Quiz 30: Limited Liability Companies and Limited Liability Partnerships


Liability of an LLC: An LLC is responsible for any loss or injury to anyone because of the wring actions by any of its members, employees or its directors. Liability of the members: Members of an LLC are not personally liable for any of the debts, injuries or any other obligations. The extent of their liability will be limited to the extent of their contributions. Facts: D is a member of an LLC and the LLC constructed a propane gas bulk storage tank in a facility. Others living in the vicinity sued D and the LLC alleging that the built is a nuisance. The local court granted the verdict in favor of the LLC and D sued the plaintiffs alleging that they have wrongly sued him instead of the LLC. Outcome: In this case, the plaintiffs need pay the legal charges to D because they have sued him wrongly. This is because D is a member of a LLC and thus he is not personally liable for any of the actions of the LLC. The incurred additional expenditure in terms of legal expenses will be paid by the plaintiffs for the damages.

Facts of the Case The case is related to liability of members. There was a limited liability company named M LLC incorporated by four members H, J, C and Y. The Company used to sell computer hardware and software over the internet. The company hired a software engineer who graduated from University of Chicago. His name was H. His role was to make software that will replicate the thinking of the user with regard to the next command to be performed on the computer. The company was able to develop such a software naming Third Eye. Accordingly H was made to visit annual Comdex computer to showcase his exemplary work. It was held in Las Vegas. In Las Vegas he took a vehicle on rent from his hotel to meet few of interested prospective buyers of the software which were placed at different parts of the city. At the time of driving from the hotel to the venue of show he met with an accident leading to severe injuries to HS. This act was caused by negligence of H. The victim sued the company and its four members to recover the monetary damages for his injuries. Issue concerning the case The issue is whether the four members were liable to pay for the damages. Findings and Decision of the Court The principle of vicarious liability is applicable in this case where in the principal is responsible for actions of its agent if those actions are done with in the scope of the employment. In this case H ran over HS at the time of performing his official duties. Therefore he was with in the scope of his work and his employer is obligated for his conduct. Therefore M LLC would be liable for paying the damages to HS. The amount of liability would only be limited to the company and the members would not be liable for damages. H is also liable for negligence in his personal capacity because he did not pay adequate attention while performing his duties.

Facts of the Case The case is related to the member managed limited liability. A limited liability company naming BA was formed by J, M and E. The company was made to run a bar in New York. All 3 of them were the member managers of the company. J was entrusted with the task of driving the company's truck and pick up few items for the bar. This was done only on Wednesday. On one of these Wednesday while coming back to the bar after carrying the supplies for the entire week, J ran over a pedestrian in his negligence at Times Square. The name of victim was TT and suffered severe injuries. He then filed a suit against the company and its 3 member in lieu of the monetary damage recovery. Issue concerning the case The issue is whether the company is liable or the members. Findings and Decision of the Court In this case J was acting on behalf of the company BA Inc and was within the scope of his employment when the accident took place and caused injuries to TT. Therefore TT can sue BA Inc for recovering the damages caused due to the accident. J was also found to be negligent while driving the truck for supplies therefore he seemed to be personally liable for the damages as well. TT can recover damages from J as well.

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