Tag: Oregon

States That Cancel Dissolved LLCs Create Problems

LLCs have a natural life cycle. They are formed, they organize, they begin conducting their business. And eventually, eventually all LLCs come to an end – sometimes gracefully, sometimes not. The end stage for an LLC begins with its dissolution, continues with its winding up, and eventually concludes when the business has been closed down, … Continue Reading

Oregon Becomes the Second State to Authorize Benefit LLCs

This week Oregon became only the second state to authorize benefit LLCs, when Governor Kitzhaber signed House Bill 2296. Over a dozen states have authorized benefit corporations, but until now only Maryland had authorized benefit LLCs. Benefit Corporations. Benefit corporations are intended to provide general public benefit in addition to the usual corporate principle of maximizing … Continue Reading

Oregon Supreme Court Overrules Court of Appeals: LLC Manager with a Known Conflict of Interest Does Not Have Authority to Bind LLC

An LLC manager that causes its LLC to enter into a transaction where the manager has a conflict of interest can create havoc. Case in point: An Oregon LLC manager extended the term of a loan agreement between his LLCs and a borrower, but the manager was at the same time chairman of the board … Continue Reading

North Carolina Court Resolves Conflict Between LLC Act Rules on Member Withdrawals and Assignments to Non-Members

A North Carolina court last month was faced with troubling issues involving assignments of LLC member interests and changes of control. There was no dispute that the assignments conveyed the assigning members’ economic rights. The question was whether the associated control rights (management and voting) were retained by the assignor, conveyed to the assignee, or … Continue Reading

Oregon Workers’ Compensation Law Does Not Shield Employer LLC’s Managing Member from Negligence Claim by Injured Worker

The Oregon Court of Appeals recently held that the exclusive remedy provision of Oregon’s workers’ compensation law does not shield an employer LLC’s managing member from a negligence claim by the LLC’s injured worker. Cortez v. NACCO Materials Handling Grp., Inc., No. A144045; 050302632, 2012 WL 758895 (Or. App. Feb. 29, 2012). Background. Workers’ compensation … Continue Reading

More States Are Considering Low-Profit LLCs

At least 10 state legislatures are considering bills to authorize low-profit limited liability companies (L3Cs) – all introduced in the last two and a half months: Arizona; Senate Bill No. 1503 Arkansas; Senate Bill No. 5 Hawaii; Senate Bill No. 674 Indiana; Senate Bill No. 501 Kentucky; House Bill No. 110 Maryland; House Bill No. … Continue Reading

Oregon Clarifies LLC Derivative Suit Requirements

The Oregon Court of Appeals has clarified when and how members of an Oregon LLC can maintain a derivative suit in the name of the LLC. Bernards v. Summit Real Estate Mgmt., 229 Or.App. 357, 213 P.3d 1 (July 1, 2009). Oregon’s LLC Act allows member derivative suits, but the court imposed additional pleading requirements on … Continue Reading