Iowa Code 489.502 – Transfer of transferable interest
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1. Subject to section 489.503, subsection 6, for a transfer, in whole or in part, all of the following applies to a transferable interest:
a. It is permissible.
b. It does not by itself cause a person‘s dissociation as a member or a dissolution and winding up of the limited liability company’s activities and affairs.
c. Subject to section 489.504, it does not entitle the transferee to do any of the following:
(1) Participate in the management or conduct of the limited liability company’s activities and affairs.
(2) Except as otherwise provided in subsection 3, have access to records or other information concerning the limited liability company’s activities and affairs.
Terms Used In Iowa Code 489.502
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Member: means a person for whom all of the following are true:a. See Iowa Code 489.102
- Operating agreement: means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in section 489. See Iowa Code 489.102
- Person: includes a protected series, however denominated, of an entity if the protected series is established under law that limits, or limits if conditions specified under law are satisfied, the ability of a creditor of the entity or of any other protected series of the entity to satisfy a claim from assets of the protected series. See Iowa Code 489.102
- Transfer: includes any of the following:
a. See Iowa Code 489.102- Transferable interest: means the right, as initially owned by a person in the person's capacity as a member, to receive distributions from a limited liability company, whether or not the person remains a member or continues to own any part of the right. See Iowa Code 489.102
- Transferee: includes a person that owns a transferable interest under section 489. See Iowa Code 489.102
2. A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.3. In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the company’s transactions only from the date of dissolution.4. A transferable interest may be evidenced by a certificate of the interest issued by a limited liability company in a record, and, subject to this section, the interest represented by the certificate may be transferred by a transfer of the certificate.5. A limited liability company need not give effect to a transferee’s rights under this section until the company knows or has notice of the transfer.6. A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer.7. Except as otherwise provided in section 489.602, subsection 5, paragraph “b”, if a member transfers a transferable interest, the transferor retains the rights of a member other than the transferable interest transferred and retains all duties and obligations of a member.8. If a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member’s obligations under sections 489.403 and 489.406 known to the transferee when the transferee becomes a member.