Iowa Code § 489.407
Management of limited liability company
Redline — January 1, 2012 → current.View current text →
Current — January 1, 2025
As of January 1, 2012
1. A limited liability company is a member-managed limited liability company unless the operating agreement does any of the following:
1. A limited liability company is a member-managed limited liability company unless the operating agreement does any of the following:
a. Expressly provides that any of the following apply:
a. Expressly provides that any of the following apply:
(1) The company is or will be “manager-managed”.
(1) The limited liability company is or will be “manager-managed”.
(2) The company is or will be “managed by managers”.
(2) The limited liability company is or will be “managed by managers”.
(3) Management of the company is or will be “vested in managers”.
(3) Management of the limited liability company is or will be “vested in managers”.
b. Includes words of similar import.
b. Includes words of similar import.
2. In a member-managed limited liability company, all of the following rules apply:
2. In a member-managed limited liability company, all of the following rules apply:
a. The management and conduct of the company are vested in the members.
a. Except as expressly provided in this chapter, the management and conduct of the limited liability company are vested in the members.
b. Each member has equal rights in the management and conduct of the company’s activities.
b. Each member has equal rights in the management and conduct of the limited liability company’s activities and affairs.
c. A difference arising among members as to a matter in the ordinary course of the activities of the company may be decided by a majority of the members.
c. A difference arising among members as to a matter in the ordinary course of the activities and affairs of the limited liability company may be decided by a majority of the members.
d. The affirmative vote or consent of all the members is required to do any of the following:
(1) Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited liability company’s property, with or without good will, outside the ordinary course of the company’s activities.
e. The operating agreement may be amended only with the consent of all members.
(2) Undertake an act outside the ordinary course of the activities and affairs of the limited liability company.
(3) Approve a merger, interest exchange, conversion, or domestication under subchapter X.
(4) Amend the operating agreement.
3. In a manager-managed limited liability company, all of the following rules apply:
3. In a manager-managed limited liability company, all of the following rules apply:
a. Except as otherwise expressly provided in this chapter, any matter relating to the activities of the company is decided exclusively by the managers.
a. Except as expressly provided in this chapter, any matter relating to the activities and affairs of the limited liability company is decided exclusively by the manager, or, if there is more than one manager, by a majority of the managers.
b. Each manager has equal rights in the management and conduct of the activities of the company.
b. Each manager has equal rights in the management and conduct of the activities and affairs of the limited liability company.
c. A difference arising among managers as to a matter in the ordinary course of the activities of the company may be decided by a majority of the managers.
c. The affirmative vote or consent of all members is required to do any of the following:
(1) Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the company’s property, with or without the goodwill, outside the ordinary course of the company’s activities.
(1) Sell, lease, exchange, or otherwise dispose of all, or substantially all, of the limited liability company’s property, with or without goodwill, outside the ordinary course of the company’s activities.
(2) Approve a merger, conversion, or domestication under article 10.
(2) Undertake any other act outside the ordinary course of the limited liability company’s activities and affairs.
(3) Approve a merger, interest exchange, conversion, or domestication under subchapter X.
(4) Amend the operating agreement.
(4) Amend the operating agreement.
d. A manager may be chosen at any time by the affirmative vote or consent of a majority of the members and remains a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates. A manager may be removed at any time by the affirmative vote or consent of a majority of the members without notice or cause.
e. A person need not be a member to be a manager, but the dissociation of a member that is also a manager removes the person as a manager. If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member.
f. A person’s ceasing to be a manager does not discharge any debt, obligation, or other liability to the limited liability company or members which the person incurred while a manager.
4. An action requiring the consent of members under this chapter may be taken without a meeting, and a member may appoint a proxy or other agent to consent or otherwise act for the member by signing an appointing record, personally or by the member’s agent.
4. An action requiring the vote or consent of members under this chapter may be taken without a meeting, and a member may appoint a proxy or other agent to vote, consent, or otherwise act for the member by signing an appointing record, personally or by the member’s agent.
5. The dissolution of a limited liability company does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.
5. The dissolution of a limited liability company does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.
6. A limited liability company shall reimburse a member for an advance to the company beyond the amount of capital the member agreed to contribute.
7. A payment or advance made by a member which gives rise to a limited liability company obligation under subsection 6 or section 489.408, subsection 1, constitutes a loan to the company which accrues interest from the date of the payment or advance.
8. A member is not entitled to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities of the company.
Referred to in
*Description of approval process and any restrictions on the approval process probably intended; corrective legislation is pending
Official source: Iowa Legislature. Reproduced from public-domain Iowa statutes; confirm against the official source for the current text. Not legal advice.