Who Needs to Sign? Signing Authority in Estates, Trust, and LLCs

by | May 8, 2025 | Blog

By: Jessica O. Wilke
Partner, Hansen, Howell & Wilkie, PLLC
North Carolina Underwriting Counsel, Alliant National Title Insurance Company

I. Why do we care?

  • A. Because claims / litigation due to lack of authority or capacity in signing real property documents are costly and on the rise.
  • B. We want to protect our clients and ensure they get good title.
  • C. A real property transaction starts long before the deed gets signed and the closing happens – who is retaining the real estate agent? Who is signing the offer to purchase and contract? The sooner in the process you identify the proper parties, the smoother things will (should?) go.

II. Limited Liability Companies

  •  A. The new North Carolina Limited Liability Company Act (NCGS Chapter 57D) took effect Jan. 1, 2014 and replaced the old LLC Act (Chapter 57C). Chapter 57D applies to every LLC, whether formed on, before, or after that date. N.C. Gen. Stat. § 57D-11- 01.
  • B. Under the New Act, when forming an LLC via Articles of Organization, there is no option to select if the LLC is member-managed or manager-managed. The Operating Agreement (“OA”) should control that. If there is no OA, or it is silent, then all members are managers. NCGS § 57D-20-3(d). OA can specify managers or other company officials and their duties.
  • C. The Operating Agreement of an LLC controls. It may be in writing but note that under the New Act, OAs much of OAs can be oral or implied.
  • D. If there is no written OA, then the New Act controls. If there is a conflict between the OA and the Articles of Organization on file, then the OA controls – but Articles of Organization prevail as to extent that a 3rd party reasonably relied on it. NCGS § 57D-2-30(d).
  • E. Each manager has equal rights to participate in the management of the LLC and its business. 57D-3-20(a)-(b), (d). Further, although the “manager[s] may act on behalf of the LLC in the ordinary course of the LLC’s business” and “may make management decisions without a meeting and without notice,” this authority is subject to the Act’s mandate that “management decisions approved by a majority of the managers are controlling.” N.C. Gen. Stat. § 57D-3-20(b)-(c). Emphasis added.
  • F. Under the New Act, Managers can delegate management authority unless OA prohibits it. NCGS § 57D-3-33. Delegation may be general or specific. (Per the Old Act: OA must authorize delegation of authority.) This delegation can be to other persons and/or via a Power of Attorney. See also NCGS Chapter 32C, which includes the grant of general authority for “Operation of Entity or Business” in the statutory for. NCGS § 32C-3-301.
  • G. Status of LLC
    1. Generally in a real property transaction – especially a purchase or refinance – an LLC must be in good standing (no dissolved or suspended).
    2. Note that LLCs can still continue business after dissolution as part of “winding up.” NCGS § 57D-6-07. So a transfer of real property from a dissolved LLC does not necessarily require that the LLC be reinstated.
    3. HOWEVER if the dissolution or suspension was tax-related, this must be addressed before it may dispose of real property or conduct other business, as any act performed during the period of suspension is invalid and of no effect. See NCGS § 105-230.
  • H. Foreign LLCs
    1. A foreign LLC must obtain a certificate of authority from the Secretary of State in order to transact business. NCGS § 57D-7-01(a). However, merely owning real property is not considered transacting business. NCGS § 57D-7-01(b)(11). What about buying and selling real property? Probably need a certificate of authority. Note that “the failure of a foreign LLC to obtain a certificate of authority does not impair the validity of its acts[.]” § 57D-7-02(c). So a BFP would get good title even if the foreign LLC failed to obtain a certificate of authority.
    2. You obtain a certificate of authority from the Secretary of State (see
      https://www.sosnc.gov/Guides/register_a_foreign_business). Generally the foreign entity will need to complete paperwork, provide the names and titles of the officers, and submit a Certificate of Existence from the state of formation. See also NCGS § 57D-7-03.
  • I. Takeaways:
    1. Read the Operating Agreement! Who is identified as a manager or company official? Who needs to sign?
    2. If there is no Operating Agreement – then all members are managers, and a MAJORITY will be required to join in a conveyance.

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