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1. A limited liability company organized under this chapter has the purpose of engaging in any lawful business unless a more limited purpose is set forth in the articles of organization.
2. A limited liability company engaging in a business that is subject to regulation under another statute of this state may organize under this chapter only if permitted by, and subject to all limitations of, the other statute.
Unless its articles of organization provide otherwise, a limited liability company has the same powers as an individual to do all things necessary or convenient to carry out its business and affairs, including without limitation power to do all of the following:
1. Sue and be sued, complain, and defend in its name.
2. Transact its business, carry on its operations, and have and exercise the powers granted by this chapter in any state and in any foreign country.
3. Purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located.
4. Sell, convey, transfer, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property.
5. Purchase, receive, subscribe for, or otherwise acquire and hold, to sell, mortgage, lend, pledge, or otherwise dispose of, and deal in and with, shares or other interests in, or obligations of any other person.
6. Make contracts and guaranties, incur liabilities, borrow money, issue its notes, bonds, and other obligations, which may be convertible into or include the option to purchase other securities of the limited liability company, and secure any of its obligations by mortgage, deed of trust, or pledge of any of its property, franchises, or income.
7. Lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment.
8. Elect and appoint managers, employees, and agents of the limited liability company, define their duties, fix their compensation, and lend them money and credit.
9. Pay pensions and establish pension plans, pension trusts, profit sharing plans, and benefit and incentive plans for all or any of its current or former members, managers, employees, and agents.
10. Make donations for the public welfare or for religious, charitable, scientific, or educational purposes.
11. Make payments or donations, or do any other act, not inconsistent with law, that furthers the business and affairs of the limited liability company.
12. Cease its activities and dissolve.
13. Be a promoter, stockholder, partner, member, associate, agent, or manager of any corporation, partnership, limited liability company, joint venture, trust, or other entity.
14. Make and amend operating agreements, not inconsistent with its articles of organization or with the law of this state, for the administration and regulation of its affairs.
15. Transact any lawful business that a corporation, partnership, or other entity may conduct under the law of this state subject, however, to any and all laws and restrictions that govern or limit the conduct of such activity by such corporation, partnership, or other entity.
16. Have and exercise all powers necessary or convenient to effect any or all of the purposes for which the limited liability company is organized.
17. Indemnify and hold harmless a member, manager, or other person against a claim, liability, or other demand, as provided in an operating agreement.
92 Acts, ch 1151, ¡ì23; 93 Acts, ch 39, ¡ì22; 95 Acts, ch 138, ¡ì1; 97 Acts, ch 188, ¡ì54
490A.402 Reserved name.
1. A person may reserve the exclusive use of a limited liability company name, including a fictitious name for a foreign limited liability company whose limited liability company name is not available, by delivering an application to the secretary of state for filing. The application must set forth the name and address of the applicant and the name proposed to be reserved. If the secretary of state finds that the limited liability company name applied for is available, the secretary of state shall reserve the name for the applicant's exclusive use for a nonrenewable one hundred twenty-day period.
2. The owner of a reserved limited liability company name may transfer the reservation to another person by delivering to the secretary of state a signed notice of the transfer that states the name and address of the transferee.
490A.501 Registered office and registered agent.
Each limited liability company must continuously maintain in this state each of the following:
1. A registered office that may be the same as any of its places of business.
2. A registered agent who may be any of the following:
a. An individual who is a resident of this state and whose business office is identical with the registered office.
b. A domestic corporation, domestic limited liability company, or not-for-profit domestic corporation whose business office is identical with the registered office.
c. A foreign corporation, foreign limited liability company, or not-for-profit foreign corporation authorized to transact business in this state whose business office is identical with the registered office.
92 Acts, ch 1151, ¡ì29
490A.502 Change of registered office or registered agent.
1. Each limited liability company may change its registered office or registered agent by delivering to the secretary of state for filing a statement of change that sets forth the following:
a. The name of the limited liability company or foreign limited liability company.
b. If the current registered office is to be changed, the street address of the new registered office.
c. If the current registered agent is to be changed, the name of the new registered agent and the new agent's written consent either on the statement or attached to it, to the appointment.
d. That after the change or changes are made, the street address of its registered office and the business office of its registered agent will be identical.
2. A statement of change shall forthwith be filed in the office of the secretary of state by a limited liability company whenever its registered agent dies, resigns, or ceases to satisfy the requirements of section 490A.501 .
3. If a registered agent changes the registered agent's business address to another place, the registered agent may change the business address and the address of the registered agent by filing a statement as required in subsection 1 for each limited liability company, or a single statement for all limited liability companies named in the notice, except that it need be signed only by the registered agent or agents and need not be responsive to subsection 1, paragraph "c" , and must recite that a copy of the statement has been mailed to each limited liability company named in the notice.
4. The change of address of a registered office or the change of registered agent becomes effective upon the filing of such statement by the secretary of state.
92 Acts, ch 1151, ¡ì30; 97 Acts, ch 107, ¡ì7, 8
490A.504 Service on limited liability company.
1. A domestic or foreign limited liability company's registered agent is the limited liability company's agent for service of process, notice, or demand required or permitted by law to be served on the limited liability company.
2. If a limited liability company has no registered agent, or the agent cannot with reasonable diligence be served, the limited liability company may be served by registered or certified mail, return receipt requested, addressed to the limited liability company at its principal office. Service is perfected under this subsection at the earliest of:
a. The date the limited liability company receives the mail.
b. The date shown on the return receipt, if signed on behalf of the limited liability company.
c. Five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed.
3. This section does not prescribe the only means, or necessarily the required means, of serving a domestic or foreign limited liability company.
92 Acts, ch 1151, ¡ì32
490A.601 Liability to third parties.
Except as otherwise provided by this chapter or as expressly provided in the articles of organization, no member or manager of a limited liability company is personally liable for the acts or debts of the limited liability company.
92 Acts, ch 1151, ¡ì33
490A.602 Parties to actions.
A member of a limited liability company is not a proper party to a proceeding by or against a limited liability company, except where either of the following applies:
1. The object is to enforce a member's right against or liability to the limited liability company.
2. As provided in subchapter X.
92 Acts, ch 1151, ¡ì34
490A.603 Liability of members.
1. Except as otherwise provided in this chapter or by written agreement of a member, a member or manager of a limited liability company is not personally liable solely by reason of being a member or manager of the limited liability company under any judgment, or in any other manner, for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort, or otherwise.
2. A member of a limited liability company is personally liable under a judgment or for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort, or otherwise, under the same or similar circumstances and to the same extent as a shareholder of a corporation may be personally liable for any debt, obligation, or liability of the corporation, except that the failure to hold meetings of members or managers or the failure to observe formalities pertaining to the calling or conduct of meetings shall not be considered a factor tending to establish that the members have personal liability for any debt, obligation, or liability of the limited liability company.
3. Nothing in this section shall be construed to affect the liability of a member of a limited liability company to third parties for the member's participation in tortious conduct.
97 Acts, ch 188, ¡ì60
490A.701 Voting rights of members.
1. Unless otherwise provided in the articles of organization or an operating agreement, the members of a limited liability company shall vote in proportion to their capital contributions to the limited liability company, as adjusted from time to time to reflect any additional contributions or withdrawals.
2. Unless otherwise provided in the articles of organization or an operating agreement, a majority vote shall be required to approve the following matters:
a. The dissolution and winding up of the limited liability company.
b. The sale, exchange, lease, mortgage, pledge, or other transfer of all or substantially all of the assets of the limited liability company other than in the ordinary course of business.
c. Merger of the limited liability company with another entity.
3. Unless otherwise provided in the articles of organization or an operating agreement, a unanimous vote shall be required to approve an amendment to the articles of organization or operating agreement.
92 Acts, ch 1151, ¡ì35; 93 Acts, ch 39, ¡ì23, 24
490A.702 Management of limited liability company.
1. Unless the articles of organization or an operating agreement provides for management of a limited liability company by a manager or managers, management of a limited liability company shall be vested in its members.
2. Unless otherwise provided in the articles of organization and except as provided in subsection 3, every member is an agent of the limited liability company for the purpose of its business or affairs. The act of any member, including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the ordinary course the business or affairs of the limited liability company shall bind the limited liability company, unless the member so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the member is dealing has knowledge of the fact that the member has no such authority.
3. If the articles of organization provide that management of the limited liability company is vested in a manager or managers the following apply:
a. A member, acting solely in the capacity as a member, is not an agent of the limited liability company.
b. Every manager is an agent of the limited liability company for the purpose of its business or affairs, unless otherwise provided in the articles of organization or an operating agreement. The act of any manager with agency authority, including, but not limited to, the execution in the name of the limited liability company of any instrument, for apparently carrying on in the ordinary course the business or affairs of the limited liability company shall bind the limited liability company, unless the manager so acting has, in fact, no authority to act for the limited liability company in the particular matter, and the person with whom the manager is dealing has knowledge of the fact that the manager has no such authority.
4. Except as provided in subsection 5, the validity of an act of a limited liability company is not challengeable on the ground that the limited liability company lacks or lacked the power or authority to act.
5. A limited liability company's power to act may be challenged in the following proceedings:
a. In an action by a member against the limited liability company to enjoin an unauthorized act.
b. In an action by the limited liability company against an incumbent or former manager, employee, or agent of the limited liability company, either directly, derivatively, or through a receiver, trustee, or other legal representative.
c. By the attorney general under section 490A.1409 .
6. In a member's proceeding under subsection 5, paragraph "a" , to enjoin an unauthorized act, the court may enjoin or set aside the act if equitable and if all affected persons are parties to the proceeding. The court may award damages, other than anticipated profits, for loss suffered by the limited liability company or another party as a result of the unauthorized act being enjoined.
7. An act of a manager or member in contravention of a restriction on authority shall not bind the limited liability company to persons having knowledge of the restriction.
92 Acts, ch 1151, ¡ì36; 93 Acts, ch 39, ¡ì25; 95 Acts, ch 138, ¡ì3, 4; 97 Acts, ch 188, ¡ì61, 62; 2000 Acts, ch 1041, ¡ì1
490A.703 Operating agreement.
1. The members of a limited liability company may enter into an operating agreement to establish or regulate the affairs of the limited liability company, the conduct of its business and the relations of its members. An operating agreement may contain any provisions regarding the affairs of a limited liability company and the conduct of its business to the extent that such provisions are not inconsistent with law or the articles of organization.
2. An operating agreement must initially be agreed to by all of the members. Unless the articles of organization specifically permit otherwise, an operating agreement shall be in writing.
3. a. A written operating agreement or other writing may provide for a person to be admitted as a member of a limited liability company, or to become an assignee of a limited liability company membership interest or other rights or powers of a member, to the extent that either of the following occurs:
(1) If the person, or a representative authorized by the person orally, in writing, or by other action such as payment for a limited liability company interest, executes the operating agreement or any other writing evidencing the intent of such person to become a member or assignee.
(2) Without execution of the operating agreement or similar writing, if the person or such authorized representative of the person complies with the conditions for becoming a member or assignee as set forth in the operating agreement or any other writing and requests orally, in writing, or by other action such as payment for a limited liability company interest, that the records of the limited liability company reflect such admission or assignment.
b. A written operating agreement or another written agreement or writing is not unenforceable by reason of its not having been signed by a person being admitted as a member or becoming an assignee, or the member's or assignee's representative, as provided in paragraph "a" .
4. A court may enforce an operating agreement by injunction or by other relief that the court determines to be fair and appropriate in the circumstances. As an alternative to injunctive or other equitable relief, when the provisions of section 490A.1302 are applicable, the court may order dissolution of the limited liability company.
92 Acts, ch 1151, ¡ì37; 97 Acts, ch 188, ¡ì63
490A.603 Liability of members.
1. Except as otherwise provided in this chapter or by written agreement of a member, a member or manager of a limited liability company is not personally liable solely by reason of being a member or manager of the limited liability company under any judgment, or in any other manner, for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort, or otherwise.
2. A member of a limited liability company is personally liable under a judgment or for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort, or otherwise, under the same or similar circumstances and to the same extent as a shareholder of a corporation may be personally liable for any debt, obligation, or liability of the corporation, except that the failure to hold meetings of members or managers or the failure to observe formalities pertaining to the calling or conduct of meetings shall not be considered a factor tending to establish that the members have personal liability for any debt, obligation, or liability of the limited liability company.
3. Nothing in this section shall be construed to affect the liability of a member of a limited liability company to third parties for the member's participation in tortious conduct.
97 Acts, ch 188, ¡ì60
490A.801 Contributions - penalties.
1. The contributions of a member to a limited liability company may be in cash, property, or services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.
2. Unless otherwise provided in the articles of organization or an operating agreement, a member is obligated to the limited liability company to perform any enforceable promise to contribute cash or property or to perform services, even if the member is unable to perform because of death, disability, or any other reason. If a member does not make the contribution, the member is obligated at the option of the limited liability company to contribute cash equal to that portion of the value of the contribution that has not been made as stated in the limited liability company records required to be kept by section 490A.709 . A promise by a member to contribute to a limited liability company is not enforceable unless set out in a writing signed by the member.
3. Unless otherwise provided in the articles of organization or an operating agreement, the obligation of a member to make a contribution or return money or other property paid or distributed in violation of this chapter may be compromised only by consent of all the members. Notwithstanding the compromise, a creditor of a limited liability company who extends credit or otherwise acts in reliance on the original obligation may enforce the original obligation.
4. An operating agreement may provide that the interest of any member who fails to make a contribution that the member is obligated to make is subject to specified penalties for, or specified consequences of, such failure. The penalty or consequence may take the form of reducing or eliminating the defaulting member's proportionate interest in a limited liability company, subordinating the member's membership interest to that of a nondefaulting member, a forced sale of the member's membership interest, forfeiture of the member's membership interest, the lending by other members of the amount necessary to meet the member's commitment, a fixing of the value of the member's membership interest by appraisal or by formula and redemption, or sale of the member's membership interest at such value or other penalty or consequence.
92 Acts, ch 1151, ¡ì44; 97 Acts, ch 188, ¡ì70
490A.802 Sharing of profits and losses.
The profits and losses of a limited liability company shall be allocated among the members, and among classes of members, in the manner provided in writing in the articles of organization or an operating agreement. If the articles of organization or an operating agreement do not so provide in writing, profits and losses shall be allocated on the basis of their respective capital contributions, as adjusted from time to time to reflect any additional contributions or withdrawals.
92 Acts, ch 1151, ¡ì45
490A.803 Sharing of distributions.
Distributions of cash or other assets of a limited liability company shall be allocated among the members, and among classes of members, in the manner provided in writing in the articles of organization or an operating agreement. If the articles of organization or an operating agreement do not so provide in writing, distributions shall be made on the basis of their respective capital contributions, as adjusted from time to time to reflect any additional contributions or withdrawals.
92 Acts, ch 1151, ¡ì46
490A.809 Right to distribution.
Subject to sections 490A.807 and 490A.1304 , and unless otherwise provided in an operating agreement, at the time a member becomes entitled to receive a distribution, the member has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution. An operating agreement may provide for the establishment of a record date with respect to allocations and distributions by a limited liability company.
97 Acts, ch 188, ¡ì71
490A.807 Restrictions on making distribution.
1. A distribution shall not be made if, after giving it effect, either of the following would result:
a. The limited liability company would not be able to pay its debts as they became due in the usual course of business.
b. The limited liability company's total assets would be less than the sum of its total liabilities plus, unless the articles of organization or an operating agreement permit otherwise, the amount that would be needed, if the limited liability company were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of members whose preferential rights are superior to the rights of members receiving the distribution.
2. The limited liability company may base a determination that a distribution is not prohibited under subsection 1 of this section on either of the following:
a. Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances.
b. A fair valuation or other method that is reasonable in the circumstances.
3. The effect of a distribution under subsection 1 of this section is measured as of one of the following:
a. The date the distribution is authorized if the payment occurs within one hundred twenty days after the date of authorization.
b. The date the payment is made if it occurs more than one hundred twenty days after the date of authorization.
4. A limited liability company's indebtedness to a member incurred by reason of a distribution made in accordance with this section is at parity with the limited liability company's indebtedness to its general unsecured creditors, except to the extent subordinated by agreement.
490A.804 Interim distributions.
Except as otherwise provided in this chapter, a member is entitled to receive distributions from a limited liability company before the member's withdrawal from the limited liability company and before the dissolution and winding up of the company to the extent and at the times or upon the happening of the events specified in the articles of organization or an operating agreement.
92 Acts, ch 1151, ¡ì47
490A.704 Withdrawal of member.
A member may withdraw from a limited liability company at the time or upon the happening of events specified in writing in the articles of organization or an operating agreement. If the articles of organization or an operating agreement does not specify in writing the time or the events upon the happening of which a member may withdraw, a member may withdraw upon not less than six months' prior written notice to each member at the member's address on the books of the limited liability company. The articles of organization or an operating agreement may prohibit withdrawal by a member.
92 Acts, ch 1151, ¡ì38; 93 Acts, ch 39, ¡ì26
490A.805 Distribution upon withdrawal.
Except as otherwise provided in this chapter, upon withdrawal, a withdrawing member is entitled to receive any distribution to which the member is entitled under the articles of organization or an operating agreement. If not otherwise provided in the articles of organization or an operating agreement, the member is entitled to receive, within a reasonable time after withdrawal, the fair value of the member's membership interest as of the date of withdrawal, based on the member's right to share in distributions from the limited liability company.
490A.704A Resignation or withdrawal of member.
1. a. This section applies to a limited liability company whose original articles of organization are filed with the secretary of state on or after July 1, 1997.
b. This section applies to a limited liability company whose original articles of organization are filed with the secretary of state and effective on or prior to June 30, 1997, if such company's operating agreement provides that it is subject to this section.
c. If no provision is made in the operating agreement, a limited liability company whose original articles of organization were filed with the secretary of state and effective on or prior to June 30, 1997, is subject to section 490A.704 .
2. A member may resign or withdraw from a limited liability company only at the time or upon the happening of an event specified in an operating agreement and pursuant to the operating agreement.
3. Unless an operating agreement provides otherwise, a member may not resign or withdraw from a limited liability company prior to the dissolution and winding up of the limited liability company. However, if the articles of organization or an operating agreement do not specify the time or the events upon the happening of which a member may resign or withdraw, a member may resign or withdraw from the limited liability company in the event any amendment to the articles of organization or operating agreement that is adopted over the member's written dissent adversely affects the rights or preferences of the dissenting member's membership interest in any of the ways described in paragraphs "a" through "e" . A resignation or withdrawal in the event of such dissent and adverse effect is deemed to have occurred as of the effective date of the amendment, if the member gives notice to the limited liability company not more than sixty days after the date of the amendment. In valuing the member's distribution pursuant to this subsection, any depreciation in anticipation of the amendment shall be excluded. An amendment that does any of the following is subject to this subsection:
a. Alters or abolishes a member's right to receive a distribution.
b. Alters or abolishes a member's right to voluntarily withdraw or resign.
c. Alters or abolishes a member's right to vote on any matter, except as the rights may be altered or abolished through the acceptance of contributions or the making of contribution agreements.
d. Alters or abolishes a member's preemptive right to make contributions.
e. Establishes or changes the conditions for or consequences of expulsion.
4. A member withdrawing under this section is not liable for damages for the breach of any agreement not to withdraw.
5. An operating agreement may provide that a membership interest may be assigned prior to the dissolution and winding up of the limited liability company.
97 Acts, ch 188, ¡ì64
490A.705 Management of a limited liability company by a manager or managers.
1. The articles of organization or an operating agreement of a limited liability company may apportion responsibility for managing a limited liability company among one or more managers who may be, but need not be, members.
2. The articles of organization or an operating agreement may prescribe qualifications for managers.
3. The number of managers shall be fixed by or in the manner provided in the articles of organization or an operating agreement. The number of managers may be increased or decreased by amendment to, or in the manner provided in, the articles of organization or an operating agreement.
4. Unless otherwise provided in the articles of organization or an operating agreement, managers shall be elected by the majority vote of the members.
5. Unless otherwise provided in the articles of organization or an operating agreement, any vacancy occurring in the office of manager shall be filled by a majority vote of the members.
6. All managers or any lesser number may be removed in the manner provided in the articles of organization or an operating agreement. If the articles of organization or an operating agreement does not provide for the removal of managers, then all managers or any lesser number may be removed with or without cause by a majority vote of the members.
7. Unless otherwise provided in the articles of organization or an operating agreement, if the limited liability company has more than one manager, all decisions of the managers shall be by majority vote of the managers.
8. Unless the articles of organization or an operating agreement require a different number, a quorum for a meeting of managers consists of a majority of the managers.
92 Acts, ch 1151, ¡ì39
490A.705A Classes of managers and voting.
1. An operating agreement may provide for classes or groups of managers having such relative rights, powers, and duties as the operating agreement may provide, and may make provision for the future creation of additional classes or groups of managers having such relative rights, powers, and duties as may from time to time be established, including rights, powers, and duties senior to existing classes and groups of managers. An operating agreement may provide for taking action, including the amendment of the operating agreement, without the vote or approval of any manager or class or group of managers, including an action to create a class or group of membership interests that was not previously outstanding.
2. An operating agreement may grant to all or certain identified managers or a specified class or group of managers the right to vote on any matter, separately or with all or any class or group of managers or members. Voting by managers may be on a per capita, number, financial interest, class, group, or any other basis.
3. An operating agreement which grants a right to vote may set forth provisions relating to notice of the time, place, or purpose of any meeting at which any matter is to be voted on by any manager or class or group of managers, waiver of any such notice, action by consent without a meeting, the establishment of a record date, quorum requirements, voting in person or by proxy, or any other matter with respect to the exercise of any such right to vote.
97 Acts, ch 188, ¡ì65
490A.706 General standards of conduct for managers.
1. A manager shall discharge that manager's duties as a manager in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in a manner the manager believes to be in the best interests of the limited liability company.
2. In discharging the manager's duties, a manager is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by any of the following:
a. One or more managers or employees of the limited liability company whom the manager reasonably believes to be reliable and competent in the matters presented.
b. Legal counsel, public accountants, or other persons as to matters the manager reasonably believes are within the person's professional or expert competence.
c. A committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence.
3. A manager is not acting in good faith if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection 2 unwarranted.
4. A manager is not liable for any action taken as a manager or any failure to take any action, if the manager performed the duties of the manager's office in compliance with this section, or if, and to the extent that, liability for any such action or failure to act has been limited by the articles of organization pursuant to section 490A.707 .
92 Acts, ch 1151, ¡ì40
490A.707 Limitation of liability of managers.
The articles of organization may contain a provision eliminating or limiting the personal liability of a manager to the limited liability company or to its members or of the members with whom the management of the limited liability company is vested pursuant to section 490A.702 , to the limited liability company or to its members for money damages for any action taken, or any failure to take action, as a manager or a member with whom management of the limited liability company is vested, except for liability for any of the following:
1. The amount of a financial benefit received by a manager or member to which the manager or member is not entitled.
2. An intentional infliction of harm on the limited liability company or its members.
4. An intentional violation of criminal law.
A provision shall not eliminate or limit the liability of a manager or member with whom management of the limited liability company is vested for an act or omission occurring prior to the date when the provision in the articles of organization becomes effective.
92 Acts, ch 1151, ¡ì41; 93 Acts, ch 39, ¡ì27; 2003 Acts, ch 66, ¡ì4
490A.708 Business transactions of managers with the limited liability company.
1. A conflict of interest transaction is a transaction with the limited liability company in which a manager of the limited liability company has a direct or indirect interest. A conflict of interest transaction is not voidable by the limited liability company solely because of the manager's interest in the transaction if any one of the following is true:
a. The material facts of the transaction and the manager's interest were disclosed or known to the managers or a committee of managers and the managers or a committee of managers authorized, approved, or ratified the transaction.
b. The material facts of the transaction and the manager's interest were disclosed or known to the members entitled to vote and they authorized, approved, or ratified the transaction.
c. The transaction was fair to the limited liability company.
2. For purposes of this section, a manager of the limited liability company has an indirect interest in a transaction if either:
a. Another entity in which the manager has a material financial interest or in which the manager is a general partner is a party to the transaction.
b. Another entity of which the manager is a director, officer, manager, or trustee is a party to the transaction and the transaction is or should be considered by the limited liability company.
3. For purposes of subsection 1, paragraph "a" , a conflict of interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the managers or of the committee of managers, who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single manager. If a majority of the managers who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of taking action under this section. The presence of, or a vote cast by, a manager with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection 1, paragraph "a" , if the transaction is otherwise authorized, approved, or ratified as provided in that subsection.
4. For purposes of subsection 1, paragraph "b" , a conflict of interest transaction is authorized, approved, or ratified if it receives the vote of a majority of the members entitled to vote under this subsection. Interests owned by or voted under the control of a manager who has a direct or indirect interest in the transaction, and interests owned by or voted under the control of an entity described in subsection 2, paragraph "a" , shall not be counted in a vote of members to determine whether to authorize, approve, or ratify a conflict of interest transaction under subsection 1, paragraph "b" . The vote of those members, however, is counted in determining whether the transaction is approved under other sections of this chapter. Members, whether or not present, that are entitled to be counted in a vote on the transaction under this subsection constitute a quorum for the purpose of taking action under this section.
92 Acts, ch 1151, ¡ì42
490A.709 Information and records.
1. Each limited liability company shall keep at its principal office the following:
a. A current list of the full name and last known business address of each member and manager.
b. A copy of the articles of organization and all articles of amendment thereto.
c. Copies of the limited liability company's federal, state, and local income tax returns and reports, if any, for the three most recent years.
d. Copies of any then-effective written operating agreement and of any financial statements of the limited liability company for the three most recent years.
e. Unless contained in a written operating agreement, a writing setting out:
(1) The amount of cash and a description and statement of the agreed value of the other property or services contributed by each member and which each member has agreed to contribute.
(2) The times at which or events on the happening of which any additional contributions agreed to be made by each member are to be made.
(3) Any right of a member to receive, or of the limited liability company to make, distributions to a member which include a return of all or any part of the member's contribution.
(4) Any events upon the happening of which the limited liability company is to dissolve and its affairs be wound up.
2. Each member has the right for any purpose reasonably related to the member's interest as a member of the limited liability company, upon reasonable request and subject to reasonable standards as may be set forth in an operating agreement, to do any of the following:
a. Inspect and copy any of the limited liability company records required to be maintained by this section; and
b. Obtain from the manager or managers, or if the limited liability company has no manager or managers, from any member or other person with access to such information, from time to time upon reasonable demand any of the following:
(1) True and full information regarding the state of the business and financial condition of the limited liability company.
(2) Promptly after it becomes available, a copy of the limited liability company's federal, state, and local income tax returns for each year.
(3) Other information regarding the affairs of the limited liability company as is just and reasonable.
92 Acts, ch 1151, ¡ì43; 97 Acts, ch 188, ¡ì66
490A.710 Delegation of rights and powers to manage.
Unless otherwise provided in the operating agreement, a member or manager of a limited liability company may delegate to one or more other persons the member's or manager's rights and powers to manage and control the business and affairs of the limited liability company, including to agents and employees of a member or manager of the limited liability company, and to delegate by a management agreement or another agreement with other persons. Unless otherwise provided in the operating agreement, such delegation by a member or manager of a limited liability company shall not cause the member or manager to cease to be a member or manager of the limited liability company.
97 Acts, ch 188, ¡ì67
490A.1507 Relationship and liability to persons served.
This subchapter does not modify any law applicable to the relationship between an individual practicing a profession and a person receiving professional services, including, but not limited to, any liability arising out of such practice and any law respecting privileged communications. This chapter does not modify or affect the ethical standards or standards of conduct of any profession, including, but not limited to, any standards prohibiting or limiting the practice of the profession by a limited liability company or prohibiting or limiting the practice of two or more professions in combination. All such standards shall apply to the members, managers, employees, and agents through whom a professional limited liability company practices any profession in this state, to the same extent that the standards apply to an individual practitioner.
92 Acts, ch 1151, ¡ì91
490A.1101 Amendment of articles of organization.
1. A limited liability company may amend its articles of organization at any time to add or change a provision that is required or permitted in the articles of organization or to delete a provision not required in the articles of organization by delivering articles of amendment to the secretary of state for filing. Whether a provision is required or permitted for the articles of organization is determined as of the effective date of the amendment.
2. To amend its articles of organization, a limited liability company shall deliver to the secretary of state for filing articles of amendment setting forth all of the following:
a. The name of the limited liability company.
b. The text of each amendment adopted.
c. The date of each amendment's adoption.
d. A statement that the amendment was adopted by a vote of the members in accordance with this chapter.
490A.1102 Restated articles of organization.
1. A limited liability company may restate its articles of organization at any time.
2. The restatement may include one or more amendments to the articles. The restatement must be adopted by a vote of the members as provided by this chapter.
3. A limited liability company restating its articles of organization shall deliver to the secretary of state for filing articles of restatement setting forth the name of the limited liability company and the text of the restated articles of organization together with a certificate setting forth the information required by section 490A.1101 , subsection 2.
4. Duly adopted restated articles of organization supersede the original articles of organization and all amendments to them.
5. The secretary of state may certify restated articles of organization, as the articles of organization currently in effect, without including the certificate information required by subsection 3.
92 Acts, ch 1151, ¡ì59
In this chapter, unless the context otherwise requires:
1. "Articles of organization" means documents filed under section 490A.301 for the purpose of forming a limited liability company and includes amended and restated articles of organization, and articles of merger.
2. "Bankruptcy" means, with respect to any person, being the subject of an order for relief under Title 11 of the United States Code.
3. "Capital contribution" means any cash, property, or services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services, which a member contributes to a limited liability company in the capacity of a member.
4. "Constituent entity" means each limited liability company, limited partnership, corporation, or domestic cooperative which is party to a plan of merger pursuant to subchapter XII.
5. "Corporation" means a domestic corporation formed under the law of this state or subject to the law of this state, or a foreign corporation as defined in this chapter.
6. "Court" includes every court having jurisdiction of the case.
7. "Distribution" means a direct or indirect transfer of money or other property, or incurrence of indebtedness by a limited liability company to or for the benefit of its members in respect of their interests.
8. "Domestic cooperative" means a cooperative organized under chapter 497 , 498 , 499 , 501 , or 501A .
9. "Entity" includes corporation and foreign corporation; nonprofit corporation; profit and nonprofit unincorporated association; business trust, estate, partnership, limited liability company, trust, and two or more persons having a joint or common economic interest; and state, United States, and foreign government.
10. "Foreign corporation" means a corporation for profit incorporated under a law other than the law of this state.
11. "Foreign limited liability company" means a limited liability company organized under a law other than the law of this state.
12. "Foreign limited partnership" means a limited partnership organized under a law other than the law of this state.
13. "Individual" includes the estate of an incompetent, a ward, or a deceased individual.
14. "Limited liability company" or "domestic limited liability company" means an unincorporated association having one or more members, and organized under or subject to this chapter.
15. "Limited partnership" means a limited partnership organized under the law of this state or a foreign limited partnership as defined in this section.
16. "Manager" or "managers" means a person or persons designated by the members of a limited liability company to manage the limited liability company as provided in the articles of organization or an operating agreement.
17. "Member" means a person with a membership interest in a limited liability company under this chapter or, with respect to a foreign limited liability company, under the laws of the state, foreign country, or other foreign jurisdiction under which such company is organized.
18. "Membership interest" or "interest" means a member's share of the profits and the losses of the limited liability company and the right to receive distributions of the limited liability company's assets, and any right to vote or participate in management.
19. "Operating agreement" means any agreement, written or oral, of the members as to the affairs of a limited liability company and the conduct of its business.
20. "Person" has the same meaning as specified in section 4.1 , subsection 20.
21. "Principal office" means the office, in or out of this state, where the principal executive offices of a domestic or foreign limited liability company are located.
22. "Secretary of state" means the Iowa secretary of state.
23. "State" , when referring to a part of the United States, includes a state, commonwealth, and their agencies and governmental subdivisions; and a territory or insular possession, and their agencies and governmental subdivisions, of the United States.
24. "Surviving entity" means the constituent entity surviving the merger, as identified in the articles of merger provided for in subchapter XII.
25. "United States" includes a district, authority, bureau, commission, department, and any other agency of the United States.
92 Acts, ch 1151, ¡ì10; 97 Acts, ch 188, ¡ì53; 2005 Acts, ch 135, ¡ì107 , 108
NEW subsection 8 and former subsections 8 - 24 renumbered as 9 - 25
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