Also known as: LLCs · L.L.C. · limited liability company
Written by attorneys · grounded in primary & secondary sources — see below
A business entity formed under state law that shields its members from personal liability for the entity's debts. Members may manage the entity directly or through designated managers. The entity is treated as an unincorporated association for purposes such as citizenship in diversity jurisdiction.
Leah Lamb and Landon Long form Lighthouse Shipping LLC with members residing in Illinois and Indiana. When Lighthouse Shipping sues a defendant in federal court, the court determines that complete diversity is lacking because the LLC takes on the citizenship of every member. The action is dismissed for lack of subject-matter jurisdiction.
Linden Logistics LLC winds up after paying all creditors. The remaining surplus is first returned to persons owning transferable interests in proportion to unreturned contributions. Any leftover amount is then distributed among such persons according to their rights to share in distributions immediately before dissolution.
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Luna Lang's investment fund, an LLC, purchases shares in a public company after the company and its suppliers allegedly concealed channel-stuffing practices. The LLC sues the suppliers for participating in a scheme to defraud investors. The court examines whether the suppliers' conduct gives rise to primary liability under the securities laws.
Linden Bank, a German entity, operates through its Delaware LLC subsidiary that sells products in California. Plaintiffs injured abroad sue Linden Bank in California federal court, arguing that the subsidiary's California sales impute contacts to the parent. The court analyzes whether the subsidiary's activities establish jurisdiction over the parent.
Lily Lopez, a member of Lotus Pharmaceuticals LLC, challenges a merger approved by the managers. The managers conditioned the deal on approval by a majority of disinterested members after full disclosure. The court applies the business judgment rule because the informed member vote cleanses the transaction.
Lance Lee owns a closely held LLC that operates retail stores and objects on religious grounds to providing certain employee benefits. The LLC seeks an exemption from a federal mandate requiring those benefits. The court considers whether the entity's religious beliefs qualify for protection under the Religious Freedom Restoration Act.
An LLC is treated as an unincorporated association. Its citizenship is determined by the citizenship of each of its members rather than by a state of formation or principal place of business.
After paying creditors, any surplus is first returned to holders of transferable interests for unreturned contributions. Remaining surplus is then distributed in proportion to the members' rights to distributions immediately before dissolution.
Yes. The UCC expressly includes a limited liability company within the definition of person, along with other legal or commercial entities.
One or more persons may form an LLC by filing a certificate of organization with the secretary of state. Two or more persons may also enter an agreement that becomes the operating agreement upon formation.
…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…