LLCs

Question 1

Formation

Answer 1

1) Certificate of Formation
2) Filed with Secretary of State
3) Company has at least one member

Question 2

Operating Agreement

Answer 2

Governs:
1) relations between members and LLC
2) rights & duties of managers
3) the activities and affairs of the company
4) any means and conditions for amending operating agreement

Question 3

Certificate of Formation

Answer 3

1) name and purpose
2) address for business
3) address for registered agent
4) initial capital contributions agreed to and made
5) people who will manage LLC

Question 4

Member-Managed

Answer 4

Default under RULLCA

Question 5

Manager-Managed

Answer 5

LLC is run by an elected group of managers who manage the business similarly to a board of directors.

Question 6

Member-Managed Fiduciary Duties

Answer 6

Under RULLCA, member owes fiduciary duties of care and loyalty to the company and its members.

Question 7

LLC Duty of Care

Answer 7

Owes duty of care to act: 1) with care that a person in a like position would reasonably exercise under similar circumstnaces, and 2) in a manner the member believes to be in the best interests of the company.

Question 8

LLC Duty of Loyalty

Answer 8

Duties to:
1) account for any property, profit, or benefit from the member derived from LLC
2) refrain from dealing in adverse interest
3) refrain from competing

Question 9

Manager-Managed LLC Duties

Answer 9

Duty only applies to managers not members.