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LLCs And Corporations - Another Judicial Mash-UP

Dean Joshua Fershee at Creighton University School of Law has had a habit of pointing out judicial confusion of limited liability companies and corporations.  See LLCs Still Not Corporations, Even In Class Action Settlements.  Recently, I came across the following example from the California Court of Appeal:

"Tribeca is a California limited liability company formed in October 2005 by William Faidi, its sole shareholder. . . . Sky Pacific Holdings I, LLC (Sky Pacific), is another California limited liability company also formed by Faidi, who is its sole member. . . . Grishin and Faidi's joint venture was structured as a two-member limited liability company named Sky Group Ventures, LLC (Sky Group), whose articles of incorporation were filed on April 5, 2010."

Tribeca Companies, LLC v. First American Title Ins. Co., 239 Cal. App. 4th 1088, 1091, 192 Cal. Rptr. 3d 354, 357 (2015). 

Limited liability companies formed under California's former Beverly-Killea Limited Liability Company Act have members not shareholders.  Cal. Corp. Code § 17050(b) (repealed).  While an operating agreement may denominate members as shareholders.  Further, LLCs were formed by the filing of articles of organization (not incorporation).  Cal. Corp. Code § 17050(a) (repealed).

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...