Organization

One or more persons may organize a limited liability company, consisting of one or more members, by delivering articles of organization to the office of the Secretary of State for filing. Unless a delayed effective date is specified, the existence of a limited liability company begins when the articles of organization are filed. The filing of the articles of organization is conclusive proof that the organizers satisfied all conditions precedent to the creation of a limited liability company.

Articles of Organization

Articles of organization of a limited liability company must set forth:

  • The name of the company;
  • The address of the initial designated office;
  • The name and street address of the initial agent for service of process;
  • The name and address of each organizer;
  • Whether the company is to be a term company and, if so, the term specified;
  • Whether the company is to be manager-managed, and, if so, the name and address of each initial manager; and
  • Whether one or more of the members of the company are to be liable for its debts and obligations

Articles of organization of a limited liability company may set forth provisions permitted to be set forth in an operating agreement or other matters not inconsistent with law. If any provision of an operating agreement is inconsistent with the articles of organization the operating agreement controls as to managers, members, and members’ transferees. Also, the articles of organization control as to persons, other than managers, members and their transferees, who reasonably rely on the articles to their detriment.

Filing

Articles of organization or any other record filed must meet the requirements and must be delivered to the Secretary of State. Unless a record fails to comply as to form with the filing requirements of this, and if all filing fees have been paid, the Secretary of State shall file the record and send a receipt for the record and the fees to the limited liability company or its representative.Upon request and payment of a
fee, the Secretary of State shall send to the requester a certified copy of the requested record. A record
accepted for filing by the Secretary of State is effective at the time of filing on the date it is filed or at the time specified in the record as its effective time on the date it is filed. A record may specify a delayed effective time and date, and if it does so the record becomes effective at the time and date specified. If a delayed effective date but no time is specified, the record is effective at the close of business on that date. If a delayed effective date is later than the 90th day after the record is filed, the record is effective on the 90th day.

Signing of Records

Except as otherwise provided, a record to be filed by or on behalf of a limited liability company in the office of the Secretary of State must be signed in the name of the company by a:

  • Manager of a manager-managed company;
  • Member of a member-managed company;
  • Person organizing the company, if the company has not been formed; or
  • Fiduciary, if the company is in the hands of a receiver, trustee, or other court-appointed fiduciary

A record signed under subsection (a) must state adjacent to the signature the name and capacity of the signer. Also, any person may sign a record to be filed under subsection (a) by an attorney-in-fact. Powers of attorney relating to the signing of records to be filed under subsection (a) by an attorney-in-fact need not be filed in the office of the Secretary of State as evidence of authority by the person filing but must be retained by the company.

Operating Agreement

Except as otherwise provided, all members of a limited liability company may enter into an operating agreement, which need not be in writing, to regulate the affairs of the company and the conduct of its business, and to govern relations among the members, managers, and company. To the extent the operating agreement does not otherwise provide, this governs relations among the members, managers, and company.

However, The operating agreement may not:

  • Unreasonably restrict a right to information or access to records
  • Eliminate the duty of loyalty
    • Identify specific types or categories of activities that do not violate the duty of loyalty, if not manifestly unreasonable; and
    • Specify the number or percentage of members or disinterested managers that may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty;
  • Unreasonably reduce the duty of care;
  • Eliminate the obligation of good faith and fair dealing, but the operating agreement may determine the standards by which the performance of the obligation is to be measured, if the standards are not manifestly unreasonable;
  • Vary the right to expel a member in an event;
  • Vary the requirement to wind up the limited liability company’s business in a case specified
  • Restrict rights of a person, other than a manager, member, and transferee of a member’s distributional interest

Name

The name of a limited liability company must contain “limited liability company” or “limited company” or the abbreviation “L.L.C.”, “LLC”, “L.C.”, or “LC”. “Limited” may be abbreviated as “Ltd.”, and “company” may be abbreviated as “Co.”. Except as authorized by subsections (c) and (d), the name of a limited liability company must be distinguishable upon the records of the Secretary of State from:

  • The name of any corporation, limited partnership, or company incorporated, organized or authorized to transact business, in this State;
  • A name reserved or registered;
  • A fictitious name approved for a foreign company authorized to transact business in this State because its real name is unavailable

A limited liability company may apply to the Secretary of State for authorization to use a name that is not distinguishable upon the records of the Secretary of State from one or more of the names. The Secretary of State shall authorize use of the name applied for the present user, registrant, or owner of a reserved name consents to the use in a record and submits an undertaking in form satisfactory to the Secretary of State to change the name to a name that is distinguishable upon from the name applied for. Additionally, If the applicant delivers to the Secretary of State a certified copy of the final judgment of a court of competent jurisdiction establishing the applicant’s right to use the name applied for in this State. A limited liability company may use the name, including a fictitious name, of another domestic or foreign company which is used in this State if the other company is organized or authorized to transact business in this State and the company proposing to use the name has either merged with the other company, been formed by reorganization with the other company, or acquired substantially all of the assets, including the name, of the other company.

Certificate of Authorization

A person may request the Secretary of State to furnish a certificate of existence for a limited liability company or a certificate of authorization for a foreign limited liability company. A certificate of existence for a limited liability company must set forth:

  • The company’s name;
  • That it is duly organized under the laws of this State, the date of organization, whether its duration is at will or for a specified term, and, if the latter, the period specified;
  • If payment is reflected in the records of the Secretary of State and if nonpayment affects the existence of the company, that all fees, taxes, and penalties owed to this State have been paid;
  • Whether its most recent annual report required by Section 211 has been filed with the Secretary of State;
  • That articles of termination have not been filed; and
  • Other facts of record in the office of the Secretary of State which may be requested by the applicant

A certificate of authorization for a foreign limited liability company must set forth:

  • The company’s name used in this State;
  • That it is authorized to transact business in this State;
  • If payment is reflected in the records of the Secretary of State and if nonpayment affects the authorization of the company, that all fees, taxes, and penalties owed to this State have been paid;
  • Whether its most recent annual report required by Section 211 has been filed with the Secretary of State;
  • That a certificate of cancellation has not been filed; and
  • Other facts of record in the office of the Secretary of State which may be requested by the applicant

Liability of False Statement

If a record authorized or required to be filed under this [Act] contains a false statement, one who suffers loss by reliance on the statement may recover damages for the loss from a person who signed the record or caused another to sign it on the person’s behalf and knew the statement to be false at the time the record was signed.

Agency of Members

Each member is an agent of the limited liability company for the purpose of its business, and an act of a member, including the signing of an instrument in the company’s name, for apparently carrying on in the ordinary course the company’s business or business of the kind carried on by the company binds the company, unless the member had no authority to act for the company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority. An act of a member which is not apparently for carrying on in the ordinary course the company’s business or business of the kind carried on by the company binds the company only if the act was authorized by the other members.

A member is not an agent of the company for the purpose of its business solely by reason of being a member. Each manager is an agent of the company for the purpose of its business, and an act of a
manager, including the signing of an instrument in the company’s name, for apparently carrying on in the ordinary course the company’s business or business of the kind carried on by the company binds the company, unless the manager had no authority to act for the company in the particular matter and the person with whom the manager was dealing knew or had notice that the manager lacked authority. An act of a manager which is not apparently for carrying on in the ordinary course the company’s business or business of the kind carried on by the company binds the company only if the act was authorized.

Unless the articles of organization limit their authority, any member of a member-managed company or manager of a manager-managed company may sign and deliver any instrument transferring or affecting the company’s interest in real property. The instrument is conclusive in favor of a person who gives value without knowledge of the lack of the authority of the person signing and delivering the instrument.

Liability

A limited liability company is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a member or manager acting in the ordinary course of business of the company or with authority of the company. Except as otherwise provided, the debts, obligations, and liabilities of a limited liability company, whether arising in contract,
tort, or otherwise, are solely the debts, obligations, and liabilities of the company. A member or manager is not personally liable for a debt, obligation, or liability of the company solely by reason of being or acting as a member or manager.

The failure of a limited liability company to observe the usual company formalities or
requirements relating to the exercise of its company powers or management of its business is not a ground for imposing personal liability on the members or managers for liabilities of the company. All or specified members of a limited liability company are liable in their capacity as members for all or specified debts, obligations, or liabilities of the company a provision to that effect is contained in the articles of organization and a member is liable has consented in writing to the adoption of the provision or to be bound by the provision.

Contribution

A contribution of a member of a limited liability company may consist of tangible or intangible property or other benefit to the company, including money, promissory notes, services performed, or other agreements to contribute cash or property, or contracts for services to be performed.

Membership Dissociation

A member is dissociated from a limited liability company upon the occurrence of any of the following events:

  • The company’s having notice of the member’s express will to withdraw upon the date of notice or on a later date specified by the member;
  • An event agreed to in the operating agreement as causing the member’s dissociation;
  • Upon transfer of all of a member’s distributional interest, other than a transfer for security purposes or a court order charging the member’s distributional interest which has not been foreclosed;
  • The member’s expulsion pursuant to the operating agreement;
  • The member’s expulsion by unanimous vote of the other members
  • On application by the company or another member, the member’s expulsion by judicial determination because the member engaged in wrongful conduct that adversely and materially affected the company’s business;
  • In the case of a member who is an individual: the member’s death or a judicial determination that the member has otherwise become incapable of performing the member’s duties under the operating agreement;
  • In the case of a member that is a trust or an estate distribution of the trust’s or estates entire rights to receive distributions from the company, but not merely by reason of the
    substitution of a successor trustee;
  • Termination of the existence of a member if the member is not an individual, estate, or trust other than a business trust

Amendment

Articles of organization of a limited liability company may be amended at any time by delivering articles of amendment to the Secretary of State for filing. The articles of amendment must set forth the

  • Name of the limited liability company;
  • Date of filing of the articles of organization; and
  • Amendment to the articles

A limited liability company may restate its articles of organization at any time. Restated articles of organization must be signed and filed in the same manner as articles of amendment. Restated articles of organization must be designated as such in the heading and state in the heading or in an introductory paragraph the limited liability company’s present name and, if it has been changed, all of its former names and the date of the filing of its initial articles of organization.