Relations of Members and Managers to Persons Dealing With Limited Liability Company

MCA tit. 35, ch. 8, pt. 3

in effect

Mont. Code Ann. § 35-8-301 Agency power of members and managers

35-8-301. Agency power of members and managers (1) Except as provided in subsection (2), a member is an agent of the limited liability company for the purpose of its business or affairs and the act of a member, including but not limited to the execution of any instrument in the name of the limited liability company for apparently carrying on in the usual way the business or affairs of the limited liability company 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 knowledge of the fact that the member has no such authority. (2) If the articles of organization provide that management of the limited liability company is vested in a manager or managers: (a) a member, acting solely in the capacity as a member, may not be an agent of the limited liability company; and (b) a manager is an agent of the limited liability company for the purpose of its business or affairs, and the act of a manager, including but not limited to the execution of any instrument in the name of the limited liability company for apparently carrying on in the usual way the business or affairs of the limited liability company, 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 knowledge of the fact that the manager has no such authority. (3) An act of a manager or a member that is not apparently for carrying on in the usual way the business of the limited liability company does not bind the limited liability company, unless authorized in accordance with the articles of organization or the operating agreement, at the time of the transaction or at any other time. (4) An act of a manager or member in contravention of a restriction on authority may not bind the limited liability company to persons having knowledge of the restriction. (5) Unless the articles of organization state otherwise, a member with a majority interest in the limited liability company may represent the limited liability company in justice's court as provided in 25-31-601 and small claims court pursuant to 25-35-505 . En. Sec. 20, Ch. 120, L. 1993; amd. Sec. 3, Ch. 189, L. 2017.

Mont. Code Ann. § 35-8-302 Admissions of members and managers

35-8-302. Admissions of members and managers (1) Except as provided in subsection (2), an admission or representation made by a member concerning the business or affairs of a limited liability company within the scope of the member's authority as provided for by this chapter is evidence against the limited liability company. (2) If the articles of organization provide that management of the limited liability company is vested in a manager or managers: (a) an admission or representation made by a manager concerning the business or affairs of a limited liability company within the scope of the manager's authority, as provided for by this chapter, is evidence against the limited liability company; and (b) the admission or representation of a member, acting solely in the capacity as a member, may not constitute evidence. En. Sec. 21, Ch. 120, L. 1993.

Mont. Code Ann. § 35-8-304 Liability of members, managers, and series of members to third parties

35-8-304. Liability of members, managers, and series of members to third parties (1) Except as provided in 39-51-1105 and subsection (3) of this section, a person who is a member or manager, or both, of a limited liability company is not liable, solely by reason of being a member or manager, or both, under a judgment, decree or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company, whether arising in contract, tort, or otherwise or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company. (2) The failure of a limited liability company to observe the usual company formalities or requirements relating to the exercise of its company powers or management of its business is not a ground for imposing personal liability on the members or managers of the limited liability company. (3) All or specified members of a limited liability company are liable in their capacity as members for all or specified debts, obligations, or liabilities of the company if: (a) a provision to that effect is contained in the articles of organization; and (b) a member named as liable has consented in writing to the adoption of the provision or to be bound by the provision. (4) The debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to a particular series of members are enforceable against the assets of that series of members only and not against the assets of the company generally or any other series of members if: (a) separate and distinct records are maintained for the series of members and the assets associated with the series of members are held, directly or indirectly, including through a nominee or otherwise, and accounted for separately from the other assets of the company and any other series of members; and (b) unless otherwise provided in the articles of organization or operating agreement, debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the company generally or another series of members are not enforceable against the assets of the series of members. En. Sec. 23, Ch. 120, L. 1993; amd. Sec. 2, Ch. 268, L. 1997; amd. Sec. 14, Ch. 302, L. 1999; amd. Sec. 4, Ch. 88, L. 2009; amd. Sec. 7, Ch. 183, L. 2013.

Mont. Code Ann. § 35-8-305 reserved

Mont. Code Ann. § 35-8-306 Limited liability company liability for member's or manager's conduct

35-8-306. Limited liability company liability for member's or manager's conduct A limited liability company is liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission or other actionable conduct of a member or manager acting in the ordinary course of business of the company or with the authority of the company. En. Sec. 15, Ch. 302, L. 1999.

Mont. Code Ann. § 35-8-307 Management and voting

35-8-307. Management and voting (1) Unless the articles of organization or the operating agreement provide otherwise, in a member-managed company: (a) each member has equal rights in the management and conduct of the company's business; and (b) except as provided in subsection (3), any matter relating to the business of the company may be decided by a majority of the members. (2) Unless the articles of organization or the operating agreement provide otherwise, in a manager-managed company: (a) each manager has equal rights in the management and conduct of the company's business; (b) except as provided in subsection (3), any matter relating to the business of the company may be exclusively decided by the manager or, if there is more than one manager, by a majority of the managers; and (c) a manager: (i) must be designated, appointed, elected, removed, or replaced by a vote, approval, or consent of a majority of the members; and (ii) holds office until a successor has been elected and qualified, unless the manager sooner resigns or is removed. (3) Unless the articles of organization or the operating agreement provide otherwise, the only matters of a member-managed or manager-managed company's business requiring the consent of all of the members are: (a) the amendment of the operating agreement under 35-8-109 ; (b) the authorization or ratification of acts or transactions under 35-8-109 that would otherwise violate the duty of loyalty; (c) an amendment to the articles of organization under 35-8-203 ; (d) the compromise of an obligation to make a contribution under 35-8-502 ; (e) the compromise, as among members, of an obligation to make a contribution or return money or other property paid or distributed in violation of this chapter; (f) the making of interim distributions under 35-8-601 , including the redemption or repurchase of an interest; (g) the admission of a new member; (h) the use of the company's property to redeem an interest subject to a charging order; (i) the consent to dissolve the company under 35-8-901 ; (j) a waiver of the right to have the company's business wound up and the company terminated under 35-8-901 ; (k) the consent of members to merge with another entity under 35-8-1201 ; and (l) the sale, lease, exchange, or other disposal of all, or substantially all, of the company's property with or without goodwill. (4) Unless the articles of organization or the operating agreement provide otherwise, the management of a series of members is vested in the members associated with the series in proportion to their contribution to the capital of the series as adjusted from time to time to reflect properly any additional contributions or withdrawals from the assets or income of the series by the members associated with the series. (5) Action requiring the consent of members or managers under this chapter may be taken without a meeting. (6) A member or manager may appoint a proxy to vote or otherwise act for the member or manager by signing an appointment instrument, either personally or by the member's or manager's attorney-in-fact. (7) (a) The articles of organization or operating agreement of a limited liability company may: (i) create one or more series of members; or (ii) vest authority in one or more members or managers of the company or in other persons to create one or more series of members that may include, without limitation, rights, powers, and duties senior to any existing series of members. (b) The articles of organization or operating agreement may provide that any member associated with a series of members has no voting rights or has voting rights that differ from other members or other series of members. (c) A series of members may have separate powers, rights, or duties with respect to specified property or obligations of the company or profits and losses associated with specified property or obligations, and any series of members may have a separate business purpose or investment objective. En. Sec. 16, Ch. 302, L. 1999; amd. Sec. 8, Ch. 183, L. 2013; amd. Sec. 2, Ch. 749, L. 2025.

Mont. Code Ann. § 35-8-308 and 35-8-309 reserved

Mont. Code Ann. § 35-8-310 General standards of member's and manager's conduct

35-8-310. General standards of member's and manager's conduct (1) The only fiduciary duties that a member owes to a member-managed company and the other members are the duty of loyalty imposed by subsection (2) and the duty of care imposed by subsection (3). (2) A member's duty of loyalty to a member-managed company and its other members is limited to the following: (a) to account to the company and to hold as trustee for it any property, profit, or benefit derived by the member in the conduct or winding up of the company's business or derived from a use by the member of the company's property, including the appropriation of a company's opportunity; (b) to refrain from dealing with the company in the conduct or winding up of the company's business on behalf of a party or as a person having an interest adverse to the company; and (c) to refrain from competing with the company in the conduct of the company's business before the dissolution of the company. (3) A member's duty of care to a member-managed company and the other members in the conduct of and winding up of the company's business is limited to refraining from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law. (4) A member shall discharge the duties under this chapter or the operating agreement to a member-managed company and its other members and exercise any rights consistently with the obligation of good faith and fair dealing. (5) A member of a member-managed company does not violate a duty or obligation under this chapter or under the operating agreement merely because the member's conduct furthers the member's own interest. (6) A member of a member-managed company may lend money to and transact other business with the company. As to each loan or transaction, the rights and obligations of the member are the same as those of a person who is not a member, subject to other applicable law. (7) This section applies to a person winding up the limited liability company's business as the personal or legal representative of the last-surviving member as if the person were a member. (8) In a manager-managed company: (a) a member who is not also a manager owes no duties to the company or to the other members solely by reason of being a member; (b) a manager is held to the same standards of conduct as those prescribed for members in subsections (2) through (6); (c) a member who pursuant to the operating agreement exercises some or all of the rights of a manager in the management and conduct of the company's business is held to the standards of conduct prescribed for members in subsections (2) through (6) to the extent that the member exercises the managerial authority vested in a manager by this chapter; and (d) a manager is relieved of liability imposed by law for violation of the standards prescribed for members by subsections (2) through (6) to the extent of the managerial authority delegated to the members by the operating agreement. En. Sec. 17, Ch. 302, L. 1999.

Source: Montana Legislative Services Division (mca.legmt.gov)URL: https://mca.legmt.gov/bills/mca/title_0350/chapter_0080/part_0030/sections_index.htmlFetched: 10/20/2026