1. A member of a member-managed limited liability company owes to the company and,
subject to section 489.801, subsection 2, the other members the fiduciary duties of loyalty and
care stated in subsections 2 and 3.
2. The fiduciary duty of loyalty of a member in a member-managed limited liability
company includes all of the following duties:
a. To account to the limited liability company and to hold as trustee for it any property,
profit, or benefit derived by the member regarding any of the following:
(1)In the conduct or winding up of the limited liability company’s activities and affairs.
(2)From a use by the member of the limited liability company’s property.
(3)From the appropriation of a limited liability company opportunity.
b. To refrain from dealing with the limited liability c
Free access — add to your briefcase to read the full text and ask questions with AI
1. A member of a member-managed limited liability company owes to the company and,
subject to section 489.801, subsection 2, the other members the fiduciary duties of loyalty and
care stated in subsections 2 and 3.
2. The fiduciary duty of loyalty of a member in a member-managed limited liability
company includes all of the following duties:
a. To account to the limited liability company and to hold as trustee for it any property,
profit, or benefit derived by the member regarding any of the following:
(1) In the conduct or winding up of the limited liability company’s activities and affairs.
(2) From a use by the member of the limited liability company’s property.
(3) From the appropriation of a limited liability company opportunity.
b. To refrain from dealing with the limited liability company in the conduct or winding up
of the company’s activities and affairs as or on behalf of a person having an interest adverse
to the company.
c. To refrain from competing with the limited liability company in the conduct of the
company’s activities and affairs before the dissolution of the company.
3. The duty of care of a member of a member-managed limited liability company in the
conduct or winding up of the company’s activities and affairs is to refrain from engaging in
grossly negligent or reckless conduct, willful or intentional misconduct, or knowing violation
of law.
4. A member shall discharge the duties and obligations under this chapter or under the
operating agreement and exercise any rights consistently with the contractual obligation of
good faith and fair dealing.
5. A member does not violate a duty or obligation under this chapter or under the
operating agreement solely because the member’s conduct furthers the member’s own
interest.
6. All the members of a member-managed limited liability company or a
manager-managed limited liability company may authorize or ratify, after full disclosure of
all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.
7. It is a defense to a claim under subsection 2, paragraph “b”, and any comparable claim
in equity or at common law that the transaction was fair to the limited liability company.
8. If, as permitted by subsection 6 or subsection 9, paragraph “f”, or the operating
agreement, a member enters into a transaction with the limited liability company which
otherwise would be prohibited by subsection 2, paragraph “b”, the member’s rights and
obligations arising from the transaction are the same as those of a person that is not a
member.
9. In a manager-managed limited liability company, all of the following rules apply:
a. Subsections 1, 2, 3, and 7 apply to the manager or managers and not the members.
b. The duty stated under subsection 2, paragraph “c”, continues until winding up is
completed.
c. Subsection 4 applies to managers and members.
d. Subsection 5 applies only to members.
e. The power to ratify under subsection 6 may be exercised only by the members.
f. Subject to subsection 4, a member does not have any duty to the limited liability
company or to any other member solely by reason of being a member.