In his new blog, Marc Ward of the Dickinson Law Firm, sets out some key changes to the new Iowa LLC Act. One important issue to remember is that by default under the current law, Iowa LLCs are member managed unless unless the articles of organization or the operating agreement provides for management by manager(s). Under the new law only a provision in the operating agreement can change the management of the LLC from member-managed to manager-managed. As Marc indicates:
The operating agreement must expressly provide that (a) the LLC is "manager-managed" (b) the LLC is "managed by managers" (c) management of the LLC is "vested in managers" or (d) words of similar import. Be safe, use one of the first three phrases recognized by the Act to avoid all doubt.
But even perhaps more importantly, the new law (effective Jan. 2009) provides that a member is not an agent that can bind the LLC just because they are a member. The LLC may also file a statement of authority with the Iowa Secretary of State that specifically sets forth who does or does not have authority to act for the LLC to execute an instrument transferring real property or to enter into transactions on behalf of or otherwise act for or bind the LLC.
Hat tip to Joe Kristan for pointing out Marc’s blog. For those that doubt the validity of social media, it’s kind of funny that I learned my neighbor was blogging through someone else’s blog post.