Operating Agreement Mistake that Tears LLCs Apart: Failing to Specify How Members Will Be Paid for Their Labor
Photo by geralt on Pixabay As an attorney who helps small business owners who have disputes with their co-owners, I see a lot of California limited liability company operating agreements. Many are well-prepared and thoughtful documents that help founders protect themselves and their company. But many LLCs have problems that can lead to major disputes including expensive lawsuits between the owners…
No claim for breach of fiduciary duty against member of manager-membered LLC in California
I am often approached by co-owners or members of an LLC who have been victimized by self-dealing or embezzlement or mismanagement of funds when other members of an LLC have taken money out of the LLC for their own use or simply misused company funds by, for instance, overpaying for equipment in order to help a family member who sells the equipment….
New Corporate Disclosure Requirements Make It Harder to Own a Business Anonymously
The Federal Government has new disclosure requirements that require corporations, LLCs and similar business organizations to disclose their true owners to the government. The disclosures are supposed to remain confidential (at least until the system is hacked), but still it makes it harder to own a company without anybody knowing you do. This article at CEB has a great rundown of the…
A key reason to file in Federal vs California Court – Discovery of Financial / Technical Information
I haven’t seen this talked about much in legal blogs but it seems like an important consideration in whether to bring a case in Federal vs California state court: there may be much broader discovery of financial and technical information in Federal court. In years of practice in Federal courts, I was used to getting detailed financial and technical information in discovery…
What Happens When a Contract Fails?
In the United States, people enter into contracts under the implied covenant of good faith and fair dealing. This means all parties that sign a contract agree to keep their word and treat one another with respect — without using trickery or unfair tactics to avoid their contractual obligations. Sadly, not all contracts go according to plan. Sometimes, legitimate obstacles, such as delays…