Posted by David H on March 24, 2002 at 15:55:55:
TJ’s entire response, which I received by email, is below. I include excerpts immediately below.
>David, "the fact I “oversee” or have “day-to-day
>involvement” does not, as a matter of law, trigger
>liability on my part.
I agree with that. But that’s not the point I’m making. The point I’m making is that everyone is personally liable for the decisions and actions that they make or take. (And this is consistent with the legal advise that I have received, and that reported to have been received by another poster, below.) The LLC/Corporation needs a natural person(s) to effect the agenda of the company. If the person doing this is negligent in their actions, they are liable. For a single-member LLC, there is no such thing as a “mere member” - there is someone effecting the agenda of the company, and by definition, it can only be one person, and where they are deemed to be negligent in their actions, they can be held liable. I’m not claiming they are liable for everything to do with the LLC in every case. I’m saying that it may not be clear to some people that simply setting up the LLC does not completely remove one’s liability for one’s actions.
>Nor does the fact I sign as as “member” for my LLC
>make me magically responsible for all actions on its >behalf.
I agree. I never suggested otherwise. But there is a distinction between you, “overseeing” the day-to-day operations of the LLC and, for example, your brother who contributed equity to the LLC and is a “mere member” by virtue of not having to do with day-to-day operations. If you are negligent in your day-to-day activities of the LLC, you may be liable, while, certainly, your brother - a “mere member” in the true sense - would not.
–
TJ has posted a response to your message titled
Re: Not So Fast in CREOnline News Group.
The posted reply can be found at the following URL:
http://www.creonline.com/wwwboard/messages/86952.html
If the reply pertains to an ongoing discussion, it is
requested you go to the above URL to post any response.
The posted reply reads as follows:
Dated : March 24, 2002 at 11:33:06
Subject: Re: Not So Fast
David, "the fact I “oversee” or have “day-to-day involvement” does not, as a
matter of law, trigger liability on my part. There is simply no such legal
doctrine. Nor does the fact I sign as as “member” for my LLC make me magically
responsible for all actions on its behalf. To be liable, I must have actually
personally committed the injury-producing negligence MYSELF, along with or independent
of my underling. Otherwise, his negligence is NOT imputed to me as an
individual regardless of my active involvement in the property. His negligence IS
imputed to his employer or and the LLC/Corp, neither of which is me personally even
if I alone comprise the entire membersip or slate of officers. You are missing
the point of what these entities are.
And as for gratuitous repetition, you seem a little stuck on this “no matter
what liability protection it affords, you can still be sued.” This is really the
statement that is meaningless out of context. I can sue my mother in law
because I don’t like her face. My lawsuit will die a speedy death though since it
still comes back to what the law says about liability. As some other posts have
rightly pointed out, there are situations where an entity does not protect the
individual and it is essential to understand that they do not afford
invincibility; however, this whole discussion began with someone’s inordinate and legally
false statement that LLCs and Corps give no real protection, and that’s what
spurred me to respond.