Question

WHICH IS TRUE ABOUT LIMITED LIABILITY COMAPNIES WHERE THE RESTRICTIONS ON THE AUTHORITY OF MANAGERS ARE SET FORTH IN AN OPERATING AGREEMENT

IT MAY NOT BE SUFFICIENT TO PROTECT THE LLC AGAINST THIRD PARTIESWITHOUT KNOWLEDGE OF RESTRICTIONS

NONMANAGERS MEMBERS CANNOT BIND THE LLC

THE MANGERS CANNOT BIND THE LLC WITHOUT UNANIMOUS APPROVED VOTE OF THE MEMBERS

THESE RESTRICTIONS ARE NOT BINDING ON THE MANAGERS

Answer 1

The first statement is false. If the restriction on the authority of managers are specified in the operating agreement, the LLC stays protected if the third parties are not aware of the restrictions.

The second statement is True in case of member managed LLC only. The non members cannot bind the LLC.

The third statement is false. The managers can bind the LLC without voting also.

The fourth statement is True. All restrictions in the operating agreement are binding on the managers who sign. The restrictions do not bind a non signatory member.