Fiduciary Duties in Single Member LLCs

Fiduciary duties play a part in most of the Single Member LLCs organized by this firm because most for those single member LLCs have a Potential Manager. The fiduciary duties that exist per the LLC Act and are explained in Fiduciary Duties and Potential LLC Owner/Member Liability create potential liability for anyone acting as manager in a “Manger” Managed LLC whether that manager be an LLC owner/member or a non-owner/member manager (which would include a potential manager when acting as manager of the LLC). Because fiduciary duties are an issue when a Potential Manager provision is used, I also recommend that fiduciary duties and alternative dispute resolution be addressed in the single member LLC Operating Agreement (see Fiduciary Duties and Potential LLC Owner/Member Liability and ADR - Mediation as well as Arbitration). None of the “Form” LLC organizations I have reviewed include these things in their single member LLC organization. (See “Form” LLCs Are Everywhere.)