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

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....

Limited Liability Companies

Franchise Tax Board Loses LLC Class Certification Battle

When the legislature enacted the former Beverly-Killea Limited Liability Company Act in 1994 it included a levy on LLCs equal to specified dollar amounts based on the total income from all sources reportable to this state for the taxable year.  In...

Limited Liability Companies

The Memberless LLC And Diversity

When faced with someone who is blowing things out of proportion, one response might be "Don't make a federal case out of this!"  Sometimes, it may not even be possible to make a federal case.  The reason is that federal courts are courts of limited...

Limited Liability Companies

Court: Operating Agreement Did Not Grant Terminated Employees Lifetime Jobs

An employment agreement is one thing and an operating agreement quite another.  In ITV Gurney Holding Inc. v. Gurney, Cal. Ct. Appeal Case No. B281694, the board of a limited liability company fired two employees who were also managers.  The two...

employees, ITV Gurney Holding Inc. v. Gurney, Limited Liability Companies, operating agreement

Court Rules LLC Members May Be "Fiduciaries In Fact"

U.S. District Court Judge Tena Campbell's ruling in Strong v. Cochran, 2017 U.S. Dist. LEXIS 170073, is a reminder that sometimes what you do matters more than what you say.  The case involved claims by the liquidating trustee for a failed real...

CAREIC, fiduciary in fact, Limited Liability Companies, Limited Liability Company, llc, Strong v. Cochran, Tena Campbell

Are Limited Liability Companies "Persons"?

Limited liability companies did not exist when Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934.  Therefore, it should be no surprise that as originally enacted these acts did not mention LLCs.  Congress has since...

California Securities Laws, Exchange Act, Limited Liability Companies, Limited Liability Company, LLCs, person, Section 25013, Section 2(a)(2), Section 3(a)(9), Securities Act of 1933

Inside And Outside Reverse Veil Piercing

UCLA Professor Stephen Bainbridge has published several posts commenting on my post discussing Curci Invs. v. Baldwin, 2017 Cal. App. LEXIS 698.  The issue in Curci was whether reverse veil piercing of a limited liability company is possible in...

Curci, hamartia, Limited Liability Companies, Postal Instant Press, reverse veil piercing, Stephen Bainbridge

California Court Green Lights Reverse Veil Piercing Of Delaware LLC

Courts historically have applied the alter ego doctrine to "pierce the corporate veil" so that a shareholder may be held liable for the debts or conduct of the corporation.  California has extended the possibility of alter ego liability to members...

Alter Ego, Baldwin, Curci Investments, Kaswa, Limited Liability Companies, Limited Liability Company, llc, Postal Instant Press, reverse veil piercing, Section 17703.04, Section 17705.03, veil piercing

Nevada Supreme Court Holds That Member-Managers Were Not Proper Parties To Negligence Claim Against An LLC

In an opinion issued yesterday, the Nevada Supreme Court addressed the extent to which a member of a limited liability company is protected in a negligence based tort action against the LLC.  Gardner v. Henderson Water Park, LLC, 133 Nev. Adv. Op....

86.371, 86.381, Gardner v. Henderson Water Park, liability, Limited Liability Companies, Mark Gibbons, member liability, negligence, proper party, shield

Court Of Appeal Holds LLC's Former Counsel May Represent Insider Defendants In Derivative Suit

Derivative actions can be somewhat confusing.  Although the entity is essentially the plaintiff, it is named as a defendant.  Initially, one might question why must the corporation be named as a party?  I can think of at least two reasons.  First,...

Beachcomber Management, CCP Section 382, derivative, Derivative Suits, disqualification, Limited Liability Companies, Richard M. Aronson, successive representation

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashxKeith Paul Bishop
Partner at Allen Matkins
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