This section defines terms used throughout the act, confining interpretation to those definitions when provided. This can limit parties from using definitions that may be more beneficial or detrimental to their case in the event of litigation. The tribe can use this section to selectively limit or expand the meaning of specific terms. When developing this section, the tribe should take care to thoroughly review the issues regarding the specific terms it selects to include in its definitions section.

Denoting the limited liability company as a "separate entity" aids in shielding the members from liability. The purpose can limit the limited liability companies only to those that are organized for profit or expand it to include charitable organizations.

a) A limited liability company is an entity distinct from its members.

(b) A limited liability company may have any lawful purpose, regardless of whether for profit. 

(c) A limited liability company has perpetual duration. 

-ULLCA §104

A limited liability company may be organized under this Act for any lawful purpose. Unless otherwise provided in article of operation [sic], a LLC organized and existing under this Act has the same powers as an individual to do all things necessary and convenient to carry out it business, including but not limited to all of the following.

[...]g. Lend money, invest and reinvest its funds, and receive and hold real or personal property as security for repayment. 

[...]l. Make donations to and otherwise devote its resources for the public welfare or for charitable, scientific, educational, humanitarian, philanthropic, or religious purposes. [...]p. Provide benefits or payments to members, managers, employees, and agents of the LLC, and to their estates, families, dependants or beneficiaries in recognition of the past services of the members, managers, employees, and agents of the LLC. 

-5HCC03 §9

Companies exist indefinitely and terminate at-will unless the articles of incorporation set a specific duration of time the company will exist and stipulate that the company is to expire at the end of that term. Generally, members of an at-will company may demand a payment of the fair value of their interests at any time. Owners of a term company must generally wait until the expiration of the term to obtain the value of their interests. The tribe can limit the lifespan of a company by dissolving it at a certain time or upon the occurrence of a specific event, or the tribe may allow it to exist indefinitely, or in perpetuity.

The tribe may want to consider providing avenues to override perpetuity such as member consent or other terms or events specified in the operating agreement. If the operating agreement includes its own duration provision that would override this default rule and the tribe does not require the limited liability company to file its operating agreement and make it public, it may not be public knowledge whether the company is for a term or is at-will.

The tribe can prohibit the operating agreement from altering the capacity for the company to sue and be sued. In addition, the tribe will want to demarcate the boundaries of its sovereign immunity and clarify that tribal law will govern the affairs of the company. This is covered below in the section on Sovereign Immunity. The code should clarify whether “affairs” includes member actions with third parties, as members may not be considered to be part of the “internal affairs” of the company, which could include their torts or actions and decisions that bind the company.

EXAMPLE

SECTION 105. POWERS. A limited liability company has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities. SECTION 106. GOVERNING LAW. The law of this [tribe] governs:

(1) the internal affairs of a limited liability company; and 

(2) the liability of a member as member and a manager as manager for the debts, obligations, or other liabilities of a limited liability company.

SECTION 107. SUPPLEMENTAL PRINCIPLES OF LAW. Unless displaced by particular provisions of this [act], the principles of law and equity supplement this [act]. 

-ULLCA §§105-107

A fundamental element of a limited liability code is a process for designating a person who will be accountable for receiving and confirming delivery of documents for a company. To hold a company liable for its obligations, other entities must be able to locate the company. Therefore, the company must designate one person at a specified address who will always be able to deliver documents to the company. In this way, if a company is not located on the tribe’s land or nearby, the company can still be found easily through the designated agent. Because of the importance of the contact agent, the code is often very specific about transferring the responsibility and seamlessly changing agents so that there is someone designated at all times to serve in this capacity.

The tribe should choose whether or not to require LLCs to designate and continuously maintain an office on tribal land and/or an agent who is a tribal member. Not including these requirements can allow businesses to operate off of tribal lands more easily. Some tribes require the office and agent to be located in one place on the reservation, as serving process on a company is simplified when all of the tribal companies’ agents are centrally located.

EXAMPLE