Iowa 2023 2023-2024 Regular Session

Iowa House Bill HF655 Amended / Bill

Filed 04/04/2023

                    House File 655 - Reprinted   HOUSE FILE 655   BY COMMITTEE ON JUDICIARY   (SUCCESSOR TO HSB 207)   (COMPANION TO LSB 1051SV BY   COMMITTEE ON JUDICIARY)   (As Amended and Passed by the House April 4, 2023 )   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   HF 655 (4) 90   da/jh/md  

  H.F. 655   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 persons 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 persons capacity as a 33   member.   34   3. Debtor in bankruptcy means a person that is the subject 35   -1-   HF 655 (4) 90   da/jh/md   1/ 159                                       

  H.F. 655   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 persons   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 members 19   relinquishment of any right to participate as a member in 20   the management or conduct of the limited liability companys   21   activities and affairs or to have access to records or other 22   information concerning the companys 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-   HF 655 (4) 90   da/jh/md   2/ 159                                                 

  H.F. 655   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   9.   Filing entity means an unincorporated entity, other 14   than a limited liability partnership, that is of a type that 15   is created by filing a public organic record or is required to 16   file a public organic record that evidences its creation. 17   9.   10. Foreign limited liability company means an 18   unincorporated entity formed under the law of a jurisdiction 19   other than this state and denominated by that law as a limited   20   liability company   which would be a limited liability company if 21   formed under the law of this state . 22   11.   Jurisdiction , used to refer to a political entity, 23   means the United States, a state, a foreign country, or a 24   political subdivision of a foreign country. 25   12. Jurisdiction of formation means the jurisdiction whose 26   law governs the internal affairs of an entity. 27   10.   13. Limited liability company , except in the phrase 28   foreign limited liability company , and in subchapter X   means 29   an entity formed under this chapter or which becomes subject to   30   this chapter under subchapter X or section 489.110 . 31   11.   14. Manager means a person that under the operating 32   agreement of a manager-managed limited liability company is 33   responsible, alone or in concert with others, for performing 34   the management functions stated in section 489.407, subsection 35   -3-   HF 655 (4) 90   da/jh/md   3/ 159                                                       

  H.F. 655   3 . 1   12.   15. Manager-managed limited liability company means a 2   limited liability company that qualifies under section 489.407, 3   subsection 1 . 4   13.   16. Member means a person that has become a member 5   of a limited liability company under   section 489.401 and has 6   not dissociated under section 489.602 . for whom all of the 7   following are true: 8   a.   The person has become a member of a limited liability 9   company under section 489.401 or was a member in a limited 10   liability company when the company became subject to this   11   chapter under section 489.110. 12   b. The person is not dissociated under section 489.602. 13   14.   17. Member-managed limited liability company means a 14   limited liability company that is not a manager-managed limited 15   liability company. 16   18. Nonfiling entity means an unincorporated entity that 17   is of a type that is not created by filing a public organic   18   record.   19   15. 19. Operating agreement means the agreement, whether 20   or not referred to as an operating agreement and whether oral, 21   implied,   in a record, implied, or in any combination thereof, 22   of all the members of a limited liability company, including 23   a sole member, concerning the matters described in section 24   489.110, subsection 1 . The term includes the agreement as 25   amended or restated. 26   16.   20. Organizer means a person that acts under section 27   489.201 to form a limited liability company. 28   17. 21. a. Person means an individual, business 29   corporation, business trust, estate, trust,   nonprofit 30   corporation, partnership, limited partnership, limited 31   liability company, domestic cooperative, unincorporated   32   nonprofit association, statutory trust, business trust, 33   common-law business trust, estate, trust, association,   joint 34   venture, public corporation, government or governmental 35   -4-   HF 655 (4) 90   da/jh/md   4/ 159                                                   

  H.F. 655   subdivision, agency, or instrumentality, or any other legal or 1   commercial entity. 2   b.   Person includes a protected series, however 3   denominated, of an entity if the protected series is 4   established under law that limits, or limits if conditions   5   specified under law are satisfied, the ability of a creditor   6   of the entity or of any other protected series of the entity to 7   satisfy a claim from assets of the protected series. 8   18.   22. Principal office means the principal executive 9   office of a limited liability company or foreign limited 10   liability company, whether or not the office is located in this 11   state. 12   23.   Property means all property, whether real, personal, 13   or mixed or tangible or intangible, or any right or interest   14   therein. 15   19. 24. Record , used as a noun, means information that 16   is inscribed on a tangible medium or that is stored in an 17   electronic or other medium and is retrievable in perceivable 18   form. 19   20.   Registered office means the office that a limited 20   liability company or foreign limited liability company is   21   required to designate and maintain under section 489.113 . 22   25.   Registered agent means an agent of a limited 23   liability company or foreign limited liability company which is 24   authorized to receive service of any process, notice, or demand 25   required or permitted by law to be served on the company. 26   26. Registered foreign limited liability company means 27   a foreign limited liability company that is registered to do 28   business in this state pursuant to a statement of registration 29   filed by the secretary of state.   30   21. 27. Sign means, with the present intent to 31   authenticate or adopt a record, to do any of the following: 32   a. Execute or adopt a tangible symbol. 33   b. Attach to or logically associate with the record an 34   electronic symbol, sound, or process. 35   -5-   HF 655 (4) 90   da/jh/md   5/ 159                                               

  H.F. 655   22. 28. State means a state of the United States, the 1   District of Columbia, Puerto Rico, the United States Virgin 2   Islands, or any territory or insular possession subject to the 3   jurisdiction of the United States. 4   23. 29. Transfer includes an assignment, conveyance, 5   deed, bill of sale, lease, mortgage, security interest,   6   encumbrance, gift, or transfer by operation of law. any of the 7   following: 8   a.   An assignment. 9   b. A conveyance. 10   c.   A sale. 11   d. A lease. 12   e. An encumbrance, including a mortgage or security 13   interest.   14   f. A gift. 15   g. A transfer by operation of law. 16   24. 30. a. Transferable interest means the right, as 17   originally associated with   initially owned by a person in the 18   persons capacity as a member, to receive distributions from 19   a limited liability company ,   in accordance with the operating 20   agreement,   whether or not the person remains a member or 21   continues to own any part of the right. 22   b.   Transferable interest applies to any fraction of the 23   interest, by whomever owned. 24   25. 31. a. Transferee means a person to which all or 25   part of a transferable interest has been transferred, whether 26   or not the transferor is a member.   27   b.   Transferee includes a person that owns a transferable 28   interest under section 489.603, subsection 1, paragraph   c . 29   Sec. 3. Section 489.103, Code 2023, is amended to read as   30   follows:   31   489.103 Knowledge  notice. 32   1. A person knows a fact when   if the person has or is any 33   of the following: 34   a. Has actual knowledge of it. 35   -6-   HF 655 (4) 90   da/jh/md   6/ 159                                                             

  H.F. 655   b. Is deemed to know it under subsection 4 , paragraph a , 1   or law other than this chapter . 2   2. A person has notice of a fact when   if the person has or 3   is any of the following: 4   a. Has reason to know the fact from all of   the facts known 5   to the person at the time in question. 6   b. Is deemed to have notice of the fact under subsection 4 , 7   paragraph b . 8   3. A   Subject to section 489.210, subsection 6, a person 9   notifies another person of a fact by taking steps reasonably 10   required to inform the other person in ordinary course, whether 11   or not those steps cause   the other person knows to know the 12   fact. 13   4. A person that is   not a member is deemed both all of the 14   following: 15   a. To know of a limitation on authority to transfer real 16   property as provided in section 489.302, subsection 7 . 17   b. To have notice of all of the following regarding a   18   limited liability companys   : 19   (1) Dissolution, The limited liability companys 20   dissolution,   ninety days after a statement of dissolution under 21   section 489.702, subsection 2 , paragraph b , subparagraph (1), 22   becomes effective. 23   (2) Termination,   The limited liability companys 24   termination, ninety days after a statement of termination under 25   section 489.702, subsection 2 , paragraph b , subparagraph (6), 26   becomes effective.   27   (3) Merger,   The limited liability companys participation 28   in a merger, interest exchange, conversion, or domestication, 29   ninety days after articles of merger, interest exchange,   30   conversion, or domestication under article 10 subchapter X 31   become effective. 32   Sec. 4. Section 489.104, Code 2023, is amended to read as   33   follows:   34   489.104 Nature, purpose, and duration of limited liability 35   -7-   HF 655 (4) 90   da/jh/md   7/ 159                            

  H.F. 655   company. 1   1. A limited liability company is an entity distinct from 2   its member or   members. 3   2. A limited liability company may have any lawful purpose, 4   regardless of whether for profit. 5   3. A limited liability company has perpetual duration. 6   Sec. 5. Section 489.105, Code 2023, is amended to read as 7   follows: 8   489.105 Powers. 9   1. Except as otherwise provided in subsection 2 , a limited 10   liability company has the capacity to sue and be sued in its 11   own name and the power to do all things necessary or convenient 12   to carry on its activities and affairs   . 13   2. Until a limited liability company has or has had at 14   least one member, the limited liability   company lacks the 15   capacity to do any act or carry on any activity except all of 16   the following: 17   a. Delivering to the secretary of state for filing a 18   statement of change under section 489.114 , an amendment to the 19   certificate under section 489.202 , a statement of correction 20   under section 489.206 , a biennial report under section 489.209 , 21   a statement of withdrawal or a statement of rescission under 22   section 489.701A , or a statement of termination under section 23   489.702, subsection 2 , paragraph b , subparagraph (6). 24   b. Admitting a member under section 489.401 . 25   c. Dissolving under section 489.701 . 26   3. A limited liability company that has or has had at least 27   one member may ratify an act or activity that occurred when the 28   company lacked capacity under subsection 2 . 29   Sec. 6. Section 489.106, Code 2023, is amended to read as   30   follows:   31   489.106 Governing law. 32   The law of this state governs all of the following: 33   1. The internal affairs of a limited liability company. 34   2. The liability of a member as member and a manager as 35   -8-   HF 655 (4) 90   da/jh/md   8/ 159     

  H.F. 655   manager for the debts, obligations, a debt, obligation, or 1   other liabilities   liability of a limited liability company. 2   Sec. 7. Section 489.108, Code 2023, is amended to read as 3   follows: 4   489.108 Name   Permitted names . 5   1. The name of a limited liability company must contain 6   the words   phrase limited liability company or limited 7   company or the abbreviation L. L. C., LLC, L. C., or LC. 8   Limited may be abbreviated as Ltd., and company may be 9   abbreviated as Co.. 10   2. Unless authorized by   Except as otherwise provided in 11   subsection 3 , the name of a limited liability company , and 12   the name under which a foreign limited liability company may 13   register to do business in this state,   must be distinguishable 14   in on the records of the secretary of state from all any of the 15   following: 16   a. The name of each person that is not an individual and 17   that is incorporated, organized, or authorized to transact   18   business in this state.   19   b. Each name reserved under section 489.109 . 20   a.   The name of an existing person whose formation required 21   the filing of a record by the secretary of state and which is 22   not at the time administratively dissolved, or if such person   23   has been administratively dissolved, within five years of the 24   effective date of dissolution. 25   b. The name of a limited liability partnership whose 26   statement of qualification is in effect. 27   c. The name under which a person is registered to do 28   business in this state by the filing of a record by the 29   secretary of state.   30   d. The name reserved under section 489.109 or other law 31   of this state providing for the reservation of a name by the   32   filing of a record by the secretary of state. 33   e.   The name registered under section 489.114 or other law 34   of this state providing for the registration of a name by the 35   -9-   HF 655 (4) 90   da/jh/md   9/ 159                                                      

  H.F. 655   filing of a record by the secretary of state. 1   f.   The name registered with the secretary of state as a 2   fictitious name. 3   3. A limited liability company may apply to the secretary of 4   state for authorization to use a name that does not comply with   5   subsection 2   . The secretary of state shall authorize use of 6   the name applied for if either of the following applies: If a 7   person consents in a record to the use of its name and submits 8   an undertaking in a form satisfactory to the secretary of state   9   to change its name to a name that is distinguishable on the 10   records of the secretary of state from any name in any category   11   of names in subsection 2, the name of the consenting person may 12   be used by the person to which the consent was given. 13   a.   The present user, registrant, or owner of the 14   noncomplying name consents in a signed record to the use 15   and submits an undertaking in a form satisfactory to the 16   secretary of state to change the noncomplying name to a name 17   that complies with   subsection 2 and is distinguishable in the 18   records of the secretary of state from the name applied for.   19   b. The applicant delivers to the secretary of state a 20   certified copy of the final judgment of a court establishing   21   the applicants right to use in this state the name applied 22   for.   23   4. A limited liability company may use the name, including 24   the fictitious name, of another entity that is used in this 25   state if the other entity is formed under the law of this 26   state or is authorized to transact business in this state 27   and the proposed user limited liability company meets any 28   of the following conditions: In determining whether a name 29   is the same as or not distinguishable on the records of the   30   secretary of state from the name of another person, words,   31   phrases, or abbreviations indicating a type of person, such as   32   corporation, corp., incorporated, Inc., professional 33   corporation, P.C., PC, professional association, P.A.,   34   PA, Limited, Ltd., limited partnership, L.P., LP,   35   -10-   HF 655 (4) 90   da/jh/md   10/ 159                                                

  H.F. 655   limited liability partnership, L.L.P., LLP, registered 1   limited liability partnership, R.L.L.P., RLLP, limited   2   liability limited partnership, L.L.L.P., LLLP, registered 3   limited liability limited partnership, R.L.L.L.P., RLLLP, 4   limited liability company, L.L.C., LLC, cooperative,   5   coop, or CP shall not be taken into account.   6   a. Has merged with the other entity. 7   b. Has been formed by reorganization of the other entity. 8   c.   Has acquired all or substantially all of the assets, 9   including the name, of the other entity. 10   5. This article   does not control the use of fictitious 11   names. However, if a limited liability company uses a 12   fictitious name in this state, it shall deliver to the 13   secretary of state for filing a certified copy of the   14   resolution of its members if it is member-managed or its 15   managers if it is manager-managed, adopting the fictitious 16   name. The name of a limited liability company or foreign 17   limited liability company shall not contain words that may be   18   used only with approval by another state department or state   19   agency unless the company obtains the approval of such other 20   state department or agency and delivers to the secretary of   21   state for filing a record certifying such approval. 22   6. Subject to   section 489.805 , this section applies to 23   a foreign limited liability company transacting business in 24   this state which has a certificate of authority to transact 25   business in this state or which has applied for a certificate 26   of authority. A limited liability company or foreign limited 27   liability company may use a name that is not distinguishable 28   from a name described in subsection 2, paragraphs a through 29   f   , if the company delivers to the secretary of state a 30   certified copy of a final judgment of a court of competent 31   jurisdiction establishing the right of the company to use the   32   name in this state. 33   7.   A limited liability company may use the name, including 34   the fictitious name, of another entity that is used in this 35   -11-   HF 655 (4) 90   da/jh/md   11/ 159                                                       

  H.F. 655   state if the other entity is formed under the law of this 1   state or is authorized to transact business in this state and   2   the proposed user limited liability company meets any of the 3   following conditions: 4   a.   Has merged with the other entity. 5   b.   Has been formed by reorganization of the other entity. 6   c. Has acquired all or substantially all of the assets, 7   including the name, of the other entity. 8   8.   This subchapter does not control the use of fictitious 9   names. However, if a limited liability company uses a 10   fictitious name in this state, it shall deliver to the   11   secretary of state for filing a certified copy of the 12   resolution of its members if it is member-managed or its 13   managers if it is manager-managed, adopting the fictitious   14   name. 15   Sec. 8. Section 489.109, Code 2023, is amended to read as 16   follows: 17   489.109 Reservation of name. 18   1. A person may reserve the exclusive use of the   a name 19   of a limited liability company, including a fictitious or 20   assumed name for a foreign limited liability company whose   21   name is not available, by delivering an application to the 22   secretary of state for filing   that complies with section 23   489.112 by delivering an application to the secretary of state 24   for filing . The application must state the name and address 25   of the applicant and the name proposed to be reserved. If 26   the secretary of state finds that the name applied for is 27   available, it must be reserved the secretary of state shall 28   reserve the name for the applicants exclusive use for a 29   one-hundred-twenty-day period   one hundred and twenty days . 30   2. The owner of a reserved name reserved for a limited 31   liability company   may transfer the reservation to another 32   person by delivering to the secretary of state for filing a 33   signed notice in a record   of the transfer which states the name 34   and address of the transferee person to which the reservation 35   -12-   HF 655 (4) 90   da/jh/md   12/ 159                                                 

  H.F. 655   is being transferred . 1   Sec. 9. Section 489.110, Code 2023, is amended to read as 2   follows: 3   489.110 Operating agreement  scope, function, and 4   limitations. 5   1. Except as otherwise provided in subsections 2   3 and 3 4 , 6   the operating agreement governs all of the following: 7   a. Relations among the members as members and between the 8   members and the limited liability company. 9   b. The rights and duties under this chapter of a person in 10   the capacity of manager. 11   c. The activities and affairs   of the company and the conduct 12   of those activities and affairs . 13   d. The means and conditions for amending the operating 14   agreement. 15   2. To the extent the operating agreement does not otherwise   16   provide for a matter described in subsection 1 , this chapter 17   governs the matter. 18   3. An operating agreement shall not do any of the following: 19   a. Vary a limited liability companys capacity under   section 20   489.105   to sue and be sued in its own name the law applicable 21   under section 489.104 . 22   b. Vary the law applicable under   section 489.106 a limited 23   liability companys capacity under section 489.109 to sue and 24   be sued in its own name . 25   c. Vary the power of the court under section 489.204 . any 26   requirement, procedure, or other provision of this chapter 27   pertaining to any of the following: 28   (1) Registered agents. 29   (2)   The secretary of state, including provisions pertaining 30   to records authorized or required to be delivered to the 31   secretary of state for filing under this chapter.   32   d. Subject to subsections 4 through 7 , eliminate the duty of 33   loyalty, the duty of care, or any other fiduciary duty   Vary the 34   provisions of section 489.204 . 35   -13-   HF 655 (4) 90   da/jh/md   13/ 159                                         

  H.F. 655   e. Subject to subsections 4 through 7 , eliminate the 1   contractual obligation of good faith and fair dealing under   2   section 489.409, subsection 4 Alter or eliminate the duty of 3   loyalty or the duty of care, except as otherwise provided in 4   subsection 4   . 5   f. Unreasonably restrict the duties and rights stated in   6   section 489.410 Eliminate the contractual obligation of good 7   faith and fair dealing under section 489.409, subsection 4, 8   but the operating agreement may prescribe the standards, if   9   not manifestly unreasonable, by which the performance of the 10   obligation is to be measured   . 11   g. Vary the power of a court to decree dissolution in 12   the circumstances specified in section 489.701, subsection 13   1   , paragraphs d and e Relieve or exonerate a person from 14   liability for conduct except as provided in subsection 6 . 15   h. Vary the requirement to wind up a limited liability 16   companys business as specified in section 489.702, 17   subsection 1   , and section 489.702, subsection 2 , paragraph 18   a   Unreasonably restrict the duties and rights under section 19   489.410, but the operating agreement may impose reasonable 20   restrictions on the availability and use of information   21   obtained under that section and may define appropriate 22   remedies, including liquidated damages, for a breach of any   23   reasonable restriction on use . 24   i. Unreasonably restrict the right of a member to maintain 25   an action under article 9 Vary the causes of dissolution 26   specified in section 489.701, subsection 1, paragraph d . 27   j. Restrict the right to approve a merger, conversion, or 28   domestication under section 489.1014 to a member that will have 29   personal liability with respect to a surviving, converted, or   30   domesticated organization Vary the requirement to wind up the 31   limited liability companys activities and affairs as specified   32   in section 489.702, subsection 1; subsection 2, paragraph   a ; 33   and subsection 5   .   34   k. Except as otherwise provided in   section 489.112, 35   -14-   HF 655 (4) 90   da/jh/md   14/ 159                                                             

  H.F. 655   subsection 2 , restrict the rights under this chapter of a 1   person other than a member or manager   Unreasonably restrict the 2   right of a member to maintain an action under subchapter VIII . 3   l. Vary the provisions of section 489.805A, but the 4   operating agreement may provide that the limited liability   5   company shall not have a special litigation committee.   6   m. Vary the right of a member to approve a merger, interest 7   exchange, conversion, or domestication under section 489.1023, 8   subsection 1, paragraph   b ; section 489.1033, subsection 1, 9   paragraph b ; section 489.1043, subsection 1, paragraph b ; or 10   section 489.1053, subsection 1, paragraph   b . 11   n. Vary the required contents of a plan of merger under 12   section 489.1022, subsection 1; plan of interest exchange 13   under section 489.1032, subsection 1; plan of conversion under   14   section 489.1042, subsection 1; or plan of domestication under 15   section 489.1052, subsection 1. 16   o. Except as otherwise provided in sections 489.111 and 17   489.112, subsection 2, restrict the rights under this chapter   18   of a person other than a member or manager.   19   4. If not manifestly unreasonable, the operating agreement 20   may do any of the following:   Subject to subsection 3, 21   paragraph g , without limiting other terms that may be included 22   in an operating agreement, all the following rules apply:   23   a. Restrict or eliminate the duty to do any The operating 24   agreement may do all of the following: 25   (1) As required in section 489.409, subsection 2 , paragraph 26   a , and section 489.409, subsection 8 , to account to the 27   limited liability company and to hold as trustee for it any 28   property, profit, or benefit derived by the member in the 29   conduct or winding up of the companys business, from a use by   30   the member of the companys property, or from the appropriation   31   of a limited liability company opportunity   Specify the method 32   by which a specific act or transaction that would otherwise 33   violate the duty of loyalty may be authorized or ratified by   34   one or more disinterested and independent persons after full 35   -15-   HF 655 (4) 90   da/jh/md   15/ 159                                                                   

  H.F. 655   disclosure of all material facts . 1   (2) As required in   section 489.409, subsection 2 , paragraph 2   b , and section 489.409, subsection 8 , to refrain from dealing 3   with the company in the conduct or winding up of the companys 4   business as or on behalf of a party having an interest adverse   5   to the company   Alter the prohibition in section 489.405, 6   subsection 1, paragraph b , so that the prohibition requires 7   only that the limited liability companys total assets not be 8   less than the sum of its total liabilities   . 9   (3) As required by section 489.409, subsection 2 , paragraph 10   c   , and section 489.409, subsection 8 , to refrain from 11   competing with the company in the conduct of the companys 12   business before the dissolution of the company. 13   b. Identify specific types or categories of activities   14   that do not violate the duty of loyalty To the extent the 15   operating agreement of a member-managed limited liability 16   company expressly relieves a member of a responsibility that 17   the member otherwise would have under this chapter and imposes   18   the responsibility on one or more other members, the agreement   19   also may eliminate or limit any fiduciary duty of the member 20   relieved of the responsibility which would have pertained to   21   the responsibility . 22   c. Alter the duty of care, except to authorize intentional   23   misconduct or knowing violation of law. If not manifestly 24   unreasonable, the operating agreement may do all of the 25   following: 26   (1) Alter or eliminate the aspects of the duty of loyalty 27   stated in section 489.409, subsections 2 and 9. 28   (2) Identify specific types or categories of activities 29   that do not violate the duty of loyalty.   30   (3) Alter the duty of care, but may not authorize conduct 31   involving bad faith, willful or intentional misconduct, or   32   knowing violation of law. 33   (4)   Alter or eliminate any other fiduciary duty. 34   d. Alter any other fiduciary duty, including eliminating 35   -16-   HF 655 (4) 90   da/jh/md   16/ 159                                                                

  H.F. 655   particular aspects of that duty. 1   e.   Prescribe the standards by which to measure the 2   performance of the contractual obligation of good faith and 3   fair dealing under section 489.409, subsection 4 . 4   5. The operating agreement may specify the method by which   5   a specific act or transaction that would otherwise violate the   6   duty of loyalty may be authorized or ratified by one or more 7   disinterested and independent persons after full disclosure 8   of all material facts   The court shall decide as a matter of 9   law whether a term of an operating agreement is manifestly 10   unreasonable under subsection 3, paragraph   f , or subsection 11   4, paragraph c . All of the following shall apply: 12   a. The court shall make its determination as of the time the 13   challenged term became part of the operating agreement and by   14   considering only circumstances existing at that time. 15   b. The court may invalidate the term only if, in light of 16   the purposes, activities, and affairs of the limited liability 17   company, it is readily apparent that any of the following   18   apply:   19   (1) The objective of the term is unreasonable. 20   (2)   The term is an unreasonable means to achieve the terms 21   objective. 22   6.   To the extent the operating agreement of a member-managed 23   limited liability company expressly relieves a member of a 24   responsibility that the member would otherwise have under 25   this chapter and imposes the responsibility on one or more 26   other members, the operating agreement may, to the benefit 27   of the member that the operating agreement relieves of the 28   responsibility, also eliminate or limit any fiduciary duty that 29   would have pertained to the responsibility.   30   7. 6. The An operating agreement may alter or eliminate 31   the indemnification for a member or manager provided by section 32   489.408, subsection 1 , and may eliminate or limit a members 33   or managers liability to the limited liability company and 34   members for money damages, except for any of the following: 35   -17-   HF 655 (4) 90   da/jh/md   17/ 159                                                        

  H.F. 655   a. A breach of the duty of loyalty. 1   b. A financial benefit received by the member or manager to 2   which the member or manager is not entitled. 3   c. A breach of a duty under section 489.406 . 4   d. Intentional infliction of harm on the company or a 5   member. 6   e. An intentional violation of criminal law. 7   8.   The court shall decide any claim under subsection 4 that 8   a term of an operating agreement is manifestly unreasonable.   9   All of the following apply: 10   a.   The court shall make its determination as of the time the 11   challenged term became part of the operating agreement and by 12   considering only circumstances existing at that time. 13   b.   The court may invalidate the term only if, in light of 14   the purposes and activities of the limited liability company, 15   it is readily apparent that any of the following applies: 16   (1) The objective of the term is unreasonable. 17   (2)   The term is an unreasonable means to achieve the 18   provisions objective.   19   Sec. 10. Section 489.111, Code 2023, is amended to read as 20   follows: 21   489.111 Operating agreement  effect on limited liability 22   company and persons becoming members  preformation agreement. 23   1. A limited liability company is bound by and may enforce 24   the operating agreement, whether or not the company has itself 25   manifested assent to the operating agreement. 26   2. A person that becomes a member of a limited liability 27   company is deemed to assent to the operating agreement. 28   3. Two or more persons intending to become the initial 29   members of a limited liability company may make an agreement 30   providing that upon the formation of the company the agreement 31   will become the operating agreement. One person intending 32   to become the initial member of a limited liability   company 33   may assent to terms providing that upon the formation of the 34   company the terms will become the operating agreement. 35   -18-   HF 655 (4) 90   da/jh/md   18/ 159                           

  H.F. 655   4. An operating agreement in a signed record that excludes 1   modification or rescission except by a signed record cannot be 2   otherwise modified or rescinded. 3   Sec. 11. Section 489.112, Code 2023, is amended to read as 4   follows: 5   489.112 Operating agreement  effect on third parties and 6   relationship to records effective on behalf of limited liability 7   company. 8   1. An operating agreement may specify that its amendment 9   requires the approval of a person that is not a party to the 10   operating agreement or the satisfaction of a condition. An 11   amendment is ineffective if its adoption does not include the 12   required approval or satisfy the specified condition. 13   2. The obligations of a limited liability company and its 14   members to a person in the persons capacity as a transferee or 15   a person   dissociated as a member are governed by the operating 16   agreement. Subject only to any a court order issued under 17   section 489.503, subsection 2 , paragraph b , to effectuate a 18   charging order, an amendment to the operating agreement made 19   after a person becomes a transferee or is   dissociated as a 20   member is or is not   effective as follows: 21   a. Is effective with regard to any debt, obligation, or 22   other liability of the limited liability company or its members 23   to the person in the persons capacity as a transferee or 24   person   dissociated as a member. 25   b. Is not effective to the extent the amendment imposes a 26   new debt, obligation, or other liability on the transferee or 27   person dissociated as a member. 28   3. If a record that has been delivered by a limited 29   liability company to the secretary of state for filing and   30   has become becomes effective under this chapter and contains 31   a provision that would be ineffective under section 489.110, 32   subsection 3 or subsection 4, paragraph   c , if contained in 33   the operating agreement, the provision is likewise   ineffective 34   in the record. 35   -19-   HF 655 (4) 90   da/jh/md   19/ 159                              

  H.F. 655   4. Subject to subsection 3 , if a record that has been 1   delivered by a limited liability company to the secretary 2   of state for filing and has become   becomes effective under 3   this chapter and conflicts with a provision of the operating 4   agreement, all of   the following rules apply: 5   a. The operating agreement prevails as to members, persons   6   dissociated as members, transferees, and managers. 7   b. The record prevails as to other persons to the extent 8   they reasonably rely on the record. 9   Sec. 12. Section 489.114, Code 2023, is amended to read as 10   follows: 11   489.114 Change of registered office or registered   agent for 12   service of process or address for registered agency by limited 13   liability company   . 14   1. A limited liability company or registered foreign 15   limited liability company may change its registered office 16   or its registered agent for service of process agent or the 17   address of its registered agent   by delivering to the secretary 18   of state for filing a statement of change that sets forth   19   states all of the following: 20   a. The name of the limited liability   company or foreign 21   limited liability company . 22   b. If the current registered office is to be changed, the   23   street and mailing addresses of the new registered office The 24   information that is to be in effect as a result of the filing of 25   the statement of change . 26   c. If the current registered agent is to be changed, the 27   name of the new registered agent and the new agents consent to   28   the appointment. The agents consent may be on the statement   29   or attached to it.   30   d.   That after the change or changes are made, the street 31   address of its registered office and the business office of its   32   registered agent will be identical. 33   2. If a registered agent changes the street address of   34   the registered agents business office, the registered agent 35   -20-   HF 655 (4) 90   da/jh/md   20/ 159                                            

  H.F. 655   may change the street address of the registered office of any 1   limited liability company or foreign limited liability company   2   for which the person is the registered agent by notifying the 3   limited liability company or foreign limited liability company 4   in writing of the change and signing, either manually or in   5   facsimile, and delivering to the secretary of state for filing   6   a statement that complies with the requirements of subsection 7   1 and recites that the limited liability company or foreign 8   limited liability company has been notified of the change.   The 9   members or managers of a limited liability company need not 10   approve the delivery to the secretary of state for filing of   11   any of the following: 12   a. A statement of change under this section. 13   b.   A similar filing changing the registered agent or 14   registered office, if any, of the limited liability company in 15   any other jurisdiction. 16   3. If a registered agent changes the registered agents 17   business address to another place, the registered agent may   18   change the business address and the address of the registered   19   agent by filing a statement as required by subsection 2 for 20   each limited liability company or foreign limited liability   21   company, or a single statement of all limited liability 22   companies or all foreign limited liability companies named   23   in the notice, except that it need be signed only by the 24   registered agent and need not be responsive to subsection 1 , 25   paragraph c , and must recite that a copy of the statement 26   has been mailed to each limited liability company or foreign 27   limited liability company named in the notice A statement of 28   change under this section designating a new registered agent 29   is an affirmation of fact by the limited liability company or   30   registered foreign limited liability company that the agent has 31   consented to serve   . 32   4. A limited liability company or foreign limited liability 33   company may also change its registered office or registered   34   agent in its biennial report as provided in section 489.209 35   -21-   HF 655 (4) 90   da/jh/md   21/ 159                                                    

  H.F. 655   As an alternative to using the procedure in this section, 1   a limited liability company may amend its certificate of   2   organization . 3   5. Subject to section 489.205, subsection 3 , a statement of 4   change is effective when filed by the secretary of state. 5   Sec. 13. NEW SECTION . 489.114A Registration of name. 6   1. A foreign limited liability company not registered to 7   do business in this state under subchapter IX may register 8   its name, or an alternate name adopted pursuant to section 9   489.906A, if the name is distinguishable on the records of the 10   secretary of state from the names that are not available under 11   section 489.108. 12   2. To register its name or an alternate name adopted 13   pursuant to section 489.906A, a foreign limited liability 14   company must deliver to the secretary of state for filing an 15   application stating the companys name, the jurisdiction and 16   date of its formation, and any alternate name adopted pursuant 17   to section 489.906A. If the secretary of state finds that the 18   name applied for is available, the secretary of state shall 19   register the name for the applicants exclusive use. 20   3. The registration of a name under this section is 21   effective for one year after the date of registration. 22   4. A foreign limited liability company whose name 23   registration is effective may renew the registration for 24   successive one-year periods by delivering, not earlier than 25   three months before the expiration of the registration, 26   to the secretary of state for filing a renewal application 27   that complies with this section. When filed, the renewal 28   application renews the registration for a succeeding one-year 29   period. 30   5. A foreign limited liability company whose name 31   registration is effective may register as a foreign limited 32   liability company under the registered name or consent in a 33   signed record to the use of that name by another person that is 34   not an individual. 35   -22-   HF 655 (4) 90   da/jh/md   22/ 159      

  H.F. 655   Sec. 14. Section 489.115, Code 2023, is amended to read as 1   follows: 2   489.115 Resignation of registered agent for service of   3   process . 4   1. A registered agent may resign the agents agency   5   appointment by signing and   as an agent for a limited liability 6   company or registered foreign limited liability company by 7   delivering to the secretary of state for filing the signed 8   original   a statement of resignation . The statement of 9   resignation may include a statement that the registered office 10   is also discontinued. The registered agent shall send a copy   11   of the statement of resignation by certified mail, return 12   receipt requested, to the limited liability company or foreign 13   limited liability company at its principal office and to the   14   registered office, if not discontinued. The registered agent 15   shall certify to the secretary of state that the copies have 16   been sent to the limited liability company or foreign limited 17   liability company, including the date the copies were sent.   18   that states all of the following:   19   a. The name of the limited liability company or foreign 20   limited liability company.   21   b. The name of the agent. 22   c.   That the agent resigns from serving as registered agent 23   for the limited liability company or foreign limited liability 24   company. 25   d. The address of the limited liability company or foreign 26   limited liability company to which the agent will send the 27   notice required by subsection 3. 28   2. A statement of resignation takes effect on the earlier 29   of the following: 30   a. 12:01 a.m. on the   The thirty-first day after the day on 31   which it is filed with the secretary of state. 32   b. The designation of a new registered agent for the limited 33   liability company or registered foreign limited liability   34   company . 35   -23-   HF 655 (4) 90   da/jh/md   23/ 159                                           

  H.F. 655   3. A registered agent promptly shall furnish to the limited 1   liability company or registered foreign limited liability   2   company notice in a record of the date on which a statement of 3   resignation was filed. 4   4.   When a statement of resignation takes effect, the 5   registered agent ceases to have responsibility under this   6   chapter for any matter thereafter tendered to it as agent for 7   the limited liability company or registered foreign limited 8   liability company. The resignation does not affect any   9   contractual rights the company or foreign company has against 10   the agent or that the agent has against the company or foreign   11   company. 12   5. A registered agent may resign with respect to a limited 13   liability company or registered foreign limited liability   14   company whether or not the company or foreign company is in 15   good standing. 16   Sec. 15. NEW SECTION . 489.115A Registered agent. 17   1. Each limited liability company and each registered 18   foreign limited liability company shall designate and maintain 19   a registered agent in this state. The designation of a 20   registered agent is an affirmation of fact by the limited 21   liability company or registered foreign limited liability 22   company that the agent has consented to serve. 23   2. A registered agent for a limited liability company or 24   registered foreign limited liability company must have a place 25   of business in this state. 26   3. The only duties under this chapter of a registered agent 27   that has complied with this chapter are as follows: 28   a. To forward to the limited liability company or registered 29   foreign limited liability company at the address most recently 30   supplied to the agent by the limited liability company or 31   registered foreign limited liability company any process, 32   notice, or demand pertaining to the company or foreign company 33   which is served on or received by the agent. 34   b. If the registered agent resigns, to provide the notice 35   -24-   HF 655 (4) 90   da/jh/md   24/ 159                         

  H.F. 655   required by section 489.115, subsection 3, to the limited 1   liability company or registered foreign limited liability 2   company at the address most recently supplied to the agent by 3   the limited liability company or registered foreign limited 4   liability company. 5   c. To keep current the information with respect to the agent 6   in the certificate of organization or foreign registration 7   statement. 8   Sec. 16. Section 489.116, Code 2023, is amended to read as 9   follows: 10   489.116 Service of process , notice, or demand   . 11   1. A limited liability companys company or registered 12   foreign limited liability companys registered agent is the 13   companys agent for service of process, notice, or demand   14   required or permitted by law to company may be served on 15   the company with any process, notice, or demand required or 16   permitted by law by serving its registered agent . 17   2. If a limited liability company or registered   foreign 18   limited liability company has no   ceases to have a registered 19   agent, or the if its registered agent cannot with reasonable 20   diligence be served, the limited liability   company or 21   registered foreign limited liability company may be served by 22   registered or certified mail, return receipt requested, or by   23   similar commercial delivery service, addressed to the limited 24   liability company or registered foreign limited liability 25   company at its principal office. The address of the principal 26   office must be as shown on the limited liability companys or 27   registered foreign limited liability companys most recent   28   biennial report filed with the secretary of state pursuant to 29   section 489.209.   Service is perfected effected under this 30   subsection at on the earliest of any of the following: 31   a. The date the limited liability company or registered   32   foreign limited liability company receives the mail or delivery 33   by the commercial delivery service   . 34   b. The date shown on the return receipt, if signed on behalf 35   -25-   HF 655 (4) 90   da/jh/md   25/ 159                                         

  H.F. 655   of by the limited liability company or registered foreign 1   limited liability company   . 2   c. Five days after its deposit in with the United States 3   mail, as evidenced by the postmark, if mailed postpaid and 4   postal service or with the commercial delivery service, if   5   correctly addressed and with sufficient postage or payment   . 6   3. A limited liability company or foreign limited liability 7   company may be served pursuant to this section , as provided 8   in another provision of   this chapter , or as provided in 9   sections 617.3 through 617.6 , unless the manner of service is 10   otherwise specifically provided for by another provision of law   11   If process, notice, or demand cannot be served on a limited 12   liability company or registered foreign limited liability 13   company pursuant to subsection 1 or 2, service may be made by   14   handing a copy to the individual in charge of any regular place 15   of business or activity of the limited liability company or 16   registered foreign company if the individual served is not a 17   plaintiff in the action   . 18   4.   Service of process, notice, or demand on a registered 19   agent must be in a written record. 20   5.   Service of process, notice, or demand may be made by 21   other means under law other than this chapter, including as 22   provided in sections 617.3 through 617.6 unless specifically   23   provided for by another provision of law. 24   Sec. 17. Section 489.117, Code 2023, is amended to read as 25   follows: 26   489.117 Fees. 27   1. The secretary of state shall collect the following fees 28   when documents described in this subsection are delivered to 29   the secretarys office for filing: 30   a. Statement of rescission . . . . . . . . . . . . . . . . . . . . . No fee   31   b. Statement of withdrawal . . . . . . . . . . . . . . . . . . . . . No fee   32   c. Certificate of organization . . . . . . . . . . . . . . . . . . . $ 50 33   d. Application for use of 34   indistinguishable name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 35   -26-   HF 655 (4) 90   da/jh/md   26/ 159                                       

  H.F. 655   e. Application for reserved name . . . . . . . . . . . . . . . . . $ 10 1   f. Notice of transfer of reserved name . . . . . . . . . . . $ 10 2   g. Statement of change of registered 3   agent or registered office or both . . . . . . . . . . . . . . . . . No fee 4   h. Registered agents statement of 5   change of registered office   for each 6   affected limited liability company . . . . . . . . . . . . . . . . . No fee 7   i. Registered agents statement 8   of resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee 9   j. Amendment to certificate of 10   organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 11   k. Restatement of certificate of 12   organization with amendment 13   of certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 14   l. Articles of merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 15   m. Statement of dissolution . . . . . . . . . . . . . . . . . . . . . . $ 5 16   n. Declaration of administrative 17   dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No fee 18   o. Application for reinstatement 19   following administrative dissolution . . . . . . . . . . . . . . . . . $ 5 20   p. Certificate of reinstatement . . . . . . . . . . . . . . . . No fee 21   q. Application for certificate 22   of authority   registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . $100 23   r. Application for amended 24   certificate of authority registration . . . . . . . . . . . . . . . . $100 25   s. Statement of cancellation . . . . . . . . . . . . . . . . . . . . . $ 10 26   t. Certificate of revocation   27   of authority to transact business . . . . . . . . . . . . . . . . . . No fee 28   u. Statement of correction . . . . . . . . . . . . . . . . . . . . . . . $ 5 29   v. Application for certificate of 30   existence or authorization   registration . . . . . . . . . . . . . . $ 5 31   w. Any other document required or 32   permitted to be filed by this chapter . . . . . . . . . . . . . . . . . $ 5 33   2. The secretary of state shall collect a fee of five 34   dollars each time process is served on the secretary under this 35   -27-   HF 655 (4) 90   da/jh/md   27/ 159         

  H.F. 655   chapter . The party to a proceeding causing service of process 1   is entitled to recover this fee as costs if the party prevails 2   in the proceeding. 3   3. The secretary of state shall collect the following fees 4   for copying and certifying the copy of any filed document 5   relating to a domestic   limited liability company or foreign 6   limited liability company as follows : 7   a. One dollar a page for copying. 8   b. Five dollars for the certificate. 9   4. The secretary of state may impose, assess, and collect 10   a filing fee as a condition to accepting a biennial report as 11   provided in section 489.209 . 12   Sec. 18. NEW SECTION   . 489.118 Change of name or address by 13   registered agent. 14   1. If a registered agent changes its name or address, 15   the agent may deliver to the secretary of state for filing a 16   statement of change that states all of the following: 17   a. The name of the limited liability company or registered 18   foreign limited liability company represented by the registered 19   agent. 20   b. The name of the agent as currently shown in the records 21   of the secretary of state for the limited liability company or 22   registered foreign limited liability company. 23   c. If the name of the agent has changed, its new name. 24   d. If the address of the agent has changed, its new address. 25   2. A registered agent promptly shall furnish notice to the 26   represented limited liability company or registered foreign 27   limited liability company of the filing by the secretary of 28   state of the statement of change and the changes made by the 29   statement.   30   Sec. 19. NEW SECTION   . 489.120 Delivery of record. 31   1. Except as otherwise provided in this chapter, 32   permissible means of delivery of a record include delivery by 33   hand, mail, conventional commercial practice, and electronic 34   transmission.   35   -28-   HF 655 (4) 90   da/jh/md   28/ 159       

  H.F. 655   2. Delivery to the secretary of state is effective only when 1   a record is received by the secretary of state. 2   Sec. 20. NEW SECTION   . 489.121 Reservation of power to amend 3   or repeal. 4   The general assembly has power to amend or repeal all or 5   part of this chapter at any time, and all limited liability 6   companies and foreign limited liability companies subject to 7   this chapter are governed by the amendment or repeal. 8   Sec. 21. Section 489.201, Code 2023, is amended to read as 9   follows: 10   489.201 Formation of limited liability company  certificate 11   of organization. 12   1. One or more persons may act as organizers to form a 13   limited liability company by signing and   delivering to the 14   secretary of state for filing a certificate of organization. 15   2. A certificate of organization must state all of the 16   following: 17   a. The name of the limited liability company, which must 18   comply with section 489.108 . 19   b. The street address   and mailing addresses of the initial 20   registered office and the name of the initial registered   21   agent for service of process on the company limited liability 22   companys principal office   . 23   c. The name and street and mailing addresses in this state 24   of the limited liability companys registered agent. 25   3. Subject to section 489.112, subsection 3 , a A certificate 26   of organization may also contain statements as to matters other 27   than those required by subsection 2 , but shall not vary or 28   otherwise affect the provisions specified in section 489.110, 29   subsections 3 and 4, in a manner inconsistent with that   30   section . However, a statement in a certificate of organization 31   is not effective as a statement of authority. 32   4. A limited liability company is formed when the secretary   33   of state has filed the   certificate of organization , unless the 34   certificate states a delayed becomes effective date pursuant 35   -29-   HF 655 (4) 90   da/jh/md   29/ 159                              

  H.F. 655   to section 489.205, subsection 3 . If the certificate states 1   a delayed effective date, a limited liability company is not   2   formed if, before the certificate takes effect, a statement of 3   cancellation is signed and delivered to the secretary of state 4   for filing and the secretary of state files the certificate.   5   5.   Subject to any delayed effective date and except in 6   a proceeding by this state to dissolve a limited liability 7   company, the filing of the certificate of organization by the 8   secretary of state is conclusive proof that the organizer   9   satisfied all conditions to the formation of a limited 10   liability company.   11   Sec. 22. Section 489.202, Code 2023, is amended to read as 12   follows: 13   489.202 Amendment or restatement of certificate of 14   organization. 15   1. A certificate of organization may be amended or restated 16   at any time. 17   2. To amend its certificate of organization, a limited 18   liability company must deliver to the secretary of state for 19   filing an amendment stating all of the following: 20   a. The name of the limited liability   company. 21   b. The date of filing of its initial certificate of 22   organization   . 23   c. The changes the amendment makes to the certificate as 24   most recently amended or restated text of the amendment . 25   3. To restate its certificate of organization, a limited 26   liability company must deliver to the secretary of state for 27   filing a restatement, designated as such in its heading, 28   stating and setting forth all of the following: 29   a. In the heading or an introductory paragraph, the   30   companys present name and the date of the filing of the 31   companys initial certificate of organization   The name of the 32   limited liability company . 33   b. If the companys name has been changed at any time since   34   the companys formation, each of the companys former names   The 35   -30-   HF 655 (4) 90   da/jh/md   30/ 159                                  

  H.F. 655   text of the restated certificate of organization . 1   c. The changes the restatement makes to the certificate as   2   most recently amended or restated A statement that the restated 3   certificate consolidates all amendments into a single document . 4   d.   If a new amendment is included in the restated 5   certificate of organization, the statements required under   6   subsection 2 with respect to the new amendment if not otherwise 7   provided. 8   4. Subject to   section 489.112, subsection 3 , and section 9   489.205, subsection 3 , an amendment to or restatement of a 10   certificate of organization is effective when filed by the   11   secretary of state. If a member of a member-managed limited 12   liability company, or a manager of a manager-managed limited 13   liability company, knows that any information in a filed   14   certificate of organization was inaccurate when the certificate 15   of organization was filed or has become inaccurate due to 16   changed circumstances, the member or manager shall promptly do 17   any of the following:   18   a.   Cause the certificate of organization to be amended. 19   b. If appropriate, deliver to the secretary of state 20   for filing a statement of change under section 489.114 or a   21   statement of correction under section 489.206. 22   5.   If a member of a member-managed limited liability 23   company, or a manager of a manager-managed limited liability 24   company, knows that any information in a filed certificate of 25   organization was inaccurate when the certificate was filed 26   or has become inaccurate owing to changed circumstances, the 27   member or manager shall promptly do any of the following: 28   a. Cause the certificate to be amended. 29   b.   If appropriate, deliver to the secretary of state 30   for filing a statement of change under section 489.114 or a 31   statement of correction under   section 489.206 . 32   Sec. 23. Section 489.203, Code 2023, is amended to read as   33   follows:   34   489.203 Signing of records to be delivered for filing to 35   -31-   HF 655 (4) 90   da/jh/md   31/ 159                                                        

  H.F. 655   secretary of state. 1   1. A record delivered to the secretary of state for filing 2   pursuant to this chapter must be signed as follows: 3   a. Except as otherwise provided in paragraphs b and c , a 4   record signed on behalf of by a limited liability company must 5   be signed by a person authorized by the company. 6   b. A limited liability companys initial certificate of 7   organization must be signed by at least one person acting as 8   an organizer. 9   c. A record filed   delivered on behalf of a dissolved limited 10   liability company that does not have or has not had at least   11   one has no member must be signed by an organizer the person 12   winding up the companys activities and affairs under section 13   489.702, subsection 3, or a person appointed under section   14   489.702, subsection 4, to wind up the activities and affairs . 15   d. A record filed on behalf of a dissolved limited liability 16   company that has no members must be signed by the person 17   winding up the companys activities under   section 489.702, 18   subsection 3   , or a person appointed under section 489.702, 19   subsection 4 , to wind up those activities A statement of denial 20   by a person under section 489.303 must be signed by that   21   person . 22   e. A statement of cancellation under   section 489.201, 23   subsection 4 , must be signed by each organizer that signed 24   the initial certificate of organization, but a personal 25   representative of a deceased or incompetent organizer may sign 26   in the place of the decedent or incompetent Any other record 27   delivered on behalf of a person to the secretary of state for 28   filing must be signed by that person . 29   f.   A statement of denial by a person under section 489.303 30   must be signed by that person. 31   g.   Any other record must be signed by the person on whose 32   behalf the record is delivered to the secretary of state. 33   2. Any   A record filed delivered for filing under this 34   chapter may be signed by an agent. Whenever this chapter 35   -32-   HF 655 (4) 90   da/jh/md   32/ 159                                                   

  H.F. 655   requires a particular individual to sign a record and the 1   individual is deceased or incompetent, the record may be signed   2   by a legal representative of the individual. 3   3. A person that signs a record as an agent or legal 4   representative affirms as a fact that the person is authorized   5   to sign the record.   6   Sec. 24. Section 489.204, Code 2023, is amended to read as 7   follows: 8   489.204 Signing and filing pursuant to judicial order. 9   1. If a person required by this chapter to sign a record 10   or deliver a record to the secretary of state for filing under 11   this chapter does not do so, any other person that is aggrieved 12   may petition the district court to order one or more of the 13   following: 14   a. The person to sign the record. 15   b. The person to deliver the record to the secretary of 16   state for filing. 17   c. The secretary of state to file the record unsigned. 18   2. If a petitioner under subsection 1 is not the limited 19   liability company or foreign limited liability company to which 20   the record pertains, the petitioner shall make the limited   21   liability company or foreign limited liability company a party 22   to the action. 23   3. If a district court orders an unsigned record to be   24   delivered to the secretary of state, the secretary of state 25   shall file the record and the court order upon receipt A record 26   filed under subsection 1, paragraph c , is effective without 27   being signed . 28   Sec. 25. Section 489.205, Code 2023, is amended by striking 29   the section and inserting in lieu thereof the following: 30   489.205 Liability for inaccurate information in filed 31   records.   32   1. If a record delivered to the secretary of state for 33   filing under this chapter and filed by the secretary of state 34   contains inaccurate information, a person that suffers loss by 35   -33-   HF 655 (4) 90   da/jh/md   33/ 159                     

  H.F. 655   reliance on the information may recover damages for the loss 1   from all of the following: 2   a. A person that signed the record, or caused another to 3   sign it on the persons behalf, and knew the information to be 4   inaccurate at the time the record was signed. 5   b. Subject to subsection 2, a member of a member-managed 6   limited liability company or a manager of a manager-managed 7   limited liability company if all of the following apply: 8   (1) The record was delivered for filing on behalf of the 9   limited liability company. 10   (2) The member or manager knew or had notice of the 11   inaccuracy for a reasonably sufficient time before the 12   information was relied upon so that, before the reliance, 13   the member or manager reasonably could have done any of the 14   following: 15   (a) Effected an amendment under section 489.202. 16   (b) Filed a petition under section 489.204. 17   (c) Delivered to the secretary of state for filing a 18   statement of change under section 489.114 or a statement of 19   correction under section 489.206. 20   2. To the extent the operating agreement of a member-managed 21   limited liability company expressly relieves a member of 22   responsibility for maintaining the accuracy of information 23   contained in records delivered on behalf of the limited 24   liability company to the secretary of state for filing under 25   this chapter and imposes that responsibility on one or more 26   other members, the liability stated in subsection 1, paragraph 27   b , applies to those other members and not to the member that 28   the operating agreement relieves of the responsibility. 29   3. A person commits a serious misdemeanor if that person 30   signs a record the person knows is false in any material 31   respect with intent that the record be delivered to the 32   secretary of state for filing. 33   Sec. 26. Section 489.206, Code 2023, is amended to read as 34   follows:   35   -34-   HF 655 (4) 90   da/jh/md   34/ 159  

  H.F. 655   489.206 Correcting filed record. 1   1. A limited liability company or foreign limited liability   2   company may deliver to the secretary of state for filing 3   a statement of correction to correct a record previously 4   delivered by the company to the secretary of state and filed   5   by the secretary of state, if at the time of filing the record   6   contained inaccurate information or was defectively signed. 7   A person on whose behalf a filed record was delivered to the 8   secretary of state for filing may correct the record if any of   9   the following apply: 10   a.   The record at the time of filing was inaccurate. 11   b. The record was defectively signed. 12   c. The electronic transmission of the record to the 13   secretary of state was defective.   14   2. A statement of correction under subsection 1 shall not 15   have a delayed effective date and must do all of the following: 16   To correct a filed record, a person on whose behalf the record 17   was delivered to the secretary of state must deliver to the   18   secretary of state for filing a statement of correction.   19   a. Describe the record to be corrected, including its filing 20   date, or attach a copy of the record as filed.   21   b. Specify the inaccurate information and the reason it is 22   inaccurate or the manner in which the signing was defective.   23   c. Correct the defective signature or inaccurate 24   information. 25   3. When filed by the secretary of state, a statement of 26   correction under subsection 1 is effective retroactively as 27   of the effective date of the record the statement corrects, 28   but the statement is effective when filed as to A statement of 29   correction shall comply with   all of the following: 30   a. For the purposes of section 489.103, subsection 4 It must 31   not state a delayed effective date   . 32   b. As to persons that previously relied on the uncorrected 33   record and would be adversely affected by the retroactive   34   effect It must be signed by the person correcting the filed 35   -35-   HF 655 (4) 90   da/jh/md   35/ 159                                                        

  H.F. 655   record . 1   c.   It must describe the record to be corrected including its 2   filing date or attach a copy of the record as filed. 3   d. It must specify the inaccuracy or defect to be corrected. 4   e.   It must correct the inaccuracy or defect. 5   4.   A statement of correction is effective as of the 6   effective date of the filed record that it corrects except for 7   purposes of section 489.103, subsection 4, and as to persons 8   relying on the uncorrected filed record and adversely affected   9   by the correction. For those purposes and as to those persons, 10   the statement of correction is effective when filed.   11   Sec. 27. NEW SECTION . 489.206A Filing requirements. 12   1. To be filed by the secretary of state pursuant to 13   this chapter, a record must be captioned to describe the 14   records purpose, must be received by the secretary of state, 15   must comply with this chapter, and must satisfy all of the 16   following: 17   a. The filing of the record must be required or permitted by 18   this chapter. 19   b. The record must be physically delivered in written 20   form unless and to the extent the secretary of state permits 21   electronic delivery of records. 22   c. The words in the record must be in English, and numbers 23   must be in Arabic or Roman numerals, but the name of an entity 24   need not be in English if written in English letters or Arabic 25   or Roman numerals. 26   d. The record must be signed by a person authorized or 27   required under this chapter to sign the record. 28   e. The record must state the name and capacity, if 29   any, of each individual who signed it, either on behalf 30   of the individual or the person authorized or required to 31   sign the record, but need not contain a seal, attestation, 32   acknowledgment, or verification. 33   2. If law other than this chapter prohibits the disclosure 34   by the secretary of state of information contained in a record 35   -36-   HF 655 (4) 90   da/jh/md   36/ 159                      

  H.F. 655   delivered to the secretary of state for filing, the secretary 1   of state shall file the record if the record otherwise complies 2   with this chapter but may redact the information. 3   3. When a record is delivered to the secretary of state for 4   filing, any fee required under this chapter and any fee, tax, 5   interest, or penalty required to be paid under this chapter or 6   law other than this chapter must be paid in a manner permitted 7   by the secretary of state or by that law. 8   4. The secretary of state may require that a record 9   delivered in written form be accompanied by an identical or 10   conformed copy. 11   5. The secretary of state may provide forms for filings 12   required or permitted to be made by this chapter, but, except 13   as otherwise provided in subsection 6, their use is not 14   required. 15   6. The secretary of state may prescribe, and furnish on 16   request and require any of the following forms: 17   a. A cover sheet for a filing. 18   b. An application for a certificate of existence or 19   certificate of registration. 20   c. A foreign corporations registration statement. 21   d. A foreign corporations statement of withdrawal. 22   e. A foreign corporations transfer of registration 23   statement. 24   f. The biennial report required by section 489.209. 25   7. Upon request and payment of the requisite fee, the 26   secretary of state shall send the requester a certified copy 27   of a requested record. 28   Sec. 28. Section 489.207, Code 2023, is amended by striking 29   the section and inserting in lieu thereof the following: 30   489.207 Effective date and time. 31   Except as otherwise provided in section 489.115 and section 32   489.208A and subject to section 489.206, subsection 4, a record 33   filed under this chapter is effective as follows: 34   1. On the date and at the time of its filing by the 35   -37-   HF 655 (4) 90   da/jh/md   37/ 159  

  H.F. 655   secretary of state, as provided in section 489.210, subsection 1   2. 2   2. On the date of filing and at the time specified in the 3   record as its effective time, if later than the time under 4   subsection 1. 5   3. At a specified delayed effective date and time, which may 6   not be more than ninety days after the date of filing. 7   4. If a delayed effective date is specified, but no time is 8   specified, at 12:01 a.m. on the date specified, which shall not 9   be more than ninety days after the date of filing. 10   Sec. 29. Section 489.208, Code 2023, is amended to read as 11   follows: 12   489.208 Certificate of existence or authorization   13   registration   . 14   1. Any person may apply to On request of any person, the 15   secretary of state to be furnished shall issue a certificate 16   of existence for a domestic limited liability company or a 17   certificate of authorization   registration for a registered 18   foreign limited liability company. 19   2. A certificate of existence or certificate of 20   authorization   registration under subsection 1 must set forth 21   state all of the following: 22   a. The domestic   limited liability companys name or the 23   registered foreign limited liability companys name used in 24   this state. 25   b. One In the case of a limited liability company, all of 26   the following: 27   (1) If it is a domestic limited liability company, that 28   the company is duly formed under the laws of this state, the 29   date of its formation, and the period of its duration   That 30   a certificate of organization has been filed and has taken 31   effect   .   32   (2) If it is a foreign limited liability company, that the   33   company is authorized to transact business in this state   The 34   date the certificate became effective .   35   -38-   HF 655 (4) 90   da/jh/md   38/ 159                              

  H.F. 655   (3) The period of the limited liability companys duration 1   if the records of the secretary of state reflect that its   2   period of duration is less than perpetual. 3   (4) That all of the following apply: 4   (a)   No statement of dissolution, statement of 5   administrative dissolution, or statement of termination has   6   been filed. 7   (b) The records of the secretary of state do not otherwise 8   reflect that the limited liability company has been dissolved   9   or terminated. 10   (c)   A proceeding is not pending under section 489.705. 11   c. That all fees, taxes, and penalties due under this 12   chapter or other law to the secretary of state have been paid 13   In the case of a registered foreign limited liability company,   14   that it is registered to do business in this state . 15   d. That the companys most recent biennial report required 16   by this chapter has been filed by the secretary of state That 17   all fees, taxes, interest, and penalties owed to this state   18   by the limited liability company or foreign limited liability   19   company and collected through the secretary of state have been 20   paid, if all of the following apply:   21   (1) Payment is reflected in the records of the secretary of 22   state   . 23   (2) Nonpayment affects the good standing or registration 24   of the limited liability company or foreign limited liability 25   company. 26   e. If it is a domestic limited liability company, that a 27   statement of dissolution or statement of termination has not 28   been filed That the most recent biennial report required by 29   section 489.209 has been delivered to the secretary of state   30   for filing . 31   f. Other facts of record in the office   reflected in the 32   records   of the secretary of state that may be requested by 33   the applicant   pertaining to the limited liability company or 34   foreign limited liability company which the person requesting 35   -39-   HF 655 (4) 90   da/jh/md   39/ 159                                                            

  H.F. 655   the certificate reasonably requests . 1   3. Subject to any qualification stated in the certificate, a 2   certificate of existence or certificate of authorization   issued 3   by the secretary of state is under subsection 1 may be relied 4   on as   conclusive evidence that the domestic limited liability 5   company is in existence or the foreign limited liability   6   company is authorized to transact business in this state of the 7   facts stated in the certificate . 8   Sec. 30. NEW SECTION   . 489.208A Withdrawal of filed record 9   before effectiveness. 10   1. Except as otherwise provided in sections 489.1024, 11   489.1034, 489.1044, and 489.1054, a record delivered to the 12   secretary of state for filing may be withdrawn before it takes 13   effect by delivering to the secretary of state for filing a 14   statement of withdrawal. 15   2. A statement of withdrawal must comply with all of the 16   following: 17   a. Be signed by each person that signed the record being 18   withdrawn, except as otherwise agreed by those persons. 19   b. Identify the record to be withdrawn. 20   c. If signed by fewer than all the persons that signed the 21   record being withdrawn, state that the record is withdrawn in 22   accordance with the agreement of all the persons that signed 23   the record. 24   3. On filing by the secretary of state of a statement of 25   withdrawal, the action or transaction evidenced by the original 26   record does not take effect.   27   Sec. 31. Section 489.209, Code 2023, is amended to read as 28   follows:   29   489.209 Biennial report for secretary of state. 30   1. A limited liability company or a foreign limited 31   liability company authorized   registered to transact do business 32   in this state shall deliver to the secretary of state for 33   filing a biennial report that states all of the following: 34   a. The name of the company. 35   -40-   HF 655 (4) 90   da/jh/md   40/ 159                 

  H.F. 655   b. The street address of the companys registered office, 1   the name of its registered agent at that office, and the 2   consent of any new registered agent. 3   c. The street address of its principal office. 4   d. In the case of a foreign limited liability company, the 5   state or other jurisdiction under whose law the foreign   company 6   is formed and any alternate name adopted under section 489.805, 7   subsection 1 . 8   2. Information in a biennial report under this section 9   must be current as of the date the report is delivered to the 10   secretary of state for filing. The report shall be executed 11   on behalf of the limited liability company or foreign limited 12   liability company and signed as provided in section 489.203 . 13   3. The first biennial report under   this section in this 14   state must be delivered to the secretary of state between 15   January 1 and April 1 of the first odd-numbered year following 16   the calendar year in which a limited liability company was 17   formed or a foreign limited liability company was authorized   18   registered   to transact do business. A subsequent biennial 19   report must be delivered to the secretary of state between 20   January 1 and April 1 of each following odd-numbered calendar 21   year. A filing fee for the biennial report shall be determined 22   by the secretary of state pursuant to section 489.117 . Each 23   biennial report shall contain information related to the 24   two-year period immediately preceding the calendar year in 25   which the report is filed. 26   4. If a biennial report does not contain the information 27   required in this section , the secretary of state shall promptly 28   notify the reporting limited liability company or foreign 29   limited liability company in writing and return the report to 30   it for correction. 31   5. The secretary of state may provide for the change of 32   registered office or registered agent on the form prescribed by 33   the secretary of state for the biennial report, provided that 34   the form contains the information required in section 489.114 . 35   -41-   HF 655 (4) 90   da/jh/md   41/ 159           

  H.F. 655   If the secretary of state determines that a biennial report 1   does not contain the information required in this section but 2   otherwise meets the requirements of section 489.114 for the 3   purpose of changing the registered office or registered agent, 4   the secretary of state shall file the statement of change 5   for the registered office or registered agent, effective as 6   provided in section 489.205   489.207 , subsection 3 , before 7   returning the biennial report to the limited liability 8   company as provided in this section . A statement of change of 9   registered office or registered agent accomplished pursuant to 10   this subsection shall be executed by a person authorized to 11   execute the biennial report. 12   Sec. 32. NEW SECTION   . 489.210 Duty of secretary of state 13   to file  review of refusal to file  delivery of record by 14   secretary of state.   15   1. The secretary of state shall file a record delivered 16   to the secretary of state for filing which satisfies this 17   chapter. The duty of the secretary of state under this section 18   is ministerial. 19   2. When the secretary of state files a record, the secretary 20   of state shall record it as filed on the date and at the time of 21   its delivery. After filing a record, the secretary of state 22   shall deliver to the person that submitted the record a copy 23   of the record with an acknowledgment of the date and time of 24   filing and, in the case of a statement of denial, also to the 25   limited liability company to which the statement pertains. 26   3. If the secretary of state refuses to file a record, the 27   secretary of state shall, not later than fifteen business days 28   after the record is delivered, do all of the following: 29   a. Return the record or notify the person that submitted the 30   record of the refusal. 31   b. Provide a brief explanation in a record of the reason for 32   the refusal. 33   4. If the secretary of state refuses to file a record, the 34   person that submitted the record may petition the district 35   -42-   HF 655 (4) 90   da/jh/md   42/ 159     

  H.F. 655   court of Polk county to compel filing of the record. The 1   record and the explanation of the secretary of state of 2   the refusal to file must be attached to the petition. The 3   court may decide the matter in a summary proceeding. If the 4   court orders the record to be filed, the court may order it 5   filed with an effective date that is the date on which it was 6   submitted to the secretary of state for filing. 7   5. The filing of or refusal to file a record does not do any 8   of the following: 9   a. Affect the validity or invalidity of the record in whole 10   or in part. 11   b. Create a presumption that the information contained in 12   the record is correct or incorrect. 13   6. Except as otherwise provided by section 489.116 or by law 14   other than this chapter, the secretary of state may deliver any 15   record to a person by delivering it by any of the following: 16   a. In person to the person that submitted it. 17   b. To the address of the persons registered agent. 18   c. To the principal office of the person. 19   d. To another address the person provides to the secretary 20   of state for delivery. 21   Sec. 33. Section 489.302, Code 2023, is amended to read as 22   follows: 23   489.302 Statement of limited liability company   authority. 24   1. A limited liability company may deliver to the secretary 25   of state for filing a statement of authority. All of the 26   following apply to the statement: 27   a. It must include the name of the limited liability company 28   and the name and street address and mailing addresses of its 29   principal office   registered agent . 30   b. With respect to any position that exists in or with 31   respect to the limited liability   company, it may state the 32   authority, or limitations on the authority, of all persons 33   holding the position to do any of the following: 34   (1) Execute   Sign an instrument transferring real property 35   -43-   HF 655 (4) 90   da/jh/md   43/ 159            

  H.F. 655   held in the name of the limited liability company. 1   (2) Enter into other transactions on behalf of, or otherwise 2   act for or bind, the limited liability   company. 3   c. It may state the authority, or limitations on the 4   authority, of a specific person to do any of the following: 5   (1) Execute Sign an instrument transferring real property 6   held in the name of the limited liability company. 7   (2) Enter into other transactions on behalf of, or otherwise 8   act for or bind, the limited liability   company. 9   2. To amend or cancel a statement of authority filed by 10   the secretary of state under   section 489.205, subsection 1 , 11   a limited liability company must deliver to the secretary of 12   state for filing an amendment or cancellation stating all of 13   the following: 14   a. The name of the limited liability   company. 15   b. The name and street address and mailing addresses of the 16   limited liability companys principal office registered agent . 17   c. The caption of the statement being amended or canceled   18   and the   date the statement being affected became effective. 19   d. The contents of the amendment or a declaration that the 20   statement being affected   is canceled. 21   3. A statement of authority affects only the power of a 22   person to bind a limited liability company to persons that are 23   not members. 24   4. Subject to subsection 3 and section 489.103, subsection 25   4 , and except as otherwise provided in subsections 6, 7, and 26   8 , a limitation on the authority of a person or a position 27   contained in an effective statement of authority is not by 28   itself evidence of any persons   knowledge or notice of the 29   limitation by any person   . 30   5. Subject to subsection 3 , a grant of authority not 31   pertaining to a transfer of real property and contained in an 32   effective statement of authority is conclusive in favor of a 33   person that gives value in reliance on the grant, except to the 34   extent that when the person gives value, any of the following 35   -44-   HF 655 (4) 90   da/jh/md   44/ 159                      

  H.F. 655   applies: 1   a. The person has knowledge to the contrary. 2   b. The statement has been canceled or restrictively amended 3   under subsection 2 . 4   c. A limitation on the grant is contained in another 5   statement of authority that became effective after the 6   statement containing the grant became effective. 7   6. Subject to subsection 3 , an effective statement of 8   authority that grants authority to transfer real property 9   held in the name of the limited liability company and that   , a 10   certified copy of which statement   is recorded by certified copy 11   in the office for recording transfers of the real property , is 12   conclusive in favor of a person that gives value in reliance 13   on the grant without knowledge to the contrary, except to the 14   extent that when the person gives value, any of the following 15   applies: 16   a. The statement has been canceled or restrictively amended 17   under subsection 2 and a certified copy of the cancellation 18   or restrictive amendment has been recorded in the office for 19   recording transfers of the real property. 20   b. A limitation on the grant is contained in another 21   statement of authority that became effective after the 22   statement containing the grant became effective ,   and a 23   certified copy of the later-effective statement is recorded in 24   the office for recording transfers of the real property. 25   7. Subject to subsection 3 , if a certified copy of an 26   effective statement containing a limitation on the authority to 27   transfer real property held in the name of a limited liability 28   company is recorded in the office for recording transfers of 29   that real property, all persons are deemed to know of the 30   limitation.   31   8. Subject to subsection 9 , an effective statement of 32   dissolution or a   statement of termination is a cancellation 33   of any filed statement of authority for the purposes of 34   subsection 6 and is a limitation on authority for the purposes 35   -45-   HF 655 (4) 90   da/jh/md   45/ 159         

  H.F. 655   of subsection 7 . 1   9. After a statement of dissolution becomes effective, 2   a limited liability company may deliver to the secretary of 3   state for filing and, if appropriate, the secretary of state   4   may record a statement of authority that is designated as 5   a post-dissolution statement of authority. The statement 6   operates as provided in subsections 6 and 7 . 7   10. A statement of authority filed by the secretary of 8   state under section 489.205   489.207 , subsection 1 , is effective 9   until amended or canceled as provided in subsection 2 , unless 10   an earlier cancellation date is specified in the statement. 11   11. An effective statement of denial operates as a 12   restrictive amendment under this section and may be recorded by 13   certified copy for the   purposes of subsection 6 , paragraph a . 14   Sec. 34. Section 489.304, Code 2023, is amended to read as 15   follows: 16   489.304 Liability of members and managers. 17   1. For debts, obligations, or other liabilities   A debt, 18   obligation, or other liability   of a limited liability 19   company , whether arising in contract, tort, or otherwise 20   all of the following apply:   is solely the debt, obligation, 21   or other liability of the company. A member or manager is 22   not personally liable, directly or indirectly, by way of   23   contribution or otherwise, for a debt, obligation, or other 24   liability of the company solely by reason of being or acting 25   as a member or manager. This subsection applies regardless of 26   the dissolution of the company. 27   a. They are solely the debts, obligations, or other 28   liabilities of the company. 29   b.   They do not become the debts, obligations, or other 30   liabilities of a member or manager solely by reason of the 31   member acting as a member or manager acting as a manager.   32   2. The failure of a limited liability company to observe any 33   particular   formalities relating to the exercise of its powers 34   or management of its activities and affairs is not a ground 35   -46-   HF 655 (4) 90   da/jh/md   46/ 159                              

  H.F. 655   for imposing liability on the members a member or managers 1   manager   for the debts, obligations, a debt, obligation, or 2   other liabilities liability of the company. 3   Sec. 35. Section 489.401, Code 2023, is amended to read as 4   follows: 5   489.401 Becoming member. 6   1. If a limited liability company is to have only one member 7   upon formation, a the person becomes the a member as agreed by 8   that person and the organizer of the company or a majority of   9   organizers if more than one . That person and the organizer 10   may be, but need not be, different persons. If different, the 11   organizer acts on behalf of the initial member. 12   2. If a limited liability company is to have more than 13   one member upon formation, those persons become members as 14   agreed by the persons before the formation of the company. The 15   organizer acts on behalf of the persons in forming the company 16   and may be, but need not be, one of the persons. 17   3. If a limited liability company has no members upon   18   formation, a person becomes a member of the limited liability   19   company with the consent of the organizer or a majority of 20   the organizers if more than one. The organizers may consent   21   to more than one person simultaneously becoming the companys 22   initial members   After formation of a limited liability company, 23   a person becomes a member according to any of the following: 24   a. As provided in the operating agreement . 25   b. As the result of a transaction effective under subchapter 26   X. 27   c. With the affirmative vote or consent of all the members. 28   d. As provided in section 489.701, subsection 1, paragraph 29   c   . 30   4. After formation of a limited liability company, a person 31   becomes a member upon   A person may become a member without any 32   of the following: 33   a. As provided in the operating agreement   Acquiring a 34   transferable interest .   35   -47-   HF 655 (4) 90   da/jh/md   47/ 159                                             

  H.F. 655   b. As the result of a transaction effective under article 10 1   Making or being obligated to make a contribution to the limited   2   liability company . 3   c. With the consent of all the members. 4   d.   If, within ninety consecutive days after the company 5   ceases to have any members, all of the following occur:   6   (1) The last person to have been a member, or the legal 7   representative of that person, designates a person to become a 8   member.   9   (2) The designated person consents to become a member. 10   5.   A person may become a member without acquiring a 11   transferable interest and without making or being obligated to 12   make a contribution to the limited liability company. 13   Sec. 36. Section 489.402, Code 2023, is amended to read as 14   follows: 15   489.402 Form of contribution. 16   A contribution may consist of tangible or intangible   17   property or other benefit to a limited liability company,   18   including money, services performed, promissory notes, other   19   agreements to contribute money or property, and contracts for 20   services to be performed   property transferred to, services 21   performed for, or another benefit provided to the limited 22   liability company or an agreement to transfer property to,   23   perform services for, or provide another benefit to the 24   company . 25   Sec. 37. Section 489.403, Code 2023, is amended to read as 26   follows:   27   489.403 Liability for contributions. 28   1. A persons obligation to make a contribution to a 29   limited liability company is not excused by the persons 30   death, disability, termination,   or other inability to perform 31   personally. If a person does not make a required contribution,   32   the person or the persons estate is obligated to contribute   33   money equal to the value of the part of the contribution which   34   has not been made, at the option of the company. 35   -48-   HF 655 (4) 90   da/jh/md   48/ 159                                        

  H.F. 655   2. A creditor of a limited liability company which extends 1   credit or otherwise acts in reliance on an obligation described   2   in subsection 1 may enforce the obligation If a person does not 3   fulfill an obligation to make a contribution other than money, 4   the person is obligated at the option of the limited liability   5   company to contribute money equal to the value of the part of   6   the contribution which has not been made . 7   3. An operating agreement may provide that the interest of 8   any member who fails to make a contribution that the member   9   is obligated to make is subject to specified penalties for, 10   or specified consequences of, such failure. The penalty or   11   consequence may take the form of reducing or eliminating 12   the defaulting members proportionate interest in a limited 13   liability company, subordinating the members interest to   14   that of a nondefaulting member, a forced sale of the members 15   interest, forfeiture of the members interest, the lending by 16   other members of the amount necessary to meet the members 17   commitment, a fixing of the value of the members interest   18   by appraisal or by formula and redemption, or sale of the   19   members interest at such value or other penalty or consequence 20   The obligation of a person to make a contribution may be   21   compromised only by the affirmative vote or consent of all the 22   members. If a creditor of a limited liability company extends   23   credit or otherwise acts in reliance on an obligation described 24   in subsection 1 without knowledge or notice of a compromise 25   under this subsection, the creditor may enforce the obligation . 26   4. An operating agreement may provide that the interest of 27   any member who fails to make a contribution that the member 28   is obligated to make is subject to specified penalties for, 29   or specified consequences of, such failure. The penalty or   30   consequence may take the form of reducing or eliminating 31   the defaulting members proportionate interest in a limited   32   liability company, subordinating the members interest to   33   that of a nondefaulting member, a forced sale of the members   34   interest, forfeiture of the members interest, the lending by   35   -49-   HF 655 (4) 90   da/jh/md   49/ 159                                          

  H.F. 655   other members of the amount necessary to meet the members 1   commitment, a fixing of the value of the members interest by   2   appraisal or by formula and redemption, or sale of the members 3   interest at such value or other penalty or consequence. 4   Sec. 38. Section 489.404, Code 2023, is amended to read as 5   follows: 6   489.404 Sharing of and right to distributions before 7   dissolution. 8   1. Any distributions   distribution made by a limited 9   liability company before its dissolution and winding up must 10   be in equal shares among members and persons   dissociated as 11   members, except to the extent necessary to comply with any a 12   transfer effective under section 489.502 and any charging order 13   in effect under section 489.503 . 14   2. A person has a right to a distribution before the 15   dissolution and winding up of a limited liability company only 16   if the limited liability   company decides to make an interim 17   distribution. A persons dissociation does not entitle the 18   person to a distribution. 19   3. A person does not have a right to demand or receive a 20   distribution from a limited liability company in any form other 21   than money. Except as otherwise provided in section 489.708, 22   subsection 3   4 , a limited liability company may distribute an 23   asset in kind only if each part of the asset is fungible with 24   each other part and each person receives a percentage of the 25   asset equal in value to the persons share of distributions. 26   4. If a member or transferee becomes entitled to receive a   27   distribution, the member or transferee has the status of, and 28   is entitled to all remedies available to, a creditor of the   29   limited liability company with respect to the distribution. 30   However, the companys obligation to make a distribution is   31   subject to offset for any amount owed to the company by the   32   member or a person dissociated as a member on whose account the 33   distribution is made.   34   Sec. 39. Section 489.405, Code 2023, is amended to read as   35   -50-   HF 655 (4) 90   da/jh/md   50/ 159                    

  H.F. 655   follows: 1   489.405 Limitations on distribution. 2   1. A limited liability company shall not make a 3   distribution , including a distribution under section 489.708,   4   if after the distribution any of the following applies: 5   a. The limited liability company would not be able to pay 6   its debts as they become due in the ordinary course of the 7   companys activities and affairs . 8   b. The limited liability   companys total assets would be 9   less than the sum of its total liabilities plus the amount that 10   would be needed, if the company were to be dissolved ,   and wound 11   up , and terminated at the time of the distribution, to satisfy 12   the preferential rights upon dissolution , and winding up, and 13   termination of members   up of members and transferees whose 14   preferential rights are superior to those the rights of persons 15   receiving the distribution. 16   2. A limited liability company may base a determination 17   that a distribution is not prohibited under subsection 1 on 18   financial statements prepared on the basis of accounting   19   practices and principles that are reasonable in the 20   circumstances or on a fair valuation or other method that is   21   reasonable under the circumstances any of the following: 22   a.   Financial statements prepared on the basis of 23   accounting practices and principles that are reasonable in the 24   circumstances . 25   b. A fair valuation or other method that is reasonable under 26   the circumstances. 27   3. Except as otherwise provided in subsection 5 , the effect 28   of a distribution under subsection 1 is measured as follows:   29   a. In the case of a distribution by purchase, redemption, or   30   other acquisition of a transferable interest in the company, 31   as of the date money or other property is transferred or   32   debt incurred by the company as defined in section 489.102, 33   subsection 5, paragraph   a , as of the earlier of any of the 34   following: 35   -51-   HF 655 (4) 90   da/jh/md   51/ 159                                       

  H.F. 655   (1) The date money or other property is transferred or debt 1   is incurred by the limited liability company   . 2   (2) The date the person entitled to the distribution ceases 3   to own the interest or right being acquired by the limited 4   liability company in return for the distribution.   5   b.   In the case of any other distribution of indebtedness, as 6   of the date the indebtedness is distributed. 7   b. c. In all other cases , as follows any of the following : 8   (1) The date that   the distribution is authorized, if the 9   payment occurs within not later than one hundred twenty days 10   after that date. 11   (2) The date that   the payment is made, if the payment occurs 12   more than one hundred twenty days after the distribution is 13   authorized. 14   4. A limited liability companys indebtedness to a member 15   or transferee   incurred by reason of a distribution made in 16   accordance with this section is at parity with the companys 17   indebtedness to its general, unsecured creditors , except to the   18   extent subordinated by agreement   . 19   5. A limited liability companys indebtedness, including 20   indebtedness issued in connection with or as part of   as a 21   distribution, is not a liability for purposes of subsection 22   1 if the terms of the indebtedness provide that payment of 23   principal and interest are   is made only if and to the extent 24   that payment of a distribution could then be made to members 25   under this section . If the indebtedness is issued as a 26   distribution, each payment of principal or interest on the 27   indebtedness is treated as a distribution, the effect of which   28   is measured on the date the payment is made. 29   6. In   subsection 1 , distribution does not include amounts 30   constituting reasonable compensation for present or past 31   services or reasonable payments made in the ordinary course of   32   business under a bona fide retirement plan or other benefits 33   program   In measuring the effect of a distribution under section 34   489.708, the liabilities of a dissolved limited liability 35   -52-   HF 655 (4) 90   da/jh/md   52/ 159                                                  

  H.F. 655   company do not include any claim that has been disposed of 1   under section 489.703, 489.704, or 489.706A   . 2   Sec. 40. Section 489.406, Code 2023, is amended to read as 3   follows: 4   489.406 Liability for improper distributions. 5   1. Except as otherwise provided in subsection 2 , if a member 6   of a member-managed limited liability company or a manager 7   of a manager-managed limited liability company consents to 8   a distribution made in violation of section 489.405 and in 9   consenting to the distribution fails to comply with section 10   489.409 , the member or manager is personally liable to the 11   company for the amount of the distribution that   which exceeds 12   the amount that could have been distributed without the 13   violation of section 489.405 . 14   2. To the extent the operating agreement of a member-managed 15   limited liability company expressly relieves a member of the 16   authority and responsibility to consent to distributions and 17   imposes that authority and responsibility on one or more other 18   members, the liability stated in subsection 1 applies to the 19   other members and not the member that the operating agreement 20   relieves of the   authority and responsibility. 21   3. A person that receives a distribution knowing that the 22   distribution to that person was made in violation of   violated 23   section 489.405 is personally liable to the limited liability 24   company but only to the extent that the distribution received 25   by the person exceeded the amount that could have been properly 26   paid under section 489.405 . 27   4. A person against which an action is commenced because 28   the person is liable under subsection 1 may do all of the 29   following: 30   a. Implead any other person that is subject to liability   31   liable   under subsection 1 and seek to compel enforce a right of 32   contribution from the person. 33   b. Implead any person that received a distribution in 34   violation of subsection 3 and seek to compel   enforce a right of 35   -53-   HF 655 (4) 90   da/jh/md   53/ 159                

  H.F. 655   contribution from the person in the amount the person received 1   in violation of subsection 3 . 2   5. An action under this section is barred if not   3   unless commenced within not later than two years after the 4   distribution. 5   Sec. 41. Section 489.407, Code 2023, is amended to read as 6   follows: 7   489.407 Management of limited liability company. 8   1. A limited liability company is a member-managed limited 9   liability company unless the operating agreement does any of 10   the following: 11   a. Expressly provides that any of the following apply: 12   (1) The limited liability   company is or will be 13   manager-managed. 14   (2) The limited liability   company is or will be managed by 15   managers. 16   (3) Management of the limited liability company is or will 17   be vested in managers. 18   b. Includes words of similar import. 19   2. In a member-managed limited liability company, all of the 20   following rules apply: 21   a. The   Except as expressly provided in this chapter, the 22   management and conduct of the limited liability   company are 23   vested in the members. 24   b. Each member has equal rights in the management and 25   conduct of the limited liability companys activities and 26   affairs .   27   c. A difference arising among members as to a matter in the 28   ordinary course of the activities and affairs   of the limited 29   liability   company may be decided by a majority of the members. 30   d. An act outside the ordinary course of the activities 31   of the company, including selling, leasing, exchanging, or   32   otherwise disposing of all, or substantially all, of the 33   companys property, with or without the goodwill, may be   34   undertaken only with the consent of all members The affirmative 35   -54-   HF 655 (4) 90   da/jh/md   54/ 159                        

  H.F. 655   vote or consent of all the members is required to do any of the 1   following:   2   (1) Sell, lease, exchange, or otherwise dispose of all, or 3   substantially all, of the limited liability companys property, 4   with or without good will, outside the ordinary course of the   5   companys activities   . 6   (2) Undertake an act outside the ordinary course of the 7   activities and affairs of the limited liability company. 8   (3)   Approve a merger, interest exchange, conversion, or 9   domestication under subchapter X. 10   (4)   Amend the operating agreement. 11   e. The operating agreement may be amended only with the 12   consent of all members. 13   3. In a manager-managed limited liability company, all of 14   the following rules apply: 15   a. Except as otherwise   expressly provided in this chapter , 16   any matter relating to the activities and affairs of the 17   limited liability   company is decided exclusively by the 18   managers   manager, or, if there is more than one manager, by a 19   majority of the managers . 20   b. Each manager has equal rights in the management and 21   conduct of the activities and affairs   of the limited liability 22   company. 23   c.   A difference arising among managers as to a matter in the 24   ordinary course of the activities of the company may be decided 25   by a majority of the managers. 26   d. c. The affirmative vote or consent of all members is   27   required to do any of the following: 28   (1) Sell, lease, exchange, or otherwise dispose of all, or 29   substantially all, of the limited liability   companys property, 30   with or without the goodwill, outside the ordinary course of 31   the companys activities. 32   (2) Approve a merger, conversion, or domestication under   33   article 10   Undertake any other act outside the ordinary course 34   of the limited liability companys activities and affairs   . 35   -55-   HF 655 (4) 90   da/jh/md   55/ 159                                               

  H.F. 655   (3) Undertake any other act outside the ordinary course of 1   the companys activities   Approve a merger, interest exchange, 2   conversion, or domestication under subchapter X . 3   (4) Amend the operating agreement. 4   e.   d. A manager may be chosen at any time by the 5   affirmative vote or   consent of a majority of the members and 6   remains a manager until a successor has been chosen, unless the 7   manager at an earlier time resigns, is removed, or dies, or, in 8   the case of a manager that is not an individual, terminates. A 9   manager may be removed at any time by the affirmative vote or   10   consent of a majority of the members without notice or cause. 11   f.   e. A person need not be a member to be a manager, but 12   the dissociation of a member that is also a manager removes the 13   person as a manager. If a person that is both a manager and 14   a member ceases to be a manager, that cessation does not by 15   itself dissociate the person as a member. 16   g.   f. A persons ceasing to be a manager does not discharge 17   any debt, obligation, or other liability to the limited 18   liability company or members which the person incurred while 19   a manager. 20   4. An action requiring the vote or   consent of members under 21   this chapter may be taken without a meeting, and a member may 22   appoint a proxy or other agent to vote,   consent , or otherwise 23   act for the member by signing an appointing record, personally 24   or by the members agent. 25   5. The dissolution of a limited liability company does not 26   affect the applicability of this section . However, a person 27   that wrongfully causes dissolution of the company loses the 28   right to participate in management as a member and a manager. 29   6. This chapter   does not entitle a member to remuneration 30   for services performed for a member-managed limited liability 31   company, except for reasonable compensation for services   32   rendered in winding up the activities of the company A limited 33   liability company shall reimburse a member for an advance to   34   the company beyond the amount of capital the member agreed to 35   -56-   HF 655 (4) 90   da/jh/md   56/ 159                         

  H.F. 655   contribute . 1   7.   A payment or advance made by a member which gives rise 2   to a limited liability company obligation under subsection 6 3   or section 489.408, subsection 1, constitutes a loan to the 4   company which accrues interest from the date of the payment or   5   advance.   6   8. A member is not entitled to remuneration for services 7   performed for a member-managed limited liability company, 8   except for reasonable compensation for services rendered in   9   winding up the activities of the company. 10   Sec. 42. Section 489.407A, Code 2023, is amended to read as 11   follows: 12   489.407A Real estate interest transferred by limited 13   liability company or foreign limited liability company. 14   1. A transfer of an interest in real estate situated in 15   this state held by a limited liability company or a registered   16   foreign limited liability company authorized to transact do 17   business in this state is subject to the provisions of this 18   section . 19   2. a. In a member-managed limited liability   company, a 20   transfer of an interest in real estate held by the company may 21   be undertaken by any of the following: 22   (1) As provided in the operating agreement, or if the 23   operating agreement does not so provide, only with the consent 24   of all members. 25   (2) As provided in a statement of authority filed by the 26   limited liability   company with the secretary of state and 27   the recorder of the county where the real estate is situated 28   pursuant to section 489.302 . 29   b. A requirement of paragraph a is applicable to every 30   transfer of an interest in real estate situated in this state   31   held by a member-managed limited liability   company, whether or 32   not the transfer is in the ordinary course of the companys 33   business.   34   3. a. In a manager-managed limited liability   company, a 35   -57-   HF 655 (4) 90   da/jh/md   57/ 159                       

  H.F. 655   transfer of an interest in real estate held by the company may 1   be undertaken by any of the following: 2   (1) As provided in the operating agreement, or if the 3   operating agreement does not so provide, only with the consent 4   of a majority of all managers. 5   (2) As provided in a statement of authority filed by the 6   limited liability   company with the secretary of state and 7   the recorder of the county where the real estate is situated 8   pursuant to section 489.302 . 9   b. A requirement in paragraph a is applicable to every 10   transfer of an interest in real estate situated in this state 11   held by a manager-managed limited liability company, whether 12   or not the transfer is in the ordinary course of the companys 13   business. 14   Sec. 43. Section 489.408, Code 2023, is amended to read as 15   follows: 16   489.408 Indemnification   Reimbursement, indemnification, 17   advancement,   and insurance. 18   1. A limited liability company shall reimburse a member of   19   a member-managed limited liability company or the manager of 20   a manager-managed limited liability company   for any payment 21   made and indemnify for any debt, obligation, or other liability 22   incurred by a member of a member-managed company or the manager   23   of a manager-managed company in the course of the members 24   or managers activities on behalf of the company, if, in 25   making the payment or incurring the debt, obligation, or other 26   liability, the member or manager complied with the duties 27   stated in sections 489.405 and 489.409 by the member or manager 28   in the course of the members or managers activities on behalf 29   of the company, if the member or manager complied with sections   30   489.405, 489.407, and 489.409 in making the payment . 31   2. A limited liability company may purchase and maintain   32   insurance on behalf of a member or manager of the company 33   against liability asserted against or incurred by the member or   34   manager in that capacity or arising from that status even if, 35   -58-   HF 655 (4) 90   da/jh/md   58/ 159                           

  H.F. 655   under section 489.110, subsection 7 , the operating agreement 1   could not eliminate or limit the persons liability to the   2   company for the conduct giving rise to the liability A limited 3   liability company shall indemnify and hold harmless a person 4   with respect to any claim or demand against the person and any   5   debt, obligation, or other liability incurred by the person by   6   reason of the persons former or present capacity as a member 7   or manager, if the claim, demand, debt, obligation, or other 8   liability does not arise from the persons breach of section   9   489.405, 489.407, or 489.409 . 10   3.   In the ordinary course of its activities and affairs, 11   a limited liability company may advance reasonable expenses, 12   including attorneys fees and costs, incurred by a person 13   in connection with a claim or demand against the person by   14   reason of the persons former or present capacity as a member 15   or manager, if the person promises to repay the company if 16   the person ultimately is determined not to be entitled to be 17   indemnified under subsection 2.   18   4.   A limited liability company may purchase and maintain 19   insurance on behalf of a member or manager against liability 20   asserted against or incurred by the member or manager in that   21   capacity or arising from that status even if, under section 22   489.110, subsection 3, paragraph   g , the operating agreement 23   could not eliminate or limit the persons liability to the 24   company for the conduct giving rise to the liability. 25   Sec. 44. Section 489.409, Code 2023, is amended to read as 26   follows:   27   489.409 Standards of conduct for members and managers. 28   1. A member of a member-managed limited liability company 29   owes to the company and, subject to section 489.901, subsection 30   2 , the other members the fiduciary duties of loyalty and care 31   stated in subsections 2 and 3 .   32   2. The fiduciary   duty of loyalty of a member in a 33   member-managed limited liability company includes all of the 34   following duties: 35   -59-   HF 655 (4) 90   da/jh/md   59/ 159                                     

  H.F. 655   a. To account to the limited liability company and to hold 1   as trustee for it any property, profit, or benefit derived by 2   the member regarding any of the following: 3   (1) In the conduct or winding up of the limited liability   4   companys activities and affairs   . 5   (2) From a use by the member of the limited liability   6   companys property. 7   (3) From the appropriation of a limited liability company 8   opportunity. 9   b. To refrain from dealing with the limited liability   10   company in the conduct or winding up of the companys 11   activities and affairs   as or on behalf of a person having an 12   interest adverse to the company. 13   c. To refrain from competing with the limited liability   14   company in the conduct of the companys activities and affairs 15   before the dissolution of the company. 16   3. Subject to the business judgment rule as stated in 17   subsection 7   , the duty of care of a member of a member-managed 18   limited liability company in the conduct and winding up of the   19   companys activities is to act with the care that a person 20   in a like position would reasonably exercise under similar   21   circumstances and in a manner the member reasonably believes to 22   be in the best interests of the company. In discharging this   23   duty, a member may rely in good faith upon opinions, reports, 24   statements, or other information provided by another person 25   that the member reasonably believes is a competent and reliable 26   source for the information The duty of care of a member of 27   a member-managed limited liability company in the conduct 28   or winding up of the companys activities and affairs is to 29   refrain from engaging in grossly negligent or reckless conduct,   30   willful or intentional misconduct, or knowing violation of law . 31   4. A member in a member-managed limited liability company   32   or a manager-managed limited liability company shall discharge 33   the duties under   this chapter or under the operating agreement 34   and exercise any rights consistently with the contractual 35   -60-   HF 655 (4) 90   da/jh/md   60/ 159                                 

  H.F. 655   obligation of good faith and fair dealing A member shall 1   discharge the duties and obligations under this chapter   2   or under the operating agreement and exercise any rights 3   consistently with the contractual obligation of good faith and 4   fair dealing   . 5   5. It is a defense to a claim under   subsection 2 , paragraph 6   b , and any comparable claim in equity or at common law that 7   the transaction was fair to the limited liability company A 8   member does not violate a duty or obligation under this chapter   9   or under the operating agreement solely because the members 10   conduct furthers the members own interest   . 11   6. All of the members of a member-managed limited liability 12   company or a manager-managed limited liability company may 13   authorize or ratify, after full disclosure of all material 14   facts, a specific act or transaction that otherwise would 15   violate the duty of loyalty. 16   7. a.   A member satisfies the duty of care in subsection 3 17   if all of the following apply:   It is a defense to a claim under 18   subsection 2, paragraph   b , and any comparable claim in equity 19   or at common law that the transaction was fair to the limited 20   liability company.   21   (1) The member is not interested in the subject matter of 22   the business judgment.   23   (2) The member is informed with respect to the subject 24   of the business judgment to the extent the member reasonably 25   believes to be appropriate in the circumstances. 26   (3) The member has a rational basis for believing that 27   the business judgment is in the best interests of the limited 28   liability company. 29   b.   A person challenging the business judgment of a member 30   has the burden of proving a breach of the duty of care, and 31   in a damage action, the burden of proving that the breach was   32   the legal cause of damage suffered by the limited liability 33   company.   34   8. In a manager-managed limited liability company, all of 35   -61-   HF 655 (4) 90   da/jh/md   61/ 159                                                    

  H.F. 655   the following rules apply: If, as permitted by subsection 6 1   or subsection 9, paragraph   f , or the operating agreement, a 2   member enters into a transaction with the limited liability 3   company which otherwise would be prohibited by subsection 2, 4   paragraph   b , the members rights and obligations arising from 5   the transaction are the same as those of a person that is not a   6   member. 7   a. Subsections 1, 2, 3, 5, and 7 apply to the manager or 8   managers and not the members.   9   b. The duty stated under subsection 2 , paragraph c , 10   continues until winding up is completed.   11   c. Subsection 4 applies to the members and managers. 12   d. Subsection 6 applies only to the members. 13   e.   A member does not have any fiduciary duty to the company 14   or to any other member solely by reason of being a member. 15   9. In a manager-managed limited liability company, all of 16   the following rules apply: 17   a.   Subsections 1, 2, 3, and 7 apply to the manager or 18   managers and not the members.   19   b. The duty stated under subsection 2, paragraph c , 20   continues until winding up is completed.   21   c. Subsection 4 applies to managers and members. 22   d.   Subsection 5 applies only to members. 23   e. The power to ratify under subsection 6 may be exercised 24   only by the members. 25   f. Subject to subsection 4, a member does not have any duty 26   to the limited liability company or to any other member solely 27   by reason of being a member. 28   Sec. 45. Section 489.410, Code 2023, is amended to read as 29   follows:   30   489.410 Right of members, managers, and dissociated members   31   to information   Rights to information of member, manager, and 32   person dissociated as member . 33   1. In a member-managed limited liability company, all of the 34   following rules apply: 35   -62-   HF 655 (4) 90   da/jh/md   62/ 159                                                                        

  H.F. 655   a. On reasonable notice, a member may inspect and copy 1   during regular business hours, at a reasonable location 2   specified by the limited liability   company, any record 3   maintained by the company regarding the companys activities, 4   affairs,   financial condition, and other circumstances, to the 5   extent the information is material to the members rights and 6   duties under the operating agreement or this chapter . 7   b. The limited liability   company shall furnish to each 8   member all of the following: 9   (1) Without demand, any information concerning the limited   10   liability   companys activities, affairs, financial condition, 11   and other circumstances which the company knows and is material 12   to the proper exercise of the members rights and duties under 13   the operating agreement or this chapter , except to the extent 14   the company can establish that it reasonably believes the 15   member already knows the information. 16   (2) On demand, any other information concerning the limited   17   liability   companys activities, affairs, financial condition, 18   and other circumstances, except to the extent the demand or   for 19   the information demanded is unreasonable or otherwise improper 20   under the circumstances. 21   c. The duty to furnish information under paragraph b also 22   applies to each member to the extent the member knows any of 23   the information described in paragraph b . 24   2. In a manager-managed limited liability company, all of 25   the following rules apply: 26   a. The informational rights stated in subsection 1 and 27   the duty stated in subsection 1 , paragraph c , apply to the 28   managers and not the members. 29   b. During regular business hours and at a reasonable 30   location specified by the limited liability   company, a 31   member may obtain from the company and   inspect and copy full 32   information regarding the activities, affairs, financial 33   condition, and other circumstances of the company as is just 34   and reasonable if all of the following apply: 35   -63-   HF 655 (4) 90   da/jh/md   63/ 159                  

  H.F. 655   (1) The member seeks the information for a purpose material 1   reasonably related   to the members interest as a member. 2   (2) The member makes a demand in a record received by 3   the limited liability company, describing with reasonable 4   particularity the information sought and the purpose for 5   seeking the information. 6   (3) The information sought is directly connected to the 7   members purpose. 8   c. Within   Not later than ten days after receiving a demand 9   pursuant to paragraph b , subparagraph (2), the limited 10   liability   company shall in a record inform in a record the 11   member that made the demand that includes all of the following: 12   (1) Of the What information that the limited liability 13   company will provide in response to the demand and when and 14   where the company will provide the information. 15   (2) If the company declines to provide any demanded   16   information, the companys reasons for declining The limited 17   liability companys reasons for declining, if the company   18   declines to provide any demanded information   . 19   d. Whenever this chapter or an operating agreement provides 20   for a member to vote on or   give or withhold consent to a matter, 21   before the vote is cast or consent is given or withheld, the 22   limited liability   company shall, without demand, provide the 23   member with all information that is known to the company and is 24   material to the members decision. 25   3. On ten days demand made in a record received by a 26   limited liability company, a dissociated member may have access 27   to information to which the person was entitled while a member 28   if the information pertains to the period during which the 29   person was a member, the person seeks the information in good   30   faith, and the person satisfies the requirements imposed on 31   a member by   subsection 2 , paragraph b . The company shall 32   respond to a demand made pursuant to this subsection in the 33   manner provided in   subsection 2 , paragraph c Subject to 34   subsection 8, on ten days demand made in a record received by   35   -64-   HF 655 (4) 90   da/jh/md   64/ 159                                            

  H.F. 655   a limited liability company, a person dissociated as a member 1   may have access to the information to which the person was   2   entitled while a member if all of the following apply: 3   a. The information pertains to the period during which the 4   person was a member   . 5   b.   The person seeks the information in good faith. 6   c. The person satisfies the requirements imposed on a member 7   by subsection 2, paragraph b . 8   4. A limited liability company may charge a person that   9   makes a demand under this section the reasonable costs of 10   copying, limited to the costs of labor and material   shall 11   respond to a demand made pursuant to subsection 3 in the manner 12   provided in subsection 2, paragraph c . 13   5. A member or dissociated member may exercise rights   14   under this section through an agent or, in the case of an 15   individual under legal disability, a legal representative. Any 16   restriction or condition imposed by the operating agreement 17   or under   subsection 7 applies both to the agent or legal 18   representative and the member or dissociated member   A limited 19   liability company may charge a person that makes a demand under 20   this section the reasonable costs of copying, limited to the   21   costs of labor and material . 22   6. The rights under   this section do not extend to a person 23   as transferee A member or person dissociated as a member may 24   exercise the rights under this section through an agent or, 25   in the case of an individual under legal disability, a legal 26   representative . Any restriction or condition imposed by the 27   operating agreement or under subsection 8 applies both to the 28   agent or legal representative and to the member or person 29   dissociated as a member.   30   7. In addition to any restriction or condition stated 31   in its operating agreement, a limited liability company, as   32   a matter within the ordinary course of its activities, may 33   impose reasonable restrictions and conditions on access to   34   and use of information to be furnished under this section , 35   -65-   HF 655 (4) 90   da/jh/md   65/ 159                                                            

  H.F. 655   including designating information confidential and imposing 1   nondisclosure and safeguarding obligations on the recipient.   2   In a dispute concerning the reasonableness of a restriction 3   under this subsection , the company has the burden of proving 4   reasonableness   Subject to section 489.504, the rights under 5   this section do not extend to a person as transferee   . 6   8. In addition to any restriction or condition stated in its 7   operating agreement, a limited liability company, as a matter 8   within the ordinary course of its activities and affairs, may   9   impose reasonable restrictions and conditions on access to 10   and use of information to be furnished under this section,   11   including designating information confidential and imposing 12   nondisclosure and safeguarding obligations on the recipient. 13   In a dispute concerning the reasonableness of a restriction   14   under this subsection, the company has the burden of proving 15   reasonableness. 16   Sec. 46. Section 489.502, Code 2023, is amended to read as 17   follows: 18   489.502 Transfer of transferable interest. 19   1. For   Subject to section 489.503, subsection 6, for a 20   transfer, in whole or in part, all of the following applies to 21   a transferable interest: 22   a. It is permissible. 23   b. It does not by itself cause a members   persons 24   dissociation as a member or a dissolution and winding up of the 25   limited liability companys activities and affairs . 26   c. Subject to section 489.504 , it does not entitle the 27   transferee to do any of the following: 28   (1) Participate in the management or conduct of the limited 29   liability   companys activities and affairs . 30   (2) Except as otherwise provided in subsection 3 , have 31   access to records or other information concerning the limited   32   liability   companys activities and affairs . 33   2. A transferee has the right to receive, in accordance 34   with the transfer, distributions to which the transferor would 35   -66-   HF 655 (4) 90   da/jh/md   66/ 159                                   

  H.F. 655   otherwise be entitled. 1   3. In a dissolution and winding up of a limited liability 2   company, a transferee is entitled to an account of the 3   companys transactions only from the date of dissolution. 4   4. A transferable interest may be evidenced by a certificate 5   of the interest issued by the   a limited liability company in a 6   record, and, subject to this section , the interest represented 7   by the certificate may be transferred by a transfer of the 8   certificate. 9   5. A limited liability company need not give effect to a 10   transferees rights under this section until the company knows   11   or has notice of the transfer. 12   6. A transfer of a transferable interest in violation of a 13   restriction on transfer contained in the operating agreement 14   or another agreement to which the transferor is a party   is 15   ineffective as to a person having notice of the restriction at 16   the time of transfer if the intended transferee has knowledge 17   or notice of the restriction at the time of transfer   . 18   7. Except as otherwise provided in section 489.602, 19   subsection 4   5 , paragraph b , when if a member transfers a 20   transferable interest, the transferor retains the rights of a 21   member other than the transferable   interest in distributions 22   transferred and retains all duties and obligations of a member. 23   8. When   If a member transfers a transferable interest to a 24   person that becomes a member with respect to the transferred 25   interest, the transferee is liable for the members obligations 26   under section sections 489.403 and section 489.406, subsection 27   3 , 489.406 known to the transferee when the transferee becomes 28   a member. 29   Sec. 47. Section 489.503, Code 2023, is amended to read as   30   follows:   31   489.503 Charging order. 32   1. On application by a judgment creditor of a member 33   or transferee, a court may enter a charging order against 34   the transferable interest of the judgment debtor for the 35   -67-   HF 655 (4) 90   da/jh/md   67/ 159                         

  H.F. 655   unsatisfied amount of the judgment. A Except as otherwise 1   provided in subsection 6, a   charging order constitutes a lien 2   on a judgment debtors transferable interest and requires the 3   limited liability company to pay over to the person to which 4   the charging order was issued any distribution that would   5   otherwise would   be paid to the judgment debtor. 6   2. To the extent necessary to effectuate the collection 7   of distributions pursuant to a charging order in effect under 8   subsection 1 , the court may do all of the following: 9   a. Appoint a receiver of the distributions subject to 10   the charging order, with the power to make all inquiries the 11   judgment debtor might have made. 12   b. Make all other orders necessary to give effect to the 13   charging order. 14   3. Upon a showing that distributions under a charging 15   order will not pay the judgment debt within a reasonable 16   time, the court may foreclose the lien and order the sale of 17   the transferable interest. The   Except as otherwise provided 18   in subsection 6, the   purchaser at the foreclosure sale only 19   obtains only the transferable interest, does not thereby become 20   a member, and is subject to section 489.502 . 21   4. At any time before foreclosure under subsection 3 , the 22   member or transferee whose transferable interest is subject to 23   a charging order under subsection 1 may extinguish the charging 24   order by satisfying the judgment and filing a certified copy of 25   the satisfaction with the court that issued the charging order. 26   5. At any time before foreclosure under subsection 3 , 27   a limited liability company or one or more members whose 28   transferable interests are not subject to the charging order 29   may pay to the judgment creditor the full amount due under the 30   judgment and thereby succeed to the rights of the judgment 31   creditor, including the charging order. 32   6. This chapter   does not deprive any member or transferee of 33   the benefit of any exemption laws applicable to the members   34   or transferees transferable interest   If a court orders 35   -68-   HF 655 (4) 90   da/jh/md   68/ 159                 

  H.F. 655   foreclosure of a charging order lien against the sole member of 1   a limited liability company all of the following apply:   2   a. The court shall confirm the sale . 3   b. The purchaser at the sale obtains the members entire 4   interest, not only the members transferable interest.   5   c.   The purchaser thereby becomes a member. 6   d. The person whose interest was subject to the foreclosed 7   charging order is dissociated as a member. 8   7. This section   provides the exclusive remedy by which 9   a person seeking to enforce a judgment against a member or 10   transferee may, in the capacity of judgment creditor, satisfy   11   the judgment from the judgment debtors transferable interest 12   This chapter does not deprive any member or transferee of the 13   benefit of any exemption law applicable to the transferable   14   interest of the member or transferee . 15   8. This section provides the exclusive remedy by which a 16   person seeking in the capacity of judgment creditor to enforce 17   a judgment against a member or transferee may satisfy the   18   judgment from the judgment debtors transferable interest.   19   Sec. 48. Section 489.504, Code 2023, is amended to read as 20   follows: 21   489.504 Power of personal representative of deceased member. 22   If a member dies, the deceased members personal   legal 23   representative or other legal representative may exercise all 24   of the following: 25   1. The rights of a transferee provided in section 489.502, 26   subsection 3 , and, for . 27   2. For the purposes of settling the estate, the rights of a 28   current the deceased member had under section 489.410 .   29   Sec. 49. Section 489.601, Code 2023, is amended to read as   30   follows:   31   489.601 Members power   Power to dissociate as a member  32   wrongful dissociation. 33   1. A person has the power to dissociate as a member at any 34   time, rightfully or wrongfully, by withdrawing as a member by 35   -69-   HF 655 (4) 90   da/jh/md   69/ 159                                                     

  H.F. 655   express will under section 489.602, subsection 1 . 1   2. A persons dissociation from a limited liability company   2   as a member is wrongful only if any of the following applies to 3   the dissociation: 4   a. It is in breach of an express provision of the operating 5   agreement. 6   b. It occurs before the termination completion of the 7   winding up of the limited liability company and any of the 8   following applies: 9   (1) The person withdraws as a member by express will. 10   (2) The person is expelled as a member by judicial order 11   under section 489.602, subsection 5   6 . 12   (3) The person is dissociated under section 489.602, 13   subsection 7, paragraph   a , by becoming a debtor in bankruptcy 14   8 . 15   (4) In the case of a person that is not a trust other than 16   a business trust, an estate, or an individual, the person 17   is expelled or otherwise dissociated as a member because it 18   willfully dissolved or terminated. 19   3. A person that wrongfully dissociates as a member is 20   liable to the limited liability company and, subject to 21   section 489.901 , to the other members for damages caused by the 22   dissociation. The liability is in addition to any other   debt, 23   obligation, or other liability of the member to the company or 24   the other members. 25   Sec. 50. Section 489.602, Code 2023, is amended to read as 26   follows:   27   489.602 Events causing dissociation. 28   A person is dissociated as a member from a limited liability   29   company   when any of the following applies: 30   1. The limited liability company knows or has notice of 31   the persons express will to withdraw as a member, but, if the 32   person specified a withdrawal date later than the date the 33   limited liability   company knew or had notice, on that later 34   date. 35   -70-   HF 655 (4) 90   da/jh/md   70/ 159                     

  H.F. 655   2. An event stated in the operating agreement as causing the 1   persons dissociation occurs. 2   3. The person is expelled as a member pursuant to the   3   operating agreement The persons entire interest is transferred 4   in a foreclosure sale under section 489.503, subsection 6   . 5   4. The person is expelled as a member by the unanimous   6   consent of the other members if any of the following applies: 7   pursuant to the operating agreement. 8   a.   It is unlawful to carry on the companys activities with 9   the person as a member. 10   b.   There has been a transfer of all of the persons 11   transferable interest in the company, other than any of the 12   following: 13   (1)   A transfer for security purposes. 14   (2) A charging order in effect under section 489.503 which 15   has not been foreclosed. 16   c. The person is a corporation and, within ninety days 17   after the company notifies the person that it will be expelled   18   as a member because the person has filed a certificate of   19   dissolution or the equivalent, its charter has been revoked, 20   or its right to conduct business has been suspended by   21   the jurisdiction of its incorporation, the certificate of 22   dissolution has not been revoked or its charter or right to   23   conduct business has not been reinstated. 24   d. The person is a limited liability company or partnership 25   that has been dissolved and whose business is being wound up. 26   5. On application by the company, the person is expelled 27   as a member by judicial order because the person has done any 28   of the following The person is expelled as a member by the 29   affirmative vote or consent of all the other members if any of   30   the following apply : 31   a. Has engaged, or is engaging, in wrongful conduct that   32   has adversely and materially affected, or will adversely and 33   materially affect, the companys activities   It is unlawful to 34   carry on the limited liability companys activities and affairs   35   -71-   HF 655 (4) 90   da/jh/md   71/ 159                                                    

  H.F. 655   with the person as a member . 1   b. Has willfully or persistently committed, or is willfully   2   and persistently committing, a material breach of the 3   operating agreement or the persons duties or obligations under 4   section 489.409   There has been a transfer of all the persons 5   transferable interest in the limited liability company, other   6   than any of the following: 7   (1) A transfer for security purposes . 8   (2)   A charging order in effect under section 489.503 which 9   has not been foreclosed. 10   c. Has engaged in, or is engaging in, conduct relating   11   to the companys activities which makes it not reasonably 12   practicable to carry on the activities with the person as a 13   member   The person is an entity and all of the following apply: 14   (1) The limited liability company notifies the person that 15   it will be expelled as a member because the person has filed 16   a statement of dissolution or the equivalent, the person has 17   been administratively dissolved, the persons charter or the   18   equivalent has been revoked, or the persons right to conduct   19   business has been suspended by the persons jurisdiction of 20   formation   . 21   (2) Not later than ninety days after the notification, 22   the statement of dissolution or the equivalent has not been   23   withdrawn, rescinded, or revoked, the person has not been 24   reinstated, or the persons charter or the equivalent or right 25   to conduct business has not been reinstated. 26   d. The person is an unincorporated entity that has been 27   dissolved and whose activities and affairs are being wound up. 28   6. In the case of a person who is an individual, any of 29   the following applies   On application by the limited liability 30   company or a member in a direct action under section 489.901, 31   the person is expelled as a member by judicial order because   32   any of the following apply : 33   a. The person dies   has engaged or is engaging in wrongful 34   conduct that has affected adversely and materially, or will 35   -72-   HF 655 (4) 90   da/jh/md   72/ 159                                                   

  H.F. 655   affect adversely and materially, the companys activities and 1   affairs   . 2   b. In a member-managed limited liability company, any of 3   the following applies: The person has committed willfully or 4   persistently, or is committing willfully or persistently,   5   a material breach of the operating agreement or a duty or   6   obligation under section 489.409. 7   (1) A guardian or general conservator for the person is 8   appointed.   9   (2) There is a judicial order that the person has otherwise 10   become incapable of performing the persons duties as a member   11   under this chapter or the operating agreement. 12   c. The person has engaged or is engaging in conduct relating 13   to the limited liability companys activities and affairs which   14   makes it not reasonably practicable to carry on the activities 15   and affairs with the person as a member. 16   7. In a member-managed limited liability company, the 17   person does any of the following   In the case of an individual 18   any of the following apply   : 19   a. Becomes a debtor in bankruptcy The individual dies . 20   b. Executes an assignment for the benefit of creditors   In a 21   member-managed limited liability company any of the following 22   apply:   23   (1) A guardian or general conservator for the individual is 24   appointed . 25   (2) A court orders that the individual has otherwise become 26   incapable of performing the individuals duties as a member 27   under this chapter or the operating agreement. 28   c. Seeks, consents to, or acquiesces in the appointment of 29   a trustee, receiver, or liquidator of the person or of all or   30   substantially all of the persons property. 31   8. In the case of a person that is a trust or is acting as   32   a member by virtue of being a trustee of a trust, the trusts 33   entire transferable interest in the company is distributed   In a 34   member-managed limited liability company, any of the following 35   -73-   HF 655 (4) 90   da/jh/md   73/ 159                                                        

  H.F. 655   apply: 1   a.   The person becomes a debtor in bankruptcy . 2   b. The person signs an assignment for the benefit of 3   creditors. 4   c.   The person seeks, consents to, or acquiesces in the 5   appointment of a trustee, receiver, or liquidator of the person   6   or of all or substantially all the persons property. 7   9. In the case of a person that is an estate or is acting 8   as a member by virtue of being a personal representative of   9   an estate, the estates entire transferable interest in the 10   company is distributed   In the case of a person that is a 11   testamentary or inter vivos trust or is acting as a member by 12   virtue of being a trustee of such a trust, the trusts entire 13   transferable interest in the limited liability company is   14   distributed . 15   10. In the case of a member that is not an individual, 16   partnership, limited liability company, corporation, trust, or 17   estate, the termination of the member   In the case of a person 18   that is an estate or is acting as a member by virtue of being   19   a personal representative of an estate, the estates entire 20   transferable interest in the limited liability company is   21   distributed . 22   11. The company participates in a merger under   article 10 , 23   if any of the following applies: In the case of a person that 24   is not an individual, the existence of the person terminates. 25   a. The company is not the surviving entity. 26   b. Otherwise as a result of the merger, the person ceases 27   to be a member.   28   12. The company participates in a conversion under article 29   10   The limited liability company participates in a merger under 30   subchapter X and any of the following apply: 31   a.   The limited liability company is not the surviving 32   entity . 33   b.   Otherwise as a result of the merger, the person ceases 34   to be a member.   35   -74-   HF 655 (4) 90   da/jh/md   74/ 159                                                          

  H.F. 655   13. The company participates in a domestication under 1   article 10   , if, as a result of the domestication, the 2   person ceases to be a member The limited liability company 3   participates in an interest exchange under subchapter X and, 4   as a result of the interest exchange, the person ceases to be a   5   member   . 6   14. The limited liability company terminates participates 7   in a conversion under subchapter X . 8   15.   The limited liability company participates in a 9   domestication under subchapter X and, as a result of the 10   domestication, the person ceases to be a member.   11   16. The limited liability company dissolves and completes 12   winding up. 13   Sec. 51. Section 489.603, Code 2023, is amended to read as 14   follows: 15   489.603 Effect of persons   dissociation as member . 16   1. When If a person is dissociated as a member , of a limited 17   liability company,   all of the following apply: 18   a. The persons right to participate as a member in the 19   management and conduct of the limited liability   companys 20   activities and affairs   terminates. 21   b. If the company is member-managed, the persons fiduciary 22   duties as a member end with regard to matters arising and   23   events occurring after the persons dissociation The persons 24   duties and obligations under section 489.409 as a member end 25   with regard to matters arising and events occurring after the 26   persons dissociation . 27   c. Subject to section 489.504 and article 10 subchapter X , 28   any transferable interest owned by the person in the persons 29   capacity as a member   immediately before dissociation in the 30   persons capacity as a member is owned by the person solely as 31   a transferee.   32   2. A persons dissociation as a member of a limited 33   liability company does not of itself discharge the person from 34   any debt, obligation, or other liability to the company or the 35   -75-   HF 655 (4) 90   da/jh/md   75/ 159                                             

  H.F. 655   other members which the person incurred while a member. 1   Sec. 52. Section 489.604, Code 2023, is amended to read as 2   follows: 3   489.604 Members power to dissociate under certain 4   circumstances. 5   1. If the certificate of organization or an operating 6   agreement does not specify the time or the events upon the 7   happening of which a member may dissociate from a limited   8   liability company   , a member may dissociate from the limited 9   liability company in the event any amendment to the certificate 10   of organization or operating agreement that is adopted over 11   the members written dissent adversely affects the rights or 12   preferences of the dissenting members transferable interest 13   in any of the ways described in paragraphs a through f . 14   A dissociation in the event of such dissent and adverse 15   effect is deemed to have occurred as of the effective date 16   of the amendment, if the member gives notice to the limited   17   liability   company not more than sixty days after the date of 18   the amendment. In valuing the members distribution pursuant 19   to this subsection , any depreciation in anticipation of the 20   amendment shall be excluded. An amendment that does any of the 21   following is subject to this section : 22   a. Alters or abolishes a members right to receive a 23   distribution. 24   b. Alters or abolishes a members right to voluntarily 25   dissociate. 26   c. Alters or abolishes a members right to vote on any 27   matter, except as the rights may be altered or abolished 28   through the acceptance of contributions or the making of 29   contribution agreements. 30   d. Alters or abolishes a members preemptive right to make 31   contributions.   32   e. Establishes or changes the conditions for or consequences 33   of expulsion. 34   f. Waives the application of this section to the limited 35   -76-   HF 655 (4) 90   da/jh/md   76/ 159        

  H.F. 655   liability company. 1   2. A member dissociating from a limited liability company   2   under this section is not liable for damages for the breach of 3   any agreement not to withdraw. 4   3. This section applies to a limited liability company 5   whose original articles of organization or certificate of 6   organization is filed with the secretary of state on or after 7   July 1, 1997. 8   4. This section applies to a limited liability company whose 9   original articles of organization are filed with the secretary 10   of state and effective on or prior to June 30, 1997, if such 11   companys operating agreement provides that it is subject to 12   this section . 13   5. The operating agreement of a limited liability company 14   may waive the applicability of this section to the company and 15   its members. 16   Sec. 53. Section 489.701, Code 2023, is amended to read as 17   follows: 18   489.701 Events causing dissolution. 19   1. A limited liability company is dissolved, and its 20   activities and affairs   must be wound up, upon the occurrence 21   of any of the following: 22   a. An event or circumstance that the operating agreement 23   states causes dissolution. 24   b. The affirmative vote or   consent of all the members. 25   c. Once After the limited liability company has at least 26   one member, the passage of that member and any other member 27   dissociate, and ninety consecutive days pass during which the 28   company has no members . , unless before the end of the period 29   all of the following apply:   30   (1) Consent to admit at least one specified person as a 31   member is given by transferees owning the rights to receive   32   a majority of distributions as transferees at the time the 33   consent is to be effective.   34   (2) At least one person becomes a member in accordance with 35   -77-   HF 655 (4) 90   da/jh/md   77/ 159                        

  H.F. 655   the consent. 1   d. On application by a member, the entry by a   the district 2   court of an order dissolving the limited liability company on 3   the grounds that any of the following applies: 4   (1) The conduct of all or substantially all of   the limited 5   liability   companys activities and affairs is unlawful. 6   (2) It is not reasonably practicable to carry on the limited 7   liability companys activities and affairs in conformity with 8   the certificate of organization and the operating agreement. 9   (3)   The managers or those members in control of the limited 10   liability company conduct themselves according to any of the   11   following: 12   (a) Have acted, are acting, or will act in a manner that is 13   illegal or fraudulent.   14   (b) Have acted or are acting in a manner that is oppressive 15   and was, is, or will be directly harmful to the applicant. 16   e. On application by a member or transferee, the entry by 17   a district court of an order dissolving the company on the   18   grounds that the managers or those members in control of the   19   company have done any of the following: The signing and filing 20   of a statement of administrative dissolution by the secretary   21   of state under section 489.705. 22   (1)   Have acted, are acting, or will act in a manner that is 23   illegal or fraudulent. 24   (2) Have acted or are acting in a manner that is oppressive 25   and was, is, or will be directly harmful to the applicant. 26   2. In a proceeding brought under subsection 1 , paragraph 27   e   , d , subparagraph (3), the district court may order a 28   remedy other than dissolution. 29   Sec. 54. Section 489.701A, Code 2023, is amended to read as 30   follows:   31   489.701A Rescinding dissolution. 32   1. A limited liability company may rescind its dissolution, 33   unless a statement of termination applicable to the company has 34   become effective, a   the district court has entered an order 35   -78-   HF 655 (4) 90   da/jh/md   78/ 159                                                

  H.F. 655   under section 489.701, subsection 1 , paragraph d , dissolving 1   the company, or the secretary of state has dissolved the 2   company under section 489.705 . 3   2. Rescinding dissolution under this section requires all 4   of the following: 5   a. The affirmative vote or consent of each member. 6   b. If the limited liability company has delivered to the 7   secretary of state for filing a statement of dissolution and 8   any of the following applies   apply : 9   (1) If the statement has not become effective, delivery to 10   the secretary of state for filing of a statement of withdrawal 11   under section 489.205   489.208A applicable to the statement of 12   dissolution. 13   (2) If the statement of dissolution has become effective, 14   delivery to the secretary of state for filing of a statement of 15   rescission stating the name of the limited liability   company 16   and that dissolution has been rescinded under this section . 17   3. If a limited liability company rescinds its dissolution 18   all of the following apply: 19   a. The limited liability   company shall resume resumes 20   carrying on its activities and affairs as if the   dissolution 21   had never occurred. 22   b. Subject to paragraph c , any liability incurred by the 23   limited liability   company after the dissolution and before 24   the rescission has become effective shall be determined as if 25   dissolution had never occurred. 26   c. The rights of a third party arising out of conduct in 27   reliance on the dissolution before the third party knew or had 28   notice of the rescission must not be adversely affected. 29   Sec. 55. Section 489.702, Code 2023, is amended to read as   30   follows:   31   489.702 Winding up. 32   1. A dissolved limited liability company shall wind up its 33   activities and affairs   , and except as otherwise provided in 34   section 489.701A, the company continues after dissolution only 35   -79-   HF 655 (4) 90   da/jh/md   79/ 159               

  H.F. 655   for the purpose of winding up. 1   2. In winding up its activities and affairs   , all of the 2   following apply to a limited liability company: 3   a. It shall discharge the limited liability companys debts, 4   obligations, or   and other liabilities, settle and close the 5   companys activities and affairs   , and marshal and distribute 6   the assets of the company. 7   b. It may do all of the following: 8   (1) Deliver to the secretary of state for filing a statement 9   of dissolution stating the name of the limited liability   10   company and that the company is dissolved. 11   (2) Preserve the limited liability   company activities , 12   affairs, and property as a going concern for a reasonable time. 13   (3) Prosecute and defend actions and proceedings, whether 14   civil, criminal, or administrative. 15   (4) Transfer the limited liability   companys property. 16   (5) Settle disputes by mediation or arbitration. 17   (6) Deliver to the secretary of state for filing a statement 18   of termination stating the name of the limited liability   19   company and that the company is terminated. 20   (7) Perform other acts necessary or appropriate to the 21   winding up. 22   3. If a dissolved limited liability company has no members, 23   the legal representative of the last person to have been a 24   member may wind up the activities and affairs   of the company. 25   If the person does so, the person has the powers of a sole 26   manager under section 489.407, subsection 3 , and is deemed to 27   be a manager for the purposes of section 489.304, subsection 28   1 , paragraph b . 29   4. If the legal representative under subsection 3 declines 30   or fails to wind up the limited liability   companys activities 31   and affairs   , a person may be appointed to do so by the consent 32   of transferees owning a majority of the rights to receive 33   distributions as transferees at the time the consent is to be   34   effective. All of the following apply to a person appointed 35   -80-   HF 655 (4) 90   da/jh/md   80/ 159                  

  H.F. 655   under this subsection : 1   a. The person has the powers of a sole manager under section 2   489.407, subsection 3 , and is deemed to be a manager for the 3   purposes of section 489.304, subsection 1 , paragraph   b . 4   b. The person shall deliver   promptly deliver to the 5   secretary of state for filing an amendment to the limited   6   liability companys certificate of organization to do stating 7   all of the following: 8   (1) State that   That the limited liability company has no 9   members. 10   (2) State that the person has been appointed pursuant to   11   this subsection to wind up the company The name and street and 12   mailing addresses of the person . 13   (3) Provide the street and mailing addresses of the person   14   That the person has been appointed pursuant to this subsection 15   to wind up the limited liability companys activities and 16   affairs . 17   5. The district court may order judicial supervision of the 18   winding up of a dissolved limited liability company, including 19   the appointment of a person to wind up the companys activities 20   and affairs   pursuant to any of the following: 21   a. On application of a member, if the applicant establishes 22   good cause. 23   b. On the application of a transferee, if all of the 24   following apply: 25   (1) The limited liability   company does not have any members. 26   (2) The legal representative of the last person to have been 27   a member declines or fails to wind up the limited liability 28   companys activities and affairs . 29   (3) Within a reasonable time following the dissolution a 30   person has not been appointed pursuant to subsection 4   3 . 31   c. In connection with a proceeding under section 489.701, 32   subsection 1 , paragraph d or   e . 33   Sec. 56. Section 489.703, Code 2023, is amended to read as   34   follows:   35   -81-   HF 655 (4) 90   da/jh/md   81/ 159                              

  H.F. 655   489.703 Known claims against dissolved limited liability 1   company. 2   1. Except as otherwise provided in subsection 4 , a dissolved 3   limited liability company may give notice of a known claim 4   under subsection 2 , which has the effect as provided in 5   subsection 3 . 6   2. A dissolved limited liability company may in a record 7   notify its known claimants of the dissolution. The notice must 8   do all of the following: 9   a. Specify the information required to be included in a 10   claim. 11   b. Provide   State that a claim must be in writing and provide 12   a mailing address to which the claim is to be sent. 13   c. State the deadline for receipt of the   a claim, which may 14   not be less than one hundred twenty days after the date the 15   notice is received by the claimant. 16   d. State that the claim will be barred if not received by 17   the deadline. 18   3. A claim against a dissolved limited liability company is 19   barred if the requirements of subsection 2 are met and any of 20   the following applies: 21   a. The claim is not received by the specified deadline. 22   b. If the claim is timely received but rejected by the 23   limited liability   company, all of the following must apply: 24   (1) The limited liability company causes the claimant to 25   receive a notice in a record stating that the claim is rejected 26   and will be barred unless the claimant commences an action   27   against the company to enforce the claim within   not later than 28   ninety days after the claimant receives the notice. 29   (2) The claimant does not commence the required action 30   within   not later than the ninety days after the claimant 31   receives the notice   . 32   4. This section does not apply to a claim based on an 33   event occurring after the effective   date of dissolution or a 34   liability that on that date is contingent. 35   -82-   HF 655 (4) 90   da/jh/md   82/ 159                 

  H.F. 655   Sec. 57. Section 489.704, Code 2023, is amended to read as 1   follows: 2   489.704 Other claims against dissolved limited liability 3   company. 4   1. A dissolved limited liability company may publish notice 5   of its dissolution and request persons having claims against 6   the company to present them in accordance with the notice. 7   2. The notice authorized by   under subsection 1 must do all 8   of the following   meet all of the following requirements : 9   a. Be published at least once in a newspaper of general 10   circulation in the county in this state in which the dissolved   11   limited liability companys principal office is located or, if 12   it has none in this state, in the county in which the companys 13   registered office is or was last located   Comply with any of the 14   following: 15   (1) Publication of the notice one time in a newspaper of 16   general circulation in the county in this state in which the 17   dissolved limited liability companys principal office is   18   located or, if the principal office is not located in this   19   state, in the county in which the office of the companys 20   registered agent is or was last located   . 21   (2) Publication by posting the notice conspicuously for at 22   least thirty days on the dissolved limited liability companys   23   internet site. 24   b. Describe the information required to be contained in a 25   claim , state that the claim must be in writing, and provide a 26   mailing address to which the claim is to be sent. 27   c. State that a claim against the limited liability company 28   is barred unless an action to enforce the claim is commenced 29   within five   not later than three years after publication of the 30   notice. 31   3. If a dissolved limited liability company publishes a 32   notice in accordance with subsection 2 , unless the claimant   33   commences an action to enforce   the claim against the company 34   within five years after the publication date of the notice, the 35   -83-   HF 655 (4) 90   da/jh/md   83/ 159                                   

  H.F. 655   claim of each of the following claimants is barred of each of 1   the following claimants is barred unless the claimant commences   2   an action to enforce the claim against the company not later 3   than three years after the publication date of the notice : 4   a. A claimant that did not receive notice in a record under 5   section 489.703 . 6   b. A claimant whose claim was timely sent to the limited 7   liability company but not acted on. 8   c. A claimant whose claim is contingent at, or based on an 9   event occurring after, the effective   date of dissolution. 10   4. A claim not barred under this section or section 489.703   11   may be enforced as follows: 12   a. Against a dissolved limited liability company, to the 13   extent of its undistributed assets. 14   b. If   Except as otherwise provided in section 489.706A, if 15   assets of the limited liability company have been distributed 16   after dissolution, against a member or transferee to the extent 17   of that persons proportionate share of the claim or of the 18   companys   assets distributed to the member or transferee after 19   dissolution, whichever is less, but a persons total liability 20   for all claims under this paragraph does not exceed the total 21   amount of assets distributed to the person after dissolution. 22   Sec. 58. Section 489.705, Code 2023, is amended to read as 23   follows: 24   489.705 Administrative   Grounds for administrative 25   dissolution. 26   1. The secretary of state may commence a proceeding under 27   this section 489.709 to administratively dissolve a limited 28   liability company administratively, if any of the following 29   apply: 30   a.   1. The limited liability company has not delivered a 31   biennial report to the secretary of state in a form that meets   32   the requirements of section 489.209 within sixty days after 33   it is due, or has not paid within sixty days after the due   34   date, any fee, tax, or penalty due to the secretary of state 35   -84-   HF 655 (4) 90   da/jh/md   84/ 159                               

  H.F. 655   under this chapter or law other than this chapter The limited 1   liability company does not pay within sixty days after they are   2   due any fees, taxes, interest, or penalties imposed by this 3   chapter or other laws of this state . 4   b.   The limited liability company is without a registered 5   office or registered agent in this state for sixty days or   6   more. 7   c. The limited liability company does not notify the 8   secretary of state within sixty days that its registered agent   9   or registered office has been changed, that its registered 10   agent has resigned, or that its registered office has been   11   discontinued. 12   d. The limited liability companys period of duration stated 13   in its certificate of organization has expired.   14   2. If the secretary of state determines that a ground exists 15   for administratively dissolving a limited liability company, 16   the secretary of state shall file a record of the determination 17   and serve the company with a copy of the filed record   The 18   limited liability company does not deliver its biennial report   19   required by section 489.209 to the secretary of state within 20   sixty days after it is due   . 21   3. If within sixty days after service of the copy pursuant 22   to   subsection 2 a limited liability company does not correct 23   each ground for dissolution or demonstrate to the reasonable 24   satisfaction of the secretary of state that each ground 25   determined by the secretary of state does not exist, the 26   secretary of state shall dissolve the company administratively 27   by preparing, signing, and filing a declaration of dissolution 28   that states the grounds for dissolution. The secretary 29   of state shall serve the company with a copy of the filed   30   declaration The limited liability company is without a 31   registered agent or the registered agent does not have a place   32   of business in this state for sixty days or more . 33   4. A limited liability company that has been   34   administratively dissolved continues in existence but, subject 35   -85-   HF 655 (4) 90   da/jh/md   85/ 159                                                   

  H.F. 655   to section 489.706 , may carry on only activities necessary to 1   wind up its activities and liquidate its assets under   sections 2   489.702 and 489.708 and to notify claimants under sections 3   489.703 and 489.704 The secretary of state has not been 4   notified within sixty days that the limited liability companys   5   registered agent or place of business of the registered agent   6   has been changed, or that its registered agent has resigned, or 7   that its registered office has been discontinued . 8   5. The administrative dissolution of a limited liability   9   company does not terminate the authority of its registered 10   agent for service of process   The limited liability companys 11   period of duration stated in its certificate of organization 12   expires . 13   Sec. 59. Section 489.706, Code 2023, is amended to read as 14   follows: 15   489.706 Reinstatement following administrative dissolution. 16   1. A limited liability company administratively dissolved 17   under section 489.705 may apply to the secretary of state 18   for reinstatement at any time after the effective date 19   of dissolution. The application must be delivered to the   20   secretary of state and   meet all of the following requirements: 21   a. Recite State the name of the limited liability company 22   at its date of dissolution and the effective date of its 23   administrative dissolution. 24   b. State that the ground or grounds for dissolution as   25   provided in section 489.705 either did not exist or have been 26   eliminated.   27   c. If the application is received more than five years after 28   the effective date of the administrative   dissolution, state a   29   name that satisfies the requirements of section 489.108 . 30   d. State the federal tax identification number of the 31   limited liability company. 32   2. a.   The secretary of state shall refer the federal 33   tax identification number contained in the application for 34   reinstatement to the department of workforce development. 35   -86-   HF 655 (4) 90   da/jh/md   86/ 159                                    

  H.F. 655   The department of workforce development shall report to the 1   secretary of state the tax status of the limited liability 2   company. If the department reports to the secretary of state 3   that a filing delinquency or liability exists against the 4   limited liability company, the secretary of state shall not 5   cancel the declaration   certificate of dissolution until the 6   filing delinquency or liability is satisfied. 7   3. b. (1) If the secretary of state determines that the 8   application contains the information required by subsection 9   1 , and that a delinquency or liability reported pursuant to 10   subsection 2   paragraph a has been satisfied, and that the 11   information is correct, the secretary of state shall cancel 12   the declaration certificate of dissolution and prepare a 13   certificate of reinstatement that recites the secretary of 14   states determination and the effective date of reinstatement, 15   file the original of the   certificate of reinstatement , and 16   serve deliver a copy on to the limited liability company under 17   section 489.116 . 18   (2)   If the limited liability companys name in subsection 19   1 , paragraph c , is different than from the name in subsection 20   1 , paragraph a , the certificate of reinstatement shall 21   constitute an amendment to the limited liability   companys 22   certificate of organization insofar as it pertains to its 23   name. A limited liability   company shall not relinquish the 24   right to retain its name as provided in section 489.108 , if the 25   reinstatement is effective within five years of the effective 26   date of the limited liability companys dissolution. 27   4. 3. When the reinstatement is effective, it relates   28   back to and takes effect as of the effective date of the   29   administrative dissolution as if the administrative dissolution   30   had never occurred. 31   Sec. 60. NEW SECTION   . 489.706A Court proceedings. 32   1. A dissolved limited liability company that has published 33   a notice under section 489.704 may file an application with 34   the district court in the county where the companys principal 35   -87-   HF 655 (4) 90   da/jh/md   87/ 159                                

  H.F. 655   office is located or, if the principal office is not located 1   in this state, where the office of its registered agent is 2   or was last located, for a determination of the amount and 3   form of security to be provided for payment of claims that are 4   reasonably expected to arise after the date of dissolution 5   based on facts known to the company and any of the following 6   apply: 7   a. At the time of application any of the following apply: 8   (1) The facts are contingent. 9   (2) The facts have not been made known to the limited 10   liability company. 11   b. The facts are based on an event occurring after the date 12   of dissolution. 13   2. Security is not required for any claim that is or is 14   reasonably anticipated to be barred under section 489.704. 15   3. Not later than ten days after the filing of an 16   application under subsection 1, the dissolved limited liability 17   company shall give notice of the proceeding to each claimant 18   holding a contingent claim known to the company. 19   4. In a proceeding under this section, the court may appoint 20   a guardian ad litem to represent all claimants whose identities 21   are unknown. The reasonable fees and expenses of the guardian, 22   including all reasonable expert witness fees, must be paid by 23   the dissolved limited liability company. 24   5. A dissolved limited liability company that provides 25   security in the amount and form ordered by the court under 26   subsection 1 satisfies the companys obligations with respect 27   to claims that are contingent, have not been made known to 28   the company, or are based on an event occurring after the 29   date of dissolution, and such claims may not be enforced 30   against a member or transferee on account of assets received 31   in liquidation. 32   Sec. 61. Section 489.707, Code 2023, is amended to read as 33   follows:   34   489.707 Appeal from rejection   denial of reinstatement. 35   -88-   HF 655 (4) 90   da/jh/md   88/ 159    

  H.F. 655   1. If the secretary of state rejects denies a limited 1   liability companys application for reinstatement following 2   administrative dissolution, the secretary of state shall 3   prepare, sign, and file a notice that explains the reason for   4   rejection and   serve the company under section 489.116 with a 5   copy of the   written notice that explains the reason or reasons 6   for denial . 7   2. Within thirty days after service of a notice of rejection 8   of reinstatement under   subsection 1 , a limited liability 9   company may appeal from the rejection by petitioning the 10   district court to set aside the dissolution. The petition   11   must be served on the secretary of state and contain a copy 12   of the secretary of states declaration of dissolution, the 13   companys application for reinstatement, and the secretary   14   of states notice of rejection The limited liability company 15   may appeal the denial of reinstatement to the district court 16   of the county where the companys principal office or, if none 17   in this state, where its registered office is located within   18   thirty days after service of the notice of denial is effected   . 19   The company appeals by petitioning the court to set aside 20   the dissolution and attaching to the petition copies of the   21   secretary of states certificate of dissolution, the companys 22   application for reinstatement, and the secretary of states   23   notice of denial. 24   3. The court may summarily order the secretary of state to 25   reinstate a the dissolved limited liability company or may take 26   other action the court considers appropriate. 27   4.   The courts final decision may be appealed as in other 28   civil proceedings. 29   Sec. 62. Section 489.708, Code 2023, is amended to read as 30   follows:   31   489.708 Distribution   Disposition of assets in winding up 32   limited liability companys activities . 33   1. In winding up its activities and affairs   , a limited 34   liability company must shall apply its assets to discharge its 35   -89-   HF 655 (4) 90   da/jh/md   89/ 159                                              

  H.F. 655   the companys obligations to creditors, including members that 1   are creditors. 2   2. After a limited liability company complies with 3   subsection 1 , any surplus must be distributed in the following 4   order, subject to any charging order in effect under section 5   489.503 : 6   a. To each person owning a transferable interest that 7   reflects contributions made by a member and not previously   8   returned, an amount equal to the value of the unreturned   9   contributions and not previously returned, an amount equal to 10   the value of the unreturned contributions   . 11   b. In equal shares among members and dissociated members, 12   except to the extent necessary to comply with any transfer 13   effective under   section 489.502 Among persons owning 14   transferable interests in proportion to their respective rights 15   to share in distributions immediately before the dissolution of 16   the limited liability company . 17   3. If a limited liability company does not have sufficient 18   surplus to comply with subsection 2 , paragraph a , any surplus 19   must be distributed among the owners of transferable interests 20   in proportion to the value of their   the respective unreturned 21   contributions. 22   4. All distributions made under subsections 2 and 3 must be 23   paid in money. 24   Sec. 63. NEW SECTION   . 489.709 Procedure for and effect of 25   administrative dissolution. 26   1. If the secretary of state determines that one or more 27   grounds exist under section 489.705 for dissolving a limited 28   liability company, the secretary of state shall serve the 29   company with written notice of such determination under section 30   489.116.   31   2. If the limited liability company does not correct 32   each ground for dissolution or demonstrate to the reasonable 33   satisfaction of the secretary of state that each ground 34   determined by the secretary of state does not exist within 35   -90-   HF 655 (4) 90   da/jh/md   90/ 159                   

  H.F. 655   sixty days after service of the notice under section 489.116, 1   the secretary of state shall administratively dissolve the 2   company by signing a certificate of dissolution that recites 3   the ground or grounds for dissolution and its effective 4   date. The secretary of state shall file the original of the 5   certificate and serve a copy on the company under section 6   489.116. 7   3. A limited liability company administratively dissolved 8   continues its existence but shall not carry on any business 9   except that necessary to wind up and liquidate its business 10   and affairs under section 489.702 and notify claimants under 11   sections 489.703 and 489.704. 12   4. The administrative dissolution of a limited liability 13   company does not terminate the authority of its registered 14   agent. 15   Sec. 64. Section 489.801, Code 2023, is amended to read as 16   follows: 17   489.801 Governing law. 18   1. Subject to sections   489.14402 and 489.14404 , the law 19   of the state or other jurisdiction under which The law of 20   the jurisdiction of formation of   a foreign limited liability 21   company is formed governs all of the following: 22   a. The internal affairs of the foreign limited liability   23   company. 24   b. The liability of a member as member and a manager as 25   manager for the debts, obligations, or other liabilities a 26   debt, obligation, or other liability of the foreign limited 27   liability company. 28   c. The liability of a series of the foreign limited 29   liability company.   30   2. A foreign limited liability company shall not be denied 31   a certificate of authority by reason of any difference between   32   the law of the jurisdiction under which the company is formed 33   is not precluded from registering to do business in this state   34   because of any difference between the law of the foreign 35   -91-   HF 655 (4) 90   da/jh/md   91/ 159                           

  H.F. 655   limited liability companys jurisdiction of formation and the 1   law of this state. 2   3. A certificate of authority does not authorize a   3   foreign limited liability company to engage in any business 4   or exercise any power that a limited liability company shall   5   not   Registration of a foreign limited liability company to do 6   business in this state does not permit the foreign limited 7   liability company to engage in any business or affairs or 8   exercise any power that a limited liability company cannot   9   lawfully engage in or exercise in this state. 10   Sec. 65. NEW SECTION   . 489.805A Special litigation 11   committee. 12   1. If a limited liability company is named as or made a 13   party in a derivative proceeding, the company may appoint a 14   special litigation committee to investigate the claims asserted 15   in the proceeding and determine whether pursuing the action is 16   in the best interests of the company. If the company appoints 17   a special litigation committee, on motion by the committee made 18   in the name of the company, except for good cause shown, the 19   court shall stay discovery for the time reasonably necessary 20   to permit the committee to make its investigation. This 21   subsection does not prevent the court from doing any of the 22   following: 23   a. Enforcing a persons right to information under section 24   489.410. 25   b. Granting extraordinary relief in the form of a temporary 26   restraining order or preliminary injunction. 27   2. A special litigation committee must be composed of one 28   or more disinterested and independent individuals, who may be 29   members. 30   3. A special litigation committee may be appointed as 31   follows: 32   a. In a member-managed limited liability company, any of the 33   following: 34   (1) By the affirmative vote or consent of a majority of the 35   -92-   HF 655 (4) 90   da/jh/md   92/ 159             

  H.F. 655   members not named as parties in the proceeding. 1   (2) If all members are named as parties in the proceeding, 2   by a majority of the members named as defendants. 3   b. In a manager-managed limited liability company, any of 4   the following: 5   (1) By a majority of the managers not named as parties in 6   the proceeding. 7   (2) If all managers are named as parties in the proceeding, 8   by a majority of the managers named as defendants. 9   4. After appropriate investigation, a special litigation 10   committee may determine that it is in the best interests of the 11   limited liability company that the proceeding comply with any 12   of the following: 13   a. Continue under the control of the plaintiff. 14   b. Continue under the control of the committee. 15   c. Be settled on terms approved by the committee. 16   d. Be dismissed. 17   5. After making a determination under subsection 4, a 18   special litigation committee shall file with the court a 19   statement of its determination and its report supporting its 20   determination and shall serve each party with a copy of the 21   determination and report. The court shall determine whether 22   the members of the committee were disinterested and independent 23   and whether the committee conducted its investigation and made 24   its recommendation in good faith, independently, and with 25   reasonable care, with the committee having the burden of proof. 26   If the court finds that the members of the committee were   27   disinterested and independent and that the committee acted in 28   good faith, independently, and with reasonable care, the court 29   shall enforce the determination of the committee. Otherwise, 30   the court shall dissolve the stay of discovery entered under 31   subsection 1 and allow the action to continue under the control 32   of the plaintiff. 33   Sec. 66. Section 489.809, Code 2023, is amended to read as 34   follows:   35   -93-   HF 655 (4) 90   da/jh/md   93/ 159  

  H.F. 655   489.809 Action by attorney general. 1   The attorney general may maintain an action to enjoin a 2   foreign limited liability company from transacting   doing 3   business in this state in violation of this article chapter . 4   Sec. 67. Section 489.902, Code 2023, is amended to read as 5   follows: 6   489.902 Derivative action. 7   A member may maintain a derivative action to enforce a right 8   of a limited liability company as follows:   9   1. The A member may maintain a derivative action to enforce 10   a right of a limited liability company, if the member   first 11   makes a demand on the other members in a member-managed limited 12   liability company, or the managers of a manager-managed limited 13   liability company, requesting that they cause the company to 14   bring an action to enforce the right, and the managers or other 15   members do not bring the action within ninety days from the 16   date the demand was made unless the member has earlier been 17   notified that the demand has been rejected by the company 18   or unless irreparable injury to the company would result by 19   waiting for the expiration of the ninety-day period. 20   2.   A demand under subsection 1 would be futile. 21   Sec. 68. Section 489.904, Code 2023, is amended to read as 22   follows: 23   489.904 Pleading. 24   In a derivative action under section 489.902 , the complaint 25   must state with particularity any of the following: 26   1. The date and content of the plaintiffs demand and the 27   response to the demand by the managers or other members. 28   2. If a demand has not been made, the reasons a demand under   29   section 489.902, subsection 1   , would be Why demand should be 30   excused as futile. 31   Sec. 69. NEW SECTION   . 489.905 Activities not constituting 32   doing business in this state. 33   1. Activities of a foreign limited liability company that 34   do not constitute doing business in this state for purposes of 35   -94-   HF 655 (4) 90   da/jh/md   94/ 159                       

  H.F. 655   this subchapter include all of the following: 1   a. Maintaining, defending, mediating, arbitrating, or 2   settling a proceeding. 3   b. Carrying on any activity concerning the internal affairs 4   of the foreign limited liability company, including holding 5   meetings of its members or managers. 6   c. Maintaining accounts in financial institutions. 7   d. Maintaining offices or agencies for the transfer, 8   exchange, and registration of securities of the foreign limited 9   liability company or maintaining trustees or depositories with 10   respect to those securities. 11   e. Selling through independent contractors. 12   f. Soliciting or obtaining orders by any means if the 13   orders require acceptance outside this state before they become 14   contracts. 15   g. Creating or acquiring indebtedness, mortgages, or 16   security interests in property. 17   h. Securing or collecting debts or enforcing mortgages or 18   other security interests in property securing the debts and 19   holding, protecting, or maintaining property so acquired. 20   i. Conducting an isolated transaction that is not in the 21   course of similar transactions. 22   j. Owning, protecting, and maintaining property. 23   k. Doing business in interstate commerce. 24   2. This section does not apply in determining the contacts 25   or activities that may subject a foreign limited liability 26   company to service of process, taxation, or regulation under 27   the laws of this state other than this chapter. 28   Sec. 70. Section 489.906, Code 2023, is amended to read as 29   follows:   30   489.906 Proceeds and expenses. 31   1. Except as otherwise provided in subsection 2 , all of the 32   following apply: 33   a. Any proceeds or other benefits of a derivative action 34   under   section 489.902 , whether by judgment, compromise, or 35   -95-   HF 655 (4) 90   da/jh/md   95/ 159    

  H.F. 655   settlement, belong to the limited liability company and not to 1   the plaintiff. 2   b. If the plaintiff receives any proceeds, the plaintiff 3   shall remit them immediately to the limited liability   company. 4   2. If a derivative action under   section 489.902 is 5   successful in whole or in part, the court may award the 6   plaintiff reasonable expenses, including reasonable attorney 7   fees and costs, from the recovery of the limited liability 8   company. 9   3.   A derivative action on behalf of a limited liability 10   company shall not be voluntarily dismissed or settled without   11   the courts approval. 12   Sec. 71. NEW SECTION . 489.906A Noncomplying name of foreign 13   limited liability company. 14   1. A foreign limited liability company whose name does 15   not comply with section 489.108 shall not register to do 16   business in this state until it adopts, for the purpose of 17   doing business in this state, an alternate name that complies 18   with section 489.108 by filing a foreign registration statement 19   under section 489.911B, or if applicable, a transfer of 20   registration statement under section 489.910, setting forth 21   that alternate name. After registering to do business in this 22   state with an alternate name, a foreign limited liability 23   company shall do business in this state under any of the 24   following: 25   a. The alternate name. 26   b. The foreign limited liability companys name, with the 27   addition of its jurisdiction of formation. 28   2. If a registered foreign limited liability company 29   changes its name after registration to a name that does not 30   comply with section 489.108, it shall not do business in this 31   state until it complies with subsection 1 by amending its 32   registration statement to adopt an alternate name that complies 33   with section 489.108.   34   Sec. 72. NEW SECTION   . 489.907 Withdrawal of registration of 35   -96-   HF 655 (4) 90   da/jh/md   96/ 159            

  H.F. 655   registered foreign limited liability company. 1   1. A registered foreign limited liability company may 2   withdraw its registration by delivering a statement of 3   withdrawal to the secretary of state for filing. The statement 4   of withdrawal must be signed by the foreign limited liability 5   company and state all of the following: 6   a. The name of the foreign limited liability company and its 7   jurisdiction of formation. 8   b. That the foreign limited liability company is not doing 9   business in this state and that it withdraws its registration 10   to do business in this state. 11   c. That the foreign limited liability company revokes the 12   authority of its registered agent in this state. 13   d. An address to which process on the foreign limited 14   liability company may be sent by the secretary of state under 15   section 489.116, subsection 3. 16   2. After the withdrawal of the registration of a foreign 17   limited liability company, service of process in any proceeding 18   based on a cause of action arising during the time the entity 19   was registered to do business in this state may be made as 20   provided in section 489.116. 21   Sec. 73. NEW SECTION   . 489.908 Deemed withdrawal upon 22   domestication or conversion to certain domestic entities. 23   A registered foreign limited liability company that 24   domesticates to a domestic limited liability company or 25   converts to a domestic business corporation or domestic 26   nonprofit corporation or any type of domestic filing entity or 27   to a domestic limited liability partnership is deemed to have 28   withdrawn its registration on the effectiveness of such event. 29   Sec. 74. NEW SECTION   . 489.909 Withdrawal upon dissolution 30   or conversion to certain nonfiling entities. 31   1. A registered foreign limited liability company that 32   has dissolved and completed winding up or has converted to 33   a domestic or foreign nonfiling entity other than a limited 34   liability partnership shall deliver to the secretary of state 35   -97-   HF 655 (4) 90   da/jh/md   97/ 159    

  H.F. 655   for filing a statement of withdrawal. The statement must be 1   signed by the dissolved foreign limited liability company or 2   the converted domestic or foreign nonfiling entity and state: 3   a. In the case of a foreign limited liability company that 4   has completed winding up all of the following: 5   (1) Its name and jurisdiction of formation. 6   (2) That the foreign limited liability company withdraws 7   its registration to do business in this state and revokes the 8   authority of its registered agent to accept service on its 9   behalf. 10   (3) An address to which process on the foreign limited 11   liability company may be sent by the secretary of state under 12   section 489.116, subsection 3. 13   b. In the case of a foreign limited liability company that 14   has converted to a domestic or foreign nonfiling entity other 15   than a limited liability partnership, all of the following: 16   (1) The name of the converting foreign limited liability 17   company and its jurisdiction of formation. 18   (2) The type of the nonfiling entity to which it has 19   converted and its name and jurisdiction of formation. 20   (3) That it withdraws its registration to do business in 21   this state and revokes the authority of its registered agent to 22   accept service on its behalf. 23   (4) An address to which process on the foreign limited 24   liability company may be sent by the secretary of state under 25   section 489.116, subsection 3. 26   2. After the withdrawal of the registration of a foreign 27   limited liability company, service of process in any proceeding 28   based on a cause of action arising during the time the entity 29   was registered to do business in this state may be made as 30   provided in section 489.116. 31   Sec. 75. NEW SECTION   . 489.910 Transfer of registration. 32   1. If a registered foreign limited liability company merges 33   into a nonregistered foreign entity or converts to a foreign 34   entity required to register with the secretary of state to do 35   -98-   HF 655 (4) 90   da/jh/md   98/ 159   

  H.F. 655   business in this state, the foreign entity shall deliver to 1   the secretary of state for filing a transfer of registration 2   statement. The transfer of registration statement must be 3   signed by the surviving or converted foreign entity and state 4   all of the following: 5   a. The name of the registered foreign limited liability 6   company and its jurisdiction of formation before the merger or 7   conversion. 8   b. The name and type of the surviving or converted foreign 9   entity and its jurisdiction of formation after the merger 10   or conversion and, if the name does not comply with section 11   489.108, an alternate name adopted pursuant to section 12   489.906A. 13   c. All of the following information regarding the surviving 14   or converted foreign entity after the merger or conversion: 15   (1) The street and mailing addresses of the principal office 16   of the foreign entity and, if the law of the foreign entitys 17   jurisdiction of formation requires it to maintain an office in 18   that jurisdiction, the street and mailing addresses of that 19   office. 20   (2) The street and mailing addresses of the place of 21   business of the foreign entitys registered agent in this state 22   and the name of its registered agent. 23   2. On the effective date of a transfer of registration 24   statement as determined in accordance with section 489.207, 25   the registration of the registered foreign limited liability 26   company to do business in this state is transferred without 27   interruption to the foreign entity into which it has merged or 28   to which it has been converted. 29   Sec. 76. NEW SECTION   . 489.911 Administrative termination of 30   registration. 31   1. The secretary of state may terminate the registration of 32   a registered foreign limited liability company in the manner 33   provided in subsections 2 and 3, if any of the following 34   applies: 35   -99-   HF 655 (4) 90   da/jh/md   99/ 159   

  H.F. 655   a. The foreign limited liability company does not pay within 1   sixty days after they are due any fees, taxes, interest, or 2   penalties imposed by this chapter or other laws of this state. 3   b. The foreign limited liability company does not deliver 4   its biennial report to the secretary of state within sixty days 5   after it is due. 6   c. The foreign limited liability company is without a 7   registered agent or its registered agent has no place of 8   business in this state for sixty days or more. 9   d. The secretary of state has not been notified within sixty 10   days that the foreign limited liability companys registered 11   agent or the registered agents place of business has been 12   changed, that its registered agent has resigned, or that its 13   registered office has been discontinued. 14   2. The secretary of state may terminate the registration of 15   a registered foreign limited liability company by doing all of 16   the following: 17   a. Filing a certificate of termination. 18   b. Delivering a copy of the certificate of termination 19   to the foreign companys registered agent or, if the foreign 20   company does not have a registered agent, to the foreign 21   companys principal office. 22   3. The certificate of termination must state all of the 23   following: 24   a. The effective date of the termination, which must be 25   not less than sixty days after the secretary of state delivers 26   the copy of the certificate of termination as prescribed in 27   subsection 2, paragraph b . 28   b. The grounds for termination under subsection 1. 29   4. The registration of a registered foreign limited 30   liability company to do business in this state ceases on 31   the effective date of the termination as set forth in the 32   certificate of termination, unless before that date the   33   foreign company cures each ground for termination stated in the 34   certificate of termination. If the foreign company cures each 35   -100-   HF 655 (4) 90   da/jh/md   100/ 159  

  H.F. 655   ground, the secretary of state shall file a statement that the 1   certificate of termination is withdrawn. 2   5. After the effective date of the termination as set forth 3   in the certificate of termination, service of process in any 4   proceeding based on a cause of action arising during the time 5   the entity was registered to do business in this state may be 6   made as provided in section 489.116. 7   Sec. 77. NEW SECTION   . 489.911A Registration to do business 8   in this state. 9   1. A foreign limited liability company shall not do business 10   in this state until it registers with the secretary of state 11   under this chapter. 12   2. A foreign limited liability company doing business in 13   this state shall not maintain a proceeding in any court of this 14   state until it is registered to do business in this state. 15   3. The failure of a foreign limited liability company 16   to register to do business in this state does not impair 17   the validity of a contract or act of the foreign company or 18   preclude it from defending a proceeding in this state. 19   4. A limitation on the liability of a member or manager 20   of a foreign limited liability company is not waived solely 21   because the foreign company does business in this state without 22   registering. 23   5. Section 489.801, subsection 1, applies even if a 24   foreign limited liability company fails to register under this 25   subchapter. 26   Sec. 78. NEW SECTION   . 489.911B Foreign registration 27   statement.   28   1. To register to do business in this state, a foreign 29   limited liability company shall deliver a foreign registration 30   statement to the secretary of state for filing. The 31   registration statement must be signed by the foreign company 32   and state all of the following: 33   a. The name of the foreign limited liability company and, 34   if the name does not comply with section 489.108, an alternate 35   -101-   HF 655 (4) 90   da/jh/md   101/ 159    

  H.F. 655   name as required by section 489.906A. 1   b. The foreign limited liability companys jurisdiction of 2   formation. 3   c. The street and mailing addresses of the foreign limited 4   liability companys principal office and, if the law of the 5   foreign companys jurisdiction of formation requires the 6   foreign company to maintain an office in that jurisdiction, the 7   street and mailing addresses of that required office. 8   d. The street and mailing addresses of the place of business 9   of the foreign limited liability companys registered agent in 10   this state and the name of its registered agent. 11   2. The foreign limited liability company shall deliver the 12   completed foreign registration statement to the secretary of 13   state, and also deliver to the secretary of state a certificate 14   of existence or a document of similar import duly authenticated 15   by the secretary of state or other official having custody of 16   corporate records in the state or country under whose law it is 17   incorporated which is dated no earlier than ninety days prior 18   to the date the application is filed by the secretary of state. 19   Sec. 79. NEW SECTION   . 489.911C Amendment of foreign 20   registration statement. 21   A registered foreign limited liability company shall sign 22   and deliver to the secretary of state for filing an amendment 23   to its foreign registration statement if there is a change in 24   any of the following: 25   1. Its name or alternate name. 26   2. Its jurisdiction of formation, unless its registration 27   is deemed to have been withdrawn under section 489.908 or   28   transferred under section 489.910.   29   3. An address required by section 489.911B, subsection 1, 30   paragraph c . 31   4. The information required by section 489.911B, subsection 32   1, paragraph d . 33   Sec. 80. Section 489.1001, Code 2023, is amended by striking 34   the section and inserting in lieu thereof the following: 35   -102-   HF 655 (4) 90   da/jh/md   102/ 159   

  H.F. 655   489.1001 Definitions. 1   As used in this subchapter, unless the context otherwise 2   requires: 3   1. Acquired entity means the entity, all of one or more 4   classes or series of interests of which are acquired in an 5   interest exchange. 6   2. Acquiring entity means the entity that acquires all 7   of one or more classes or series of interests of the acquired 8   entity in an interest exchange. 9   3. Conversion means a transaction authorized by part 4. 10   4. Converted entity means the converting entity as it 11   continues in existence after a conversion. 12   5. Converting entity means the domestic entity that 13   approves a plan of conversion pursuant to section 489.1043 or 14   the foreign entity that approves a conversion pursuant to the 15   law of its jurisdiction of formation. 16   6. Distributional interest means the right under an 17   unincorporated entitys organic law and organic rules to 18   receive distributions from the entity. 19   7. Domestic , with respect to an entity, means governed as 20   to its internal affairs by the law of this state. 21   8. Domesticated limited liability company means the 22   domesticating limited liability company as it continues in 23   existence after a domestication. 24   9. Domesticating limited liability company means the 25   domestic limited liability company that approves a plan of 26   domestication pursuant to section 489.1053 or the foreign 27   limited liability company that approves a domestication 28   pursuant to the law of its jurisdiction of formation. 29   10. Domestication means a transaction authorized by part 30   5.   31   11. a. Entity means any of the following: 32   (1) A business corporation. 33   (2) A nonprofit corporation. 34   (3) A general partnership, including a limited liability 35   -103-   HF 655 (4) 90   da/jh/md   103/ 159  

  H.F. 655   partnership. 1   (4) A limited partnership, including a limited liability 2   limited partnership. 3   (5) A limited liability company. 4   (6) A domestic cooperative. 5   (7) An unincorporated nonprofit association. 6   (8) A statutory trust, business trust, or common-law 7   business trust. 8   (9) Any other person that has any of the following: 9   (a) A legal existence separate from any interest holder of 10   that person. 11   (b) The power to acquire an interest in real property in 12   its own name. 13   b. Entity does not include any of the following: 14   (1) An individual. 15   (2) A trust with a predominantly donative purpose or a 16   charitable trust. 17   (3) An association or relationship that is not an entity 18   listed in paragraph a and is not a partnership under the 19   rules stated in section 486A.202, subsection 3, or a similar 20   provision of the law of another jurisdiction. 21   (4) A decedents estate. 22   (5) A government or a governmental subdivision, agency, or 23   instrumentality. 24   12. Filing entity means an entity whose formation requires 25   the filing of a public organic record. The term does not 26   include a limited liability partnership. 27   13. Foreign , with respect to an entity, means an 28   entity governed as to its internal affairs by the law of a 29   jurisdiction other than this state. 30   14. Governance interest means a right under the organic 31   law or organic rules of an unincorporated entity, other than as 32   a governor, agent, assignee, or proxy, to any of the following: 33   a. Receive or demand access to information concerning, or 34   the books and records of, the entity. 35   -104-   HF 655 (4) 90   da/jh/md   104/ 159  

  H.F. 655   b. Vote for or consent to the election of the governors of 1   the entity. 2   c. Receive notice of or vote on or consent to an issue 3   involving the internal affairs of the entity. 4   15. Governor means any of the following: 5   a. A director of a business corporation. 6   b. A director or trustee of a nonprofit corporation. 7   c. A general partner of a general partnership. 8   d. A general partner of a limited partnership. 9   e. A manager of a manager-managed limited liability company. 10   f. A member of a member-managed limited liability company. 11   g. A director of a domestic cooperative. 12   h. A manager of an unincorporated nonprofit association. 13   i. A trustee of a statutory trust, business trust, or 14   common-law business trust. 15   j. Any other person under whose authority the powers of an 16   entity are exercised and under whose direction the activities 17   and affairs of the entity are managed pursuant to the organic 18   law and organic rules of the entity. 19   16. Interest means any of the following: 20   a. A share in a business corporation. 21   b. A membership in a nonprofit corporation. 22   c. A partnership interest in a general partnership. 23   d. A partnership interest in a limited partnership. 24   e. A membership interest in a limited liability company. 25   f. A share in a domestic cooperative. 26   g. A membership in an unincorporated nonprofit association. 27   h. A beneficial interest in a statutory trust, business 28   trust, or common-law business trust. 29   i. A governance interest or distributional interest in any 30   other type of unincorporated entity. 31   17. Interest exchange means a transaction authorized by 32   part 3. 33   18. Interest holder means any of the following: 34   a. A shareholder of a business corporation. 35   -105-   HF 655 (4) 90   da/jh/md   105/ 159  

  H.F. 655   b. A member of a nonprofit corporation. 1   c. A general partner of a general partnership. 2   d. A general partner of a limited partnership. 3   e. A limited partner of a limited partnership. 4   f. A member of a limited liability company. 5   g. a shareholder of a domestic cooperative. 6   h. A member of an unincorporated nonprofit association. 7   i. A beneficiary or beneficial owner of a statutory trust, 8   business trust, or common-law business trust. 9   j. Any other direct holder of an interest. 10   19. Interest holder liability means any of the following: 11   a. Personal liability for a liability of an entity which is 12   imposed on a person due to any of the following: 13   (1) Solely by reason of the status of the person as an 14   interest holder. 15   (2) By the organic rules of the entity which make one or 16   more specified interest holders or categories of interest 17   holders liable in their capacity as interest holders for all or 18   specified liabilities of the entity. 19   b. An obligation of an interest holder under the organic 20   rules of an entity to contribute to the entity. 21   20. Merger means a transaction authorized by part 2. 22   21. Merging entity means an entity that is a party to 23   a merger and exists immediately before the merger becomes 24   effective. 25   22. Organic law means the law of an entitys jurisdiction 26   of formation governing the internal affairs of the entity. 27   23. Organic rules means the public organic record and 28   private organic rules of an entity. 29   24. Plan means a plan of merger, plan of interest 30   exchange, plan of conversion, or plan of domestication. 31   25. Plan of conversion means a plan under section 32   489.1042.   33   26. Plan of domestication means a plan under section 34   489.1052.   35   -106-   HF 655 (4) 90   da/jh/md   106/ 159  

  H.F. 655   27. Plan of interest exchange means a plan under section 1   489.1032. 2   28. Plan of merger means a plan under section 489.1022. 3   29. a. Private organic rules means the rules, whether or 4   not in a record, that govern the internal affairs of an entity, 5   are binding on all its interest holders, and are not part of 6   its public organic record, if any. 7   b. Private organic rules includes all of the following: 8   (1) The bylaws of a business corporation. 9   (2) The bylaws of a nonprofit corporation. 10   (3) The partnership agreement of a general partnership. 11   (4) The partnership agreement of a limited partnership. 12   (5) The operating agreement of a limited liability company. 13   (6) The bylaws of a domestic cooperative. 14   (7) The governing principles of an unincorporated nonprofit 15   association. 16   (8) The trust instrument of a statutory trust or similar 17   rules of a business trust or common-law business trust. 18   30. Protected agreement means any of the following: 19   a. A record evidencing indebtedness and any related 20   agreement in effect on January 1, 2009. 21   b. An agreement that is binding on an entity on January 1, 22   2009. 23   c. The organic rules of an entity in effect on January 1, 24   2009. 25   d. An agreement that is binding on any of the governors or 26   interest holders of an entity on January 1, 2009. 27   31. a. Public organic record means the record the filing 28   of which by the secretary of state is required to form an 29   entity and any amendment to or restatement of that record. 30   b. Public organic record includes any of the following: 31   (1) The articles of incorporation of a business 32   corporation. 33   (2) The articles of incorporation of a nonprofit 34   corporation. 35   -107-   HF 655 (4) 90   da/jh/md   107/ 159  

  H.F. 655   (3) The certificate of limited partnership of a limited 1   partnership. 2   (4) The certificate of organization of a limited liability 3   company. 4   (5) The articles of incorporation of a domestic 5   cooperative. 6   (6) The certificate of trust of a statutory trust or similar 7   record of a business trust. 8   32. Registered foreign entity means a foreign entity that 9   is registered to do business in this state pursuant to a record 10   filed by the secretary of state. 11   33. Statement of conversion means a statement under 12   section 489.1045. 13   34. Statement of domestication means a statement under 14   section 489.1055. 15   35. Statement of interest exchange means a statement under 16   section 489.1035. 17   36. Statement of merger means a statement under section 18   489.1025. 19   37. Surviving entity means the entity that continues in 20   existence after or is created by a merger. 21   38. Type of entity means a generic form of entity that is 22   any of the following: 23   a. Recognized at common law. 24   b. Formed under an organic law, whether or not some entities 25   formed under that organic law are subject to provisions of that 26   law that create different categories of the form of entity. 27   Sec. 81. Section 489.1002, Code 2023, is amended by striking 28   the section and inserting in lieu thereof the following: 29   489.1002 Relationship of subchapter to other laws. 30   1. This subchapter does not authorize an act prohibited by, 31   and does not affect the application or requirements of, law 32   other than this subchapter. 33   2. A transaction effected under this subchapter shall 34   not create or impair a right, duty, or obligation of a 35   -108-   HF 655 (4) 90   da/jh/md   108/ 159  

  H.F. 655   person under the statutory law of this state other than this 1   subchapter relating to a change in control, takeover, business 2   combination, control-share acquisition, or similar transaction 3   involving a domestic merging, acquired, converting, or 4   domesticating business corporation unless any of the following 5   applies: 6   a. If the corporation does not survive the transaction, the 7   transaction satisfies any requirements of the law. 8   b. If the corporation survives the transaction, the approval 9   of the plan is by a vote of the shareholders or directors which 10   would be sufficient to create or impair the right, duty, or 11   obligation directly under the law. 12   Sec. 82. Section 489.1003, Code 2023, is amended by striking 13   the section and inserting in lieu thereof the following: 14   489.1003 Required notice or approval. 15   1. A domestic or foreign entity that is required to give 16   notice to, or obtain the approval of, a governmental agency 17   or officer of this state to be a party to a merger must give 18   the notice or obtain the approval to be a party to an interest 19   exchange, conversion, or domestication. 20   2. Property held for a charitable purpose under the law of 21   this state by a domestic or foreign entity immediately before 22   a transaction under this subchapter becomes effective may be 23   diverted from the objects for which it was donated, granted, 24   devised, or otherwise transferred only to the extent a public 25   benefit corporation is able to divert from such objects under 26   chapter 504. 27   3. A bequest, devise, gift, grant, or promise contained 28   in a will or other instrument of donation, subscription, or 29   conveyance which is made to a merging entity that is not the 30   surviving entity and which takes effect or remains payable 31   after the merger inures to the surviving entity. 32   4. A trust obligation that would govern property if 33   transferred to a nonsurviving entity applies to property that 34   is transferred to the surviving entity under this section. 35   -109-   HF 655 (4) 90   da/jh/md   109/ 159  

  H.F. 655   Sec. 83. Section 489.1004, Code 2023, is amended by striking 1   the section and inserting in lieu thereof the following: 2   489.1004 Nonexclusivity. 3   The fact that a transaction under this subchapter produces 4   a certain result does not preclude the same result from being 5   accomplished in any other manner permitted by law other than 6   this subchapter. 7   Sec. 84. Section 489.1005, Code 2023, is amended by striking 8   the section and inserting in lieu thereof the following: 9   489.1005 Reference to external facts. 10   1. A plan may refer to facts ascertainable outside the plan 11   if the manner in which the facts will operate upon the plan is 12   specified in the plan. The facts may include the occurrence of 13   an event or a determination or action by a person, whether or 14   not the event, determination, or action is within the control 15   of a party to the transaction. 16   2. The following provisions of a record delivered to the 17   secretary of state for filing under this chapter or a plan 18   delivered for filing in lieu of a statement shall not be made 19   dependent on facts outside the record or plan: 20   a. The name and address of any person. 21   b. The registered office of any entity. 22   c. The registered agent of any entity. 23   d. The number of authorized interests and designation of 24   each class or series of interests. 25   e. The effective date of a record delivered to the secretary 26   of state for filing. 27   f. Any required statement in a record delivered to the 28   secretary of state for filing of the date on which the 29   underlying transaction was approved or the manner in which that 30   approval was given. 31   Sec. 85. Section 489.1006, Code 2023, is amended by striking 32   the section and inserting in lieu thereof the following: 33   489.1006 Appraisal rights. 34   An interest holder of a domestic merging, acquired, 35   -110-   HF 655 (4) 90   da/jh/md   110/ 159  

  H.F. 655   converting, or domesticating limited liability company is 1   entitled to contractual appraisal rights in connection with a 2   transaction under this subchapter to the extent provided in any 3   of the following: 4   1. The operating agreement. 5   2. The plan. 6   Sec. 86. Section 489.1007, Code 2023, is amended by striking 7   the section and inserting in lieu thereof the following: 8   489.1007 Excluded entities and transactions. 9   This subchapter shall not be used to effect a transaction 10   involving a bank, insurance company, or public utility where 11   any chapter governing the regulation of such entity does not 12   permit the transaction. 13   Sec. 87. NEW SECTION   . 489.1021 Merger authorized. 14   1. By complying with this part, all of the following apply: 15   a. One or more domestic limited liability companies may 16   merge with one or more domestic or foreign entities into a 17   domestic or foreign surviving entity. 18   b. Two or more foreign entities may merge into a domestic 19   limited liability company. 20   2. By complying with the provisions of this part applicable 21   to foreign entities, a foreign entity may be a party to a 22   merger under this part or may be the surviving entity in such 23   a merger if the merger is authorized by the law of the foreign 24   entitys jurisdiction of formation. 25   Sec. 88. NEW SECTION   . 489.1022 Plan of merger. 26   1. A domestic limited liability company may become a party 27   to a merger under this part by approving a plan of merger. The 28   plan must be in a record and contain all of the following: 29   a. As to each merging entity, its name, jurisdiction of 30   formation, and type of entity. 31   b. If the surviving entity is to be created in the merger, a 32   statement to that effect and the entitys name, jurisdiction of 33   formation, and type of entity. 34   c. The manner of converting the interests in each party 35   -111-   HF 655 (4) 90   da/jh/md   111/ 159    

  H.F. 655   to the merger into interests, securities, obligations, money, 1   other property, rights to acquire interests or securities, or 2   any combination of the foregoing. 3   d. If the surviving entity exists before the merger, any 4   proposed amendments to all of the following: 5   (1) Its public organic record, if any. 6   (2) Its private organic rules that are, or are proposed to 7   be, in a record. 8   e. If the surviving entity is to be created in the merger, 9   all of the following: 10   (1) Its proposed public organic record, if any. 11   (2) The full text of its private organic rules that are 12   proposed to be in a record. 13   f. The other terms and conditions of the merger. 14   g. Any other provision required by the law of a merging 15   entitys jurisdiction of formation or the organic rules of a 16   merging entity. 17   2. In addition to the requirements of subsection 1, a plan 18   of merger may contain any other provision not prohibited by 19   law. 20   Sec. 89. NEW SECTION   . 489.1023 Approval of merger. 21   1. A plan of merger is not effective unless it has been 22   approved according to all of the following: 23   a. By a domestic merging limited liability company, by all 24   the members of the company entitled to vote on or consent to 25   any matter. 26   b. In a record, by each member of a domestic merging limited 27   liability company which will have interest holder liability for 28   debts, obligations, and other liabilities that are incurred 29   after the merger becomes effective, unless all of the following 30   apply: 31   (1) The operating agreement of the limited liability 32   company provides in a record for the approval of a merger in 33   which some or all of its members become subject to interest 34   holder liability by the affirmative vote or consent of fewer 35   -112-   HF 655 (4) 90   da/jh/md   112/ 159   

  H.F. 655   than all the members. 1   (2) The member consented in a record to or voted for that 2   provision of the operating agreement or became a member after 3   the adoption of that provision. 4   2. A merger involving a domestic merging entity that is not 5   a limited liability company is not effective unless the merger 6   is approved by that entity in accordance with its organic law. 7   3. A merger involving a foreign merging entity is not 8   effective unless the merger is approved by the foreign entity 9   in accordance with the law of the foreign entitys jurisdiction 10   of formation. 11   Sec. 90. NEW SECTION   . 489.1024 Amendment or abandonment 12   of plan of merger. 13   1. A plan of merger may be amended only with the consent 14   of each party to the plan, except as otherwise provided in the 15   plan. 16   2. A domestic merging limited liability company may approve 17   an amendment of a plan of merger according to any of the 18   following: 19   a. In the same manner as the plan was approved, if the plan 20   does not provide for the manner in which it may be amended. 21   b. By its managers or members in the manner provided in the 22   plan, but a member that was entitled to vote on or consent to 23   approval of the merger is entitled to vote on or consent to any 24   amendment of the plan that will change any of the following: 25   (1) The amount or kind of interests, securities, 26   obligations, money, other property, rights to acquire interests 27   or securities, or any combination of the foregoing, to be 28   received by the interest holders of any party to the plan. 29   (2) The public organic record, if any, or private 30   organic rules of the surviving entity that will be in effect 31   immediately after the merger becomes effective, except for 32   changes that do not require approval of the interest holders of 33   the surviving entity under its organic law or organic rules. 34   (3) Any other terms or conditions of the plan, if the change 35   -113-   HF 655 (4) 90   da/jh/md   113/ 159   

  H.F. 655   would adversely affect the member in any material respect. 1   3. After a plan of merger has been approved and before 2   a statement of merger becomes effective, the plan may be 3   abandoned as provided in the plan. Unless prohibited by the 4   plan, a domestic merging limited liability company may abandon 5   the plan in the same manner as the plan was approved. 6   4. If a plan of merger is abandoned after a statement of 7   merger has been delivered to the secretary of state for filing 8   and before the statement becomes effective, a statement of 9   abandonment, signed by a party to the plan, must be delivered 10   to the secretary of state for filing before the statement of 11   merger becomes effective. The statement of abandonment takes 12   effect on filing, and the merger is abandoned and does not 13   become effective. The statement of abandonment must contain 14   all of the following: 15   a. The name of each party to the plan of merger. 16   b. The date on which the statement of merger was filed by 17   the secretary of state. 18   c. A statement that the merger has been abandoned in 19   accordance with this section. 20   Sec. 91. NEW SECTION   . 489.1025 Statement of merger  21   effective date of merger. 22   1. A statement of merger must be signed by each merging 23   entity and delivered to the secretary of state for filing. 24   2. A statement of merger must contain all of the following: 25   a. The name, jurisdiction of formation, and type of entity 26   of each merging entity that is not the surviving entity. 27   b. The name, jurisdiction of formation, and type of entity 28   of the surviving entity, and if the surviving entity is a 29   foreign entity, the street and mailing addresses of an office 30   of the surviving entity that the secretary of state may use for 31   purposes of section 489.1026, subsection 5. 32   c. A statement that the merger was approved by each domestic 33   merging entity, if any, in accordance with this part and by 34   each foreign merging entity, if any, in accordance with the law 35   -114-   HF 655 (4) 90   da/jh/md   114/ 159   

  H.F. 655   of its jurisdiction of formation. 1   d. If the surviving entity exists before the merger and is 2   a domestic filing entity, any amendment to its public organic 3   record approved as part of the plan of merger. 4   e. If the surviving entity is created by the merger and 5   is a domestic filing entity, its public organic record, as an 6   attachment. 7   f. If the surviving entity is created by the merger and 8   is a domestic limited liability partnership, its statement of 9   qualification, as an attachment. 10   3. In addition to the requirements of subsection 2, a 11   statement of merger may contain any other provision not 12   prohibited by law. 13   4. If the surviving entity is a domestic entity, its public 14   organic record, if any, must satisfy the requirements of the 15   law of this state, except that the public organic record does 16   not need to be signed. 17   5. If the surviving entity is a domestic limited liability 18   company, the merger becomes effective when the statement of 19   merger is effective. In all other cases, the merger becomes 20   effective on the later of the following: 21   a. The date and time provided by the organic law of the 22   surviving entity. 23   b. When the statement is effective. 24   Sec. 92. NEW SECTION   . 489.1026 Effect of merger. 25   1. When a merger becomes effective, all of the following 26   apply: 27   a. The surviving entity continues or comes into existence. 28   b. Each merging entity that is not the surviving entity 29   ceases to exist. 30   c. All property of each merging entity vests in the 31   surviving entity without transfer, reversion, or impairment. 32   d. All debts, obligations, and other liabilities of each 33   merging entity are debts, obligations, and other liabilities 34   of the surviving entity. 35   -115-   HF 655 (4) 90   da/jh/md   115/ 159   

  H.F. 655   e. Except as otherwise provided by law or the plan of 1   merger, all the rights, privileges, immunities, powers, and 2   purposes of each merging entity vest in the surviving entity. 3   f. If the surviving entity exists before the merger, all of 4   the following apply: 5   (1) All its property continues to be vested in it without 6   transfer, reversion, or impairment. 7   (2) It remains subject to all its debts, obligations, and 8   other liabilities. 9   (3) All its rights, privileges, immunities, powers, and 10   purposes continue to be vested in it. 11   g. The name of the surviving entity may be substituted for 12   the name of any merging entity that is a party to any pending 13   action or proceeding. 14   h. If the surviving entity exists before the merger, all of 15   the following apply: 16   (1) Its public organic record, if any, is amended to the 17   extent provided in the statement of merger. 18   (2) Its private organic rules that are to be in a record, if 19   any, are amended to the extent provided in the plan of merger. 20   i. If the surviving entity is created by the merger, its 21   private organic rules are effective and all of the following 22   apply: 23   (1) If it is a filing entity, its public organic record 24   becomes effective. 25   (2) If it is a limited liability partnership, its statement 26   of qualification becomes effective. 27   j. The interests in each merging entity which are to be 28   converted in the merger are converted, and the interest holders 29   of those interests are entitled only to the rights provided to 30   them under the plan of merger and to any appraisal rights they 31   have under section 489.1006 and the merging entitys organic 32   law.   33   2. Except as otherwise provided in the organic law or 34   organic rules of a merging entity, the merger does not give 35   -116-   HF 655 (4) 90   da/jh/md   116/ 159  

  H.F. 655   rise to any rights that an interest holder, governor, or third 1   party would have upon a dissolution, liquidation, or winding up 2   of the merging entity. 3   3. When a merger becomes effective, a person that did 4   not have interest holder liability with respect to any of 5   the merging entities and becomes subject to interest holder 6   liability with respect to a domestic entity as a result of 7   the merger has interest holder liability only to the extent 8   provided by the organic law of that entity and only for those 9   debts, obligations, and other liabilities that are incurred 10   after the merger becomes effective. 11   4. When a merger becomes effective, the interest holder 12   liability of a person that ceases to hold an interest in a 13   domestic merging limited liability company with respect to 14   which the person had interest holder liability is subject to 15   the following rules: 16   a. The merger does not discharge any interest holder 17   liability under this chapter to the extent the interest holder 18   liability was incurred before the merger became effective. 19   b. The person does not have interest holder liability under 20   this chapter for any debt, obligation, or other liability that 21   is incurred after the merger becomes effective. 22   c. This chapter continues to apply to the release, 23   collection, or discharge of any interest holder liability 24   preserved under paragraph a as if the merger had not occurred. 25   d. The person has whatever rights of contribution from 26   any other person as are provided by this chapter, law other 27   than this chapter, or the operating agreement of the domestic 28   merging limited liability company with respect to any interest 29   holder liability preserved under paragraph a as if the merger 30   had not occurred. 31   5. When a merger becomes effective, a foreign entity that is 32   the surviving entity may be served with process in this state 33   for the collection and enforcement of any debts, obligations, 34   or other liabilities of a domestic merging limited liability 35   -117-   HF 655 (4) 90   da/jh/md   117/ 159  

  H.F. 655   company as provided in section 489.116. 1   6. When a merger becomes effective, the registration to do 2   business in this state of any foreign merging entity that is 3   not the surviving entity is canceled. 4   Sec. 93. NEW SECTION . 489.1031 Interest exchange 5   authorized. 6   1. By complying with this part, any of the following apply: 7   a. A domestic limited liability company may acquire all 8   of one or more classes or series of interests of another 9   domestic entity or a foreign entity in exchange for interests, 10   securities, obligations, money, other property, rights to 11   acquire interests or securities, or any combination of the 12   foregoing. 13   b. All of one or more classes or series of interests of a 14   domestic limited liability company may be acquired by another 15   domestic entity or a foreign entity in exchange for interests, 16   securities, obligations, money, other property, rights to 17   acquire interests or securities, or any combination of the 18   foregoing. 19   2. By complying with the provisions of this part applicable 20   to foreign entities, a foreign entity may be the acquiring or 21   acquired entity in an interest exchange under this part if 22   the interest exchange is authorized by the law of the foreign 23   entitys jurisdiction of formation. 24   3. If a protected agreement contains a provision that 25   applies to a merger of a domestic limited liability company but 26   does not refer to an interest exchange, the provision applies 27   to an interest exchange in which the domestic limited liability 28   company is the acquired entity as if the interest exchange were 29   a merger until the provision is amended on or after January 1, 30   2009. 31   Sec. 94. NEW SECTION   . 489.1032 Plan of interest exchange. 32   1. A domestic limited liability company may be the acquired 33   entity in an interest exchange under this part by approving a 34   plan of interest exchange. The plan must be in a record and 35   -118-   HF 655 (4) 90   da/jh/md   118/ 159    

  H.F. 655   contain all of the following: 1   a. The name of the acquired entity. 2   b. The name, jurisdiction of formation, and type of entity 3   of the acquiring entity. 4   c. The manner of converting the interests in the acquired 5   entity into interests, securities, obligations, money, other 6   property, rights to acquire interests or securities, or any 7   combination of the foregoing. 8   d. Any proposed amendments to all of the following: 9   (1) The certificate of organization of the acquired entity. 10   (2) The operating agreement of the acquired entity that are, 11   or are proposed to be, in a record. 12   e. The other terms and conditions of the interest exchange. 13   f. Any other provision required by the law of this state or 14   the operating agreement of the acquired entity. 15   2. In addition to the requirements of subsection 1, a 16   plan of interest exchange may contain any other provision not 17   prohibited by law. 18   Sec. 95. NEW SECTION   . 489.1033 Approval of interest 19   exchange. 20   1. A plan of interest exchange is not effective unless it 21   has been approved according to all of the following: 22   a. By all the members of a domestic acquired limited 23   liability company entitled to vote on or consent to any matter. 24   b. In a record, by each member of the domestic acquired 25   limited liability company that will have interest holder 26   liability for debts, obligations, and other liabilities that 27   are incurred after the interest exchange becomes effective, 28   unless all of the following apply: 29   (1) The operating agreement of the limited liability 30   company provides in a record for the approval of an interest 31   exchange or a merger in which some or all of its members become 32   subject to interest holder liability by the affirmative vote or 33   consent of fewer than all the members. 34   (2) The member consented in a record to or voted for that 35   -119-   HF 655 (4) 90   da/jh/md   119/ 159   

  H.F. 655   provision of the operating agreement or became a member after 1   the adoption of that provision. 2   2. An interest exchange involving a domestic acquired 3   entity that is not a limited liability company is not effective 4   unless it is approved by the domestic entity in accordance with 5   its organic law. 6   3. An interest exchange involving a foreign acquired entity 7   is not effective unless it is approved by the foreign entity in 8   accordance with the law of the foreign entitys jurisdiction 9   of formation. 10   4. Except as otherwise provided in its organic law or 11   organic rules, the interest holders of the acquiring entity are 12   not required to approve the interest exchange. 13   Sec. 96. NEW SECTION   . 489.1034 Amendment or abandonment 14   of plan of interest exchange. 15   1. A plan of interest exchange may be amended only with the 16   consent of each party to the plan, except as otherwise provided 17   in the plan. 18   2. A domestic acquired limited liability company may 19   approve an amendment of a plan of interest exchange according 20   to any of the following: 21   a. In the same manner as the plan was approved, if the plan 22   does not provide for the manner in which it may be amended. 23   b. By its managers or members in the manner provided in 24   the plan, but a member that was entitled to vote on or consent 25   to approval of the interest exchange is entitled to vote on or 26   consent to any amendment of the plan that will change any of 27   the following: 28   (1) The amount or kind of interests, securities, 29   obligations, money, other property, rights to acquire interests 30   or securities, or any combination of the foregoing, to be 31   received by any of the members of the acquired company under 32   the plan. 33   (2) The certificate of organization or operating agreement 34   of the acquired company that will be in effect immediately 35   -120-   HF 655 (4) 90   da/jh/md   120/ 159   

  H.F. 655   after the interest exchange becomes effective, except for 1   changes that do not require approval of the members of the 2   acquired company under this chapter or the operating agreement. 3   (3) Any other terms or conditions of the plan, if the change 4   would adversely affect the member in any material respect. 5   3. After a plan of interest exchange has been approved and 6   before a statement of interest exchange becomes effective, 7   the plan may be abandoned as provided in the plan. Unless 8   prohibited by the plan, a domestic acquired limited liability 9   company may abandon the plan in the same manner as the plan was 10   approved. 11   4. If a plan of interest exchange is abandoned after a 12   statement of interest exchange has been delivered to the 13   secretary of state for filing and before the statement becomes 14   effective, a statement of abandonment, signed by the acquired 15   limited liability company, must be delivered to the secretary 16   of state for filing before the statement of interest exchange 17   becomes effective. The statement of abandonment takes effect 18   on filing, and the interest exchange is abandoned and does not 19   become effective. The statement of abandonment must contain 20   all of the following: 21   a. The name of the acquired limited liability company. 22   b. The date on which the statement of interest exchange was 23   filed by the secretary of state. 24   c. A statement that the interest exchange has been abandoned 25   in accordance with this section. 26   Sec. 97. NEW SECTION   . 489.1035 Statement of interest 27   exchange  effective date of interest exchange. 28   1. A statement of interest exchange must be signed by a 29   domestic acquired limited liability company and delivered to 30   the secretary of state for filing. 31   2. A statement of interest exchange must contain all of the 32   following: 33   a. The name of the acquired limited liability company. 34   b. The name, jurisdiction of formation, and type of entity 35   -121-   HF 655 (4) 90   da/jh/md   121/ 159   

  H.F. 655   of the acquiring entity. 1   c. A statement that the plan of interest exchange was 2   approved by the acquired company in accordance with this part. 3   d. Any amendments to the acquired companys certificate of 4   organization approved as part of the plan of interest exchange. 5   3. In addition to the requirements of subsection 2, a 6   statement of interest exchange may contain any other provision 7   not prohibited by law. 8   4. An interest exchange becomes effective when the 9   statement of interest exchange is effective. 10   Sec. 98. NEW SECTION   . 489.1036 Effect of interest exchange. 11   1. When an interest exchange in which the acquired entity 12   is a domestic limited liability company becomes effective, all 13   of the following apply: 14   a. The interests in the acquired limited liability company 15   which are the subject of the interest exchange are converted, 16   and the members holding those interests are entitled only to 17   the rights provided to them under the plan of interest exchange 18   and to any appraisal rights they have under section 486.1006. 19   b. The acquiring entity becomes the interest holder of the 20   interests in the acquired limited liability company stated in 21   the plan of interest exchange to be acquired by the acquiring 22   entity. 23   c. The certificate of organization of the acquired limited 24   liability company is amended to the extent provided in the 25   statement of interest exchange. 26   d. The provisions of the operating agreement of the acquired 27   limited liability company that are to be in a record, if any, 28   are amended to the extent provided in the plan of interest 29   exchange. 30   2. Except as otherwise provided in the operating agreement 31   of a domestic acquired limited liability company, the interest 32   exchange does not give rise to any rights that a member, 33   manager, or third party would have upon a dissolution, 34   liquidation, or winding up of the acquired limited liability 35   -122-   HF 655 (4) 90   da/jh/md   122/ 159   

  H.F. 655   company. 1   3. When an interest exchange becomes effective, a person 2   that did not have interest holder liability with respect to 3   a domestic acquired limited liability company and becomes 4   subject to interest holder liability with respect to a domestic 5   entity as a result of the interest exchange has interest holder 6   liability only to the extent provided by the organic law of 7   the entity and only for those debts, obligations, and other 8   liabilities that are incurred after the interest exchange 9   becomes effective. 10   4. When an interest exchange becomes effective, the 11   interest holder liability of a person that ceases to hold an 12   interest in a domestic acquired limited liability company with 13   respect to which the person had interest holder liability is 14   subject to all of the following rules: 15   a. The interest exchange does not discharge any interest 16   holder liability under this chapter to the extent the interest 17   holder liability was incurred before the interest exchange 18   became effective. 19   b. The person does not have interest holder liability under 20   this chapter for any debt, obligation, or other liability that 21   is incurred after the interest exchange becomes effective. 22   c. This chapter continues to apply to the release, 23   collection, or discharge of any interest holder liability 24   preserved under paragraph a as if the interest exchange had 25   not occurred. 26   d. The person has whatever rights of contribution from 27   any other person as are provided by this chapter, law other 28   than this chapter, or the operating agreement of the acquired 29   limited liability company with respect to any interest holder 30   liability preserved under paragraph a as if the interest 31   exchange had not occurred. 32   Sec. 99. NEW SECTION   . 489.1041 Conversion authorized.   33   1. By complying with this part, a domestic limited liability 34   company may become any of the following: 35   -123-   HF 655 (4) 90   da/jh/md   123/ 159   

  H.F. 655   a. A domestic entity that is a different type of entity. 1   b. A foreign entity that is a different type of entity, if 2   the conversion is authorized by the law of the foreign entitys 3   jurisdiction of formation. 4   2. By complying with the provisions of this part applicable 5   to foreign entities, a foreign entity that is not a foreign 6   limited liability company may become a domestic limited 7   liability company if the conversion is authorized by the law of 8   the foreign entitys jurisdiction of formation. 9   3. If a protected agreement contains a provision that 10   applies to a merger of a domestic limited liability company 11   but does not refer to a conversion, the provision applies 12   to a conversion of the limited liability company as if the 13   conversion were a merger until the provision is amended on or 14   after January 1, 2009. 15   4. A domestic entity that is not a limited liability company 16   may become a domestic limited liability company if all of the 17   following apply: 18   a. The domestic converting entity complies with section 19   489.1043. 20   b. The domestic converting entity files a statement of 21   conversion in accordance with section 489.1045. 22   Sec. 100. NEW SECTION   . 489.1042 Plan of conversion. 23   1. A domestic limited liability company may convert to a 24   different type of entity under this part by approving a plan 25   of conversion. The plan must be in a record and contain all of 26   the following: 27   a. The name of the converting limited liability company. 28   b. The name, jurisdiction of formation, and type of entity 29   of the converted entity. 30   c. The manner of converting the interests in the converting 31   limited liability company into interests, securities, 32   obligations, money, other property, rights to acquire interests 33   or securities, or any combination of the foregoing. 34   d. The proposed public organic record of the converted 35   -124-   HF 655 (4) 90   da/jh/md   124/ 159   

  H.F. 655   entity if it will be a filing entity. 1   e. The full text of the private organic rules of the 2   converted entity which are proposed to be in a record. 3   f. The other terms and conditions of the conversion. 4   g. Any other provision required by the law of this state 5   or the operating agreement of the converting limited liability 6   company. 7   2. In addition to the requirements of subsection 1, a plan 8   of conversion may contain any other provision not prohibited 9   by law. 10   Sec. 101. NEW SECTION   . 489.1043 Approval of conversion. 11   1. A plan of conversion is not effective unless it has been 12   approved according to all of the following: 13   a. By a domestic converting limited liability company, by 14   all the members of the limited liability company entitled to 15   vote on or consent to any matter. 16   b. In a record, by each member of a domestic converting 17   limited liability company which will have interest holder 18   liability for debts, obligations, and other liabilities that 19   are incurred after the conversion becomes effective, unless all 20   of the following apply: 21   (1) The operating agreement of the limited liability 22   company provides in a record for the approval of a conversion 23   or a merger in which some or all of its members become subject 24   to interest holder liability by the affirmative vote or consent 25   of fewer than all the members. 26   (2) The member voted for or consented in a record to that 27   provision of the operating agreement or became a member after 28   the adoption of that provision. 29   2. A conversion involving a domestic converting entity that 30   is not a limited liability company is not effective unless it 31   is approved by the domestic converting entity in accordance 32   with its organic law. 33   3. A conversion of a foreign converting entity is not 34   effective unless it is approved by the foreign entity in 35   -125-   HF 655 (4) 90   da/jh/md   125/ 159   

  H.F. 655   accordance with the law of the foreign entitys jurisdiction 1   of formation. 2   Sec. 102. NEW SECTION   . 489.1044 Amendment or abandonment of 3   plan of conversion. 4   1. A plan of conversion of a domestic converting limited 5   liability company may be amended according to any of the 6   following: 7   a. In the same manner as the plan was approved, if the plan 8   does not provide for the manner in which it may be amended. 9   b. By its managers or members in the manner provided in the 10   plan, but a member that was entitled to vote on or consent to 11   approval of the conversion is entitled to vote on or consent 12   to any amendment of the plan that will change any of the 13   following: 14   (1) The amount or kind of interests, securities, 15   obligations, money, other property, rights to acquire interests 16   or securities, or any combination of the foregoing, to be 17   received by any of the members of the converting limited 18   liability company under the plan. 19   (2) The public organic record, if any, or private organic 20   rules of the converted entity which will be in effect 21   immediately after the conversion becomes effective, except for 22   changes that do not require approval of the interest holders of 23   the converted entity under its organic law or organic rules. 24   (3) Any other terms or conditions of the plan, if the change 25   would adversely affect the member in any material respect. 26   2. After a plan of conversion has been approved by a 27   domestic converting limited liability company and before a 28   statement of conversion becomes effective, the plan may be 29   abandoned as provided in the plan. Unless prohibited by the 30   plan, a domestic converting limited liability company may 31   abandon the plan in the same manner as the plan was approved. 32   3. If a plan of conversion is abandoned after a statement 33   of conversion has been delivered to the secretary of state 34   for filing and before the statement becomes effective, a 35   -126-   HF 655 (4) 90   da/jh/md   126/ 159   

  H.F. 655   statement of abandonment, signed by the converting entity, 1   must be delivered to the secretary of state for filing before 2   the statement of conversion becomes effective. The statement 3   of abandonment takes effect on filing, and the conversion is 4   abandoned and does not become effective. The statement of 5   abandonment must contain all of the following: 6   a. The name of the converting limited liability company. 7   b. The date on which the statement of conversion was filed 8   by the secretary of state. 9   c. A statement that the conversion has been abandoned in 10   accordance with this section. 11   Sec. 103. NEW SECTION   . 489.1045 Statement of conversion  12   effective date of conversion. 13   1. A statement of conversion must be signed by the 14   converting entity and delivered to the secretary of state for 15   filing. 16   2. A statement of conversion must contain all of the 17   following: 18   a. The name, jurisdiction of formation, and type of entity 19   of the converting entity. 20   b. The name, jurisdiction of formation, and type of entity 21   of the converted entity and if the converted entity is a 22   foreign entity, the street and mailing addresses of an office 23   of the converted entity that the secretary of state may use for 24   purposes of section 489.1046, subsection 5. 25   c. If the converting entity is a domestic limited liability 26   company, a statement that the plan of conversion was approved 27   in accordance with this part or, if the converting entity is a 28   foreign entity, a statement that the conversion was approved 29   by the foreign entity in accordance with the law of its 30   jurisdiction of formation. 31   d. If the converted entity is a domestic filing entity, its 32   public organic record, as an attachment. 33   e. If the converted entity is a domestic limited liability 34   partnership, its statement of qualification, as an attachment. 35   -127-   HF 655 (4) 90   da/jh/md   127/ 159   

  H.F. 655   3. In addition to the requirements of subsection 2, a 1   statement of conversion may contain any other provision not 2   prohibited by law. 3   4. If the converted entity is a domestic entity, its public 4   organic record, if any, must satisfy the requirements of the 5   law of this state, except that the public organic record does 6   not need to be signed. 7   5. If the converted entity is a domestic limited liability 8   company, the conversion becomes effective when the statement of 9   conversion is effective. In all other cases, the conversion 10   becomes effective on the later of the following: 11   a. The date and time provided by the organic law of the 12   converted entity. 13   b. When the statement is effective. 14   Sec. 104. NEW SECTION   . 489.1046 Effect of conversion. 15   1. When a conversion becomes effective all of the following 16   apply: 17   a. The converted entity is any of the following: 18   (1) Organized under and subject to the organic law of the 19   converted entity. 20   (2) The same entity without interruption as the converting 21   entity. 22   b. All property of the converting entity continues to be 23   vested in the converted entity without transfer, reversion, or 24   impairment. 25   c. All debts, obligations, and other liabilities of the 26   converting entity continue as debts, obligations, and other 27   liabilities of the converted entity. 28   d. Except as otherwise provided by law or the plan of 29   conversion, all the rights, privileges, immunities, powers, 30   and purposes of the converting entity remain in the converted 31   entity. 32   e. The name of the converted entity may be substituted for 33   the name of the converting entity in any pending action or 34   proceeding. 35   -128-   HF 655 (4) 90   da/jh/md   128/ 159   

  H.F. 655   f. The certificate of organization of the converted entity 1   becomes effective. 2   g. The provisions of the operating agreement of the 3   converted entity which are to be in a record, if any, approved 4   as part of the plan of conversion become effective. 5   h. The interests in the converting entity are converted, and 6   the interest holders of the converting entity are entitled only 7   to the rights provided to them under the plan of conversion and 8   to any appraisal rights they have under section 489.1006. 9   2. Except as otherwise provided in the operating agreement 10   of a domestic converting limited liability company, the 11   conversion does not give rise to any rights that a member, 12   manager, or third party would have upon a dissolution, 13   liquidation, or winding up of the converting entity. 14   3. When a conversion becomes effective, a person that 15   did not have interest holder liability with respect to the 16   converting entity and becomes subject to interest holder 17   liability with respect to a domestic entity as a result of the 18   conversion has interest holder liability only to the extent 19   provided by the organic law of the entity and only for those 20   debts, obligations, and other liabilities that are incurred 21   after the conversion becomes effective. 22   4. When a conversion becomes effective, the interest holder 23   liability of a person that ceases to hold an interest in a 24   domestic converting limited liability company with respect to 25   which the person had interest holder liability is subject to 26   all of the following rules: 27   a. The conversion does not discharge any interest holder 28   liability under this chapter to the extent the interest holder 29   liability was incurred before the conversion became effective. 30   b. The person does not have interest holder liability under 31   this chapter for any debt, obligation, or other liability that 32   arises after the conversion becomes effective. 33   c. This chapter continues to apply to the release, 34   collection, or discharge of any interest holder liability 35   -129-   HF 655 (4) 90   da/jh/md   129/ 159  

  H.F. 655   preserved under paragraph a as if the conversion had not 1   occurred. 2   d. The person has whatever rights of contribution from any 3   other person as are provided by this chapter, law other than 4   this chapter, or the organic rules of the converting entity 5   with respect to any interest holder liability preserved under 6   paragraph a as if the conversion had not occurred. 7   5. When a conversion becomes effective, a foreign entity 8   that is the converted entity may be served with process in this 9   state for the collection and enforcement of any of its debts, 10   obligations, and other liabilities as provided in section 11   489.116. 12   6. If the converting entity is a registered foreign entity, 13   its registration to do business in this state is canceled when 14   the conversion becomes effective. 15   7. A conversion does not require the entity to wind up its 16   affairs and does not constitute or cause the dissolution of the 17   entity. 18   Sec. 105. NEW SECTION   . 489.1051 Domestication authorized. 19   1. By complying with this part, a domestic limited liability 20   company may become a foreign limited liability company if 21   the domestication is authorized by the law of the foreign 22   jurisdiction. 23   2. By complying with the provisions of this part applicable 24   to foreign limited liability companies, a foreign limited 25   liability company may become a domestic limited liability 26   company if the domestication is authorized by the law of the 27   foreign limited liability companys jurisdiction of formation. 28   3. If a protected agreement contains a provision that 29   applies to a merger of a domestic limited liability company 30   but does not refer to a domestication, the provision applies 31   to a domestication of the limited liability company as if the 32   domestication were a merger until the provision is amended on 33   or after January 1, 2009. 34   Sec. 106. NEW SECTION   . 489.1052 Plan of domestication.   35   -130-   HF 655 (4) 90   da/jh/md   130/ 159    

  H.F. 655   1. A domestic limited liability company may become a foreign 1   limited liability company in a domestication by approving 2   a plan of domestication. The plan must be in a record and 3   contain all of the following: 4   a. The name of the domesticating limited liability company. 5   b. The name and jurisdiction of formation of the 6   domesticated limited liability company. 7   c. The manner of converting the interests in the 8   domesticating limited liability company into interests, 9   securities, obligations, money, other property, rights to 10   acquire interests or securities, or any combination of the 11   foregoing. 12   d. The proposed certificate of organization of the 13   domesticated limited liability company. 14   e. The full text of the provisions of the operating 15   agreement of the domesticated limited liability company that 16   are proposed to be in a record. 17   f. The other terms and conditions of the domestication. 18   g. Any other provision required by the law of this state or 19   the operating agreement of the domesticating limited liability 20   company. 21   2. In addition to the requirements of subsection 1, a plan 22   of domestication may contain any other provision not prohibited 23   by law. 24   Sec. 107. NEW SECTION   . 489.1053 Approval of domestication. 25   1. A plan of domestication of a domestic domesticating 26   limited liability company is not effective unless it has been 27   approved according to any of the following: 28   a. By all the members entitled to vote on or consent to any 29   matter.   30   b. In a record, by each member that will have interest 31   holder liability for debts, obligations, and other liabilities 32   that are incurred after the domestication becomes effective,   33   unless all of the following apply: 34   (1) The operating agreement of the domesticating limited 35   -131-   HF 655 (4) 90   da/jh/md   131/ 159   

  H.F. 655   liability company in a record provides for the approval of a 1   domestication or merger in which some or all of its members 2   become subject to interest holder liability by the affirmative 3   vote or consent of fewer than all the members. 4   (2) The member voted for or consented in a record to that 5   provision of the operating agreement or became a member after 6   the adoption of that provision. 7   2. A domestication of a foreign domesticating limited 8   liability company is not effective unless it is approved in 9   accordance with the law of the foreign limited liability 10   companys jurisdiction of formation. 11   Sec. 108. NEW SECTION   . 489.1054 Amendment or abandonment 12   of plan of domestication. 13   1. A plan of domestication of a domestic domesticating 14   limited liability company may be amended according to any of 15   the following: 16   a. In the same manner as the plan was approved, if the plan 17   does not provide for the manner in which it may be amended. 18   b. By its managers or members in the manner provided in 19   the plan, but a member that was entitled to vote on or consent 20   to approval of the domestication is entitled to vote on or 21   consent to any amendment of the plan that will change any of 22   the following: 23   (1) The amount or kind of interests, securities, 24   obligations, money, other property, rights to acquire interests 25   or securities, or any combination of the foregoing, to be 26   received by any of the members of the domesticating limited 27   liability company under the plan. 28   (2) The certificate of organization or operating agreement 29   of the domesticated limited liability company that will be in 30   effect immediately after the domestication becomes effective, 31   except for changes that do not require approval of the members 32   of the domesticated limited liability company under its organic 33   law or operating agreement. 34   (3) Any other terms or conditions of the plan, if the change 35   -132-   HF 655 (4) 90   da/jh/md   132/ 159   

  H.F. 655   would adversely affect the member in any material respect. 1   2. After a plan of domestication has been approved by a 2   domestic domesticating limited liability company and before a 3   statement of domestication becomes effective, the plan may be 4   abandoned as provided in the plan. Unless prohibited by the 5   plan, a domestic domesticating limited liability company may 6   abandon the plan in the same manner as the plan was approved. 7   3. If a plan of domestication is abandoned after a statement 8   of domestication has been delivered to the secretary of state 9   for filing and before the statement becomes effective, a 10   statement of abandonment, signed by the domesticating limited 11   liability company, must be delivered to the secretary of state 12   for filing before the statement of domestication becomes 13   effective. The statement of abandonment takes effect on 14   filing, and the domestication is abandoned and does not become 15   effective. The statement of abandonment must contain all of 16   the following: 17   a. The name of the domesticating limited liability company. 18   b. The date on which the statement of domestication was 19   filed by the secretary of state. 20   c. A statement that the domestication has been abandoned in 21   accordance with this section. 22   Sec. 109. NEW SECTION   . 489.1055 Statement of domestication 23    effective date of domestication. 24   1. A statement of domestication must be signed by the 25   domesticating limited liability company and delivered to the 26   secretary of state for filing. 27   2. A statement of domestication must contain all of the   28   following: 29   a. The name and jurisdiction of formation of the 30   domesticating limited liability company. 31   b. The name and jurisdiction of formation of the 32   domesticated limited liability company and the street and 33   mailing addresses of an office of the domesticated limited 34   liability company that the secretary of state may use for 35   -133-   HF 655 (4) 90   da/jh/md   133/ 159   

  H.F. 655   purposes of section 489.1056, subsection 5. 1   c. If the domesticating limited liability company is a 2   domestic limited liability company, a statement that the plan 3   of domestication was approved in accordance with this part or, 4   if the domesticating limited liability company is a foreign 5   limited liability company, a statement that the domestication 6   was approved in accordance with the law of its jurisdiction of 7   formation. 8   d. The certificate of organization of the domesticated 9   limited liability company, as an attachment. 10   3. In addition to the requirements of subsection 2, a 11   statement of domestication may contain any other provision not 12   prohibited by law. 13   4. The certificate of organization of a domestic 14   domesticated limited liability company must satisfy the 15   requirements of this chapter, but the certificate does not need 16   to be signed. 17   5. If the domesticated entity is a domestic limited 18   liability company, the domestication becomes effective 19   when the statement of domestication is effective. If the 20   domesticated entity is a foreign limited liability company, 21   the domestication becomes effective on the later of all of the 22   following: 23   a. The date and time provided by the organic law of the 24   domesticated entity. 25   b. When the statement is effective. 26   Sec. 110. NEW SECTION   . 489.1056 Effect of domestication.   27   1. When a domestication becomes effective, all of the 28   following apply: 29   a. The domesticated entity is all of the following: 30   (1) Organized under and subject to the organic law of the 31   domesticated entity. 32   (2) The same entity without interruption as the 33   domesticating entity. 34   b. All property of the domesticating entity continues to be 35   -134-   HF 655 (4) 90   da/jh/md   134/ 159   

  H.F. 655   vested in the domesticated entity without transfer, reversion, 1   or impairment. 2   c. All debts, obligations, and other liabilities of the 3   domesticating entity continue as debts, obligations, and other 4   liabilities of the domesticated entity. 5   d. Except as otherwise provided by law or the plan of 6   domestication, all the rights, privileges, immunities, 7   powers, and purposes of the domesticating entity remain in the 8   domesticated entity. 9   e. The name of the domesticated entity may be substituted 10   for the name of the domesticating entity in any pending action 11   or proceeding. 12   f. The certificate of organization of the domesticated 13   entity becomes effective. 14   g. The provisions of the operating agreement of the 15   domesticated entity that are to be in a record, if any, 16   approved as part of the plan of domestication become effective. 17   h. The interests in the domesticating entity are converted 18   to the extent and as approved in connection with the 19   domestication, and the members of the domesticating entity are 20   entitled only to the rights provided to them under the plan 21   of domestication and to any appraisal rights they have under 22   section 489.1006. 23   2. Except as otherwise provided in the organic law or 24   operating agreement of the domesticating limited liability 25   company, the domestication does not give rise to any rights 26   that a member, manager, or third party would otherwise 27   have upon a dissolution, liquidation, or winding up of the 28   domesticating company. 29   3. When a domestication becomes effective, a person that 30   did not have interest holder liability with respect to the 31   domesticating limited liability company and becomes subject to 32   interest holder liability with respect to a domestic limited 33   liability company as a result of the domestication has interest 34   holder liability only to the extent provided by this chapter 35   -135-   HF 655 (4) 90   da/jh/md   135/ 159  

  H.F. 655   and only for those debts, obligations, and other liabilities 1   that are incurred after the domestication becomes effective. 2   4. When a domestication becomes effective, the interest 3   holder liability of a person that ceases to hold an interest in 4   a domestic domesticating limited liability company with respect 5   to which the person had interest holder liability is subject 6   to all of the following rules: 7   a. The domestication does not discharge any interest 8   holder liability under this chapter to the extent the interest 9   holder liability was incurred before the domestication became 10   effective. 11   b. A person does not have interest holder liability under 12   this chapter for any debt, obligation, or other liability that 13   is incurred after the domestication becomes effective. 14   c. This chapter continues to apply to the release, 15   collection, or discharge of any interest holder liability 16   preserved under paragraph a as if the domestication had not 17   occurred. 18   d. A person has whatever rights of contribution from any 19   other person as are provided by this chapter, law other than 20   this chapter, or the operating agreement of the domestic 21   domesticating limited liability company with respect to any 22   interest holder liability preserved under paragraph a as if 23   the domestication had not occurred. 24   5. When a domestication becomes effective, a foreign 25   limited liability company that is the domesticated company 26   may be served with process in this state for the collection 27   and enforcement of any of its debts, obligations, and other 28   liabilities as provided in section 489.116. 29   6. If the domesticating limited liability company is a 30   registered foreign entity, the registration of the limited 31   liability company is canceled when the domestication becomes 32   effective. 33   7. A domestication does not require a domestic 34   domesticating limited liability company to wind up its affairs 35   -136-   HF 655 (4) 90   da/jh/md   136/ 159  

  H.F. 655   and does not constitute or cause the dissolution of the limited 1   liability company. 2   Sec. 111. Section 489.1101, Code 2023, is amended to read 3   as follows: 4   489.1101 Definitions. 5   As used in this article   subchapter , unless the context 6   otherwise requires: 7   1. Employee or agent does not include a clerk, 8   stenographer, secretary, bookkeeper, technician, or other 9   person who is not usually and ordinarily considered by custom 10   and practice to be practicing a profession nor any other person 11   who performs all that persons duties for the professional 12   limited liability company under the direct supervision and 13   control of one or more managers, employees, or agents of the 14   professional limited liability company who are duly licensed in 15   this state to practice a profession which the limited liability 16   company is authorized to practice in this state. This article   17   subchapter   does not require any such persons to be licensed to 18   practice a profession if they are not required to be licensed 19   under any other law of this state. 20   2. Foreign professional limited liability company means 21   a limited liability company organized under laws other than 22   the laws of this state for a purpose for which a professional 23   limited liability company may be organized under this article   24   subchapter . 25   3. Licensed includes registered, certified, admitted to 26   practice, or otherwise legally authorized under the laws of 27   this state.   28   4. Profession means the following professions: 29   a. Certified public accountancy. 30   b. Architecture. 31   c. Chiropractic. 32   d. Dentistry. 33   e. Physical therapy. 34   f. Practice as a physician assistant. 35   -137-   HF 655 (4) 90   da/jh/md   137/ 159        

  H.F. 655   g. Psychology. 1   h. Professional engineering. 2   i. Land surveying. 3   j. Landscape architecture. 4   k. Law. 5   l. Medicine and surgery. 6   m. Optometry. 7   n. Osteopathic medicine and surgery. 8   o. Accounting practitioner. 9   p. Podiatry. 10   q. Real estate brokerage. 11   r. Speech pathology. 12   s. Audiology. 13   t. Veterinary medicine. 14   u. Pharmacy. 15   v. Nursing. 16   w. Marital and family therapy or mental health counseling, 17   provided that the marital and family therapist or mental health 18   counselor is licensed under chapters 147 and 154D . 19   x. Social work, provided that the social worker is licensed 20   pursuant to chapter 147 and section 154C.3, subsection 1 , 21   paragraph c . 22   5. Professional limited liability company means a limited 23   liability company subject to this article   subchapter , except a 24   foreign professional limited liability company. 25   6. Regulating board means any board, commission, court, 26   or governmental authority which, under the laws of this state, 27   is charged with the licensing, registration, certification, 28   admission to practice, or other legal authorization of the 29   practitioners of any profession. 30   7. a. Voluntary transfer includes a sale, voluntary 31   assignment, gift, pledge, or encumbrance; a voluntary change 32   of legal or equitable ownership or beneficial interest; or a 33   voluntary change of persons having voting rights with respect 34   to any transferable interest, except as proxies. 35   -138-   HF 655 (4) 90   da/jh/md   138/ 159    

  H.F. 655   b. Voluntary transfer does not include a transfer of 1   an individuals interest in a limited liability company or 2   other property to a guardian or conservator appointed for that 3   individual or the individuals property. 4   Sec. 112. Section 489.1106, Code 2023, is amended to read 5   as follows: 6   489.1106 Professional regulation. 7   A professional limited liability company shall not 8   be required to register with or to obtain any license, 9   registration, certificate, or other legal authorization from 10   a regulating board in order to practice a profession. Except 11   as provided in this section , this article   subchapter does not 12   restrict or limit in any manner the authority or duties of any 13   regulating board with respect to individuals   an individual 14   practicing a profession which is within the jurisdiction of the 15   regulating board, even if the individual is a member, manager, 16   employee, or agent of a professional limited liability company 17   or foreign professional limited liability company and practices 18   the individuals profession through such professional limited 19   liability company. 20   Sec. 113. Section 489.1107, Code 2023, is amended to read 21   as follows: 22   489.1107 Relationship and liability to persons served. 23   This article   subchapter does not modify any law applicable 24   to the relationship between an individual practicing a 25   profession and a person receiving professional services, 26   including but not limited to any liability arising out of such 27   practice or any law respecting privileged communications. 28   This article subchapter does not modify or affect the ethical 29   standards or standards of conduct of any profession, including 30   but not limited to any standards prohibiting or limiting the 31   practice of the profession by a limited liability company or 32   prohibiting or limiting the practice of two or more professions 33   in combination. All such standards shall apply to the members, 34   managers, employees, and agents through whom a professional 35   -139-   HF 655 (4) 90   da/jh/md   139/ 159          

  H.F. 655   limited liability company practices any profession in this 1   state, to the same extent that the standards apply to an 2   individual practitioner. 3   Sec. 114. Section 489.1110, Code 2023, is amended to read 4   as follows: 5   489.1110 Convertible interests  rights and options. 6   A professional limited liability company shall not create 7   or issue any interest convertible into an interest of the 8   professional limited liability company. The provisions of this 9   article   subchapter with respect to the issuance and transfer 10   of interests apply to the creation, issuance, and transfer 11   of any right or option entitling the holder to purchase from 12   a professional limited liability company any interest of the 13   professional limited liability company. A right or option 14   shall not be transferable, whether voluntarily, involuntarily, 15   by operation of law, or in any other manner. Upon the death 16   of the holder, or when the holder ceases to be licensed to 17   practice a profession in this state which the professional 18   limited liability company is authorized to practice, the right 19   or option shall expire. 20   Sec. 115. Section 489.1112, subsections 4, 5, and 6, Code 21   2023, are amended to read as follows: 22   4. When a person other than a member of record becomes 23   entitled to have interests of a professional limited liability 24   company transferred into that persons name or to exercise 25   voting rights, except as a proxy, with respect to interests of 26   the professional limited liability company, the professional 27   limited liability company shall immediately purchase the 28   interests. Without limiting the generality of the foregoing, 29   this section shall be applicable whether the event occurs 30   as a result of appointment of a guardian or conservator for 31   a member or the members property, transfer of interests 32   by operation of law, involuntary transfer of interests, 33   judicial proceeding, execution, levy, bankruptcy proceeding, 34   receivership proceeding, foreclosure or enforcement of a pledge 35   -140-   HF 655 (4) 90   da/jh/md   140/ 159    

  H.F. 655   or encumbrance, or any other situation or occurrence. However, 1   this section does not apply to any voluntary transfer of 2   interests as defined in this article   subchapter . 3   5. Interests purchased by a professional limited liability 4   company under this section shall be transferred to the 5   professional limited liability company as of the close 6   of business on the date of the death or other event which 7   requires purchase. The member and the members executors, 8   administrators, legal representatives, or successors in 9   interest, shall promptly do all things which may be necessary 10   or convenient to cause transfer to be made as of the transfer 11   date. However, the interests shall promptly be transferred on 12   the books and records of the professional limited liability 13   company as of the transfer date, notwithstanding any delay in 14   transferring or surrendering the interests or certificates 15   representing the interests, and the transfer shall be valid and 16   effective for all purposes as of the close of business on the 17   transfer date. The purchase price for such interests shall be 18   paid as provided in this article   subchapter , but the transfer 19   of interests to the professional limited liability company as 20   provided in this section shall not be delayed or affected by 21   any delay or default in making payment. 22   6. a.   Notwithstanding subsections 1 through 5 , purchase by 23   the professional limited liability company is not required upon 24   the occurrence of any event other than death of a member, if 25   the professional limited liability company is dissolved within 26   sixty days after the occurrence of the event or voluntarily 27   elects to no longer be a professional limited liability company 28   but continue its existence as a limited liability company 29   pursuant to section 489.1119A within sixty days after the   30   occurrence of the event . The certificate of organization or 31   operating agreement of the professional limited liability 32   company may provide that purchase is not required upon the 33   death of a member, if the professional limited liability 34   company is dissolved within sixty days after the date of the 35   -141-   HF 655 (4) 90   da/jh/md   141/ 159            

  H.F. 655   members death. 1   b.   Notwithstanding sections 1 through 5, purchase by the 2   professional limited liability company is not required upon the 3   death of a member if the professional limited liability company 4   voluntarily elects to no longer be a professional limited   5   liability company but continue its existence as a limited   6   liability company pursuant to section 489.1119A within sixty 7   days after death. 8   Sec. 116. Section 489.1113, Code 2023, is amended to read 9   as follows: 10   489.1113 Certificates representing interests. 11   Each certificate representing an interest of a professional 12   limited liability company shall state in substance that the 13   certificate represents an interest in a professional limited 14   liability company and is not transferable except as expressly 15   provided in this article   subchapter and in the certificate of 16   organization or an operating agreement of the professional 17   limited liability company. 18   Sec. 117. Section 489.1114, Code 2023, is amended to read 19   as follows: 20   489.1114 Management. 21   1.   All managers of a professional limited liability 22   company shall at all times be individuals who are licensed to 23   practice a profession in this state or a lawful combination of 24   professions pursuant to section 489.1102 , which the limited 25   liability company is authorized to practice. A person who   26   is not licensed shall have no authority or duties in the 27   management or control of the professional limited liability 28   company. If a manager ceases to have this qualification, the 29   manager shall immediately and automatically cease to hold such   30   management position. 31   2.   Notwithstanding subsection 1, upon the occurrence of 32   any event that requires the professional limited liability 33   company either to be dissolved or to elect to no longer be   34   a professional limited liability company but continue its 35   -142-   HF 655 (4) 90   da/jh/md   142/ 159                          

  H.F. 655   existence as a limited liability company, as provided in 1   section 489.1119A, all of the following apply:   2   a. The professional limited liability company ceases to 3   practice the profession that the professional limited liability 4   company is authorized to practice, as provided in section   5   489.1119A.   6   b. The individuals who are not licensed to practice in this 7   state a profession that the professional limited liability 8   company is authorized to practice may be appointed as officers   9   and directors for the sole purpose of doing any of the 10   following:   11   (1) Carrying out the dissolution of the professional 12   limited liability company. 13   (2)   If applicable, carrying out the voluntary election 14   of the professional limited liability company to no longer 15   be a professional limited liability company but continue its 16   existence as a limited liability company, as provided in 17   section 489.1119A.   18   Sec. 118. Section 489.1115, Code 2023, is amended to read 19   as follows: 20   489.1115 Merger. 21   A professional limited liability company shall not merge 22   with any entity except another professional limited liability 23   company subject to this article   subchapter or a professional 24   corporation subject to chapter 496C . Merger is not permitted 25   unless the surviving or new professional limited liability 26   company is a professional limited liability company which that 27   complies with all requirements of this article subchapter . 28   Sec. 119. Section 489.1116, Code 2023, is amended to read 29   as follows:   30   489.1116 Dissolution or liquidation. 31   A violation of any provision of this article   subchapter by a 32   professional limited liability company or any of its members 33   or managers shall be cause for its involuntary dissolution, or 34   liquidation of its assets and business by the district court. 35   -143-   HF 655 (4) 90   da/jh/md   143/ 159                                    

  H.F. 655   Upon the death of the last remaining member of a professional 1   limited liability company, or when the last remaining member is 2   not licensed or ceases to be licensed to practice a profession 3   in this state which the professional limited liability company 4   is authorized to practice, or when any person other than 5   the member of record becomes entitled to have all interests 6   of the last remaining member of the professional limited 7   liability company transferred into that persons name or to 8   exercise voting rights, except as a proxy, with respect to such 9   interests, the professional limited liability company shall not 10   practice any profession and it   . In that case, the professional 11   limited liability company shall either be promptly dissolved 12   or shall promptly elect to no longer be a professional limited 13   liability company but continue its existence as a limited   14   liability company as provided in section 489.1119A . However, 15   if prior to dissolution all outstanding interests of the 16   professional limited liability company are acquired by two 17   or more persons licensed to practice a profession in this 18   state which the professional limited liability company is 19   authorized to practice, the professional limited liability 20   company need not be dissolved nor elect to no longer be a   21   professional limited liability company and may instead practice 22   the profession as provided in this article   subchapter . 23   Sec. 120. Section 489.1117, Code 2023, is amended to read 24   as follows: 25   489.1117 Foreign professional limited liability company. 26   1. A foreign professional limited liability company may 27   practice a profession in this state if it complies with the 28   provisions of this article subchapter . The secretary of state 29   may prescribe forms for this purpose. A foreign professional 30   limited liability company may practice a profession in this 31   state only through members, managers, employees, and agents 32   who are licensed to practice the profession in this state. 33   The provisions of this article   subchapter with respect to the 34   practice of a profession by a professional limited liability 35   -144-   HF 655 (4) 90   da/jh/md   144/ 159                  

  H.F. 655   company apply to a foreign professional limited liability 1   company. 2   2. This article   subchapter does not prohibit the practice 3   of a profession in this state by an individual who is a member, 4   manager, employee, or agent of a foreign professional limited 5   liability company, if the individual could lawfully practice 6   the profession in this state in the absence of any relationship 7   to a foreign professional limited liability company. This 8   subsection applies regardless of whether or not the foreign 9   professional limited liability company is authorized to 10   practice a profession in this state. 11   Sec. 121. Section 489.1118, Code 2023, is amended to read 12   as follows: 13   489.1118 Limited liability companies organized under the 14   other laws. 15   This article   subchapter does not apply to or interfere with 16   the practice of any profession by or through any professional 17   limited liability company organized after July 1, 1992, under 18   any other law of this state or any other state or country, if 19   the practice is lawful under any other statute or rule of law 20   of this state. Any such professional limited liability company 21   may voluntarily elect to adopt this article   subchapter and 22   become subject to its provisions, by amending its certificate 23   of organization to be consistent with all provisions of this 24   article   subchapter and by stating in its amended certificate 25   of organization that the limited liability company has 26   voluntarily elected to adopt this article subchapter . Any 27   limited liability company organized under any law of any other 28   state or country may become subject to the provisions of this 29   article   subchapter by complying with all provisions of this 30   article subchapter with respect to foreign professional limited 31   liability companies. 32   Sec. 122. Section 489.1119, Code 2023, is amended to read 33   as follows:   34   489.1119 Conflicts with other provisions of this chapter . 35   -145-   HF 655 (4) 90   da/jh/md   145/ 159                

  H.F. 655   The provisions of this article subchapter shall prevail over 1   any inconsistent provisions of this chapter . 2   Sec. 123. NEW SECTION   . 489.1119A Election to no longer be 3   a professional limited liability company. 4   A professional limited liability company may elect to no 5   longer be a professional limited liability company but continue 6   its existence as a limited liability company by filing with 7   the secretary of state an amendment to or restatement of its 8   certificate of organization that states that the limited 9   liability company is no longer a professional limited liability 10   company and amending its name to no longer indicate it is a 11   professional limited liability company. 12   Sec. 124. NEW SECTION   . 489.1204 Severability clause. 13   If any provision of this chapter or its application to any 14   person or circumstance is held invalid, the invalidity does 15   not affect other provisions or applications of this chapter 16   which can be given effect without the invalid provision or 17   application, and to this end the provisions of this chapter are 18   severable. 19   Sec. 125. NEW SECTION   . 489.1207 Application to existing 20   relationships. 21   1. For purposes of applying this chapter to a limited 22   liability company formed before the effective date of this 23   Act, references in the limited liability companys operating 24   agreement to provisions in this chapter in effect before the 25   effective date of this Act are deemed to be references to the 26   comparable provision in this chapter after the effective date 27   of this Act.   28   2. A limited liability company that has published notice of 29   its dissolution and requested persons having claims against the 30   limited liability company to present them in accordance with 31   the notice pursuant to section 489.703 as that section existed 32   immediately prior to the effective date of this Act shall be 33   subject to the requirements set forth in that section as it 34   existed immediately prior to the effective date of this Act, 35   -146-   HF 655 (4) 90   da/jh/md   146/ 159       

  H.F. 655   including the right of a claim by a person that is commenced 1   within five years after publication of the notice. 2   3. For the purposes of applying this chapter to a limited 3   liability company formed before January 1, 2009, all of the 4   following apply: 5   a. The limited liability companys articles of organization 6   are deemed to be the companys certificate of organization. 7   b. For the purposes of applying section 489.102, subsection 8   15, and subject to section 489.112, subsection 4, language 9   in the limited liability companys articles of organization 10   designating the limited liability companys management 11   structure operates as if that language were in the operating 12   agreement. 13   c. If a professional limited liability companys name 14   complied with section 490A.1503 as that section existed on 15   December 30, 2010, that companys name shall also be deemed to 16   comply with the name requirements of section 489.1103 of the 17   2011 edition of the Iowa Code. 18   Sec. 126. Section 489.14101, Code 2023, is amended to read 19   as follows: 20   489.14101 Short title. 21   This article   subchapter may be cited as the Uniform 22   Protected Series Act . 23   Sec. 127. Section 489.14102, unnumbered paragraph 1, Code 24   2023, is amended to read as follows: 25   As used in this article   subchapter , unless the context 26   otherwise requires: 27   Sec. 128. Section 489.14102, subsections 4 and 9, Code 2023,   28   are amended to read as follows: 29   4. Foreign protected series means an arrangement, 30   configuration, or other structure established by a foreign 31   limited liability company which has attributes comparable to 32   a protected series established under this article   subchapter . 33   The term applies whether or not the law under which the foreign 34   company is organized refers to protected series. 35   -147-   HF 655 (4) 90   da/jh/md   147/ 159        

  H.F. 655   9. Protected-series manager means a person under whose 1   authority the powers of a protected series are exercised 2   and under whose direction the activities and affairs of the 3   protected series are managed under the operating agreement, 4   this article subchapter , and this chapter . 5   Sec. 129. Section 489.14104, subsection 4, paragraph c, 6   Code 2023, is amended to read as follows: 7   c. Except as permitted by law of this state other than 8   this article   subchapter , have a purpose or power that the law 9   of this state other than this article subchapter prohibits a 10   limited liability company from doing or having. 11   Sec. 130. Section 489.14106, subsections 2, 3, and 4, Code 12   2023, are amended to read as follows: 13   2. If this chapter otherwise restricts the power of an 14   operating agreement to affect a matter, the restriction applies 15   to a matter under this article   subchapter in accordance with 16   section 489.14108 . 17   3. If law of this state other than this article   subchapter 18   imposes a prohibition, limitation, requirement, condition, 19   obligation, liability, or other restriction on a limited 20   liability company, a member, manager, or other agent of the 21   company, or a transferee of the company, except as otherwise 22   provided in law of this state other than this article   23   subchapter , the restriction applies in accordance with section 24   489.14108 . 25   4. Except as otherwise provided in section 489.14107 , if the 26   operating agreement of a series limited liability company does 27   not provide for a matter described in subsection 1 in a manner 28   permitted by this article subchapter , the matter is determined 29   in accordance with the following rules: 30   a. To the extent this article   subchapter addresses the 31   matter, this article   subchapter governs. 32   b. To the extent this article subchapter does not address 33   the matter, the other articles   subchapters of this chapter 34   govern the matter in accordance with section 489.14108 . 35   -148-   HF 655 (4) 90   da/jh/md   148/ 159                        

  H.F. 655   Sec. 131. Section 489.14107, subsection 1, paragraphs v, w, 1   x, and y, Code 2023, are amended to read as follows: 2   v. Article 6   Subchapter VI . 3   w. Article 7 Subchapter VII . 4   x. Article 8   Subchapter VIII . 5   y. A provision of this article   subchapter pertaining to any 6   of the following: 7   (1) Registered agents. 8   (2) The secretary of state, including provisions pertaining 9   to records authorized or required to be delivered to the 10   secretary of state for filing under this article   subchapter . 11   Sec. 132. Section 489.14108, subsection 2, paragraph b, 12   subparagraphs (1) and (2), Code 2023, are amended to read as 13   follows: 14   (1) Accept for filing a type of record that neither this 15   article   subchapter nor any of the other articles subchapters of 16   this chapter authorizes or requires a person to deliver to the 17   secretary of state for filing. 18   (2) Make or deliver a record that neither this article   19   subchapter nor the other articles subchapters of this chapter 20   authorizes or requires the secretary of state to make or 21   deliver. 22   Sec. 133. Section 489.14204, subsection 1, paragraph c, 23   Code 2023, is amended to read as follows: 24   c. Other means authorized by law of this state other than 25   the other articles   subchapters of this chapter . 26   Sec. 134. Section 489.14301, subsection 5, unnumbered   27   paragraph 1, Code 2023, is amended to read as follows: 28   To the extent permitted by this section and law of this 29   state other than this article   subchapter , a series limited 30   liability company or protected series of the company may 31   hold an associated asset directly or indirectly, through a 32   representative, nominee, or similar arrangement, except that 33   all of the following applies: 34   Sec. 135. Section 489.14303, subsection 4, Code 2023, is   35   -149-   HF 655 (4) 90   da/jh/md   149/ 159                        

  H.F. 655   amended to read as follows: 1   4. Except for section 489.14108, subsection 1 , paragraph 2   c , a provision of this article   subchapter which applies 3   to a protected-series transferee of a protected series of a 4   series limited liability company applies to the company in 5   its capacity as an owner of a protected-series transferable 6   interest of the protected series. A provision of the operating 7   agreement of a series limited liability company which applies 8   to a protected-series transferee of a protected series of the 9   company applies to the company in its capacity as an owner of a 10   protected-series transferable interest of the protected series. 11   Sec. 136. Section 489.14304, subsection 6, Code 2023, is 12   amended to read as follows: 13   6. Article 9   Subchapter IX applies to a protected series in 14   accordance with section 489.14108 . 15   Sec. 137. Section 489.14402, subsection 3, paragraph b, 16   Code 2023, is amended to read as follows: 17   b. The claim is to establish or enforce a liability arising 18   under law of this state other than this article   subchapter or 19   from an act or omission in this state. 20   Sec. 138. Section 489.14404, subsection 3, Code 2023, is 21   amended to read as follows: 22   3. In addition to any other remedy provided by law or 23   equity, if a claim against a series limited liability company 24   or a protected series has not been reduced to a judgment and 25   law other than this article   subchapter permits a prejudgment 26   remedy by attachment, levy, or the like, the court may apply 27   subsection 2 as a prejudgment remedy. 28   Sec. 139. Section 489.14404, subsection 5, paragraph b, 29   Code 2023, is amended to read as follows:   30   b. The claimant is a resident of this state or doing 31   business or authorized to do business in this state, or the 32   claim under section 489.14404 is to enforce a judgment, or to 33   seek a prejudgment remedy, pertaining to a liability arising 34   from law of this state other than this article   subchapter or an 35   -150-   HF 655 (4) 90   da/jh/md   150/ 159            

  H.F. 655   act or omission in this state. 1   Sec. 140. Section 489.14801, Code 2023, is amended to read 2   as follows: 3   489.14801 Uniformity of application and construction. 4   In applying and construing this article subchapter , 5   consideration shall be given to the need to promote uniformity 6   of the law with respect to its subject matter among states 7   that enact the uniform protected series Act as approved and 8   recommended by the national conference of commissioners on 9   uniform state laws. 10   Sec. 141. Section 489.14804, Code 2023, is amended to read 11   as follows: 12   489.14804 Savings clause. 13   This article   subchapter does not affect an action commenced, 14   proceeding brought, or right accrued before July 1, 2020. 15   Sec. 142. REPEAL. Sections 489.113, 489.802, 489.803, 16   489.804, 489.805, 489.806, 489.807, 489.808, 489.1008, 17   489.1009, 489.1010, 489.1011, 489.1012, 489.1013, 489.1014, 18   489.1015, 489.1016, and 489.1304, Code 2023, are repealed. 19   Sec. 143. CODE EDITOR DIRECTIVE. 20   1. The Code editor is directed to make the following 21   transfers: 22   a. Section 489.104 to section 489.108. 23   b. Section 489.105 to section 489.109. 24   c. Section 489.106 to section 489.104. 25   d. Section 489.107 to section 489.111. 26   e. Section 489.108 to section 489.112.   27   f. Section 489.109 to section 489.113. 28   g. Section 489.110 to section 489.105. 29   h. Section 489.111 to section 489.106. 30   i. Section 489.112 to section 489.107. 31   j. Section 489.114 to section 489.116. 32   k. Section 489.114A, as enacted by this Act, to section 33   489.114. 34   l. Section 489.115 to section 489.117. 35   -151-   HF 655 (4) 90   da/jh/md   151/ 159      

  H.F. 655   m. Section 489.115A, as enacted by this Act, to section 1   489.115. 2   n. Section 489.116 to section 489.119. 3   o. Section 489.117 to section 489.122. 4   p. Section 489.205A to section 489.122A. 5   q. Section 489.206 to section 489.209. 6   r. Section 489.206A, as enacted by this Act, to section 7   489.206. 8   s. Section 489.208 to section 489.211. 9   t. Section 489.208A, as enacted by this Act, to section 10   489.208. 11   u. Section 489.209 to section 489.211A. 12   v. Section 489.701A to section 489.703. 13   w. Section 489.703 to section 489.704. 14   x. Section 489.704 to section 489.705. 15   y. Section 489.705 to section 489.708. 16   z. Section 489.706 to section 489.710. 17   aa. Section 489.706A, as enacted by this Act, to section 18   489.706. 19   ab. Section 489.707 to section 489.711. 20   ac. Section 489.708 to section 489.707. 21   ad. Section 489.801 to section 489.901. 22   ae. Section 489.805A, as enacted by this Act, to section 23   489.805. 24   af. Section 489.809 to section 489.912. 25   ag. Section 489.901 to section 489.801. 26   ah. Section 489.902 to section 489.802.   27   ai. Section 489.903 to section 489.803. 28   aj. Section 489.904 to section 489.804. 29   ak. Section 489.906 to section 489.806. 30   al. Section 489.906A, as enacted by this Act, to section 31   489.906. 32   am. Section 489.911A to section 489.902.   33   an. Section 489.911B to section 489.903.   34   ao. Section 489.911C to section 489.904.   35   -152-   HF 655 (4) 90   da/jh/md   152/ 159  

  H.F. 655   ap. Section 489.1119 to section 489.1120. 1   aq. Section 489.1119A to section 489.1119. 2   ar. Section 489.1301 to section 489.1201. 3   as. Section 489.1302 to section 489.1202. 4   at. Section 489.1303 to section 489.1203. 5   2. The Code editor shall correct internal references in the 6   Code and in any enacted legislation as necessary due to the 7   enactment of this section. 8   Sec. 144. DIRECTIONS TO THE CODE EDITOR  DIVIDING 9   SUBCHAPTER X INTO PARTS. The Code editor is directed to divide 10   the provisions of chapter 489, subchapter X, as amended or 11   enacted in this division of this Act, into parts as follows: 12   1. Part 1, including sections 489.1001 through 489.1007. 13   2. Part 2, including sections 489.1021 through 489.1026. 14   3. Part 3, including sections 489.1031 through 489.1036. 15   4. Part 4, including sections 489.1041 through 489.1046. 16   5. Part 5, including sections 489.1051 through 489.1056. 17   DIVISION II 18   COORDINATING AMENDMENTS 19   Sec. 145. Section 9.11, subsection 1, paragraph c, Code 20   2023, is amended to read as follows: 21   c. Chapter 489 , including as provided in section 489.205,   22   489.205A   and as stated in section 489.117 or as otherwise 23   described in sections 489.112, 489.302 , 489.702 , 489.1008 , 24   489.1012 , and 489.14502 section 489.210 . 25   Sec. 146. Section 10.1, subsection 9, paragraph b, Code 26   2023, is amended to read as follows:   27   b. As used in paragraph a , a type of membership interest 28   in a limited liability company includes a protected series as 29   provided in chapter 489, article 14   subchapter XIV . 30   Sec. 147. Section 10.1, subsection 17, paragraph b, Code 31   2023, is amended to read as follows: 32   b. As used in paragraph a , a type of membership interest 33   in a limited liability company includes a protected series of a 34   series limited liability company as provided in chapter 489, 35   -153-   HF 655 (4) 90   da/jh/md   153/ 159                 

  H.F. 655   article 14 subchapter XIV . 1   Sec. 148. Section 10.10, subsection 1, paragraph c, 2   subparagraph (2), Code 2023, is amended to read as follows: 3   (2) As used in subparagraph (1), a type of membership 4   interest in a limited liability company includes a protected 5   series of a series limited liability company as provided in 6   chapter 489, article 14   subchapter XIV . 7   Sec. 149. Section 488.108, subsection 4, paragraph b, 8   subparagraph (4), Code 2023, is amended to read as follows: 9   (4) For a limited liability company under chapter 489 , 10   section 489.108 , 489.109 , 489.114A,   or 489.706 . 11   Sec. 150. Section 490.401, subsection 2, paragraph h, 12   subparagraph (4), Code 2023, is amended to read as follows: 13   (4) For a limited liability company under chapter 489 , 14   section 489.108 , 489.109 , 489.114A,   or 489.706 . 15   Sec. 151. Section 501A.102, subsection 13, Code 2023, is 16   amended by striking the subsection. 17   Sec. 152. Section 501A.1101, subsections 1, 2, and 5, Code 18   2023, are amended to read as follows: 19   1. Authorization. Unless otherwise prohibited, cooperatives 20   organized under the laws of this state, including cooperatives 21   organized under this chapter or traditional cooperatives, may 22   merge or consolidate with each other, an Iowa limited liability   23   company under the provisions of section 489.1015 , or other 24   another business entities entity organized under the laws 25   of another state , by complying with the provisions of this 26   section and the law of the state where the surviving or new 27   business entity will exist. A cooperative shall not merge or 28   consolidate with a business entity organized under the laws 29   of this state, other than a traditional cooperative, unless 30   the law governing the business entity expressly authorizes 31   merger or consolidation with a cooperative. This subsection 32   does not authorize a foreign business entity to do any act not 33   authorized by the law governing the foreign business entity. 34   2. Plan. To initiate a merger or consolidation of a 35   -154-   HF 655 (4) 90   da/jh/md   154/ 159                 

  H.F. 655   cooperative, a written plan of merger or consolidation shall be 1   prepared by the board or by a committee selected by the board 2   to prepare a plan. The plan shall state all of the following: 3   a. The names of the   each constituent domestic cooperative , 4   the name of any Iowa limited liability company   that is a party 5   to the merger , to the extent authorized under   section 489.1015 , 6   and any foreign business entities entity that is a party to the 7   merger . 8   b. The name of the surviving or new domestic cooperative ,   9   Iowa limited liability company as required by section 489.1015 , 10   or other   foreign business entity. 11   c. The manner and basis of converting membership or 12   ownership interests of the constituent domestic cooperative , 13   the Iowa limited liability company that is a party as provided   14   in section 489.1015 , or foreign business entity into membership 15   or ownership interests in the surviving or new domestic 16   cooperative, the surviving Iowa limited liability company as 17   authorized in   section 489.1015 , or foreign business entity. 18   d. The terms of the merger or consolidation. 19   e. The proposed effect of the merger or consolidation on 20   the members and patron members of each constituent domestic 21   cooperative. 22   f. For a consolidation, the plan shall contain the articles 23   of the entity or organizational documents to be filed with the 24   state in which the entity is organized or, if the surviving   25   organization is an Iowa limited liability company, the articles 26   of organization . 27   5. Effect of merger or consolidation. For a merger that does 28   not involve an Iowa limited liability company, the following 29   shall apply to the   The effect of a merger or consolidation 30   shall be as follows : 31   a. After the effective date, the   each domestic cooperative, 32   Iowa limited liability company, if party to the plan, 33   cooperatives   and any foreign business entity that is a party to 34   the plan become a single entity. For a merger, the surviving 35   -155-   HF 655 (4) 90   da/jh/md   155/ 159                                        

  H.F. 655   business entity is the business entity designated in the plan. 1   For a consolidation, the new domestic cooperative , the Iowa   2   limited liability company, if any, and any or new foreign 3   business entity is the business entity provided for in the 4   plan. Except for the surviving or new domestic cooperative, 5   Iowa limited liability company, or foreign business entity, the 6   separate existence of each merged or consolidated domestic or 7   foreign business entity that is a party to the plan ceases on 8   the effective date of the merger or consolidation. 9   b. The surviving or new domestic cooperative , Iowa limited   10   liability company,   or foreign business entity possesses all of 11   the rights and property of each of the merged or consolidated 12   business entities and is responsible for all their obligations. 13   The title to property of the merged or consolidated domestic 14   cooperative, Iowa limited liability company,   or foreign 15   business entity , is vested in the surviving or new domestic 16   cooperative, Iowa limited liability company, or foreign 17   business entity without reversion or impairment of the title 18   caused by the merger or consolidation. 19   c.   If a merger involves an Iowa limited liability company, 20   this subsection   is subject to the provisions of section 21   489.1015 . 22   Sec. 153. Section 501A.1102, subsection 1, Code 2023, is 23   amended to read as follows: 24   1. Definition. For purposes of this section , subsidiary 25   means a domestic cooperative , an Iowa limited liability   26   company, or a foreign cooperative. 27   Sec. 154. Section 501A.1102, subsection 2, unnumbered   28   paragraph 1, Code 2023, is amended to read as follows: 29   An Iowa limited liability company may only participate   30   in a merger under this section to the extent authorized 31   under   section 489.1015 . A parent domestic cooperative or 32   a subsidiary that is a domestic cooperative may complete 33   the merger of a subsidiary as provided in this section . 34   However, if either the parent cooperative or the subsidiary 35   -156-   HF 655 (4) 90   da/jh/md   156/ 159                            

  H.F. 655   is a business entity organized under the laws of this state, 1   the merger of the subsidiary is not authorized under this 2   section unless the law governing the business entity expressly 3   authorizes merger with a cooperative. 4   Sec. 155. Section 501A.1103, subsection 2, paragraph a, 5   Code 2023, is amended to read as follows: 6   a. A merger may be abandoned upon any of the following: 7   (1) The members of each of the constituent domestic 8   cooperatives entitled to vote on the approval of the plan 9   have approved the abandonment at a meeting by the affirmative 10   vote of the holders of a majority of the voting power of the 11   membership interests entitled to vote. 12   (2)   The merger is with a domestic cooperative and an Iowa 13   limited liability company or foreign business entity.   14   (3) (2) The abandonment is approved in such manner as may 15   be required by section 489.1015 for the involvement of an Iowa 16   limited liability company, or for a foreign business entity by 17   under   the laws of the state under which the foreign business 18   entity is organized. 19   (4)   (3) The members of a constituent domestic cooperative 20   are not entitled to vote on the approval of the plan, and the 21   board of the constituent domestic cooperative has approved 22   the abandonment by the affirmative vote of a majority of the 23   directors present. 24   (5)   (4) The plan provides for abandonment and all 25   conditions for abandonment set forth in the plan are met. 26   (6) (5) The plan is abandoned before the effective date 27   of the plan by a resolution of the board of any constituent 28   domestic cooperative abandoning the plan of merger approved by 29   the affirmative vote of a majority of the directors present, 30   subject to the contract rights of any other person under the 31   plan. If a plan of merger is with a domestic business entity or 32   foreign business entity, the plan of merger may be abandoned 33   before the effective date of the plan by a resolution of the 34   foreign business entity adopted according to the laws of the 35   -157-   HF 655 (4) 90   da/jh/md   157/ 159                   

  H.F. 655   state under which the foreign business entity is organized, 1   subject to the contract rights of any other person under the 2   plan. If the plan of merger is with an Iowa limited liability   3   company, the plan of merger may be abandoned by the Iowa 4   limited liability company as provided in   section 489.1015 , 5   subject to the contractual rights of any other person under the   6   plan. 7   Sec. 156. Section 504.401, subsection 2, paragraph b, 8   subparagraph (4), Code 2023, is amended to read as follows: 9   (4) For a limited liability company under chapter 489 , 10   section 489.108 , 489.109 , 489.114A,   or 489.706 . 11   Sec. 157. Section 504.403, subsection 1, paragraph b, 12   subparagraph (4), Code 2023, is amended to read as follows: 13   (4) For a limited liability company under chapter 489 , 14   section 489.108 , 489.109 , 489.114A,   or 489.706 . 15   Sec. 158. Section 524.303, subsection 2, Code 2023, is 16   amended to read as follows: 17   2. Applicable fees, payable to the secretary of state as 18   specified in section 489.117 or   section 490.122 , for the filing 19   of the articles of incorporation or section 489.117 for filing 20   a certificate of organization   . 21   Sec. 159. Section 524.310, subsection 5, paragraph b, Code 22   2023, is amended to read as follows: 23   b. A corporate or company name reserved, registered, or 24   protected as provided in section 489.109 , 489.114A, 489.706,   25   490.402 , 490.403 , 504.402 , or 504.403 . 26   Sec. 160. Section 542.7, subsection 3, paragraph c, 27   subparagraph (2), Code 2023, is amended to read as follows: 28   (2) Notwithstanding chapter 489, article 11 subchapter XI , 29   or any other provision of law to the contrary, a certified 30   public accounting firm organized as a professional limited 31   liability company under chapter 489, article 11   subchapter XI , 32   may have nonlicensee members provided that the professional 33   limited liability company complies with the requirements of 34   this section . 35   -158-   HF 655 (4) 90   da/jh/md   158/ 159                      

  H.F. 655   DIVISION III 1   EFFECTIVE DATE 2   Sec. 161. EFFECTIVE DATE. This Act takes effect January 1, 3   2024. 4   -159-   HF 655 (4) 90   da/jh/md   159/ 159