When an LLC suffers primary harm that also indirectly harms the LLC’s members, the cause of action generally belongs to the LLC, not its members. Only if the LLC (through its duly authorized management) fails to pursue the...more
Business divorce can be messy, as reflected by many of the cases covered here at The LLC Jungle. Two issues that frequently arise during the dissolution of an LLC are: 1. the statutory buyout procedure, and 2. claims for...more
10/25/2021
/ Appraisal ,
Breach of Duty ,
Business Divorce ,
Buyouts ,
Damages ,
Derivative Suit ,
Dissolution ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Membership Interest ,
Misappropriation ,
Standing
In California, all LLCs are required to periodically file a Statement of Information with the Secretary of State. The Statement of Information is posted to the Secretary of State’s website, and can be accessed by the public...more
When LLC membership interests suffer harm at the hands of wrongful conduct by another member or the LLC’s manager, the litigation claims are usually based on fiduciary duties, including the duty of good faith and fair dealing...more
LLC members often hold their membership interests in a family trust. The benefits of trusts are well known — they generally allow assets to be easily transferred after death without the time, hassle, and expense of court...more
LLC membership interests are usually straightforward and can determined by simply reviewing the LLC’s operating agreement. The operating agreement typically lists the members. Sometimes the operating agreement will impose...more
Today’s post focuses on a thorny issue arising from the LLC Jungle — can derivative claims be pursued on behalf of a dissolved or cancelled LLC?
In short, the answer is “yes” — but there are nuances to be aware of....more
LLCs are celebrated for allowing business partners to freely define their relationship by contract — i.e., the LLC operating agreement. The operating agreement generally covers all of the important aspects of the company and...more
11/26/2018
/ Capital Contributions ,
Contract Amendments ,
Corporate Dissolution ,
Dismissals ,
Family Businesses ,
Limited Liability Company (LLC) ,
Managing Members ,
Member Removal ,
Membership Interest ,
Motion to Dismiss ,
Operating Agreements
There are not many published California Court of Appeal opinions providing guidance for LLC managers and members. That’s why it’s an “LLC Jungle” out there.
While unpublished opinions are not binding precedent outside of...more
10/22/2018
/ Bad Faith ,
Breach of Duty ,
Creditors ,
Debtors ,
Default ,
Demurrers ,
Distribution Rules ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Managing Members ,
Membership Interest ,
Operating Agreements
The “Seven Critical Mistakes LLCs Make” Series -
This series of posts covers some of the most serious mistakes that LLCs regularly make. Here are...short summaries of each:
Choosing the Wrong Business Partners —...more
10/8/2018
/ Alter Ego ,
Apparent Authority ,
Business Divorce ,
Business Formation ,
Business Partners ,
Covenant of Good Faith and Fair Dealing ,
Due Diligence ,
Duty of Loyalty ,
Fiduciary Duty ,
Founding Members ,
Guaranty Claims ,
Intellectual Property Protection ,
Limited Liability Company (LLC) ,
Managing Members ,
Membership Agreements ,
Membership Interest ,
Operating Agreements ,
Prohibited Transactions ,
Secured Debt ,
Trade Secrets