LLC Flashcards
What document must be filed to form an LLC in Louisiana?
Articles of Organization must be filed with the Secretary of State.
Who must sign the Articles of Organization?
At least one person, but they do not need to be a member or manager.
What must be included in the Articles of Organization?
LLC name, purpose (can be general), registered agent’s name and notarized affidavit, names of those vested with management authority (if applicable).
What must be filed with the Articles of Organization?
The Initial Report.
What happens if an LLC does not file an annual report for 3 consecutive years?
The Secretary of State may administratively dissolve the LLC after 30 days’ notice.
What are the two types of LLC management structures?
Member-managed and Manager-managed.
Who has fiduciary duties in a member-managed LLC?
All members owe a duty of care & loyalty to the LLC.
Who has fiduciary duties in a manager-managed LLC?
Only managers owe fiduciary duties; members do not unless stated otherwise.
What is the default management structure of an LLC?
Member-managed, unless the Articles specify otherwise.
What authority do members have in a member-managed LLC?
They are mandataries for ordinary business but cannot unilaterally alienate, lease, or encumber immovable property.
What is the default voting rule in an LLC?
One person, one vote, unless the Articles or Operating Agreement state otherwise.
What decisions require a majority vote?
Dissolution & winding up, sale/transfer of substantially all assets, merger/consolidation, incurring major debts outside the ordinary course, amending the Articles or Operating Agreement.
What decision requires unanimous consent?
Admitting a new member.
Are LLC members personally liable for LLC debts?
No, the LLC provides limited liability protection.
What happens if a member dies?
The heir inherits the economic interest but does not become a member unless unanimously approved by other members.
What records can a member request from the LLC?
Copy of federal & state tax returns, LLC records during business hours, formal accounting if circumstances justify.
Can a member withdraw from an LLC with a term?
Only if: 1. Unanimous consent of other members, OR 2. Another member fails to perform a material obligation.
Can a member withdraw from an LLC without a term?
Yes, with 30 days’ written notice unless otherwise stated in the Articles or Operating Agreement.
What happens if a withdrawing member is not approved for buyout?
The LLC must buy out their interest at fair market value.
How are profits and losses allocated?
Equally among members, unless a written operating agreement says otherwise.
What forms of contributions can members make?
Cash, property, services rendered, promissory notes.
When is a promise to contribute enforceable?
Only if in writing and signed by the member.
When are distributions restricted?
If the LLC would become insolvent or violate legal provisions.
Does Louisiana LLC law require indemnification for members’ legal fees?
No, there is no statutory requirement for indemnification.
