Bill Text: IA SF158 | 2011-2012 | 84th General Assembly | Introduced
Bill Title: A bill for an act providing for limited liability companies organized on a low-profit basis.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-12-31 - END OF 2011 ACTIONS [SF158 Detail]
Download: Iowa-2011-SF158-Introduced.html
Senate
File
158
-
Introduced
SENATE
FILE
158
BY
BOLKCOM
A
BILL
FOR
An
Act
providing
for
limited
liability
companies
organized
on
a
1
low-profit
basis.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
1812XS
(4)
84
da/nh
S.F.
158
Section
1.
Section
489.201,
subsection
2,
paragraph
a,
Code
1
2011,
is
amended
to
read
as
follows:
2
a.
The
name
of
the
limited
liability
company,
which
must
3
comply
with
section
489.108
.
The
name
of
a
low-profit
limited
4
liability
company
must
also
comply
with
section
489.1404.
5
Sec.
2.
Section
489.805,
Code
2011,
is
amended
to
read
as
6
follows:
7
489.805
Noncomplying
name
of
foreign
limited
liability
8
company.
9
1.
A
foreign
limited
liability
company
whose
name
does
10
not
comply
with
section
489.108
or
489.1404
shall
not
obtain
11
a
certificate
of
authority
until
it
adopts,
for
the
purpose
12
of
transacting
business
in
this
state,
an
alternate
name
that
13
complies
with
section
489.108
and
489.1404
.
After
obtaining
14
a
certificate
of
authority
with
an
alternate
name,
a
foreign
15
limited
liability
company
shall
transact
business
in
this
state
16
under
the
alternate
name.
17
2.
If
a
foreign
limited
liability
company
authorized
to
18
transact
business
in
this
state
changes
its
name
to
one
that
19
does
not
comply
with
section
489.108
or
489.1404
,
it
may
not
20
thereafter
transact
business
in
this
state
until
it
complies
21
with
subsection
1
and
obtains
an
amended
certificate
of
22
authority.
23
Sec.
3.
NEW
SECTION
.
489.1401
Definitions.
24
As
used
in
this
article,
unless
the
context
otherwise
25
requires:
26
1.
“Foreign
low-profit
limited
liability
company”
means
a
27
limited
liability
company
organized
under
laws
other
than
the
28
laws
of
this
state
for
a
purpose
for
which
a
low-profit
limited
29
liability
company
may
be
organized
under
section
489.1402.
30
2.
“Low-profit
limited
liability
company”
means
a
limited
31
liability
company
subject
to
this
article
that
is
not
a
foreign
32
low-profit
limited
liability
company.
33
Sec.
4.
NEW
SECTION
.
489.1402
Organized.
34
A
low-profit
limited
liability
company
must
be
organized
as
35
-1-
LSB
1812XS
(4)
84
da/nh
1/
5
S.F.
158
a
limited
liability
company
and
a
low-profit
foreign
limited
1
liability
company
must
be
organized
as
a
foreign
limited
2
liability
company
as
provided
in
this
chapter.
In
addition,
3
a
low-profit
limited
liability
company
or
low-profit
foreign
4
limited
liability
company
must
meet
the
requirements
of
this
5
article.
6
Sec.
5.
NEW
SECTION
.
489.1403
Purposes.
7
A
limited
liability
company
is
not
a
low-profit
limited
8
liability
company,
and
a
foreign
limited
liability
company
is
9
not
a
foreign
low-profit
limited
liability
company,
unless
all
10
of
the
following
apply:
11
1.
The
limited
liability
company
significantly
furthers
12
the
accomplishment
of
one
or
more
charitable
or
educational
13
purposes
within
the
meaning
of
section
170(c)(2)(B)
of
the
14
Internal
Revenue
Code,
26
U.S.C.
§
170(c)(2)(B),
and
would
not
15
have
been
formed
but
for
its
relationship
to
the
accomplishment
16
of
a
charitable
or
educational
purpose.
17
2.
a.
The
limited
liability
company
cannot
have
as
18
a
significant
purpose
the
production
of
income
or
the
19
appreciation
of
property.
However,
the
fact
that
the
limited
20
liability
company
produces
significant
income
or
capital
21
appreciation
shall
not,
in
the
absence
of
other
factors,
be
22
conclusive
evidence
of
a
significant
purpose
involving
the
23
production
of
income
or
the
appreciation
of
property.
24
b.
The
limited
liability
company
cannot
have
as
a
purpose
25
the
accomplishment
of
a
political
or
legislative
purpose
within
26
the
meaning
of
section
170(c)(2)(D)
of
the
Internal
Revenue
27
Code,
26
U.S.C.
§
170(c)(2)(D).
28
Sec.
6.
NEW
SECTION
.
489.1404
Name.
29
1.
A
limited
liability
company
is
not
a
low-profit
30
limited
liability
company
unless
its
name
contains
the
words
31
“low-profit
limited
liability
company”
or
the
abbreviation
32
“L.P.L.L.C.”
or
“LPLLC”.
33
2.
Subject
to
section
489.805,
this
section
applies
to
34
a
foreign
low-profit
limited
liability
company
transacting
35
-2-
LSB
1812XS
(4)
84
da/nh
2/
5
S.F.
158
business
in
this
state
which
has
a
certificate
of
authority
1
to
transact
business
in
this
state
or
which
has
applied
for
a
2
certificate
of
authority.
3
Sec.
7.
NEW
SECTION
.
489.1405
Certificate
of
organization.
4
1.
A
limited
liability
company
is
not
a
low-profit
limited
5
liability
company
unless
it
is
identified
as
a
low-profit
6
limited
liability
company
in
its
certificate
of
organization
7
as
provided
in
section
489.201.
8
2.
A
foreign
limited
liability
company
is
not
a
low-profit
9
foreign
limited
liability
company
unless
it
is
identified
as
a
10
foreign
low-profit
limited
liability
company
in
its
certificate
11
of
organization
as
provided
in
section
489.802.
12
Sec.
8.
NEW
SECTION
.
489.1406
Cessation.
13
If
a
low-profit
limited
liability
company
or
foreign
14
low-profit
limited
liability
company
fails
to
comply
with
the
15
applicable
requirements
of
this
article,
including
section
16
489.1403,
the
limited
liability
company
shall
immediately
17
cease
to
be
a
low-profit
limited
liability
company
or
foreign
18
low-profit
limited
liability
company.
The
cessation
may
19
be
either
voluntary
or
involuntary.
The
limited
liability
20
company
shall
no
longer
refer
to
itself
by
name
as
required
in
21
section
489.1404.
It
shall
no
longer
be
a
limited
liability
22
company
under
this
chapter
unless
it
amends
its
certificate
23
of
organization
as
provided
in
section
489.202
to
remove
its
24
identification
as
a
low-profit
limited
liability
company.
It
25
shall
no
longer
be
a
foreign
limited
liability
company
under
26
this
chapter
unless
it
amends
its
certificate
of
authority
27
pursuant
to
section
489.805,
to
remove
its
identification
as
a
28
foreign
low-profit
limited
liability
company.
29
Sec.
9.
NEW
SECTION
.
489.1407
Statutory
construction.
30
Unless
inconsistent
with
a
provision
in
this
article,
a
31
low-profit
limited
liability
company
must
comply
with
the
32
requirements
in
other
articles
of
this
chapter
applicable
to
33
a
limited
liability
company
and
a
foreign
low-profit
limited
34
liability
company.
Otherwise,
the
provisions
of
this
article
35
-3-
LSB
1812XS
(4)
84
da/nh
3/
5
S.F.
158
shall
prevail
over
any
inconsistent
provision
in
another
1
article.
2
Sec.
10.
DIRECTIONS
TO
CODE
EDITOR.
The
Code
editor
shall
3
codify
sections
489.1401
through
489.1407
as
enacted
in
this
4
Act,
as
a
new
article
in
chapter
489.
5
EXPLANATION
6
GENERAL.
A
limited
liability
company
is
organized
or
7
recognized
under
Code
chapter
489,
and
entitled
the
“Revised
8
Uniform
Limited
Liability
Company
Act”.
The
Code
chapter
9
is
divided
into
a
number
of
articles.
A
limited
liability
10
company
(L.L.C.)
is
a
kind
of
business
organization
usually
11
perpetual
in
duration
and
formed
for
capital
acquisition
and
12
the
distribution
of
any
profits.
Members
and
managers
are
13
shielded
from
personal
liability
similar
to
shareholders
of
14
a
corporation;
but
unlike
a
corporation,
taxes
are
“passed
15
through”
to
investors
without
being
taxed
at
the
business
level
16
(i.e.,
no
double
taxation).
17
A
domestic
limited
liability
company
is
formed
by
filing
a
18
certificate
of
organization
with
the
secretary
of
state.
A
19
foreign
limited
liability
company
must
be
issued
a
certificate
20
of
authority
by
the
secretary
of
state.
The
name
of
the
21
organization
must
identify
it
as
a
limited
liability
company,
22
which
may
include
an
abbreviation
(L.L.C.).
23
BILL.
This
bill
creates
a
new
article
in
Code
chapter
24
489
dedicated
for
Iowa
and
foreign
low-profit
limited
25
liability
companies.
For
another
example
of
a
subclass
of
26
limited
liability
companies,
see
article
11
providing
for
27
professional
limited
liability
companies.
A
low-profit
28
limited
liability
company
must
be
formed
to
accomplish
a
29
charitable
or
educational
purpose
recognized
by
the
Internal
30
Revenue
Code.
However,
the
organization
is
not
required
to
31
have
federal
tax
exemption
status
in
order
to
qualify
as
32
a
low-profit
limited
liability
company.
The
organization
33
also
cannot
have
as
a
significant
purpose
the
production
34
of
income
or
the
appreciation
of
property.
Its
name
must
35
-4-
LSB
1812XS
(4)
84
da/nh
4/
5
S.F.
158
identify
its
legal
standing
under
the
new
article
(e.g.,
1
L.P.L.L.C.).
Upon
failing
to
comply
with
the
applicable
2
requirements
of
the
article,
it
immediately
ceases
to
be
a
3
low-profit
limited
liability
company
or
foreign
low-profit
4
limited
liability
company.
An
entity
organized
as
a
limited
5
liability
company
must
amend
its
certificate
of
organization
by
6
removing
that
designation,
and
an
entity
organized
as
a
foreign
7
limited
liability
company
must
be
issued
a
new
certificate
of
8
authority.
9
-5-
LSB
1812XS
(4)
84
da/nh
5/
5
