605.04074 Agency rights of members and managers.
447 words·~2 min read·
/fl/title-xxxvi/chapter-605/605-04074·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)In a member-managed limited liability company, the following rules apply:
(a)Except as provided in subsection (3), each member is an agent of the limited liability company for the purpose of its activities and affairs, and an act of a member, including signing an agreement or instrument of transfer in the name of the company for apparently carrying on in the ordinary course of the company’s activities and affairs or activities and affairs of the kind carried on by the company, binds the company unless the member had no authority to act for the company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority.
(b)An act of a member which is not done for apparently carrying on in the ordinary course of the limited liability company’s activities and affairs or activities and affairs of the kind carried on by the company, binds the company only if the act was authorized by appropriate vote of the members.
(2)In a manager-managed limited liability company, the following rules apply:
(a)A member is not an agent of the limited liability company for the purpose of its business solely by reason of being a member.
(b)Except as provided in subsection (3), each manager is an agent of the limited liability company for the purpose of its activities and affairs, and an act of a manager, including signing an agreement or instrument of transfer in the name of the company, for apparently carrying on in the ordinary course of the company’s activities and affairs or activities and affairs of the kind carried on by the company, binds the company unless the manager had no authority to act for the company in the particular matter and the person with whom the manager was dealing knew or had notice that the manager lacked authority.
(c)An act of a manager which is not apparently for carrying on in the ordinary course of the limited liability company’s activities and affairs or activities and affairs of the kind carried on by the company, binds the company only if the act was authorized by appropriate vote of the members.
(3)Unless a certified statement of authority recorded in the applicable real estate records limits the authority of a member or a manager, a member of a member-managed company or a manager of a manager-managed company may sign and deliver an instrument transferring or affecting the limited liability company’s interest in real property. The instrument is conclusive in favor of a person who gives value without knowledge of the lack of the authority of the person signing and delivering the instrument.