Be careful when creating a board of managers in an LLC operating agreement
Posted on 10/03/2010 at 11:43 AM by The Newsroom
Even though LLCs are not corporations, owners and their lawyers like for LLCs to look and act like corporations. One of the most prevalent corporate characteristics seen in LLC operating agreements is the concept of a board of managers intended to act like a board of directors. Corporate board members, however, do not have an independent right to act on behalf of the corporation. That may not be the case with managers of an LLC. Iowa Code Section 489.407 (3)(b) says that Each manager has equal rights in the management and conduct of the activities of the company. Depending on the circumstances this may permit one manager among many to act as agent for the LLC.
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Categories: Commercial Litigation
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