Currently, Iowa LLCs cannot exist without members. Technically speaking, articles of organization should not be filed for an LLC until it has at least one member. This probably comes as a surprise to many Iowa lawyers.
Shelf LLCs are limited liability companies permitted by state law to be formed without members and put on the shelf until needed. They clear up many issues with regard to valid existence and due organization, but they run contrary to the idea that an LLC is an association of members, not an entity whose existence is created by a filing with the state government. This subject was the single most contentious issue debated by the National Conference of Commissioners on Uniform State Laws Drafting Committee for the Revised Uniform Limited Liability Company Act.
The NACCUSL committee compromised and the official Revised Uniform LLC Act allows LLCs to have a shelf life of 90 days before needing at least one member.
In Iowa, we took a more practical approach. Shelf LLCs can be formed under the new LLC Act, but LLCs will need at least one member in order to operate and do business. Until an LLC has at least one member it can only (a) deliver filings to the secretary of state; (b) admit a member; and (c) dissolve.
An LLC with at least one member may ratify an act or activity that occurred when the company lacked members.
-Marc Ward
Comments