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LLC Derivative Lawsuits

Though the cases are not as nearly developed as with corporations, limited liability companies (LLCs) are subject to derivative lawsuits. A typical derivative lawsuit is one in which a member/owner of the company brings a claim on behalf of the LLC against a manager, director or third-party. Usually the manager/director is authorized to bring the […]

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LLC Manager Removal

Unlike with corporations, partnerships and other business entities, there are few statutory provisions addressing the procedures for removing a manager of a limited liability company in Missouri. If a LLC is manager-managed, then management is vested in the manager(s), who has the right and authority to manage the affairs of the LLC and make decisions […]

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Partnership Dissolution

A general partnership typically exists when two or more persons carry on a business as co-owners for profit. Stuart v. Overland Medical Center, 510 S.W.2d 494, 497 (Mo. Ct. App. 1974). It is more specifically defined as a “a contract of two or more competent persons to place their money, effects, labor and skill, or […]

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Intra-Corporate Immunity, Defamation

Defamation generally consists of a (1) publication, (2) a defamatory statement, that (3) identifies the plaintiff, that is (4) false, that is (5) published with the requisite degree of fault and (6) damages to the plaintiff’s reputation. Nazeri v. Missouri Valley College, 860 S.W.2d 303 (Mo. banc 1993). The publication must be to a third-person. […]

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When you may be Personally Liable for LLC or Corporate Debt

One of the main benefits to forming a limited liability company or corporation is that the owners of the company are usually not personally responsible for the debts of the busness. There are exceptions to this general rule. First and foremost, if there is a personal guarantee for a business debt, then the personal guarantor […]

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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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