WA Business Law Blog

In a previous blog titled “Digital Assets under the Uniform Commercial Code,” posted on November 29, 2022, I discussed the fact that digital assets, including virtual currencies, electronic money, and nonfungible tokens, are classified as general intangibles under the Uniform Commercial Code (the “UCC”) and that the current UCC does not adequately address the secured… Read More

I previously wrote on this subject here and write this to provide a couple more differences between Washington’s LLC Act (the “Act”) and RULLCA. The Act allows for an LLC to be formed without a member (a so-called “shelf LLC”): “a limited liability company is formed when its certificate of formation is filed by the… Read More

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

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

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

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

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

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

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