Member and Manager Liability

Question 1

What is the general rule re: member and manager liability for LLC obligations?

Answer 1

In general –>

Members and Managers are NOT personally liable for LLC’s obligations.

Question 2

Under what circumstances may court “pierce the LLC veil”?

What is the EFFECT of doing so?

Answer 2

Courts may pierce LLC veil to reach MEMBER’S and MANAGER’s personal assets to satisfy LLC obligations under similar circumstances as corporation.

EXCEPTION –> failure to observer formalities (ie..having meetings/recording minutes) will NOT be a group for piercing LLC veil

Question 3

What is the rule re: indemnification of LLC members/managers?

Answer 3

Members and managers are INDEMNIFIED for debts, obligations, and other liabilities incurred in the court of their activities on behalf of the LLC PROVIDED THAT –>

• the complied with DOL and DOC

Question 4

What is the rule re: reimbursement of members/managers?

Answer 4

Members and managers are reimbursed for expenses they incur on company’s behalf