Yes, Virginia, There Is A Limited-Liability Corporation (At Least In Case Law And Statute)

Allen Matkins
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Twenty years ago, limited liability companies were a novelty.  Today, they are common, but courts often conflate LLCs with corporations by referring to "limited liability corporations".  For example, the Court of Appeal iHotels Nevada, LLC v. Bridge Banc, LLC, 130 Cal. App. 4th 1431, 1434 (2005) advised "Defendant is a California limited liability corporation with its office in Los Angeles".  See also Swissmex-Rapid S.A. de C.V. v. SP Systems, LLC, 212 Cal. App. 4th 539, 542 (2012) ("SP is a California limited liability corporation . . . .") and People v. Noori, 136 Cal. App. 4th 964, 971 (2006) ("Mehdipanah's company, Sarafi International, was registered with the California Secretary of State as a limited liability corporation.").  This is truly an odd construct because one of the hallmarks of the corporate form is limited liability. 

Legislatures also suffer from the same confusion.  California Government Code Section 65863.11 refers to a "managing member of a limited liability corporation".  When the Legislative Counsel's office recommended technical corrections to various code provisions, including Section 65863.11, it failed to correct the reference.  See SB 1289.

Nevada's legislature has been similarly confused.  NRS 639.575 and NRS 639.580 each refer to "limited-liability corporations".

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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