CONVEYANCES INVOLVING LIMITED LIABILITY COMPANIES



12.1 General Authority


Limited liability companies may be created under the laws of this state from and after March 1, 1994. With respect to third parties, the articles of organization, which are filed with the Secretary of State, establish whether the limited liability company is managed by its members or managed by managers. If the articles of organization do not state that the limited liability company is managed by managers, then it is managed by its members. The examiner should consider the agency powers of members and managers as set forth in O.C.G.A. Section 14-11-301. In general, in a member-managed limited liability company, every member is an agent of the limited liability company, and the act of any member, including, but not limited to, the execution in the name of the limited liability company of any instrument for apparently carrying on in the usual way the business and affairs of the limited liability company, binds the limited liability company. If a limited liability company is manager-managed, no member has such agency powers and every manager has such agency powers.

12.2 Recorded Copies of Articles of Organization


O.C.G.A. Section 14-11-302 authorizes the filing of a copy of the article of organization certified by the Secretary of State in the office of the superior court of a county where real property owned by the limited liability company is located. Any limitations on the authority of any or all members or managers that are set forth in articles of organization so filed shall be conclusively presumed in favor of the limited liability company and against a grantee of the limited liability company, or a person claiming through such grantee, with respect to real property of the limited liability company located in that county. Accordingly, the examiner should determine whether a limited liability company with an instrument in the title has recorded a copy of its articles of organization in the county in which the real property is located. If a copy of the limited liability company’s articles of organization has been so recorded, the examiner should consider the effect of any limitations on authority stated therein.

12.3 Mergers


If the effect on title of a merger of a limited liability company appearing in the title is relevant to the examination, and if the limited liability company was the surviving entity in such merger, the examiner should consider O.C.G.A. Section 14-11-905(a) which provides that “if the surviving entity is a limited liability company, when a merger takes effect . . . (3) the title to all real estate and other property owned by each constituent business entity is vested in the surviving limited liability company without reversion or impairment.”

12.4 Terminated Limited Liability Companies


If a limited liability company with an instrument in the title has terminated and a certificate of termination has been filed with the Secretary of State, the examiner should consider O.C.G.A. Section 14-11-611, which provides that “deeds and other instruments requiring execution after the filing of a certificate of termination by a dissolved limited liability company may be signed by any person who had authority to wind up the dissolved limited liability company under the provisions of subsection (a) of Code Section 14-11-604.”

12.5 Foreign Limited Liability Companies


O.C.G.A. Section 14-11-711(b) provides that “the failure of a foreign limited liability company to procure a certificate of authority does not impair the validity of any contract or act of the foreign limited liability company.” Accordingly, there should be no need for the examiner to establish whether a foreign limited liability company was qualified to do business in this state at the time it acquired or conveyed real property.