Agency; Management; Duties; Liability

O.C.G.A. tit. 14, ch. 11, art. 3

in effect

O.C.G.A. § 14-11-301 Agency of members and managers.

14-11-301. Agency of members and managers. (a) Except as provided in subsection (b) of this Code section, every member is an agent of the limited liability company for the purpose of its business and 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 apparently carrying on in the usual way the business and affairs of the limited liability company of which he or she 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 he or she is dealing has knowledge of the fact that the member has no such authority. (b) If the articles of organization provide that management of the limited liability company is vested in a manager or managers: (1) No member, acting solely in the capacity as a member, is an agent of the limited liability company; and (2) Every manager is an agent of the limited liability company for the purpose of its business and 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 and affairs of the limited liability company of which he or she is a 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 he or she is dealing has knowledge of the fact that the manager has no such authority. (c) An act of a manager or a member that is not apparently for the carrying on in the usual way the business or affairs of the limited liability company does not bind the limited liability company unless authorized in accordance with a written operating agreement at the time of the transaction or at any other time. (d) No act of a manager or member in contravention of a restriction on authority shall bind the limited liability company to persons having knowledge of the restriction. (Code 1981, § 14-11-301, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-302 Limitations on authority to convey real property.

14-11-302. Limitations on authority to convey real property. Limitations on the authority of any or all members or managers that are set forth in a limited liability company's articles of organization shall be conclusively presumed in favor of the limited liability company and against a grantee of the limited liability company, or a person claiming through such grantee, with respect to limited liability company real property located in a county of this state if a copy of the articles of organization certified by the Secretary of State is filed in the office of the clerk of the superior court of the county where the real property is located and recorded in the book kept by such clerk for statements of partnership pursuant to Code Section 14-8-10.1. (Code 1981, § 14-11-302, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-303 Liability to third parties.

14-11-303. Liability to third parties. (a) A person who is a member, manager, agent, or employee of a limited liability company is not liable, solely by reason of being a member, manager, agent, or employee of the limited liability company, 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, including liabilities and obligations of the limited liability company to any member or assignee, 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, whether arising in contract, tort, or otherwise. Notwithstanding the provisions of this subsection, a member, manager, or employee may be personally liable for tax liabilities arising from the operation of the limited liability company as provided in Code Section 48-2-52. (b) Notwithstanding the provisions of subsection (a) of this Code section, under a written operating agreement or under another written agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations, and liabilities of the limited liability company. (Code 1981, § 14-11-303, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 1997, p. 1380, § 5; Ga. L. 2001, p. 984, § 3; Ga. L. 2009, p. 108, § 4/HB 308.)

O.C.G.A. § 14-11-304 Management.

14-11-304. Management. (a) Unless the articles of organization or a written operating agreement vests management of the limited liability company in a manager or managers, management of the business and affairs of the limited liability company shall be vested in the members, and, subject to any provisions in the articles of organization or a written operating agreement, the members shall have the right and authority to manage the affairs of the limited liability company and to make all decisions with respect thereto. The articles of organization or a written operating agreement may contain any provision relating to any phase of managing the business or regulating the affairs of the limited liability company. (b) If the articles of organization or a written operating agreement vests management of the limited liability company in one or more managers, then such persons shall have such right and authority to manage the business and affairs of the limited liability company as is provided in the articles of organization or a written operating agreement. Unless otherwise provided in the articles of organization or a written operating agreement, such persons: (1) Shall be designated, appointed, elected, removed, or replaced by the approval of more than one half by number of the members; (2) Need not be members of the limited liability company or natural persons; and (3) Unless they have been earlier removed or have earlier resigned, shall hold office until their successors shall have been elected and qualified. (c) A written operating agreement may provide that (1) a member or manager who fails to perform in accordance with, or to comply with the terms and conditions of, the written operating agreement shall be subject to specified penalties or specified consequences, and (2) at the time or upon the happening of events specified in a written operating agreement, a member or manager shall be subject to specified penalties or specified consequences. (d) A person who is both a manager and member has the rights and powers, and is subject to the restrictions and liabilities, of a manager and, except as provided in the articles of organization or a written operating agreement, also has the rights and powers, and is subject to the restrictions and liabilities, of a member to the extent of his or her participation in the limited liability company as a member. (Code 1981, § 14-11-304, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-305 Duties.

14-11-305. Duties. In managing the business or affairs of a limited liability company: (1) A member or manager shall act in a manner he or she believes in good faith to be in the best interests of the limited liability company and with the care an ordinarily prudent person in a like position would exercise under similar circumstances. A member or manager is not liable to the limited liability company, its members, or its managers for any action taken in managing the business or affairs of the limited liability company if he or she performs the duties of his or her office in compliance with this Code section. Except as otherwise provided in the articles of organization or a written operating agreement, a person who is a member of a limited liability company in which management is vested in one or more managers, and who is not a manager, shall have no duties to the limited liability company or to the other members solely by reason of acting in his or her capacity as a member; (2) A member or manager, as the case may be, is entitled to rely on information, opinions, reports, or statements, including but not limited to financial statements or other financial data, if prepared or presented by: (A) One or more members, managers, or employees of the limited liability company whom the member or manager reasonably believes to be reliable and competent in the matter presented; (B) Legal counsel, public accountants, or other persons as to matters the member or manager reasonably believes are within the person's professional or expert competence; or (C) A committee of members or managers of which he or she is not a member if the manager reasonably believes the committee merits confidence; (3) In the instances described in paragraph (2) of this Code section, a member or manager is not entitled to rely if he or she has knowledge concerning the matter in question that makes reliance otherwise permitted by paragraph (2) of this Code section unwarranted; and (4) To the extent that, pursuant to paragraph (1) of this Code section or otherwise at law or in equity, a member or manager has duties (including fiduciary duties) and liabilities relating thereto to a limited liability company or to another member or manager: (A) The member's or manager's duties and liabilities may be expanded, restricted, or eliminated by provisions in the articles of organization or a written operating agreement; provided, however, that no such provision shall eliminate or limit the liability of a member or manager: (i) For intentional misconduct or a knowing violation of law; or (ii) For any transaction for which the person received a personal benefit in violation or breach of any provision of a written operating agreement; and (B) The member or manager shall have no liability to the limited liability company or to any other member or manager for his or her good faith reliance on the provisions of a written operating agreement, including, without limitation, provisions thereof that relate to the scope of duties (including fiduciary duties) of members and managers. (Code 1981, § 14-11-305, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 1995, p. 470, § 17.)

O.C.G.A. § 14-11-306 Indemnification.

14-11-306. Indemnification. Subject to such standards and restrictions, if any, as are set forth in the articles of organization or a written operating agreement, a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager or other person from and against any and all claims and demands whatsoever arising in connection with the limited liability company; provided, however, that no limited liability company shall have the power to indemnify any member or manager for any liability that may not be eliminated or limited by the articles of organization or a written operating agreement by reason of division (4)(A)(i) or (ii) of Code Section 14-11-305. (Code 1981, § 14-11-306, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-307 Conflicting interest transactions.

14-11-307. Conflicting interest transactions. (a) The provisions of this Code section shall apply to a limited liability company unless its articles of organization or a written operating agreement provides that they shall not apply. If the provisions of this Code section apply to a limited liability company, its articles of organization or a written operating agreement may limit, expand, or modify, in any manner whatsoever, the effect thereof. If the provisions of this Code section do not apply to a limited liability company, its articles of organization or a written operating agreement may, but is not required to, contain any provision whatsoever relating to transactions that might give rise to conflicts of interest for members or managers. (b) A transaction effected or proposed to be effected by a limited liability company (or by a person in which the limited liability company has a controlling interest) that is not a member's or manager's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a member or by or in the right of the limited liability company, on the ground of a conflicting interest in the transaction of a member or manager or any person with whom or which he or she has a personal, economic, or other association. (c) A member's or manager's conflicting interest transaction may not be enjoined, set aside, or give rise to an award of damages or other sanctions, in an action by a member or by or in the right of the limited liability company, on the ground of a conflicting interest in the transaction of the member or manager, as the case may be, or any person with whom or which he or she has a personal, economic, or other association, if: (1) The member's or manager's action respecting the transaction was at any time taken in compliance with this Code section; or (2) The transaction, judged in the circumstances at the time of commitment, is established to have been fair to the limited liability company. (d) A member's or manager's action respecting a transaction is effective for purposes of paragraph (1) of subsection (c) of this Code section if the transaction received the approval of a majority of those qualified members or managers who expressed approval or disapproval of the transaction after either required disclosure to them (to the extent the information was not known by them) or compliance with subsection (e) of this Code section. (e) If a member or manager has a conflicting interest respecting a transaction, but neither he or she nor a related person of the member or manager specified in paragraph (21) of Code Section 14-11-101 is a party thereto, and if the member or manager has a duty under law or professional canon, or a duty of confidentiality to another person, respecting information relating to the transaction such that the member or manager cannot, consistent with that duty, make the disclosure contemplated by paragraph (22) of Code Section 14-11-101, then disclosure is sufficient for purposes of subsection (d) of this Code section if the member or manager: (1) Discloses to the members or managers voting on the transaction the existence and nature of his or her conflicting interest and informs them of the character of and limitations imposed by that duty prior to their vote on the transaction; and (2) Plays no part, directly or indirectly, in their deliberations or vote. (f) A majority of all the qualified members or managers constitutes a quorum for purposes of action that complies with this Code section. Members' or managers' action that otherwise complies with this Code section is not affected by the presence or vote of a member or manager who is not a qualified member or manager. (g) For purposes of this Code section, "qualified member or manager" means, with respect to a member's or manager's conflicting interest transaction, any member (if management of the limited liability company is not vested in a manager or managers) or manager (if management of the limited liability company is vested in a manager or managers) who does not have either a conflicting interest respecting the transaction or a familial, financial, professional, or employment relationship with a second member or manager who does have a conflicting interest respecting the transaction, which relationship would, in the circumstances, reasonably be expected to exert an influence on the first member's or manager's judgment when voting on the transaction. (Code 1981, § 14-11-307, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-308 Approval rights of members and managers.

14-11-308. Approval rights of members and managers. (a) Except as otherwise provided in this chapter or in the articles of organization or a written operating agreement, and subject to subsection (b) of this Code section: (1) If management of the limited liability company is vested in the members, each member shall have one vote with respect to, and the affirmative vote, approval, or consent of a majority of the members shall be required to decide, any matter arising in connection with the business and affairs of the limited liability company; and (2) If management of the limited liability company is vested in a manager or managers, each manager shall have one vote with respect to, and the affirmative vote, approval, or consent of a majority of the managers shall be required to decide, any matter arising in connection with the business and affairs of the limited liability company. (b) Unless otherwise provided in the articles of organization or a written operating agreement, the unanimous vote or consent of the members shall be required to approve the following matters: (1) The dissolution of the limited liability company under paragraph (3) of subsection (a) or paragraph (3) of subsection (b) of Code Section 14-11-602; (2) The merger of the limited liability company under subsection (a) of Code Section 14-11-903; (3) The sale, exchange, lease, or other transfer of all or substantially all of the assets of the limited liability company. For the purposes of this paragraph, assets shall be deemed to be less than all or substantially all of a limited liability company's assets if the value of the assets does not exceed two-thirds of the value of all of the assets of the limited liability company and the revenues represented or produced by such assets do not exceed two-thirds of the total revenues of the limited liability company; provided, however, that this paragraph shall not create any inference that the sale, exchange, lease, or other transfer of assets exceeding the amounts described in this paragraph is the sale of all or substantially all of the assets of the limited liability company; (4) The admission of any new member of the limited liability company under subsection (b) of Code Section 14-11-505; (5) An amendment to the articles of organization under Code Section 14-11-210 or an amendment to a written operating agreement; (6) Action under subsection (b) of Code Section 14-11-402 to reduce or eliminate an obligation to make a contribution to the capital of a limited liability company; (7) Action to approve a distribution under Code Section 14-11-404; or (8) Action to continue a limited liability company under paragraph (4) of subsection (a) or paragraph (4) of subsection (b) of Code Section 14-11-602. (Code 1981, § 14-11-308, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 1994, p. 161, § 6; Ga. L. 2002, p. 1235, § 2.)

O.C.G.A. § 14-11-309 Action without meeting.

14-11-309. Action without meeting. Except as otherwise provided in the articles of organization or a written operating agreement: (1) Action required or permitted by this chapter to be taken by members or managers may be taken without a meeting if the action is taken by all the members or managers entitled to vote on the action or, if so provided in the articles of organization or a written operating agreement, by persons who would be entitled to vote not less than the minimum number of votes that would be necessary to authorize or take the action. The action must be evidenced by one or more written consents describing the action taken, signed by members or managers entitled to take such action, and delivered to the limited liability company for inclusion in its records; (2) If not otherwise fixed under the articles of organization or a written operating agreement, the record date for determining members or managers entitled to take action without a meeting is the date the first member or manager signs the consent; (3) A consent signed under this Code section has the effect of a meeting vote and may be described as such in any document; and (4) If action is taken under this Code section by less than all of the members or managers entitled to vote on the action, all members or managers entitled to vote on the action who did not participate in taking the action shall be given written notice of the action not more than ten days after the taking of the action without a meeting, but the failure to give such notice shall not invalidate the action so taken. (Code 1981, § 14-11-309, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-310 Meetings.

14-11-310. Meetings. (a) Except as otherwise provided in the articles of organization or a written operating agreement, if the limited liability company has more than one manager: (1) Meetings of managers may be called by any manager; (2) At least two days' notice of any meeting of managers shall be given by any manager calling the meeting; (3) Managers may participate in any meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. A manager participating in a meeting by this means is deemed to be present in person at the meeting; (4) A majority in number of managers shall constitute a quorum for a meeting of managers; and (5) The act of a majority of managers at a meeting of managers at which a quorum is present shall be required for managers to take action on any matter where a vote of managers is required. (b) Unless otherwise provided in the articles of organization or a written operating agreement: (1) Meetings of members may be called by at least 25 percent of the members; (2) At least two days' notice of all meetings of members shall be given by the members authorized to call meetings; (3) Members may participate in any meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in a meeting by this means is deemed to be present in person at the meeting; (4) A majority of the members shall constitute a quorum for a meeting of members; and (5) Except as otherwise provided in this chapter, the act of a majority of members present at a meeting at which a quorum is present shall be required to take action on any matter where a vote of members is required. (Code 1981, § 14-11-310, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-311 Notice.

14-11-311. Notice. Except as otherwise provided in the articles of organization or a written operating agreement: (1) Notice shall be in writing unless oral notice is reasonable under the circumstances; (2) Notice may be communicated in person; by telephone, electronic transmission, or other form of wire or wireless communication; or by mail or private carrier. If these forms of personal notice are impracticable, notice may be communicated by a newspaper of general circulation in the area where published or by radio, television, or other form of public broadcast communication; (3) Written notice to a person that is required by this title to maintain a registered agent and a registered office in this state may be, but is not required to be, addressed to its registered agent at its registered office; (4) Written notice, if in a comprehensible form, is effective at the earliest of the following: (A) When received, or when delivered, properly addressed, as permitted by paragraph (2) of this Code section or to the addressee's last known principal place of business or residence; (B) Five days, or such other period as shall be provided in the articles of organization or a written operating agreement, after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed to a member or manager at the address shown in the limited liability company's current record of members or managers; or (C) On the date shown on the return receipt, if sent by registered or certified mail or statutory overnight delivery, return receipt requested, and the receipt is signed by or on behalf of the addressee; (5) Oral notice is effective when communicated if communicated in a comprehensible manner; (6) In calculating time periods for notice under this chapter, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted; and (7) If this chapter prescribes notice requirements for particular circumstances, those requirements govern. (Code 1981, § 14-11-311, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 2000, p. 1589, § 3; Ga. L. 2009, p. 108, § 5/HB 308.)

O.C.G.A. § 14-11-312 Waiver of notice.

14-11-312. Waiver of notice. Except as otherwise provided in the articles of organization or a written operating agreement: (1) A member or manager may waive any notice required by this chapter, the articles of organization, or an operating agreement before or after the date and time stated in the notice. The waiver must be in writing, be signed by the member or manager entitled to the notice, and be delivered to the limited liability company for inclusion in its records; (2) A member or manager's attendance at a meeting: (A) Waives objection to lack of notice or defective notice of the meeting, unless the member or manager at the beginning of the meeting objects to holding the meeting or transacting business at the meeting; and (B) Waives objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the member or manager objects to considering the matter when it is presented; and (3) Unless required by a written operating agreement, neither the business transacted nor the purpose of the meeting need be specified in the waiver. (Code 1981, § 14-11-312, enacted by Ga. L. 1993, p. 123, § 1.)

O.C.G.A. § 14-11-313 Records and information.

14-11-313. Records and information. Except as otherwise provided in the articles of organization or a written operating agreement: (1) Each limited liability company shall keep at its principal office the following: (A) A current list of the name and last known address of each member and manager; (B) Copies of records that would enable a member to determine the relative voting rights, if any, of the members; (C) A copy of the articles of organization, together with any amendments thereto; (D) Copies of the limited liability company's federal, state, and local income tax returns, if any, for the three most recent years; (E) A copy of any operating agreement that is in writing, together with any amendments thereto; and (F) Copies of financial statements, if any, of the limited liability company for the three most recent years; (2) A member may: (A) At the member's own expense, inspect and copy any limited liability company record upon reasonable request during ordinary business hours; (B) Obtain from time to time upon reasonable demand: (i) True and complete financial statements of the limited liability company; (ii) Promptly after becoming available, a copy of the limited liability company's filed federal, state, and local income tax returns, if any, for each year; and (iii) Other information regarding the affairs of the limited liability company as is just, reasonable, and demanded for a proper purpose; and (3) If the limited liability company refuses to permit the inspection authorized by paragraph (2) of this Code section, the member demanding inspection may apply to the Georgia State-wide Business Court or the superior court for the county in which the registered office of the limited liability company is located, upon such notice as the court may require, for an order directing the limited liability company to show cause why an order permitting such inspection by the applicant should not be granted. The court shall hear the parties summarily, by affidavit or otherwise, or by a hearing if requested by a party, and if the limited liability company fails to establish that the applicant is not entitled to such inspection, the court shall grant an order permitting such inspection, subject to any limitations which the court may prescribe, and grant such other relief, including costs and reasonable attorneys' fees, as the court may deem just and proper. If the court does not grant an order permitting such inspection and determines that the demand was not just, reasonable, or made for a proper purpose, it may order the member demanding inspection to pay the limited liability company's costs and reasonable attorneys' fees. (4) As used in this Code section, the term 'proper purpose' shall not include: (A) An active or pending derivative proceeding in the right of the limited liability company that is, or is reasonably expected to be, instituted or maintained by the member; or (B) An active or pending civil lawsuit to which the limited liability company and the member are, or are reasonably expected to be, adversarial named parties. (Code 1981, § 14-11-313, enacted by Ga. L. 1993, p. 123, § 1.) (Amended by Ga. L. 2026, Act 460 (HB 1185), eff. July 1, 2026.)

O.C.G.A. § 14-11-314 Professional relationships.

14-11-314. Professional relationships. This chapter does not alter any law applicable to the relationship between a person rendering professional services and a person receiving those services, including liability arising out of those professional services. This chapter does not alter any law with respect to disregarding legal entities. The failure of a limited liability company to observe formalities relating to the exercise of its powers or the management of its business and affairs is not a ground for imposing personal liability on a member, manager, agent, or employee of the limited liability company for liabilities of the limited liability company. (Code 1981, § 14-11-314, enacted by Ga. L. 1993, p. 123, § 1.)

Source: Official Code of Georgia (Legislative Counsel's copy via Public.Resource.Org) + acts (legis.ga.gov)URL: https://archive.org/download/gov.ga.ocga.2024/T14%20%28V12%29%202017.txtFetched: 10/24/2026