A Limited Liability Company is a unique legal entity. While these entities share many characteristics of a corporation, the law allows the owners of these companies to change the way the company is managed. Typically, an LLC is run by a managing member, rather than a board of directors, and the owners hold membership interests rather than stock certificates. There may be restrictions on the transfer of membership interests or on the creation of new membership interests.
When a dispute develops between the members of an Limited Liability Company, many of the same options that are available to the shareholders of a corporation may be available to the members of the LLC. Members should seek legal counsel to determine their best strategy for resolving the dispute, since the rules that govern the operation of the company can vary significantly. The “company agreement” (sometimes called an “operating agreement”) must be consulted to determine each member’s rights.
Since the managers of the LLC act as the agents of the company, the managers owe duties of loyalty to the company. Many Texas courts have also recognized fiduciary duties similar to the duties owed by corporate officers and directors. If the managers have violated those duties, other members of the LLC may have legal claims for damages.
Contact Powers Taylor today.
If you are involved in a dispute involving the ownership of a Limited Liability Company, the attorneys at Powers Taylor can help. With our experience in this area, we can help you negotiate a workable solution without breaking the bank. If negotiations fail, our team of litigators can file a lawsuit to ensure that your interests are protected.