O.C.G.A.
O.C.G.A.

O.C.G.A. § 14-11-303 (2019)

Liability to third parties

✓ O.C.G.A. — 2019 edition (Public.Resource.Org Release 73)
Code text and O.C.G.A. statutory annotations on this page reflect the 2019 Official Code of Georgia Annotated (Public.Resource.Org Release 73, 2019-08-21; public domain per Georgia v. Public.Resource.Org, 2020). The Syfert case-law annotations in Notes of Decisions, below, are current.
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(a) A person who is a member, manager, agent, or employee of a limited liability company is not liable, solely by reason of being a member, manager, agent, or employee of the limited liability company, under a judgment, decree, or order of a court, or in any other manner, for a debt, obligation, or liability of the limited liability company, including liabilities and obligations of the limited liability company to any member or assignee, whether arising in contract, tort, or otherwise, or for the acts or omissions of any other member, manager, agent, or employee of the limited liability company, whether arising in contract, tort, or otherwise. Notwithstanding the provisions of this subsection, a member, manager, or employee may be personally liable for tax liabilities arising from the operation of the limited liability company as provided in Code Section 48-2-52. (b) Notwithstanding the provisions of subsection (a) of this Code section, under a written operating agreement or under another written agreement, a member or manager may agree to be obligated personally for any or all of the debts, obligations, and liabilities of the limited liability company.

History

(Code 1981, § 14-11-303, enacted by Ga. L. 1993, p. 123, § 1; Ga. L. 1997, p. 1380, § 5; Ga. L. 2001, p. 984, § 3; Ga. L. 2009, p. 108, § 4/HB 308.)

Annotations

Law reviews. - For article commenting on the 1997 amendment of this Code section, see 14 Ga. St. U. L. Rev. 57 (1997). For article, ‘‘2008 Annual Review of Case

Law Development,’’ see 14 (No. 6) Ga. St. B. J. 28 (2009). For article, ‘‘The Georgia LLC Act Comes of Age,’’ see 16 (No. 1) Ga. St. B. J. 20 (2010).

For note on the 2001 amendment to this Code section, see 18 Ga. St. U. L. Rev. 294 (2001). JUDICIAL DECISIONS No liability of members for debt of LLC. - In a lender’s suit against a limited liability company (LLC) and two individuals, it was error to find the individual defendants liable to repay the loan. The money was paid to the LLC, not to the individual defendants; even if the individuals were members of the LLC, the individuals were not liable for the LLC’s obligations solely by reason of being members. Gardner v. Marcum, 292 Ga. App. 369, 665 S.E.2d 336 (2008), cert. denied, 2008 Ga. LEXIS 938 (Ga. 2008). Members of the limited liability corporation (LLC) were not personally liable for the arbitration debts of the LLC because the members did not execute a written agreement to personally guaranty the LLC’s debts and liabilities. Am. Arbitration Ass’n v. Bowen, 322 Ga. App. 51, 743 S.E.2d 612 (2013). Noncompetition clause not binding on members. - Noncompetition clause in parties’ agreement did not bar members of a limited liability company that sold a childcare facility from opening another daycare center as the members were not parties to the agreement and were not bound thereby; further, a member’s signature was as a disclosed agent. Primary Invs., LLC v. Wee Tender Care III, Inc., 323 Ga. App. 196, 746 S.E.2d 823 (2013). Negligent supervision. - Senior partners of a law firm could not be held liable for negligent supervision solely by reason of their positions, and the complaint lacked allegations that any lawyers

had a tendency to engage in malpractice or that the senior partners knew or should have been aware of such tendencies. Hays v. Page Perry, LLC, No. 15-11506, 2015 U.S. App. LEXIS 17460 (11th Cir. Oct. 5, 2015) (Unpublished). Applicability. - Reliance of signatory to contribution agreement on O.C.G.A. § 14-11-303 was misplaced because signatory’s liabilities arose from signatory’s contractual obligations as a party to the contribution agreement and as guarantor of an employment contract, not on account of signatory’s interest in a limited liability company. Ervin v. Turner, 291 Ga. App. 719, 662 S.E.2d 721 (2008), cert. denied, 2008 Ga. LEXIS 773, 774, 794 (Ga. 2008). Piercing corporate veil of LLC. - Condominium purchasers could not pierce the corporate veils to hold two limited liability company (LLC) members accountable for the acts of the LLC because the members were not proper parties solely by being members of the LLC and the purchasers failed to present any evidence that the members abused the forms by which the LLC was maintained as a separate entity. Lokey v. FDIC, No. 14-14822, 2015 U.S. App. LEXIS 5973 (11th Cir. Apr. 13, 2015) (Unpublished). Cited in Winzer v. EHCA Dunwoody, LLC, 277 Ga. App. 710, 627 S.E.2d 426 (2006); Milk v. Total Pay & HR Solutions, Inc., 280 Ga. App. 449, 634 S.E.2d 208 (2006); Internal Med. Alliance, LLC v. Budell, 290 Ga. App. 231, 659 S.E.2d 668 (2008).

RESEARCH REFERENCES ALR. - Construction and application of limited liability company acts - issues relating to liability of limited liability company for acts of its members, managers, officers, and agents, 46 ALR6th 1.

Construction and application of limited liability company acts - issues relating to personal liability of individual members and managers of limited liability company as to third parties, 47 ALR6th 1.

CORPORATIONS & PARTNERSHIPS

Notes of Decisions
Cited in 14 cases (2 in the last 5 years), 2003–2022 · leading case: Milk v. Total Pay & HR Solutions, Inc., 634 S.E.2d 208 (Ga. Ct. App. 2006).
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Milk v. Total Pay & HR Solutions, Inc., 634 S.E.2d 208 (Ga. Ct. App. 2006). · cites it 2× “Total Pay first contends that summary judgment against Milk was authorized because Burrito Joe’s dissolved before an operating agreement for the LLC was ever executed.”
Winzer v. Ehca Dunwoody, LLC., 627 S.E.2d 426 (Ga. Ct. App. 2006). · cites it 2× “11 OCGA§ 14-11-303 (a). 12 See Eckles, supra at 803 (2).”
Internal Med. All., LLC v. Budell, 659 S.E.2d 668 (Ga. Ct. App. 2008). · cites it 2× “See also OCGA § 14-11-303 (a). Verbitsky and Budell merely guaranteed the construction costs associated with the lease agreement.”
Am. Arbitration Ass'n v. Bowen, 743 S.E.2d 612 (Ga. Ct. App. 2013). · cites it 4× “Although the Members argued at the hearing that the Association granted them a hardship waiver, they presented no evidence to establish this fact, and the arbitrator testified that the Association did not send invoices to parties that had received such a waiver. Consequently,…”
Primary Investments, LLC v. Wee Tender Care III, Inc., 746 S.E.2d 823 (Ga. Ct. App. 2013). · cites it 2× “Under the Act, [a] person who is a member, manager, agent, or employee of a limited liability company is not liable, .”
Bonner v. Brunson, 585 S.E.2d 917 (Ga. Ct. App. 2003). · cites it 2× “1, 5-6 ( 572 SE2d 647 ) (2002); OCGA §§ 14-11-303; 14-11-1107 (j). In order to pierce this veil and hold Brunson personally liable for the alleged debt of the LLC, there must be evidence that he abused *522 the forms by which the LLC was maintained as a separate legal entity…”
Ervin v. Turner, 662 S.E.2d 721 (Ga. Ct. App. 2008). · cites it 2× “" She relies on OCGA § 14-11-303(a), which provides that "[a] person who is a member .”
Gardner v. Marcum, 665 S.E.2d 336 (Ga. Ct. App. 2008). · cites it 2× “17 OCGA § 14-11-303 (a) (“[a] person who is a member, manager, agent, or employee of a limited liability company is not liable, solely by reason of being a member, manager, agent, or *374 employee of the limited liability company .”
Hays v. Page Perry, LLC, 26 F. Supp. 3d 1311 (N.D. Ga. 2014). · cites it 2× “his fraud against Lighthouse, as fully set forth above.”
Lokey v. Fed. Deposit Ins., 608 F. App'x 736 (11th Cir. 2015). “§ 14-11-1107(j)); see also O.C.G.A. § 14-11-303(a). To hold them personally liable, Appellants must show that Croll or Brown “abused the forms by which the LLC was maintained as a separate legal entity.”
Sentinel Ins. Co./the Hartford v. Usaa Ins. Co., 782 S.E.2d 718 (Ga. Ct. App. 2016). · cites it 2× “This Court has not previously addressed the priority of UM coverage in the context of a limited liability company. A limited liability company is a business entity that (with some exceptions not pertinent here) protects its members from personal liability, debts, or obligations…”
Am. Arbitration Ass'n v. Gene Bowen (Ga. Ct. App. 2013). · cites it 4× “Although the Members argued at the hearing that the Association granted them a hardship waiver, they presented no evidence to establish this fact, and the arbitrator testified that the Association did not send invoices to parties that had received such a waiver. Consequently,…”
Show all 14 citing cases →
— 14-11-303(a) — 2 cases
Ervin v. Turner, 662 S.E.2d 721 (Ga. Ct. App. 2008). “" She relies on OCGA § 14-11-303(a), which provides that "[a] person who is a member .”
Lokey v. Fed. Deposit Ins., 608 F. App'x 736 (11th Cir. 2015). “§ 14-11-1107(j)); see also O.C.G.A. § 14-11-303(a). To hold them personally liable, Appellants must show that Croll or Brown “abused the forms by which the LLC was maintained as a separate legal entity.”
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