TELESEMINAR: Understanding and Modifying Fiduciary Duties in LLCs – A National Perspective
September 23, 2014
12:00 – 1:00 p.m.
1.00 MCLE hours
LLCs are unique among business entities in that members have almost complete authority to alter by contract the express and implied fiduciary duties to which managers and others are subject. Duties of loyalty, care, good faith and fair dealing and others can be reduced or, in many instances, eliminated by clear and ambiguous agreement of the parties. There are many motivations for wanting to do so, including where a member wants to branch out and start a business related to the business of the LLC or the vehicle is used only for financing another business. But these modifications of core duties can also be highly problematic – giving rise to abuse or unintended consequences. This program will provide you with a real-world guide to express and implied fiduciary duties in LLCs, how and why they may be modified, and the practical risks of doing so.
- Contractual modification of fiduciary duties in LLCs
- Understanding express and implied fiduciary duties in LLCs – statute, case law, agreement
- How fiduciary duties can be modified or even eliminated by agreement in many circumstances
- Motivations for modifications – competing business, uncertain application, risk of litigation, finance, and more
- Effective drafting to modify fiduciary duties in new and existing LLCs
- Counseling clients about the substantial risks of reducing duties
Frank Ciatto, Venable, LLP, Washington, D.C.