Who Signs For The LLC?

Allen Matkins
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Allen Matkins

California's Revised Uniform Limited Liability Company Act includes two separate provisions validating notes, mortgages, evidences of indebtedness, contracts, certificates, statements, conveyances or other written instruments against any lack of authority when signed by specified signatories.  These provisions apply in the absence of actual knowledge of the lack of authority of the signing person(s).

Section 17703.01(d) applies when the instrument is signed by at least two managers, or by one manager in the case of an LLC whose articles of organization state that it is managed by only one manager.  The statutory provision curiously begins with "Notwithstanding the provisions of [Section 17704.01] subdivision (c)".  I say "curiously" because subdivision (c) provides that no act of a manager or member in contravention of a restriction on authority shall bind the LLC to persons having actual knowledge of the restriction.  That is fair enough, but subdivision (d) ends requiring an absence of actual knowledge.  Thus, what does it mean to say "notwithstanding the provisions of subdivision (c)"?

Section 17704.07(w) applies when the instrument is signed by the chairperson of the board, the president, or any vice president and any secretary, assistant secretary, the chief financial officer, or any assistant treasurer of the LLC.  Neither of these provisions apply to foreign limited liability companies.  Section 17704.07 is made expressly subject to the provisions of the LLC's articles of organization.

Readers will note that these sections were essentially plagiarized from Corporations Code Section 313 which wrote about here and here.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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