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By Dick H. Brandon

ISBN-10: 0442210310

ISBN-13: 9780442210311

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Sample text

Probably. Joe would normally be justified in believing that an officer of 4F had authority to place the full order on its behalf, unless Gary specifically told Joe that the extra station­ery should be billed to him alone. It’s safest to assume that any contract or transaction signed on behalf of your LLC by anyone in management will be legally binding. This legal authority should not present a problem if you choose the right people to be members or managers of your LLC. caution If you’re uncomfortable with others obligating your business, an LLC is probably not the right business entity for you.

Basically, a tort is an act that harms another person and causes monetary loss—for example, running a red light, which causes an accident and damages another automobile. Members of an LLC, like corporate directors, partners, and all other business managers, can be personally liable for financial loss caused by their negligent tortious behavior. Whether working for an LLC as an employee or acting in the capacity of a member, if a member does something negligently that causes harm to another person or that person’s property, the member can be held personally liable for the damage.

Under federal statutes and case (court-developed) law, the selling of securities privately—without advertising or promotion—to a limited number of people may be eligible for the private chapter 2 | basic llc legalities | 37 placement exemption contained in Section 4(2) of the federal Securities Act of 1933. You stand a better chance of being eligible for this exemption if transfers of the securities—memberships—are restricted (for example, language restricting transfer of the stock is placed on all membership certificates and a conspicuous notation is made in the LLC membership book that memberships are nontransferable), and if persons buying memberships are doing so for themselves (that is, not for resale to other investors).

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Data Processing Contracts by Dick H. Brandon


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