Legal Articles

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…

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…

Business Judgment Rule

In Missouri, the “Business Judgment Rule” is a legal principle which protects directors and officers of a corporation from liability for decisions made within the director’s or officer’s authority that are made in good faith and uninfluenced by any other consideration than the honest belief that the action serves the best interests of the corporation. Betty…

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…

LLC Litigation, Involuntary Dissolution

Although corporations and limited liability companies (“LLC”) have many similar legal characteristics, they do have some dissimilarities when it comes to litigation. Both corporations and LLCs may be involuntarily dissolved by the Missouri attorney general or shareholders or LLC members. There is a clear difference , however, in when a shareholder may move to dissolve a corporation…

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…

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…

Partnership Agreements, Disputes

Partnership agreements are essential in any type of business form in Missouri: limited liability companies (LLC), professional corporations (PC), limited liability partnerships (LLP), and even general partnerships. More than anything else, they should be put in place to ensure that operation of the business is in line with how the business owners want the business…

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