PART III.  RELATIONS OF MEMBERS AND MANAGERS TO PERSONS

DEALING WITH THE LIMITED LIABILITY COMPANY

     [§428-301]  Agency of members and managers.  (a)  Subject to the provisions of subsections (b) and (c):

     (1)  Each member is an agent of the limited liability company for the purpose of its business;

     (2)  An act of a member, including the signing of an instrument in the company name, for apparently carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company, unless the member had no authority to act for the company in the particular matter and the person with whom the member was dealing knew or had notice that the member lacked authority; and

     (3)  An act of a member which is not apparently for carrying on in the ordinary course of the company's business or business of the kind carried on by the company binds the company only if the act was authorized by the other members.

     (b)  Subject to subsection (c), in a manager-managed limited liability company:

     (1)  A member is not an agent of the company for the purpose of its business solely by reason of being a member;

     (2)  Each manager is an agent of the company for the purpose of its business;

     (3)  An act of a manager, including the signing of an instrument in the company name, for apparently carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company, unless the manager had no authority to act for the company in the particular matter and the person with whom the manager was dealing knew or had notice that the manager lacked authority; and

     (4)  An act of a manager which is not apparently for carrying on in the ordinary course the company's business or business of the kind carried on by the company binds the company only if the act was authorized under section 428-404(b)(2).

     (c)  Unless the articles of organization limit their authority, any member of a member-managed limited liability company or any manager of a manager-managed company may sign and deliver any instrument transferring or affecting the company's interest in real property.  Such an instrument shall be conclusively in favor of a person who gives value without knowledge of the lack of the authority of the person signing and delivering the instrument. [L 1996, c 92, pt of §1]