In a past post, I highlighted a common mistake in judicial opinions whereby courts identify LLCs as “limited liability corporations.” Limited liability corporations do not exist. Passage of time has not cured the susceptibility to committing this mistake. In this post, I will show a few recent opinions that label an LLC as a “limited liability corporation” as opposed to a “limited liability company,” and a case that labels “members” of an LLC as “shareholders.” While my efforts certainly will not remedy these blunders, perhaps I can prevent a few misguided souls from its perpetration.
Judges Can Still Make Mistakes
In the 22 months since my first post on this matter, a search of Washington’s case law reveals an additional 15 examples of the term “limited liability corporation” used in Washington opinions. Some examples include:
(1) Bard v. Monsanto Company, identifies both Monsanto, and Pharmacia LLC, as a “limited liability corporation.” See Bard v. Monsanto Company, 15 Wash.App.2d 1001 (Wash. Ct. App. 2020).
(2) RJ Gaudet & Associates, LLC v. Anitei, “the law firm’s organization as a ‘limited liability corporation’ does not preclude summary judgment. See RJ Gaudet & Associates, LLC v. Anitei, 19 Wash.App.2d 1058 (Wash. Ct. App. 2021).
(3) Dalton M, LLC v. N. Cascade Trustee Services Inc., identifies Dalton M’s LLC as a “limited liability corporation.’ See Dalton M, LLC v. N. Cascade Trustee Services Inc., 504 P.3d 834 (Wash. Ct. App. 2022).
Washington judges are not alone in this error, even in Delaware, the crème de la crème of business litigation, judges can still make this mistake. Specialty Dx Holdings, LLC v. Laboratory Corporation of America Holdings identifies Specialty Dx as a “limited liability corporation.” See Specialty Dx Holdings, LLC v. Laboratory Corp. of America Holdings, 2021 WL 6327369 at * 1 (Del Super. Ct. 2021).
Happily, in my efforts to find cases in the past 22 months that call “members” of an LLC “shareholders,” I have found none. I salute the Washington courts for their attention to detail in this regard.
Not the End of the World, But Understand the Differences
I poke fun, but it is important to understand the differences between each entity. In my past post, I explain a few of these differences. Alas, an LLC is STILL not a corporation.
For more information about LLCs, visit Beresford Booth – WA State Lawyers (beresfordlaw.com), reach out directly to info@beresfordlaw.com , or give me a call at (425) 776-4100.