and filing pursuant to judicial order. 10 1. If a person required by this chapter to sign a record 11 or deliver a record to the secretary of state for filing under 12 this chapter does not do so, any other person that is aggrieved 13 may petition the district court to order one or more of the 14 following: 15 a. The person to sign the record. 16 b. The person to deliver the record to the secretary of 17 state for filing. 18 c. The secretary of state to file the record unsigned. 19 2. If a petitioner under subsection 1 is not the limited 20 liability company or foreign limited liability company to which 21 the record pertains, the petitioner shall make the limited 22 liability company or foreign limited liability company a party 23 to the action. 24 3. If a district court orders an unsigned record to be 25 delivered to the secretary of state, the secretary of state 26 shall file the record and the court order upon receipt A record 27 filed under subsection 1, paragraph “c” , is effective without 28 being signed . 29 Sec. 25. Section 489.205, Code 2023, is amended by striking 30 the section and inserting in lieu thereof the following: 31 489.205 Liability for inaccurate information in filed 32 records. 33 1. If a record delivered to the secretary of state for 34 filing under this chapter and filed by the secretary of state 35 -33- LSB 1051XC (18) 90 da/jh 33/ 161
S.F. _____ contains inaccurate information, a person that suffers loss by 1 reliance on the information may recover damages for the loss 2 from all of the following: 3 a. A person that signed the record, or caused another to 4 sign it on the person’s behalf, and knew the information to be 5 inaccurate at the time the record was signed. 6 b. Subject to subsection 2, a member of a member-managed 7 limited liability company or a manager of a manager-managed 8 limited liability company if all of the following apply: 9 (1) The record was delivered for filing on behalf of the 10 limited liability company. 11 (2) The member or manager knew or had notice of the 12 inaccuracy for a reasonably sufficient time before the 13 information was relied upon so that, before the reliance, 14 the member or manager reasonably could have done any of the 15 following: 16 (a) Effected an amendment under section 489.202. 17 (b) Filed a petition under section 489.204. 18 (c) Delivered to the secretary of state for filing a 19 statement of change under section 489.114 or a statement of 20 correction under section 489.206. 21 2. To the extent the operating agreement of a member-managed 22 limited liability company expressly relieves a member of 23 responsibility for maintaining the accuracy of information 24 contained in records delivered on behalf of the limited 25 liability company to the secretary of state for filing under 26 this chapter and imposes that responsibility on one or more 27 other members, the liability stated in subsection 1, paragraph 28 “b” , applies to those other members and not to the member that 29 the operating agreement relieves of the responsibility. 30 3. A person commits a serious misdemeanor if that person 31 signs a record the person knows is false in any material 32 respect with intent that the record be delivered to the 33 secretary of state for filing. 34 Sec. 26. Section 489.206, Code 2023, is amended to read as 35 -34- LSB 1051XC (18) 90 da/jh 34/ 161
S.F. _____ follows: 1 489.206 Correcting filed record. 2 1. A limited liability company or foreign limited liability 3 company may deliver to the secretary of state for filing 4 a statement of correction to correct a record previously 5 delivered by the company to the secretary of state and filed 6 by the secretary of state, if at the time of filing the record 7 contained inaccurate information or was defectively signed. 8 A person on whose behalf a filed record was delivered to the 9 secretary of state for filing may correct the record if any of 10 the following apply: 11 a. The record at the time of filing was inaccurate. 12 b. The record was defectively signed. 13 c. The electronic transmission of the record to the 14 secretary of state was defective. 15 2. A statement of correction under subsection 1 shall not 16 have a delayed effective date and must do all of the following: 17 To correct a filed record, a person on whose behalf the record 18 was delivered to the secretary of state must deliver to the 19 secretary of state for filing a statement of correction. 20 a. Describe the record to be corrected, including its filing 21 date, or attach a copy of the record as filed. 22 b. Specify the inaccurate information and the reason it is 23 inaccurate or the manner in which the signing was defective. 24 c. Correct the defective signature or inaccurate 25 information. 26 3. When filed by the secretary of state, a statement of 27 correction under subsection 1 is effective retroactively as 28 of the effective date of the record the statement corrects, 29 but the statement is effective when filed as to A statement of 30 correction shall comply with all of the following: 31 a. For the purposes of section 489.103, subsection 4 It must 32 not state a delayed effective date . 33 b. As to persons that previously relied on the uncorrected 34 record and would be adversely affected by the retroactive 35 -35- LSB 1051XC (18) 90 da/jh 35/ 161
S.F. _____ effect It must be signed by the person correcting the filed 1 record . 2 c. It must describe the record to be corrected including its 3 filing date or attach a copy of the record as filed. 4 d. It must specify the inaccuracy or defect to be corrected. 5 e. It must correct the inaccuracy or defect. 6 4. A statement of correction is effective as of the 7 effective date of the filed record that it corrects except for 8 purposes of section 489.103, subsection 4, and as to persons 9 relying on the uncorrected filed record and adversely affected 10 by the correction. For those purposes and as to those persons, 11 the statement of correction is effective when filed. 12 Sec. 27. NEW SECTION . 489.206A Filing requirements. 13 1. To be filed by the secretary of state pursuant to 14 this chapter, a record must be captioned to describe the 15 record’s purpose, must be received by the secretary of state, 16 must comply with this chapter, and must satisfy all of the 17 following: 18 a. The filing of the record must be required or permitted by 19 this chapter. 20 b. The record must be physically delivered in written 21 form unless and to the extent the secretary of state permits 22 electronic delivery of records. 23 c. The words in the record must be in English, and numbers 24 must be in Arabic or Roman numerals, but the name of an entity 25 need not be in English if written in English letters or Arabic 26 or Roman numerals. 27 d. The record must be signed by a person authorized or 28 required under this chapter to sign the record. 29 e. The record must state the name and capacity, if 30 any, of each individual who signed it, either on behalf 31 of the individual or the person authorized or required to 32 sign the record, but need not contain a seal, attestation, 33 acknowledgment, or verification. 34 2. If law other than this chapter prohibits the disclosure 35 -36- LSB 1051XC (18) 90 da/jh 36/ 161
S.F. _____ by the secretary of state of information contained in a record 1 delivered to the secretary of state for filing, the secretary 2 of state shall file the record if the record otherwise complies 3 with this chapter but may redact the information. 4 3. When a record is delivered to the secretary of state for 5 filing, any fee required under this chapter and any fee, tax, 6 interest, or penalty required to be paid under this chapter or 7 law other than this chapter must be paid in a manner permitted 8 by the secretary of state or by that law. 9 4. The secretary of state may require that a record 10 delivered in written form be accompanied by an identical or 11 conformed copy. 12 5. The secretary of state may provide forms for filings 13 required or permitted to be made by this chapter, but, except 14 as otherwise provided in subsection 6, their use is not 15 required. 16 6. The secretary of state may prescribe, and furnish on 17 request and require any of the following forms: 18 a. A cover sheet for a filing. 19 b. An application for a certificate of existence or 20 certificate of registration. 21 c. A foreign corporation’s registration statement. 22 d. A foreign corporation’s statement of withdrawal. 23 e. A foreign corporation’s transfer of registration 24 statement. 25 f. The biennial report required by section 489.209. 26 7. Upon request and payment of the requisite fee, the 27 secretary of state shall send the requester a certified copy 28 of a requested record. 29 Sec. 28. Section 489.207, Code 2023, is amended by striking 30 the section and inserting in lieu thereof the following: 31 489.207 Effective date and time. 32 Except as otherwise provided in section 489.115 and section 33 489.208A and subject to section 489.206, subsection 4, a record 34 filed under this chapter is effective as follows: 35 -37- LSB 1051XC (18) 90 da/jh 37/ 161
S.F. _____ 1. On the date and at the time of its filing by the 1 secretary of state, as provided in section 489.210, subsection 2 2. 3 2. On the date of filing and at the time specified in the 4 record as its effective time, if later than the time under 5 subsection 1. 6 3. At a specified delayed effective date and time, which may 7 not be more than ninety days after the date of filing. 8 4. If a delayed effective date is specified, but no time is 9 specified, at 12:01 a.m. on the date specified, which shall not 10 be more than ninety days after the date of filing. 11 Sec. 29. Section 489.208, Code 2023, is amended to read as 12 follows: 13 489.208 Certificate of existence or authorization 14 registration . 15 1. Any person may apply to On request of any person, the 16 secretary of state to be furnished shall issue a certificate 17 of existence for a domestic limited liability company or a 18 certificate of authorization registration for a registered 19 foreign limited liability company. 20 2. A certificate of existence or certificate of 21 authorization registration under subsection 1 must set forth 22 state all of the following: 23 a. The domestic limited liability company’s name or the 24 registered foreign limited liability company’s name used in 25 this state. 26 b. One In the case of a limited liability company, all of 27 the following: 28 (1) If it is a domestic limited liability company, that 29 the company is duly formed under the laws of this state, the 30 date of its formation, and the period of its duration That 31 a certificate of organization has been filed and has taken 32 effect . 33 (2) If it is a foreign limited liability company, that the 34 company is authorized to transact business in this state The 35 -38- LSB 1051XC (18) 90 da/jh 38/ 161
S.F. _____ date the certificate became effective . 1 (3) The period of the limited liability company’s duration 2 if the records of the secretary of state reflect that its 3 period of duration is less than perpetual. 4 (4) That all of the following apply: 5 (a) No statement of dissolution, statement of 6 administrative dissolution, or statement of termination has 7 been filed. 8 (b) The records of the secretary of state do not otherwise 9 reflect that the limited liability company has been dissolved 10 or terminated. 11 (c) A proceeding is not pending under section 489.705. 12 c. That all fees, taxes, and penalties due under this 13 chapter or other law to the secretary of state have been paid 14 In the case of a registered foreign limited liability company, 15 that it is registered to do business in this state . 16 d. That the company’s most recent biennial report required 17 by this chapter has been filed by the secretary of state That 18 all fees, taxes, interest, and penalties owed to this state 19 by the limited liability company or foreign limited liability 20 company and collected through the secretary of state have been 21 paid, if all of the following apply: 22 (1) Payment is reflected in the records of the secretary of 23 state . 24 (2) Nonpayment affects the good standing or registration 25 of the limited liability company or foreign limited liability 26 company. 27 e. If it is a domestic limited liability company, that a 28 statement of dissolution or statement of termination has not 29 been filed That the most recent biennial report required by 30 section 489.209 has been delivered to the secretary of state 31 for filing . 32 f. Other facts of record in the office reflected in the 33 records of the secretary of state that may be requested by 34 the applicant pertaining to the limited liability company or 35 -39- LSB 1051XC (18) 90 da/jh 39/ 161
S.F. _____ foreign limited liability company which the person requesting 1 the certificate reasonably requests . 2 3. Subject to any qualification stated in the certificate, a 3 certificate of existence or certificate of authorization issued 4 by the secretary of state is under subsection 1 may be relied 5 on as conclusive evidence that the domestic limited liability 6 company is in existence or the foreign limited liability 7 company is authorized to transact business in this state of the 8 facts stated in the certificate . 9 Sec. 30. NEW SECTION . 489.208A Withdrawal of filed record 10 before effectiveness. 11 1. Except as otherwise provided in sections 489.1024, 12 489.1034, 489.1044, and 489.1054, a record delivered to the 13 secretary of state for filing may be withdrawn before it takes 14 effect by delivering to the secretary of state for filing a 15 statement of withdrawal. 16 2. A statement of withdrawal must comply with all of the 17 following: 18 a. Be signed by each person that signed the record being 19 withdrawn, except as otherwise agreed by those persons. 20 b. Identify the record to be withdrawn. 21 c. If signed by fewer than all the persons that signed the 22 record being withdrawn, state that the record is withdrawn in 23 accordance with the agreement of all the persons that signed 24 the record. 25 3. On filing by the secretary of state of a statement of 26 withdrawal, the action or transaction evidenced by the original 27 record does not take effect. 28 Sec. 31. Section 489.209, Code 2023, is amended to read as 29 follows: 30 489.209 Biennial report for secretary of state. 31 1. A limited liability company or a foreign limited 32 liability company authorized registered to transact do business 33 in this state shall deliver to the secretary of state for 34 filing a biennial report that states all of the following: 35 -40- LSB 1051XC (18) 90 da/jh 40/ 161
S.F. _____ a. The name of the company. 1 b. The street address of the company’s registered office, 2 the name of its registered agent at that office, and the 3 consent of any new registered agent. 4 c. The street address of its principal office. 5 d. In the case of a foreign limited liability company, the 6 state or other jurisdiction under whose law the foreign company 7 is formed and any alternate name adopted under section 489.805, 8 subsection 1 . 9 2. Information in a biennial report under this section 10 must be current as of the date the report is delivered to the 11 secretary of state for filing. The report shall be executed 12 on behalf of the limited liability company or foreign limited 13 liability company and signed as provided in section 489.203 . 14 3. The first biennial report under this section in this 15 state must be delivered to the secretary of state between 16 January 1 and April 1 of the first odd-numbered year following 17 the calendar year in which a limited liability company was 18 formed or a foreign limited liability company was authorized 19 registered to transact do business. A subsequent biennial 20 report must be delivered to the secretary of state between 21 January 1 and April 1 of each following odd-numbered calendar 22 year. A filing fee for the biennial report shall be determined 23 by the secretary of state pursuant to section 489.117 . Each 24 biennial report shall contain information related to the 25 two-year period immediately preceding the calendar year in 26 which the report is filed. 27 4. If a biennial report does not contain the information 28 required in this section , the secretary of state shall promptly 29 notify the reporting limited liability company or foreign 30 limited liability company in writing and return the report to 31 it for correction. 32 5. The secretary of state may provide for the change of 33 registered office or registered agent on the form prescribed by 34 the secretary of state for the biennial report, provided that 35 -41- LSB 1051XC (18) 90 da/jh 41/ 161
S.F. _____ the form contains the information required in section 489.114 . 1 If the secretary of state determines that a biennial report 2 does not contain the information required in this section but 3 otherwise meets the requirements of section 489.114 for the 4 purpose of changing the registered office or registered agent, 5 the secretary of state shall file the statement of change 6 for the registered office or registered agent, effective as 7 provided in section 489.205 489.207 , subsection 3 , before 8 returning the biennial report to the limited liability 9 company as provided in this section . A statement of change of 10 registered office or registered agent accomplished pursuant to 11 this subsection shall be executed by a person authorized to 12 execute the biennial report. 13 Sec. 32. NEW SECTION . 489.210 Duty of secretary of state 14 to file —— review of refusal to file —— delivery of record by 15 secretary of state. 16 1. The secretary of state shall file a record delivered 17 to the secretary of state for filing which satisfies this 18 chapter. The duty of the secretary of state under this section 19 is ministerial. 20 2. When the secretary of state files a record, the secretary 21 of state shall record it as filed on the date and at the time of 22 its delivery. After filing a record, the secretary of state 23 shall deliver to the person that submitted the record a copy 24 of the record with an acknowledgment of the date and time of 25 filing and, in the case of a statement of denial, also to the 26 limited liability company to which the statement pertains. 27 3. If the secretary of state refuses to file a record, the 28 secretary of state shall, not later than fifteen business days 29 after the record is delivered, do all of the following: 30 a. Return the record or notify the person that submitted the 31 record of the refusal. 32 b. Provide a brief explanation in a record of the reason for 33 the refusal. 34 4. If the secretary of state refuses to file a record, the 35 -42- LSB 1051XC (18) 90 da/jh 42/ 161
S.F. _____ person that submitted the record may petition the district 1 court of Polk county to compel filing of the record. The 2 record and the explanation of the secretary of state of 3 the refusal to file must be attached to the petition. The 4 court may decide the matter in a summary proceeding. If the 5 court orders the record to be filed, the court may order it 6 filed with an effective date that is the date on which it was 7 submitted to the secretary of state for filing. 8 5. The filing of or refusal to file a record does not do any 9 of the following: 10 a. Affect the validity or invalidity of the record in whole 11 or in part. 12 b. Create a presumption that the information contained in 13 the record is correct or incorrect. 14 6. Except as otherwise provided by section 489.116 or by law 15 other than this chapter, the secretary of state may deliver any 16 record to a person by delivering it by any of the following: 17 a. In person to the person that submitted it. 18 b. To the address of the person’s registered agent. 19 c. To the principal office of the person. 20 d. To another address the person provides to the secretary 21 of state for delivery. 22 Sec. 33. Section 489.302, Code 2023, is amended to read as 23 follows: 24 489.302 Statement of limited liability company authority. 25 1. A limited liability company may deliver to the secretary 26 of state for filing a statement of authority. All of the 27 following apply to the statement: 28 a. It must include the name of the limited liability company 29 and the name and street address and mailing addresses of its 30 principal office registered agent . 31 b. With respect to any position that exists in or with 32 respect to the limited liability company, it may state the 33 authority, or limitations on the authority, of all persons 34 holding the position to do any of the following: 35 -43- LSB 1051XC (18) 90 da/jh 43/ 161
S.F. _____ (1) Execute Sign an instrument transferring real property 1 held in the name of the limited liability company. 2 (2) Enter into other transactions on behalf of, or otherwise 3 act for or bind, the limited liability company. 4 c. It may state the authority, or limitations on the 5 authority, of a specific person to do any of the following: 6 (1) Execute Sign an instrument transferring real property 7 held in the name of the limited liability company. 8 (2) Enter into other transactions on behalf of, or otherwise 9 act for or bind, the limited liability company. 10 2. To amend or cancel a statement of authority filed by 11 the secretary of state under section 489.205, subsection 1 , 12 a limited liability company must deliver to the secretary of 13 state for filing an amendment or cancellation stating all of 14 the following: 15 a. The name of the limited liability company. 16 b. The name and street address and mailing addresses of the 17 limited liability company’s principal office registered agent . 18 c. The caption of the statement being amended or canceled 19 and the date the statement being affected became effective. 20 d. The contents of the amendment or a declaration that the 21 statement being affected is canceled. 22 3. A statement of authority affects only the power of a 23 person to bind a limited liability company to persons that are 24 not members. 25 4. Subject to subsection 3 and section 489.103, subsection 26 4 , and except as otherwise provided in subsections 6, 7, and 27 8 , a limitation on the authority of a person or a position 28 contained in an effective statement of authority is not by 29 itself evidence of any person’s knowledge or notice of the 30 limitation by any person . 31 5. Subject to subsection 3 , a grant of authority not 32 pertaining to a transfer of real property and contained in an 33 effective statement of authority is conclusive in favor of a 34 person that gives value in reliance on the grant, except to the 35 -44- LSB 1051XC (18) 90 da/jh 44/ 161
S.F. _____ extent that when the person gives value, any of the following 1 applies: 2 a. The person has knowledge to the contrary. 3 b. The statement has been canceled or restrictively amended 4 under subsection 2 . 5 c. A limitation on the grant is contained in another 6 statement of authority that became effective after the 7 statement containing the grant became effective. 8 6. Subject to subsection 3 , an effective statement of 9 authority that grants authority to transfer real property 10 held in the name of the limited liability company and that , a 11 certified copy of which statement is recorded by certified copy 12 in the office for recording transfers of the real property is 13 conclusive in favor of a person that gives value in reliance 14 on the grant without knowledge to the contrary, except to the 15 extent that when the person gives value, any of the following 16 applies: 17 a. The statement has been canceled or restrictively amended 18 under subsection 2 and a certified copy of the cancellation 19 or restrictive amendment has been recorded in the office for 20 recording transfers of the real property. 21 b. A limitation on the grant is contained in another 22 statement of authority that became effective after the 23 statement containing the grant became effective , and a 24 certified copy of the later-effective statement is recorded in 25 the office for recording transfers of the real property. 26 7. Subject to subsection 3 , if a certified copy of an 27 effective statement containing a limitation on the authority to 28 transfer real property held in the name of a limited liability 29 company is recorded in the office for recording transfers of 30 that real property, all persons are deemed to know of the 31 limitation. 32 8. Subject to subsection 9 , an effective statement of 33 dissolution or a statement of termination is a cancellation 34 of any filed statement of authority for the purposes of 35 -45- LSB 1051XC (18) 90 da/jh 45/ 161
S.F. _____ subsection 6 and is a limitation on authority for the purposes 1 of subsection 7 . 2 9. After a statement of dissolution becomes effective, 3 a limited liability company may deliver to the secretary of 4 state for filing and, if appropriate, the secretary of state 5 may record a statement of authority that is designated as 6 a post-dissolution statement of authority. The statement 7 operates as provided in subsections 6 and 7 . 8 10. A statement of authority filed by the secretary of 9 state under section 489.205 489.207 , subsection 1 , is effective 10 until amended or canceled as provided in subsection 2 , unless 11 an earlier cancellation date is specified in the statement. 12 11. An effective statement of denial operates as a 13 restrictive amendment under this section and may be recorded by 14 certified copy for the purposes of subsection 6 , paragraph “a” . 15 Sec. 34. Section 489.304, Code 2023, is amended to read as 16 follows: 17 489.304 Liability of members and managers. 18 1. For debts, obligations, or other liabilities A debt, 19 obligation, or other liability of a limited liability 20 company , whether arising in contract, tort, or otherwise 21 all of the following apply: is solely the debt, obligation, 22 or other liability of the company. A member or manager is 23 not personally liable, directly or indirectly, by way of 24 contribution or otherwise, for a debt, obligation, or other 25 liability of the company solely by reason of being or acting 26 as a member or manager. This subsection applies regardless of 27 the dissolution of the company. 28 a. They are solely the debts, obligations, or other 29 liabilities of the company. 30 b. They do not become the debts, obligations, or other 31 liabilities of a member or manager solely by reason of the 32 member acting as a member or manager acting as a manager. 33 2. The failure of a limited liability company to observe any 34 particular formalities relating to the exercise of its powers 35 -46- LSB 1051XC (18) 90 da/jh 46/ 161
S.F. _____ or management of its activities and affairs is not a ground 1 for imposing liability on the members a member or managers 2