Providing for limited liability companies, providing for fees, and including effective date provisions

GENERAL. This bill amends provisions in the uniform limited liability company Act (Code chapter 489) originally enacted in 2008 and rewritten during the 2023 legislative session (2023 Iowa Acts, chapter 152). The 2023 Iowa Act was based on a proposed Act (model legislation) approved and recommended by the national conference on commissioners on uniform state laws, also named the uniform law commissioners (ULC), which includes commissioners appointed by the Governor (Code chapter 5). A limited liability company (LLC), or simply “company”, is a type of unincorporated business entity formed for the acquisition of capital (contributions) from, and the payout of receipts (distributions) to, its investors (members). Although an LLC is sometimes compared to other types of unincorporated entities, and specifically a limited partnership (Code chapter 488) or general partnership (Code chapter 486A), it also resembles a corporation (Code chapter 490). BILL —— TERMINOLOGY CHANGES, SECTION TRANSFER, AND INTERNAL REFERENCE CORRECTIONS. The bill makes changes in terminology to be consistent with the model legislation, including references from “articles of merger” to “statement of merger”, and from “office of the registered agent” to “address of the registered agent”. The bill corrects a number of internal references due to the transfer or rewriting of the Code sections.212) and makes new corresponding changes to internal references. Many of the internal reference corrections are in Code chapter 489, subchapter XIV, the uniform protected series Act, which is separate model legislation approved and recommended by the ULC and enacted in 2019 and unamended by the model legislation or the 2023 Iowa Act. BILL —— CORRESPONDING CHANGE —— DERIVATIVE ACTIONS. The bill includes a corresponding change in Code chapter 489, subchapter VIII, providing for derivative actions by members.802). A derivative action is a type of cause of action brought by one or more members of an LLC acting on behalf of the LLC to enforce a right held by the LLC. Under the model legislation, a member may maintain a derivative action only after the member first makes a demand on the LLC to enforce the right. The model legislation allowed the member to skip this demand requirement if it would be futile. The 2023 Iowa Act eliminated this exception.802. The bill eliminates the corresponding futile exception in the pleading requirement. BILL —— FEES.122 for corporations). The bill adds a fee of $50 for filing a statement of domestication or statement of conversion. EFFECTIVE DATE. The bill takes effect upon enactment.