Question

Under the Uniform Limited Liability Company Act (ULLCA), managers in a manager-managed LLC owe fiduciary duties, such as the duty of loyalty and the duty of care, to the LLC and its members just as corporate directors and officers owe fiduciary duties to the corporation and its shareholders.
True or False?

Answer 1

Answer:

True

Explanation:

The reason is that all the management owe fiduciary duties towards the shareholders and the corporation as well because the managers are acting as an agent and their principal is shareholders are principal so the agent must act in the best interest of the principal and shareholder's best interest here is long term success of the company with no fraudulent activities in the company. This law protects the shareholders by stating that management owe fiduciary duty to shareholders which is a true statement.

Answer 2

Answer:

True

Explanation:

A limited liability company (LLC) is basically the best of both worlds, it provides limited liability to the owners and at the same time is manage similarly to a partnership.

The Uniform Limited Liability Company Act (1995) established a set of common rules since LLCs operate under state statutes, and states actually had different statues regarding LLCs. One of the issues included in the ULLCA was that each member of the LLC owes the other members the following duties:

1. Fiduciary duty
2. Duty of care
3. Duty of fair dealing and good faith