LIMITED LIABILITY COMPANIES
30-25-105. OPERATING AGREEMENT — SCOPE — FUNCTION — LIMITATIONS. (a) Except as otherwise provided in subsections (c) and (d) of this section, the operating agreement governs:
(1) Relations among the members as members and between the members and the limited liability company;
(2) The rights and duties under this act of a person in the capacity of manager;
(3) The activities and affairs of the company and the conduct of those activities and affairs; and
(4) The means and conditions for amending the operating agreement.
(b) To the extent the operating agreement does not provide for a matter described in subsection (a) of this section, this chapter governs the matter.
(c) An operating agreement may not:
(1) Vary the law applicable under section 30-25-104, Idaho Code;
(2) Vary a limited liability company’s capacity under section 30-25-109, Idaho Code, to sue and be sued in its own name;
(3) Vary any requirement, procedure, or other provision of this act pertaining to:
(A) Registered agents; or
(B) The secretary of state, including provisions pertaining to records authorized or required to be delivered to the secretary of state for filing under this act;
(4) Vary the provisions of section 30-25-204, Idaho Code;
(5) Alter or eliminate the duty of loyalty or the duty of care, except as otherwise provided in subsection (d) of this section;
(6) Eliminate the contractual obligation of good faith and fair dealing under section 30-25-409(d), Idaho Code, but the operating agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured;
(7) Relieve or exonerate a person from liability for conduct involving bad faith, willful or intentional misconduct, or knowing violation of law;
(8) Unreasonably restrict the duties and rights under section 30-25-410, Idaho Code, but the operating agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use;
(9) Vary the causes of dissolution specified in section 30-25-701(a)(4), Idaho Code;
(10) Vary the requirement to wind up the company’s activities and affairs as specified in section 30-25-702(a), (b)(1) and (e), Idaho Code;
(11) Unreasonably restrict the right of a member to maintain an action under part 8 of this chapter;
(12) Vary the provisions of section 30-25-805, Idaho Code, but the operating agreement may provide that the company may not have a special litigation committee;
(13) Vary the right of a member to approve a merger, interest exchange, conversion, or domestication under section 30-22-203(a)(2), 30-22-303(a)(2), 30-22-403(a)(2) or 30-22-503(a)(2), Idaho Code; or
(14) Vary the required contents of a plan of merger under section 30-22-202(a), Idaho Code, plan of interest exchange under section 30-22-302(a), Idaho Code, plan of conversion under section 30-22-402(a), Idaho Code, or plan of domestication under section 30-22-502(a), Idaho Code; or
(15) Except as otherwise provided in sections 30-25-106 and 30-25-107(b), Idaho Code, restrict the rights under this chapter of a person other than a member or manager.
(d) Subject to subsection (c)(7) of this section, without limiting other terms that may be included in an operating agreement, the following rules apply:
(1) The operating agreement may:
(A) Specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one (1) or more disinterested and independent persons after full disclosure of all material facts; and
(B) Alter the prohibition in section 30-25-405(a)(2), Idaho Code, so that the prohibition requires only that the company’s total assets not be less than the sum of its total liabilities.
(2) To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member otherwise would have under this chapter and imposes the responsibility on one (1) or more other members, the agreement also may eliminate or limit any fiduciary duty of the member relieved of the responsibility that would have pertained to the responsibility.
(3) If not manifestly unreasonable, the operating agreement may:
(A) Alter or eliminate the aspects of the duty of loyalty stated in section 30-25-409(b) and (i), Idaho Code;
(B) Identify specific types or categories of activities that do not violate the duty of loyalty;
(C) Alter the duty of care, but may not authorize conduct involving bad faith, willful or intentional misconduct, or knowing violation of law; and
(D) Alter or eliminate any other fiduciary duty.
(e) The court shall decide as a matter of law whether a term of an operating agreement is manifestly unreasonable under subsection (c)(6) or (d)(3) of this section. The court:
(1) Shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
(2) May invalidate the term only if, in light of the purposes, activities, and affairs of the limited liability company, it is readily apparent that:
(A) The objective of the term is unreasonable; or
(B) The term is an unreasonable means to achieve the provision’s objective.
[30-25-105, added 2015, ch. 243, sec. 43, p. 873.]