A member and/or manager of a LLC is obligated by law to operate the LLC with the care a corporate officer of like position would exercise under similar circumstances, in the manner a reasonable person would believe to be in the best interest of the LLC. See Mo. Rev. Stat. 347.088.1. Further, a member and/or manager may owe additional fiduciary duties which arise out of the operating agreement. The reason for this is that a chief policy of the Missouri LLC Act is to promote the freedom of contract to allow LLCs to be set up in a manner acceptable to the LLC members and managers; as such, the member’s/manager’s duties and liabilities may be expanded or restricted by the operating agreement.
The fiduciary duties expressed in the operating agreement and Missouri law can be fairly complex. As an example, any member/manager shall, by statute, not be liable to the LLC or to any other member/manager when they acted in good faith reliance on the provisions of the operating agreement. In addition, the traditional corporate business judgment rule — which maintains that “the directors and officers of a corporation from liability for intra vires [“within the powers”] decisions within their authority made in good faith, uninfluenced by any other consideration than the honest belief that the action subserves the best interests of the corporation” — has been applied to LLCs in Missouri. See Sutherland v. Sutherland, 348 S.W.3d 84, 89-90 (Mo. Ct. App. 2011). The business judgment rule, therefore, precludes Missouri courts from interfering with the decisions of LLC members and managers absent a showing of fraud, illegal conduct, an ultra vires (“beyond the powers”) act, or an irrational business judgment. See Ironite Products Co. v. Samuels, 985 S.W.2d 858, 862 (Mo. Ct. App. 1998).
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