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Corporate Director/Officer, Limited Liability Company Manager Liability

Corporate officers and directors, as well as managers of limited liability companies (LLC), are generally protected from discretionary business decisions. Inevitably, when a suit is filed by a shareholder of a corporation or member of a LLC , the director, officer or manager will assert the business judgment rule as a defense to the lawsuit.  […]

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Drag-Along Rights and Tag-Along Rights

When starting any type of business with multiple owners (whether it be a limited liability company, corporation, partnership, etc.) it is important to include provisions relating to the sale of the business to a third-party purchaser. These types of provisions are especially important if the owners ultimately intend to sell the business to someone else. […]

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Personal Liability from a Business Debt

There are certain circumstances in which a business liability can flow through and result in personal liability to a business owner. Missouri law permits a court to “pierce the corporate veil” and make an owner liable for a business debt when the following is shown:  (1) There is control and complete domination, not only of […]

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LLC Derivative Action Attorney Fees

A derivative action in limited liability company (“LLC”) litigation is generally when a member (i.e., owner) brings an action against the manager or managing member for causing a loss to the LLC. The action is “derivative” in that the member is suing on behalf of the LLC to recover an injury that the LLC sustained. […]

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Limited Liability Company (LLC) Derivative Lawsuits

Similar to corporations, owners (i.e., members) in limited liability companies (LLC) in Missouri can initiate derivative actions on behalf of the LLC to recover money/assets. This is expressly authorized under Section 347.171, RSMo. A number of requirements must be present: (1) the plaintiff-member cannot have the authority under the LLC’s operating agreement to cause the […]

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Fiduciary Duties in Limited Liability Companies (LLC)

Limited liability companies are a hybrid between a corporation and partnership. Hibbs v. Berger, 430 S.W.3d 296, 313 (Mo. Ct. App. 2014). They are creatures of statute. Those individuals or entities that hold an ownership interest in a limited liability company are designated as “members.” “Managers,” on the other hand, are those individuals who may or […]

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Successor Liability: Corporate & Business

The general rule in Missouri is that when one corporation/business sells or transfers all of its assets to another corporation/business the latter is not liable for the debts and liabilities of the former. This is because Missouri recognizes the distinction between (a) corporate mergers or the sale and purchase of outstanding stock of a corporation […]

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Member/Manager Fiduciary Duties in a Limited Liability Company (LLC)

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 […]

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Missouri Limited Liability Companies: Formation & Advantages

Limited liability Companies (“LLC”) have far and away become the business entity of choice in Missouri and most other states. LLCs are attractive because of the (1) minimal red tape and procedural hurdles you have to overcome to form the entity, (2) its guarantee of limited liability for members, the (3) freedom to contract and […]

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Business Partnerships in Missouri

Under Missouri Law, a general partnership, unlike a limited liability or corporation, does not necessarily require that the owner(s) file an organization or incorporation document with the Secretary of State. Rather, Missouri law will recognize the existence of a general partnership when 1) two or more people 2) carry on a business as co-owners with […]

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