December 10, 2009, 16:58
CRTLLC Member as theft defendant
Has anyone filed a case against a member of an LLC for stealing from the LLC?
December 14, 2009, 15:48
pkdyerHere is the question -- A,B, and C form LLC to recycle (clean and resell). A is designated president. A then forms company with another and begins selling the recycle goods under that company. Is it theft for 2/3 of what A sold under other company?
December 14, 2009, 15:57
JohnRisn't it much like a partnership but with some corporate aspects? Misapp maybe?
December 15, 2009, 13:33
Lee WestmorelandJohn's essentially correct that LLC's are a hybridized partnership-corporate business organization.
I'd strongly recommend spending some quality time with the Business Organizations Code.
Generally speaking, partners can't steal from each other as they each have joint and several ownership to any and all partnership assets.
LLC's usually speak in terms of "members" (if I recall correctly. My strong recommendation is to get the chartering documents, and take a hard look at the rights and responsibilities section, which will largely specify what the owners / members can and can't do.
Misapplication of Fiduciary Property is most likely your single best bet, as the chartering documentation will probably specify that each member is a fiduciary of the LLC and that he owes a duty of fair dealing.
Just my two cents.