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Personal Liability of Business Owners Update: You Don’t Buy Immunity from Suits for Your Own Wrongdoing by Forming an LLC: LLC Member’s Personal Liability for Torts

January 12, 2016

As many of you know, one of the greatest advantages of forming an LLC is that it offers protection from personal liability for business debts and liabilities. As we explained in our previous blog series “Personal Liability of Business Owners,” however, the liability shield is not absolute, and there are limited circumstances in which courts will impose personal liability on LLC owners. One such situation is where a member or manager commits a tort (wrongful act) while acting in furtherance of LLC business, the consequence of which is often misunderstood by LLC owners (and even some lawyers).… Read the rest

Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update (Part 2)

December 15, 2015

Hill International, Inc. v. Opportunity Partners L.P.

In Hill Int’l, Inc. v. Opportunity Partners L.P., Hill asserted that its announcement in 2014 constituted prior public disclosure of the date of the 2015 annual meeting, and since this disclosure was made more than 70 days in advance, Opportunity’s proposals dated May 7, 2015, was untimely for failing to meet the 30-day-window requirement under the bylaws.[1] Opportunity argued that Hill first gave notice of the date of the annual meeting on April 30, 2015, because that was the first time Hill specifically identified June 9, 2015, as the actual date of its annual meeting, and since the notice was given less than 70 days in advance of the meeting, the 10-day notice period applied and its proposals dated May 7, 2015, were timely.… Read the rest

Protect Your Personal Assets!!: Corporate Formalities Are Not Just Formalities, a Delaware Law Update

December 10, 2015

Many are familiar with the advantages of having a formal entity for business. Limited liability companies, or LLCs, in particular, have gained popularity in recent years and seem to be the entity of choice for small business owners not only because of the liability shield and favorable tax treatment, but also because of the simplicity and flexibility. Mind you, certain formalities, such as meetings and records, are still necessary for LLCs (if required by your LLC Agreement or similar governing document), and LLC members and managers are not free to ignore them if they want to maintain the liability shield.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.