Fiduciary Duties in a Limited Liability Company

In Missouri, Managers of a limited liability company owe fiduciary duties to the company itself. Hibbs v. Berger, 430 SW.3d 296, 315 (Mo. Ct. App. 2014) (citing Section 347.088.2, RSMo). Indeed, a manager “has a duty to act in good faith and in the best interests of the limited liability company”). Sutherland v. Sutherland, 348 S.W.3d 84, 91-92 (Mo. Ct. App. 2011). What is more, the managers of a LLC also we duties to the owners/members of a LLC — except if limited by the LLC’s operating agreement. Hibbs, 430 S.W.3d at 315-15.

As a result, when evaluating whether there is a breach of fiduciary duty, it is important to identify whether the particular individual owes a fiduciary duty, to who it is owed, and whether the LLC’s operating agreement curtails the duty(ies). If the duty is only owed to the LLC itself, there may need to be a derivative action filed if suit is necessary. Sutherland, 348 S.W.3d at 95; Section 347.175, RSMo.

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