PART III. RELATIONS OF MEMBERS AND MANAGERS TO PERSONS

DEALINGWITH THE LIMITED LIABILITY COMPANY

 

[§428-301]  Agency of members and managers. (a)  Subject to the provisions of subsections (b) and (c):

(1)  Each member is an agent of the limited liabilitycompany for the purpose of its business;

(2)  An act of a member, including the signing of aninstrument in the company name, for apparently carrying on in the ordinarycourse the company's business or business of the kind carried on by the companybinds the company, unless the member had no authority to act for the company inthe particular matter and the person with whom the member was dealing knew orhad notice that the member lacked authority; and

(3)  An act of a member which is not apparently for carrying onin the ordinary course of the company's business or business of the kindcarried on by the company binds the company only if the act was authorized bythe other members.

(b)  Subject to subsection (c), in amanager-managed limited liability company:

(1)  A member is not an agent of the company for thepurpose of its business solely by reason of being a member;

(2)  Each manager is an agent of the company for thepurpose of its business;

(3)  An act of a manager, including the signing of aninstrument in the company name, for apparently carrying on in the ordinarycourse the company's business or business of the kind carried on by the companybinds the company, unless the manager had no authority to act for the companyin the particular matter and the person with whom the manager was dealing knewor had notice that the manager lacked authority; and

(4)  An act of a manager which is not apparently forcarrying on in the ordinary course the company's business or business of thekind carried on by the company binds the company only if the act was authorizedunder section 428-404(b)(2).

(c)  Unless the articles of organization limittheir authority, any member of a member-managed limited liability company orany manager of a manager-managed company may sign and deliver any instrumenttransferring or affecting the company's interest in real property.  Such aninstrument shall be conclusively in favor of a person who gives value withoutknowledge of the lack of the authority of the person signing and delivering theinstrument. [L 1996, c 92, pt of §1]