Category Archives: Derivative Actions
How Do Shareholder Derivative Suits in Corporations Work?
We’ve written on this blog about how “derivative actions” work under Florida’s Revised LLC Act. As we’ve previously explained, a derivative action is a method by which a minority member can bring a claim in court in the name of the company. Often, these suits are used to recover damages from controlling shareholders or… Read More »
What Fiduciary Duty of Loyalty Does a Manager or Member Owe an LLC?
The Fiduciary Duty of Loyalty and Managers/Members of an LLC Under the Florida Revised LLC Act, each manager of a manager-managed LLC and member of a member-managed LLC owes a fiduciary duty of loyalty to the LLC and its members. See Fla. Stat. 605.04091(1). The Fiduciary Duty of Loyalty The fiduciary duty of loyalty… Read More »
Can a Minority Member Bring a Derivative Action to Enforce the Rights of the LLC?
Under the Florida Revised LLC Act (the “Revised Act’), a minority member may file a “derivative action” to enforce any right of the LLC. So what is a derivative action? A derivative action refers to the method by which a member who owns a minority interest in an LLC can bring a claim in… Read More »
What Rights Do Members in an LLC Have That an Operating Agreement Cannot Eliminate or Alter?
Under the Florida Revised LLC Act (“Revised Act”), members in an LLC have certain key rights that an operating agreement cannot eliminate or alter. In contrast, members maintain certain rights that an LLC operating agreement can eliminate or alter unless it would be “manifestly unreasonable” to do so. Here is a summary of these… Read More »