Idaho State Statute Code

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30-1-201.

INCORPORATORS

One (1) or more persons may act as the incorporator or incorporators of a corporation by delivering articles of incorporation to the secretary of state for filing.

30-1-206.

BYLAWS

  1. The incorporators or board of directors of a corporation shall adopt initial bylaws for the corporation.
  2. The bylaws of a corporation may contain any provision for managing the business and regulating the affairs of the corporation that is not inconsistent with law or the articles of incorporation.

30-1-601.

AUTHORIZED SHARES

  1. The articles of incorporation must set forth any classes of shares and series of shares within a class, and the number of shares of each class and series, that the corporation is authorized to issue. If more than one (1) class or series of shares is authorized, the articles of incorporation must prescribe a distinguishing designation for each class or series and must describe, prior to the issuance of shares of a class or series, the terms, including the preferences, rights and limitations of that class or series. Except to the extent varied as permitted by this section, all shares of a class or series must have terms, including preferences, rights and limitations, that are identical with those of other shares of the same class or series.
  2. The articles of incorporation must authorize:
    1. One (1) or more classes or series of shares that together have unlimited voting rights; and
    2. One (1) or more classes or series of shares, which may be the same class or classes as those with voting rights, that together are entitled to receive the net assets of the corporation upon dissolution.
  3. The articles of incorporation may authorize one (1) or more classes or series of shares that:
    1. Have special, conditional or limited voting rights, or no right to vote, except to the extent otherwise provided by this chapter;
    2. Are redeemable or convertible as specified in the articles of incorporation:
      1. At the option of the corporation, the shareholder, or another person or upon the occurrence of a specified event;
      2. For cash, indebtedness, securities or other property; and
      3. At prices and in amounts specified, or determined in accordance with a formula;
    3. Entitle the holders to distributions calculated in any manner, including dividends that may be cumulative, noncumulative or partially cumulative; or
    4. Have preference over any other class or series of shares with respect to distributions, including distributions upon the dissolution of the corporation.
  4. Terms of shares may be made dependent upon facts objectively ascertainable outside the articles of incorporation in accordance with section 30-1-120(11), Idaho Code.
  5. Any of the terms of shares may vary among holders of the same class or series so long as such variations are expressly set forth in the articles of incorporation.
  6. The description of the preferences, rights and limitations of classes or series of shares in subsection (3) of this section is not exhaustive.

30-1-622.

LIABILITY OF SHAREHOLDERS

  1. A purchaser from a corporation of its own shares is not liable to the corporation or its creditors with respect to the shares except to pay the consideration for which the shares were authorized to be issued as provided in section 30-1-621, Idaho Code, or specified in the subscription agreement as provided in section 30-1-620, Idaho Code.
  2. Unless otherwise provided in the articles of incorporation, a shareholder of a corporation is not personally liable for the acts or debts of the corporation except that he may become personally liable by reason of his own acts or conduct.

30-1-801.

REQUIREMENT FOR AND DUTIES OF BOARD OF DIRECTORS

  1. Except as provided in section 30-1-732, Idaho Code, each corporation must have a board of directors.
  2. All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed by or under the direction of, its board of directors, subject to any limitation set forth in the articles of incorporation or in an agreement authorized under section 30-1-732, Idaho Code.

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30-6-110.

OPERATING AGREEMENT -- SCOPE, FUNCTION AND LIMITATIONS

  1. Except as otherwise provided in subsections (2) and (3) of this section, the operating agreement governs:
    1. Relations among the members as members and between the members and the limited liability company;
    2. The rights and duties under this chapter of a person in the capacity of manager;
    3. The activities of the company and the conduct of those activities; and
    4. The means and conditions for amending the operating agreement.
  2. To the extent the operating agreement does not otherwise provide for a matter described in subsection (1) of this section, this chapter governs the matter.
  3. An operating agreement may not:
    1. Vary a limited liability company's capacity under section 30-6-105, Idaho Code, to sue and be sued in its own name;
    2. Vary the law applicable under section 30-6-106, Idaho Code;
    3. Vary the power of the court under section 30-6-204, Idaho Code;
    4. Subject to subsections (4) through (7) of this section, eliminate the duty of loyalty, the duty of care, or any other fiduciary duty;
    5. Subject to subsections (4) through (7) of this section, eliminate the contractual obligation of good faith and fair dealing under section 30-6-409(4), Idaho Code;
    6. Unreasonably restrict the duties and rights stated in section 30-6-410, Idaho Code;
    7. Vary the power of a court to decree dissolution in the circumstances specified in sections 30-6-701(1)(d) and (e), Idaho Code;
    8. Vary the requirement to wind up a limited liability company's business as specified in sections 30-6-702(1) and (2)(a), Idaho Code;
    9. Unreasonably restrict the right of a member to maintain an action under part 9 of this chapter;
    10. Restrict the right to approve a merger, conversion or domestication under chapter 18, title 30, Idaho Code, to a member that will have personal liability with respect to a surviving, converted or domesticated organization; or
    11. Except as otherwise provided in section 30-6-112(2), Idaho Code, restrict the rights under this chapter of a person other than a member or manager.
  4. If not manifestly unreasonable, the operating agreement may:
    1. Restrict or eliminate the duty:
      1. As required in sections 30-6-409(2)(a) and (7), Idaho Code, to account to the limited liability company and to hold as trustee for it any property, profit or benefit derived by the member in the conduct or winding up of the company's business, from a use by the member of the company's property, or from the appropriation of a limited liability company opportunity;
      2. As required in sections 30-6-409(2)(b) and (7), Idaho Code, to refrain from dealing with the company in the conduct or winding up of the company's business as or on behalf of a party having an interest adverse to the company; and
      3. As required by sections 30-6-409(2)(c) and (7), Idaho Code, to refrain from competing with the company in the conduct of the company's business before the dissolution of the company;
    2. Identify specific types or categories of activities that do not violate the duty of loyalty;
    3. Alter the duty of care, except to authorize intentional misconduct or knowing violation of law;
    4. Alter any other fiduciary duty, including eliminating particular aspects of that duty; and
    5. Prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under section 30-6-409(4), Idaho Code.
  5. The operating agreement may specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one (1) or more disinterested and independent persons after full disclosure of all material facts.
  6. To the extent the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member would otherwise have under this chapter and imposes the responsibility on one (1) or more other members, the operating agreement may, to the benefit of the member that the operating agreement relieves of the responsibility, also eliminate or limit any fiduciary duty that would have pertained to the responsibility.
  7. The operating agreement may alter or eliminate the indemnification for a member or manager provided by section 30-6-408(1), Idaho Code, and may eliminate or limit a member or manager's liability to the limited liability company and members for money damages, except for:
    1. Breach of the duty of loyalty;
    2. A financial benefit received by the member or manager to which the member or manager is not entitled;
    3. A breach of a duty under section 30-6-406, Idaho Code;
    4. Intentional infliction of harm on the company or a member; or
    5. An intentional violation of criminal law.
  8. The court shall decide any claim, under subsection (4)(a) of this section, that a term of an operating agreement is manifestly unreasonable. The court:
    1. Shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
    2. May invalidate the term only if, in light of the purposes and activities of the limited liability company, it is readily apparent that:
      1. The objective of the term is unreasonable; or
      2. The term is an unreasonable means to achieve the provision's objective.

30-6-304.

LIABILITY OF MEMBERS AND MANAGERS

  1. The debts, obligations or other liabilities of a limited liability company, whether arising in contract, tort or otherwise:
    1. Are solely the debts, obligations or other liabilities of the company; and
    2. Do not become the debts, obligations or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager.
  2. The failure of a limited liability company to observe any particular formalities relating to the exercise of its powers or management of its activities is not a ground for imposing liability on the members or managers for the debts, obligations or other liabilities of the company.

30-6-407.

MANAGEMENT OF LIMITED LIABILITY COMPANY

  1. A limited liability company is a member-managed limited liability company unless the operating agreement:
    1. Expressly provides that:
      1. The company is or will be "manager-managed";
      2. The company is or will be "managed by managers"; or
      3. Management of the company is or will be "vested in managers"; or
    2. Includes words of similar import.
  2. In a member-managed limited liability company, as among the members, the following rules apply:
    1. The management and conduct of the company are vested in the members.
    2. Each member has equal rights in the management and conduct of the company's activities.
    3. A difference arising among members as to a matter in the ordinary course of the activities of the company may be decided by a majority of the members.
    4. An act outside the ordinary course of the activities of the company may be undertaken only with the consent of all members.
    5. The operating agreement may be amended only with the consent of all members.
  3. In a manager-managed limited liability company, as among the members and the managers, the following rules apply:
    1. Except as otherwise expressly provided in this chapter, any matter relating to the activities of the company is decided exclusively by the managers.
    2. Each manager has equal rights in the management and conduct of the activities of the company.
    3. A difference arising among managers as to a matter in the ordinary course of the activities of the company may be decided by a majority of the managers.
    4. The consent of all members is required to:
      1. Sell, lease, exchange or otherwise dispose of all, or substantially all, of the company's property, with or without the good will, outside the ordinary course of the company's activities;
      2. Approve a merger, conversion or domestication under part 10 of this chapter;
      3. Undertake any other act outside the ordinary course of the company's activities; and
      4. Amend the operating agreement.
    5. A manager may be chosen at any time by the consent of a majority of the members and remains a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, or dies, or, in the case of a manager that is not an individual, terminates. A manager may be removed at any time by the consent of a majority of the members without notice or cause.
    6. A person need not be a member to be a manager, but the dissociation of a member that is also a manager removes the person as a manager. If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member.
    7. A person's ceasing to be a manager does not discharge any debt, obligation or other liability to the limited liability company or members which the person incurred while a manager.
  4. An action requiring the consent of members under this chapter may be taken without a meeting, and a member may appoint a proxy or other agent to consent or otherwise act for the member by signing an appointing record, personally or by the member's agent.
  5. The dissolution of a limited liability company does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.
  6. This chapter does not entitle a member to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities of the company.