Asked by Jessica Stocker on May 26, 2024
Verified
In a state in which the managers of a limited liability company owe fiduciary duties to the firm and its members, those members can sue the managers for breaching a fiduciary duty.
Fiduciary Duties
Obligations of trust and confidence requiring a party to act in the best interests of another party.
Limited Liability Company
A business entity model combining the benefit of limited liability from a corporation with the direct tax advantages of a partnership or sole proprietorship.
Breaching
The act of violating a law, duty, other form of agreement, or trust.
- Grasp the concept of fiduciary duties within the management structure of LLCs.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
True
Explanation :
In states where the law establishes that managers of a limited liability company (LLC) owe fiduciary duties to the LLC and its members, members can indeed sue the managers for breaching those fiduciary duties. This is because fiduciary duties create legal obligations that, when violated, provide grounds for legal action by those owed the duties.
Learning Objectives
- Grasp the concept of fiduciary duties within the management structure of LLCs.