Recently, I wrote about Corporations Code Section 17703.04(a) which in singularly inept fashion attempts to establish the non-liability of members of a limited liability company under the California's new Revised Uniform Limited Liability Company Act. Whatever principle Section 17703.04(a) may be trying to enunciate, it's clear that the new act provides ample opportunity for member liability, including the following:
Of course, the "mother of all potential liabilities" for members of a California LLC is the potential for alter ego liability pursuant Section 17703.04(b). As to this last point, UCLA Law School Professor Stephen Bainbridge argues in a recent paper that veil piercing in LLCs is "hopelessly dysfunctional" and that encourages "inefficient investment in irrelevant precautions, while encouraging expensive and complex litigation". His paper, Abolishing LLC Veil Piercing, can be downloaded here.