Keeping owners, managers, and stakeholders up to date on issues affecting their businesses.
In Marx v. Morris, 2019 WI 34, 386 Wis. 2d 122, 925 N.W.2d 112, the Wisconsin Supreme Court addressed the question of whether an LLC member has standing to assert a claim against another member of the same LLC based on an injury suffered primarily by the LLC (rather than by the individual member asserting the claim). That is, can an LLC member bring a claim on behalf of the LLC itself, or are they limited to "derivative claims," as are shareholders in a corporation? The court concluded that members do have standing to assert individual claims against other members and managers of the LLC based on harm to the LLC itself (in addition to claims based on harm to the individual member) and are not limited to derivative claims.
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This is the third of three posts discussing steps owners can take to protect themselves: discussing whether and how to obtain security (collateral) for a loan to the company.
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This is the second of three posts discussing steps owners can take to protect themselves: discussing the requirement to charge minimum interest.
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This is the first of three posts discussing steps owners can take to protect themselves: discussing the importance of properly documenting the loan, such as with a promissory note.
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For many business owners, there comes a time when it makes sense to move from a sole proprietorship or partnership to a more formal business entity, such as a limited liability company (LLC) or corporation. There are many possible reasons, but a common one is that the owners want to utilize the personal liability protection that those entities offer.
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