WA Business Law Blog

What is a De Facto LLC Manager?

Caleb J. Tingstad, Edmonds Lawyer
Caleb J. Tingstad
Feb 22, 2023
LLCs are either “member-managed” or “manager-managed.” Determining which management structure applies is significant—it impacts everything from fiduciary duties to the authority to act on behalf of the LLC. The easiest way to determine management structure is to look at the LLC agreement. However, when the LLC agreement is silent on this issue (or does not… Read More

Advising the Board: Lawful Distributions

Caleb J. Tingstad, Edmonds Lawyer
Caleb J. Tingstad
Feb 6, 2023
Washington law provides a board of directors discretion to make distributions to its shareholders. However, this discretion is not unfettered. This post will explore the limitations on distributions for which Boards should be aware to protect themselves from personal liability. Limitations on Distribution A board’s ability to make distributions to its shareholders is limited by… Read More

Advising the Board: Derivative vs. Direct Actions

Caleb J. Tingstad, Edmonds Lawyer
Caleb J. Tingstad
Jan 20, 2023
Corporations and their boards frequently find themselves confronted with litigation from their own shareholders. Shareholder litigation usually involves either a shareholder demand (via a letter) or a filed complaint alleging the shareholder need not make demand in the first place (e.g. demand is “futile”). Often times, the success or failure of a shareholder’s claims simply… Read More

No, Washington’s LLC Act is not modeled on the Uniform LLC Act.

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Jan 18, 2023
I read Berman v. Tierra Real Estate Group, LLC (515 P.3d 1004) (2022) and was surprised when I read the following: “As Washington's act was substantially modeled on the ULLCA, we may look to the ULLCA to assist in our interpretation. Dragt v. Dragt/DeTray, LLC., 139 Wash. App. 560, 575, 161 P.3d 473 (2007)*.  I… Read More

LLC Operating Agreements and Dispute Resolution Clauses

Babak Shamsi Edmonds Lawyer
Babak Shamsi
Dec 5, 2022
When individuals wish to join forces in business and form a limited liability company, they should put together a written operating agreement for their entity, and take care to consider each provision carefully, as the final document will govern their rights and responsibilities and will fundamentally steer the course of the relationship between them. One… Read More

Members Have No Interest in the Assets of the LLC

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Nov 30, 2022
Per RCW 25.15.246(1), “a member has no interest in specific limited liability company property.” There are a number of consequences that flow from such a brief statement in the LLC Act.  This article will discuss a few of such consequences. First, the members have no right to prosecute a cause of action owned by the… Read More

Digital Assets under the Uniform Commercial Code

Per E. Oscarsson, Edmonds Lawyer
Per E. Oscarsson
Nov 29, 2022
One aspect of business that is governed by the Uniform Commercial Code (the “UCC”) is secured transactions involving personal property. A good example of such a transaction is the bank loan the repayment of which is secured by a security interest in inventory, equipment, supplies, work in process, and general intangibles, etc. The UCC defines… Read More

Judicial Dissolution Is Not Easy: No, A Contrived Deadlock Will Not Get You There

David C. Tingstad, Edmonds Lawyer
David C. Tingstad
Oct 7, 2022
The Washington LLC Act provides “courts may order dissolution of a limited liability company whenever: (1) it is not reasonably practicable to carry on the limited liability company's activities in conformity with the certificate of formation and the limited liability company agreement; or (2) other circumstances render dissolution equitable.” RCW 25.15.274. This begs the question:… Read More