SECTIONS 17150-17158 - California Statutes

CORPORATIONS CODE

SECTION 17150-17158

17150. Unless the articles of organization include the statement
referred to in subdivision (b) of Section 17151 vesting management of
the limited liability company in a manager or managers, the business
and affairs of a limited liability company shall be managed by the
members subject to any provisions of the articles of organization or
operating agreement restricting or enlarging the management rights
and duties of any member or class of members. If management is vested
in the members, each of the members shall have the same rights and
be subject to all duties and obligations of managers as set forth in
this title.

17151. (a) The articles of organization may provide that the
business and affairs of the limited liability company shall be
managed by or under the authority of one or more managers who may,
but need not, be members.
(b) If the limited liability company is to be managed by one or
more managers and not by all its members, the articles of
organization shall contain a statement to that effect. Neither the
names of the managers nor the number of managers need be specified in
the articles of organization, but if management is vested in only
one manager, the articles of organization shall so state.
(c) The articles of organization or operating agreement may
prescribe the number and qualifications of managers who may, but need
not, be natural persons.

17152. If management of the limited liability company is vested in
one or more managers pursuant to a statement in the articles of
organization:
(a) Election of managers to fill initial positions or vacancies
shall be by the affirmative vote of a majority in interest of the
members.
(b) Any or all managers may be removed, with or without cause, by
the vote of a majority in interest of the members at a meeting called
expressly for that purpose. Any removal shall be without prejudice
to the rights, if any, of the manager under any contract of
employment.
(c) Any manager may resign as a manager at any time upon written
notice to the limited liability company, without prejudice to the
rights, if any, of the limited liability company under any contract
to which the manager is a party.
(d) Unless they have earlier resigned or been removed, managers
shall hold office until the expiration of the term for which they
were elected or, if no term was provided, until their successors have
been elected and qualified.

17153. The fiduciary duties a manager owes to the limited liability
company and to its members are those of a partner to a partnership
and to the partners of the partnership.

17154. (a) A written operating agreement may provide for the
appointment of officers, including, without limitation, a chairperson
or a president, or both, a secretary, a chief financial officer, and
any other officers with such titles, powers, and duties as shall be
specified in the articles of organization or operating agreement, or
determined by the managers or members. An officer may, but need not,
be a member or manager of the limited liability company, and any
number of offices may be held by the same person.
(b) Officers, if any, shall be appointed in accordance with the
written operating agreement or, if no such provision is made in the
operating agreement, any officers shall be appointed by the managers
and shall serve at the pleasure of the managers, subject to the
rights, if any, of an officer under any contract of employment. Any
officer may resign at any time upon written notice to the limited
liability company without prejudice to the rights, if any, of the
limited liability company under any contract to which the officer is
a party.
(c) Subject to the provisions of subdivision (d) of Section 17051,
any note, mortgage, evidence of indebtedness, contract, certificate,
statement, conveyance, or other instrument in writing, and any
assignment or endorsement thereof, executed or entered into between
any limited liability company and any other person, when signed by
the chairperson of the board, the president or any vice president and
any secretary, any assistant secretary, the chief financial officer,
or any assistant treasurer of the limited liability company, is not
invalidated as to the limited liability company by any lack of
authority of the signing officers in the absence of actual knowledge
on the part of the other person that the signing officers had no
authority to execute the same.

17155. (a) Except for a breach of the duty set forth in Section
17153, the articles of organization or written operating agreement of
a limited liability company may provide for indemnification of any
person, including, without limitation, any manager, member, officer,
employee, or agent of the limited liability company, against
judgments, settlements, penalties, fines, or expenses of any kind
incurred as a result of acting in that capacity.
(b) A limited liability company shall have power to purchase and
maintain insurance on behalf of any manager, member, officer,
employee, or agent of the limited liability company against any
liability asserted against or incurred by the person in that capacity
or arising out of the person's status as a manager, member, officer,
employee, or agent of the limited liability company.

17156. Except as otherwise provided in the articles of organization
or the operating agreement, if the members have appointed more than
one manager, decisions of the managers shall be made by majority vote
of the managers if at a meeting, or by unanimous written consent.

17157. (a) Unless the statement referred to in subdivision (b) of
Section 17151 is included in the articles of organization, every
member is an agent of the limited liability company for the purpose
of its business or affairs, and the act of any member, including, but
not limited to, the execution in the name of the limited liability
company of any instrument, for the apparent purpose of carrying on in
the usual way the business or affairs of the limited liability
company of which that person is a member, binds the limited liability
company, unless the member so acting has, in fact, no authority to
act for the limited liability company in the particular matter, and
the person with whom the member is dealing has actual knowledge of
the fact that the member has no such authority.
(b) If the articles of organization contain the statement referred
to in subdivision (b) of Section 17151 that management of the
limited liability company is vested in a manager or managers, then:
(1) No member, acting solely in the capacity of a member, is an
agent of the limited liability company nor can any member bind, nor
execute any instrument on behalf of, the limited liability company.
(2) Every manager is an agent of the limited liability company for
the purpose of its business or affairs, and the act of any manager,
including, but not limited to, the execution in the name of the
limited liability company of any instrument, for apparently carrying
on in the usual way the business or affairs of the limited liability
company of which the person is the manager, binds the limited
liability company, unless the manager so acting has, in fact, no
authority to act for the limited liability company in the particular
matter, and the person with whom the manager is dealing has actual
knowledge of the fact that the manager has no such authority.
(c) No act of a manager or member in contravention of a
restriction on authority shall bind the limited liability company to
persons having actual knowledge of the restriction.
(d) Notwithstanding the provisions of subdivision (c) of this
section, and subject to the provisions of subdivision (d) of Section
17051, any note, mortgage, evidence of indebtedness, contract,
certificate, statement, conveyance, or other instrument in writing,
and any assignment or endorsement thereof, executed or entered into
between any limited liability company and any other person, when
signed by at least two managers (or by one manager in the case of a
limited liability company whose articles of organization state that
it is managed by only one manager), is not invalidated as to the
limited liability company by any lack of authority of the signing
managers or manager in the absence of actual knowledge on the part of
the other person that the signing managers or manager had no
authority to execute the same.

17158. (a) No person who is a manager or officer or both a manager
and officer of a limited liability company shall be personally liable
under any judgment of a court, or in any other manner, for any debt,
obligation, or liability of the limited liability company, whether
that liability or obligation arises in contract, tort, or otherwise,
solely by reason of being a manager or officer or both a manager and
officer of the limited liability company.
(b) Notwithstanding subdivision (a), a manager of a limited
liability company may agree to be obligated personally for any or all
of the debts, obligations, and liabilities of the limited liability
company as follows:
(1) If the agreement to be so liable is set forth in the articles
of organization or in a written operating agreement that specifically
references this subdivision.
(2) Pursuant to the terms of a written guarantee or other
contractual obligation entered into by the manager, other than an
operating agreement.