Does duty of loyalty to my LLC end immediately under judicial dissolution?
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Does duty of loyalty to my LLC end immediately under judicial dissolution?
Hello. I’m a 50 member of a member-managed LLC in California. I recently went to court with my 50 partner and won a claim for judicial dissolution. We are about to undergo a court managed dissolution. I’m interested in getting my new company up and running ASAP. Are my duties of loyalty to refrain from competing, specifically to my current LLC immediately gone as soon as a CA Superior Court house awards me a decree of judicial dissolution? Or do I have to wait until the company has been completely liquidated? I would really like to get my new company up and running while the old company is being dissolved. Thanks
Asked on December 21, 2016 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Your duty of loyalty lasts as long as the company lasts; and while there is a decree of dissolution, it has not been dissolved yet. You need to wait until the dissolution actually occurs to be free from your duties to the LLC (and through it, to other members).
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