48-238-103 - Agency of members in a member-managed LLC.
48-238-103. Agency of members in a member-managed LLC.
(a) Unless the articles otherwise provide, if an LLC is member-managed, every member is an agent of the LLC for the purpose of its business, and the act of every member, including the execution in the LLC name of any instrument, for apparently carrying on in the usual way the business of the LLC of which such member is a member, binds the LLC, unless the member so acting has in fact no authority to act for the LLC in the particular matter, and the person with whom the member is dealing has knowledge of the fact that the member has no such authority.
(b) An act of a member which is not apparently for carrying on of the business of the LLC in the usual way does not bind the LLC unless authorized by the other members.
(c) Unless authorized by the other members, no single member or group of members less than all the members shall have authority to:
(1) Dispose of the goodwill of the business;
(2) Do any other act which would make it impossible to carry on the ordinary business of the LLC;
(3) Confess a judgment; or
(4) Submit an LLC claim or liability to arbitration or reference.
(d) No act of a member in contravention of a restriction on such member's authority shall bind the LLC to persons having knowledge of the restriction.
[Acts 1994, ch. 868, § 1.]