Do you need to change your statutes? We have a model for that. Or do you need to re-evaluate your entire LLC enterprise agreement? You can use our free company agreement if you want – you just need to add a line in which you indicate that you are going to revert the LLC company agreement. If your organization articles or company agreement contain the names of all LLC members, you must update them with the new information. There are few rules in the current law on when an officer must obtain the consent of members before taking action. In the company agreement, members were able to agree to expand the number of measures requiring the approval of a manager or to retain the approval rights of certain important measures, for example. B amendments to the articles or to the company agreement or conclusion of a merger. Since the 1994 law contains only a handful of standard approval rules, company agreements are often designed to set the limits of a manager`s ability to act without the consent of the members, instead of simply indicating that the members had no voting rights other than the indicated voting rights. In many other agreements, language may provide that members do not have the right to vote “except as provided by the LLC Act.” While such provisions were correct in the context of the current law, the new law significantly expands members` approval rights. Depending on the language of the company agreement, the new law can effectively limit a manager`s power to take actions that the manager could have taken before 2014. For example, a new standard rule is that when an LLC is managed by managers, the manager cannot take actions “outside of normal operation” without the agreement of all members.
A similar standard rule exists in the New Act for a member-managed LLC. If, before 2014, a company agreement provides that the consent of the members holding the majority of the shares of the members is only necessary for the acts listed in the agreement, this new rule would not apply and the manager would retain the power described in the company agreement. However, if the company agreement does not exclude additional voting rights or does not apply to members who have voting rights under the LLC Act, the New Act allows any member who does not accept a measure implemented by an officer to challenge the act by claiming that it is an act “outside the normal course of business” and that the member has not approved it. Since many company agreements have been developed with the aim of giving the manager (who is often the most interested member) absolute control over the decision on shares, both within and outside normal activity, the new law could significantly change control rights and give a minority member a veto if the members did not initially intend to do so. Since the new law does not contain an explicit definition of actions that are not normal, this issue is likely to be the subject of much litigation between officers and members. Members can address these potential issues by changing the company agreement to reflect the expected extent of members` voting rights and to set any limits on a manager`s powers. Most LLC company agreements or articles of association include the coordination procedure necessary for the addition or removal of members to the company. If the LLC has its own provisions regarding the date of a vote and the number of votes required to change ownership, continue as ordered.