Alter Ego And The California LLC

Yesterday's post concerned a recent federal district court decision applying the corporate alter ego doctrine to a Nevada limited liability company. Bustos v. Dennis, 2018 U.S. Dist.  LEXIS 45764.  An update to this post noted that although Judge...

When An LLC Interest Is A Security

Yesterday's post concerned U.S. District Court Judge Cynthia Ann Bashant's recent ruling that a plaintiff had failed to plead adequately the existence of a security.  D.R. Mason Constr. Co. v. GBOD, LLC, 2018 U.S. Dist. LEXIS 41236.  Professor...

A Five Percent Interest Is Not Necessarily Stock

As Professor Joshua Fershee has often noted, many judges fail to distinguish between corporations and limited liability companies.  See, e.g., LLCs Are Not Corporations. Be Vigilant. Respect the Entity.  Therefore, it is nice to see that some judges...

Court Presumes LLC Statute Applies Retroactively But Declines To Apply Statute Retroactively

Marlene Dietrich reportedly said "When you're dead, you're dead, thats it."  At one time, that was true of limited liability companies formed under California's Revised Uniform Limited Liability Company Act. 

This Professor Asks Why Does CARULLCA Cabin The Duty Of Loyalty?

Professor Douglas K. Moll points out a small, but significant, difference between the duty of loyalty owed by a partner under California's Uniform Partnership Act of 1994 and the duty of loyalty owed by a member or manager under California's Revised...

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...

Filing Statements Of Information Online

Last June, the California Secretary of State's office announced bizfile California, which it described as "a new online portal to help businesses file, search, and order business records quickly and conveniently from one webpage".  Bizfile...

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  Therefore, it should be no surprise that as originally enacted these acts did not mention LLCs.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 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...

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