LLC Definitions

DISSOLUTION VS. LIQUIDATION

Another basic distinction you should be aware of in forming LLCs is the distinction between an LLC dissolution and an LLC liquidation.  Click here for to read a post about this distinction in the excellent LLC blog called LLC Law Monitor.

APPARENT VS. ACTUAL AUTHORITY

In handling LLC formations, you need to understand the difference between actual and apparent LLC member and manager authority.   For a clear explanation of the difference in the context of litigation in a New York court, click here for a recent post in an excellent LLC blog called LLC Law Monitor.  

WHAT DOES “MATERIAL” MEAN?

The term “material” is often a useful one to include in LLC operating agreements, even though the precise meaning of the term is usually quite unclear.  For example, many operating agreements provide that the managers must promptly disclose to the members all material information of which the managers become aware that may affect the LLC.  […]

MEANING OF THE TERM “LLC INTEREST”

Even experienced LLC lawyers sometimes refer to LLC members’ memberships as “LLC interests.”  However, under most LLC statutes, the term “LLC interest” means only a member’s right to allocations of LLC profits and losses and to distributions of LLC cash and other assets.  It does not mean a member’s LLC membership rights in their entirety […]

THE MEANING OF “LIMITED LIABILITY”

Whenever you form an LLC for your clients, you should explain to them the meaning of key LLC statutory rules and terms relevant to them.  The most relevant term of all is often the term “limited liability.”   In this blog post, Doug Batey discusses two issues concerning limited liability that often arise in LLC formations […]

WHAT IS AN LLC “MANAGER”?

The term “manager” is one of the most basic terms in LLC business organization law, but I know of no LLC act that defines the term.  This post in a Morris James LLP blog entitled “Delaware Business Litigation Report” discusses a recent Delaware district court decision that defines it.  Basically, the case holds that in […]