WA Business Law Blog

A buy-sell agreement is an agreement among the owners of a business that typically restricts ownership while the owners are alive, identifies a process in the event of the death or disability of an owner and establishes a methodology for valuation.  According to The Piedmont Group, only 46% of business owners have a buy-sell agreement… Read More

What rights do minority shareholders have to oppose a merger? In short—almost no rights at all. In Allentoff v. Red Lion Hotels Corporation, No. 83576-9-I, 2023 WL 21338 (Wn. App. Jan. 3, 2023), the Division One Court of Appeals reiterated the now-concrete principal that, absent a showing of fraud, a minority shareholder dissenting from a… Read More

I have written previously on Washington’s 2022 Amendment to the LLC Act to permit voluntary withdrawal (see here).  Withdrawal continues to plague LLC members because, while many LLC agreements discuss withdrawal caused by death, disability or bankruptcy, most LLC agreements do not solve the challenges created by a voluntary withdrawal. I find it helpful to… Read More

This blog frequently laments the lack of Washington case law across a number of LLC and corporate topics. One such topic includes records requests in both a corporate and LLC context. The scant authority makes every new case on the subject worthy of discussion—enter Lott on behalf of Blue Mountain Farms, L.L.C. v. Lott, No.… Read More

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