Also known as: limited liability company · LLC · LLCs
Written by attorneys · grounded in primary & secondary sources — see below
A business entity that provides its members with limited liability for the entity's obligations while permitting flexible management and pass-through tax treatment.
Laura Lewis and Swift Clinic form Green Med LLC with members holding interests in both Green Med and Liberty Life LLC. When Green Med sues Liberty Life in federal court asserting diversity jurisdiction, the court determines that both LLCs share citizenship in States A and B because each member's citizenship is attributed to the entity. Complete diversity is absent and the case is remanded to state court.
Lumen Capital winds up its affairs after paying all creditors. The LLC then distributes remaining surplus first to members in proportion to their unreturned capital contributions and next to members according to their rights to share in distributions immediately before dissolution. All payments are made in cash as required by the governing statute.
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Daimler maintains a Delaware LLC subsidiary that conducts marketing activities through a regional office and independent dealers in California. Plaintiffs seek to assert personal jurisdiction over the parent based on the subsidiary's in-state conduct. The court examines whether the subsidiary's contacts can be attributed to the parent under agency principles.
Stoneridge Investment Partners LLC alleges that suppliers and customers participated in a scheme to inflate a public company's financial statements. The court considers whether the LLC's claims can proceed under the private right of action for securities fraud when the defendants had no duty to disclose.
KKR Financial Holdings LLC enters a merger agreement after its board approves the transaction. Stockholders later challenge the deal and the court evaluates whether the fully informed stockholder vote cleanses any alleged breaches by the controlling stockholder under the business judgment rule.
Erica P. John Fund Inc. brings a class action alleging that Halliburton Co. made material misrepresentations that affected the market price of its stock. The court addresses whether the fraud-on-the-market presumption of reliance applies and whether defendants may rebut it with evidence of no price impact.
An LLC is treated as an unincorporated association. Its citizenship is that of each of its members, with no separate state of incorporation or principal place of business attributed to the entity itself.
Any surplus is first distributed to holders of transferable interests to return unreturned contributions, then distributed among those holders in proportion to their pre-dissolution distribution rights, subject to any charging orders.
No. Every member counts regardless of the percentage held or whether the interest is held directly or indirectly through another entity.
Yes. When the same individuals or entities are members of both the plaintiff LLC and the defendant LLC, both entities share citizenship in the same states and complete diversity fails.
…the United States, where its subsidiary, Mercedes-Benz USA, LLC (MBUSA), distributes Daimler vehicles. MBUSA is a Delaware limited liability company and has its principal place of business in New Jersey. MBUSA’s marketing and sales efforts in California are undertaken by a regional office in Costa Mesa and a network of independent…