Cal. Codes » Corporations Code

Cal. Corporations Code § 17703.04

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(a)All of the following apply to debts, obligations, or other liabilities of a limited liability company, whether arising in contract, tort, or otherwise:

(1)They are solely the debts, obligations, or other liabilities of the limited liability company to which the debts, obligations, or other liabilities relate.

(2)They do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager for the limited liability company.

(b)A member of a limited liability company shall be subject to liability under the common law governing alter ego liability, and shall also be personally liable under a judgment of a court or for any debt, obligation, or liability of the limited liability company, whether that liability or obligation arises in contract, tort, or otherwise, under the same or similar circumstances and to the same extent as a shareholder of a corporation may be personally liable for any debt, obligation, or liability of the corporation; except that the failure to hold meetings of members or managers or the failure to observe formalities pertaining to the calling or conduct of meetings shall not be considered a factor tending to establish that a member or the members have alter ego or personal liability for any debt, obligation, or liability of the limited liability company where the articles of organization or operating agreement do not expressly require the holding of meetings of members or managers.

(c)Nothing in this section shall be construed to affect the liability of a member of a limited liability company to third parties for the member’s participation in tortious conduct, or pursuant to the terms of a written guarantee or other contractual obligation entered into by the member, other than an operating agreement.

(d)A limited liability company or foreign limited liability company shall carry insurance or provide an undertaking to the same extent and in the same amount as is required by any law, rule, or regulation of this state that would be applicable to the limited liability company or foreign limited liability company were it a corporation organized and existing or duly qualified for the transaction of intrastate business under the General Corporation Law.

(e)Notwithstanding subdivision (a), a member of a limited liability company may agree to be obligated personally for any or all of the debts, obligations, and liabilities of the limited liability company as long as the agreement to be so obligated is set forth in the articles of organization or in a written operating agreement that specifically references this subdivision.

Notes of Decisions
Cited in 20 cases (9 in the last 5 years), 2014–2026 · leading case: CB Richard Ellis, Inc. v. Terra Nostra Consultants
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CB Richard Ellis, Inc. v. Terra Nostra Consultants (2014) calctapp “(Corp. Code, § 17703.04, subd. (a); see id.”
Rush Air Sports, LLC v. RDJ Group Holdings, LLC (2020) caed · cites it 3× “Cal. Corp. Code § 17703.04 (a)(2) (“debts, obligations, or other liabilities 19 of a limited liability company, whether arising in contract, tort, or otherwise .”
Owens v. American Cable Services CA2/2 (2014) calctapp · cites it 5× “(Corp. Code, § 17703.04, subd. (a)(1).)2 “They do not become the .”
Nidiver v. Lifehouse Health Services CA3 (2016) calctapp · cites it 2× “(Corp. Code, § 17703.04, subd. (b).) “The alter ego doctrine arises when a plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in derogation of the plaintiff’s interests.”
Alikhani v. Azartash CA4/3 (2023) calctapp · cites it 2× “” (Corp. Code, § 17703.04, subd. (a)(1).) “They do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting as a manager for the limited liability company.”
Busalacchi v. Browning CA1/1 (2016) calctapp “”7 (Corp. Code, § 17703.04, subd. (b).) “It is a fundamental rule applicable to cases invoking the alter ego doctrine that the conditions under which the corporate entity may be disregarded necessarily vary according to the circumstances of each case inasmuch as the doctrine is…”
Quinn v. Halachian CA2/1 (2020) calctapp “” (Corp. Code, § 17703.04, subd. (a)(2); see also 5 Ballantine & Sterling, Cal.”
In re: Bernd Schaefers (2020) bap9 “…alter ego liability apply to limited liability companies and their members. See Cal. Corp. Code § 17703.04 (b). Under California common law, a judgment creditor may allege that a member of a 12 limited liability company is the company’s alter ego in order to reverse pi”
Holistic Supplements v. Stark (2021) calctapp “(Corp. Code, § 17703.04, subd. (b) [“A member of a limited liability company shall be .”
Duncan v. Kihagi CA1/1 (2021) calctapp “(Corp. Code, § 17703.04, subd. (a)(1) & (a)(2).”
Duncan v. Kihagi (2021) calctapp “(Corp. Code, § 17703.04, subd. (a)(1) & (a)(2).”
Rincon EV Realty v. CP III Rincon Towers CA1/4 (2022) calctapp “For example, there was no evidence Cohen withdrew plaintiffs’ funds for his personal use, and there were “no material failures to follow the technicalities of the corporate form such as the absence of corporate minutes and the like” (an element that has less importance for LLC’s…”
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