SENATE BILL NO. 1350

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S1350................................................by JUDICIARY AND RULES
LIMITED LIABILITY COMPANIES - Repeals, amends and adds to existing law to
enact the Idaho Uniform Limited Liability Company Act.

01/28    Senate intro - 1st rdg - to printing
01/29    Rpt prt - to Jud
02/12    Rpt out - rec d/p - to 2nd rdg
02/13    2nd rdg - to 3rd rdg
02/19    3rd rdg - PASSED - 32-0-3
      AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
      Cameron, Coiner, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde,
      Hammond, Heinrich, Hill, Jorgenson, Kelly, Keough, Langhorst, Little,
      Lodge, Malepeai(Sagness), McGee, McKague, Pearce, Richardson,
      Schroeder, Siddoway, Stegner, Werk
      NAYS -- None
      Absent and excused -- Corder, McKenzie, Stennett
    Floor Sponsor - Hill
    Title apvd - to House
02/20    House intro - 1st rdg - to Jud
03/04    Rpt out - rec d/p - to 2nd rdg
03/05    2nd rdg - to 3rd rdg
03/11    3rd rdg - PASSED - 53-13-4
      AYES -- Anderson, Bayer, Bedke, Bell, Bilbao, Black, Block, Bock,
      Boe, Bolz, Brackett, Bradford, Chadderdon, Chavez, Chew, Clark,
      Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Henbest, Henderson,
      Jaquet, Killen, King, Labrador, Lake, LeFavour, Luker, Mathews,
      Nonini, Pasley-Stuart, Pence, Raybould, Ringo, Ruchti, Rusche,
      Sayler, Schaefer, Shepherd(02), Shirley, Shively, Smith(30),
      Smith(24), Stevenson, Thomas, Trail, Vander Woude, Wills, Wood(27),
      Mr. Speaker
      NAYS -- Andrus, Barrett, Bowers, Harwood, Kren, Loertscher, Marriott,
      McGeachin, Nielsen, Patrick, Shepherd(08), Thayn, Wood(35)
      Absent and excused -- Mortimer, Moyle, Roberts, Snodgrass
    Floor Sponsor - Labrador
    Title apvd - to Senate
03/12    To enrol
03/13    Rpt enrol - Pres signed - Sp signed
03/14    To Governor
03/18    Governor signed
         Session Law Chapter 176
         Effective: 07/01/08 Sections 1 through 4;
         07/01/10 Section 5

Bill Text




                                                                       
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-ninth Legislature                   Second Regular Session - 2008

                                                                       

                                       IN THE SENATE

                                    SENATE BILL NO. 1350

                              BY JUDICIARY AND RULES COMMITTEE

  1                                        AN ACT
  2    RELATING TO THE IDAHO UNIFORM LIMITED LIABILITY COMPANY  ACT;  AMENDING  TITLE
  3        30,  IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 6, TITLE 30, IDAHO CODE,
  4        TO PROVIDE A SHORT TITLE, TO DEFINE TERMS, TO PROVIDE  FOR  KNOWLEDGE  AND
  5        FOR  NOTICE,  TO  PROVIDE  FOR THE NATURE, PURPOSE AND DURATION OF LIMITED
  6        LIABILITY COMPANIES, TO PROVIDE FOR POWERS, TO PROVIDE FOR GOVERNING  LAW,
  7        TO  PROVIDE  FOR  SUPPLEMENTAL PRINCIPLES OF LAW, TO PROVIDE FOR NAMES, TO
  8        PROVIDE FOR RESERVATION OF  NAMES, TO PROVIDE FOR SCOPE, FUNCTION AND LIM-
  9        ITATIONS OF OPERATING AGREEMENTS, TO PROVIDE FOR THE EFFECT  OF  OPERATING
 10        AGREEMENTS ON LIMITED LIABILITY COMPANIES AND PERSONS BECOMING MEMBERS, TO
 11        PROVIDE FOR A PREFORMATION AGREEMENT, TO PROVIDE FOR THE EFFECT OF OPERAT-
 12        ING AGREEMENTS ON THIRD PARTIES AND TO RECORDS EFFECTIVE ON BEHALF OF LIM-
 13        ITED  LIABILITY COMPANIES, TO PROVIDE FOR THE DESIGNATED OFFICE AND REGIS-
 14        TERED AGENT, TO PROVIDE FOR CHANGE OF DESIGNATED OFFICE,  TO  PROVIDE  FOR
 15        FORMATION  OF LIMITED LIABILITY COMPANIES AND FOR CERTIFICATE OF ORGANIZA-
 16        TION, TO PROVIDE FOR PROFESSIONAL COMPANIES, TO PROVIDE FOR  AMENDMENT  OR
 17        RESTATEMENT  OF  CERTIFICATES  OF  ORGANIZATION, TO PROVIDE FOR SIGNING OF
 18        RECORDS TO BE DELIVERED FOR FILING TO THE SECRETARY OF STATE,  TO  PROVIDE
 19        FOR SIGNING AND FILING PURSUANT TO JUDICIAL ORDER, TO PROVIDE FOR DELIVERY
 20        TO  AND FILING OF RECORDS BY THE SECRETARY OF STATE AND FOR EFFECTIVE TIME
 21        AND DATE, TO PROVIDE FOR CORRECTING FILED RECORDS, TO PROVIDE FOR  LIABIL-
 22        ITY  FOR  INACCURATE INFORMATION IN FILED RECORDS, TO PROVIDE FOR CERTIFI-
 23        CATES OF EXISTENCE OR AUTHORIZATION, TO PROVIDE FOR ANNUAL REPORTS FOR THE
 24        SECRETARY OF STATE, TO PROVIDE FOR FILING, SERVICE AND  COPYING  FEES,  TO
 25        PROVIDE  FOR  NO AGENCY POWER OF MEMBERS AS MEMBERS, TO PROVIDE FOR STATE-
 26        MENTS OF AUTHORITY, TO PROVIDE FOR STATEMENTS OF DENIAL,  TO  PROVIDE  FOR
 27        LIABILITY  OF  MEMBERS  AND MANAGERS, TO PROVIDE FOR BECOMING A MEMBER, TO
 28        PROVIDE FOR FORMS OF CONTRIBUTION, TO PROVIDE FOR LIABILITY FOR  CONTRIBU-
 29        TIONS,  TO PROVIDE FOR SHARING OF AND RIGHT TO DISTRIBUTIONS BEFORE DISSO-
 30        LUTION, TO PROVIDE FOR LIMITATIONS ON DISTRIBUTIONS, TO PROVIDE  FOR  LIA-
 31        BILITY  FOR  IMPROPER  DISTRIBUTIONS, TO PROVIDE FOR MANAGEMENT OF LIMITED
 32        LIABILITY COMPANIES, TO PROVIDE FOR INDEMNIFICATION AND INSURANCE, TO PRO-
 33        VIDE FOR STANDARDS OF CONDUCT FOR MEMBERS AND  MANAGERS,  TO  PROVIDE  FOR
 34        RIGHT OF MEMBERS, MANAGERS AND DISSOCIATED MEMBERS TO INFORMATION, TO PRO-
 35        VIDE  FOR  NATURE  OF  TRANSFERABLE  INTEREST,  TO PROVIDE FOR TRANSFER OF
 36        TRANSFERABLE INTEREST, TO PROVIDE FOR  CHARGING  ORDERS,  TO  PROVIDE  FOR
 37        POWER  OF  PERSONAL  REPRESENTATIVE  OF  DECEASED  MEMBER,  TO PROVIDE FOR
 38        MEMBER'S POWER TO DISSOCIATE AND FOR WRONGFUL DISSOCIATION, TO PROVIDE FOR
 39        EVENTS CAUSING DISSOCIATION, TO PROVIDE FOR EFFECT OF  PERSON'S  DISSOCIA-
 40        TION  AS MEMBER, TO PROVIDE FOR EVENTS CAUSING DISSOLUTION, TO PROVIDE FOR
 41        WINDING UP, TO PROVIDE FOR KNOWN CLAIMS AGAINST DISSOLVED LIMITED  LIABIL-
 42        ITY  COMPANIES, TO PROVIDE FOR OTHER CLAIMS AGAINST DISSOLVED LIMITED LIA-
 43        BILITY COMPANIES, TO PROVIDE GROUNDS FOR  ADMINISTRATIVE  DISSOLUTION  AND
 44        FOR  PROCEDURE AND EFFECT, TO PROVIDE FOR REINSTATEMENT FOLLOWING ADMINIS-
 45        TRATIVE DISSOLUTION, TO PROVIDE FOR APPEAL FROM  REJECTION  OF  REINSTATE-
 46        MENT,  TO PROVIDE FOR DISTRIBUTION OF ASSETS IN WINDING UP LIMITED LIABIL-

                                       2

  1        ITY COMPANIES' ACTIVITIES, TO PROVIDE GOVERNING LAW  FOR  FOREIGN  LIMITED
  2        LIABILITY  COMPANIES,  TO PROVIDE APPLICATION FOR CERTIFICATE OF AUTHORITY
  3        FOR FOREIGN LIMITED LIABILITY COMPANIES, TO PROVIDE ACTIVITIES NOT CONSTI-
  4        TUTING TRANSACTING BUSINESS FOR FOREIGN LIMITED  LIABILITY  COMPANIES,  TO
  5        PROVIDE  FOR FILING CERTIFICATES OF AUTHORITY BY FOREIGN LIMITED LIABILITY
  6        COMPANIES, TO PROVIDE FOR NONCOMPLYING NAMES OF FOREIGN LIMITED  LIABILITY
  7        COMPANIES,  TO  PROVIDE FOR REVOCATION OF CERTIFICATE OF AUTHORITY OF FOR-
  8        EIGN LIMITED LIABILITY COMPANIES, TO PROVIDE FOR CANCELLATION OF  CERTIFI-
  9        CATE  OF  AUTHORITY OF FOREIGN LIMITED LIABILITY COMPANIES, TO PROVIDE FOR
 10        THE EFFECT OF FAILURE TO HAVE FOREIGN  LIMITED  LIABILITY  CERTIFICATE  OF
 11        AUTHORITY,  TO  PROVIDE FOR ACTION BY THE ATTORNEY GENERAL, TO PROVIDE FOR
 12        DIRECT ACTION BY MEMBERS, TO PROVIDE FOR DERIVATIVE  ACTIONS,  TO  PROVIDE
 13        FOR PROPER PLAINTIFF, TO PROVIDE FOR PLEADING, TO PROVIDE FOR SPECIAL LIT-
 14        IGATION  COMMITTEES,  TO PROVIDE FOR PROCEEDS AND EXPENSES, TO PROVIDE FOR
 15        APPLICABILITY OF  THE  IDAHO  ENTITY  TRANSACTIONS  ACT,  TO  PROVIDE  FOR
 16        RESTRICTIONS  ON  APPROVAL  OF MERGERS, CONVERSIONS AND DOMESTICATIONS, TO
 17        PROVIDE FOR UNIFORMITY OF APPLICATION AND  CONSTRUCTION,  TO  PROVIDE  FOR
 18        RELATION TO THE ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT,
 19        TO  PROVIDE  A  SAVINGS CLAUSE, TO PROVIDE FOR THE APPLICATION TO EXISTING
 20        RELATIONSHIPS; AMENDING SECTION 30-1-401, IDAHO CODE, TO  PROVIDE  CORRECT
 21        CODE REFERENCES; AMENDING SECTION 63-3004A, IDAHO CODE, TO PROVIDE CORRECT
 22        CODE  REFERENCES; AMENDING SECTION 63-3622, IDAHO CODE, TO PROVIDE CORRECT
 23        CODE REFERENCES; REPEALING CHAPTER 6, TITLE 53, IDAHO  CODE,  RELATING  TO
 24        THE IDAHO LIMITED LIABILITY COMPANY ACT; AND PROVIDING EFFECTIVE DATES.

 25    Be It Enacted by the Legislature of the State of Idaho:

 26        SECTION  1.  That Title 30, Idaho Code, be, and the same is hereby amended
 27    by the addition thereto of a NEW CHAPTER, to be known and designated as  Chap-
 28    ter 6, Title 30, Idaho Code, and to read as follows:

 29                                      CHAPTER 6
 30                     IDAHO UNIFORM LIMITED LIABILITY COMPANY ACT
 31                                       PART 1.
 32                                  GENERAL PROVISIONS

 33        30-6-101.  SHORT  TITLE.  This  chapter may be cited as the "Idaho Uniform
 34    Limited Liability Company Act."

 35        30-6-102.  DEFINITIONS. In this chapter:
 36        (1)  "Allied professional services" means professional services which  are
 37    so  related  in substance that they are frequently offered in conjunction with
 38    one another as parts of the same service package to the consumer.
 39        (2)  "Certificate of organization" means the certificate required by  sec-
 40    tion  30-6-201,  Idaho  Code.  The term includes the certificate as amended or
 41    restated.
 42        (3)  "Contribution" means any benefit provided by a person  to  a  limited
 43    liability company:
 44        (a)  In  order  to  become  a  member upon formation of the company and in
 45        accordance with an agreement between or among the persons that have agreed
 46        to become the initial members of the company;
 47        (b)  In order to become a member after formation of  the  company  and  in
 48        accordance with an agreement between the person and the company; or
 49        (c)  In the person's capacity as a member and in accordance with the oper-
 50        ating agreement or an agreement between the member and the company.

                                       3

  1        (4)  "Debtor in bankruptcy" means a person that is the subject of:
  2        (a)  An  order  for  relief  under Title 11 of the United States Code or a
  3        successor statute of general application; or
  4        (b)  A comparable order under federal,  state  or  foreign  law  governing
  5        insolvency.
  6        (5)  "Designated office" means:
  7        (a)  The  office that a limited liability company is required to designate
  8        and maintain under section 30-6-113, Idaho Code; or
  9        (b)  The principal office of a foreign limited liability company.
 10        (6)  "Distribution," except as otherwise provided in section  30-6-405(7),
 11    Idaho Code, means a transfer of money or other property from a limited liabil-
 12    ity company to another person on account of a transferable interest.
 13        (7)  "Effective,"  with  respect  to  a record required or permitted to be
 14    delivered to the secretary of state  for  filing  under  this  chapter,  means
 15    effective under section 30-6-205(3), Idaho Code.
 16        (8)  "Foreign  limited  liability  company" means an unincorporated entity
 17    formed under the law of a jurisdiction other than this state  and  denominated
 18    by that law as a limited liability company.
 19        (9)  "Limited  liability  company,"  except in the phrase "foreign limited
 20    liability company," means an entity formed under this chapter.
 21        (10) "Manager" means a person that under  the  operating  agreement  of  a
 22    manager-managed  limited liability company is responsible, alone or in concert
 23    with others,  for  performing  the  management  functions  stated  in  section
 24    30-6-407(3), Idaho Code.
 25        (11) "Manager-managed limited liability company" means a limited liability
 26    company that qualifies under section 30-6-407(1), Idaho Code.
 27        (12) "Member" means a person that has become a member of a limited liabil-
 28    ity  company under section 30-6-401, Idaho Code, and has not dissociated under
 29    section 30-6-602, Idaho Code.
 30        (13) "Member-managed limited liability company" means a limited  liability
 31    company that is not a manager-managed limited liability company.
 32        (14) "Membership"  or  "membership interest" means, for purposes of a pro-
 33    fessional company formed under  section  30-6-201A,  Idaho  Code,  a  member's
 34    transferable interest, together with the member's governance rights under part
 35    4 of this chapter.
 36        (15) "Operating agreement" means the agreement, whether or not referred to
 37    as  an  operating  agreement and whether oral, in a record, implied, or in any
 38    combination thereof, of all  the  members  of  a  limited  liability  company,
 39    including   a  sole  member,  concerning  the  matters  described  in  section
 40    30-6-110(1), Idaho Code.  The  term  includes  the  agreement  as  amended  or
 41    restated.
 42        (16) "Organizer"  means  a  person that acts under section 30-6-201, Idaho
 43    Code, to form a limited liability company.
 44        (17) "Person" means an individual, corporation,  business  trust,  estate,
 45    trust,  partnership,  limited  liability  company, association, joint venture,
 46    public corporation, government or governmental subdivision, agency, or instru-
 47    mentality, or any other legal or commercial entity.
 48        (18) "Principal office" means the principal executive office of a  limited
 49    liability  company  or  foreign  limited liability company, whether or not the
 50    office is located in this state.
 51        (19) "Professional company" means a limited  liability  company  organized
 52    under the provisions of this chapter for the sole and specific purpose of ren-
 53    dering  professional  services,  allied  professional  services,  and services
 54    ancillary to the professional services and which has as its members only:  (a)
 55    natural  persons  who themselves are duly licensed or otherwise legally autho-

                                       4

  1    rized to render one (1) or more of the same professional services as the  pro-
  2    fessional  company; and/or (b) professional corporations, partnerships or lim-
  3    ited liability companies, all of whose shareholders, partners or  members  are
  4    duly licensed or otherwise legally authorized to render one (1) or more of the
  5    same professional services as the professional company.
  6        (20) "Professional  service" means any type of service to the public which
  7    can be rendered by a member of any profession within the purview of  his  pro-
  8    fession.  For  the  purpose  of this chapter, the professions shall be held to
  9    include the practices of architecture, chiropractic,  dentistry,  engineering,
 10    landscape  architecture, law, medicine, nursing, occupational therapy, optome-
 11    try, physical therapy, podiatry, professional geology,  psychology,  certified
 12    or  licensed  public  accountancy, social work, surveying and veterinary medi-
 13    cine, and no others.
 14        (21) "Record" means information that is inscribed on a tangible medium  or
 15    that  is  stored  in  an  electronic  or  other  medium  and is retrievable in
 16    perceivable form.
 17        (22) "Registered agent" means an agent for  service  of  process  in  this
 18    state in accordance with chapter 4, title 30, Idaho Code.
 19        (23) "Sign"  means,  with  the  present  intent to authenticate or adopt a
 20    record:
 21        (a)  To execute or adopt a tangible symbol; or
 22        (b)  To attach to or logically associate with  the  record  an  electronic
 23        symbol, sound or process.
 24        (24) "State" means a state of the United States, the District of Columbia,
 25    Puerto Rico, the United States Virgin Islands or any territory or insular pos-
 26    session subject to the jurisdiction of the United States.
 27        (25) "Transfer"  includes  an  assignment, conveyance, deed, bill of sale,
 28    lease, mortgage, security interest, encumbrance, gift and transfer  by  opera-
 29    tion of law.
 30        (26) "Transferable  interest"  means  the  right, as originally associated
 31    with a person's capacity as a member, to receive distributions from a  limited
 32    liability  company  in accordance with the operating agreement, whether or not
 33    the person remains a member or continues to own any part of the right.
 34        (27) "Transferee" means a person to which all or part  of  a  transferable
 35    interest has been transferred, whether or not the transferor is a member.

 36        30-6-103.  KNOWLEDGE -- NOTICE. (1) A person knows a fact when the person:
 37        (a)  Has actual knowledge of it; or
 38        (b)  Is  deemed  to know it under subsection (4)(a) of this section or law
 39        other than this chapter.
 40        (2)  A person has notice of a fact when the person:
 41        (a)  Has reason to know the fact from all of the facts known to the person
 42        at the time in question; or
 43        (b)  Is deemed to have notice of the fact under subsection (4)(b) of  this
 44        section;
 45        (3)  A  person  notifies  another  of  a  fact  by taking steps reasonably
 46    required to inform the other person in ordinary course,  whether  or  not  the
 47    other person knows the fact.
 48        (4)  A person that is not a member is deemed:
 49        (a)  To  know  of  a  limitation on authority to transfer real property as
 50        provided in section 30-6-302(7), Idaho Code; and
 51        (b)  To have notice of a limited liability company's:
 52             (i)   Dissolution, ninety (90)  days after a statement of dissolution
 53             under section 30-6-702(2)(b)(i), Idaho Code, becomes effective;
 54             (ii)  Termination, ninety (90) days after a statement of  termination

                                       5

  1             under section 30-6-702(2)(b)(vi), Idaho Code, becomes effective; and
  2             (iii) Merger,  conversion  or  domestication, ninety (90)  days after
  3             articles of merger, conversion or domestication under part 10 of this
  4             chapter become effective.

  5        30-6-104.  NATURE, PURPOSE AND DURATION OF LIMITED LIABILITY COMPANY.  (1)
  6    A limited liability company is an entity distinct from its members.
  7        (2)  A limited liability company may have any lawful purpose.
  8        (3)  A limited liability company has perpetual duration.
  9        (4)  A limited liability company may have one (1) or more members.

 10        30-6-105.  POWERS. A limited liability company has the capacity to sue and
 11    be sued in its own name and the power to do all things necessary or convenient
 12    to  carry  on  its activities including, in the case of a professional company
 13    formed under this chapter, the power to render professional services.

 14        30-6-106.  GOVERNING LAW. The law of this state governs:
 15        (1)  The internal affairs of a limited liability company; and
 16        (2)  The liability of a member as member and a manager as manager for  the
 17    debts, obligations or other liabilities of a limited liability company.

 18        30-6-107.  SUPPLEMENTAL  PRINCIPLES OF LAW. Unless displaced by particular
 19    provisions of this chapter, the principles of law and equity  supplement  this
 20    chapter.

 21        30-6-108.  NAME.  (1) The name of a limited liability company must contain
 22    the words "limited liability company" or "limited company" or the abbreviation
 23    "L.L.C.," "LLC," "L.C.," or "LC." "Limited" may be abbreviated as  "ltd."  and
 24    "company"  may  be abbreviated as "co."  If the limited liability company is a
 25    professional company, however, the name of the limited liability company  must
 26    contain  the  words  "Professional Company" or the abbreviations "P.L.L.C." or
 27    "PLLC."
 28        (2)  Unless authorized by subsection (3) of this section, the  name  of  a
 29    limited liability company must be distinguishable on the records of the secre-
 30    tary of state from:
 31        (a)  The  name of each person that is not an individual and that is incor-
 32        porated, organized or authorized to transact business in this state;
 33        (b)  The limited liability company name  stated  in  each  certificate  of
 34        organization   that   contains   the  statement  as  provided  in  section
 35        30-6-201(2)(c), Idaho Code, and that has not lapsed; and
 36        (c)  Each name reserved under section 30-6-109, Idaho Code,  and  sections
 37        30-1-402  and  30-1-403,  Idaho  Code, sections 30-3-28 and 30-3-29, Idaho
 38        Code, and section 53-2-109, Idaho Code.
 39        (3)  A limited liability company may apply to the secretary of  state  for
 40    authorization  to  use a name that does not comply with subsection (2) of this
 41    section.  The secretary of state shall authorize use of the name  applied  for
 42    if, as to each noncomplying name:
 43        (a)  The  present  user, registrant or owner of the noncomplying name con-
 44        sents in a signed record to the use and submits an undertaking in  a  form
 45        satisfactory  to the secretary of state to change the noncomplying name to
 46        a name that complies with subsection (2) of this section  and  is  distin-
 47        guishable  in  the records of the secretary of state from the name applied
 48        for; or
 49        (b)  The applicant delivers to the secretary of state a certified copy  of
 50        the final judgment of a court establishing the applicant's right to use in

                                       6

  1        this state the name applied for.
  2        (4)  Subject  to  section  30-6-805, Idaho Code, this section applies to a
  3    foreign limited liability company transacting business in this state which has
  4    a certificate of authority to transact business in this  state  or  which  has
  5    applied for a certificate of authority.

  6        30-6-109.  RESERVATION OF NAME. (1) A person may reserve the exclusive use
  7    of  the name of a limited liability company, including a fictitious or assumed
  8    name for a foreign limited liability company whose name is not  available,  by
  9    delivering  an  application to the secretary of state for filing. The applica-
 10    tion must state the name and address of the applicant and the name proposed to
 11    be reserved. If the secretary of state finds that  the  name  applied  for  is
 12    available,  it  must  be reserved for the applicant's exclusive use for a four
 13    (4) month period.
 14        (2)  The owner of a name reserved for  a  limited  liability  company  may
 15    transfer  the  reservation to another person by delivering to the secretary of
 16    state for filing a signed notice of the transfer which  states  the  name  and
 17    address of the transferee.

 18        30-6-110.  OPERATING  AGREEMENT  --  SCOPE,  FUNCTION AND LIMITATIONS. (1)
 19    Except as otherwise provided in subsections (2) and (3) of this  section,  the
 20    operating agreement governs:
 21        (a)  Relations  among  the  members as members and between the members and
 22        the limited liability company;
 23        (b)  The rights and duties under this chapter of a person in the  capacity
 24        of manager;
 25        (c)  The  activities  of  the company and the conduct of those activities;
 26        and
 27        (d)  The means and conditions for amending the operating agreement.
 28        (2)  To the extent the operating agreement does not otherwise provide  for
 29    a matter described in subsection (1) of this section, this chapter governs the
 30    matter.
 31        (3)  An operating agreement may not:
 32        (a)  Vary  a  limited liability company's capacity under section 30-6-105,
 33        Idaho Code, to sue and be sued in its own name;
 34        (b)  Vary the law applicable under section 30-6-106, Idaho Code;
 35        (c)  Vary the power of the court under section 30-6-204, Idaho Code;
 36        (d)  Subject to subsections (4) through (7) of this section, eliminate the
 37        duty of loyalty, the duty of care, or any other fiduciary duty;
 38        (e)  Subject to subsections (4) through (7) of this section, eliminate the
 39        contractual obligation of  good  faith  and  fair  dealing  under  section
 40        30-6-409(4), Idaho Code;
 41        (f)  Unreasonably  restrict  the  duties  and  rights  stated  in  section
 42        30-6-410, Idaho Code;
 43        (g)  Vary  the power of a court to decree dissolution in the circumstances
 44        specified in sections 30-6-701(1)(d) and (e), Idaho Code;
 45        (h)  Vary the requirement to wind up a limited liability  company's  busi-
 46        ness as specified in sections 30-6-702(1) and (2)(a), Idaho Code;
 47        (i)  Unreasonably  restrict  the  right  of a member to maintain an action
 48        under part 9 of this chapter;
 49        (j)  Restrict the right to approve a merger, conversion  or  domestication
 50        under  chapter  18,  title 30, Idaho Code, to a member that will have per-
 51        sonal liability with respect to a  surviving,  converted  or  domesticated
 52        organization; or
 53        (k)  Except  as  otherwise  provided  in  section 30-6-112(2), Idaho Code,

                                       7

  1        restrict the rights under this chapter of a person other than a member  or
  2        manager.
  3        (4)  If not manifestly unreasonable, the operating agreement may:
  4        (a)  Restrict or eliminate the duty:
  5             (i)   As  required in sections 30-6-409(2)(a) and (7), Idaho Code, to
  6             account to the limited liability company and to hold as  trustee  for
  7             it  any property, profit or benefit derived by the member in the con-
  8             duct or winding up of the company's business, from a use by the  mem-
  9             ber of the company's property, or from the appropriation of a limited
 10             liability company opportunity;
 11             (ii)  As  required in sections 30-6-409(2)(b) and (7), Idaho Code, to
 12             refrain from dealing with the company in the conduct or winding up of
 13             the company's business as or on behalf of a party having an  interest
 14             adverse to the company; and
 15             (iii) As  required by sections 30-6-409(2)(c) and (7), Idaho Code, to
 16             refrain from competing  with  the  company  in  the  conduct  of  the
 17             company's business before the dissolution of the company;
 18        (b)  Identify  specific types or categories of activities that do not vio-
 19        late the duty of loyalty;
 20        (c)  Alter the duty of care, except to authorize intentional misconduct or
 21        knowing violation of law;
 22        (d)  Alter any other  fiduciary  duty,  including  eliminating  particular
 23        aspects of that duty; and
 24        (e)  Prescribe  the  standards  by which to measure the performance of the
 25        contractual obligation of  good  faith  and  fair  dealing  under  section
 26        30-6-409(4), Idaho Code.
 27        (5)  The  operating  agreement  may specify the method by which a specific
 28    act or transaction that would otherwise violate the duty  of  loyalty  may  be
 29    authorized  or  ratified by one (1) or more disinterested and independent per-
 30    sons after full disclosure of all material facts.
 31        (6)  To the extent the operating agreement  of  a  member-managed  limited
 32    liability  company  expressly  relieves  a member of a responsibility that the
 33    member would otherwise have under this chapter and imposes the  responsibility
 34    on  one (1) or more other members, the operating agreement may, to the benefit
 35    of the member that the operating agreement  relieves  of  the  responsibility,
 36    also  eliminate  or  limit any fiduciary duty that would have pertained to the
 37    responsibility.
 38        (7)  The operating agreement may alter or  eliminate  the  indemnification
 39    for  a  member or manager provided by section 30-6-408(1), Idaho Code, and may
 40    eliminate or limit a member or manager's liability to  the  limited  liability
 41    company and members for money damages, except for:
 42        (a)  Breach of the duty of loyalty;
 43        (b)  A  financial  benefit  received by the member or manager to which the
 44        member or manager is not entitled;
 45        (c)  A breach of a duty under section 30-6-406, Idaho Code;
 46        (d)  Intentional infliction of harm on the company or a member; or
 47        (e)  An intentional violation of criminal law.
 48        (8)  The court shall decide any claim, under  subsection  (4)(a)  of  this
 49    section, that a term of an operating agreement is manifestly unreasonable. The
 50    court:
 51        (a)  Shall  make  its  determination  as  of  the time the challenged term
 52        became part of the operating agreement and  by  considering  only  circum-
 53        stances existing at that time; and
 54        (b)  May invalidate the term only if, in light of the purposes and activi-
 55        ties of the limited liability company, it is readily apparent that:

                                       8

  1             (i)   The objective of the term is unreasonable; or
  2             (ii)  The  term  is  an unreasonable means to achieve the provision's
  3             objective.

  4        30-6-111.  OPERATING AGREEMENT -- EFFECT ON LIMITED LIABILITY COMPANY  AND
  5    PERSONS  BECOMING  MEMBERS  -- PREFORMATION AGREEMENT. (1) A limited liability
  6    company is bound by and may enforce the operating agreement,  whether  or  not
  7    the company has itself manifested assent to the operating agreement.
  8        (2)  A  person  that  becomes  a  member of a limited liability company is
  9    deemed to assent to the operating agreement.
 10        (3)  Two (2) or more persons intending to become the initial members of  a
 11    limited liability company may make an agreement providing that upon the forma-
 12    tion of the company the agreement will become the operating agreement. One (1)
 13    person  intending  to become the initial member of a limited liability company
 14    may assent to terms providing that upon the formation of the company the terms
 15    will become the operating agreement.

 16        30-6-112.  OPERATING AGREEMENT -- EFFECT ON THIRD PARTIES AND RELATIONSHIP
 17    TO RECORDS EFFECTIVE ON BEHALF OF LIMITED LIABILITY COMPANY. (1) An  operating
 18    agreement  may  specify  that  its amendment requires the approval of a person
 19    that is not a party to the operating agreement or the satisfaction of a condi-
 20    tion. An amendment is  ineffective  if  its  adoption  does  not  include  the
 21    required approval or satisfy the specified condition.
 22        (2)  The  obligations  of a limited liability company and its members to a
 23    person in the person's capacity as a transferee or dissociated member are gov-
 24    erned by the operating agreement. Subject only to any court order issued under
 25    section 30-6-503(2)(b), Idaho Code, to effectuate a charging order, an  amend-
 26    ment  to  the  operating agreement made after a person becomes a transferee or
 27    dissociated member is effective with regard to any debt, obligation  or  other
 28    liability of the limited liability company or its members to the person in the
 29    person's capacity as a transferee or dissociated member.
 30        (3)  If a record that has been delivered by a limited liability company to
 31    the  secretary of state for filing and has become effective under this chapter
 32    contains a provision that would  be  ineffective  under  section  30-6-110(3),
 33    Idaho Code, if contained in the operating agreement, the provision is likewise
 34    ineffective in the record.
 35        (4)  Subject  to subsection (3) of this section, if a record that has been
 36    delivered by a limited liability company to the secretary of state for  filing
 37    and  has become effective under this chapter conflicts with a provision of the
 38    operating agreement:
 39        (a)  The operating agreement prevails as to members, dissociated  members,
 40        transferees and managers; and
 41        (b)  The record prevails as to other persons to the extent they reasonably
 42        rely on the record.

 43        30-6-113.  DESIGNATED OFFICE AND REGISTERED AGENT. (1) A limited liability
 44    company shall designate and continuously maintain in this state:
 45        (a)  An  office,  which need not be a place of its activity in this state;
 46        and
 47        (b)  A registered agent.
 48        (2)  A foreign limited liability company that has a certificate of author-
 49    ity under section 30-6-802, Idaho Code, shall designate and continuously main-
 50    tain in this state a registered agent.

 51        30-6-114.  CHANGE OF DESIGNATED OFFICE. (1) A limited liability company or

                                       9

  1    foreign limited liability company may change its designated office by deliver-
  2    ing to the secretary of state for filing a statement of change containing:
  3        (a)  The name of the company;
  4        (b)  The street and mailing addresses of its  current  designated  office;
  5        and
  6        (c)  If  the  current  designated  office is to be changed, the street and
  7        mailing addresses of the new designated office.
  8        (2)  Subject to section 30-6-205(3), Idaho Code, a statement of change  is
  9    effective when filed by the secretary of state.

 10                                       PART 2.
 11                       FORMATION -- CERTIFICATE OF ORGANIZATION
 12                                  AND OTHER FILINGS

 13        30-6-201.  FORMATION  OF LIMITED LIABILITY COMPANY -- CERTIFICATE OF ORGA-
 14    NIZATION. (1) One (1) or more persons may act as organizers to form a  limited
 15    liability company by signing and delivering to the secretary of state for fil-
 16    ing a certificate of organization.
 17        (2)  A certificate of organization must state:
 18        (a)  The  name  of  the  limited liability company, which must comply with
 19        section 30-6-108, Idaho Code;
 20        (b)  The street and mailing addresses of the initial designated office and
 21        the information required by section 30-405(1), Idaho Code;
 22        (c)  The name and mailing address of at least one (1) member or manager of
 23        the limited liability company; and
 24        (d)  If the limited liability company is a professional company, a  state-
 25        ment  to that effect and the principal profession or professions for which
 26        members are duly licensed or otherwise legally authorized to  render  pro-
 27        fessional services.
 28        (3)  Subject  to section 30-6-112(3), Idaho Code, a certificate of organi-
 29    zation may also contain statements as to matters other than those required  by
 30    subsection (2) of this section. However, a statement in a certificate of orga-
 31    nization  is  not  effective as a statement of authority as defined in section
 32    30-6-302, Idaho Code. The secretary of state shall not accept operating agree-
 33    ments for filing.
 34        (4)  The following rules apply to the filing of a certificate of organiza-
 35    tion:
 36        (a)  A limited liability company is formed when the secretary of state has
 37        filed the certificate of organization, unless  the  certificate  states  a
 38        delayed effective date pursuant to section 30-6-205(3), Idaho Code.
 39        (b)  If the certificate states a delayed effective date, a limited liabil-
 40        ity  company  is  not  formed  if,  before the certificate takes effect, a
 41        statement of cancellation  is signed and delivered  to  the  secretary  of
 42        state  for filing and the secretary of state files the certificate of can-
 43        cellation.
 44        (c)  Subject to any delayed effective date and except in a  proceeding  by
 45        this state to dissolve a limited liability company, the filing of the cer-
 46        tificate  of  organization  by  the secretary of state is conclusive proof
 47        that the organizer satisfied all conditions to the formation of a  limited
 48        liability company.

 49        30-6-201A.  PROFESSIONAL  COMPANY. (1) Section 30-6-201, Idaho Code, shall
 50    not be deemed to authorize a professional company  to  render  allied  profes-
 51    sional services where the laws pertaining to specific professions or the codes
 52    of ethics or professional responsibility of any of the professions involved in

                                       10

  1    such  a  proposed  professional company prohibit such a combination of profes-
  2    sional services.
  3        (2)  No professional company may  render  professional  services  in  this
  4    state  except through its managers, members, employees and agents who are duly
  5    licensed or otherwise legally authorized to render such professional  services
  6    within  this  state.  The  term  "employee," as used in this section, does not
  7    include clerks, secretaries, bookkeepers, technicians and other assistants who
  8    are not usually and ordinarily considered by custom and practice to be render-
  9    ing professional services to the public for which a  license  or  other  legal
 10    authorization is required.
 11        (3)  Nothing  contained  in  this section shall be interpreted to abolish,
 12    repeal, modify, restrict or limit the law now in effect in this state applica-
 13    ble to the professional relationship and liabilities between the  person  fur-
 14    nishing  the  professional services and the person receiving such professional
 15    services or to the standards for professional conduct. Notwithstanding section
 16    30-6-304(1), Idaho Code, any manager, member, agent or employee of  a  profes-
 17    sional  company organized under this chapter shall remain personally and fully
 18    liable and accountable for any negligent or wrongful acts or  misconduct  com-
 19    mitted  by  him,  or  by  any person under his direct supervision and control,
 20    while rendering professional services on behalf of the professional company to
 21    the person for whom such professional services were being rendered.  The  pro-
 22    fessional company shall be liable up to the full value of its property for any
 23    negligent  or  wrongful  acts  or misconduct committed by any of its managers,
 24    members, agents or employees while they are engaged on behalf of  the  profes-
 25    sional company in the rendering of professional services.
 26        (4)  The  relationship  of a person, whether as an individual, shareholder
 27    of a professional corporation, partner of a partnership or member of a profes-
 28    sional company, to a professional company organized under  the  provisions  of
 29    this  chapter with which such person is associated, whether as manager, member
 30    or employee, shall in no way modify or diminish the jurisdiction over  him  of
 31    the governmental authority or state agency which licensed, certified or regis-
 32    tered him for a particular profession.
 33        (5)  No professional company may offer membership to or accept as a member
 34    anyone  other  than  an  individual  who is duly licensed or otherwise legally
 35    authorized to render the same specific  professional  services  as  those  for
 36    which  the company was organized or professional corporations, partnerships or
 37    limited liability companies, all of whose shareholders,  partners  or  members
 38    are  duly licensed or otherwise legally authorized to render the same specific
 39    professional services as those for which the professional  company  was  orga-
 40    nized.  No  member  of  a professional company shall enter into a voting trust
 41    agreement or any other  type of agreement  vesting  another  person  with  the
 42    authority to exercise the voting power of his membership.
 43        (6)  If  any  manager, member, agent or employee of a professional company
 44    who has been rendering professional services within this state accepts employ-
 45    ment that, pursuant to existing law, places restrictions or  limitations  upon
 46    his  continued rendering of such professional services, he shall cease to be a
 47    member in such professional company in accordance with the provisions of  sec-
 48    tion  30-6-602(15),  Idaho Code, and the remaining members of the professional
 49    company shall take such action as is required to terminate such membership.
 50        (7)  No member of a professional company may sell or transfer his  member-
 51    ship  in  such professional company except to another individual, professional
 52    corporation, partnership or limited liability company eligible to be a  member
 53    of  such professional company and except pursuant to the provisions of section
 54    30-6-502, Idaho Code.
 55        (8)  The provisions of this section shall not be considered as  repealing,

                                       11

  1    modifying  or restricting the applicable provisions of law regulating the sev-
  2    eral professions except insofar as such laws conflict with this section.

  3        30-6-202.  AMENDMENT OR RESTATEMENT OF CERTIFICATE OF  ORGANIZATION. (1) A
  4    certificate of organization may be amended or restated at any time.
  5        (2)  To amend its certificate of organization, a limited liability company
  6    must deliver to the secretary of state for filing an amendment stating:
  7        (a)  The name of the company;
  8        (b)  The date of filing of its certificate of organization; and
  9        (c)  The changes the amendment makes to the certificate as  most  recently
 10        amended or restated.
 11        (3)  To  restate its certificate of organization, a limited liability com-
 12    pany must deliver to the secretary of state for filing a  restatement,  desig-
 13    nated as such in its heading, stating:
 14        (a)  In the heading or in an introductory paragraph, the company's present
 15        name  and  the  date of the filing of the company's initial certificate of
 16        organization;
 17        (b)  If the company's  name  has  been  changed  at  any  time  since  the
 18        company's formation, each of the company's former names; and
 19        (c)  The changes the restatement makes to the certificate as most recently
 20        amended or restated.
 21        (4)  Subject  to  sections  30-6-112(3)  and  30-6-205(3),  Idaho Code, an
 22    amendment to or restatement of a certificate of organization is effective when
 23    filed by the secretary of state.
 24        (5)  If a member of a member-managed limited liability company, or a  man-
 25    ager  of  a manager-managed limited liability company, knows that any informa-
 26    tion in a filed certificate of organization was inaccurate when  the  certifi-
 27    cate  was  filed  or has become inaccurate owing to changed circumstances, the
 28    member or manager shall promptly:
 29        (a)  Cause the certificate to be amended; or
 30        (b)  If appropriate, deliver to the secretary of state for filing a state-
 31        ment of change under section 30-6-114,  Idaho  Code,  or  section  30-408,
 32        Idaho  Code,  or  a  statement of correction under section 30-6-206, Idaho
 33        Code.

 34        30-6-203.  SIGNING OF RECORDS TO BE DELIVERED FOR FILING TO  SECRETARY  OF
 35    STATE. (1) A record delivered to the secretary of state for filing pursuant to
 36    this chapter must be signed as follows:
 37        (a)  Except  as  otherwise  provided in paragraphs (b) through (d) of this
 38        subsection,  a record signed on behalf of a limited liability company must
 39        be signed by a person authorized by the company.
 40        (b)  A limited liability company's  initial  certificate  of  organization
 41        must be signed by at least one (1) person acting as an organizer.
 42        (c)  A  record  filed  on  behalf of a dissolved limited liability company
 43        that has no members must be signed by the person winding up the  company's
 44        activities  under  section  30-6-702(3), Idaho Code, or a person appointed
 45        under section 30-6-702(4), Idaho Code, to wind up those activities.
 46        (d)  A statement of cancellation under section 30-6-201(4)(b), Idaho Code,
 47        must be signed by each organizer that signed the  initial  certificate  of
 48        organization,  but  a personal representative of a deceased or incompetent
 49        organizer may sign in the place of the decedent or incompetent.
 50        (e)  A statement of denial by a person under section 30-6-303, Idaho Code,
 51        must be signed by that person.
 52        (f)  Any other record must be signed by the person  on  whose  behalf  the
 53        record is delivered to the secretary of state.

                                       12

  1        (2)  Any record filed under this chapter may be signed by an agent.
  2        (3)  Any  record  filed  under  this  chapter  must  be signed in a manner
  3    acceptable to the secretary of state.

  4        30-6-204.  SIGNING AND FILING PURSUANT TO JUDICIAL ORDER. (1) If a  person
  5    required by this chapter to sign a record or deliver a record to the secretary
  6    of  state  for filing under this chapter does not do so, any other person that
  7    is aggrieved may petition the district court to order:
  8        (a)  The person to sign the record;
  9        (b)  The person to deliver the record to the secretary of state  for  fil-
 10        ing; or
 11        (c)  The secretary of state to file the record unsigned.
 12        (2)  If  a petitioner under subsection (1) of this section is not the lim-
 13    ited liability company or foreign  limited  liability  company  to  which  the
 14    record pertains, the petitioner shall make the company a party to the action.

 15        30-6-205.  DELIVERY  TO  AND  FILING  OF  RECORDS BY SECRETARY OF STATE --
 16    EFFECTIVE TIME AND DATE. (1) A record authorized or required to  be  delivered
 17    to  the  secretary of state for filing under this chapter must be captioned to
 18    describe the record's purpose, be in a medium permitted by  the  secretary  of
 19    state,  and  be  delivered  to the secretary of state. If the filing fees have
 20    been paid, unless the secretary of state determines that  a  record  does  not
 21    comply  with  the  filing requirements of this chapter, the secretary of state
 22    shall file the record and:
 23        (a)  For a statement of denial under section 30-6-303, Idaho Code, send  a
 24        copy  of  the  filed statement and a receipt for the fees to the person on
 25        whose behalf the statement was delivered for filing  and  to  the  limited
 26        liability company; and
 27        (b)  For  all other records, send a copy of the filed record and a receipt
 28        for the fees to the person on whose behalf the record was filed.
 29        (2)  Upon request and payment of the requisite fee, the secretary of state
 30    shall send to the requester a certified copy of a requested record.
 31        (3)  Except as otherwise provided  in  section  30-6-206,  Idaho  Code,  a
 32    record  delivered  to the secretary of state for filing under this chapter may
 33    specify an effective time and a delayed effective date.  Subject  to  sections
 34    30-408,  30-6-201(4)(a) and 30-6-206, Idaho Code, a record filed by the secre-
 35    tary of state is effective:
 36        (a)  If the record does not specify either an effective time or a  delayed
 37        effective  date,  on  the date and at the time the record is filed as evi-
 38        denced by the secretary of state's endorsement of the date and time on the
 39        record;
 40        (b)  If the record specifies an effective time but not a delayed effective
 41        date, on the date the record is filed at the time specified in the record;
 42        (c)  If the record specifies a delayed effective date but not an effective
 43        time, at 12:01 a.m. on the earlier of:
 44             (i)   The specified date; or
 45             (ii)  The ninetieth day after the record is filed; or
 46        (d)  If the record specifies an effective time  and  a  delayed  effective
 47        date, at the specified time on the earlier of:
 48             (i)   The specified date; or
 49             (ii)  The ninetieth day after the record is filed.

 50        30-6-206.  CORRECTING  FILED  RECORD.  (1)  A limited liability company or
 51    foreign limited liability company may deliver to the secretary  of  state  for
 52    filing  a  statement of correction to correct a record previously delivered by

                                       13

  1    the company to the secretary of state and filed by the secretary of state,  if
  2    at  the  time  of  filing  the  record contained inaccurate information or was
  3    defectively signed.
  4        (2)  A statement of correction under subsection (1) of  this  section  may
  5    not state a delayed effective date and must:
  6        (a)  Describe  the  record  to be corrected, including its filing date, or
  7        attach a copy of the record as filed;
  8        (b)  Specify the inaccurate information and the reason it is inaccurate or
  9        the manner in which the signing was defective; and
 10        (c)  Correct the defective signature or inaccurate information.
 11        (3)  When filed by the secretary of state, a statement of correction under
 12    subsection (1) of this section is effective retroactively as of the  effective
 13    date of the record the statement corrects, but the statement is effective when
 14    filed:
 15        (a)  For the purposes of section 30-6-103(4), Idaho Code; and
 16        (b)  As  to  persons  that previously relied on the uncorrected record and
 17        would be adversely affected by the retroactive effect.

 18        30-6-207.  LIABILITY FOR INACCURATE INFORMATION IN FILED RECORD. (1) If  a
 19    record  delivered  to the secretary of state for filing under this chapter and
 20    filed by the secretary of state contains inaccurate information, a person that
 21    suffers a loss by reliance on the information may recover damages for the loss
 22    from:
 23        (a)  A person that signed the record, or caused another to sign it on  the
 24        person's behalf, and knew the information to be inaccurate at the time the
 25        record was signed; and
 26        (b)  Subject  to  subsection  (2)  of  this section, a member of a member-
 27        managed limited liability company or the manager of a manager-managed lim-
 28        ited liability company, if:
 29             (i)   The record was delivered for filing on behalf of  the  company;
 30             and
 31             (ii)  The  member  or manager had notice of the inaccuracy for a rea-
 32             sonably  sufficient time before the information was  relied  upon  so
 33             that,  before  the  reliance,  the member or manager reasonably could
 34             have:
 35                  1.  Effected an amendment under section 30-6-202, Idaho Code;
 36                  2.  Filed a petition under section 30-6-204, Idaho Code; or
 37                  3.  Delivered to the secretary of state for filing  a  statement
 38                  of change under section 30-6-114, Idaho Code, or section 30-408,
 39                  Idaho Code, or a statement of correction under section 30-6-206,
 40                  Idaho Code.
 41        (2)  To  the  extent that the operating agreement of a member-managed lim-
 42    ited liability company expressly relieves a member of responsibility for main-
 43    taining the accuracy of information contained in records delivered  on  behalf
 44    of  the  company  to  the secretary of state for filing under this chapter and
 45    imposes that responsibility on one (1) or more other  members,  the  liability
 46    stated in subsection (1)(b) of this section applies to those other members and
 47    not to the member that the operating agreement relieves of the responsibility.
 48        (3)  An  individual  who signs a record authorized or required to be filed
 49    under this chapter affirms under  penalty  of  perjury  that  the  information
 50    stated in the record is accurate.

 51        30-6-208.  CERTIFICATE OF EXISTENCE OR AUTHORIZATION. (1) The secretary of
 52    state,  upon  request  and  payment of the requisite fee, shall furnish to any
 53    person a certificate of existence for  a  limited  liability  company  if  the

                                       14

  1    records  filed  in  the office of the secretary of state show that the company
  2    has been formed under section 30-6-201, Idaho Code, and the secretary of state
  3    has not filed a statement of termination pertaining to the company. A certifi-
  4    cate of existence must state:
  5        (a)  The company's name;
  6        (b)  That the company was duly formed under the laws of this state and the
  7        date of formation;
  8        (c)  Whether all fees due under this chapter or other law to the secretary
  9        of state have been paid;
 10        (d)  Whether the company's most recent annual report required  by  section
 11        30-6-209, Idaho Code, has been filed by the secretary of state;
 12        (e)  Whether  the  secretary  of  state has administratively dissolved the
 13        company;
 14        (f)  Whether the company has delivered to the secretary of state for  fil-
 15        ing a statement of dissolution;
 16        (g)  That  a  statement of termination has not been filed by the secretary
 17        of state; and
 18        (h)  Other facts of record in the office of the secretary of  state  which
 19        are specified by the person requesting the certificate.
 20        (2)  The  secretary  of  state,  upon request and payment of the requisite
 21    fee, shall furnish to any person a certificate of authorization for a  foreign
 22    limited  liability company if the records filed in the office of the secretary
 23    of state show that the secretary of state has filed a certificate  of  author-
 24    ity,  has not revoked the certificate of authority, and has not filed a notice
 25    of cancellation. A certificate of authorization must state:
 26        (a)  The company's name and  any  alternate  name  adopted  under  section
 27        30-6-805(1), Idaho Code, for use in this state;
 28        (b)  That the company is authorized to transact business in this state;
 29        (c)  Whether all fees due under this chapter or other law to the secretary
 30        of state have been paid;
 31        (d)  Whether  the  company's most recent annual report required by section
 32        30-6-209,  Idaho Code, has been filed by the secretary of state;
 33        (e)  That the secretary of state has not revoked the company's certificate
 34        of authority and has not filed a notice of cancellation; and
 35        (f)  Other facts of record in the office of the secretary of  state  which
 36        are specified by the person requesting the certificate.
 37        (3)  Subject to any qualification stated in the certificate, a certificate
 38    of  existence or certificate of authorization issued by the secretary of state
 39    is conclusive evidence that the limited liability company is in  existence  or
 40    the  foreign  limited  liability company is authorized to transact business in
 41    this state.

 42        30-6-209.  ANNUAL REPORT FOR SECRETARY OF STATE. (1) Each year, a  limited
 43    liability  company or a foreign limited liability company authorized to trans-
 44    act business in this state shall deliver to the secretary of state for  filing
 45    a report that states:
 46        (a)  The name of the company;
 47        (b)  The information required by section 30-405(1), Idaho Code;
 48        (c)  The street and mailing addresses of the company's designated office;
 49        (d)  The street and mailing addresses of its principal office;
 50        (e)  The  name  and mailing address of at least one (1) member or manager;
 51        and
 52        (f)  In the case of a foreign limited  liability  company,  the  state  or
 53        other jurisdiction under whose law the company is formed and any alternate
 54        name adopted under section 30-6-805(1), Idaho Code.

                                       15

  1        (2)  Information in an annual report under this section must be current as
  2    of the date the report is delivered to the secretary of state for filing.
  3        (3)  The  annual  report of a limited liability company or foreign limited
  4    liability company shall be delivered to  the  secretary  of  state  each  year
  5    before  the end of the month during which a limited liability company was ini-
  6    tially organized, or a foreign limited liability company was initially  autho-
  7    rized  to  transact business. Beginning one (1) year after a limited liability
  8    company is organized or a foreign limited liability company is  authorized  to
  9    transact  business, and each year thereafter, the annual report of the limited
 10    liability company must be received in the office of the secretary of state not
 11    later than the close of business on the final day of the applicable month.  If
 12    the  secretary of state finds that such report conforms to the requirements of
 13    this chapter, he shall file the same.
 14        (4)  If an annual report under this section does not contain the  informa-
 15    tion  required in subsection (1) of this section, the secretary of state shall
 16    promptly notify the reporting limited liability  company  or  foreign  limited
 17    liability company and return the report to it for correction. If the report is
 18    corrected  to  contain the information required in subsection (1) of this sec-
 19    tion and delivered to the secretary of state within  thirty  (30)  days  after
 20    the effective date of the notice, it is timely delivered.
 21        (5)  If  an annual report under this section contains an address of a des-
 22    ignated office or the name or address of a registered agent which differs from
 23    the information shown in the records of the  secretary  of  state  immediately
 24    before  the  annual report becomes effective, the differing information in the
 25    annual report is considered a statement  of  change  under  section  30-6-114,
 26    Idaho Code, or section 30-408, Idaho Code.

 27        30-6-210.  FILING,  SERVICE  AND  COPYING FEES. (1) The secretary of state
 28    shall collect the following fees for copying and certifying the  copy  of  any
 29    document filed under this chapter:
 30        (a)  Twenty-five cents (25¢) per page for copying; and
 31        (b)  Ten dollars ($10.00) for a certificate.
 32        (2)  The  secretary  of  state shall charge and collect the following fees
 33    when the documents described are delivered for filing:
 34        (a)  Certificate of organization ................................. $100.00
 35        (b)  Correction statement ........................................ $ 30.00
 36        (c)  Statement of cancellation ................................... $ 30.00
 37        (d)  Statement of authority ...................................... $ 30.00
 38        (e)  Statement of denial ......................................... $ 30.00
 39        (f)  Amendment of certificate of organization .................... $ 30.00
 40        (g)  Restatement of certificate of organization .................. $ 30.00
 41        (h)  Statement of dissolution ....................................  no fee

 42                                       PART 3.
 43                          RELATIONS OF MEMBERS AND MANAGERS
 44                  TO PERSONS DEALING WITH LIMITED LIABILITY COMPANY

 45        30-6-301.  NO AGENCY POWER OF MEMBER AS MEMBER. (1) A  member  is  not  an
 46    agent of a limited liability company solely by reason of being a member.
 47        (2)  A  person's status as a member does not prevent or restrict law other
 48    than this chapter from imposing  liability  on  a  limited  liability  company
 49    because of the person's conduct.

 50        30-6-302.  STATEMENT  OF  AUTHORITY.  (1)  A limited liability company may
 51    deliver to the secretary of state for filing a  statement  of  authority.  The

                                       16

  1    statement:
  2        (a)  Must  include  the  name  of  the  company and the street and mailing
  3        addresses of its designated office;
  4        (b)  With respect to any position that exists in or with  respect  to  the
  5        company,  may state the authority, or limitations on the authority, of all
  6        persons holding the position to:
  7             (i)   Execute an instrument transferring real property  held  in  the
  8             name of the company; or
  9             (ii)  Enter  into  other  transactions on behalf of, or otherwise act
 10             for or bind, the company; and
 11        (c)  May state the authority, or limitations on the authority, of  a  spe-
 12        cific person to:
 13             (i)   Execute  an  instrument  transferring real property held in the
 14             name of the company; or
 15             (ii)  Enter into other transactions on behalf of,  or  otherwise  act
 16             for or bind, the company.
 17        (2)  To amend or cancel a statement of authority filed by the secretary of
 18    state  under section 30-6-205(1), Idaho Code, a limited liability company must
 19    deliver to the secretary of state for  filing  an  amendment  or  cancellation
 20    stating:
 21        (a)  The name of the company;
 22        (b)  The street and mailing addresses of the company's designated office;
 23        (c)  The  caption  of the statement being amended or canceled and the date
 24        the statement being affected became effective; and
 25        (d)  The contents of the amendment or a  declaration  that  the  statement
 26        being affected is canceled.
 27        (3)  A statement of authority affects only the power of a person to bind a
 28    limited liability company to persons that are not members.
 29        (4)  Subject  to  subsection  (3) of this section and section 30-6-103(4),
 30    Idaho Code, and except as otherwise provided in subsections (6), (7)  and  (8)
 31    of  this section, a limitation on the authority of a person or a position con-
 32    tained in an effective statement of authority is not  by  itself  evidence  of
 33    knowledge or notice of the limitation by any person.
 34        (5)  Subject  to  subsection (3) of this section, a grant of authority not
 35    pertaining to transfers of real property and contained in an effective  state-
 36    ment of authority is conclusive in favor of a person that gives value in reli-
 37    ance on the grant, except to the extent that when the person gives value:
 38        (a)  The person has knowledge to the contrary;
 39        (b)  The  statement  has been canceled or restrictively amended under sub-
 40        section (2) of this section; or
 41        (c)  A limitation on the  grant  is  contained  in  another  statement  of
 42        authority  that  became effective after the statement containing the grant
 43        became effective.
 44        (6)  Subject to subsection (3) of this section, an effective statement  of
 45    authority  that grants authority to transfer real property held in the name of
 46    the limited liability company and that is delivered by the  limited  liability
 47    company  to the secretary of state for filing is conclusive in favor of a per-
 48    son that gives value in reliance on the grant without knowledge  to  the  con-
 49    trary, except to the extent that when the person gives value:
 50        (a)  The  statement  has been canceled or restrictively amended under sub-
 51        section (2) of this section; or
 52        (b)  A limitation on the  grant  is  contained  in  another  statement  of
 53        authority  that  became effective after the statement containing the grant
 54        became effective.
 55        (7)  Subject to subsection (3) of this section, if a statement  containing

                                       17

  1    a  limitation on the authority to transfer real property held in the name of a
  2    limited liability company is filed with the secretary of  state,  all  persons
  3    are deemed to know of the limitation.
  4        (8)  Subject  to subsection (9) of this section, an effective statement of
  5    dissolution or termination is a cancellation of any filed statement of author-
  6    ity for the purposes of subsection (6) of this section and is a limitation  on
  7    authority for the purposes of subsection (7) of this section.
  8        (9)  After a statement of dissolution becomes effective, a limited liabil-
  9    ity  company  may  deliver to the secretary of state for filing a statement of
 10    authority that is designated as a postdissolution statement of authority.  The
 11    statement operates as provided in subsections (6) and (7) of this section.
 12        (10) Unless  earlier canceled, an effective statement of authority is can-
 13    celed by operation of law five (5) years after the date on  which  the  state-
 14    ment, or its most recent amendment, becomes effective.
 15        (11) An  effective statement of denial operates as a restrictive amendment
 16    under this section.

 17        30-6-303.  STATEMENT OF DENIAL. A person named in  a  filed  statement  of
 18    authority granting that person authority may deliver to the secretary of state
 19    for filing a statement of denial that:
 20        (1)  Provides the name of the limited liability company and the caption of
 21    the statement of authority to which the statement of denial pertains; and
 22        (2)  Denies the grant of authority.

 23        30-6-304.  LIABILITY  OF  MEMBERS AND MANAGERS. (1) The debts, obligations
 24    or other liabilities of a limited liability company, whether arising  in  con-
 25    tract, tort or otherwise:
 26        (a)  Are  solely  the  debts, obligations or other liabilities of the com-
 27        pany; and
 28        (b)  Do not become the debts, obligations or other liabilities of a member
 29        or manager solely by reason of the member acting as a  member  or  manager
 30        acting as a manager.
 31        (2)  The  failure of a limited liability company to observe any particular
 32    formalities relating to the exercise of its powers or management of its activ-
 33    ities is not a ground for imposing liability on the members  or  managers  for
 34    the debts, obligations or other liabilities of the company.

 35                                       PART 4.
 36                          RELATIONS OF MEMBERS TO EACH OTHER
 37                           AND TO LIMITED LIABILITY COMPANY

 38        30-6-401.  BECOMING  A  MEMBER.  (1)  If a limited liability company is to
 39    have only one (1) member upon formation, the person becomes a member as agreed
 40    by that person and the organizer of the company. That person and the organizer
 41    may be, but need not be, different persons. If different, the  organizer  acts
 42    on behalf of the initial member.
 43        (2)  If  a  limited  liability company is to have more than one (1) member
 44    upon formation, those persons become members as agreed by the  persons  before
 45    the  formation  of the company. The organizer acts on behalf of the persons in
 46    forming the company and may be, but need not be, one (1) of the persons.
 47        (3)  After formation of a limited liability company, a  person  becomes  a
 48    member:
 49        (a)  As provided in the operating agreement;
 50        (b)  As  the result of a transaction effective under chapter 18, title 30,
 51        Idaho Code;

                                       18

  1        (c)  With the consent of all the members; or
  2        (d)  If, within ninety (90) consecutive days after the company  ceases  to
  3        have any members:
  4             (i)   The last person to have been a member, or the legal representa-
  5             tive of that person, designates a person to become a member; and
  6             (ii)  The designated person consents to become a member.
  7        (4)  A  person may become a member without acquiring a transferable inter-
  8    est and without making or being obligated to make a contribution to  the  lim-
  9    ited liability company.

 10        30-6-402.  FORM OF CONTRIBUTION. A contribution may consist of tangible or
 11    intangible property or other benefit to a limited liability company, including
 12    money,  services  performed,  promissory notes, other agreements to contribute
 13    money or property, and contracts for services to be performed.

 14        30-6-403.  LIABILITY FOR CONTRIBUTIONS. (1) A person's obligation to  make
 15    a  contribution  to a limited liability company is not excused by the person's
 16    death, disability, or other inability to perform personally. If a person  does
 17    not  make  a required contribution, the person or the person's estate is obli-
 18    gated to contribute money equal to the value of the part of  the  contribution
 19    which has not been made, at the option of the company.
 20        (2)  A  creditor  of  a  limited liability company which extends credit or
 21    otherwise acts in reliance on an obligation described  in  subsection  (1)  of
 22    this section may enforce the obligation.

 23        30-6-404.  SHARING  OF  AND RIGHT TO DISTRIBUTIONS BEFORE DISSOLUTION. (1)
 24    Any distributions made by a limited liability company before  its  dissolution
 25    and  winding up must be in equal shares among members and dissociated members,
 26    except to the extent necessary to comply with  any  transfer  effective  under
 27    section  30-6-502,  Idaho Code, and any charging order in effect under section
 28    30-6-503, Idaho Code.
 29        (2)  A person has a right to a distribution  before  the  dissolution  and
 30    winding  up of a limited liability company only if the company decides to make
 31    an interim distribution. A person's dissociation does not entitle  the  person
 32    to a distribution.
 33        (3)  A  person  does  not have a right to demand or receive a distribution
 34    from a limited liability company in any  form  other  than  money.  Except  as
 35    otherwise  provided  in  section  30-6-708(3), Idaho Code, a limited liability
 36    company may distribute an asset in kind if each part of the asset is  fungible
 37    with  each other part and each person receives a percentage of the asset equal
 38    in value to the person's share of distributions.
 39        (4)  If a member or transferee becomes entitled to receive a distribution,
 40    the member or transferee is entitled to all remedies available to  a  creditor
 41    of the limited liability company with respect to the distribution.

 42        30-6-405.  LIMITATIONS  ON  DISTRIBUTION.  (1) A limited liability company
 43    may not make a distribution if after the distribution:
 44        (a)  The company would not be able to pay its debts as they become due  in
 45        the ordinary course of the company's activities; or
 46        (b)  The  company's  total  assets would be less than the sum of its total
 47        liabilities plus the amount that would be needed, if the company  were  to
 48        be  dissolved, wound up and terminated at the time of the distribution, to
 49        satisfy the preferential rights upon dissolution, winding up and  termina-
 50        tion of members whose preferential rights are superior to those of persons
 51        receiving the distribution.

                                       19

  1        (2)  A limited liability company may base a determination that a distribu-
  2    tion  is  not  prohibited  under  subsection  (1) of this section on financial
  3    statements prepared on the basis of accounting practices and  principles  that
  4    are  reasonable  in  the  circumstances or on a fair valuation or other method
  5    that is reasonable under the circumstances.
  6        (3)  Except as otherwise provided in subsection (6) of this  section,  the
  7    effect of a distribution under subsection (1) of this section is measured:
  8        (a)  In the case of a distribution by purchase, redemption or other acqui-
  9        sition  of a transferable interest in the company, as of the date money or
 10        other property is transferred or debt incurred by the company; and
 11        (b)  In all other cases, as of the date:
 12             (i)   The distribution is authorized, if the  payment  occurs  within
 13             one hundred twenty (120) days after that date; or
 14             (ii)  The  payment  is made, if the payment occurs more than one hun-
 15             dred twenty (120) days after the distribution is authorized.
 16        (4)  A limited liability company's indebtedness to a  member  incurred  by
 17    reason  of  a  distribution  made in accordance with this section is at parity
 18    with the company's indebtedness to its general, unsecured creditors.
 19        (5)  A limited liability company's  indebtedness,  including  indebtedness
 20    issued in connection with or as part of a distribution, is not a liability for
 21    purposes  of  subsection  (1) of this section if the terms of the indebtedness
 22    provide that payment of principal and interest are made  only  to  the  extent
 23    that a distribution could be made to members under this section.
 24        (6)  If  indebtedness is issued as a distribution, each payment of princi-
 25    pal or interest on the indebtedness is treated as a distribution,  the  effect
 26    of which is measured on the date the payment is made.
 27        (7)  In  subsection  (1)  of this section, "distribution" does not include
 28    amounts constituting reasonable compensation for present or past  services  or
 29    reasonable  payments made in the ordinary course of business under a bona fide
 30    retirement plan or other benefits program.

 31        30-6-406.  LIABILITY FOR IMPROPER DISTRIBUTIONS. (1) Except  as  otherwise
 32    provided  in  subsection  (2) of this section, if a member of a member-managed
 33    limited liability company or manager of a  manager-managed  limited  liability
 34    company  consents  to  a  distribution  made in violation of section 30-6-405,
 35    Idaho Code, and in consenting to the distribution fails to comply with section
 36    30-6-409, Idaho Code, the member or manager is personally liable to  the  com-
 37    pany  for  the  amount  of the distribution that exceeds the amount that could
 38    have been distributed without the violation of section 30-6-405, Idaho Code.
 39        (2)  To the extent the operating agreement  of  a  member-managed  limited
 40    liability  company  expressly relieves a member of the authority and responsi-
 41    bility to consent to distributions and imposes that authority and responsibil-
 42    ity on one (1) or more other members, the liability stated in  subsection  (1)
 43    of this section applies to the other members and not the member that the oper-
 44    ating agreement relieves of authority and responsibility.
 45        (3)  A  person  that receives a distribution knowing that the distribution
 46    to that person was made in violation of section 30-6-405, Idaho Code, is  per-
 47    sonally  liable  to  the limited liability company but only to the extent that
 48    the distribution received by the person exceeded the amount  that  could  have
 49    been properly paid under section 30-6-405, Idaho Code.
 50        (4)  A  person  against which an action is commenced because the person is
 51    liable under subsection (1) of this section may:
 52        (a)  Implead any other person that is subject to liability  under  subsec-
 53        tion  (1) of this section and seek to compel contribution from the person;
 54        and

                                       20

  1        (b)  Implead any person that received a distribution in violation of  sub-
  2        section  (3) of this section and seek to compel contribution from the per-
  3        son in the amount the person received in violation of  subsection  (3)  of
  4        this section.
  5        (5)  An  action  under  this section is barred if not commenced within two
  6    (2) years after the distribution.

  7        30-6-407.  MANAGEMENT OF LIMITED LIABILITY COMPANY. (1) A limited  liabil-
  8    ity company is a member-managed limited liability company unless the operating
  9    agreement:
 10        (a)  Expressly provides that:
 11             (i)   The company is or will be "manager-managed";
 12             (ii)  The company is or will be "managed by managers"; or
 13             (iii) Management  of  the company is or will be "vested in managers";
 14             or
 15        (b)  Includes words of similar import.
 16        (2)  In a member-managed limited liability company, as among the  members,
 17    the following rules apply:
 18        (a)  The management and conduct of the company are vested in the members.
 19        (b)  Each  member  has  equal  rights in the management and conduct of the
 20        company's activities.
 21        (c)  A difference arising among members as to a  matter  in  the  ordinary
 22        course  of  the  activities of the company may be decided by a majority of
 23        the members.
 24        (d)  An act outside the ordinary course of the activities of  the  company
 25        may be undertaken only with the consent of all members.
 26        (e)  The  operating  agreement may be amended only with the consent of all
 27        members.
 28        (3)  In a manager-managed limited liability company, as among the  members
 29    and the managers, the following rules apply:
 30        (a)  Except  as  otherwise  expressly provided in this chapter, any matter
 31        relating to the activities of the company is decided  exclusively  by  the
 32        managers.
 33        (b)  Each  manager  has  equal rights in the management and conduct of the
 34        activities of the company.
 35        (c)  A difference arising among managers as to a matter  in  the  ordinary
 36        course  of  the  activities of the company may be decided by a majority of
 37        the managers.
 38        (d)  The consent of all members is required to:
 39             (i)   Sell, lease, exchange or otherwise dispose of all, or  substan-
 40             tially all, of the company's property, with or without the good will,
 41             outside the ordinary course of the company's activities;
 42             (ii)  Approve  a merger, conversion or domestication under part 10 of
 43             this chapter;
 44             (iii) Undertake any other act outside  the  ordinary  course  of  the
 45             company's activities; and
 46             (iv)  Amend the operating agreement.
 47        (e)  A  manager  may be chosen at any time by the consent of a majority of
 48        the members and remains a manager  until  a  successor  has  been  chosen,
 49        unless the manager at an earlier time resigns, is removed, or dies, or, in
 50        the case of a manager that is not an individual, terminates. A manager may
 51        be removed at any time by the consent of a majority of the members without
 52        notice or cause.
 53        (f)  A  person  need not be a member to be a manager, but the dissociation
 54        of a member that is also a manager removes the person as a manager.  If  a

                                       21

  1        person  that  is  both a manager and a member ceases to be a manager, that
  2        cessation does not by itself dissociate the person as a member.
  3        (g)  A person's ceasing to be a manager does not discharge any debt, obli-
  4        gation or other liability to the  limited  liability  company  or  members
  5        which the person incurred while a manager.
  6        (4)  An  action requiring the consent of members under this chapter may be
  7    taken without a meeting, and a member may appoint a proxy or  other  agent  to
  8    consent  or otherwise act for the member by signing an appointing record, per-
  9    sonally or by the member's agent.
 10        (5)  The dissolution of a limited liability company does  not  affect  the
 11    applicability   of this section. However, a person that wrongfully causes dis-
 12    solution of the company loses the right to participate in management as a mem-
 13    ber and a manager.
 14        (6)  This chapter does not entitle a member to remuneration  for  services
 15    performed  for  a member-managed limited liability company, except for reason-
 16    able compensation for services rendered in winding up the  activities  of  the
 17    company.

 18        30-6-408.  INDEMNIFICATION  AND INSURANCE. (1) A limited liability company
 19    shall reimburse for any payment made and indemnify for any debt, obligation or
 20    other liability incurred by a member of a member-managed company or  the  man-
 21    ager  of  a manager-managed company in the course of the member's or manager's
 22    activities on behalf of the company, if, in making the  payment  or  incurring
 23    the  debt,  obligation or other liability, the member or manager complied with
 24    the duties stated in sections 30-6-405 and 30-6-409, Idaho Code.
 25        (2)  A limited liability company may purchase and  maintain  insurance  on
 26    behalf  of  a  member  or  manager  of  the company against liability asserted
 27    against or incurred by the member or manager in that capacity or arising  from
 28    that  status  even  if,  under  section 30-6-110(7), Idaho Code, the operating
 29    agreement could not eliminate or limit the person's liability to  the  company
 30    for the conduct giving rise to the liability.

 31        30-6-409.  STANDARDS  OF CONDUCT FOR MEMBERS AND MANAGERS. (1) A member of
 32    a member-managed limited liability company owes to the company and, subject to
 33    section 30-6-901(2), Idaho Code, the other members  the  fiduciary  duties  of
 34    loyalty and care stated in subsections (2) and (3) of this section.
 35        (2)  The duty of loyalty of a member in a member-managed limited liability
 36    company includes the duties:
 37        (a)  To account to the company and to hold as trustee for it any property,
 38        profit or benefit derived by the member:
 39             (i)   In the conduct or winding up of the company's activities;
 40             (ii)  From a use by the member of the company's property; or
 41             (iii) From  the appropriation of a limited liability company opportu-
 42             nity;
 43        (b)  To refrain from dealing with the company in the conduct or winding up
 44        of the company's activities as or on behalf of a person having an interest
 45        adverse to the company; and
 46        (c)  To refrain from competing with the company  in  the  conduct  of  the
 47        company's activities before the dissolution of the company.
 48        (3)  Subject  to  the business judgment rule, the duty of care of a member
 49    of a member-managed limited liability company in the conduct and winding up of
 50    the company's activities is to act with the care that a person in a like posi-
 51    tion would reasonably exercise under similar circumstances and in a manner the
 52    member reasonably believes to be in the best interests of the company. In dis-
 53    charging this duty, a member may rely in good faith  upon  opinions,  reports,

                                       22

  1    statements  or  other  information  provided by another person that the member
  2    reasonably believes is a competent and reliable source for the information.
  3        (4)  A member in a member-managed limited liability company or a  manager-
  4    managed  limited liability company shall discharge the duties under this chap-
  5    ter or under the operating agreement and exercise any rights consistently with
  6    the contractual obligation of good faith and fair dealing.
  7        (5)  It is a defense to a claim under subsection (2)(b)  of  this  section
  8    and  any  comparable claim in equity or at common law that the transaction was
  9    fair to the limited liability company.
 10        (6)  All of the members of a member-managed limited liability company or a
 11    manager-managed limited liability company may authorize or ratify, after  full
 12    disclosure of all material facts, a specific act or transaction that otherwise
 13    would violate the duty of loyalty.
 14        (7)  In  a  manager-managed limited liability company, the following rules
 15    apply:
 16        (a)  Subsections (1), (2), (3) and (5) of this section apply to  the  man-
 17        ager or managers and not the members.
 18        (b)  The  duty  stated  under  subsection (2)(c) of this section continues
 19        until winding up is completed.
 20        (c)  Subsection (4) of this section applies to the members and managers.
 21        (d)  Subsection (6) of this section applies only to the members.
 22        (e)  A member does not have any fiduciary duty to the company  or  to  any
 23        other member solely by reason of being a member.

 24        30-6-410.  RIGHT  OF MEMBERS, MANAGERS AND DISSOCIATED MEMBERS TO INFORMA-
 25    TION. (1) In a member-managed limited liability company, the  following  rules
 26    apply:
 27        (a)  On  reasonable  notice,  a member may inspect and copy during regular
 28        business hours, at a reasonable location specified  by  the  company,  any
 29        record  maintained  by  the  company  regarding  the company's activities,
 30        financial condition and other circumstances, to the extent the information
 31        is material to the member's rights and duties under the  operating  agree-
 32        ment or this chapter.
 33        (b)  The company shall furnish to each member:
 34             (i)   Without demand, any information concerning the company's activ-
 35             ities,  financial condition and other circumstances which the company
 36             knows and is material to the proper exercise of the  member's  rights
 37             and  duties  under the operating agreement or this chapter, except to
 38             the extent the company can establish that it reasonably believes  the
 39             member already knows the information; and
 40             (ii)  On  demand,  any  other  information  concerning  the company's
 41             activities, financial condition and other  circumstances,  except  to
 42             the  extent  the  demand  or  information demanded is unreasonable or
 43             otherwise improper under the circumstances.
 44        (c)  The duty to furnish information under paragraph (b) of  this  subsec-
 45        tion also applies to each member to the extent the member knows any of the
 46        information described in paragraph (b) of this subsection.
 47        (2)  In  a  manager-managed limited liability company, the following rules
 48    apply:
 49        (a)  The informational rights stated in subsection (1) of this section and
 50        the duty stated in subsection (1)(c) of this section apply to the managers
 51        and not the members.
 52        (b)  During regular business hours and at a reasonable location  specified
 53        by  the company, a member may obtain from the company and inspect and copy
 54        full information regarding the activities, financial condition  and  other

                                       23

  1        circumstances of the company as is just and reasonable if:
  2             (i)   The  member seeks the information for a purpose material to the
  3             member's interest as a member;
  4             (ii)  The member makes a demand in a record received by the  company,
  5             describing  with  reasonable particularity the information sought and
  6             the purpose for seeking the information; and
  7             (iii) The information sought is directly connected  to  the  member's
  8             purpose.
  9        (c)  Within  ten  (10) days after receiving a demand pursuant to paragraph
 10        (b)(ii) of this subsection, the company shall in a record inform the  mem-
 11        ber that made the demand:
 12             (i)   Of the information that the company will provide in response to
 13             the  demand  and when and where the company will provide the informa-
 14             tion; and
 15             (ii)  If the company declines to provide  any  demanded  information,
 16             the company's reasons for declining.
 17        (d)  Whenever this chapter or an operating agreement provides for a member
 18        to  give  or  withhold consent to a matter, before the consent is given or
 19        withheld, the company shall, without demand, provide the member  with  all
 20        information  that  is known to the company and is material to the member's
 21        decision.
 22        (3)  On ten (10) days' demand made in a record received by a limited  lia-
 23    bility  company,  a dissociated member may have access to information to which
 24    the person was entitled while a member if  the  information  pertains  to  the
 25    period  during which the person was a member, the person seeks the information
 26    in good faith, and the person satisfies the requirements imposed on  a  member
 27    by  subsection  (2)(b)  of this section. The company shall respond to a demand
 28    made pursuant to this subsection in the manner provided in  subsection  (2)(c)
 29    of this section.
 30        (4)  A  limited  liability company may charge a person that makes a demand
 31    under this section the reasonable costs of copying, limited to  the  costs  of
 32    labor and material.
 33        (5)  A member or dissociated member may exercise rights under this section
 34    through  an  agent  or, in the case of an individual under legal disability, a
 35    legal representative. Any restriction or condition imposed  by  the  operating
 36    agreement or under subsection (7) of this section applies both to the agent or
 37    legal representative and the member or dissociated member.
 38        (6)  The  rights  under  this  section do not extend to a person as trans-
 39    feree.
 40        (7)  In addition to any restriction or condition stated in  its  operating
 41    agreement, a limited liability company, as a matter within the ordinary course
 42    of its activities, may impose reasonable restrictions and conditions on access
 43    to and use of information to be furnished under this section, including desig-
 44    nating  information  confidential  and imposing nondisclosure and safeguarding
 45    obligations on the recipient. In a dispute concerning the reasonableness of  a
 46    restriction  under this subsection, the company has the burden of proving rea-
 47    sonableness.

 48                                       PART 5.
 49                          TRANSFERABLE INTERESTS AND RIGHTS
 50                             OF TRANSFEREES AND CREDITORS

 51        30-6-501.  NATURE OF TRANSFERABLE INTEREST.  A  transferable  interest  is
 52    personal property.

                                       24

  1        30-6-502.  TRANSFER  OF TRANSFERABLE INTEREST. (1) A transfer, in whole or
  2    in part, of a transferable interest:
  3        (a)  Is permissible, provided however, that the transfer of a transferable
  4        interest in a professional company is not  permissible  absent  compliance
  5        with section 30-6-201A(7), Idaho Code;
  6        (b)  Does not by itself cause a member's dissociation or a dissolution and
  7        winding up of the limited liability company's activities; and
  8        (c)  Subject  to section 30-6-504, Idaho Code, does not entitle the trans-
  9        feree to:
 10             (i)   Participate in the  management  or  conduct  of  the  company's
 11             activities; or
 12             (ii)  Except as otherwise provided in subsection (3) of this section,
 13             have  access to records or other information concerning the company's
 14             activities.
 15        (2)  A transferee has the right to receive, in accordance with the  trans-
 16    fer, distributions to which the transferor would otherwise be entitled.
 17        (3)  In  a  dissolution  and  winding up of a limited liability company, a
 18    transferee is entitled to an account of the company's transactions  only  from
 19    the date of dissolution.
 20        (4)  A  transferable  interest  may  be  evidenced by a certificate of the
 21    interest issued by the limited liability company in a record, and, subject  to
 22    this  section,  the interest represented by the certificate may be transferred
 23    by a transfer of the certificate.
 24        (5)  A limited liability company need not give effect  to  a  transferee's
 25    rights under this section until the company has notice of the transfer.
 26        (6)  A  transfer  of a transferable interest in violation of a restriction
 27    on transfer contained in the operating agreement is ineffective as to a person
 28    having notice of the restriction at the time of transfer.
 29        (7)  Except as otherwise provided in section 30-6-602(4)(b),  Idaho  Code,
 30    when  a  member  transfers a transferable interest, the transferor retains the
 31    rights of a member other than the interest in  distributions  transferred  and
 32    retains all duties and obligations of a member.
 33        (8)  When  a  member  transfers  a  transferable interest to a person that
 34    becomes a member with respect to the transferred interest, the  transferee  is
 35    liable  for  the member's obligations under sections 30-6-403 and 30-6-406(3),
 36    Idaho Code, known to the transferee when the transferee becomes a member.

 37        30-6-503.  CHARGING ORDER. (1) On application by a judgment creditor of  a
 38    member or transferee, a court may enter a charging order against the transfer-
 39    able  interest  of the judgment debtor for the unsatisfied amount of the judg-
 40    ment. A charging order constitutes a lien on a judgment debtor's  transferable
 41    interest  and requires the limited liability company to pay over to the person
 42    to which the charging order was issued any distribution that  would  otherwise
 43    be paid to the judgment debtor.
 44        (2)  To the extent necessary to effectuate the collection of distributions
 45    pursuant  to  a charging order in effect under subsection (1) of this section,
 46    the court may:
 47        (a)  Appoint a receiver of  the  distributions  subject  to  the  charging
 48        order, with the power to make all inquiries the judgment debtor might have
 49        made; and
 50        (b)  Make all other orders necessary to give effect to the charging order.
 51        (3)  Upon a showing that distributions under a charging order will not pay
 52    the  judgment  debt within a reasonable time, the court may foreclose the lien
 53    and order the sale of the transferable interest. The purchaser at the foreclo-
 54    sure sale only obtains the transferable interest, does not  thereby  become  a

                                       25

  1    member, and is subject to section 30-6-502, Idaho Code.
  2        (4)  At  any time before foreclosure under subsection (3) of this section,
  3    the member or transferee whose transferable interest is subject to a  charging
  4    order  under  subsection (1) of this section may extinguish the charging order
  5    by satisfying the judgment and filing a certified  copy  of  the  satisfaction
  6    with the court that issued the charging order.
  7        (5)  At any time before foreclosure under subsection (3) of this section,
  8    a  limited  liability  company  or  one (1) or more members whose transferable
  9    interests are not subject to the charging order may pay to the judgment credi-
 10    tor the full amount due under the judgment and thereby succeed to  the  rights
 11    of the judgment creditor, including the charging order.
 12        (6)  This chapter does not deprive any member or transferee of the benefit
 13    of  any exemption laws applicable to the member's or transferee's transferable
 14    interest.
 15        (7)  This section provides the exclusive remedy by which a person  seeking
 16    to  enforce  a judgment against a member or transferee may, in the capacity of
 17    judgment creditor, satisfy the judgment from the judgment  debtor's  transfer-
 18    able interest.

 19        30-6-504.  POWER  OF PERSONAL REPRESENTATIVE OF DECEASED MEMBER. If a mem-
 20    ber dies, the deceased member's personal representative or other legal  repre-
 21    sentative  may  exercise  the  rights  of  a  transferee  provided  in section
 22    30-6-502(3), Idaho Code, and, for the purposes of  settling  the  estate,  the
 23    rights of a current member under section 30-6-410, Idaho Code.

 24                                       PART 6.
 25                                MEMBER'S DISSOCIATION

 26        30-6-601.  MEMBER'S  POWER  TO  DISSOCIATE -- WRONGFUL DISSOCIATION. (1) A
 27    person has the power to dissociate as a member  at  any  time,  rightfully  or
 28    wrongfully,  by  withdrawing  as  a  member  by  express  will  under  section
 29    30-6-602(1), Idaho Code.
 30        (2)  A  person's dissociation from a limited liability company is wrongful
 31    only if the dissociation:
 32        (a)  Is in breach of an express provision of the operating agreement; or
 33        (b)  Occurs before the termination of the company and:
 34             (i)   The person withdraws as a member by express will;
 35             (ii)  The person is expelled as a member by judicial order under sec-
 36             tion 30-6-602(5), Idaho Code;
 37             (iii) The person is dissociated under section  30-6-602(7)(a),  Idaho
 38             Code, by becoming a debtor in bankruptcy; or
 39             (iv)  In  the case of a person that is not a trust other than a busi-
 40             ness trust, an estate or an individual, the  person  is  expelled  or
 41             otherwise  dissociated  as a member because it willfully dissolved or
 42             terminated.
 43        (3)  A person that wrongfully dissociates as a member  is  liable  to  the
 44    limited liability company and, subject to section 30-6-901, Idaho Code, to the
 45    other  members  for  damages  caused  by the dissociation. The liability is in
 46    addition to any other debt, obligation or other liability of the member to the
 47    company or the other members.

 48        30-6-602.  EVENTS CAUSING DISSOCIATION. A person is dissociated as a  mem-
 49    ber from a limited liability company when:
 50        (1)  The  company has notice of the person's express will to withdraw as a
 51    member, but, if the person specified a withdrawal date later than the date the

                                       26

  1    company had notice, on that later date;
  2        (2)  An event stated in the operating agreement as  causing  the  person's
  3    dissociation occurs;
  4        (3)  The  person  is expelled as a member pursuant to the operating agree-
  5    ment;
  6        (4)  The person is expelled as a member by the unanimous  consent  of  the
  7    other members if:
  8        (a)   It  is unlawful to carry on the company's activities with the person
  9        as a member;
 10        (b)  There has been a transfer of all of the person's transferable  inter-
 11        est in the company, other than:
 12             (i)   A transfer for security purposes; or
 13             (ii)  A  charging order in effect under section 30-6-503, Idaho Code,
 14             which has not been foreclosed;
 15        (c)  The person is a corporation and, within ninety (90)  days  after  the
 16        company  notifies  the person that it will be expelled as a member because
 17        the person has filed a certificate of dissolution or the  equivalent,  its
 18        charter  has  been revoked, or its right to conduct business has been sus-
 19        pended by the jurisdiction of its incorporation, the certificate of disso-
 20        lution has not been revoked or its charter or right  to  conduct  business
 21        has not been reinstated; or
 22        (d)  The  person  is  a  limited liability company or partnership that has
 23        been dissolved and whose business is being wound up;
 24        (5)  On application by the company, the person is expelled as a member  by
 25    judicial order because the person:
 26        (a)  Has  engaged,  or is engaging, in wrongful conduct that has adversely
 27        and materially affected, or will  adversely  and  materially  affect,  the
 28        company's activities;
 29        (b)  Has   willfully  or  persistently  committed,  or  is  willfully  and
 30        persistently committing, a material breach of the operating  agreement  or
 31        the person's duties or obligations under section 30-6-409, Idaho Code; or
 32        (c)  Has  engaged in, or is engaging, in conduct relating to the company's
 33        activities which makes it not  reasonably  practicable  to  carry  on  the
 34        activities with the person as a member;
 35        (6)  In the case of a person who is an individual:
 36        (a)  The person dies; or
 37        (b)  In a member-managed limited liability company:
 38             (i)   A  guardian or general conservator for the person is appointed;
 39             or
 40             (ii)  There is a judicial order that the person has otherwise  become
 41             incapable  of  performing  the person's duties as a member under this
 42             chapter  or the operating agreement;
 43        (7)  In a member-managed limited liability company, the person:
 44        (a)  Becomes a debtor in bankruptcy;
 45        (b)  Executes an assignment for the benefit of creditors; or
 46        (c)  Seeks, consents to or acquiesces in the  appointment  of  a  trustee,
 47        receiver or liquidator of the person or of all or substantially all of the
 48        person's property;
 49        (8)  In  the  case of a person that is a trust or is acting as a member by
 50    virtue of being a trustee of a trust, the trust's entire transferable interest
 51    in the company is distributed;
 52        (9)  In the case of a person that is an estate or is acting as a member by
 53    virtue of being a personal representative of an estate,  the  estate's  entire
 54    transferable interest in the company is distributed;
 55        (10) In  the case of a member that is not an individual, partnership, lim-

                                       27

  1    ited liability company, corporation, trust or estate, the termination  of  the
  2    member;
  3        (11) The  company  participates  in  a  merger under chapter 18, title 30,
  4    Idaho Code, if:
  5        (a)  The company is not the surviving entity; or
  6        (b)  Otherwise as a result of the merger, the person ceases to be  a  mem-
  7        ber;
  8        (12) The  company participates in a conversion under chapter 18, title 30,
  9    Idaho Code;
 10        (13) The company participates in a domestication under chapter  18,  title
 11    30,  Idaho Code, if, as a result of the domestication, the person ceases to be
 12    a member;
 13        (14) The company terminates; or
 14        (15) In the case of a professional company,  restrictions  or  limitations
 15    are  placed  upon  a  member's ability to continue to render professional ser-
 16    vices.

 17        30-6-603.  EFFECT OF PERSON'S DISSOCIATION AS MEMBER. (1) When a person is
 18    dissociated as a member of a limited liability company:
 19        (a)  The person's right to participate as a member in the  management  and
 20        conduct of the company's activities terminates;
 21        (b)  If  the company is member-managed, the person's fiduciary duties as a
 22        member end with regard to matters arising and events occurring  after  the
 23        person's dissociation; and
 24        (c)  Subject  to  section  30-6-504, Idaho Code, and chapter 18, title 30,
 25        Idaho Code, any transferable interest  owned  by  the  person  immediately
 26        before  dissociation  in the person's capacity as a member is owned by the
 27        person solely as a transferee.
 28        (2)  A person's dissociation as a member of a  limited  liability  company
 29    does  not  of  itself  discharge the person from any debt, obligation or other
 30    liability to the company or the other members which the person incurred  while
 31    a member.

 32                                       PART 7.
 33                              DISSOLUTION AND WINDING UP

 34        30-6-701.  EVENTS  CAUSING DISSOLUTION. (1) A limited liability company is
 35    dissolved, and its activities must be wound up, upon the occurrence of any  of
 36    the following:
 37        (a)  An  event  or circumstance that the operating agreement states causes
 38        dissolution;
 39        (b)  The consent of all the members;
 40        (c)  The passage of ninety (90) consecutive days during which the  company
 41        has no members;
 42        (d)  On  application  by  a  member, the entry by the district court of an
 43        order dissolving the company on the grounds that:
 44             (i)   The conduct of all or substantially all of the company's activ-
 45             ities is unlawful; or
 46             (ii)  It is not reasonably practicable  to  carry  on  the  company's
 47             activities in conformity with the certificate of organization and the
 48             operating agreement; or
 49        (e)  On  application  by  a  member, the entry by the district court of an
 50        order dissolving the company on the grounds that  the  managers  or  those
 51        members in control of the company:
 52             (i)   Have acted, are acting, or will act in a manner that is illegal

                                       28

  1             or fraudulent; or
  2             (ii)  Have  acted  or  are  acting in a manner that is oppressive and
  3             was, is, or will be directly harmful to the applicant.
  4        (2)  In a proceeding brought under subsection (1)(e) of this section,  the
  5    district court may order a remedy other than dissolution.

  6        30-6-702.  WINDING  UP.  (1)  A  dissolved limited liability company shall
  7    wind up its activities, and  the company continues after dissolution only  for
  8    the purpose of winding up.
  9        (2)  In winding up its activities, a limited liability company:
 10        (a)  Shall  discharge  the  company's debts, obligations or other liabili-
 11        ties, settle and close the company's activities, and marshal and  distrib-
 12        ute the assets of the company; and
 13        (b)  May:
 14             (i)   Deliver  to  the  secretary  of state for filing a statement of
 15             dissolution stating the name of the company and that the  company  is
 16             dissolved;
 17             (ii)  Preserve the company activities and property as a going concern
 18             for a reasonable time;
 19             (iii) Prosecute  and  defend  actions and proceedings, whether civil,
 20             criminal or administrative;
 21             (iv)  Transfer the company's property;
 22             (v)   Settle disputes by mediation or arbitration;
 23             (vi)  Deliver to the secretary of state for  filing  a  statement  of
 24             termination  stating  the name of the company and that the company is
 25             terminated; and
 26             (vii) Perform other acts necessary or appropriate to the winding up.
 27        (3)  If a dissolved limited liability company has no  members,  the  legal
 28    representative of the last person to have been a member may wind up the activ-
 29    ities  of  the  company. If the person does so, the person has the powers of a
 30    sole manager under section 30-6-407(3), Idaho Code, and is deemed to be a man-
 31    ager for the purposes of section 30-6-304(1)(b), Idaho Code.
 32        (4)  If the legal representative under  subsection  (3)  of  this  section
 33    declines  or  fails  to  wind  up  the  company's  activities, a person may be
 34    appointed to do so by the consent of transferees  owning  a  majority  of  the
 35    right to receive distributions as transferees at the time the consent is to be
 36    effective. A person appointed under this subsection:
 37        (a)  Has  the  powers  of  a sole manager under section 30-6-407(3), Idaho
 38        Code, and  is  deemed  to  be  a  manager  for  the  purposes  of  section
 39        30-6-304(1)(b), Idaho Code; and
 40        (b)  Shall promptly deliver to the secretary of state for filing an amend-
 41        ment to the company's certificate of organization to:
 42             (i)   State that the company has no members;
 43             (ii)  State  that the person has been appointed pursuant to this sub-
 44             section to wind up the company; and
 45             (iii) Provide the street and mailing addresses of the person.
 46        (5)  The district court may order judicial supervision of the  winding  up
 47    of  a dissolved limited liability company, including the appointment of a per-
 48    son to wind up the company's activities:
 49        (a)  On application of a member, if the applicant establishes good cause;
 50        (b)  On the application of transferee, if:
 51             (i)   The company does not have any members;
 52             (ii)  The legal representative of the last person to have been a mem-
 53             ber declines or fails to wind up the company's activities; and
 54             (iii) Within a reasonable time following the dissolution a person has

                                       29

  1             not been appointed pursuant to subsection (3) of this section; or
  2        (c)  In connection with a proceeding under section 30-6-701(1)(d) or  (e),
  3        Idaho Code.

  4        30-6-703.  KNOWN  CLAIMS  AGAINST DISSOLVED LIMITED LIABILITY COMPANY. (1)
  5    Except as otherwise provided in subsection (4) of this  section,  a  dissolved
  6    limited  liability  company  may give notice of a known claim under subsection
  7    (2) of this section, which has the effect as provided  in  subsection  (3)  of
  8    this section.
  9        (2)  A  dissolved  limited  liability  company  may in a record notify its
 10    known claimants of the dissolution. The notice must:
 11        (a)  Specify the information required to be included in a claim;
 12        (b)  Provide a mailing address to which the claim is to be sent;
 13        (c)  State the deadline for receipt of the claim, which may  not  be  less
 14        than  one  hundred twenty (120) days after the date the notice is received
 15        by the claimant; and
 16        (d)  State that the claim will be barred if not received by the deadline.
 17        (3)  A claim against a dissolved limited liability company  is  barred  if
 18    the requirements of subsection (2) of this section are met and:
 19        (a)  The claim is not received by the specified deadline; or
 20        (b)  If the claim is timely received but rejected by the company:
 21             (i)   The company causes the claimant to receive a notice in a record
 22             stating  that  the  claim  is  rejected and will be barred unless the
 23             claimant commences an action against the company to enforce the claim
 24             within ninety (90) days after the claimant receives the notice; and
 25             (ii)  The claimant does not commence the required action  within  the
 26             ninety (90) days.
 27        (4)  This  section  does  not apply to a claim based on an event occurring
 28    after the effective date of dissolution or a liability that on  that  date  is
 29    contingent.

 30        30-6-704.  OTHER CLAIMS AGAINST DISSOLVED LIMITED LIABILITY COMPANY. (1) A
 31    dissolved  limited liability company may publish notice of its dissolution and
 32    request persons having claims against the company to present  them  in  accor-
 33    dance with the notice.
 34        (2)  The notice authorized by subsection (1) of this section must:
 35        (a)  Be  published  at least once in a newspaper of general circulation in
 36        the county  in  this  state  in  which  the  dissolved  limited  liability
 37        company's principal office is located or, if it has none in this state, in
 38        the  county  in  which  the  company's  designated  office  is or was last
 39        located;
 40        (b)  Describe the information required to be contained in a claim and pro-
 41        vide a mailing address to which the claim is to be sent; and
 42        (c)  State that a claim against the company is barred unless an action  to
 43        enforce  the claim is commenced within five (5) years after publication of
 44        the notice.
 45        (3)  If a dissolved limited liability company publishes a notice in accor-
 46    dance with subsection (2) of this section, unless the  claimant  commences  an
 47    action  to  enforce  the claim against the company within five (5) years after
 48    the publication date of the notice, the claim of each of the following  claim-
 49    ants is barred:
 50        (a)  A  claimant  that  did  not  receive notice in a record under section
 51        30-6-703, Idaho Code;
 52        (b)  A claimant whose claim was timely sent to the company but  not  acted
 53        on; and

                                       30

  1        (c)  A  claimant whose claim is contingent at, or based on an event occur-
  2        ring after, the effective date of dissolution.
  3        (4)  A claim not barred under this section may be enforced:
  4        (a)  Against a dissolved limited liability company, to the extent  of  its
  5        undistributed assets; and
  6        (b)  If  assets  of  the  company have been distributed after dissolution,
  7        against a member or transferee to the extent of that person's  proportion-
  8        ate  share  of  the  claim  or  of the assets distributed to the member or
  9        transferee after dissolution, whichever is less, but a person's total lia-
 10        bility for all claims under this  paragraph  does  not  exceed  the  total
 11        amount of assets distributed to the person after dissolution.

 12        30-6-705.  GROUNDS  FOR  ADMINISTRATIVE DISSOLUTION, PROCEDURE AND EFFECT.
 13    (1) The secretary of state may administratively dissolve a  limited  liability
 14    company if:
 15        (a)  The  limited  liability company does not deliver its annual report to
 16        the secretary of state by the date on which it is due;
 17        (b)  The limited liability company is without a registered agent for sixty
 18        (60) days or more; or
 19        (c)  The secretary of state has credible information that the limited lia-
 20        bility company has failed to notify the secretary of  state  within  sixty
 21        (60)  days after the occurrence that its registered agent has been changed
 22        or that its registered agent has resigned.
 23        (2)  If the secretary of state determines that one  (1)  or  more  grounds
 24    exist  under this section for dissolving a limited liability company, the sec-
 25    retary of state shall give notice of the determination to the limited  liabil-
 26    ity  company by first class mail addressed to its mailing address as indicated
 27    on its most recent annual report or, if the limited liability company has  not
 28    yet filed an annual report, to its registered agent.
 29        (3)  If  the  limited  liability  company does not correct each ground for
 30    dissolution or demonstrate to the reasonable satisfaction of the secretary  of
 31    state  that  each  ground  determined by the secretary of state does not exist
 32    within sixty (60) days after receipt of the notice of determination, the  sec-
 33    retary  of state shall administratively dissolve the limited liability company
 34    by noting the fact of dissolution  and  the  effective  date  thereof  in  his
 35    records.  The  secretary  of state shall give notice of the dissolution to the
 36    limited liability company by first class mail addressed to its mailing address
 37    as indicated on its most recent annual report or,  if  the  limited  liability
 38    company has not yet filed an annual report, to its registered agent.
 39        (4)  A  limited liability company administratively dissolved continues its
 40    legal existence but may not carry on any business  except  that  necessary  to
 41    wind  up  and  liquidate  its business and affairs under sections 30-6-702 and
 42    30-6-708, Idaho  Code,  and  notify  claimants  under  sections  30-6-703  and
 43    30-6-704, Idaho Code.
 44        (5)  The  administrative  dissolution  of a limited liability company does
 45    not terminate the authority of its registered agent.

 46        30-6-706.  REINSTATEMENT FOLLOWING ADMINISTRATIVE DISSOLUTION. (1) A  lim-
 47    ited  liability  company that has been administratively dissolved may apply to
 48    the secretary of state for reinstatement  within  ten  (10)  years  after  the
 49    effective date of dissolution. The application must be delivered to the secre-
 50    tary of state for filing and state:
 51        (a)  The name of the company and the effective date of its dissolution;
 52        (b)  That the grounds for dissolution have been eliminated; and
 53        (c)  That  the  company's  name  satisfies  the  requirements  of  section

                                       31

  1        30-6-108, Idaho Code.
  2        (2)  If  the  secretary of state determines that an application under sub-
  3    section (1) of this section contains the required  information  and  that  the
  4    information is correct,  the secretary of state shall prepare a certificate of
  5    reinstatement that states this determination, file the original of the certif-
  6    icate of reinstatement, and mail a copy to the limited liability company.
  7        (3)  When  a reinstatement becomes effective, it relates back to and takes
  8    effect as of the effective date of the administrative dissolution and the lim-
  9    ited liability company may resume its activities as if the dissolution had not
 10    occurred.

 11        30-6-707.  APPEAL FROM REJECTION OF REINSTATEMENT. (1)  If  the  secretary
 12    of  state  denies  a limited liability company's application for reinstatement
 13    following administrative dissolution, the secretary of state  shall  mail  the
 14    company a copy of the notice that reinstatement has been denied.
 15        (2)  Within  thirty (30) days after mailing of a notice of denial of rein-
 16    statement under subsection (1) of this section, a  limited  liability  company
 17    may  appeal from the denial by petitioning the district court of Ada county to
 18    set aside the dissolution. The petition must be served  on  the  secretary  of
 19    state  and  contain  a copy of the secretary of state's notice of dissolution,
 20    the company's application for reinstatement,  and  the  secretary  of  state's
 21    notice of denial.
 22        (3)  The  district  court  may,  if  grounds exist, order the secretary of
 23    state to reinstate a dissolved limited liability company or take other  action
 24    the court considers appropriate.

 25        30-6-708.  DISTRIBUTION   OF   ASSETS  IN  WINDING  UP  LIMITED  LIABILITY
 26    COMPANY'S ACTIVITIES.  (1) In winding up its activities, a  limited  liability
 27    company  must  apply  its  assets  to  discharge its obligations to creditors,
 28    including members that are creditors.
 29        (2)  After a limited liability company complies  with  subsection  (1)  of
 30    this  section, any surplus must be distributed in the following order, subject
 31    to any charging order in effect under section 30-6-503, Idaho Code:
 32        (a)  To each person owning a transferable interest that reflects contribu-
 33        tions made by a member and not previously returned, an amount equal to the
 34        value of the unreturned contributions; and
 35        (b)  In equal shares among members and dissociated members, except to  the
 36        extent  necessary  to  comply  with  any  transfer effective under section
 37        30-6-502, Idaho Code.
 38        (3)  If a limited liability company does not have  sufficient  surplus  to
 39    comply with subsection (2)(a) of this section, any surplus must be distributed
 40    among the owners of transferable interests in proportion to the value of their
 41    respective unreturned contributions.
 42        (4)  All  distributions made under subsections (2) and (3) of this section
 43    must be paid in money.

 44                                       PART 8.
 45                         FOREIGN LIMITED LIABILITY COMPANIES

 46        30-6-801.  GOVERNING LAW. (1) The law of the state or  other  jurisdiction
 47    under which a foreign limited liability company is formed governs:
 48        (a)  The internal affairs of the company; and
 49        (b)  The liability of  a member as member and a manager as manager for the
 50        debts,  obligations or other liabilities of the company; provided however,
 51        that a foreign professional company rendering services in this state shall

                                       32

  1        be subject to the laws of this state and the code  of  ethics  or  profes-
  2        sional  responsibility  which  are  applicable to the professions in which
  3        such professional company is rendering services in this state.
  4        (2)  A foreign limited liability company may not be denied  a  certificate
  5    of  authority  by reason of any difference between the law of the jurisdiction
  6    under which the company is formed and the law of this state.
  7        (3)  A certificate of authority does not authorize a foreign limited  lia-
  8    bility  company to engage in any business or exercise any power that a limited
  9    liability company may not engage in or exercise in this state.

 10        30-6-802.  APPLICATION FOR CERTIFICATE OF AUTHORITY. (1) A foreign limited
 11    liability company may apply for a certificate of authority to  transact  busi-
 12    ness  in this state by delivering an application to the secretary of state for
 13    filing. The application must state:
 14        (a)  The name of the company and, if the name does not comply with section
 15        30-6-108, Idaho Code,  an  alternate  name  adopted  pursuant  to  section
 16        30-6-805(1), Idaho Code;
 17        (b)  The  name of the state or other jurisdiction under whose law the com-
 18        pany is formed;
 19        (c)  The street and mailing addresses of the  company's  principal  office
 20        and,  if  the  law  of  the jurisdiction under which the company is formed
 21        requires the company to maintain  an  office  in  that  jurisdiction,  the
 22        street and mailing addresses of the required office;
 23        (d)  The information required by section 30-405(1), Idaho Code; and
 24        (e)  The name and mailing address of at least one (1) member or manager.
 25        (2)  A  foreign  limited  liability company shall deliver with a completed
 26    application under subsection (1) of this section a certificate of existence or
 27    a record of similar import signed by the secretary of state or other  official
 28    having  custody  of the company's publicly filed records in the state or other
 29    jurisdiction under whose law the company is formed.

 30        30-6-803.  ACTIVITIES NOT CONSTITUTING TRANSACTING BUSINESS.  (1)  Activi-
 31    ties  of a foreign limited liability company which do not constitute transact-
 32    ing business in this state within the meaning of this part include:
 33        (a)  Maintaining, defending or settling an action or proceeding;
 34        (b)  Carrying on any activity concerning its internal  affairs,  including
 35        holding meetings of its members or managers;
 36        (c)  Maintaining accounts in financial institutions;
 37        (d)  Maintaining offices or agencies for the transfer, exchange and regis-
 38        tration of the company's own securities or maintaining trustees or deposi-
 39        tories with respect to those securities;
 40        (e)  Selling through independent contractors;
 41        (f)  Soliciting  or  obtaining orders, whether by mail or electronic means
 42        or through employees or agents or otherwise, if the orders require  accep-
 43        tance outside this state before they become contracts;
 44        (g)  Creating  or  acquiring indebtedness, mortgages or security interests
 45        in real or personal property;
 46        (h)  Securing or collecting debts or enforcing mortgages or other security
 47        interests in property securing the debts and holding, protecting or  main-
 48        taining property so acquired;
 49        (i)  Conducting  an  isolated  transaction that is completed within thirty
 50        (30) days and is not in the course of similar transactions; and
 51        (j)  Transacting business in interstate commerce.
 52        (2)  For purposes of this part, the ownership in  this  state  of  income-
 53    producing  real  property  or  tangible personal property, other than property

                                       33

  1    excluded under subsection (1) of this section, constitutes  transacting  busi-
  2    ness in this state.
  3        (3)  This section does not apply in determining the contacts or activities
  4    that  may  subject  a foreign limited liability company to service of process,
  5    taxation or regulation under law of this state other than this chapter.

  6        30-6-804.  FILING OF CERTIFICATE OF AUTHORITY.  Unless  the  secretary  of
  7    state  determines  that an application for a certificate of authority does not
  8    comply with the filing requirements of this chapter, the secretary  of  state,
  9    upon  payment of all filing fees, shall file the application of a foreign lim-
 10    ited liability company, prepare, sign and file a certificate of  authority  to
 11    transact  business  in  this  state, and send a copy of the filed certificate,
 12    together with a receipt for the fees, to the company or its representative.

 13        30-6-805.  NONCOMPLYING NAME OF FOREIGN LIMITED LIABILITY COMPANY.  (1)  A
 14    foreign  limited  liability  company  whose  name does not comply with section
 15    30-6-108, Idaho Code, may not obtain  a  certificate  of  authority  until  it
 16    adopts,  for  the  purpose of transacting business in this state, an alternate
 17    name that complies with section 30-6-108, Idaho Code. A foreign  limited  lia-
 18    bility company that adopts an alternate name under this subsection and obtains
 19    a  certificate of authority with the alternate name need not comply with chap-
 20    ter 5, title 53, Idaho Code. After obtaining a certificate of  authority  with
 21    an alternate name, a foreign limited liability company shall transact business
 22    in  this state under the alternate name unless the company is authorized under
 23    chapter 5, title 53, Idaho Code, to transact  business  in  this  state  under
 24    another name.
 25        (2)  If  a  foreign limited liability company authorized to transact busi-
 26    ness in this state changes its name to one that does not comply  with  section
 27    30-6-108,  Idaho  Code,  it may not thereafter transact business in this state
 28    until it complies with subsection (1) of this section and obtains  an  amended
 29    certificate of authority.

 30        30-6-806.  REVOCATION  OF  CERTIFICATE  OF AUTHORITY. (1) A certificate of
 31    authority of a foreign limited liability company to transact business in  this
 32    state  may be revoked by the secretary of state in the manner provided in sub-
 33    sections (2) and (3) of this section, if the company does not:
 34        (a)  Deliver its annual report by the date on which it is due as  required
 35        under section 30-6-209, Idaho Code;
 36        (b)  Appoint and maintain a registered agent; or
 37        (c)  Deliver  for  filing  a  statement  of a change under section 30-408,
 38        Idaho Code, within thirty (30) days after a change  has  occurred  in  the
 39        name or address of the registered agent.
 40        (2)  To  revoke  a certificate of authority of a foreign limited liability
 41    company, the secretary of state must  mail  a  notice  of  revocation  to  the
 42    company's  registered agent, or if the company does not appoint and maintain a
 43    proper registered agent, to the company's designated office. The  notice  must
 44    state:
 45        (a)  The  revocation's  effective  date, which must be at least sixty (60)
 46        days after the date the secretary of state mails the notice; and
 47        (b)  The grounds for revocation under subsection (1) of this section.
 48        (3)  The authority of a foreign  limited  liability  company  to  transact
 49    business   in this state ceases on the effective date of the notice of revoca-
 50    tion unless before that date the company  cures  each  ground  for  revocation
 51    stated in the notice mailed under subsection (2) of this section.

                                       34

  1        30-6-807.  CANCELLATION OF CERTIFICATE OF AUTHORITY. To cancel its certif-
  2    icate  of authority to transact business in this state, a foreign limited lia-
  3    bility company must deliver to the secretary of state for filing a  notice  of
  4    cancellation  stating  the name of the company and that the company desires to
  5    cancel its certificate of authority. The  certificate  is  canceled  when  the
  6    notice becomes effective.

  7        30-6-808.  EFFECT  OF FAILURE TO HAVE CERTIFICATE OF AUTHORITY. (1) A for-
  8    eign limited liability company transacting business  in  this  state  may  not
  9    maintain  an action or proceeding in this state unless it has a certificate of
 10    authority to transact business in this state.
 11        (2)  The failure of a foreign limited liability company to have a certifi-
 12    cate of authority to transact business in  this  state  does  not  impair  the
 13    validity  of  a  contract  or  act  of the company or prevent the company from
 14    defending an action or proceeding in this state.
 15        (3)  A member or manager of a foreign limited  liability  company  is  not
 16    liable  for  the debts, obligations or other liabilities of the company solely
 17    because the company transacted business in this state without a certificate of
 18    authority.

 19        30-6-809.  ACTION BY ATTORNEY GENERAL. The attorney general  may  maintain
 20    an action to enjoin a foreign limited liability company from transacting busi-
 21    ness in this state in violation of this part.

 22                                       PART 9.
 23                                  ACTIONS BY MEMBERS

 24        30-6-901.  DIRECT ACTION BY MEMBER. (1)  Subject to subsection (2) of this
 25    section,  a member may maintain a direct action against another member, a man-
 26    ager or the limited liability company  to  enforce  the  member's  rights  and
 27    otherwise protect the member's interests, including rights and interests under
 28    the  operating  agreement or this chapter or arising independently of the mem-
 29    bership relationship.
 30        (2)  A member maintaining a direct action under this  section  must  plead
 31    and  prove  an actual or threatened injury that is not solely the result of an
 32    injury suffered or threatened to be suffered by the limited liability company.

 33        30-6-902.  DERIVATIVE ACTION. A member may maintain a derivative action to
 34    enforce a right of a limited liability company if:
 35        (1)  The member first makes a demand on the other  members  in  a  member-
 36    managed  limited  liability company, or the managers of a manager-managed lim-
 37    ited liability company, requesting that they cause the  company  to  bring  an
 38    action  to  enforce  the right, and the managers or other members do not bring
 39    the action within a reasonable time; or
 40        (2)  A demand under subsection (1) of this section would be futile.

 41        30-6-903.  PROPER PLAINTIFF. (1) Except as otherwise provided  in  subsec-
 42    tion  (2)  of this section, a derivative  action under section 30-6-902, Idaho
 43    Code, may be maintained only by a person that is a  member  at  the  time  the
 44    action is commenced and remains a member while the action continues.
 45        (2)  If the sole plaintiff in a derivative action dies while the action is
 46    pending,  the court may permit another member of the limited liability company
 47    to be substituted as plaintiff.

 48        30-6-904.  PLEADING. In a derivative action under section 30-6-902,  Idaho

                                       35

  1    Code, the complaint must state with particularity:
  2        (1)  The  date  and content of  plaintiff's demand and the response to the
  3    demand by the managers or other members; or
  4        (2)  If a demand has not been made, the reasons  a  demand  under  section
  5    30-6-902(1), Idaho Code, would be futile.

  6        30-6-905.  SPECIAL  LITIGATION  COMMITTEE. (1) If a limited liability com-
  7    pany is named as or made a party in a derivative proceeding, the  company  may
  8    appoint  a  special litigation committee to investigate the claims asserted in
  9    the proceeding and determine whether pursuing the action is in the best inter-
 10    ests of the company. If the company appoints a special  litigation  committee,
 11    on  motion  by  the committee made in the name of the company, except for good
 12    cause shown, the district court shall stay discovery for the  time  reasonably
 13    necessary  to  permit the committee to make its investigation. This subsection
 14    does not prevent the court from enforcing  a  person's  right  to  information
 15    under  section  30-6-410,  Idaho  Code,  or,  for  good  cause shown, granting
 16    extraordinary relief in the form of a temporary restraining order or  prelimi-
 17    nary injunction.
 18        (2)  A  special  litigation  committee  may be composed of one (1) or more
 19    disinterested and independent individuals, who may be members.
 20        (3)  A special litigation committee may be appointed:
 21        (a)  In a member-managed limited liability company:
 22             (i)   By the consent of a  majority  of  the  members  not  named  as
 23             defendants or  plaintiffs in the proceeding; and
 24             (ii)  If  all  members  are  named as defendants or plaintiffs in the
 25             proceeding, by a majority of the members named as defendants; or
 26        (b)  In a manager-managed limited liability company:
 27             (i)   By a majority of the managers not named as defendants or plain-
 28             tiffs in the proceeding; and
 29             (ii)  If all managers are named as defendants or  plaintiffs  in  the
 30             proceeding, by a majority of the managers named as defendants.
 31        (4)  After  appropriate  investigation, a special litigation committee may
 32    determine that it is in the best interests of the  limited  liability  company
 33    that the proceeding:
 34        (a)  Continue under the control of the plaintiff;
 35        (b)  Continue under the control of the committee;
 36        (c)  Be settled on terms approved by the committee; or
 37        (d)  Be dismissed.
 38        (5)  After  making a determination under subsection (4) of this section, a
 39    special litigation committee shall file with the  court  a  statement  of  its
 40    determination  and  its  report supporting its determination, giving notice to
 41    the plaintiff. The district court shall determine whether the members  of  the
 42    committee  were  disinterested and independent and whether the  committee con-
 43    ducted its investigation and made its recommendation in good  faith,  indepen-
 44    dently,  and  with  reasonable  care,  with the committee having the burden of
 45    proof. If the district court finds that the members of the committee were dis-
 46    interested and independent and that the committee acted in good  faith,  inde-
 47    pendently,  and  with  reasonable  care,  the district court shall enforce the
 48    determination of the committee. Otherwise, the district court  shall  dissolve
 49    the  stay  of discovery entered under subsection (1) of this section and allow
 50    the action to proceed under the direction of the plaintiff.

 51        30-6-906.  PROCEEDS AND EXPENSES. (1) Except as otherwise provided in sub-
 52    section (2) of this section:
 53        (a)  Any proceeds or other benefits of a derivative action  under  section

                                       36

  1        30-6-902,  Idaho  Code,  whether  by  judgment,  compromise or settlement,
  2        belong to the limited liability company and not to the plaintiff; and
  3        (b)  If the plaintiff receives any proceeds,  the  plaintiff  shall  remit
  4        them immediately to the company.
  5        (2)  If  a  derivative  action under section 30-6-902, Idaho Code, is suc-
  6    cessful in whole or in part, the district court may award the  plaintiff  rea-
  7    sonable  expenses,  including  reasonable  attorney's fees and costs, from the
  8    recovery of the limited liability company.

  9                                       PART 10.
 10               MERGER, INTEREST EXCHANGE, CONVERSION AND DOMESTICATION

 11        30-6-1001.  APPLICABILITY OF IDAHO ENTITY TRANSACTIONS ACT. (1) Unless the
 12    limited liability company is excluded therefrom by  section  30-18-110,  Idaho
 13    Code,  and  except  as  provided  in subsection (2) of this section, a merger,
 14    interest exchange, conversion or domestication, in which a  limited  liability
 15    company  is  a party is governed by the Idaho entity transactions act, chapter
 16    18, title 30, Idaho Code.
 17        (2)  Section 30-6-1002, Idaho Code, applies to  transactions  in  which  a
 18    limited  liability company is a party under the Idaho entity transactions act,
 19    chapter 18, title 30, Idaho Code.

 20        30-6-1002.  RESTRICTIONS  ON  APPROVAL  OF  MERGERS,  INTEREST  EXCHANGES,
 21    CONVERSIONS AND DOMESTICATIONS. (1) If a member of a  constituent,  converting
 22    or  domesticating  limited liability company will have personal liability with
 23    respect to a surviving, converted or domesticated  organization,  approval  or
 24    amendment  of a plan of merger, interest exchange, conversion or domestication
 25    is ineffective without the consent of the member, unless:
 26        (a)  The company's operating agreement provides for approval of a  merger,
 27        interest  exchange,  conversion or domestication with the consent of fewer
 28        than all the members; and
 29        (b)  The member has consented to the provision of the operating agreement.
 30        (2)  A member does not give the consent required by subsection (1) of this
 31    section merely by consenting to a provision of the  operating  agreement  that
 32    permits  the  operating agreement to be amended with the consent of fewer than
 33    all the members.

 34                                       PART 11.
 35                               MISCELLANEOUS PROVISIONS

 36        30-6-1101.  UNIFORMITY OF APPLICATION AND CONSTRUCTION.  In  applying  and
 37    construing  this  chapter,  consideration must be given to the need to promote
 38    uniformity of the law with respect to its subject  matter  among  states  that
 39    enact it.

 40        30-6-1102.  RELATION  TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COM-
 41    MERCE ACT. To the extent this chapter modifies, limits and supersedes the fed-
 42    eral electronic signatures in global and national commerce act, 15 U.S.C. sec-
 43    tion 7001 et seq., this chapter does not modify, limit  or  supersede  section
 44    101(c)  of that act, 15 U.S.C. section 7001(c), or authorize electronic deliv-
 45    ery of any of the notices described in section 103(b) of that act,  15  U.S.C.
 46    section 7003(b).

 47        30-6-1103.  SAVINGS  CLAUSE.  This  chapter does not affect an action com-
 48    menced, proceeding brought, or right accrued before this chapter takes effect.

                                       37

  1        30-6-1104.  APPLICATION TO EXISTING  RELATIONSHIPS.  (1)  Before  July  1,
  2    2010, this chapter governs only:
  3        (a)  A limited liability company formed on or after July 1, 2008; and
  4        (b)  Except  as  otherwise  provided  in subsection (3) of this section, a
  5        limited liability company formed before July 1, 2008, which elects, in the
  6        manner provided in its operating agreement or  by  law  for  amending  the
  7        operating agreement, to be subject to this chapter.
  8        (2)  Except  as  otherwise  provided in subsection (3) of this section, on
  9    and after July 1, 2010, this chapter governs all limited liability companies.
 10        (3)  For the purposes of applying this chapter to a limited liability com-
 11    pany formed before July 1, 2008:
 12        (a)  The company's articles of organization are deemed to be the company's
 13        certificate of organization; and
 14        (b)  For the purposes of applying section 30-6-102(10),  Idaho  Code,  and
 15        subject  to  section  30-6-112(4),  Idaho  Code, language in the company's
 16        articles of organization designating the  company's  management  structure
 17        operates as if that language were in the operating agreement.

 18        SECTION  2.  That Section 30-1-401, Idaho Code, be, and the same is hereby
 19    amended to read as follows:

 20        30-1-401.  CORPORATE NAME. (1) A corporate name:
 21        (a)  Must contain the word "corporation,"  "incorporated,"  "company,"  or
 22        "limited," or the abbreviation "corp.," "inc.," "co.," or "ltd.," or words
 23        or  abbreviations  of  like  import in another language; provided however,
 24        that if the word "company" or its abbreviation is used  it  shall  not  be
 25        immediately  preceded by the word "and" or by an abbreviation of or symbol
 26        representing the word "and";
 27        (b)  May not contain  language  falsely  stating  or  implying  government
 28        affiliation or stating or implying that the corporation is organized for a
 29        purpose other than that permitted by section 30-1-301, Idaho Code, and its
 30        articles of incorporation.
 31        (2)  Except  as  authorized  by subsections (3) and (4) of this section, a
 32    corporate name must be distinguishable upon the records of  the  secretary  of
 33    state from:
 34        (a)  The  corporate  name  of  a corporation incorporated or authorized to
 35        transact business in this state;
 36        (b)  A name reserved or registered under  section  30-1-402  or  30-1-403,
 37        Idaho Code, or reserved under section 53-2-109, Idaho Code, or as reserved
 38        under  section  30-6-109 or 53-603, Idaho Code, as appropriate pursuant to
 39        section 30-6-1104, Idaho Code;
 40        (c)  The fictitious name adopted by a foreign  corporation  authorized  to
 41        transact business in this state because its real name is unavailable;
 42        (d)  The  corporate name of a nonprofit corporation incorporated or autho-
 43        rized to transact business in this state; and
 44        (e)  The name of any limited partnership, limited liability partnership or
 45        limited liability company which is organized under the laws of this  state
 46        or registered to do business in this state.
 47        (3)  A  corporation  may apply to the secretary of state for authorization
 48    to use a name that is not distinguishable on his records from one (1) or  more
 49    of  the  names  described  in subsection (2) of this section. The secretary of
 50    state shall authorize use of the name applied for if:
 51        (a)  The other corporation, holder of a reserved or registered name,  lim-
 52        ited  partnership, limited liability partnership or limited liability com-
 53        pany consents to the use in writing and submits an undertaking in  a  form

                                       38

  1        satisfactory  to  the secretary of state to change its name to a name that
  2        is distinguishable upon the records of the secretary  of  state  from  the
  3        name of the applying corporation; or
  4        (b)  The  applicant delivers to the secretary of state a certified copy of
  5        the final judgment of a court of competent jurisdiction  establishing  the
  6        applicant's right to use the name applied for in this state.
  7        (4)  A  corporation  may  use  the name, including the fictitious name, of
  8    another domestic or foreign corporation or limited liability company  that  is
  9    used  in  this  state if the other corporation or limited liability company is
 10    organized or authorized to transact business in this state  and  the  proposed
 11    user corporation:
 12        (a)  Has merged with the other corporation or limited liability company;
 13        (b)  Has been formed by reorganization of the other corporation or limited
 14        liability company; or
 15        (c)  Has  acquired  all  or substantially all of the assets, including the
 16        name, of the other corporation or limited liability company.
 17        (5)  This chapter does not control the use of assumed business names, gov-
 18    erned by "The Assumed Business Names Act of 1997," chapter 5, title 53,  Idaho
 19    Code.
 20        (6)  Nothing  in this section shall abrogate or limit the law as to unfair
 21    competition or unfair practice in the use of trade names,  nor  derogate  from
 22    the  common law, the principles of equity, or the statutes of this state or of
 23    the United States with respect to the  right  to  acquire  and  protect  trade
 24    names.
 25        (7)  The  assumption  of  a  name  in  violation of this section shall not
 26    affect or vitiate the corporate existence, but the courts of this state,  hav-
 27    ing  equity  jurisdiction,  may,  upon the application of the state, or of any
 28    person, unincorporated association, or  corporation  interested  or  affected,
 29    enjoin  such  corporation  in  violation  from  doing  business under any name
 30    assumed in violation of this section.

 31        SECTION 3.  That Section 63-3006A, Idaho Code, be, and the same is  hereby
 32    amended to read as follows:

 33        63-3006A.  LIMITED  LIABILITY COMPANY -- CLASSIFICATION AND TAXATION. Not-
 34    withstanding the provisions of section 63-3006, Idaho Code, for  the  purposes
 35    of chapter 30, title 63, Idaho Code, a limited liability company as defined in
 36    subsection  (5) or (6) of section 53-601, Idaho Code, or as defined in section
 37    30-6-102, Idaho Code, as appropriate  pursuant  to  section  30-6-1104,  Idaho
 38    Code,  shall be classified as a partnership, corporation, unincorporated asso-
 39    ciation or otherwise pursuant to the provisions of the internal revenue  code.
 40    A  limited  liability  company that is classified as a partnership pursuant to
 41    the internal revenue code shall be treated as a partnership  for  purposes  of
 42    chapter  30, title 63, Idaho Code. A limited liability company that is classi-
 43    fied other than a partnership pursuant to the internal revenue code  shall  be
 44    treated  for  purposes of chapter 30, title 63, Idaho Code, in accordance with
 45    its classification.

 46        SECTION 4.  That Section 63-3622K, Idaho Code, be, and the same is  hereby
 47    amended to read as follows:

 48        63-3622K.  OCCASIONAL SALES. (a) There are exempted from the taxes imposed
 49    by this chapter occasional sales of tangible personal property.
 50        (b)  As used in this section, the term "occasional sale" means:
 51        (1)  A  sale  of property not held or used by a person in the course of an

                                       39

  1        activity for which he is required to hold a seller's permit, provided such
  2        sale is not one (1) of a series of sales sufficient in number or of such a
  3        nature as to constitute the seller a "retailer" under section  63-3610(c),
  4        Idaho  Code. The definition of "occasional sales" provided in this subsec-
  5        tion does not apply to use tax in regard  to  tangible  personal  property
  6        used  to improve real property when such property is obtained, directly or
  7        indirectly, from a person in  the  business  of  making  like  or  similar
  8        improvements to real property.
  9        (2)  Any transfer of all or substantially all of the property held or used
 10        by  a  person  in  a business requiring a seller's permit when, after such
 11        transfer, the real or ultimate ownership of such property is substantially
 12        similar to that which existed before such transfer.  For  the  purpose  of
 13        this  section, stockholders, bondholders, partners, or other persons hold-
 14        ing an interest in a corporation or other entity are regarded as having  a
 15        "real  or ultimate ownership" of the property of such corporation or other
 16        entity.
 17        (3)  A transfer of capital assets to or by a business when the transfer is
 18        accomplished through an adjustment of the beneficial interest of the busi-
 19        ness and the transferor has paid sales or use taxes  pursuant  to  section
 20        63-3619 or 63-3621, Idaho Code, on the capital assets, incidental to:
 21             (i)   A  division of joint venture, partnership, or limited liability
 22             company assets among the members or partners in exchange for  a  pro-
 23             portional  reduction  of  the transferee's interest in the joint ven-
 24             ture, partnership, or limited liability company. For the purposes  of
 25             this  section,  the term "limited liability company" means a business
 26             organization as defined in chapter 6, title 53,  Idaho  Code,  or  as
 27             defined  in  section 30-6-102, Idaho Code, as appropriate pursuant to
 28             section 30-6-1104, Idaho Code;
 29             (ii)  The formation of a partnership, joint venture, or limited  lia-
 30             bility  company  by  the transfer of assets to the partnership, joint
 31             venture, or limited liability company or transfers to a  partnership,
 32             joint  venture,  or limited liability company in exchange for propor-
 33             tionate interests in the partnership, joint venture, or limited  lia-
 34             bility company;
 35             (iii) The  formation of a corporation by the owners of a business and
 36             the transfer of their business assets to the corporation in  exchange
 37             for stock in proportion to assets contributed;
 38             (iv)  The transfer of assets of shareholders in the formation or dis-
 39             solution of a corporation;
 40             (v)   The  transfer  of capital assets by a corporation to its stock-
 41             holders in exchange for surrender of capital stock;
 42             (vi)  The transfer of assets from a parent corporation to  a  subsid-
 43             iary  corporation which is owned at least eighty percent (80%) by the
 44             parent corporation, which transfer is solely in exchange for stock or
 45             securities of the subsidiary corporation;
 46             (vii) The transfer of assets from a subsidiary corporation  which  is
 47             owned  at  least  eighty percent (80%) by the parent corporation to a
 48             parent corporation or another subsidiary  which  is  owned  at  least
 49             eighty  percent  (80%)  by  the parent corporation, which transfer is
 50             solely in exchange for stock or securities of the parent  corporation
 51             or the subsidiary which received the assets.
 52        (4)  The  sale,  lease  or  rental of a capital asset in substantially the
 53        same form as acquired by the transferor and on which the initial transfer-
 54        or has paid sales or use taxes pursuant to  section  63-3619  or  63-3621,
 55        Idaho  Code,  when  the  owners of all of the outstanding stock, equity or

                                       40

  1        interest of the transferor are the same as the transferee or  are  members
  2        of the same family within the second degree of consanguinity or affinity.
  3        (5)  The  sale  of substantially all of the operating assets of a business
  4        or of a separate division, branch, or identifiable segment to a buyer  who
  5        continues operation of the business. For the purpose of this subsection, a
  6        "separate  division,  branch,  or identifiable segment" shall be deemed to
  7        exist if, prior to its sale, the income and expense attributable  to  such
  8        "separate  division,  branch, or identifiable segment" could be separately
  9        ascertained from the books of accounts and records.
 10        (6)  Sales by persons who  are  not  defined  as  "retailers"  in  section
 11        63-3610, Idaho Code.
 12        (7)  Sales of animals by any 4-H club or FFA club held in conjunction with
 13        a fair or the western Idaho spring lamb sale.
 14        (8)  The  sale  or  purchase  of  tangible  personal property at home yard
 15        sales; provided however, that no more than two (2) such  home  yard  sales
 16        per individual calendar year shall be exempt.
 17        (c)  As  used in this section, the term "occasional sale," when applied to
 18    the sale of a motor vehicle, means only:
 19        (1)  Sales of motor vehicles between members of a  family  related  within
 20        the  second  degree  of  consanguinity,  unless a sales or use tax was not
 21        imposed on the sale of that motor vehicle at  the  time  of  purchase,  in
 22        which situation the sale is taxable.
 23        (2)  Sales  of  motor  vehicles that fall within the scope of the transac-
 24        tions detailed in subsection (b)(2) through (b)(5) of this section.
 25        (d)  The exemption provided by subsection (b)(1), (b)(4), (b)(6) or (b)(8)
 26    of this section shall not apply to the sale, purchase or use of  aircraft,  as
 27    defined  in  section  21-201, Idaho Code, nor shall it apply to the sale, pur-
 28    chase or use of boats or vessels, as defined in section 67-7003,  Idaho  Code,
 29    nor  shall  it apply to the sale, purchase or use of snowmobiles, recreational
 30    vehicles or off-highway motorbikes, as defined  in  section  63-3622HH,  Idaho
 31    Code.

 32        SECTION  5.  That  Chapter  6,  Title  53, Idaho Code, be, and the same is
 33    hereby repealed.

 34        SECTION 6.  Sections 1, 2, 3 and 4 of this act shall be in full force  and
 35    effect on and after July 1, 2008. Section 5 of this act shall be in full force
 36    and effect on and after July 1, 2010.

Statement of Purpose / Fiscal Impact


                    STATEMENT OF PURPOSE
                              
                          RS 17534
                              
  The purpose of the Idaho Uniform Limited Liability Company
  Act ("IULLCA") is to provide Idaho with modern, updated
  legislation governing the formation and operation of limited
  liability companies (LLCs).  An LLC is a single business
  entity which provides limited liability protection for its
  members, as well as providing all the owners of the business
  with federal partnership taxation.  IULLCA will replace, but
  retain the essential characteristics of, the existing Idaho
  Limited Liability Company Act. 
  
  IULLCA was adopted by the National Conference of
  Commissioners on Uniform State Laws in 2006, and is endorsed
  by the American Bar Association Real Property, Probate and
  Trust Law Sections.
                              
                              
                        FISCAL NOTE
                              
  There will be no impact on the state's general fund.
  
  
  
  Contact
  Name:  Rex Blackburn, Uniform Law Commissioner
  Phone:  208-890-5593
  Dale G. Higer, Uniform Law Commissioner
  Phone:  208-345-1432
  
 
  STATEMENT OF PURPOSE/FISCAL NOTE                  S 1350