DISSOLUTION AND WINDING UP

Iowa Code tit. XII, ch. 489, subch. VII

in effect

Iowa Code § 489.701 Events causing dissolution.

489.701. Events causing dissolution. 1. A limited liability company is dissolved, and its activities and affairs must be wound up, upon the occurrence of any of the following: a. An event or circumstance that the operating agreement states causes dissolution. b. The affirmative vote or consent of all the members. c. After the limited liability company has at least one member, that member and any other member dissociate, and ninety consecutive days pass during which the company has no members, unless before the end of the period all of the following apply: (1) Consent to admit at least one specified person as a member is given by transferees owning the rights to receive a majority of distributions as transferees at the time the consent is to be effective. (2) At least one person becomes a member in accordance with the consent. d. On application by a member, the entry by the district court of an order dissolving the limited liability company on the grounds that any of the following applies: (1) The conduct of all or substantially all the limited liability company’s activities and affairs is unlawful. (2) It is not reasonably practicable to carry on the limited liability company’s activities and affairs in conformity with the certificate of organization and the operating agreement. (3) The managers or those members in control of the limited liability company conduct themselves according to any of the following: (a) Have acted, are acting, or will act in a manner that is illegal or fraudulent. (b) Have acted or are acting in a manner that is oppressive and was, is, or will be directly harmful to the applicant. e. The signing and filing of a statement of administrative dissolution by the secretary of state under section 489.708. 2. In a proceeding brought under subsection 1, paragraph “d”, subparagraph (3), the district court may order a remedy other than dissolution. 2008 Acts, ch 1162, §49, 155; 2023 Acts, ch 152, §53, 161

Iowa Code § 489.701A Rescinding dissolution.

489.701A. Rescinding dissolution. Transferred to §489.703; 2023 Acts, ch 152, §143, 161.

Iowa Code § 489.702 Winding up.

489.702. Winding up. 1. A dissolved limited liability company shall wind up its activities and affairs, and except as otherwise provided in section 489.703, the company continues after dissolution only for the purpose of winding up. 2. In winding up its activities and affairs, all of the following apply to a limited liability company: a. It shall discharge the limited liability company’s debts, obligations, and other liabilities, settle and close the company’s activities and affairs, and marshal and distribute the assets of the company. b. It may do all of the following: (1) Deliver to the secretary of state for filing a statement of dissolution stating the name of the limited liability company and that the company is dissolved. (2) Preserve the limited liability company activities, affairs, and property as a going concern for a reasonable time. (3) Prosecute and defend actions and proceedings, whether civil, criminal, or administrative. (4) Transfer the limited liability company’s property. (5) Settle disputes by mediation or arbitration. (6) Deliver to the secretary of state for filing a statement of termination stating the name of the limited liability company and that the company is terminated. (7) Perform other acts necessary or appropriate to the winding up. 3. If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the activities and affairs of the company. If the person does so, the person has the powers of a sole manager under section 489.407, subsection 3, and is deemed to be a manager for the purposes of section 489.304, subsection 1. 4. If the legal representative under subsection 3 declines or fails to wind up the limited liability company’s activities and affairs, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective. All of the following apply to a person appointed under this subsection: a. The person has the powers of a sole manager under section 489.407, subsection 3, and is deemed to be a manager for the purposes of section 489.304, subsection 1. b. The person shall deliver promptly to the secretary of state for filing an amendment to the limited liability company’s certificate of organization stating all of the following: (1) That the limited liability company has no members. (2) The name and street and mailing addresses of the person. (3) That the person has been appointed pursuant to this subsection to wind up the limited liability company’s activities and affairs. 5. The district court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company’s activities and affairs pursuant to any of the following: a. On application of a member, if the applicant establishes good cause. b. On the application of a transferee, if all of the following apply: (1) The limited liability company does not have any members. (2) The legal representative of the last person to have been a member declines or fails to wind up the limited liability company’s activities and affairs. (3) Within a reasonable time following the dissolution a person has not been appointed pursuant to subsection 3. c. In connection with a proceeding under section 489.701, subsection 1, paragraph “d”. 2008 Acts, ch 1162, §50, 155; 2009 Acts, ch 133, §161; 2023 Acts, ch 152, §55, 161

Iowa Code § 489.703 Rescinding dissolution.

489.703. Rescinding dissolution. 1. A limited liability company may rescind its dissolution, unless a statement of termination applicable to the company has become effective, the district court has entered an order under section 489.701, subsection 1, paragraph “d”, dissolving the company, or the secretary of state has dissolved the company under section 489.708. 2. Rescinding dissolution under this section requires all of the following: a. The affirmative vote or consent of each member. b. If the limited liability company has delivered to the secretary of state for filing a statement of dissolution and any of the following apply: (1) If the statement has not become effective, delivery to the secretary of state for filing of a statement of withdrawal under section 489.208 applicable to the statement of dissolution. (2) If the statement of dissolution has become effective, delivery to the secretary of state for filing of a statement of rescission stating the name of the limited liability company and that dissolution has been rescinded under this section. 3. If a limited liability company rescinds its dissolution all of the following apply: a. The limited liability company resumes carrying on its activities and affairs as if dissolution had never occurred. b. Subject to paragraph “c”, any liability incurred by the limited liability company after the dissolution and before the rescission has become effective shall be determined as if dissolution had never occurred. c. The rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission must not be adversely affected. 2019 Acts, ch 26, §57 C2020, §489.701A 2020 Acts, ch 1063, §266, 267; 2023 Acts, ch 152, §54, 143, 161 C2024, §489.703 Former §489.703 transferred to §489.704; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.704 Known claims against dissolved limited liability company.

489.704. Known claims against dissolved limited liability company. 1. Except as otherwise provided in subsection 4, a dissolved limited liability company may give notice of a known claim under subsection 2, which has the effect provided in subsection 3. 2. A dissolved limited liability company may in a record notify its known claimants of the dissolution. The notice must do all of the following: a. Specify the information required to be included in a claim. b. State that a claim must be in writing and provide a mailing address to which the claim is to be sent. c. State the deadline for receipt of a claim, which may not be less than one hundred twenty days after the date the notice is received by the claimant. d. State that the claim will be barred if not received by the deadline. 3. A claim against a dissolved limited liability company is barred if the requirements of subsection 2 are met and any of the following applies: a. The claim is not received by the specified deadline. b. If the claim is timely received but rejected by the limited liability company, all of the following must apply: (1) The limited liability company causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the company to enforce the claim not later than ninety days after the claimant receives the notice. (2) The claimant does not commence the required action not later than the ninety days after the claimant receives the notice. 4. This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent. 2008 Acts, ch 1162, §51, 155 C2009, §489.703 2023 Acts, ch 152, §56, 143, 161 C2024, §489.704 Former §489.704 transferred to §489.705; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.705 Other claims against dissolved limited liability company.

489.705. Other claims against dissolved limited liability company. 1. A dissolved limited liability company may publish notice of its dissolution and request persons having claims against the company to present them in accordance with the notice. 2. The notice under subsection 1 must meet all of the following requirements: a. Comply with any of the following: (1) Publication of the notice one time in a newspaper of general circulation in the county in this state in which the dissolved limited liability company’s principal office is located or, if the principal office is not located in this state, in the county in which the office of the company’s registered agent is or was last located. (2) Publication by posting the notice conspicuously for at least thirty days on the dissolved limited liability company’s internet site. b. Describe the information required to be contained in a claim, state that the claim must be in writing, and provide a mailing address to which the claim is to be sent. c. State that a claim against the limited liability company is barred unless an action to enforce the claim is commenced not later than three years after publication of the notice. 3. If a dissolved limited liability company publishes a notice in accordance with subsection 2, the claim of each of the following claimants is barred unless the claimant commences an action to enforce the claim against the company not later than three years after the publication date of the notice: a. A claimant that did not receive notice in a record under section 489.704. b. A claimant whose claim was timely sent to the limited liability company but not acted on. c. A claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution. 4. A claim not barred under this section or section 489.704 may be enforced as follows: a. Against a dissolved limited liability company, to the extent of its undistributed assets. b. Except as otherwise provided in section 489.706, if assets of the limited liability company have been distributed after dissolution, against a member or transferee to the extent of that person’s proportionate share of the claim or of the company’s assets distributed to the member or transferee after dissolution, whichever is less, but a person’s total liability for all claims under this paragraph does not exceed the total amount of assets distributed to the person after dissolution. 2008 Acts, ch 1162, §52, 155 C2009, §489.704 2023 Acts, ch 152, §57, 143, 161 C2024, §489.705 Former §489.705 transferred to §489.708; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.706 Court proceedings.

489.706. Court proceedings. 1. A dissolved limited liability company that has published a notice under section 489.705 may file an application with the district court in the county where the company’s principal office is located or, if the principal office is not located in this state, where the office of its registered agent is or was last located, for a determination of the amount and form of security to be provided for payment of claims that are reasonably expected to arise after the date of dissolution based on facts known to the company and any of the following apply: a. At the time of application any of the following apply: (1) The facts are contingent. (2) The facts have not been made known to the limited liability company. b. The facts are based on an event occurring after the date of dissolution. 2. Security is not required for any claim that is or is reasonably anticipated to be barred under section 489.705. 3. Not later than ten days after the filing of an application under subsection 1, the dissolved limited liability company shall give notice of the proceeding to each claimant holding a contingent claim known to the company. 4. In a proceeding under this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, must be paid by the dissolved limited liability company. 5. A dissolved limited liability company that provides security in the amount and form ordered by the court under subsection 1 satisfies the company’s obligations with respect to claims that are contingent, have not been made known to the company, or are based on an event occurring after the date of dissolution, and such claims may not be enforced against a member or transferee on account of assets received in liquidation. 2023 Acts, ch 152, §60, 143, 161 Former §489.706 transferred to §489.710; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.707 Disposition of assets in winding up.

489.707. Disposition of assets in winding up. 1. In winding up its activities and affairs, a limited liability company shall apply its assets to discharge the company’s obligations to creditors, including members that are creditors. 2. After a limited liability company complies with subsection 1, any surplus must be distributed in the following order, subject to any charging order in effect under section 489.503: a. To each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions. b. Among persons owning transferable interests in proportion to their respective rights to share in distributions immediately before the dissolution of the limited liability company. 3. If a limited liability company does not have sufficient surplus to comply with subsection 2, paragraph “a”, any surplus must be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions. 4. All distributions made under subsections 2 and 3 must be paid in money. 2008 Acts, ch 1162, §56, 155 C2009, §489.708 2023 Acts, ch 152, §62, 143, 161 C2024, §489.707 Former §489.707 transferred to §489.711; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.708 Grounds for administrative dissolution.

489.708. Grounds for administrative dissolution. The secretary of state may commence a proceeding under section 489.709 to dissolve a limited liability company administratively, if any of the following apply: 1. The limited liability company does not pay within sixty days after they are due any fees, taxes, interest, or penalties imposed by this chapter or other laws of this state. 2. The limited liability company does not deliver its biennial report required by section 489.212 to the secretary of state within sixty days after it is due. 3. The limited liability company is without a registered agent or the registered agent does not have a place of business in this state for sixty days or more. 4. The secretary of state has not been notified within sixty days that the limited liability company’s registered agent or place of business of the registered agent has been changed, or that its registered agent has resigned, or that the address of the registered agent has been discontinued. 5. The limited liability company’s period of duration stated in its certificate of organization expires. 2008 Acts, ch 1162, §53, 155 C2009, §489.705 2010 Acts, ch 1100, §14; 2023 Acts, ch 152, §58, 143, 161 C2024, §489.708 2024 Acts, ch 1125, §14, 31 Former §489.708 transferred to §489.707; 2023 Acts, ch 152, §143, 161

Iowa Code § 489.709 Procedure for and effect of administrative dissolution.

489.709. Procedure for and effect of administrative dissolution. 1. If the secretary of state determines that one or more grounds exist under section 489.708 for dissolving a limited liability company, the secretary of state shall serve the company with written notice of such determination under section 489.119. 2. If the limited liability company does not correct each ground for dissolution or demonstrate to the reasonable satisfaction of the secretary of state that each ground determined by the secretary of state does not exist within sixty days after service of the notice under section 489.119, the secretary of state shall administratively dissolve the company by signing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. The secretary of state shall file the original of the certificate and serve a copy on the company under section 489.119. 3. A limited liability company administratively dissolved continues its existence but shall not carry on any business except that necessary to wind up and liquidate its business and affairs under section 489.702 and notify claimants under sections 489.704 and 489.705. 4. The administrative dissolution of a limited liability company does not terminate the authority of its registered agent. 2023 Acts, ch 152, §63, 161

Iowa Code § 489.710 Reinstatement following administrative dissolution.

489.710. Reinstatement following administrative dissolution. 1. A limited liability company administratively dissolved under section 489.709 may apply to the secretary of state for reinstatement at any time after the effective date of dissolution. The application must meet all of the following requirements: a. State the name of the limited liability company at its date of dissolution and the effective date of its administrative dissolution. b. State that the ground or grounds for dissolution either did not exist or have been eliminated. c. If the application is received more than five years after the effective date of the dissolution, state a name that satisfies the requirements of section 489.112. 2. a. If the secretary of state determines that the application contains the information required by subsection 1, and that the information is correct, the secretary of state shall cancel the certificate of dissolution and prepare a certificate of reinstatement that recites the secretary of state’s determination and the effective date of reinstatement, file the certificate of reinstatement, and deliver a copy to the limited liability company under section 489.119. b. If the limited liability company’s name in subsection 1, paragraph “c”, is different from the name in subsection 1, paragraph “a”, the certificate of reinstatement shall constitute an amendment to the company’s certificate of organization insofar as it pertains to its name. A company shall not relinquish the right to retain its name if the reinstatement is effective within five years of the effective date of the company’s dissolution. 3. When the reinstatement is effective, it relates back to and takes effect as of the effective date of the administrative dissolution as if the administrative dissolution had never occurred. 2008 Acts, ch 1162, §54, 155 C2009, §489.706 2010 Acts, ch 1040, §1; 2020 Acts, ch 1118, §24; 2023 Acts, ch 152, §59, 143, 161 C2024, §489.710 2024 Acts, ch 1048, §1; 2024 Acts, ch 1125, §15, 31

Iowa Code § 489.711 Appeal from denial of reinstatement.

489.711. Appeal from denial of reinstatement. 1. If the secretary of state denies a limited liability company’s application for reinstatement following administrative dissolution, the secretary of state shall serve the company under section 489.119 with a written notice that explains the reason or reasons for denial. 2. The limited liability company may appeal the denial of reinstatement to the district court of the county where the company’s principal office or, if none in this state, where its registered agent is located within thirty days after service of the notice of denial is effected. The company appeals by petitioning the court to set aside the dissolution and attaching to the petition copies of the secretary of state’s certificate of dissolution, the company’s application for reinstatement, and the secretary of state’s notice of denial. 3. The court may summarily order the secretary of state to reinstate the dissolved limited liability company or may take other action the court considers appropriate. 4. The court’s final decision may be appealed as in other civil proceedings. 2008 Acts, ch 1162, §55, 155 C2009, §489.707 2023 Acts, ch 152, §61, 143, 161 C2024, §489.711 2024 Acts, ch 1125, §16, 31